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Table of Contents
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
    QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended: September 30, 2020
or
    TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from ___________ to ___________

Commission File Number: 0-15386

CERNER CORPORATION
(Exact name of registrant as specified in its charter)
Delaware
https://cdn.kscope.io/8a6d1e56f7e573c431c3e13174ec0bb2-cern-20200930_g1.jpg
43-1196944
(State or other jurisdiction of
incorporation or organization)
(I.R.S. Employer Identification No.)
2800 Rockcreek Parkway
North Kansas City,MO64117
(Address of principal executive offices)(Zip Code)

(816) 221-1024
(Registrant's telephone number, including area code)
_________________________________________________________________
(Former name, former address and former fiscal year, if changed since last report)

Securities registered pursuant to Section 12(b) of the Act:
Title of each classTrading Symbol(s)Name of each exchange on which registered
Common Stock, $0.01 par value per shareCERNThe Nasdaq Stock Market LLC
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes     No
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes     No
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of "large accelerated filer," "accelerated filer," "smaller reporting company," and "emerging growth company" in Rule 12b-2 of the Exchange Act.
Large Accelerated Filer Accelerated Filer Non-accelerated Filer Smaller Reporting Company Emerging Growth Company
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards pursuant to Section 13(a) of the Exchange Act.
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes     No
Indicate the number of shares outstanding of each of the issuer's classes of common stock, as of the latest practicable date.
Class  Outstanding at October 21, 2020
Common Stock, $0.01 par value per share  306,589,898 shares



Table of Contents
CERNER CORPORATION

TABLE OF CONTENTS
 
Part I.Financial Information:
Item 1.Financial Statements:
Item 2.
Item 3.
Item 4.
Part II.Other Information:
Item 1.
Item 1A.
Item 2.
Item 6.
Signatures



Table of Contents
Part I. Financial Information

Item 1. Financial Statements

CERNER CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
As of September 30, 2020 (unaudited) and December 28, 2019

(In thousands, except share data)20202019
Assets
Current assets:
Cash and cash equivalents$419,154 $441,843 
Short-term investments473,323 99,931 
Receivables, net1,219,227 1,139,595 
Inventory15,768 23,182 
Prepaid expenses and other397,487 392,073 
Total current assets2,524,959 2,096,624 
Property and equipment, net1,867,600 1,858,772 
Right-of-use assets109,659 123,155 
Software development costs, net991,649 939,859 
Goodwill907,105 883,158 
Intangible assets, net330,837 364,439 
Long-term investments423,315 419,419 
Other assets205,688 209,196 
Total assets$7,360,812 $6,894,622 
Liabilities and Shareholders' Equity
Current liabilities:
Accounts payable$256,449 $273,440 
Deferred revenue320,294 360,025 
Accrued payroll and tax withholdings328,663 245,843 
Other current liabilities196,170 148,140 
Total current liabilities1,101,576 1,027,448 
Long-term debt1,336,018 1,038,382 
Deferred income taxes391,790 377,657 
Other liabilities125,141 133,807 
Total liabilities2,954,525 2,577,294 
Shareholders' Equity:
Common stock, $0.01 par value, 500,000,000 shares authorized, 372,272,953 shares issued at September 30, 2020 and 367,634,796 shares issued at December 28, 2019
3,723 3,676 
Additional paid-in capital2,196,127 1,905,171 
Retained earnings6,402,220 5,934,909 
Treasury stock, 65,919,144 shares at September 30, 2020 and 56,723,546 shares at December 28, 2019
(4,057,768)(3,407,768)
Accumulated other comprehensive loss, net(138,015)(118,660)
Total shareholders' equity4,406,287 4,317,328 
Total liabilities and shareholders' equity$7,360,812 $6,894,622 

See notes to condensed consolidated financial statements (unaudited).
1

Table of Contents
CERNER CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
For the three and nine months ended September 30, 2020 and September 28, 2019
(unaudited)
 
 Three Months EndedNine Months Ended
(In thousands, except per share data)2020201920202019
Revenues$1,368,673 $1,429,428 $4,110,763 $4,250,366 
Costs and expenses:
Costs of revenue231,889 271,778 698,268 793,655 
Sales and client service625,402 707,743 1,907,138 2,026,825 
Software development (Includes amortization of $61,578 and $183,786 for the three and nine months ended September 30, 2020, respectively; and $56,786 and $169,036 for the three and nine months ended September 28, 2019, respectively)
186,826 187,526 551,101 548,934 
General and administrative116,816 152,321 391,000 398,305 
Amortization of acquisition-related intangibles12,789 21,283 43,031 64,809 
Total costs and expenses1,173,722 1,340,651 3,590,538 3,832,528 
Gain on sale of businesses216,869  216,869  
Operating earnings411,820 88,777 737,094 417,838 
Other income, net48,020 13,535 78,247 44,973 
Earnings before income taxes459,840 102,312 815,341 462,811 
Income taxes(103,164)(20,377)(176,758)(87,688)
Net earnings$356,676 $81,935 $638,583 $375,123 
Basic earnings per share$1.17 $0.26 $2.08 $1.17 
Diluted earnings per share$1.16 $0.26 $2.07 $1.16 
Basic weighted average shares outstanding305,759 315,876 306,759 320,282 
Diluted weighted average shares outstanding308,366 319,113 309,124 323,361 
See notes to condensed consolidated financial statements (unaudited).

2

Table of Contents
CERNER CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
For the three and nine months ended September 30, 2020 and September 28, 2019
(unaudited)
 
 Three Months EndedNine Months Ended
(In thousands)2020201920202019
Net earnings$356,676 $81,935 $638,583 $375,123 
Foreign currency translation adjustment and other (net of taxes (benefit) of $351 and $688 for the three and nine months ended September 30, 2020; and $(409) and $(413) for the three and nine months ended September 28, 2019, respectively)
9,611 (11,679)(1,738)(9,458)
Unrealized gain (loss) on cash flow hedge (net of taxes (benefit) of $745 and $(5,937) for the three and nine months ended September 30, 2020; and $(1,327) and $(5,396) for the three and nine months ended September 28, 2019, respectively)
2,265 (4,037)(18,050)(16,407)
Unrealized holding gain (loss) on available-for-sale investments (net of taxes (benefit) of $(73) and $142 for the three and nine months ended September 30, 2020; and $5 and $286 for the three and nine months ended September 28, 2019, respectively)
(220)14 433 867 
Comprehensive income$368,332 $66,233 $619,228 $350,125 

See notes to condensed consolidated financial statements (unaudited).

3

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CERNER CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
For the nine months ended September 30, 2020 and September 28, 2019
(unaudited)
 Nine Months Ended
(In thousands)20202019
CASH FLOWS FROM OPERATING ACTIVITIES:
Net earnings$638,583 $375,123 
Adjustments to reconcile net earnings to net cash provided by operating activities:
Depreciation and amortization518,987 509,559 
Share-based compensation expense110,500 73,421 
Provision for deferred income taxes21,554 22,793 
Gain on sale of businesses(216,869) 
Investment gains(75,834)(24,231)
Changes in assets and liabilities (net of businesses acquired):
Receivables, net(78,695)24,558 
Inventory8,206 1,877 
Prepaid expenses and other(36,664)(75,191)
Accounts payable(60,808)(3,346)
Accrued income taxes33,005 (795)
Deferred revenue(32,071)(89,400)
Other accrued liabilities94,151 61,156 
Net cash provided by operating activities924,045 875,524 
CASH FLOWS FROM INVESTING ACTIVITIES:
Capital purchases(238,053)(388,588)
Capitalized software development costs(224,710)(211,284)
Purchases of investments(511,378)(317,979)
Sales and maturities of investments213,309 507,258 
Purchase of other intangibles(29,698)(25,794)
Sale of businesses229,471  
Acquisition of businesses, net of cash acquired(35,766) 
Net cash used in investing activities(596,825)(436,387)
CASH FLOWS FROM FINANCING ACTIVITIES:
Long-term debt issuance300,000 600,000 
Repayment of long-term debt(2,500) 
Proceeds from exercise of stock options202,680 188,474 
Payments to taxing authorities in connection with shares directly withheld from associates(22,623)(14,994)
Treasury stock purchases(650,000)(1,020,542)
Dividends paid(166,277)(57,293)
Other(6,807)(8,450)
Net cash used in financing activities(345,527)(312,805)
Effect of exchange rate changes on cash and cash equivalents(4,382)(4,028)
Net increase (decrease) in cash and cash equivalents(22,689)122,304 
Cash and cash equivalents at beginning of period441,843 374,126 
Cash and cash equivalents at end of period$419,154 $496,430 

See notes to condensed consolidated financial statements (unaudited).
4

Table of Contents
CERNER CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY
For the three and nine months ended September 30, 2020 and September 28, 2019
(unaudited)
Common StockAdditional Paid-in CapitalRetained EarningsTreasury StockAccumulated Other Comprehensive Loss, Net
(In thousands)SharesAmount
Balance at December 28, 2019367,635 $3,676 $1,905,171 $5,934,909 $(3,407,768)$(118,660)
Exercise of stock options and vests of restricted shares and share units2,543 26 114,050 — — — 
Employee share-based compensation expense— — 35,031 — — — 
Cumulative effect of accounting change (ASU 2016-13)— — — (4,606)— — 
Other comprehensive income (loss)— — — — — (40,703)
Treasury stock purchases— — — — (650,000)— 
Cash dividends declared ($0.18 per share)— — — (55,206)— — 
Net earnings— — — 147,159 — — 
Balance at March 31, 2020370,178 3,702 2,054,252 6,022,256 (4,057,768)(159,363)
Exercise of stock options and vests of restricted shares and share units1,009 10 28,540 — — — 
Employee share-based compensation expense— — 37,549 — — — 
Other comprehensive income (loss)— — — — — 9,692 
Cash dividends declared ($0.18 per share)— — — (55,602)— — 
Net earnings— — — 134,748 — — 
Balance at June 30, 2020371,187 3,712 2,120,341 6,101,402 (4,057,768)$(149,671)
Exercise of stock options and vests of restricted shares and share units1,086 11 37,866 — — — 
Employee share-based compensation expense— — 37,920 — — — 
Other comprehensive income (loss)— — — — — 11,656 
Cash dividends declared ($0.18 per share)— — — (55,858)— — 
Net earnings— — — 356,676 — — 
Balance at September 30, 2020372,273 $3,723 $2,196,127 $6,402,220 $(4,057,768)$(138,015)

See notes to condensed consolidated financial statements (unaudited).
















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CERNER CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY (continued)
For the three and nine months ended September 30, 2020 and September 28, 2019
(unaudited)
Common StockAdditional Paid-in CapitalRetained EarningsTreasury StockAccumulated Other Comprehensive Loss, Net
(In thousands)SharesAmount
Balance at December 29, 2018362,213 $3,622 $1,559,562 $5,576,525 $(2,107,768)$(103,552)
Exercise of stock options and vests of restricted shares and share units706 7 11,716 — — — 
Employee share-based compensation expense— — 19,860 — — — 
Other comprehensive income (loss)— — — — — 2,958 
Net earnings— — — 166,219 — — 
Balance at March 30, 2019362,919 3,629 1,591,138 5,742,744 (2,107,768)(100,594)
Exercise of stock options and vests of restricted shares and share units1,777 18 108,045 — — — 
Employee share-based compensation expense— — 23,024 — — — 
Other comprehensive income (loss)— — — — — (12,254)
Treasury stock purchases— — — — (600,000)— 
Cash dividends declared ($0.18 per share)— — — (57,682)— — 
Net earnings— — — 126,969 — — 
Balance at June 29, 2019364,696 3,647 1,722,207 5,812,031 (2,707,768)(112,848)
Exercise of stock options and vests of restricted shares and share units1,505 15 54,195 — — — 
Employee share-based compensation expense— — 30,537 — — — 
Other comprehensive income (loss)— — — — — (15,702)
Treasury stock purchases— — — — (400,000)— 
Cash dividends declared ($0.18 per share)— — — (56,982)— — 
Net earnings— — — 81,935 — — 
Balance at September 28, 2019366,201 $3,662 $1,806,939 $5,836,984 $(3,107,768)$(128,550)

See notes to condensed consolidated financial statements (unaudited).
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CERNER CORPORATION AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
 
(1) Interim Statement Presentation

Basis of Presentation

The condensed consolidated financial statements included herein have been prepared by Cerner Corporation ("Cerner," the "Company," "we," "us" or "our") without audit, pursuant to the rules and regulations of the Securities and Exchange Commission ("SEC"). Certain information and footnote disclosures normally included in annual financial statements prepared in accordance with accounting principles generally accepted in the United States of America ("GAAP") have been condensed or omitted pursuant to such rules and regulations. These condensed consolidated financial statements should be read in conjunction with the consolidated financial statements and the notes thereto included in our latest annual report on Form 10-K.
In management's opinion, the accompanying unaudited condensed consolidated financial statements include all adjustments (consisting of only normal recurring adjustments) necessary to present fairly the financial position and the results of operations and cash flows for the periods presented. Our interim results as presented in this Form 10-Q are not necessarily indicative of the operating results for the entire year.

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

Fiscal Period End

Prior to fiscal year 2020, our third fiscal quarter ended on the Saturday closest to September 30. The third quarter and year-to-date periods for 2019 presented herein consisted of 91 days and 273 days, respectively, and ended on September 28, 2019.

In December 2019, our Board of Directors approved the change of our fiscal year to a calendar year, commencing with fiscal year 2020. Accordingly, the third quarter and year-to-date periods for 2020 presented herein consisted of 92 days and 277 days, respectively, and ended on September 30, 2020.

All references to periods in these notes to condensed consolidated financial statements represent the respective periods described above ending on September 30, 2020 and September 28, 2019, unless otherwise noted.

Supplemental Disclosures of Cash Flow Information
 Nine Months Ended
(In thousands)20202019
Cash paid during the period for:
Interest (including amounts capitalized of $12,040 and $12,575, respectively)
$31,661 $20,756 
Income taxes, net of refunds78,519 65,171 
Non-cash items:
Lease liabilities recorded upon the commencement of operating leases24,499 23,129 
Capital purchases17,395 7,600 

CARES Act

Cash flows from operating activities for the first nine months of 2020 include the impact of $56 million of certain federal payroll taxes related to pay cycles in the second and third quarters of 2020, for which we have deferred remittance to the taxing authority as permitted under the Coronavirus Aid, Relief, and Economic Security Act (the "CARES Act"). We expect to continue to defer the remittance of such payroll taxes for the remainder of 2020, as permitted by the CARES Act, for which the remittances to the taxing authority are to be paid in equal amounts at the end of 2021 and 2022, respectively. At September 30, 2020, these deferred remittances are included in "Accrued payroll and tax withholdings" in our condensed consolidated balance sheets.
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Accounting Pronouncements Adopted in 2020

Credit Losses on Financial Instruments. In the first quarter of 2020, we adopted new guidance regarding impairment assessment for certain financial assets. Refer to Notes (3) and (4) for further details.

Collaborative Arrangements. In November 2018, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") 2018-18, Collaborative Arrangements (Topic 808): Clarifying the Interaction between Topic 808 and Topic 606, which clarifies when transactions between participants in a collaborative arrangement are within the scope of the FASB's recent revenue standard (Topic 606). Such guidance clarifies revenue recognition and financial statement presentation for transactions between collaboration participants. We adopted ASU 2018-18 in the first quarter of 2020. Such guidance did not have an impact on our consolidated financial statements and related disclosures.

Recently Issued Accounting Pronouncements

Reference Rate Reform. In March 2020, the FASB issued ASU 2020-04, Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting, which provides optional financial reporting alternatives to reduce the cost and complexity associated with the accounting for contracts and hedging relationships affected by reference rate reform, such as the upcoming discontinuance of the London Interbank Offered Rate ("LIBOR"). The accommodations within ASU 2020-04 may be applied prospectively from the beginning of our 2020 first quarter through December 31, 2022. We are currently evaluating the effect that ASU 2020-04 may have on our contracts that reference LIBOR, specifically, our Third Amended and Restated Credit Agreement (as amended, the "Credit Agreement") and related interest rate swap. As of the date of this filing, we have not elected to apply any of the provisions of this standard.

(2) Revenue Recognition

Disaggregation of Revenue

The following tables present revenues disaggregated by our business models:

Three Months Ended
20202019
(In thousands)Domestic
Segment
International
Segment
TotalDomestic
Segment
International
Segment
Total
Licensed software$159,327 $12,367 $171,694 $144,599 $9,934 $154,533 
Technology resale45,217 1,896 47,113 65,103 5,072 70,175 
Subscriptions87,878 5,529 93,407 85,230 6,674 91,904 
Professional services433,127 46,768 479,895 446,562 60,893 507,455 
Managed services280,827 31,017 311,844 272,933 29,502 302,435 
Support and maintenance219,682 40,296 259,978 227,131 50,163 277,294 
Reimbursed travel4,711 31 4,742 23,705 1,927 25,632 
Total revenues$1,230,769 $137,904 $1,368,673 $1,265,263 $164,165 $1,429,428 

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Nine Months Ended
20202019
(In thousands)Domestic SegmentInternational SegmentTotalDomestic SegmentInternational SegmentTotal
Licensed software$444,774 $37,114 $481,888 $466,105 $40,018 $506,123 
Technology resale126,042 14,675 140,717 169,112 17,338 186,450 
Subscriptions260,095 19,749 279,844 246,505 19,460 265,965 
Professional services1,295,759 156,564 1,452,323 1,313,701 169,500 1,483,201 
Managed services836,242 92,114 928,356 818,818 85,661 904,479 
Support and maintenance663,399 144,296 807,695 679,214 151,454 830,668 
Reimbursed travel19,086 854 19,940 68,750 4,730 73,480 
Total revenues$3,645,397 $465,366 $4,110,763 $3,762,205 $488,161 $4,250,366 


The following tables present our revenues disaggregated by timing of revenue recognition:

Three Months Ended
20202019
(In thousands)Domestic
Segment
International
Segment
TotalDomestic
Segment
International
Segment
Total
Revenue recognized over time$1,143,515 $132,891 $1,276,406 $1,143,470 $155,017 $1,298,487 
Revenue recognized at a point in time87,254 5,013 92,267 121,793 9,148 130,941 
Total revenues$1,230,769 $137,904 $1,368,673 $1,265,263 $164,165 $1,429,428 

Nine Months Ended
20202019
(In thousands)Domestic SegmentInternational SegmentTotalDomestic SegmentInternational SegmentTotal
Revenue recognized over time$3,410,827 $437,791 $3,848,618 $3,403,965 $445,320 $3,849,285 
Revenue recognized at a point in time234,570 27,575 262,145 358,240 42,841 401,081 
Total revenues$3,645,397 $465,366 $4,110,763 $3,762,205 $488,161 $4,250,366 

Transaction Price Allocated to Remaining Performance Obligations

As of September 30, 2020, the aggregate amount of transaction price allocated to performance obligations that are unsatisfied (or partially unsatisfied) for executed contracts approximates $13.01 billion of which we expect to recognize approximately 30% of the revenue over the next 12 months and the remainder thereafter.

Contract Liabilities

Customer payments received in advance of satisfaction of the related performance obligations are deferred as contract liabilities. Such amounts are classified in our condensed consolidated balance sheets as "Deferred revenue". During the nine months ended September 30, 2020, we recognized $306 million of revenues that were included in our contract liability balance at the beginning of such period.

Significant Customers

A certain customer within our Domestic segment comprised 19% and 12% of our consolidated revenues for the third quarters of 2020 and 2019, respectively; and 17% and 11% for the first nine months of 2020 and 2019, respectively. Amounts due from this same customer comprised 14% of client receivables as of September 30, 2020.

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(3) Receivables

A summary of net receivables is as follows:
(In thousands)September 30, 2020December 28, 2019
Client receivables$1,370,394 $1,245,670 
Less: Provision for expected credit losses151,167 106,075 
Total receivables, net$1,219,227 $1,139,595 

A reconciliation of the beginning and ending amount of our provision for expected credit losses is as follows:

(In thousands)
Provision for expected credit losses - balance at December 28, 2019$106,075 
Cumulative effect of accounting change (ASU 2016-13)4,606 
Additions charged to costs and expenses54,636 
Deductions(14,150)
Provision for expected credit losses - balance at September 30, 2020$151,167 

During the first nine months of 2020 and 2019, we received total client cash collections of $4.09 billion and $4.23 billion, respectively.

Expected Credit Losses

In June 2016, the FASB issued ASU 2016-13, Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments, which provides a new impairment model for certain financial assets that is based on expected losses rather than incurred losses. Such guidance impacts how we determine our allowance for estimated uncollectible client receivables. The standard requires use of the modified retrospective (cumulative effect) transition approach as of the beginning of the first reporting period in which the guidance was effective, which for the Company was the first quarter of 2020. Under this transition method, the cumulative effect from prior periods upon applying this new guidance was recognized in our condensed consolidated balance sheets as of December 29, 2019. We did not recast comparative periods.

A summary of such cumulative effect adjustment is as follows:
(In thousands)Increase/(Decrease)
Receivables, net$(4,606)
Retained earnings(4,606)

The cumulative effect adjustment is the result of providing an allowance on unbilled client receivables, for which we have an unconditional right to invoice and receive payment in the future.

Our estimates of expected credit losses for client receivables at both December 29, 2019 and September 30, 2020, were primarily based on historical credit loss experience and adjustments for certain asset-specific risk characteristics (i.e. known client financial hardship or bankruptcy). Exposure to credit losses may increase if our clients are adversely affected by changes in healthcare laws, reimbursement or payor models; economic pressures or uncertainty associated with local or global economic recessions; disruption associated with the COVID-19 pandemic; or other client-specific factors. Although we have historically not experienced significant credit losses, it is possible that there could be an adverse impact from potential adjustments to the carrying amount of client receivables as clients' cash flows are impacted by the COVID-19 pandemic and related economic uncertainty, which may be material.

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(4) Investments

Available-for-sale investments at September 30, 2020 were as follows:
(In thousands)Adjusted CostGross Unrealized GainsGross Unrealized LossesFair Value
Cash equivalents:
Money market funds$56,855 $— $— $56,855 
Time deposits19,676 — — 19,676 
Commercial Paper1,600 — — 1,600 
Government and corporate bonds1,150 — — 1,150 
Total cash equivalents79,281 — — 79,281 
Short-term investments:
Time deposits21,248 — — 21,248 
Commercial paper259,000 22 (7)259,015 
Government and corporate bonds192,536 559 (35)193,060 
Total short-term investments472,784 581 (42)473,323 
Long-term investments:
Government and corporate bonds91,605 180 (78)91,707 
Total available-for-sale investments$643,670 $761 $(120)$644,311 

Available-for-sale investments at December 28, 2019 were as follows:
(In thousands)Adjusted CostGross Unrealized GainsGross Unrealized LossesFair Value
Cash equivalents:
Money market funds$185,666 $— $— $185,666 
Time deposits64,286 — — 64,286 
Total cash equivalents249,952 — — 249,952 
Short-term investments:
Time deposits2,506 — — 2,506 
Government and corporate bonds83,272 52 (11)83,313 
Total short-term investments85,778 52 (11)85,819 
Long-term investments:
Government and corporate bonds96,186 91 (