2013 401(k) 11-K

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM 11-K

þ
ANNUAL REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the fiscal year ended: December 31, 2013

OR

o
TRANSITION REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

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
 
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
North Kansas City, MO 64117


CERNER CORPORATION FOUNDATIONS RETIREMENT PLAN
TABLE OF CONTENTS
 
 
Financial Statements:
 
 
 
 
 
 
 
 
 
Supplemental Schedule:
 
 
 
 
 
 
Exhibit:
 
 
 
Exhibit 23.1 - Consent of Independent Registered Public Accounting Firm
 



Report of Independent Registered Public Accounting Firm


Participants of the Cerner Corporation Foundations Retirement Plan and
The Investment Committee of Cerner Corporation

We have audited the accompanying statements of net assets available for benefits of the Cerner Corporation Foundations Retirement Plan (the Plan) as of December 31, 2013 and 2012, and the related statement of changes in net assets available for benefits for the year ended December 31, 2013. 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 standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. The Plan is not required to have, nor were we engaged to perform an audit of its internal control over financial reporting.  Our audits included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Plan's internal control over financial reporting.  Accordingly, we express no such opinion. An audit also includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, 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 benefits of the Cerner Corporation Foundations Retirement Plan as of December 31, 2013 and 2012, and the changes in its net assets available for benefits for the year ended December 31, 2013 in conformity with accounting principles generally accepted in the United States of America.

Our audits were conducted for the purpose of forming an opinion on the basic financial statements taken as a whole. The supplemental schedule of assets (held at end of year) is presented for the purpose of additional analysis and is not a required part of the basic financial statements but is 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. This supplemental schedule is the responsibility of the Plan's management. The supplemental schedule has been subjected to the auditing procedures applied in the audit of the basic 2013 financial statements and, in our opinion, is fairly stated in all material respects in relation to the basic financial statements taken as a whole.
 

/s/Brown Smith Wallace LLC
St. Louis, Missouri
June 13, 2014



1
Cerner Corporation Foundations Retirement Plan
Statements of Net Assets Available for Benefits

 
 
December 31,
(In thousands)
 
2013
 
2012
 
 
 
 
 
Investments at fair value (See Notes 3 and 4):
 
 
 
 
Cerner Corporation common stock
 
$
820,016

 
$
577,852

Mutual funds
 
568,442

 
404,603

Self-directed brokerage fund
 
34,058

 
28,237

Stable value fund
 
48,565

 
47,888

Total investments
 
1,471,081

 
1,058,580

 
 
 
 
 
Receivables:
 
 
 
 
Company contributions receivable
 
14,567

 
12,621

Notes receivable from participants
 
9,834

 
8,203

Other receivable
 
67

 
331

 
 
 
 
 
Total receivables
 
24,468

 
21,155

 
 
 
 
 
Net assets reflecting all investments at fair value
 
1,495,549

 
1,079,735

 
 
 
 
 
Adjustment from fair value to contract value for fully benefit-responsive investment contracts
 
(133
)
 
(1,004
)
 
 
 
 
 
Net assets available for benefits
 
$
1,495,416

 
$
1,078,731


See accompanying notes to financial statements.


2
Cerner Corporation Foundations Retirement Plan
Statement of Changes in Net Assets Available for Benefits

 
 
For the Year Ended December 31, 2013
(In thousands)
 
 
 
 
Additions to net assets attributed to:
 
 
Net appreciation in fair value of investments
 
$
353,884

Participant contributions
 
64,210

Company contributions
 
28,791

Rollover contributions
 
9,586

Interest, dividends, and other investment income
 
24,860

 
 
 
Total additions
 
481,331

 
 
 
Deductions from net assets attributed to:
 
 
Distributions to participants
 
64,419

Administrative expenses
 
227

 
 
 
Total deductions
 
64,646

 
 
 
Net increase
 
416,685

 
 
 
Net assets available for benefits at beginning of the year
 
1,078,731

 
 
 
Net assets available for benefits at end of the year
 
$
1,495,416

See accompanying notes to financial statements.



3
Cerner Corporation Foundations Retirement Plan
Notes to Financial Statements

(1) Description of the Plan
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 prospectus and Summary Plan Description for a more complete description of the Plan's provisions, which are available from Cerner Corporation, the Plan Administrator. The Plan is subject to the provisions of the Employee Retirement Income Security Act of 1974 (ERISA).
 
General
The Plan was adopted by the Board of Directors of Cerner Corporation effective November 1, 1987. All associates of Cerner Corporation (the Company) and its United States subsidiaries are eligible for participation in the Plan upon attaining age 18 except for the following:
•
Associates whose employment is governed by a collective bargaining agreement under which retirement benefits were the subject of good faith bargaining, unless such agreement expressly provides for participation in the Plan;
•
Certain non-resident aliens who have no earned income from sources within the United States;
•
Associates that would fall within the Internal Revenue Code's definition of a "leased employee;"
•
Associates who were previously not treated as associates of the Company, but who are reclassified as being common law employees of the Company or one of its affiliates; and
•
Associates who are not employed with a Participating Employer. The Plan's Participating Employers are generally all entities that (i) are a part of Cerner Corporation's controlled group of corporations, and (ii) are domestic corporations with their principal place of business in the United States.

Participant Contributions
Participants may elect to make pre-tax contributions from 1% to 80% of their eligible compensation each year to the Plan, subject to certain Internal Revenue Code (IRC) limitations (not to exceed $17,500 in 2013). New participants will automatically have 3% withheld from their compensation, unless they elect a different percentage or not to participate in the Plan. Additionally, participants who attained the age of 50 during 2013 were able to contribute an additional $5,500 in catch-up contributions. Participants also may generally contribute amounts representing distributions from other eligible retirement plans. Participants direct the investment of their contributions into various investment options offered by the Plan.

Company Contributions - First-Tier Match
If the Company elects in a given Plan year to make the first-tier match, all eligible participants contributing to the Plan will receive a matching contribution equal to 33% of the participant's deferral contribution. No first-tier match will be made on the participant's deferral contributions in excess of 6% of the participant's eligible compensation, as defined by the Plan. The first-tier match is discretionary, and the above percentages are subject to change by the Plan Administrator. An additional discretionary first-tier contribution also may be made at the end of the Plan year. Participants must be employed on the last day of the Plan year and have completed 92 consecutive days of service to be eligible for the additional discretionary contribution. First-tier contributions are invested directly in Company common stock. Participants can diversify their first-tier match after they have completed three years of service, even though they are only 60% vested at that time. See "Vesting" below for information about the vesting of Participant contributions. For the year ended December 31, 2013, the Company contributed $14.7 million in first-tier matching contributions.

Company Contributions - Second-Tier Match
The Company, at its discretion, may elect to make a second-tier match to the Plan. The contribution will be equal to a certain percentage of the participant's paid base compensation, as defined by the Plan. The percentage is determined by the Company and is dependent on whether certain Company financial metrics meet or exceed pre-established benchmarks. Participants who completed 92 consecutive days of service and are employed as of the last day of the Plan year are eligible to receive any approved second-tier match. To be eligible to receive the second-tier match

4

contribution, participants must defer at least 2% of their paid base compensation. Second-tier contributions are invested directly in Company common stock. Participants can diversify their second-tier Company match after they have completed three years of service, even though they are only 60% vested at that time. The total second-tier match amount was $15.9 million for the year ended December 31, 2013, which consisted of Company contributions of $13.9 million and forfeited funds of $2.0 million.

Company Contributions - Tiger Contributions
The Company, at its discretion, may elect to make an additional nonelective contribution available to those individuals who were former employees of the University of Missouri that became Cerner associates in connection with the Tiger Institute Strategic Alliance. Those associates receive prior service credits and may receive an additional nonelective contribution determined by the Company in consultation with its actuary for the 2010 - 2017 Plan years. Participants who are employed as of the last day of the Plan year may be eligible to receive an approved contribution. Tiger Contributions are invested directly in Company common stock. Participants can diversify their Tiger Contribution after they have completed three years of service. For the year ended December 31, 2013, the Company contributed $0.2 million in Tiger Contributions.

Company Contributions - Profit Sharing
The Company may also, at its discretion, make an additional profit sharing contribution to the Plan. If such contribution is made, it will be allocated among eligible participants based on each participant's W-2 compensation. Participants are eligible for the profit sharing contribution if they are employed on the last day of the Plan year and completed 92 consecutive days of employment with the Company during the Plan year. Profit sharing contributions are invested directly in Company common stock. Participants can diversify their profit sharing Company contribution after they have completed three years of service, even though they are only 60% vested at that time. For the year ended December 31, 2013 the Company did not make a profit sharing contribution.
 
Participant Accounts
Each participant's account is credited with the participant's and the Company's contributions and allocations of Plan earnings. Participant accounts will also be charged the applicable expense ratio for the funds in which such participant invests. Allocations are based on relative account balances. The benefit to which the participant is entitled is the benefit that can be provided from the participant's vested account.
 
Vesting
Participants vest immediately in their contributions plus actual earnings thereon. Vesting in the Company's contributions is based on years of service, except for Tiger Contributions, which are fully vested at the time of the contribution. Participants vest 20% in Company contributions after one year of service and 20% for each additional year of service until a participant is 100% vested upon completing five years of service. Participants become fully vested in their account balance upon normal retirement, permanent disability, or death.

Notes Receivable from Participants
Participants may borrow from their fund accounts a minimum of $1,000 up to a maximum of $50,000, or 50% of their vested account balance, whichever is less. Loan terms may not exceed five years, except where the loan is obtained for the purchase of a primary residence, in which case the duration may be extended to a term not to exceed 10 years. The loans are secured by the balance in the participant's account and bear interest at the current prime rate plus 1%. Interest rates on loans as of December 31, 2013 range from 4.25% to 9.25%. Principal and interest is paid ratably through scheduled payroll deductions.


5

Payments of Benefits and Transfers
Upon termination of service, a participant may elect to receive a lump-sum amount equal to the value of the vested interest in the participant's account. The Plan Administrator permits in-kind distributions of Company common stock. In such a case, only whole shares shall be distributed and the value of any fractional share will be distributed in cash.

Within a participant's account, the participant may make up to 12 transfers out of the Company stock per calendar year with no limit to the amount of stock the participant can move in any one transfer. These transfer provisions relate to Company stock held in a participant's account relating to participant contributions. Transfers out of Company stock held in a participant's account relating to Company contributions are prohibited until a participant has at least three years of service with the Company or in the event of termination of employment with the Company.

If a participant leaves employment and their vested benefit is less than $1,000 (excluding amounts attributable to rollovers), and the participant does not elect a direct rollover, a lump sum distribution will be made to the participant within a reasonable time after the termination of employment. This will occur regardless of whether the participant has consented to the distribution. If the value of the vested benefit is more than $1,000 and does not exceed $5,000, and the participant does not elect a distribution or direct rollover, the Plan will roll the distribution over to an individual retirement plan account designated by the Plan Administrator. This occurs regardless of whether the distribution is consented to by the participant.

Forfeited Accounts
At December 31, 2013 and 2012, forfeited non-vested accounts totaled $2.0 million and $2.3 million, respectively. These forfeited non-vested accounts were used to offset Company second-tier match contributions for those years respectively.

(2) Summary of Significant Accounting Policies
Basis of Presentation
The accompanying financial statements have been prepared on the accrual basis in conformity with accounting principles generally accepted in the United States of America.

Use of Estimates
The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities, and changes therein, and disclosure of contingent assets and liabilities. Actual results could differ from these estimates.

Investment Valuation and Income Recognition
The Plan invests in various investment securities. Investments in shares of mutual funds are valued at quoted market prices, which represent the net asset value of shares held by the Plan at year end. Investments in common stock, preferred stock and corporate bonds are stated at fair value based upon the closing price as reported on a recognized securities exchange on the last business day of the year.

The Stable Value Fund, an investment option discussed in further detail in Note (7) of these notes to the financial statements, is stated at fair value and then adjusted to contract value as the investment contracts are fully benefit-responsive.

Purchases and sales of securities are recorded on a trade-date basis. Interest income is recorded on the accrual basis. Dividends are recorded on the ex-dividend date.

Investment contracts held by a defined contribution plan are required to be reported at fair value. However, contract value is the relevant measurement attribute for that portion of the net assets available for benefits of a defined contribution

6

plan attributable to fully benefit-responsive investment contracts because contract value is the amount participants would receive if they were to initiate permitted transactions under the terms of the Plan. The statements of net assets available for benefits presents the fair value of the investment contracts as well as the adjustment of the fully benefit-responsive investment contracts from fair value to contract value. The statement of changes in net assets available for benefits is prepared on a contract value basis.

Contributions
Company and participant contributions are recorded in the period in which funds are remitted to the Plan, except for the second-tier match and Tiger contributions, which are recorded in the period in which they are earned.

Notes Receivable from Participants
Notes receivable from participants are measured at their unpaid principal balance plus any accrued but unpaid interest. Delinquent participant loans are reclassified as distributions based upon the terms of the Plan document.

Payment of Benefits
Benefits are recorded when paid.

Administrative Expenses
Certain expenses of the Plan are paid by the Company and are not included in the statement of changes in net assets available for benefits.

(3) Investments
The following presents investments that represent 5% or more of the Plan's net assets:
 
December 31,
(In thousands)
2013
 
2012
 
 
 
 
Cerner Corporation common stock
$
820,016

 
$
577,852

American Century Ultra Inv
111,029

 
82,531


During 2013, the Plan's investments (including gains and losses on investments bought and sold, as well as held during the year) appreciated in value as follows:
 
Year Ended
(In thousands)
December 31, 2013
 
 
Cerner Corporation common stock
$
253,447

Mutual funds
95,502

Self-directed brokerage fund
4,935

 
 
Total
$
353,884


(4) Fair Value Measurements
FASB ASC 820, Fair Value Measurements and Disclosures, provides the framework for measuring fair value. That framework provides a fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1 measurements) and the lowest priority to unobservable inputs (Level 3 measurements). The three levels of the fair value hierarchy under FASB ASC 820 are described below:
Level 1
Inputs to the valuation methodology are unadjusted quoted prices for identical assets or liabilities in active markets that the Plan has the ability to access.

7

Level 2
Inputs to the valuation methodology include quoted prices for similar assets and liabilities in active markets; quoted prices for identical or similar assets and liabilities in inactive markets; inputs other than quoted market prices that are observable for the asset or liability; inputs that are derived principally from or corroborated by observable market data by correlation or other means. If the asset or liability has a specified (contractual) term, the Level 2 input must be observable for substantially the full term of the asset or liability.
Level 3
Inputs to the valuation methodology are unobservable and significant to the fair value measurement.

The asset or liability's fair value measurement level within the fair value hierarchy is based on the lowest level of any input that is significant to the fair value measurement. Valuation techniques used need to maximize the use of observable inputs and minimize the use of unobservable inputs.

All assets have been valued using a market approach, except for Level 3 assets. Level 3 assets are valued using the income approach. Fair values for assets in Level 3 are calculated using assumptions about discounted cash flow and other present value techniques. There were no changes in the valuation techniques during the current year.

The preceding methods described may produce a fair value calculation that may not be indicative of the net realizable value or reflective of future fair values. Furthermore, although the Plan believes its valuation methods are appropriate and consistent with other market participants, the use of different methodologies or assumptions to determine the fair value of certain financial instruments could result in a different fair value measurement at the reporting date.

The following tables set forth by level, within the fair value hierarchy, the Plan's investments at fair value as of December 31, 2013 and 2012:

 
December 31, 2013
(In thousands)
Level 1
 
Level 2
 
Level 3
 
Total
 
 
 
 
 
 
 
 
Cerner Corporation common stock
$
820,016

 
$
—

 
$
—

 
$
820,016

 
 
 
 
 
 
 
 
Mutual funds:
 
 
 
 
 
 
 
Lifecycle funds
196,905

 
—

 
—

 
196,905

Bond funds
24,839

 
—

 
—

 
24,839

Large value funds
43,678

 
—

 
—

 
43,678

Large blend funds
57,620

 
—

 
—

 
57,620

Large growth funds
111,029

 
—

 
—

 
111,029

Small value funds
57,620

 
—

 
—

 
57,620

Mid blend funds
19,418

 
—

 
—

 
19,418

International / global equity funds
57,333

 
—

 
—

 
57,333

 
 
 
 
 
 
 
 
Self-directed brokerage fund:
 
 
 
 
 
 
 
Mutual funds
13,475

 
—

 
—

 
13,475

Common stock
15,867

 
—

 
—

 
15,867

Cash
4,104

 
—

 
—

 
4,104

Other
612

 
—

 
—

 
612

 
 
 
 
 
 
 
 
Stable value fund
—

 
—

 
48,565

 
48,565

 
 
 
 
 
 
 
 
Total investments at fair value
$
1,422,516

 
$
—

 
$
48,565

 
$
1,471,081


8

 
December 31, 2012
(In thousands)
Level 1
 
Level 2
 
Level 3
 
Total
 
 
 
 
 
 
 
 
Cerner Corporation common stock
$
577,852

 
$
—

 
$
—

 
$
577,852

 
 
 
 
 
 
 
 
Mutual funds:
 
 
 
 
 
 
 
Lifecycle funds
132,399

 
—

 
—

 
132,399

Bond funds
26,728

 
—

 
—

 
26,728

Large value funds
31,810

 
—

 
—

 
31,810

Large blend funds
37,751

 
—

 
—

 
37,751

Large growth funds
82,531

 
—

 
—

 
82,531

Small value funds
41,275

 
—

 
—

 
41,275

Mid blend funds
10,123

 
—

 
—

 
10,123

International / global equity funds
41,986

 
—

 
—

 
41,986

 
 
 
 
 
 
 
 
Self-directed brokerage fund:
 
 
 
 
 
 
 
Mutual funds
11,669

 
—

 
—

 
11,669

Common stock
11,965

 
—

 
—

 
11,965

Corporate bonds
86

 
—

 
—

 
86

Cash
4,101

 
—

 
—

 
4,101

Other
416

 
—

 
—

 
416

 
 
 
 
 
 
 
 
Stable value fund
—

 
—

 
47,888

 
47,888

 
 
 
 
 
 
 
 
Total investments at fair value
$
1,010,692

 
$
—

 
$
47,888

 
$
1,058,580


The table below sets forth a summary of changes in the fair value of the Plan's Level 3 assets for the year ended December 31, 2013.

 
Year Ended
(In thousands)
December 31, 2013
 
 
Beginning balance - December 31, 2012
$
47,888

Realized gains
605

Unrealized losses related to assets still held at the reporting date
(871
)
Purchases
15,085

Sales
(14,142
)
 
 
Ending balance - December 31, 2013
$
48,565


(5) Non-Participant-Directed Investment
Information about the net assets relating to the non-participant-directed investments is as follows:
 
December 31,
(In thousands)
2013
 
2012
 
 
 
 
Cerner Corporation common stock
$
585,053

 
$
410,713



9

The significant components of the changes in net assets relating to the non-participant-directed investments are as follows:
 
Year Ended
(In thousands)
December 31, 2013
 
 
Company contributions
$
26,837

Investment income
169,444

Distributions to participants
(22,417
)
Other fees and adjustments
476

 
 
Total
$
174,340


(6) Differences between Financial Statements and Form 5500
The following is a reconciliation of net assets available for benefits per the financial statements to Form 5500:
 
December 31,
(In thousands)
2013
 
2012
 
 
 
 
Net assets available for benefits per the financial statements
$
1,495,416

 
$
1,078,731

Adjustment from contract value to fair value for fully benefit-responsive investment contracts
133

 
1,004

 
 
 
 
Net assets available for benefits per the Form 5500
$
1,495,549

 
$
1,079,735


The following is a reconciliation of net appreciation in fair value of investments per the financial statements to the Form 5500:
 
Year Ended
(In thousands)
December 31, 2013
 
 
Net appreciation in fair value of investments per the financial statements
$
353,884

Change in adjustment from contract value to fair value for fully benefit-responsive investment contracts
(871
)
 
 
Net appreciation in fair value of investments per the Form 5500
$
353,013


(7) Investment Contract with J.P. Morgan Asset Management
The Stable Value Fund is separately managed by J.P. Morgan Investment Management, Inc. The Stable Value Fund invests in a common/collective trust fund and separate account which consists of a high quality fixed income portfolio, combined with investment contracts, commonly referred to as benefit-responsive wrap contracts, issued by insurance companies and other financial institutions for a fee. The fixed income portfolio consists of investment grade fixed income securities, primarily U.S. Treasury, agency, corporate, mortgage-backed, and asset-backed. The wrap contracts are credited with earnings on the underlying investments and charged for participant withdrawals and administrative expenses.
 
Because the wrap investment contracts are fully benefit-responsive, contract value is the relevant measurement attribute for that portion of the net assets available for benefits. Contract value, as reported to the Plan by Fidelity Management Trust Company (the Trustee), represents contributions made under the contract, plus earnings, less participant withdrawals and administrative expenses. Participants may ordinarily direct the withdrawal or transfer of all or a portion of their investment at contract value.

There are no reserves against contract value for credit risk of the contract issuer or otherwise. The fair value of the investment contracts at December 31, 2013 and 2012 was $48.6 million and $47.9 million, respectively. The crediting

10

interest rate is based on a formula agreed upon with the issuer, but it may not be less than zero percent. Such interest rates are reviewed on a quarterly basis for resetting.

Certain events limit the ability of the Plan to transact at contract value with the issuer. Such events include the following: (1) amendments to the Plan documents (including complete or partial plan termination or merger with another plan), (2) changes to the Plan's prohibition on competing investment options or deletion of equity wash provisions, (3) bankruptcy of the Plan sponsor or other Plan sponsor events (for example, divestitures or spin-offs of a subsidiary) that cause a significant withdrawal from the Plan, or (4) the failure of the trust to qualify for exemption from federal income taxes or any required prohibited transaction exemption under ERISA. The Plan Administrator does not believe that any events which would limit the Plan's ability to transact at contract value with participants are probable of occurring.

Generally, the wrapper contracts do not permit the issuer to terminate the contracts at a value other than contract value unless the Plan loses its qualified status, has incurred material breaches of responsibilities, or has made material and adverse changes to the provisions of the Plan. The investment contracts have a 30-day redemption notice requirement.
 
Year Ended
 
December 31, 2013
 
 
Average yields:
 
Based on actual earnings
1.31
%
Based on interest rate credited to participants
1.55
%

(8) Related Party Transactions
Certain Plan investments are shares of mutual funds managed by the Trustee; therefore, these transactions qualify as party-in-interest transactions (as such is defined under ERISA). Fees paid by the Plan to the Trustee for recordkeeping services amounted to $90,469 for the year ended December 31, 2013.

Certain Plan investments are shares of Cerner Corporation common stock. The Company is the Plan sponsor; therefore, these transactions are considered party-in-interest transactions. Certain receivables are loans to participant employees of the Company, and, therefore, these transactions are considered party-in-interest transactions.

(9) Plan Termination
Although it has not expressed any intent to do so, the Company has the right under the Plan to discontinue its contributions at any time and to terminate the Plan subject to the provisions of ERISA. In the event of Plan termination, participants would become 100% vested in their Company contributions.

(10) Tax Status
The Internal Revenue Service has determined and informed the Company by a letter dated September 22, 2011 that the Plan and the related trust are designed in accordance with applicable sections of the IRC. Although the Plan has been amended since filing for the determination letter, the Plan Administrator and the Plan's tax counsel believe that the Plan is designed and is currently being operated in compliance with the applicable requirements of the IRC.

Accounting principles generally accepted in the United States of America require Plan management to evaluate tax positions taken by the Plan and recognize a tax liability (or asset) if the Plan has taken an uncertain position that more likely than not would not be sustained upon examination by the Internal Revenue Service. The Plan Administrator has analyzed the tax positions taken by the Plan, and has concluded that as of December 31, 2013, there are no uncertain positions taken that would require recognition of a liability (or asset) or disclosure in the financial statements. The Plan is subject to routine audits by taxing jurisdictions, and currently, the Plan is being reviewed as part of the Cerner Corporation 2011 Income Tax Audit. The Plan Administrator believes it is no longer subject to income tax examinations for years prior to 2010.

11

(11) Risks and Uncertainties
The Plan invests in various investment securities. Investment securities are exposed to various risks such as interest rate, market, and credit risks. Due to the level of risk associated with certain investment securities, it is at least reasonably possible that changes in the values of investment securities will occur in the near term and that such changes could materially affect participants' account balances and the amounts reported in the statements of net assets available for benefits.

Included in investments at December 31, 2013 and 2012 are shares of the Company's common stock with a market value of $820.0 million and $577.9 million, respectively. This investment represents 55.7% and 54.6% of total investments at December 31, 2013 and 2012, respectively. A significant decline in the market value of the Company's common stock would have a material adverse effect on the Plan's net assets available for benefits.


12
Cerner Corporation Foundations Retirement Plan
Schedule H, line 4i - Schedule of Assets (Held at End of Year) - December 31, 2013
EIN: 43-1196944
Plan Number: 001

(In thousands)
 
 
 
**
 
 
 
 
-b-
 
-c-
 
-d-
 
-e-
-a-
 
Identity of issuer, borrower, lessor or other similar party
 
Description of investment, including maturity date, rate of interest, collateral, par or maturity value
 
Cost
 
Current Value
 
 
 
 
 
 
 
 
 
*
 
Cerner Corporation
 
Common Stock
 
$
195,755

 
$
820,016

 
 
 
 
 
 
 
 
 
 
 
Underlying Securities of Stable Value Fund:
 
 
 
 
 
 
 
 
JPMCB Liquidity Fund Variable Rate Short-term Investment Fund
 

 
 
 
2,834

 
 
JPMCB Intermediate Public Bond Fund
 
Common/Collective Trust; 2,040,575 units
 
 
 
26,832

 
 
AIG Insurance Wrapper
 
American General Contract #GA-1106460
 
 
 


 
 
Natixis Insurance Wrapper
 
Natixis Contract #Natixis 1984-01
 
 
 


 
 
State Street Bank Insurance Wrapper
 
State Street Bank Contract #107091
 
 
 


 
 
Metlife Separate Account #715
 
Separate Account; 189,749 units
 
 
 
18,899

 
 
Metlife Insurance Wrapper
 
Metlife Contract #GA-32580
 
 
 
 
 
 
Total Stable Value Fund
 
 
 
 
 
48,565

 
 
 
 
 
 
 
 
 
 
 
TRP Retirement 2005
 
Mutual fund
 
 
 
1,537

 
 
TRP Retirement 2010
 
Mutual fund
 
 
 
2,220

 
 
TRP Retirement 2015
 
Mutual fund
 
 
 
8,839

 
 
TRP Retirement 2020
 
Mutual fund
 
 
 
23,978

 
 
TRP Retirement 2025
 
Mutual fund
 
 
 
22,147

 
 
TRP Retirement 2030
 
Mutual fund
 
 
 
23,726

 
 
TRP Retirement 2035
 
Mutual fund
 
 
 
21,546

 
 
TRP Retirement 2040
 
Mutual fund
 
 
 
29,251

 
 
TRP Retirement 2045
 
Mutual fund
 
 
 
29,262

 
 
TRP Retirement 2050
 
Mutual fund
 
 
 
20,953

 
 
TRP Retirement 2055
 
Mutual fund
 
 
 
8,288

 
 
TRP Retirement Income
 
Mutual fund
 
 
 
5,158

 
 
ABF Large Cap Value
 
Mutual fund
 
 
 
43,678

 
 
American Century Gov't Bond Inv
 
Mutual fund
 
 
 
5,177

 
 
American Century Small Cap Inv
 
Mutual fund
 
 
 
57,620

 
 
American Century Ultra Inv
 
Mutual fund
 
 
 
111,029

 
 
Artisan International
 
Mutual fund
 
 
 
50,539

 
 
Columbia Acorn International Z
 
Mutual fund
 
 
 
6,794

*
 
Fidelity Spartan Extnd Market Index
 
Mutual fund
 
 
 
19,418

*
 
Fidelity Spartan 500 Index Inv
 
Mutual fund
 
 
 
28,790

 
 
Hartford Capital Appreciation
 
Mutual fund
 
 
 
28,830

 
 
Loomis Investment Grade BD
 
Mutual fund
 
 
 
19,662

 
 
 
 
Total mutual funds
 
 
 
568,442

 
 
 
 
 
 
 
 
 
 
 
Brokeragelink
 
Self-directed brokerage account
 
 
 
34,058

*
 
Participant loans
 
Loans with interest ranging from 4.25% to 9.25%
 
 
 
9,834

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
$
1,480,915

—————
*
Party-in-interest as defined by ERISA
**
Shares of Cerner Corporation common stock are partially nonparticipant-directed. In accordance with instructions to the Form 5500, the Plan is not required to disclose the cost component of the participant-directed investments.

13

SIGNATURE
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.
CERNER CORPORATION FOUNDATIONS RETIREMENT PLAN

Dated: June 13, 2014
By:
/s/ Marc G. Naughton X
 
 
Marc G. Naughton, Executive Vice President and Chief Financial Officer of Cerner Corporation