FORM 11-K
(Mark One)
[X] ANNUAL REPORT PURSUANT TO SECTION 15 (d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended December 31, 1996
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 15 (d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the transition period from _________ to _________
Commision 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
B. Name of issuer of the securities held pursuant to the
plan and the address of its principal executive office:
Cerner Corporation
2800 Rockcreek Parkway, Suite 601
Kansas City, Missouri 64117
Financial Statements of the Cerner Corporation
Associate 401K Retirement Plan and Trust.
Independent Auditors' Report
Statement of Net Assets Available for Participants -
December 31, 1996 and December 31, 1995
Statement of Changes in Net Assest Available for Participants -
Years Ended December 31, 1996 and December 31, 1995
Notes to Financial Statements
The following financial statement, schedules
and independent auditors' report on financial statement
schedules of the Cerner Corporation Associate 401K
Retirement Plan and Trust for the two-year period ended
December 31, 1996:
Schedule I - Schedule of Assets Held for Investment Purposes
Schedule II - Schedule of Reportable Transactions
Consent of Independent Auditors
CERNER CORPORATION
FOUNDATIONS RETIREMENT PLAN
Financial Statements and Schedules
December 31, 1996 and 1995
(With Independent Auditors' Report Thereon)
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, 1996 and 1995
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, 1996 and 1995
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 fund information in the
statements of net assets available for participants and the
statements of changes in net assets available for participants
is presented for purposes of additional analysis rather than
to present the net assets available for participants and
changes in net assets available for participants of each fund.
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 Peat Marwick LLP
June 13, 1997
Page 2
CERNER CORPORATION
FOUNDATIONS RETIREMENT PLAN
Statement of Net Assets Available for Participants
December 31, 1996
Fund A Fund B Fund C Fund D Fund E Fund F Loans Total
------ ------ ------ ------ ------ ------ ----- -----
Investments at fair value:
Common stock of Cerner Corporation, $ 16,026,208 - - - - - - 16,026,208
1,042,355 shares (cost $9,620,806)
Twentieth Century Ultra Fund,
149,825.60 shares (cost $3,685,233) - 4,208,601 - - - - - 4,208,601
Twentieth Century Growth Fund,
114,371.02 shares (cost $2,433,432) - - 2,502,438 - - - - 2,502,438
Twentieth Century Select Fund,
38,481.54 shares (cost $1,469,251) - - - 1,482,694 - - - 1,482,694
Twentieth Century Balanced Fund
58,742.28 shares (cost $981,204) - - - - 1,013,892 - - 1,013,892
Benham Preservation Fund, 836,952.26
shares (cost $836,952) - - - - - 836,952 - 836,952
Loans to participants, at cost, which
approximates fair value - - - - - - 286,581 286,581
---------- --------- --------- --------- --------- ------- ------- ----------
Total 16,026,208 4,208,601 2,502,438 1,482,694 1,013,892 836,952 286,581 26,357,366
Cash 85,233 - - - - - - 85,233
Contributions receivable:
Associates 55,813 33,747 18,172 10,384 6,490 5,192 - 129,798
Employer 25,959 - - - - - - 25,959
---------- --------- --------- --------- --------- ------- ------- ----------
Net assets available for participants $ 16,193,213 4,242,348 2,520,610 1,493,078 1,020,382 842,144 286,581 26,598,356
---------- --------- --------- --------- --------- ------- ------- ----------
See accopmpanying notes to financial statements.
Page 3
CERNER CORPORATION
FOUNDATIONS RETIREMENT PLAN
Statement of Net Assets Available for Participants
December 31, 1995
Fund A Fund B Fund C Fund D Fund E Fund F Loans Total
------ ------ ------ ------ ------ ------ ----- -----
Investments at fair value:
Common stock of Cerner Corporation,
922,253 shares (cost $7,207,192) $ 18,906,187 - - - - - - 18,906,187
Twentieth Century Ultra Fund,
104,064.79 shares (cost $2,314,951) 2,717,132 - - - - - 2,717,132
Twentieth Century Growth Fund,
84,894.68 shares (cost $1,821,710) - - 1,646,108 - - - - 1,646,108
Twentieth Century Select Fund,
27,377.38 shares (cost $1,033,449) - - - 975,182 - - - 975,182
Twentieth Century Balanced Fund,
43,875.42 shares (cost $706,165) - - - - 745,443 - - 745,443
Chase Manhattan Capital Preservation Trust,
634,997 shares at cost, which approximates
fair value - - - - - 634,997 - 634,997
Loans to participants, at cost, which
approximates fair value - - - - - - 207,684 207,684
---------- --------- --------- ------- ------- ------- ------- ----------
Total investments 18,906,187 2,717,132 1,646,108 975,182 745,443 634,997 207,684 25,832,733
Cash 8,363 - - - - - - 8,363
Contributions receivable:
Associates 94,400 46,151 31,467 16,782 10,489 10,489 1,665 211,443
Employer 25,684 - - - - - - 25,684
---------- --------- --------- ------- ------- ------- ------- ----------
Net assets available for participants $ 19,034,634 2,763,283 1,677,575 991,964 755,932 645,486 209,349 26,078,223
---------- --------- --------- ------- ------- ------- ------- ----------
See accompanying notes to financial statements.
Page 4
CERNER CORPORATION
FOUNDATIONS RETIREMENT PLAN
Statement of Changes in Net Assets Available for Participants
Year ended December 31, 1996
Fund A Fund B Fund C Fund D Fund E Fund F Loans Total
------ ------ ------ ------ ------ ------ ----- -----
Additions to net assets attributed to:
Net appreciation (depreciation) in fair
value of investments $ (5,020,042) 212,587 240,662 78,267 6,864 - - (4,481,662)
Interest and dividends 2,453 235,980 47,778 138,896 98,817 42,053 23,055 589,032
Interfund transfers 100,997 40,735 (66,345) 13,598 (27,686) (61,299) - -
Employer contributions (note 2) 592,493 - - - - - - 592,493
Associates' contributions (note 2) 2,219,846 1,335,389 825,401 414,938 277,106 321,997 - 5,394,677
Loan repayments 41,566 8,946 8,488 4,955 1,794 2,981 (68,730) -
----------- --------- ---------- ------- -------- -------- -------- -----------
Total additions (deductions) (2,062,687) 1,833,637 1,055,984 650,654 356,895 305,732 (45,675) 2,094,540
----------- --------- ---------- ------- -------- -------- -------- -----------
Deductions from net assets attributed to:
Distributions to associates (747,716) (336,556) (179,494) (139,930) (86,256) (63,998) (17,338) (1,571,288)
Loans to participants (30,567) (17,762) (33,103) (9,425) (6,028) (45,024) 141,909 -
Investments expenses (451) (254) (352) (185) (161) (52) (1,664) (3,119)
----------- ---------- ---------- --------- -------- --------- -------- -----------
Total (deductions) additions (778,734) (354,572) (212,949) (149,540) (92,445) (109,074) 122,907 (1,574,407)
----------- ---------- ---------- --------- -------- --------- -------- -----------
Net increase (decrease) (2,841,421) 1,479,065 843,035 501,114 264,450 196,658 77,232 520,133
Net assets available for participants:
Beginning of year 19,034,634 2,763,283 1,677,575 991,964 755,932 645,486 209,349 26,078,223
---------- --------- --------- ---------- --------- --------- -------- -----------
End of year $ 16,193,213 4,242,348 2,520,610 1,493,078 1,020,382 842,144 286,581 26,598,356
---------- --------- --------- ---------- --------- --------- -------- -----------
See accompanying notes to financial statements.
Page 5
CERNER CORPORATION
FOUNDATIONS RETIREMENT PLAN
Statement of Changes in Net Assets Available for Participants
Year ended Decemeber 31, 1995
Fund A Fund B Fund C Fund D Fund E Fund F Loans Total
------ ------ ------ ------ ------ ------ ----- -----
Additions to net assets attributed to:
Net appreciation (depreciation) in fair
value of investments $ (1,486,387) 459,796 (3,715) 32,477 56,492 - - (941,337)
Interest and dividends 2,379 128,649 227,678 117,977 58,568 33,239 11,831 580,321
Interfund transfers (254,356) 298,024 28,349 (6,394) 27,802 (80,915) (12,510) -
Employer contributions (note 2) 450,736 - - - - - - 450,736
Associates' contributions (note 2) 1,636,096 881,204 625,805 328,042 254,376 234,838 1,665 3,962,026
Loan repayments 11,577 12,461 2,633 1,243 464 3,047 (31,425) -
----------- --------- ------- -------- ------- -------- -------- ----------
Total additions (deductions) 360,045 1,780,134 880,750 473,345 397,702 190,209 (30,439) 4,051,746
----------- --------- ------- -------- ------- -------- -------- -----------
Deductions from net assets attributed to:
Distributions to associates (1,940,404) (216,130) (166,164) (71,906) (72,959) (338,552) (4,959) (2,811,074)
Loans to participants (39,128) (41,816) (9,998) (8,684) (28,395) (3,560) 131,581) -
Participant loan expenses - - - - - - (250) (250)
----------- ---------- --------- -------- -------- --------- -------- -----------
Total (deductions) additions (1,979,532) (257,946) (176,162) (80,590) (101,354) (342,112) 126,372 (2,811,324)
----------- ---------- --------- -------- --------- --------- -------- -----------
Net increase (decrease) (1,619,487) 1,522,188 704,588 392,755 296,348 (151,903) 95,933 1,240,422
Net assets available for participants:
Beginning of year 20,654,121 1,241,095 972,987 599,209 459,584 797,389 113,416 24,837,801
---------- --------- ---------- -------- --------- --------- -------- -----------
End of year $ 19,034,634 2,763,283 1,677,575 991,964 755,932 645,486 209,349 26,078,223
---------- --------- ---------- -------- --------- --------- -------- -----------
See accompanying notes to financial statements.
6
CERNER CORPORATION
FOUNDATIONS RETIREMENT PLAN
Notes to Financial Statements
December 31, 1996 and 1995
(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.
(Continued)
7
CERNER CORPORATION
FOUNDATIONS RETIREMENT PLAN
Notes to Financial Statements
(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 six different investment funds.
These funds include Fund A (limited to investments in
the common stock of the Company), Fund B (Twentieth
Century Ultra Investors), Fund C (Twentieth Century
Growth Investors), Fund D (Twentieth Century Select
Investors), Fund E (Twentieth Century Balanced
Investors) and Fund F (Benham Preservation Fund
(formerly Chase Manhattan Capital Preservation Trust))
which primarily invests in short-term investments and
guaranteed insurance contracts). 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 Fund A.
(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 from Fund A 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, 1996 and 1995, 44,382 shares and 42,192 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.
(Continued)
8
CERNER CORPORATION
FOUNDATIONS RETIREMENT PLAN
Notes to Financial Statements
(5) Plan Participants
-----------------
The following summarizes the number of associate
participants by fund as of December 31, 1996:
Cerner stock account 1,487
Twentieth Century Mutual Funds:
Ultra Investors 724
Growth Investors 587
Select Investors 390
Balanced Investors 258
Benham Preservation Fund 217
9 Schedule 1
----------
CERNER CORPORATION
FOUNDATIONS RETIREMENT PLAN
Item 27 (a) - Schedule of Assets Held for Investment Purposes
December 31, 1996
Fair
Asset Description Cost value
----- ----------- ---- -----
Cerner Corporation 1,042,355 shares of common stock $ 9,620,806 16,026,208
Twentieth Century Ultra Investors Mutual Fund, 149,825.60 shares 3,685,233 4,208,601
Twentieth Century Growth Investors Mutual Fund, 114,371.02 shares 2,433,432 2,502,438
Twentieth Century Select Investors Mutual Fund, 38,481.54 shares 1,469,251 1,482,694
Twentieth Century Balanced Investors Mutual Fund, 58,742.28 shares 981,204 1,013,892
Benham Preservation Trust 836,952.26 units of participation in a pooled fund 836,952 836,952
Loans to participants Loans to participants (bearing interest from 7% to 10%) 286,952 286,581
---------- ----------
19,313,459 26,357,366
See accompanying independent auditors' report.
10
CERNER CORPORATION
FOUNDATIONS RETIREMENT PLAN
Item 27(d) - Schedule of Reportable Transactions
Year ended December 31, 1996
Number of Purchase
transactions price
------------ -----
Cerner Corporation common stock (176,829 shares) Various $ 3,127,101
Ultra 73 1,554,567
In addition, the Plan distributed 44,382 shares of Cerner Corporation common
stock with a cost of $508,599 to withdrawing participants was sold 12,345
shares of Cerner Corporation common stock with a cost of $204,320 during the
year ended December 31, 1996.
Transactions involving Cerner Corporation common stock are party-in-interest
transactions.
NOTES:
A reportable transaction is defined by the Department of Labor as:
* A single transaction is 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 that 5% of the fair value of the Plan assets.
* A series of transactions with respect oto securities of the same
issue which amount in the aggregate to more that 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, 1996.
See accompanying independent auditors' report.
SIGNATURES
The Plan. Pursuant tto the requirements of the Securities Exchange Act
of 1934, the trustees (or other persons who administer the employee benefit
plan) have duly cause this annual report to be signed on its behalf by the
undersigned hereunto duly authorized.
Cerner Corporation Foundations Retirement Plan
----------------------------------------------
(Name of Plan)
Date: June 26, 1997 /s/Maureen M.Evans
--------------- ----------------------
Maureen M. Evans
----------------------
Title: Administrator
----------------
/s/Rene L. Whitcraft /s/Clifford W. Illig
- -------------------- -----------------------
Rene L. Whitcraft Clifford W. Illig
- -------------------- -----------------------
Title: Administrator Title: Administrator
INDEPENDENT AUDITORS' CONSENT
-----------------------------
The Board of Directors
Cerner Corporation:
We consent in 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 13, 1997, relating to the statements of net assets
available for participants of Cerner Corporation Foundations Retirement
Plan as of December 31, 1996 and 1995, and the related statements
of changes in net assets available for participants for the years ended and
the related supplemental schedules of assets held for investment purposes
and reportable transactions, which report included herein.
/s/ KPMG Peat Marwick LLP
Kansas City, Missouri
June 26, 1997
