Note Receivable from and Investment in CareCentrix

At June 30, 2011 and December 31, 2010, the Company held an approximate 22 percent and 30 percent ownership interest, respectively, in the combined preferred and common equity of CareCentrix Holdings Inc. The Company's ongoing ownership interest is subject to dilution following any equity issuances to employees of CareCentrix Holdings Inc. and any other parties.

The Company holds a $25 million subordinated promissory note from CareCentrix Holdings. The note is due on the earliest of March 25, 2014, a public offering by CareCentrix Holdings, or a sale of CareCentrix Holdings. The note bears interest at a fixed rate of 10 percent, which is payable quarterly, provided that CareCentrix remains in compliance with its senior debt covenants. Interest on the CareCentrix note, which is included in interest income in the Company's consolidated statements of income, amounted to $0.6 million for both the second quarter of 2011 and 2010 and $1.3 million for both the first six months of 2011 and 2010. The Company's only financing receivable is the note receivable from CareCentrix Holdings. The Company measures impairment based on the present value of expected cash flows after considering assumptions relating to risk factors and economic conditions. On an ongoing basis, the Company assesses the credit quality based on the Company's review of CareCentrix Holdings' financial position and receipt of interest payments when due. Based on the Company's analysis, as of June 30, 2011 and December 31, 2010, the Company has no allowances for credit losses.

The Company recognized approximately $0.3 million and $0.9 million of equity in the net earnings of CareCentrix for the second quarter and first six months of 2011, respectively, and $0.4 million and $0.7 million for the corresponding periods of 2010.

During the second quarter of 2010, the Company recorded a receivable from CareCentrix of $1.8 million in connection with the tax impact of settlement charges relating to the settlement of a commercial contractual dispute involving the Company's former subsidiary, CareCentrix, for which the Company will be reimbursed upon realization of the tax deduction.