Segment Reporting

3 Months Ended

Apr. 04, 2015

Segment Reporting [Abstract]

Segment Reporting

Segment Reporting

We have two operating segments, Domestic and Global. Revenues are derived primarily from the sale of clinical, financial and administrative information systems and solutions. The cost of revenues includes the cost of third party consulting services, computer hardware, devices and sublicensed software purchased from manufacturers for delivery to clients. It also includes the cost of hardware maintenance and sublicensed software support subcontracted to the manufacturers. Operating expenses incurred by the geographic business segments consist of sales and client service expenses including salaries of sales and client service personnel, expenses associated with our managed services business, marketing expenses, communications expenses and unreimbursed travel expenses. “Other” includes expenses that have not been allocated to the operating segments, such as software development, general and administrative expenses, acquisition costs and related adjustments, share-based compensation expense, and certain amortization and depreciation. Performance of the segments is assessed at the operating earnings level by our chief operating decision maker, who is our Chief Executive Officer. Items such as interest, income taxes, capital expenditures and total assets are managed at the consolidated level and thus are not included in our operating segment disclosures. Accounting policies for each of the reportable segments are the same as those used on a consolidated basis.

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

The following table presents a summary of our operating segments and other expense for the three months endedApril 4, 2015 and March 29, 2014:

(In thousands)	Domestic		Global		Other			Total
Three Months Ended 2015
Revenues	$	870,507	$	125,582	$	—		$	996,089
Cost of revenues	142,717		25,943		—			168,660
Operating expenses	361,086		50,571		248,860			660,517
Total costs and expenses	503,803		76,514		248,860			829,177
Operating earnings (loss)	$	366,704	$	49,068	$	(248,860	)	$	166,912

(In thousands)	Domestic		Global		Other			Total
Three Months Ended 2014
Revenues	$	697,704	$	87,057	$	—		$	784,761
Cost of revenues	115,345		13,754		—			129,099
Operating expenses	273,990		45,069		158,600			477,659
Total costs and expenses	389,335		58,823		158,600			606,758
Operating earnings (loss)	$	308,369	$	28,234	$	(158,600	)	$	178,003