##### 



---

---

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, 2002

COMMISSION FILE NUMBER: 000-24539

ECLIPSYS CORPORATION

(Exact name of registrant as specified in its charter)

|                                  |  |                                                
|--------------------------------- |  | -----------------------------------------------
|DELAWARE
(State of Incorporation) |  | 65-0632092
(IRS Employer Identification Number)

1750 Clint Moore Road
Boca Raton, Florida
33487
(Address of principal executive offices)

561-322-4321
(Telephone number of registrant)

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 for the past 90 days. Yes  [X]     No  [   ]

Indicate the number of shares outstanding of each of the issuers classes
of common stock as of the latest practicable date.

|                             |  |                                          
|---------------------------- |  | -----------------------------------------
|Class                        |  | Shares outstanding as of November 6, 2002
|                             |  |                                          
|Common Stock, $.01 par value |  | 44,935,329                               



---

---





---



##### 



ECLIPSYS CORPORATION

FORM 10-Q

FOR THE QUARTER ENDED SEPTEMBER 30, 2002

INDEX

|               |  |                                                                                                                               |    |  |    |      |  | 
|-------------- |  | ----------------------------------------------------------------------------------------------------------------------------- | -- |  | -- | ---- |  | 
|               |  |                                                                                                                               |    |  |    | Page
|               |  |                                                                                                                               |    |  |    |     
|PART I.        |  | Financial Information                                                                                                         |    |  |    |     
|              
|Item 1.        |  | Condensed Consolidated Balance Sheets (unaudited) - As of September 30, 2002 and December 31, 2001                            |    |  | 3  |     
|              
|               |  | Condensed Consolidated Statements of Operations (unaudited) - For the Three and Nine Months ended September 30, 2002 and 2001 |    |  | 4  |     
|              
|               |  | Condensed Consolidated Statements of Cash Flows (unaudited) - For the Three and Nine Months ended September 30, 2002 and 2001 |    |  | 5  |     
|              
|               |  | Notes to Condensed Consolidated Financial Statements (unaudited)                                                              |    |  | 6  |     
|              
|Item 2.        |  | Management's Discussion and Analysis of Financial Condition and Results of Operations                                         |    |  | 10 |     
|              
|Item 3.        |  | Quantitative and Qualitative Disclosures About Market Risk                                                                    |    |  | 19 |     
|              
|Item 4.        |  | Controls and Procedures                                                                                                       |    |  | 19 |     
|              
|PART II.       |  | Other Information                                                                                                             |    |  |    |     
|              
|Item 1.        |  | Legal Proceedings                                                                                                             |    |  | 20 |     
|              
|Item 6.        |  | Exhibits and Reports on Form 8-K                                                                                              |    |  | 20 |     
|              
|Signatures     |  |                                                                                                                               | 21 | 
|              
|Certifications |  |                                                                                                                               | 22 | 

2



---



##### 



PART I.

ITEM 1.

ECLIPSYS CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED)

(IN THOUSANDS)

|                                            |                                      |   |                    |          |                   |   |         |          |  
|------------------------------------------- | ------------------------------------ | - | ------------------ | -------- | ----------------- | - | ------- | -------- | -
|                                            |                                      |   | SEPTEMBER 30, 2002 |          | DECEMBER 31, 2001
|                                            |                                      |   |                    |          |                  
|ASSETS                                      |                                      |   |                    |          |                   |   |         |         
|Current assets:                             |                                      |   |                    |          |                   |   |         |         
|                                            | Cash and cash equivalents            |   | $                  | 139,785  |                   |   | $       | 168,942  |  
|                                            | Marketable securities                |   |                    | 41,663   |                   |   |         |         |  
|                                            | Accounts receivable, net             |   |                    | 50,798   |                   |   |         | 66,094   |  
|                                            | Inventory                            |   |                    | 1,546    |                   |   |         | 667      |  
|                                            | Other current assets                 |   |                    | 15,690   |                   |   |         | 18,424   |  
|                                            |                                      |   |                    |          |                   |   |         |         
|Total current assets                        |                                      |   | 249,482            |          |                   |   | 254,127 |         
|                                            |                                      |   |                    |          |                   |   |         |          |  
|Property and equipment, net                 |                                      |   | 25,916             |          |                   |   | 21,675  |         
|Capitalized software development costs, net |                                      |   | 15,954             |          |                   |   | 13,831  |         
|Acquired technology, net                    |                                      |   | 563                |          |                   |   | 3,345   |         
|Intangible assets, net                      |                                      |   | 454                |          |                   |   | 628     |         
|Other assets                                |                                      |   | 9,561              |          |                   |   | 6,888   |         
|                                            |                                      |   |                    |          |                   |   |         |         
|TOTAL ASSETS                                |                                      | $ | 301,930            |          |                   | $ | 300,494 |         
|                                            |                                      |   |                    |          |                   |   |         |         
|LIABILITIES AND STOCKHOLDERS EQUITY        |                                      |   |                    |          |                   |   |         |         
|Current liabilities:                        |                                      |   |                    |          |                   |   |         |         
|                                            | Deferred revenue                     |   | $                  | 67,349   |                   |   | $       | 56,428   |  
|                                            | Other current liabilities            |   |                    | 26,821   |                   |   |         | 22,748   |  
|                                            |                                      |   |                    |          |                   |   |         |         
|Total current liabilities                   |                                      |   | 94,170             |          |                   |   | 79,176  |         
|                                            |                                      |   |                    |          |                   |   |         |          |  
|Deferred revenue                            |                                      |   | 705                |          |                   |   | 2,418   |         
|Other long-term liabilities                 |                                      |   | 273                |          |                   |   | 699     |         
|Stockholders equity:                       |                                      |   |                    |          |                   |   |         |         
|                                            | Common stock                         |   |                    | 449      |                   |   |         | 444      |  
|                                            | Unearned stock compensation          |   |                    | (1,077   | )                 |   |         | (32      | )
|                                            | Additional paid-in capital           |   |                    | 404,690  |                   |   |         | 400,242  |  
|                                            | Accumulated deficit                  |   |                    | (196,963 | )                 |   |         | (182,051 | )
|                                            | Accumulated other comprehensive loss |   |                    | (317     | )                 |   |         | (402     | )
|                                            |                                      |   |                    |          |                   |   |         |         
|Total stockholders equity                  |                                      |   | 206,782            |          |                   |   | 218,201 |         
|                                            |                                      |   |                    |          |                   |   |         |         
|TOTAL LIABILITIES AND STOCKHOLDERS EQUITY  |                                      | $ | 301,930            |          |                   | $ | 300,494 |         
|                                            |                                      |   |                    |          |                   |   |         |         

The accompanying notes are an integral part of these unaudited condensed
consolidated financial statements.

3



---



##### 



ECLIPSYS CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)

(IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)

|                                                   |                                       |   |                    |        |                   |   |        |        |      |   |         |         |  |   |         |         |  
|-------------------------------------------------- | ------------------------------------- | - | ------------------ | ------ | ----------------- | - | ------ | ------ | ---- | - | ------- | ------- |  | - | ------- | ------- | -
|                                                   |                                       |   | THREE MONTHS ENDED |        | NINE MONTHS ENDED
|                                                   |                                       |   | SEPTEMBER 30,      |        | SEPTEMBER 30,    
|                                                   |                                       |   |                    |        |                  
|                                                   |                                       |   | 2002               |        | 2001              |   | 2002   |        | 2001
|                                                   |                                       |   |                    |        |                   |   |        |        |     
|REVENUES                                           |                                       |   |                    |        |                   |   |        |        |      |   |         |         |  |   |         |        
|                                                   | Systems and services                  |   | $                  | 44,521 |                   |   | $      | 59,956 |      |   | $       | 153,383 |  |   | $       | 168,417 |  
|                                                   | Hardware                              |   |                    | 3,028  |                   |   |        | 3,140  |      |   |         | 11,237  |  |   |         | 10,025  |  
|                                                   |                                       |   |                    |        |                   |   |        |        |      |   |         |         |  |   |         |        
|TOTAL REVENUES                                     |                                       |   | 47,549             |        |                   |   | 63,096 |        |      |   | 164,620 |         |  |   | 178,442 |        
|COSTS AND EXPENSES                                 |                                       |   |                    |        |                   |   |        |        |      |   |         |         |  |   |         |        
|                                                   | Cost of systems and services revenues |   |                    | 30,924 |                   |   |        | 31,899 |      |   |         | 87,047  |  |   |         | 94,723  |  
|                                                   | Cost of hardware revenues             |   |                    | 2,479  |                   |   |        | 2,701  |      |   |         | 9,292   |  |   |         | 8,294   |  
|                                                   | Sales and marketing                   |   |                    | 14,487 |                   |   |        | 10,746 |      |   |         | 37,725  |  |   |         | 31,890  |  
|                                                   | Research and development              |   |                    | 12,129 |                   |   |        | 9,248  |      |   |         | 33,584  |  |   |         | 27,823  |  
|                                                   | General and administrative            |   |                    | 3,218  |                   |   |        | 2,465  |      |   |         | 8,476   |  |   |         | 7,862   |  
|                                                   | Depreciation and amortization         |   |                    | 2,218  |                   |   |        | 3,670  |      |   |         | 6,250   |  |   |         | 10,716  |  
|                                                   | Transaction costs                     |   |                    |       |                   |   |        |       |      |   |         |        |  |   |         | (472    | )
|                                                   |                                       |   |                    |        |                   |   |        |        |      |   |         |         |  |   |         |        
|TOTAL COSTS AND EXPENSES                           |                                       |   | 65,455             |        |                   |   | 60,729 |        |      |   | 182,374 |         |  |   | 180,836 |        
|                                                   |                                       |   |                    |        |                   |   |        |        |      |   |         |         |  |   |         |        
|(LOSS) INCOME FROM OPERATIONS                      |                                       |   | (17,906            | )      |                   |   | 2,367  |        |      |   | (17,754 | )       |  |   | (2,394  | )      
|Interest income, net                               |                                       |   | 732                |        |                   |   | 1,598  |        |      |   | 3,007   |         |  |   | 4,674   |        
|                                                   |                                       |   |                    |        |                   |   |        |        |      |   |         |         |  |   |         |        
|(LOSS) INCOME BEFORE INCOME TAXES                  |                                       |   | (17,174            | )      |                   |   | 3,965  |        |      |   | (14,747 | )       |  |   | 2,280   |        
|Provision for income taxes                         |                                       |   |                   |        |                   |   |       |        |      |   | 165     |         |  |   |        |        
|                                                   |                                       |   |                    |        |                   |   |        |        |      |   |         |         |  |   |         |        
|NET (LOSS) INCOME                                  |                                       | $ | (17,174            | )      |                   | $ | 3,965  |        |      | $ | (14,912 | )       |  | $ | 2,280   |        
|                                                   |                                       |   |                    |        |                   |   |        |        |      |   |         |         |  |   |         |        
|BASIC NET (LOSS) INCOME PER COMMON SHARE           |                                       | $ | (0.38              | )      |                   | $ | 0.09   |        |      | $ | (0.33   | )       |  | $ | 0.05    |        
|                                                   |                                       |   |                    |        |                   |   |        |        |      |   |         |         |  |   |         |        
|DILUTED NET (LOSS) INCOME PER COMMON SHARE         |                                       | $ | (0.38              | )      |                   | $ | 0.08   |        |      | $ | (0.33   | )       |  | $ | 0.05    |        
|                                                   |                                       |   |                    |        |                   |   |        |        |      |   |         |         |  |   |         |        
|BASIC WEIGHTED AVERAGE COMMON SHARES
OUTSTANDING   |                                       |   | 44,774             |        |                   |   | 43,961 |        |      |   | 44,631  |         |  |   | 42,874  |        
|                                                   |                                       |   |                    |        |                   |   |        |        |      |   |         |         |  |   |         |        
|DILUTED WEIGHTED AVERAGE COMMON SHARES
OUTSTANDING |                                       |   | 44,774             |        |                   |   | 47,640 |        |      |   | 44,631  |         |  |   | 46,833  |        
|                                                   |                                       |   |                    |        |                   |   |        |        |      |   |         |         |  |   |         |        

The accompanying notes are an integral part of these unaudited condensed
consolidated financial statements.

4



---



##### 



ECLIPSYS CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)

(IN THOUSANDS)

|                                                                                         |                                             |                                              |                           |                                                                                               |       |                    |         |                   |       |        |         |         |        |        |         |         |        |        |         |  
|---------------------------------------------------------------------------------------- | ------------------------------------------- | -------------------------------------------- | ------------------------- | --------------------------------------------------------------------------------------------- | ----- | ------------------ | ------- | ----------------- | ----- | ------ | ------- | ------- | ------ | ------ | ------- | ------- | ------ | ------ | ------- | -
|                                                                                         |                                             |                                              |                           |                                                                                               |       | THREE MONTHS ENDED |         | NINE MONTHS ENDED
|                                                                                         |                                             |                                              |                           |                                                                                               |       | SEPTEMBER 30,      |         | SEPTEMBER 30,    
|                                                                                         |                                             |                                              |                           |                                                                                               |       |                    |         |                  
|                                                                                         |                                             |                                              |                           |                                                                                               |       | 2002               |         | 2001              |       | 2002   |         | 2001   
|                                                                                         |                                             |                                              |                           |                                                                                               |       |                    |         |                   |       |        |         |        
|OPERATING ACTIVITIES                                                                     |                                             |                                              |                           |                                                                                               |       |                    |         |                   |       |        |         |         |        |        |         |        
|Net (loss) income                                                                        |                                             | $                                            | (17,174                   | )                                                                                             |       | $                  | 3,965   |                   |       | $      | (14,912 | )       |        | $      | 2,280   |        
|Adjustments to reconcile net (loss) income to net cash
provided by operating activities: |                                             |                                              |                           |                                                                                               |       |                    |         |                   |       |        |         |         |        |        |         |        
|                                                                                         |                                             | Depreciation and amortization                |                           |                                                                                               | 4,469 |                    |         |                   | 9,353 |        |         |         | 14,624 |        |         |         | 28,245 |       
|                                                                                         |                                             | Provision for bad debts                      |                           |                                                                                               | 1,305 |                    |         |                   | 1,025 |        |         |         | 1,805  |        |         |         | 2,860  |       
|                                                                                         |                                             | Stock compensation expense                   |                           |                                                                                               | 46    |                    |         |                   | 36    |        |         |         | 78     |        |         |         | 108    |       
|                                                                                         |                                             | Changes in operating assets and liabilities: |                           |                                                                                               |       |                    |         |                   |       |        |         |         |        |        |         |         |        |       
|                                                                                         |                                             |                                              | Accounts receivable       |                                                                                               |       | 5,453              |         |                   |       | (2,849 | )       |         |        | 12,867 |         |         |        | (5,677 | )      
|                                                                                         |                                             |                                              | Inventory                 |                                                                                               |       | (965               | )       |                   |       | 161    |         |         |        | (879   | )       |         |        | 310    |        
|                                                                                         |                                             |                                              | Other current assets      |                                                                                               |       | (1,542             | )       |                   |       | (3,546 | )       |         |        | 2,734  |         |         |        | (4,935 | )      
|                                                                                         |                                             |                                              | Other assets              |                                                                                               |       | (2,383             | )       |                   |       | (164   | )       |         |        | (3,939 | )       |         |        | (2,127 | )      
|                                                                                         |                                             |                                              | Deferred revenue          |                                                                                               |       | 9,759              |         |                   |       | 1,299  |         |         |        | 9,209  |         |         |        | 5,841  |        
|                                                                                         |                                             |                                              | Other current liabilities |                                                                                               |       | 4,909              |         |                   |       | (1,203 | )       |         |        | 4,071  |         |         |        | (6,464 | )      
|                                                                                         |                                             |                                              | Other liabilities         |                                                                                               |       | (47                | )       |                   |       | (112   | )       |         |        | (426   | )       |         |        | (384   | )      
|                                                                                         |                                             |                                              |                           |                                                                                               |       |                    |         |                   |       |        |         |         |        |        |         |        
|                                                                                         |                                             |                                              |                           | Total adjustments to reconcile net (loss) income
to net cash provided by operating activities |       |                    | 21,004  |                   |       |        | 4,000   |         |        |        | 40,144  |         |        |        | 17,777  |  
|                                                                                         |                                             |                                              |                           |                                                                                               |       |                    |         |                   |       |        |         |         |        |        |         |        
|                                                                                         |                                             |                                              |                           | NET CASH PROVIDED BY OPERATING ACTIVITIES                                                     |       |                    | 3,830   |                   |       |        | 7,965   |         |        |        | 25,232  |         |        |        | 20,057  |  
|                                                                                         |                                             |                                              |                           |                                                                                               |       |                    |         |                   |       |        |         |         |        |        |         |        
|INVESTING ACTIVITIES                                                                     |                                             |                                              |                           |                                                                                               |       |                    |         |                   |       |        |         |         |        |        |         |        
|                                                                                         | Purchase of property and equipment          |                                              |                           | (2,288                                                                                        | )     |                    |         | (1,655            | )     |        |         | (9,693  | )      |        |         | (9,671  | )     
|                                                                                         | Purchase of marketable securities, net      |                                              |                           | 19,590                                                                                        |       |                    |         | (581              | )     |        |         | (41,588 | )      |        |         | (50,716 | )     
|                                                                                         | Capitalized software development costs      |                                              |                           | (2,235                                                                                        | )     |                    |         | (1,692            | )     |        |         | (6,449  | )      |        |         | (5,073  | )     
|                                                                                         |                                             |                                              |                           |                                                                                               |       |                    |         |                   |       |        |         |         |        |        |         |        
|                                                                                         |                                             |                                              |                           | NET CASH PROVIDED BY (USED IN) INVESTING ACTIVITIES                                           |       |                    | 15,067  |                   |       |        | (3,928  | )       |        |        | (57,730 | )       |        |        | (65,460 | )
|                                                                                         |                                             |                                              |                           |                                                                                               |       |                    |         |                   |       |        |         |         |        |        |         |        
|FINANCING ACTIVITIES                                                                     |                                             |                                              |                           |                                                                                               |       |                    |         |                   |       |        |         |         |        |        |         |        
|                                                                                         | Issuance of common stock in public offering |                                              |                           |                                                                                              |       |                    |         | (16               | )     |        |         |        |        |        |         | 123,215 |       
|                                                                                         | Payments on borrowings                      |                                              |                           |                                                                                              |       |                    |         |                  |       |        |         |        |        |        |         | (1,491  | )     
|                                                                                         | Exercise of stock options                   |                                              |                           | 19                                                                                            |       |                    |         | 9,202             |       |        |         | 1,470   |        |        |         | 14,299  |       
|                                                                                         | Employee stock purchase plan                |                                              |                           | 602                                                                                           |       |                    |         | 559               |       |        |         | 1,860   |        |        |         | 1,798   |       
|                                                                                         |                                             |                                              |                           |                                                                                               |       |                    |         |                   |       |        |         |         |        |        |         |        
|                                                                                         |                                             |                                              |                           | NET CASH PROVIDED BY FINANCING ACTIVITIES                                                     |       |                    | 621     |                   |       |        | 9,745   |         |        |        | 3,330   |         |        |        | 137,821 |  
|                                                                                         |                                             |                                              |                           |                                                                                               |       |                    |         |                   |       |        |         |         |        |        |         |        
|EFFECT OF EXCHANGE RATES ON CASH AND
CASH EQUIVALENTS                                    |                                             |                                              | (10                       | )                                                                                             |       |                    | (69     | )                 |       |        | 11      |         |        |        | (148    | )      
|                                                                                         |                                             |                                              |                           |                                                                                               |       |                    |         |                   |       |        |         |         |        |        |         |        
|NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS                                     |                                             |                                              | 19,508                    |                                                                                               |       |                    | 13,713  |                   |       |        | (29,157 | )       |        |        | 92,270  |        
|CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD                                           |                                             |                                              | 120,277                   |                                                                                               |       |                    | 99,356  |                   |       |        | 168,942 |         |        |        | 20,799  |        
|                                                                                         |                                             |                                              |                           |                                                                                               |       |                    |         |                   |       |        |         |         |        |        |         |        
|CASH AND CASH EQUIVALENTS, END OF PERIOD                                                 |                                             | $                                            | 139,785                   |                                                                                               |       | $                  | 113,069 |                   |       | $      | 139,785 |         |        | $      | 113,069 |        
|                                                                                         |                                             |                                              |                           |                                                                                               |       |                    |         |                   |       |        |         |         |        |        |         |        

The accompanying notes are an integral part of these unaudited condensed
consolidated financial statements.

5



---



##### 



ECLIPSYS CORPORATION
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)

1. BASIS OF PRESENTATION

The condensed consolidated financial statements include all adjustments
that, in the opinion of management, are necessary for a fair presentation of
the results for the periods presented. All such adjustments are considered of a
normal recurring nature. Quarterly results of operations are not necessarily
indicative of annual results. Certain prior period amounts have been
reclassified to conform to the 2002 presentation (Note 7). The Company manages
its business as one reporting segment.

Certain financial information and footnote disclosures normally included
in financial statements prepared in accordance with generally accepted
accounting principles have been condensed or omitted. These unaudited condensed
consolidated financial statements should be read in conjunction with the
audited consolidated financial statements and the notes thereto included in the
Companys Annual Report on Form 10-K filed March 25, 2002.

2. MARKETABLE SECURITIES

Marketable securities consist of funds that are highly liquid and are
classified as available-for-sale. Marketable securities are recorded at fair
value, and unrealized gains and losses are recorded as a component of other
comprehensive income.

3. ACCOUNTS RECEIVABLE

Accounts receivable was comprised of the following (in thousands):

|                               |                                                                               |   |               |        |              |   |        |        | 
|------------------------------ | ----------------------------------------------------------------------------- | - | ------------- | ------ | ------------ | - | ------ | ------ | 
|                               |                                                                               |   | September 30, |        | December 31,
|                               |                                                                               |   | 2002          |        | 2001        
|                               |                                                                               |   |               |        |             
|Accounts Receivable:           |                                                                               |   |               |        |              |   |        |       
|                               | Billed accounts receivable, net                                               |   | $             | 46,428 |              |   | $      | 56,114 | 
|                               | Unbilled accounts receivable related to
long-term contracts (current portion) |   |               | 2,200  |              |   |        | 3,212  | 
|                               | Other unbilled accounts receivable, net                                       |   |               | 2,170  |              |   |        | 6,768  | 
|                               |                                                                               |   |               |        |              |   |        |       
|                               | Total unbilled accounts receivable, net                                       |   |               | 4,370  |              |   |        | 9,980  | 
|                               |                                                                               |   |               |        |              |   |        |       
|Total accounts receivable, net |                                                                               | $ | 50,798        |        |              | $ | 66,094 |       
|                               |                                                                               |   |               |        |              |   |        |       

The non-current portion of unbilled accounts receivable is included in
other assets and was $1.5 million and $1.8 million as of September 30, 2002 and
December 31, 2001, respectively.

6



---



##### 



4. OTHER COMPREHENSIVE INCOME

The components of other comprehensive (loss) income were as follows (in
thousands):

|                                                                                             |  |                    |         |                   |  |      |       |      |  |   |         |   |  |   |       |  
|-------------------------------------------------------------------------------------------- |  | ------------------ | ------- | ----------------- |  | ---- | ----- | ---- |  | - | ------- | - |  | - | ----- | -
|                                                                                             |  | Three Months Ended |         | Nine Months Ended
|                                                                                             |  | September 30,      |         | September 30,    
|                                                                                             |  |                    |         |                  
|                                                                                             |  | 2002               |         | 2001              |  | 2002 |       | 2001
|                                                                                             |  |                    |         |                   |  |      |       |     
|Net (loss) income                                                                            |  | $                  | (17,174 | )                 |  | $    | 3,965 |      |  | $ | (14,912 | ) |  | $ | 2,280 |  
|Reclassification adjustment for realized loss
included in net earnings                       |  |                    | 447     |                   |  |      |       |      |  |   | 447     |   |  |   |       |  
|Unrealized (loss) gain on available-for-sale
marketable securities arising during the period |  |                    | (169    | )                 |  |      | 396   |      |  |   | (373    | ) |  |   | 298   |  
|Foreign currency translation adjustment                                                      |  |                    | (10     | )                 |  |      | (69   | )    |  |   | 11      |   |  |   | (148  | )
|                                                                                             |  |                    |         |                   |  |      |       |      |  |   |         |   |  |   |       |  
|Total comprehensive (loss) income                                                            |  | $                  | (16,906 | )                 |  | $    | 4,292 |      |  | $ | (14,827 | ) |  | $ | 2,430 |  
|                                                                                             |  |                    |         |                   |  |      |       |      |  |   |         |   |  |   |       |  

5. LEGAL ACTION

From July through September 2002, the Company and three of its officers (Messrs.
Colletti, Patton and Wilson) were named in seven complaints filed by purported
shareholders of the Company in the United States District Court, Southern District
of Florida, West Palm Beach Division (the District Court).  Each complaint seeks
certification as a class and monetary damages and alleges that the Company and the named
officers violated federal securities laws. The Company believes that the actions are without
merit, and intends to conduct a vigorous defense against these allegations.

6. PUBLIC OFFERING

During the quarter ended March 31, 2001, the Company completed a follow-on
public offering for 5,750,000 shares of its common stock. Net proceeds from
the offering were approximately $123.2 million.

7. RECENT ACCOUNTING PRONOUNCEMENTS

In June 2001, the Financial Accounting Standards Board (FASB) issued
Statement of Financial Accounting Standards (SFAS) No. 142 Goodwill and
Other Intangible Assets. Under this new standard, the FASB eliminated
amortization of goodwill and created indefinite life intangible assets and
established new impairment measurement procedures for goodwill. In accordance
with SFAS 142, goodwill is no longer amortized, but instead tested for
impairment at least once annually. There was no impairment of goodwill upon
adoption of SFAS 142, and amortization ceased as of January 1, 2002, leaving a
recorded balance of $454,000 for goodwill as of

7



---



##### 



December 31, 2001 and September 30, 2002. The effect of adopting SFAS 142 was
to reduce depreciation and amortization expense by $0 and $454,000 for the
three and nine months ended September 30, 2002, respectively. Net income and
earnings per share for the three and nine months ended September 30, 2001
adjusted to exclude amortization expense is as follows (in thousands, except
earnings per share):

|                                        |                                       |                                       |   |                    |       |                    |   |       |       | 
|--------------------------------------- | ------------------------------------- | ------------------------------------- | - | ------------------ | ----- | ------------------ | - | ----- | ----- | 
|                                        |                                       |                                       |   | Three Months Ended |       | Nine Months Ended 
|                                        |                                       |                                       |   | September 30, 2001 |       | September 30, 2001
|                                        |                                       |                                       |   |                    |       |                   
|Net income:                             |                                       |                                       |   |                    |       |                    |   |      
|                                        | Reported net income                   |                                       | $ | 3,965              |       |                    | $ | 2,280 |      
|                                        | Goodwill amortization                 |                                       |   | 1,244              |       |                    |   | 3,731 |      
|                                        |                                       |                                       |   |                    |       |                    |   |      
|                                        |                                       | Adjusted net income                   |   | $                  | 5,209 |                    |   | $     | 6,011 | 
|                                        |                                       |                                       |   |                    |       |                    |   |      
|Basic and diluted net income per share: |                                       |                                       |   |                    |       |                    |   |      
|                                        | Reported basic net income per share   |                                       | $ | 0.09               |       |                    | $ | 0.05  |      
|                                        | Goodwill amortization                 |                                       |   | 0.03               |       |                    |   | 0.09  |      
|                                        |                                       |                                       |   |                    |       |                    |   |      
|                                        |                                       | Adjusted basic net income per share   |   | $                  | 0.12  |                    |   | $     | 0.14  | 
|                                        |                                       |                                       |   |                    |       |                    |   |      
|                                        | Reported diluted net income per share |                                       | $ | 0.08               |       |                    | $ | 0.05  |      
|                                        | Goodwill amortization                 |                                       |   | 0.03               |       |                    |   | 0.08  |      
|                                        |                                       |                                       |   |                    |       |                    |   |      
|                                        |                                       | Adjusted diluted net income per share |   | $                  | 0.11  |                    |   | $     | 0.13  | 
|                                        |                                       |                                       |   |                    |       |                    |   |      

As of September 30, 2002, the Company had the following balances for acquired
technology and intangible assets (in thousands):

|                               |                     |  |                |        |              |  |             |        |  |  |   |     | 
|------------------------------ | ------------------- |  | -------------- | ------ | ------------ |  | ----------- | ------ |  |  | - | --- | 
|                               |                     |  | Gross Carrying |        | Accumulated  |  |             |        | 
|                               |                     |  | Amount         |        | Amortization |  | Net Balance
|                               |                     |  |                |        |              |  |            
|Amortized intangible assets:   |                     |  |                |        |              |  |             |        |  |  |   |    
|                               | Acquired technology |  | $              | 95,795 |              |  | $           | 95,232 |  |  | $ | 563 | 
|Unamortized intangible assets: |                     |  |                |        |              |  |             |        |  |  |   |    
|                               | Goodwill            |  |                |        |              |  |             |        |  |  | $ | 454 | 

Amortization of acquired technology and ongoing customer relationships for
the three and nine months ended September 30, 2002 was $295,000 and $2,956,000,
respectively. The ongoing customer relationships became fully amortized during
the first quarter of 2002. The estimated amortization expense for the next
five fiscal years is as follows (in thousands):

|                         |       |   |       |       | 
|------------------------ | ----- | - | ----- | ----- | 
|For year ending 12/31/02 |       | $ | 3,252 |      
|For year ending 12/31/03 |       |   | 267   |      
|Thereafter               |       |   |      |      
|                         |       |   |       |      
|                         | Total |   | $     | 3,519 | 
|                         |       |   |       |      

In October 2001, the FASB issued SFAS No. 144, Accounting for the Impairment
or Disposal of Long-Lived Assets, which is effective for fiscal years
beginning after December 15, 2001. This statement supercedes FASB Statement
No. 121, Accounting for the Impairment of Long-Lived Assets and for Long-Lived
Assets to Be Disposed Of. However, it retains the fundamental provisions of
SFAS 121 for the recognition and measurement of the impairment of long-lived
assets to be held and used and the measurement of long-lived assets to be
disposed of by sale. Impairment of goodwill is not included in the scope of
SFAS 144 and will be treated in accordance with the accounting standards
established in SFAS 142. According to SFAS 144, long-lived assets are measured
at the lower of carrying amount or fair value less cost to sell, whether
reported in continuing or discontinued operations. The statement applies to
all long-lived assets, including discontinued operations, and replaces the
provisions of APB Opinion No. 30, Reporting the Results of Unusual and
Infrequently Occurring Events and Transactions, for the disposal of segments
of a business. The adoption of SFAS 144 has had no impact on the Companys
financial position or results of operations.

8



---



##### 



In November 2001, the FASBs Emerging Issues Task Force (EITF) reached a
consensus on EITF Issue 01-09, Accounting for Consideration Given by a Vendor
to a Customer or a Reseller of the Vendors Products, which is a codification
of EITF 00-14, 00-22 and 00-25. This issue presumes that consideration from a
vendor to a customer or reseller of the vendors products is a reduction in the
selling prices of the vendors product and, therefore, should be characterized
as a reduction of revenue when recognized in the vendors income statement and
could lead to negative revenue under certain circumstances. Revenue reduction
is required unless the consideration related to a separate identifiable benefit
and the benefits fair value can be established. The Company adopted EITF
01-09 effective January 1, 2002, and it had no impact on the Companys
financial position or results of operations.

In January 2002, the EITF reached a consensus on EITF Issue 01-14, Income
Statement Characterization of Reimbursements Received for Out-of-Pocket
Expenses Incurred. This consensus requires that reimbursements received for
out-of-pocket expenses incurred be characterized as revenue in the income
statement. The Company adopted EITF 01-14 effective January 1, 2002 and has
made the appropriate reclassifications as required by EITF 01-14. The effect
of adopting EITF 01-14 was to increase both revenues and expenses by the
following amounts (in thousands):

|                                 |  |      |       |      |  |   |       | 
|-------------------------------- |  | ---- | ----- | ---- |  | - | ----- | 
|                                 |  | 2002 |       | 2001
|                                 |  |      |       |     
|Three months ended September 30, |  | $    | 811   |      |  | $ | 654   | 
|Nine months ended September 30,  |  | $    | 2,163 |      |  | $ | 2,128 | 

In June 2002, the FASB issued SFAS No. 146, Accounting for Costs
Associated with Exit or Disposal Activities. SFAS 146 requires that a
liability for a cost that is associated with an exit or disposal activity be
recognized when the liability is incurred. It nullifies the guidance in EITF
Issue No. 94-3, Liability Recognition for Certain Employee Termination
Benefits and Other Costs to Exit an Activity (including Certain Costs Incurred
in a Restructuring). Under EITF Issue No. 94-3, an entity recognized a
liability for an exit cost on the date that the entity committed itself to an
exit plan. In SFAS 146, the Board acknowledges that an entitys commitment to
a plan does not, by itself, create a present obligation to other parties that
meets the definition of a liability. SFAS 146 also establishes that fair value
is the objective for the initial measurement of the liability. SFAS 146 will
be effective for exit or disposal activities that are initiated after December
31, 2002. The Company does not expect the adoption of SFAS 146 to have a
significant impact on the Companys financial position or results of
operations.

8. STOCKHOLDERS EQUITY

At the Annual Meeting of Stockholders of the Company held on May 8, 2002,
the shareholders voted to approve the amendment and restatement of the
Companys 2000 Stock Incentive Plan, 1999 Stock Incentive Plan, 1998 Stock
Incentive Plan and Amended and Restated 1998 Employee Stock Purchase Plan to
reflect an increase in the number of shares of common stock authorized for
issuance under all of the Companys stock plans (the 2000 Stock Incentive Plan,
the 1999 Stock Incentive Plan, the Amended and Restated Employee Stock Purchase
Plan, the 1998 Stock Incentive Plan and the 1996 Stock Plan) from 12,000,000 to
15,000,000.

On July 15, 2002, Mr. Paul
Ruflin joined the Company as its Chief Executive Officer and President. Under
his employment arrangement with the Company, Mr. Ruflin received a restricted
stock grant effective July 15, 2002 of 150,000 shares of the Companys
common
stock subject to a five-year vesting schedule, plus an option to purchase
850,000 shares of the Companys common stock, with vesting over a five-year
period.  As of September 30, 2002, the Company had unearned compensation of
approximately $1,100,000 recorded in stockholders equity related to the
restricted stock grant.

9



---



##### 



ITEM 2.

MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS

This report contains forward-looking statements. For this purpose, any
statements contained herein that are not statements of historical fact may be
deemed to be forward-looking statements. Without limiting the foregoing, the
words believes, anticipates, plans, expects, intends, and similar
expressions are intended to identify forward-looking statements. The important
factors discussed under the caption Risk Factors, presented below, could
cause actual results to differ materially from those indicated by
forward-looking statements made herein. We undertake no obligation to publicly
update or revise any forward-looking statements, whether as a result of new
information, future events or otherwise.

OVERVIEW

Eclipsys is a healthcare information technology company that provides
advanced software solutions and services that assist healthcare organizations
in improving their outcomes by augmenting the quality of care and the level of
patient satisfaction, reducing costs and enhancing revenues.

We believe our mission of better healthcare through knowledge aligns
with our customers objectives, and our advanced software solutions and
services facilitate their workflow processes and implement best practices in
their organizations. To these ends, we design and offer a comprehensive package
of software applications and services that together enable providers in a
variety of healthcare settings to improve the effectiveness of their operations
and the quality of care as measured by clinical outcomes.

Our products perform the core information technology functions required by
healthcare organizations and other healthcare providers throughout the
healthcare enterprise. Our software applications are available to our customers
for implementation in-house or through our remote hosting service, and are
designed to work in a variety of healthcare settings. In addition, our products
are designed to work both through wireless devices within a healthcare facility
and over the Internet. Our software and services provide comprehensive
functionality to help healthcare organizations solve the clinical problems and
business issues they face and achieve balanced outcomes through an appropriate
and sustainable combination of clinical quality, resource utilization and
patient satisfaction.

During 2002, we have continued our development of SunriseXA, which is our
next generation product and service offering. SunriseXA release 2 reached
general availability in September 2002. SunriseXA is a Web-based solution that
builds upon the knowledge-driven, work-flow enhancing components of our Sunrise
suites. SunriseXAs extended architecture is built on Microsoft Corporations
Web-based infrastructure, .NET. We believe the open, modular nature of our
software architecture reduces the overall cost of ownership and reduces the
time to productive use because our solutions do not require the initial
investment and disruption associated with a complete replacement of a
customers existing systems. To facilitate rapid adoption by our customers, we
have engineered our solutions to take advantage of Web-based technologies.

In addition, we provide a wide range of complementary services to our
customers, including implementation, integration, support, maintenance and
training. We also provide outsourcing, remote hosting, network services and
business solutions consulting to assist customers in meeting their healthcare
information technology requirements. Through this comprehensive service
offering and our integrated software components, we provide our customers with
solutions for their clinical, financial and administrative information needs.

As we continue our product transition to
SunriseXA, a key component of our
strategy is to invest heavily in the areas of research and
development, sales, sales support and
marketing. Also, we have begun to offer additional contracting options to our
prospects and customers. We believe these new contracting options will be
attractive to prospects and customers. Additionally, certain aspects of these
options may contribute to a more predictable revenue stream in the future.

We maintain decentralized sales and customer support teams in each of our
six North American regions to provide direct, sustained customer contact. We
market our solutions primarily to large healthcare organizations, particularly
academic medical centers. We have one or more of our products installed or
being installed in over 1,500 facilities worldwide.

10



---



##### 



CRITICAL ACCOUNTING POLICIES

We prepare our consolidated financial statements in accordance with
accounting principles generally accepted in the United States of America. Our
significant accounting policies are discussed in detail in Note 2 to the
consolidated financial statements contained in our Form 10-K, filed on March
25, 2002. Some of these accounting policies as discussed below require
management to make estimates and assumptions about future events that could
materially affect the reported amounts of assets, liabilities, revenues and
expenses and disclosure of contingent assets and liabilities.

For contracts under which we recognize revenue using the
percentage-of-completion method, revenues are recognized based upon the
proportion of labor hours incurred in relation to the total labor hours
estimated under the agreement. The percentage-of-completion method is used when
management determines that services are essential to the functionality of the
software sold. Determining factors for percentage-of-completion include the
nature of services required and the provision for payments of software and
services upon the achievement of implementation milestones. Under the
percentage-of-completion method, revenue and profit are recognized throughout
the term of the contract, based upon estimates of the total labor hours to be
incurred and revenues to be generated throughout the term of the contract.
Changes in estimates of total labor hours and the related effect on the timing
of revenues and profits are recognized in the period in which they are
determinable. Accordingly, changes in these estimates could occur and could
have a material effect on our operating results in the period of change.

In evaluating the collectibility of our accounts receivable, we assess a
number of factors including a specific customers ability to meet its financial
obligations to us, as well as general factors, such as the length of time the
receivables are past due and historical collection experience. Based on these
assessments, we record both specific and general reserves for bad debt to
reduce the related receivables to the amount we ultimately expect to collect
from customers. If circumstances related to specific customers change or
economic conditions worsen such that our past collection experience is no
longer relevant, our estimate of the recoverability of our accounts receivable
could be further reduced from the levels provided for in the consolidated
financial statements.

At each balance sheet date, we perform a detailed assessment of our
capitalized software development costs to be marketed which includes a review
of, among other factors, projected revenues, customer demand requirements,
product lifecycle, changes in software and hardware technologies and product
development plans. Based on this analysis, we record adjustments, when
appropriate, to reflect the net realizable value of our capitalized software
development costs. The estimates of expected future revenues generated by the
software, the remaining economic life of the software, or both, could change,
materially affecting the carrying value of capitalized software development
costs as well as our consolidated operating results in the period of change.

RESULTS OF OPERATIONS

Total revenues decreased nearly $15.6 million, or 24.6%, to $47.5 million
for the quarter ended September 30, 2002, compared with $63.1 million for the
third quarter of 2001. For the nine months ended September 30, 2002, total
revenues decreased $13.8 million, or 7.7%, to $164.6 million, compared to
$178.4 million for the same period in 2001. Systems and services revenues
decreased $15.4 million, or 25.7%, to $44.5 million for the quarter ended
September 30, 2002, compared with $60.0 million for the third quarter of 2001.
For the nine months ended September 30, 2002, systems and services revenues
decreased $15.0 million, or 8.9%, to $153.4 million, compared to $168.4 million
for the same period in 2001. The decrease for the quarter and nine months
ended September 30, 2002 was primarily as a result of the continuing impact of
the bookings shortfall in the second quarter of 2002 and the limited amount of
software license fees in the third quarter of 2002. Furthermore, we
experienced a decline in networking services revenues of approximately $3.1
million for the third quarter of 2002, compared to the same period in 2001 as a
result of the bookings shortfall. We have begun to offer alternative
contracting options that, among other things, provide for payments to be spread more evenly over the term of the arrangement, as compared to our historical
contracting methods. During the transition to these new contracts, we expect
our operating results to reflect lower revenues and cash flows. However, we
believe that these new contracting options will provide for more predictable
revenues over the term of the arrangement.

Hardware revenues decreased $0.1 million, or 3.6%, to $3.0 million for the
quarter ended September 30, 2002, compared with $3.1 million for the third
quarter of 2001. For the nine months ended September 30, 2002, hardware
revenues increased $1.2 million, or 12.1%, to $11.2 million, compared to $10.0
million for the same period in 2001. The increase in hardware revenues for the
nine months ended September 30, 2002, compared to the same period in 2001, was
due to increased shipments during the first quarter, primarily related to
contracts entered into during the prior year.

11



---



##### 



Cost of systems and services revenues decreased $1.0 million, or 3.1%, to
$30.9 million for the quarter ended September 30, 2002, compared to $31.9
million for the third quarter of 2001. However, as a percentage of systems and
services revenues, cost of systems and services revenues increased to 69.5%,
compared to 53.2%. For the nine months ended September 30, 2002, cost of
systems and services revenues decreased approximately $7.7 million, or 8.1%, to
$87.0 million, or 56.8% of systems and services revenues, compared to $94.7
million, or 56.2% of systems and services revenues, for the same period in
2001. The decrease during the quarter ended September 30, 2002, was primarily
related to lower amortization of acquired technology and network service
intangible asset that amounted to $0.2 million for the quarter ended September
30, 2002, compared to $4.2 million for the same period in 2001 as a result of
certain assets becoming fully amortized. Additionally, variable costs related
to networking services were lower by $2.5 million from the third quarter of
2001 in association with lower networking services revenues. These lower costs
were partially offset by incremental costs of $1.6 million related to
additional obligations arising from contracts assumed in prior acquisitions as
well as higher costs in other areas. Costs related to remote hosting services
increased as a result of a higher volume of remote hosting customers. Also,
software royalties were higher due to a change in the mix of revenues.
Additionally, amortization of capitalized software development costs increased
due to the Company releasing certain clinical products of its new SunriseXAtm
product line during the first quarter of 2002. The decrease for the nine
months ended September 30, 2002, was primarily from lower amortization of
acquired technology and network service intangible asset that amounted to $2.6
million for the nine months ended September 30, 2002, compared to $13.2 million
for the same period in 2001. The lower amortization was partially offset by
the increased costs identified above.

Cost of hardware revenues decreased $0.2 million, or 8.2%, to $2.5 million
for the quarter ended September 30, 2002, compared to $2.7 million for the same
period in 2001. For the nine months ended September 30, 2002, cost of hardware
revenues increased $1.0 million, or 12.0%, to $9.3 million, or 82.7% of
hardware revenues, compared to $8.3 million, or 82.7% of hardware revenues, for
the same period in 2001. The fluctuations in the cost of hardware revenues for
the quarter and nine months ended September 30, 2002, as compared to the same
periods in 2001, were attributable to the fluctuations in hardware revenues.

Sales and marketing expenses increased 34.8%, or nearly $3.8 million, to
$14.5 million, or 30.5% of total revenues, for the quarter ended September 30,
2002, from $10.7 million, or 17.0% of total revenues, for the same period in
2001. For the nine months ended September 30, 2002, sales and marketing
expenses increased $5.8 million, or 18.3%, to $37.7 million, or 22.9% of total
revenues, compared to $31.9 million, or 17.9% of total revenues, for the same
period in 2001. The increase in sales and marketing expenses was primarily due
to a program we initiated, during the fourth quarter of 2001, to significantly
expand the size of our sales and marketing organization. The program was
implemented to increase the sales presence of our sales organization and
enhance the market awareness of our company and its products and services.
This program is expected to continue to result in higher expenses.
Additionally, there were an increased number of marketing events held in the
first quarter of 2002, as compared to the same period in 2001.

Research and development expenses increased $2.9 million, or 31.2%, to
$12.1 million, or 25.5% of total revenues, for the quarter ended September 30,
2002, compared to $9.2 million, or 14.7% of total revenues, for the same period
in 2001. For the nine months ended September 30, 2002, research and
development expenses increased $5.8 million, or 20.7%, to $33.6 million, or
20.4% of total revenues, compared to $27.8 million, or 15.6% of total revenues,
for the same period in 2001. The increase in research and development expenses
was due primarily to a program we implemented in the fourth quarter of 2001.
This program accelerates the development of our products with respect to our
SunriseXAtm initiative, which, among other things, will migrate our products
onto the Microsoft.NET platform. This initiative is expected to result in
continued heightened research and development expenses. The percentage of
research and development expenditures capitalized for the quarter ended
September 30, 2002 was 15.6%, compared to 15.5% for the same period in 2001.
Research and development expenses that were capitalized amounted to $2.2
million and $1.7 million for the quarters ended September 30, 2002 and 2001,
respectively. The percentage of research and development expenditures
capitalized for the nine months ended September 30, 2002 was 16.1%, compared to
15.4% for the same period in 2001. Research and development expenses that were
capitalized amounted to $6.4 million and $5.1 million for the nine months ended
September 30, 2002 and 2001, respectively. Amortization of capitalized
software development costs, which is included as a component of cost of systems
and systems revenues, were $1.5 and $1.1 million for the quarters ended
September 30, 2002 and 2001, respectively. This amortization amounted to $4.3
and $3.3 million for the nine months ended September 30, 2002 and 2001,
respectively.

General and administrative expenses increased approximately $0.7 million,
or 30.5%, to $3.2 million, or 6.8% of total revenues, for the quarter ended
September 30, 2002, compared to $2.5 million, or 3.9% of total revenues, for
the same period in 2001. For the nine months ended September 30, 2002, general
and administrative expenses increased $0.6 million, or 7.8%, to $8.5 million,
or 5.1% of total revenues, compared to $7.9 million, or 4.4% of total revenues,
for the same period in 2001. The increase was primarily due to higher
insurance premiums and legal and professional fees, partially offset by a bad
debt provision recorded in 2001.

12



---



##### 



Depreciation and amortization decreased nearly $1.5 million, or 39.6%, to
$2.2 million, or 4.7% of total revenues, for the quarter ended September 30,
2002, from $3.7 million, or 5.8% of total revenues, for the same period in
2001. For the nine months ended September 30, 2002, depreciation and
amortization expenses decreased approximately $4.4 million, or 41.7%, to $6.3
million, or 3.8% of total revenues, compared to $10.7 million, or 6.0% of total
revenues, for the same period in 2001. The decrease was primarily the result
of the complete amortization of certain intangibles, which became fully
amortized during the fourth quarter of 2001, as well as the adoption of SFAS
142, which eliminated the amortization of goodwill, partially offset by higher
depreciation of fixed assets purchased during 2001.

Transaction costs for the nine months ended September 30, 2001 were ($0.5)
million as the result of the completion of certain activities related to prior
pooling of interest transactions which were completed for less than original
estimates.

Interest income decreased $0.9 million, or 54.2%, to $0.7 million for the
quarter ended September 30, 2002, from $1.6 million for the same period in
2001. For the nine months ended September 30, 2002, interest income decreased
$1.7 million, or 35.7%, to $3.0 million, compared to $4.7 million for the same
period in 2001. This decrease was due to a significant decline in yields on
our cash and marketable securities from the same period in the prior year,
partially offset by higher cash and marketable securities balances. Also,
during the quarter ended September 30, 2002, certain marketable securities were
sold resulting in a realized loss of approximately $0.4 million.

During the first quarter of 2002, a provision for income taxes was
recorded for $165,000. Based upon current estimates, no additional provision
for income taxes was recorded during the third quarter of 2002.

As a result of these factors, we had a net loss of $17.2 million for the
quarter ended September 30, 2002, compared to net income of $4.0 million for
the same period in 2001. For the nine months ended September 30, 2002, the net
loss was $14.9 million, compared to a net income of $2.3 million for the same
period in 2001.

LIQUIDITY AND CAPITAL RESOURCES

During the quarter ended September 30, 2002, operations provided $3.8
million of cash. Investing activities provided $15.1 million of cash due to
$19.6 million from the sale of marketable securities, net of purchases,
partially offset by $2.3 million used for the purchase of fixed assets and $2.2
million used for the funding of development costs. Financing activities
provided $0.6 million of cash, as a result of the exercise of stock options and
the purchase of common stock under our employee stock purchase plan.

During the nine months ended September 30, 2002, operations provided $25.2
million of cash. Investing activities used $57.7 million of cash, of which
$41.6 million was for the net purchase of marketable securities, $9.7 million
was for the purchase of fixed assets and $6.4 million was for the funding of
development costs. Financing activities provided $3.3 million of cash, as a
result of the exercise of stock options and the purchase of common stock under
our employee stock purchase plan.

As of September 30, 2002, our principal source of liquidity is our
combined cash and marketable securities balance of $181.4 million. Although
our cash flows have been positive year-to-date through September 30, 2002, it
is likely that we may have negative cash flows from operations over the next 12
months, or beyond, due to our sales and marketing and research and development
initiatives, as well as changes in contracting, whereby less fees are collected
upon new contract signing. Our future capital requirements will depend upon a
number of factors, including our sales volumes and the timing and level of
research and development activities. As of September 30, 2002, we did not have
any material commitments for capital expenditures. We believe that our current
cash and marketable securities balances will be sufficient to meet our
operating requirements for at least the next 12 months.

RISK FACTORS

There are a number of important factors that could affect our business and
future operating results, including without limitation, the factors set forth
below. The information contained in this report should be read in light of
such factors. Any of the following factors could harm our business and future
operating results.

13



---



##### 



Given the length of our sales and implementation cycles, if a significant number of our customers delay implementation, our future operating results may
suffer

We have experienced long sales and implementation cycles. How and when to
implement, replace, expand or substantially modify an information system, or
modify or add business processes, are major decisions for healthcare
organizations. Furthermore, the solutions we provide typically require
significant capital expenditures by the customer. The sales cycle for our
systems has ranged from 6 to 18 months or more from initial contact to contract
execution. Historically, our implementation cycle has ranged from 6 to 36
months from contract execution to completion of implementation. During the
sales cycle and the implementation cycle, we will expend substantial time,
effort and financial resources preparing contract proposals, negotiating the
contract and implementing the solution. We may not realize any revenues to
offset these expenditures, and, if we do, accounting principles may not allow
us to recognize the revenues during corresponding periods, which could harm our
future operating results. Additionally, any decision by our customers to delay
implementation may adversely affect our revenues.

The healthcare industry faces financial constraints that could adversely affect the demand for our products and services

The healthcare industry has faced, and will likely continue to face,
significant financial constraints. For example, the shift to managed healthcare
in the 1990s put pressure on healthcare organizations to reduce costs, and the
Balanced Budget Act of 1997 dramatically reduced Medicare reimbursements to
healthcare organizations. Our solutions often involve a significant financial
commitment by our customers, and, as a result, our ability to grow our business
is largely dependent on our customers information technology budgets. To the
extent healthcare information technology spending declines or increases more
slowly than we anticipate, demand for our products would be adversely affected.

We have a history of operating losses, and we cannot predict future profitability

We had a net loss of $14.9 million during the first nine months of 2002,
and, prior to 2001, we incurred net losses in each year since our inception,
including net losses of $126.3 million in 1997, $35.3 million in 1998, $9.4
million in 1999 and $34.0 million in 2000. Although we had net income in 2001,
we had a loss from operations of $1.6 million. We may continue to incur net
losses and cannot predict when or if we will be profitable in the future.

Our operating results may fluctuate significantly and may cause our stock price to decline

We have experienced significant variations in revenues and operating
results from quarter to quarter. Our quarterly operating results may continue
to fluctuate due to a number of factors, including:



| |  |  | the timing, size and complexity of our product sales and
implementations;                      
| | - |  | -----------------------------------------------------------------------------------------------
|
| |  |  | overall demand for healthcare information technology;                                          
|
| |  |  | the financial condition of our customers and potential customers;                              
|
| |  |  | market acceptance of new services, products and product enhancements by
us and our competitors;
|
| |  |  | product and price competition;                                                                 
|
| |  |  | the relative proportions of revenues we derive from systems and
services and from hardware;    
|
| |  |  | changes in our operating expenses;                                                             
|
| |  |  | the timing and size of future acquisitions;                                                    
|
| |  |  | personnel changes;                                                                             
|
| |  |  | the performance of our products; and                                                           
|
| |  |  | fluctuations in general economic and financial market conditions,
including interest rates.    

14



---



##### 



It is difficult to predict the timing of revenues from product sales
because the sales cycle can vary depending upon several factors. These factors
include the size of the transaction, the changing business plans of the
customer, the effectiveness of the customers management and general economic
conditions. In addition, depending upon the extent to which our customers
elect to license our products under comprehensive bundled arrangements, the
timing of revenue recognition could vary considerably. Under comprehensive
bundled arrangements, revenues are recognized under the terms of the contract
consistent with the timing of performance of all services offered under the
arrangement. Generally, less revenue is recognized under these arrangements
during the first 12 to 24 months compared to our more traditional licensing
arrangements. We will also continue to offer contracts using our more
traditional licensing arrangements, under which revenue is recognized on a
percentage-of-completion basis. For these contracts, the revenue recognition
will depend upon a variety of factors including the availability of
implementation personnel, the implementation schedule and the complexity of the
implementation process. Because a significant percentage of our expenses will
be relatively fixed, a variation in the timing of sales and implementations
could cause significant variations in operating results from quarter to
quarter. We believe that period-to-period comparisons of our historical results
of operations are not necessarily meaningful. You should not rely on these
comparisons as indicators of future performance.

We operate in an intensely competitive market that includes companies that have greater financial, technical and marketing resources than we do

We operate in a market that is intensely competitive. Our principal
competitors include Cerner Corp., McKessonHBOC, Inc., Quadramed, IDX Systems
Corp. and Siemens. We also face competition from providers of practice
management systems, general decision support and database systems and other
segment-specific applications, as well as from healthcare technology
consultants. A number of existing and potential competitors are more
established than we are and have greater name recognition and financial,
technical and marketing resources than we do. We expect that competition will
continue to increase. Increased competition could harm our business.

If the healthcare industry continues to undergo consolidation, this could
impose pressure on our products prices, reduce our potential customer base and reduce demand for our products

Many healthcare providers have consolidated to create larger healthcare
delivery enterprises with greater market power. If this consolidation
continues, it could erode our customer base and could reduce the size of our
target market. In addition, the resulting enterprises could have greater
bargaining power, which may lead to erosion of the prices for our products.

Potential regulation by the U.S. Food and Drug Administration of our products
as medical devices could impose increased costs, delay the introduction of new
products and hurt our business

The U.S. Food and Drug Administration, or FDA, is likely to become
increasingly active in regulating computer software intended for use in the
healthcare setting. The FDA has increasingly focused on the regulation of
computer products and computer-assisted products as medical devices under the
federal Food, Drug and Cosmetic, or FDC, Act. If the FDA chooses to regulate
any of our products as medical devices, it can impose extensive requirements
upon us, including the following:



| |  |  | requiring us to seek FDA clearance of a pre-market notification
submission demonstrating that the product is substantially equivalent to
a device already legally marketed, or to obtain FDA approval of a
pre-market approval application establishing the safety and effectiveness
of the product;
| | - |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|
| |  |  | requiring us to comply with rigorous regulations governing the
pre-clinical and clinical testing, manufacture, distribution, labeling
and promotion of medical devices; and                                                                                                                         
|
| |  |  | requiring us to comply with the FDC Acts general controls, including
establishment registration, device listing, compliance with good
manufacturing practices, reporting of specified device malfunctions and
adverse device events.                                                               

If we fail to comply with applicable requirements, the FDA could respond
by imposing fines, injunctions or civil penalties, requiring recalls or product
corrections, suspending production, refusing to grant pre-market clearance or
approval of products, withdrawing clearances and approvals, and initiating
criminal prosecution. Any final FDA policy governing computer products, once
issued, may increase the cost and time to market of new or existing products or
may prevent us from marketing our products.

15



---



##### 



Changes in federal and state regulations relating to patient data could depress
the demand for our products and impose significant product redesign costs on us

State and federal laws and regulations control the use and disclosure of
patient records and may require the users of such information to implement
specified privacy, security, or other measures. Laws and regulations governing
health data transmissions may change rapidly and may be unclear or difficult to
apply.

On August 22, 1996, former President Clinton signed the Health Insurance
Portability and Accountability Act of 1996, or HIPAA. This legislation, among
other things, required the Department of Health and Human Services, or HHS, to
adopt national standards for some types of electronic health information
transactions and the data elements used in those transactions, to adopt
standards to ensure the privacy and security of health information.

In August 2000, HHS issued final rules requiring health plans, health care
clearinghouses, and health care providers that conduct electronic transactions
to adopt mandatory code sets and electronic health transaction standards. The
compliance deadlines for these rules was October 16, 2002, or October 16, 2003,
for entities that obtained an extension by submitting a written compliance plan
to HHS by October 15, 2002.

In December 2000, HHS issued final rules requiring health plans, health care
clearinghouses, and health care providers that conduct electronic transactions
to adopt policies and procedures for protecting the privacy of personally
identifiable health information. Among other things, these rules will (i)
restrict the use and disclosure of personally identifiable health information
without the prior written permission of the patient; (ii) guarantee a patients
right to be informed regarding how his or her personally identifiable
information is used; (iii) provide patients with rights to access and amend or
obtain an accounting of disclosures concerning their personally identifiable
information; and (iv) impose conditions on the disclosure of personally
identifiable information to business associates of entities that maintain such
information. The compliance deadline for these rules is April 14, 2003. In
August 2002, HHS amended the final privacy rules, but did not extend the April
2003 compliance date.

In August 1998, HHS issued proposed rules that would require health plans,
health care clearinghouses, and health care providers that conduct electronic
transactions to implement standards for protecting the security and integrity
of electronic health information. These rules have not yet been finalized,
and the compliance deadline will be two years after the final rules are issued.
The final security rules may differ from the proposed rules.

These rules could restrict the ability of our customers to obtain, use or
disseminate patient information. Our customers may consider a products
compatibility with these rules when selecting information technology solutions.
This could adversely affect demand for our products and force us to re-design
our products in order to meet the requirements of regulations affecting our
customers. We have included features in our products that are intended to
protect the privacy, security, and integrity of patient data. Despite the
existence of these features, these products may be vulnerable to break-ins and
similar disruptive problems that could jeopardize the security of information
stored in and transmitted through the computer systems of our customers. We may
need to expend significant capital, research and development and other
resources to modify our products to address evolving data security and privacy
issues.

HHS or other federal or state authorities may impose additional laws or
regulations affecting the use and disclosure of health-related information.
These future rules may be more stringent than the rules issued under HIPAA. We
cannot predict the potential impact that these future rules, as finally
approved, may have on our business.

Our products are used to assist clinical decision-making and provide
information about patient medical histories and treatment plans, and if these
products fail to provide accurate and timely information, our customers could
assert claims against us that could result in substantial cost to us, harm our
reputation in the industry and cause demand for our products to decline

We provide products that assist clinical decision-making and relate to
patient medical histories and treatment plans. If these products fail to
provide accurate and timely information, customers could assert liability
claims against us. Litigation with respect to liability claims, regardless of
its outcome, could result in substantial cost to us, divert managements
attention from operations and decrease market acceptance of our products. We
attempt to limit by contract our liability for damages arising from negligence,
errors

16



---



##### 



or mistakes. Despite this precaution, the limitations of liability set forth in
our contracts may not be enforceable or may not otherwise protect us from
liability for damages. We maintain general liability insurance coverage,
including coverage for errors or omissions. However, this coverage may not
continue to be available on acceptable terms or may not be available in
sufficient amounts to cover one or more large claims against us. In addition,
the insurer might disclaim coverage as to any future claim. One or more large
claims could exceed our available insurance coverage.

Highly complex software products such as ours often contain undetected
errors or failures when first introduced or as updates and new versions are
released. It is particularly challenging for us to test our products because it
is difficult to simulate the wide variety of computing environments in which
our customers may deploy them. Despite extensive testing, from time to time we
have discovered defects or errors in our products. Defects, errors or
difficulties could cause delays in product introductions and shipments, result
in increased costs and diversion of development resources, require design
modifications or decrease market acceptance or customer satisfaction with our
products. In addition, despite testing by us and by current and potential
customers, errors may be found after commencement of commercial shipments,
resulting in loss of or delay in market acceptance.

If we undertake additional acquisitions, they may be disruptive to our business
and could have an adverse effect on our future operations and the market price
of our common stock

An important element of our business strategy has been expansion through
acquisitions. Since 1997, we have completed eight acquisitions. Any future
acquisitions would involve a number of risks, including the following:



| |  |  | The anticipated benefits from any acquisition may not be achieved. The
integration of acquired businesses requires substantial attention from
management. The diversion of the attention of management and any
difficulties encountered in the transition process could hurt our
business.
| | - |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|
| |  |  | In future acquisitions, we could issue additional shares of our capital
stock, incur additional indebtedness or pay consideration in excess of
book value, which could have a dilutive effect on future net income, if
any, per share.                                                    
|
| |  |  | New business acquisitions must be accounted for under the purchase
method of accounting. These acquisitions may generate significant
intangible assets and result in substantial related amortization charges
to us.                                                                      

If we fail to attract, motivate and retain highly qualified technical,
marketing, sales and management personnel, our ability to execute our business
strategy could be impaired

Our success depends, in significant part, upon the continued services of
our key technical, marketing, sales and management personnel and on our ability
to continue to attract, motivate and retain highly qualified employees.
Competition for these employees is intense. In addition, the process of
recruiting personnel with the combination of skills and attributes required to
execute our business strategy can be difficult, time-consuming and expensive.
We believe that our ability to implement our strategic goals depends to a
considerable degree on our senior management team. The loss of any member of
that team could hurt our business.

Changing customer requirements could decrease the demand for our products, which could harm our business and decrease our revenues

The market for our products and services is characterized by rapidly
changing technologies, evolving industry standards and new product
introductions and enhancements that may render existing products obsolete or
less competitive. As a result, our position in the healthcare information
technology market could erode rapidly due to unforeseen changes in the features
and functions of competing products, as well as the pricing models for such
products. Our future success will depend in part upon our ability to enhance
our existing products and services and to develop and introduce new products
and services to meet changing customer requirements. The process of developing
products and services such as those we offer is extremely complex and is
expected to become increasingly complex and expensive in the future as new
technologies are introduced. If we are unable to enhance our existing products
or develop new products to meet changing customer requirements, demand for our
products could suffer.

17



---



##### 



We depend on licenses from third parties for rights to the technology used in
several of our products, and if we are unable to continue these relationships
and maintain our rights to this technology, our business could suffer

We depend upon licenses for some of the technology used in our products
from a number of third-party vendors, including Computer Corporation of
America, Computer Associates, Oracle Corporation and Microsoft. We also have
licenses from Premier, Inc. for comparative database systems and other software
components and clinical benchmarking data. Most of these licenses expire within
one to four years, can be renewed only by mutual consent and may be terminated
if we breach the terms of the license and fail to cure the breach within a
specified period of time. We may not be able to continue using the technology
made available to us under these licenses on commercially reasonable terms or
at all. As a result, we may have to discontinue, delay or reduce product
shipments until we obtain equivalent technology, which could hurt our business.
Most of our third-party licenses are non-exclusive. Our competitors may obtain
the right to use any of the technology covered by these licenses and use the
technology to compete directly with us. In addition, if our vendors choose to
discontinue support of the licensed technology in the future, we may not be
able to modify or adapt our own products.

Our products rely on our intellectual property, and any failure by us to
protect our intellectual property, or any misappropriation of it, could enable
our competitors to market products with similar features, which could reduce
demand for our products

We are dependent upon our proprietary information and technology. Our
means of protecting our proprietary rights may not be adequate to prevent
misappropriation. The laws of some foreign countries may not protect our
proprietary rights as fully as do the laws of the United States. Also, despite
the steps we have taken to protect our proprietary rights, it may be possible
for unauthorized third parties to copy aspects of our products, reverse
engineer our products or otherwise obtain and use information that we regard as
proprietary. In some limited instances, customers can access source-code
versions of our software, subject to contractual limitations on the permitted
use of the source code. Although our license agreements with these customers
attempt to prevent misuse of the source code, the possession of our source code
by third parties increases the ease and likelihood of potential
misappropriation of such software. Furthermore, others could independently
develop technologies similar or superior to our technology or design around our
proprietary rights. In addition, infringement or invalidity claims or claims
for indemnification resulting from infringement claims could be asserted or
prosecuted against us. Regardless of the validity of any claims, defending
against these claims could result in significant costs and diversion of our
resources. The assertion of infringement claims could also result in
injunctions preventing us from distributing products. If any claims or actions
are asserted against us, we might be required to obtain a license to the
disputed intellectual property rights, which might not be available on
reasonable terms or at all.

We face litigation that could force us to pay significant damages and could distract our management team

Our Company and three of our
officers were named in seven complaints filed by purported shareholders of the
Company. Each complaint seeks certification as a class and monetary damages
and alleges that the Company and the named officers violated federal securities
laws. Although we believe that these actions are without merit, we cannot
assure you that they will not, if successful, require that we pay substantial
damages. Regardless of the outcome of these matters, we might incur
substantial defense costs, and defending the actions may cause a diversion of
management time and attention.

18



---



##### 



ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

We do not currently use derivative financial instruments. We generally
buy investments that are highly liquid. Based upon the nature of our
investments, we do not expect any material loss from our investments.

Investments in both fixed-rate and floating-rate interest-earning
instruments carry a degree of interest rate risk. Fixed-rate securities may
have their fair market value adversely impacted due to a rise in interest
rates, while floating-rate securities may produce less income than expected if
interest rates fall. Due in part to these factors, our future investment
income may fall short of expectations due to changes in interest rates, or we
may suffer losses in principal if forced to sell securities that have seen a
decline in market value due to changes in interest rates. The following table
illustrates potential fluctuation in annualized interest income based upon
hypothetical values for blended interest rates and cash and marketable
securities account balances.

Annualized interest income based upon hypothetical values for cash and
marketable securities combined balances and interest rates:*

|              |  |                                    |             |  |  |   |             |  |  |   |             | 
|------------- |  | ---------------------------------- | ----------- |  |  | - | ----------- |  |  | - | ----------- | 
|              |  | Combined cash and cash equivalents
|              |  | and marketable securities balances
|Hypothetical  |  |                                   
|Interest Rate |  | $                                  | 150,000,000 |  |  | $ | 170,000,000 |  |  | $ | 190,000,000 | 
|              |  |                                    |             |  |  |  
|1.5%          |  | $                                  | 2,250,000   |  |  | $ | 2,550,000   |  |  | $ | 2,850,000   | 
|2.0%          |  |                                    | 3,000,000   |  |  |   | 3,400,000   |  |  |   | 3,800,000   | 
|2.5%          |  |                                    | 3,750,000   |  |  |   | 4,250,000   |  |  |   | 4,750,000   | 
|3.0%          |  |                                    | 4,500,000   |  |  |   | 5,100,000   |  |  |   | 5,700,000   | 
|3.5%          |  |                                    | 5,250,000   |  |  |   | 5,950,000   |  |  |   | 6,650,000   | 
|4.0%          |  |                                    | 6,000,000   |  |  |   | 6,800,000   |  |  |   | 7,600,000   | 



---

|* |  | (This sensitivity analysis is not a forecast of future interest income.)
|- |  | ------------------------------------------------------------------------

We account for cash equivalents and marketable securities in accordance
with SFAS No. 115. Accounting for Certain Investments in Debt and Equity
Securities. Cash equivalents are short-term highly liquid investments with
original maturity dates of three months or less. Cash equivalents are carried
at cost, which approximates fair market value. Marketable securities consist
of funds that are highly liquid and are classified as available-for -sale.
Marketable securities are recorded at fair value, and unrealized gains and
losses are recorded as a component of other comprehensive income.

We do not currently enter into foreign currency hedge transactions.
Through September 30, 2002, foreign currency fluctuations have not had a
material impact on our financial position or results of operations.

ITEM 4. CONTROLS AND PROCEDURES

Evaluation of disclosure controls and procedures. Based on their
evaluation of the Companys disclosure controls and procedures (as defined in
Rules 13a-14(c) and 15d-14(c) under the Securities Exchange Act of 1934) as of
a date within 90 days of the filing date of this Quarterly Report on Form 10-Q,
the Companys chief executive officer and chief financial officer have
concluded that the Companys disclosure controls and procedures are designed to
ensure that information required to be disclosed by the Company in the reports
that it files or submits under the Exchange Act is recorded, processed,
summarized and reported within the time periods specified in the SECs rules
and forms and are operating in an effective manner.

Changes in internal controls. There were no significant changes in the
Companys internal controls or in other factors that could significantly affect
these controls subsequent to the date of their most recent evaluation.

19



---



##### 



PART II.

ITEM 1. LEGAL PROCEEDINGS

From July through September
2002, the Company and three of its officers (Messrs. Colletti, Patton and
Wilson) were named in seven complaints filed by purported shareholders of the
Company in the United States District Court, Southern District of Florida, West
Palm Beach Division (the District Court).  Each complaint seeks
certification
as a class and monetary damages and alleges that the Company and the named
officers violated federal securities laws. The Company believes that the
actions are without merit, and intends to conduct a vigorous defense against
these allegations.

In September 2002, the City of
Philadelphia Board of Pensions and Retirement, Louis Giannakokas, and Norman K.
Mielziner collectively filed a motion to be appointed as lead plaintiffs and to
consolidate all of the shareholder suits described above.  The court has not
yet ruled on this motion; however, the Company does not intend to oppose it and
it is likely to be granted.  Once the court rules, lead plaintiffs would then
have 45 days to file a consolidated amended complaint, and the Company would
have 45 days from service thereof to file an answer or a motion to dismiss.

ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K

(a)  Exhibits: See Index to exhibits.

(b)  Reports on Form 8-K:



| |                                                                                                                               
| | ------------------------------------------------------------------------------------------------------------------------------
| | (1) No reports on Form 8-K were filed with the Securities and Exchange
Commission during the quarter ended September 30, 2002.

20



---



##### 



SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.

|                        |  |                                                                                                                                                     
|----------------------- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------
|                        |  | ECLIPSYS CORPORATION                                                                                                                                
|                       
|                       
|Date: November 14, 2002 |  | /s/ Robert J. CollettiRobert J. Colletti
Senior Vice President and Chief Financial Officer
(Principal financial officer and duly authorized officer)

21



---



##### 



CERTIFICATIONS

I, Paul L. Ruflin, certify that:

1.     I have reviewed this quarterly report on Form 10-Q of Eclipsys
Corporation;

2.     Based on my knowledge, this quarterly report does not contain any
untrue statement of a material fact or omit to state a material fact necessary
to make the statements made, in light of the circumstances under which such
statements were made, not misleading with respect to the period covered by this
quarterly report;

3.     Based on my knowledge, the financial statements, and other financial
information included in this quarterly report, fairly present in all material
respects the financial condition, results of operations and cash flows of the
registrant as of, and for, the periods presented in this quarterly report;

4.     The registrants other certifying officers and I are responsible for
establishing and maintaining disclosure controls and procedures (as defined in
Exchange Act Rules 13a-14 and 15d-14) for the registrant and we have:

a) designed such disclosure controls and procedures to ensure that material
information relating to the registrant, including its consolidated
subsidiaries, is made known to us by others within those entities, particularly
during the period in which this quarterly report is being prepared;

b) evaluated the effectiveness of the registrants disclosure controls and
procedures as of a date within 90 days prior to the filing date of this
quarterly report (the Evaluation Date); and

c) presented in this quarterly report our conclusions about the
effectiveness of the disclosure controls and procedures based on our evaluation
as of the Evaluation Date;

5.     The registrants other certifying officer and I have disclosed,
based on our most recent evaluation, to the registrants auditors and the audit
committee of registrants board of directors (or persons performing the
equivalent function):

a) all significant deficiencies in the design or operation of internal
controls which could adversely affect the registrants ability to record,
process, summarize and report financial data and have identified for the
registrants auditors any material weaknesses in internal controls; and

b) any fraud, whether or not material, that involves management or other
employees who have a significant role in the registrants internal controls;
and

6.     The registrants other certifying officers and I have indicated in
this quarterly report whether there were significant changes in internal
controls or in other factors that could significantly affect internal controls
subsequent to the date of our most recent evaluation, including any corrective
actions with regard to significant deficiencies and material weaknesses.

|                         |  |                                                         
|------------------------ |  | --------------------------------------------------------
|Dated: November 14, 2002 |  | /s/ Paul L. RuflinPaul L. Ruflin
Chief Executive Officer

22



---



##### 



CERTIFICATIONS

I, Robert J. Colletti, certify that:

1.     I have reviewed this quarterly report on Form 10-Q of Eclipsys
Corporation;

2.     Based on my knowledge, this quarterly report does not contain any
untrue statement of a material fact or omit to state a material fact necessary
to make the statements made, in light of the circumstances under which such
statements were made, not misleading with respect to the period covered by this
quarterly report;

3.     Based on my knowledge, the financial statements, and other financial
information included in this quarterly report, fairly present in all material
respects the financial condition, results of operations and cash flows of the
registrant as of, and for, the periods presented in this quarterly report;

4.     The registrants other certifying officers and I are responsible for
establishing and maintaining disclosure controls and procedures (as defined in
Exchange Act Rules 13a-14 and 15d-14) for the registrant and we have:

a) designed such disclosure controls and procedures to ensure that material
information relating to the registrant, including its consolidated
subsidiaries, is made known to us by others within those entities, particularly
during the period in which this quarterly report is being prepared;

b) evaluated the effectiveness of the registrants disclosure controls and
procedures as of a date within 90 days prior to the filing date of this
quarterly report (the Evaluation Date); and

c) presented in this quarterly report our conclusions about the
effectiveness of the disclosure controls and procedures based on our evaluation
as of the Evaluation Date;

5.     The registrants other certifying officer and I have disclosed,
based on our most recent evaluation, to the registrants auditors and the audit
committee of registrants board of directors (or persons performing the
equivalent function):

a) all significant deficiencies in the design or operation of internal
controls which could adversely affect the registrants ability to record,
process, summarize and report financial data and have identified for the
registrants auditors any material weaknesses in internal controls; and

b) any fraud, whether or not material, that involves management or other
employees who have a significant role in the registrants internal controls;
and

6.     The registrants other certifying officers and I have indicated in
this quarterly report whether there were significant changes in internal
controls or in other factors that could significantly affect internal controls
subsequent to the date of our most recent evaluation, including any corrective
actions with regard to significant deficiencies and material weaknesses.

|                         |  |                                                                 
|------------------------ |  | ----------------------------------------------------------------
|Dated: November 14, 2002 |  | /s/ Robert J. CollettiRobert J. Colletti
Chief Financial Officer

23



---



##### 



ECLIPSYS CORPORATION
EXHIBIT INDEX

|        |  |                                                 
|------- |  | ------------------------------------------------
|EXHIBIT |  |                                                 
|NO.     |  | DESCRIPTION                                     
|        |  |                                                 
|99.1    |  | Certification Pursuant to 18 U.S.C. Section 1350

24