Medical Information Technology 10-Q 25 Sep 14 2013 Q3 Quarterly report Financial data

Document_and_Entity_Informatio

Document and Entity Information (USD $)	9 Months Ended
	Sep. 30, 2013
Document and Entity Information [Abstract]	'
Document Type	'10-Q
Amendment Flag	'false
Document Period End Date	30-Sep-13
Document Fiscal Year Focus	'2013
Document Fiscal Period Focus	'Q3
Entity Registrant Name	'Medical Information Technology, Inc.
Entity Central Index Key	'0001011452
Current Fiscal Year End Date	'--12-31
Entity Filer Category	'Non-accelerated Filer
Entity Public Float	$0
Entity Common Stock, Shares Outstanding	37,115,854
Entity Well-known Seasoned Issuer	'No
Entity Voluntary Filers	'No
Entity Current Reporting Status	'Yes

Consolidated_Balance_Sheet

Consolidated Balance Sheet (USD $)	Sep. 30, 2013	Dec. 31, 2012
Statement of Financial Position [Abstract]	'	'
Cash and equivalents	$36,091,921	$55,248,919
Marketable securities	367,268,049	329,655,272
Trade receivables, net of reserve	51,238,187	48,250,846
Other receivables and prepaid	13,899,226	4,756,102
Deferred taxes	'	9,457,643
Current assets	468,497,383	447,368,782
Computer equipment	13,065,949	14,245,358
Furniture and fixtures	66,582,357	64,611,731
Buildings	218,063,559	189,997,036
Land	42,863,565	40,329,565
Accumulated depreciation	-130,048,314	-125,994,543
Fixed assets	210,527,116	183,189,147
Other assets	15,085,833	16,630,096
Deferred taxes	7,215,322	'
Total assets	701,325,654	647,188,025
Accounts payable	729,962	136,846
Taxes payable	0	4,863,915
Accrued expenses	53,074,077	55,098,832
Deferred revenue	47,704,679	31,512,690
Deferred Taxes	9,296,565	'
Current Liabilities	110,805,283	91,612,283
Tax reserves	20,925,288	17,779,175
Total liabilities	131,730,571	109,391,458
Common stock value	37,115,854	36,935,201
Additional paid-in capital	119,607,959	111,659,227
Retained income	345,290,740	333,185,351
Unrealized security gains, net of tax	67,580,530	56,016,788
Shareholder equity	569,595,083	537,796,567
Total liabilities and shareholder equity	$701,325,654	$647,188,025

Consolidated_Balance_Sheet_Par

Consolidated Balance Sheet (Parenthetical) (USD $)	Sep. 30, 2013	Dec. 31, 2012
Statement of Financial Position [Abstract]	'	'
Common stock par value	$1	$1
Common stock shares authorized	40,000,000	40,000,000
Common stock shares issued	37,115,854	36,935,201
Common stock shares outstanding	37,115,854	36,935,201

Consolidated_Cash_Flow_Stateme

Consolidated Cash Flow Statement (USD $)	9 Months Ended
	Sep. 30, 2013	Sep. 30, 2012
Statement of Cash Flows [Abstract]	'	'
Net income	$95,480,574	$98,544,019
Depreciation expense	9,477,241	8,891,803
Gain on sale of marketable security	-2,544,113	-11,061,656
Gain on sale of fixed assets	-44,000	'
Deferred taxes on unrealized security gain	'	-5,379,213
Change in trade receivables, net of reserve	-2,987,340	10,234,782
Change in other receivables and prepaid	-6,880,736	636,827
Change in accounts payable	593,116	1,571,115
Change in taxes payable	-7,126,306	-42,857
Change in accrued expenses	-2,024,755	2,269,227
Change in deferred revenue	16,191,989	-5,793,073
Change in deferred taxes	952,774	4,119,386
Change in tax reserves	3,146,113	702,034
Net cash from operations	104,234,557	104,692,395
Purchases of marketable securities	-20,937,683	-70,191,915
Sales of marketable securities	8,018,872	36,352,980
Purchases of fixed assets	-36,831,210	-19,660,444
Sales of fixed assets	60,000	'
Change in other assets	1,544,263	1,559,826
Net cash used in investing	-48,145,758	-51,939,553
Sales of common stock	8,129,385	10,485,679
Dividends paid	-83,375,182	-79,280,458
Net cash used in financing	-75,245,797	-68,794,779
Net change in cash and equivalents	-19,156,998	-16,041,939
Cash and equivalents at beginning	55,248,919	59,847,020
Cash and equivalents at end	$36,091,921	$43,805,081

Consolidated_Income_Statement

Consolidated Income Statement (USD $)	3 Months Ended		9 Months Ended
	Sep. 30, 2013	Sep. 30, 2012	Sep. 30, 2013	Sep. 30, 2012
Income Statement [Abstract]	'	'	'	'
Product revenue	$61,638,654	$80,375,465	$208,698,095	$237,248,080
Service revenue	76,782,991	71,735,490	224,940,401	209,733,792
Total revenue	138,421,645	152,110,955	433,638,496	446,981,872
Operations, development	67,524,187	71,576,983	215,259,291	210,580,530
Selling, G & A	31,801,269	31,165,151	93,287,399	92,339,523
Operating expense	99,325,456	102,742,134	308,546,690	302,920,053
Operating income	39,096,189	49,368,821	125,091,806	144,061,819
Other income	7,556,352	7,879,766	16,128,574	19,247,257
Other expense	1,670,641	1,532,981	4,467,874	4,575,057
Pretax income	44,981,900	55,715,606	136,752,506	158,734,019
State income tax	837,363	4,420,000	7,206,363	11,470,000
Federal income tax	12,337,569	17,392,000	34,065,569	48,720,000
Income tax	13,174,932	21,812,000	41,271,932	60,190,000
Net income	31,806,968	33,903,606	95,480,574	98,544,019
Change in net unrealized gains	-7,656,970	115,649	11,563,741	19,717,604
Comprehensive income	$24,149,998	$34,019,255	$107,044,315	$118,261,623

Available_For_Sale_Securities

Available For Sale Securities	9 Months Ended
	Sep. 30, 2013
Available For Sale Securities (Tables) [Abstract]	'
Available For Sale Securities	'
	Note 2. Available For Sale Securities
	MEDITECH follows the provisions of ASC 320-10, Investments - Debt and Equity Securities, which requires marketable securities be classified as trading, available-for-sale or held-to-maturity. MEDITECH classifies its marketable securities as available-for-sale and records them at fair value with any unrealized gains or losses, net of tax, reported as a component of shareholder equity. The fair value was determined based on quoted prices in active markets. ASC 320-10 requires that for each individual security classified as available-for-sale, a company shall determine whether a decline in fair value below the cost basis is temporary in nature. If the decline in fair value is not judged as such, the cost basis of the individual security shall be reduced to fair value and the amount of the write-down shall be reflected in earnings.
	MEDITECH follows the provisions of ASC 320-10-35 Subsequent Measurement, and evaluates its marketable securities for other-than-temporary impairment using an impairment model consistent with a debt security. The factors considered include the severity and duration of the loss, the intent and ability to hold the securities for an extended period of time until recovery, and whether issuers are current on dividend payments and maintain investment grade ratings. Finally, the effect of fluctuating interest rates, current economic and industry conditions, and the issuers' current financial position are also taken into consideration.
	MEDITECH follows the provisions of ASC 820-10, Fair Value Measurements and Disclosures, which provides for expanded disclosure and guidelines to determine fair market value of assets and liabilities. ASC 820-10 applies whenever other standards require or permit assets and liabilities to be measured at fair value, but does not expand the use of fair value in any new circumstances. MEDITECH's marketable securities represent assets measured at fair value on a recurring basis, and are considered Level 1 assets as defined by ASC 820-10.
	The following table indicates the cost net of write-downs, unrealized gains, unrealized losses and fair market value of MEDITECH's securities. The unrealized gains and the unrealized losses have been accounted for within comprehensive income. MEDITECH has evaluated the unrealized losses as of September 30, 2013 and has concluded that the unrealized losses are temporary in nature.
		Dec 31, 2012	Sep 30, 2013
	Cost net of write-downs	$272,879,085	$288,342,010
	Unrealized gains	58,012,812	79,696,811
	Unrealized losses	-1,236,625	-770,772
	Fair market value	$329,655,272	$367,268,049

Comprehensive_Income_Presentat

Comprehensive Income Presentation	9 Months Ended
	Sep. 30, 2013
Comprehensive Income Presentation (Tables) [Abstract]	'
Comprehensive Income Presentation	'
	Note 6. Comprehensive Income Presentation
	Effective January 1, 2012 MEDITECH adopted the provisions of ASU 2011-05, Presentation of Comprehensive Income, which establishes standards for reporting comprehensive income and its components in financial statements. Comprehensive income is the total of net income and all other non-owner changes in equity including items such as net unrealized gains or losses on marketable securities classified as available for sale, foreign currency translation adjustments and minimum pension liability adjustments. In MEDITECH's case net income plus the change in net unrealized security gains or losses is shown as comprehensive income in the income statement.
		3 months	3 months	9 months	9 months
		Sep 30, 2012	Sep 30, 2013	Sep 30, 2012	Sep 30, 2013
	Change in unrealized holding gains	$438,953	($6,102,986)	$20,040,908	$13,117,724
	Reclassification of realized gains	-323,304	-1,553,983	-323,304	-1,553,983
	Change in net unrealized gains	$115,649	($7,656,970)	$19,717,604	$11,563,741

Earnings_Per_Share

Earnings Per Share	9 Months Ended
	Sep. 30, 2013
Earnings Per Share (Tables) [Abstract]	'
Earnings Per Share	'
	Note 5. Earnings Per Share
	MEDITECH follows the provisions of ASC 260-10, Earnings per Share, which requires reporting both basic and diluted earnings per share. MEDITECH has no common share equivalents such as preferred stock, warrants or stock options which would dilute earnings per share. Thus, earnings per share is computed by dividing net income by the weighted average number of common shares outstanding during the applicable period. The increase in the average number of shares reflects the annual issuance of shares sold to staff members in February pursuant to the 2004 Stock Purchase Plan and contributed to the MEDITECH Profit Sharing Trust in December.
		3 months	3 months	9 months	9 months
		Sep 30, 2012	Sep 30, 2013	Sep 30, 2012	Sep 30, 2013
	Net income	$33,903,606	$31,806,968	$98,544,019	$95,480,574
	Average number of shares	36,758,106	37,095,781	36,758,106	37,095,781
	Earnings per share	$0.92	$0.86	$2.68	$2.57

Equity_Method_Investments

Equity Method Investments	9 Months Ended
	Sep. 30, 2013
Equity Method Investments [Abstract]	'
Equity Method Investments	'
	Note 3. Equity Method Investments
	MEDITECH follows the provisions of ASC 323-10, Investments - Equity Method and Joint Ventures, and as such, accounts for the equity investment in Meditech South Africa in accordance with the cost method. Meditech South Africa licenses MEDITECH's software technology and re-licenses it to its respective customers. Meditech South Africa serves a market niche which is part of the overall medical market but is outside of the hospital market which MEDITECH serves. Meditech holds a fully collateralized mortgage note for a loan to Meditech South Africa to purchase land and a building used as its corporate headquarters. MEDITECH believes the fair value of this investment and loan balance approximates its September 30, 2013 carrying value.
	During the 2nd quarter 2007 MEDITECH acquired Patient Care Technologies, Inc. (PtCT), a company engaged in the development, manufacture, licensing and support of computer software products for the home health care market. MEDITECH accounted for this acquisition under the purchase method of accounting in accordance with ASC 805-10, Business Combinations. PtCT merged with and into MEDITECH effective December 31, 2009.
	During the 1st quarter 2011 MEDITECH acquired LSS Data Systems, Inc. (LSS), a company engaged in the development, manufacture, licensing and support of ambulatory information system software for physician practices. MEDITECH accounted for this acquisition under the purchase method of accounting in accordance with ASC 805-10, Business Combinations.
	MEDITECH follows the provisions of ASC 350-20-35 Intangibles and Goodwill Impairment Evaluation - Qualitative Testing. MEDITECH annually assesses qualitative factors of its goodwill and intangible assets for impairment to determine whether it is more likely than not that the fair value of a reporting unit is less than its carrying amount. The evaluation assesses all relevant economic, industry, regulatory, and legal facts and circumstances as well as overall performance. If, after assessing the totality of such facts and circumstances, MEDITECH determines that it is more likely than not that the fair value of a reporting unit is not less than its carrying amount, then no further goodwill impairment testing is necessary.

Income_Tax_Accounting

Income Tax Accounting	9 Months Ended
	Sep. 30, 2013
Income Tax Accounting [Abstract]	'
Income Tax Accounting	'
	Note 4. Income Tax Accounting
	MEDITECH follows the provisions of ASC 740-10, Accounting for Income Taxes. Deferred taxes relate to the earlier recognition of certain revenue and the later recognition of certain expenses for tax purposes. They also relate to the increase in fair market value over the cost basis of marketable securities. Tax reserves relate to the uncertainty of domestic production activities deduction and state nexus. Key judgments are reviewed annually and adjusted to reflect current assessments. The years 2010 through 2012 are subject to examination by the IRS, and various years are subject to examination by state tax authorities.
	No R&D tax credit was taken in 2012. The amount recently reinstated for all of 2012 has been reflected in the 1st quarter of 2013 which has significantly reduced the effective tax rate.

Recent_Accounting_Pronouncemen

Recent Accounting Pronouncement	9 Months Ended
	Sep. 30, 2013
Recent Accounting Pronouncement [Abstract]	'
Recent Accounting Pronouncement	'
	Note 8. Recent Accounting Pronouncement
	In May 2014, the FASB issued updated accounting guidance on revenue recognition. This update provides a comprehensive new revenue recognition model that requires revenue to be recognized in a manner to depict the transfer of goods or services to a customer at an amount that reflects the consideration expected to be received in exchange for those goods or services. This guidance is effective for annual reporting periods, and any interim periods within those annual periods, that begin after December 15, 2016 and allows for either full retrospective or modified retrospective application, with early adoption not permitted. Accordingly, the standard is effective for the Company on January 1, 2017. The Company is currently evaluating the adoption method it will apply and the impact that this guidance will have on its financial statements and related disclosures.

Segment_Reporting

Segment Reporting	9 Months Ended
	Sep. 30, 2013
Segment Reporting (Tables) [Abstract]	'
Segment Reporting	'
	Note 7. Segment Reporting
	MEDITECH follows the provisions of ASC 280-10, Segment Reporting. Based on the criteria set forth in ASC 280-10, MEDITECH currently operates in one operating segment, medical software and services. MEDITECH derives substantially all of its operating revenue from the sale and support of one group of similar products and services. All of MEDITECH's assets are located within the United States. The following table indicates the operating revenue percentage based on location of customer.
		3 months	3 months	9 months	9 months
		Sep 30, 2012	Sep 30, 2013	Sep 30, 2012	Sep 30, 2013
	United States	90%	89%	91%	89%
	Canada	9%	10%	8%	10%
	All others	1%	1%	1%	1%

Significant_Accounting_Policie

Significant Accounting Policies	9 Months Ended
	Sep. 30, 2013
Significant Accounting Policies (Policies) [Abstract]	'
Significant Accounting Policies	'
	Note 1. Significant Accounting Policies
	The unaudited financial statements presented herein have been prepared in accordance with the instructions to Form 10-Q and do not include all of the information and note disclosures required by generally accepted accounting principles. These statements should be read in conjunction with the financial statements and notes thereto for the year ended December 31, 2012 included in MEDITECH's Form 10-K filed on January 31, 2013. The unaudited financial statements presented herein have not been audited by our Independent Registered Public Accounting Firm in accordance with the standards of the Public Company Accounting Oversight Board (United States), but in the opinion of management such financial statements include all normal recurring adjustments necessary to present fairly MEDITECH's financial position, operating results and cash flow.
	Revenue Recognition Adjustments
	MEDITECH evaluated the accounting for revenue recognition and subsequently determined certain revenues and associated expenses, including other identified errors, were not calculated correctly. Such cumulative errors were not material on a quantitative or qualitative basis using both the roll-over and iron-curtain methods as defined in SAB No. 108. At September 30, 2013 the error correction amounted to adjustments to total revenue, operating expense, pretax income and net income and are not considered material to current or prior consolidated financial statements. Such error correction adjustments are as follows.
	Error Correction	3 months	9 months
	Adjustments	Sep 30, 2013	Sep 30, 2013
	Total Revenue	-5,456,000	-17,263,000
	Operating Expense	-5,049,000	-4,963,000
	Pretax Income	-412,000	-12,305,000
	Net Income	1,303,000	-4,928,000

Significant_Accounting_Policie1

Significant Accounting Policies (Policies)	9 Months Ended
	Sep. 30, 2013
Significant Accounting Policies (Policies) [Abstract]	'
Significant Accounting Policies	'
	The unaudited financial statements presented herein have been prepared in accordance with the instructions to Form 10-Q and do not include all of the information and note disclosures required by generally accepted accounting principles. These statements should be read in conjunction with the financial statements and notes thereto for the year ended December 31, 2012 included in MEDITECH's Form 10-K filed on January 31, 2013. The unaudited financial statements presented herein have not been audited by our Independent Registered Public Accounting Firm in accordance with the standards of the Public Company Accounting Oversight Board (United States), but in the opinion of management such financial statements include all normal recurring adjustments necessary to present fairly MEDITECH's financial position, operating results and cash flow.
	Revenue Recognition Adjustments
	MEDITECH evaluated the accounting for revenue recognition and subsequently determined certain revenues and associated expenses, including other identified errors, were not calculated correctly. Such cumulative errors were not material on a quantitative or qualitative basis using both the roll-over and iron-curtain methods as defined in SAB No. 108. At September 30, 2013 the error correction amounted to adjustments to total revenue, operating expense, pretax income and net income and are not considered material to current or prior consolidated financial statements. Such error correction adjustments are as follows.
	Error Correction	3 months	9 months
	Adjustments	Sep 30, 2013	Sep 30, 2013
	Total Revenue	-5,456,000	-17,263,000
	Operating Expense	-5,049,000	-4,963,000
	Pretax Income	-412,000	-12,305,000
	Net Income	1,303,000	-4,928,000

Available_For_Sale_Securities_

Available For Sale Securities (Tables)	9 Months Ended
	Sep. 30, 2013
Available For Sale Securities (Tables) [Abstract]	'
Available For Sale Securities	'
	The following table indicates the cost net of write-downs, unrealized gains, unrealized losses and fair market value of MEDITECH's securities. The unrealized gains and the unrealized losses have been accounted for within comprehensive income. MEDITECH has evaluated the unrealized losses as of September 30, 2013 and has concluded that the unrealized losses are temporary in nature.
		Dec 31, 2012	Sep 30, 2013
	Cost net of write-downs	$272,879,085	$288,342,010
	Unrealized gains	58,012,812	79,696,811
	Unrealized losses	-1,236,625	-770,772
	Fair market value	$329,655,272	$367,268,049

Comprehensive_Income_Presentat1

Comprehensive Income Presentation (Tables)	9 Months Ended
	Sep. 30, 2013
Comprehensive Income Presentation (Tables) [Abstract]	'
Comprehensive Income Presentation	'
	Effective January 1, 2012 MEDITECH adopted the provisions of ASU 2011-05, Presentation of Comprehensive Income, which establishes standards for reporting comprehensive income and its components in financial statements. Comprehensive income is the total of net income and all other non-owner changes in equity including items such as net unrealized gains or losses on marketable securities classified as available for sale, foreign currency translation adjustments and minimum pension liability adjustments. In MEDITECH's case net income plus the change in net unrealized security gains or losses is shown as comprehensive income in the income statement.
		3 months	3 months	9 months	9 months
		Sep 30, 2012	Sep 30, 2013	Sep 30, 2012	Sep 30, 2013
	Change in unrealized holding gains	$438,953	($6,102,986)	$20,040,908	$13,117,724
	Reclassification of realized gains	-323,304	-1,553,983	-323,304	-1,553,983
	Change in net unrealized gains	$115,649	($7,656,970)	$19,717,604	$11,563,741

Earnings_Per_Share_Tables

Earnings Per Share (Tables)	9 Months Ended
	Sep. 30, 2013
Earnings Per Share (Tables) [Abstract]	'
Earnings Per Share	'
	MEDITECH follows the provisions of ASC 260-10, Earnings per Share, which requires reporting both basic and diluted earnings per share. MEDITECH has no common share equivalents such as preferred stock, warrants or stock options which would dilute earnings per share. Thus, earnings per share is computed by dividing net income by the weighted average number of common shares outstanding during the applicable period. The increase in the average number of shares reflects the annual issuance of shares sold to staff members in February pursuant to the 2004 Stock Purchase Plan and contributed to the MEDITECH Profit Sharing Trust in December.
		3 months	3 months	9 months	9 months
		Sep 30, 2012	Sep 30, 2013	Sep 30, 2012	Sep 30, 2013
	Net income	$33,903,606	$31,806,968	$98,544,019	$95,480,574
	Average number of shares	36,758,106	37,095,781	36,758,106	37,095,781
	Earnings per share	$0.92	$0.86	$2.68	$2.57

Segment_Reporting_Tables

Segment Reporting (Tables)	9 Months Ended
	Sep. 30, 2013
Segment Reporting (Tables) [Abstract]	'
Segment Reporting	'
	MEDITECH follows the provisions of ASC 280-10, Segment Reporting. Based on the criteria set forth in ASC 280-10, MEDITECH currently operates in one operating segment, medical software and services. MEDITECH derives substantially all of its operating revenue from the sale and support of one group of similar products and services. All of MEDITECH's assets are located within the United States. The following table indicates the operating revenue percentage based on location of customer.
		3 months	3 months	9 months	9 months
		Sep 30, 2012	Sep 30, 2013	Sep 30, 2012	Sep 30, 2013
	United States	90%	89%	91%	89%
	Canada	9%	10%	8%	10%
	All others	1%	1%	1%	1%

Available_For_Sale_Securities_1

Available For Sale Securities (Details 1) (USD $)	Sep. 30, 2013	Dec. 31, 2012
Available For Sale Securities (Tables) [Abstract]	'	'
Cost net of write-downs	$288,342,010	$272,879,085
Unrealized gains	79,696,811	58,012,812
Unrealized losses	-770,772	-1,236,625
Fair market value	$367,268,049	$329,655,272

Comprehensive_Income_Presentat2

Comprehensive Income Presentation (Details 1) (USD $)	3 Months Ended		9 Months Ended
	Sep. 30, 2013	Sep. 30, 2012	Sep. 30, 2013	Sep. 30, 2012
Comprehensive Income Note [Abstract] (Deprecated 2011-01-31)	'	'	'	'
Change in unrealized holding gains	($6,102,986)	$438,953	$13,117,724	$20,040,908
Reclassification of realized gains	-1,553,983	-323,304	-1,553,983	-323,304
Change in net unrealized gains	($7,656,970)	$115,649	$11,563,741	$19,717,604

Earnings_Per_Share_Details_1

Earnings Per Share (Details 1) (USD $)	3 Months Ended		9 Months Ended
	Sep. 30, 2013	Sep. 30, 2012	Sep. 30, 2013	Sep. 30, 2012
Earnings Per Share (Tables) [Abstract]	'	'	'	'
Net income	$31,806,968	$33,903,606	$95,480,574	$98,544,019
Average number of shares	37,095,781	36,758,106	37,095,781	36,758,106
Earnings per share	$0.86	$0.92	$2.57	$2.68

Segment_Reporting_Details_1

Segment Reporting (Details 1) (USD $)	3 Months Ended		9 Months Ended
	Sep. 30, 2013	Sep. 30, 2012	Sep. 30, 2013	Sep. 30, 2012
Segment Reporting (Tables) [Abstract]	'	'	'	'
United States	89.00%	90.00%	89.00%	91.00%
Canada	10.00%	9.00%	10.00%	8.00%
All others	$1	$1	$1	$1