Medical Information Technology 10-Q 9 Feb 15 2014 Q1 Quarterly report Financial data

Document_and_Entity_Informatio

Document and Entity Information	3 Months Ended
	Mar. 31, 2014
Document and Entity Information [Abstract]
Document Type	10-Q
Amendment Flag	FALSE
Document Period End Date	31-Mar-14
Document Fiscal Year Focus	2014
Document Fiscal Period Focus	Q1
Entity Registrant Name	Medical Information Technology, Inc.
Entity Central Index Key	1011452
Current Fiscal Year End Date	-19
Entity Filer Category	Non-accelerated Filer
Entity Common Stock, Shares Outstanding	37,140,854

Balance_Sheet

Balance Sheet (USD $)	Mar. 31, 2014	Dec. 31, 2013
Statement of Financial Position [Abstract]
Cash and equivalents	$34,680,473	$42,481,997
Marketable securities	340,125,220	374,023,591
Trade receivables, net of reserve	46,922,639	50,638,740
Other receivables and prepaid	25,483,153	10,681,915
Current assets	447,211,485	477,826,243
Computer equipment	13,692,114	13,416,004
Furniture and fixtures	67,932,881	67,845,622
Buildings	230,628,919	225,948,241
Land	42,233,123	42,730,565
Accumulated depreciation	-137,211,596	-133,505,381
Fixed assets	217,275,441	216,435,051
Other assets	14,684,575	15,317,332
Deferred Taxes	6,834,438	6,897,379
Total assets	686,005,939	716,476,005
Accounts payable	851,098	1,534,485
Taxes payable	3,472,134	2,054,703
Accrued expenses	19,862,715	53,976,811
Deferred revenue	33,142,764	35,503,326
Deferred taxes	24,621,418	18,649,594
Current liabilities	81,950,129	111,718,919
Tax reserves	19,198,899	18,512,277
Total liabilities	101,149,028	130,231,196
Common stock value	37,140,854	37,140,854
Additional paid-in capital	120,707,959	120,707,959
Retained income	389,290,518	355,301,450
Net unrealized security gains	37,717,580	73,094,546
Shareholder equity	584,856,911	586,244,809
Total liabilities and shareholder equity	$686,005,939	$716,476,005

Balance_Sheet_Parenthetical

Balance Sheet (Parenthetical) (USD $)	Mar. 31, 2014	Dec. 31, 2013
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	37,140,854	37,140,854
Common stock shares outstanding	37,140,854	37,140,854

Cash_Flow_Statement

Cash Flow Statement (USD $)	3 Months Ended
	Mar. 31, 2014	Mar. 31, 2013
Statement of Cash Flows [Abstract]
Net income	$61,844,708	$35,479,098
Depreciation and amortization expense	4,034,141	3,090,110
Gain on sale of marketable security	-41,381,522
Deferred taxes on unrealized security gain		-13,157,019
Change in trade receivables, net of reserve	3,716,101	-4,789,717
Change in other receivables and prepaid	-14,801,238	48,581
Change in accounts payable	-683,387	313,196
Change in taxes payable	1,417,431	3,033,601
Change in accrued expenses	-34,114,096	-30,617,429
Change in deferred revenue	-2,360,562	2,651,031
Change in deferred taxes, net	2,152,742	14,346,078
Change in tax reserves	686,622	241,250
Net cash from (used in) operations	-19,489,060	10,638,780
Purchases of marketable securities	-21,279,378
Sales of marketable securities	65,064,328
Purchases of fixed assets	-4,391,300	-2,638,352
Change in other assets	149,526	522,792
Net cash (used in) from investing	39,543,176	-2,115,560
Sales of common stock		8,129,385
Dividends paid	-27,855,640	-27,701,399
Net cash used in financing	-27,855,640	-19,572,014
Net change in cash and equivalents	-7,801,524	-11,048,794
Cash and equivalents at beginning	42,481,997	55,248,919
Cash and equivalents at end	$34,680,473	$44,200,125

Income_Statement

Income Statement (USD $)	3 Months Ended
	Mar. 31, 2014	Mar. 31, 2013
Income Statement [Abstract]
Product revenue	$55,665,102	$78,059,537
Service revenue	75,036,827	73,123,520
Total revenue	130,701,929	151,183,057
Operations, development	73,656,731	73,609,607
Selling, G & A	27,931,404	31,963,147
Operating expense	101,588,135	105,572,754
Operating income	29,113,794	45,610,303
Other income	46,673,431	4,215,281
Other expense	1,767,517	1,439,486
Pretax income	74,019,708	48,386,098
State income tax	2,650,000	3,549,000
Federal income tax	9,525,000	9,358,000
Income tax	12,175,000	12,907,000
Net income	61,844,708	35,479,098
Change in net unrealized security gains	-35,376,966	19,735,529
Comprehensive income	$26,467,742	$55,214,627

Available_For_Sale_Securities

Available For Sale Securities	3 Months Ended
	Mar. 31, 2014
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, comprised of common and preferred stock, 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 March 31, 2014 and has concluded that the unrealized losses are temporary in nature.
		Dec 31, 2013	Mar 31, 2014
	Cost net of write-downs	$279,666,014	$277,262,585
	Unrealized gains	95,805,377	62,940,162
	Unrealized losses	-1,447,800	-77,527
	Fair market value	$374,023,591	$340,125,220

Comprehensive_Income_Presentat

Comprehensive Income Presentation	3 Months Ended
	Mar. 31, 2014
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
		Mar 31, 2013	Mar 31, 2014
	Changes in unrealized gains	19,735,529	-4,034,206
	Reclassification of realized gains		-31,342,760
	Change in net unrealized gains	19,735,529	-35,376,966

Earnings_Per_Share

Earnings Per Share	3 Months Ended
	Mar. 31, 2014
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. In general, 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
		Mar 31, 2013	Mar 31, 2014
	Net income	$35,479,098	$61,844,708
	Average number of shares	37,055,636	37,140,854
	Earnings per share	$0.96	$1.67

Equity_Method_Investments

Equity Method Investments	3 Months Ended
	Mar. 31, 2014
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 March 31, 2014 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. LSS merged with and into MEDITECH effective December 31, 2013.
	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	3 Months Ended
	Mar. 31, 2014
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 2011 through 2013 are subject to examination by the IRS, and various years are subject to examination by state tax authorities.
	The research tax credit reinstated for all of 2012 has been reflected in the 1st quarter of 2013 which had significantly reduced the effective tax rate. No research tax credit has been taken thus far in 2014, however there were no income taxes associated with the sale of previously impaired marketable securities significantly reducing the effective tax rate.

Segment_Reporting

Segment Reporting	3 Months Ended
	Mar. 31, 2014
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
		Mar 31, 2013	Mar 31, 2014
	United States	88%	90%
	Canada	10%	9%
	All others	2%	1%

Significant_Accounting_Policie

Significant Accounting Policies	3 Months Ended
	Mar. 31, 2014
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, 2013 included in MEDITECH's Form 10-K filed on September 25, 2014. 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.

Significant_Accounting_Policie1

Significant Accounting Policies (Policies)	3 Months Ended
	Mar. 31, 2014
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, 2013 included in MEDITECH's Form 10-K filed on September 25, 2014. 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.

Available_For_Sale_Securities_

Available For Sale Securities (Tables)	3 Months Ended
	Mar. 31, 2014
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 March 31, 2014 and has concluded that the unrealized losses are temporary in nature.
		Dec 31, 2013	Mar 31, 2014
	Cost net of write-downs	$279,666,014	$277,262,585
	Unrealized gains	95,805,377	62,940,162
	Unrealized losses	-1,447,800	-77,527
	Fair market value	$374,023,591	$340,125,220

Comprehensive_Income_Presentat1

Comprehensive Income Presentation (Tables)	3 Months Ended
	Mar. 31, 2014
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
		Mar 31, 2013	Mar 31, 2014
	Changes in unrealized gains	19,735,529	-4,034,206
	Reclassification of realized gains		-31,342,760
	Change in net unrealized gains	19,735,529	-35,376,966

Earnings_Per_Share_Tables

Earnings Per Share (Tables)	3 Months Ended
	Mar. 31, 2014
Earnings Per Share (Tables) [Abstract]
Earning 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. In general, 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
		Mar 31, 2013	Mar 31, 2014
	Net income	$35,479,098	$61,844,708
	Average number of shares	37,055,636	37,140,854
	Earnings per share	$0.96	$1.67

Segment_Reporting_Tables

Segment Reporting (Tables)	3 Months Ended
	Mar. 31, 2014
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
		Mar 31, 2013	Mar 31, 2014
	United States	88%	90%
	Canada	10%	9%
	All others	2%	1%

Available_For_Sale_Securities_1

Available For Sale Securities (Details 1) (USD $)	Mar. 31, 2014	Dec. 31, 2013
Available For Sale Securities (Tables) [Abstract]
Cost net of write-downs	$277,262,585	$279,666,014
Unrealized gains	62,940,162	95,805,377
Unrealized losses	-77,527	-1,447,800
Fair market value	$340,125,220	$374,023,591

Comprehensive_Income_Presentat2

Comprehensive Income Presentation (Details 1) (USD $)	3 Months Ended
	Mar. 31, 2014	Mar. 31, 2013
Comprehensive Income Note [Abstract] (Deprecated 2011-01-31)
Changes in unrealized gains	($4,034,206)	$19,735,529
Reclassification of realized gains	-31,342,760
Change in net unrealized gains	($35,376,966)	$19,735,529

Earnings_Per_Share_Details_1

Earnings Per Share (Details 1) (USD $)	3 Months Ended
	Mar. 31, 2014	Mar. 31, 2013
Earnings Per Share (Tables) [Abstract]
Net income	$61,844,708	$35,479,098
Average number of shares	37,140,854	37,055,636
Earnings per share	$1.67	$0.96

Segment_Reporting_Details_1

Segment Reporting (Details 1) (USD $)	3 Months Ended
	Mar. 31, 2014	Mar. 31, 2013
Segment Reporting (Tables) [Abstract]
United States	90.00%	88.00%
Canada	9.00%	10.00%
All others	$1	$2