|   | For the Fiscal Year Ended December 31, 2010 |
|--------|---------------------------------------------|

| Delaware                        |   | 62-1117144          |
|---------------------------------|--------|---------------------|
| (State or other jurisdiction of |   | (I.R.S. Employer    |
| incorporation or organization)  |   | Identification No.) |

| 701 Cool Springs Boulevard, Franklin, TN  37067 |
|-----------------------------------------------------------|
| (Address of principal executive offices) (Zip code)       |

| (615) 614-4929                                             |
|------------------------------------------------------------|
| (Registrant’s telephone number, including area code) |

| Securities registered pursuant to Section 12(b) of the Act: |
|-------------------------------------------------------------|

| Title of each class                     |   | Name of each exchange on which registered |
|-----------------------------------------|--------|-------------------------------------------|
| Common Stock - $.001 par value, and     |   | The NASDAQ Stock Market LLC          |
| related Preferred Stock Purchase Rights |   |                                      |
|                                    |   |                                      |

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|     |     |                                                                                           | Page   |
|----------|----------|------------------------------------------------------------------------------------------------|--------|
| Part I   |     |                                                                                           |   |
|     | Item 1.  | Business                                                                                       | 4      |
|     | Item 1A. | Risk Factors                                                                                   | 12     |
|     | Item 1B. | Unresolved Staff Comments                                                                      | 19     |
|     | Item 2.  | Properties                                                                                     | 19     |
|     | Item 3.  | Legal Proceedings                                                                              | 19     |
|     | Item 4.  | Removed and Reserved                                                                           | 21     |
| Part II  |     |                                                                                           |   |
|     | Item 5.  | Market for Registrant’s Common Equity, Related Stockholder                               |   |
|     |     | Matters and Issuer Purchases of Equity Securities                                              | 22     |
|     | Item 6.  | Selected Financial Data                                                                        | 24     |
|     | Item 7.  | Management’s Discussion and Analysis of Financial Condition and                          |   |
|     |     | Results of Operations                                                                          | 25     |
|     | Item 7A. | Quantitative and Qualitative Disclosures About Market Risk                                     | 41     |
|     | Item 8.  | Financial Statements and Supplementary Data                                                    | 43     |
|     | Item 9.  | Changes in and Disagreements with Accountants on Accounting and                                |   |
|     |     | Financial Disclosure                                                                           | 75     |
|     | Item 9A. | Controls and Procedures                                                                        | 75     |
|     | Item 9B. | Other Information                                                                              | 76     |
| Part III |     |                                                                                           |   |
|     | Item 10. | Directors, Executive Officers and Corporate Governance                                         | 76     |
|     | Item 11. | Executive Compensation                                                                         | 76     |
|     | Item 12. | Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters | 76     |
|     | Item 13. | Certain Relationships and Related Transactions, and Director Independence                      | 76     |
|     | Item 14. | Principal Accounting Fees and Services                                                         | 76     |
| Part IV  |     |                                                                                           |   |
|     | Item 15. | Exhibits, Financial Statement Schedules                                                        | 76     |

----

|   | · | fostering wellness and disease prevention through total population screening, well-being assessments and supportive interventions; and |
|--------|--------|----------------------------------------------------------------------------------------------------------------------------------------|

|   | · | providing access to health improvement programs, such as fitness, weight management, and complementary and alternative medicine. |
|--------|--------|----------------------------------------------------------------------------------------------------------------------------------|

|   | · | promoting the change and improvement of the lifestyle behaviors that lead to poor health or chronic conditions; and |
|--------|--------|---------------------------------------------------------------------------------------------------------------------|

|   | · | providing educational materials and personal interactions with highly trained nurses and other healthcare professionals to create and sustain healthier behaviors for those individuals at-risk or in the early stages of chronic conditions. |
|--------|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

|   | · | incorporating the latest, evidence-based clinical guidelines into interventions to optimize patient health outcomes; |
|--------|--------|----------------------------------------------------------------------------------------------------------------------|

|   | · | developing care support plans and motivating members to set attainable goals for themselves; |
|--------|--------|----------------------------------------------------------------------------------------------|

|   | · | providing local market resources to address acute episodic interventions; |
|--------|--------|---------------------------------------------------------------------------|

|   | · | coordinating members’ care with their healthcare providers; |
|--------|--------|-------------------------------------------------------------------|

|   | · | providing software licensing and management consulting in support of well-being improvement services; and |
|--------|--------|-----------------------------------------------------------------------------------------------------------|

----

|   |   |                          |   | December 31, |   | December 31, |   |
|--------|--------|-------------------------------|--------|--------------|--------|--------------|--------|
|   |   | (In 000s)                     |   | 2010         |   | 2009         |   |
|   |   | Annualized revenue in backlog |   | $            | 37,100 |         | $      | 32,400 |   |

|   | · | adopt or maintain healthy behaviors; |
|--------|--------|--------------------------------------|

|   | · | reduce health-related risk factors; and |
|--------|--------|-----------------------------------------|

|   | · | optimize care for identified health conditions. |
|--------|--------|-------------------------------------------------|

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----

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| ·   | increasing our vulnerability to a downturn in general economic conditions or to increases in interest rates, particularly with respect to the portion of our outstanding debt that is subject to variable interest rates; |
|--------------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | potentially limiting our ability to obtain additional financing or to obtain such financing on favorable terms; |
|--------------------|-----------------------------------------------------------------------------------------------------------------|

| ·   | causing us to dedicate a portion of future cash flow from operations to service or pay down our debt, which reduces the cash available for other purposes, such as operations, capital expenditures, and future business opportunities; and |
|--------------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | possibly limiting our ability to adjust to changing market conditions and placing us at a competitive disadvantage compared to our competitors who may be less leveraged. |
|--------------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

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| Officer             | Age    | Position                                                                                                                                                                                                                                                                               |
|---------------------|--------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|                |   |                                                                                                                                                                                                                                                                                   |
| Ben R. Leedle, Jr.  | 49     | Chief Executive Officer and director of the Company since September 2003, President from May 2002 through October 2008, Executive Vice President and Chief Operating Officer of the Health Plan Group from 2000 until May 2002.  Senior Vice President from 1996 until 2000. |
|                |   |                                                                                                                                                                                                                                                                                   |
| Stefen F. Brueckner | 61     | President and Chief Operating Officer of the Company since October 2008.  Vice President, Senior Products, for Humana Inc., from 2005 to 2008 and Vice President, Market Operations and Large Group Underwriting, from 2001 to 2005.                                         |
|                |   |                                                                                                                                                                                                                                                                                   |
| Mary A. Chaput      | 60     | Chief Financial Officer and Secretary of the Company since October 2001.                                                                                                                                                                                                               |
|                |   |                                                                                                                                                                                                                                                                                   |
| Matthew E. Kelliher | 55     | President, International Business, of the Company since September 2004.                                                                                                                                                                                                                |
|                |   |                                                                                                                                                                                                                                                                                   |
| Alfred Lumsdaine    | 45     | Chief Accounting Officer since February 2002.                                                                                                                                                                                                                                          |
|                |   |                                                                                                                                                                                                                                                                                   |
| Anne M. Wilkins     | 44     | Vice President, Marketing and Strategy, of the Company since May 2008.  Partner and Managing Director and lead of the North America Payer practice of the Boston Consulting Group from 2003 to 2008.                                                                         |

----

|   |   |                         |   | High   |   |   | Low    |   |   |
|--------|--------|------------------------------|--------|--------|--------|--------|--------|--------|--------|
|   |   | Year ended December 31, 2010 |   |   |   |   |   |   |   |
|   |   | First quarter                |   | $      | 19.50  |   | $      | 14.76  |   |
|   |   | Second quarter               |   |   | 17.64  |   |   | 11.78  |   |
|   |   | Third quarter                |   |   | 15.18  |   |   | 11.44  |   |
|   |   | Fourth quarter               |   |   | 12.49  |   |   | 9.50   |   |
|   |   |                         |   |   |   |   |   |   |   |
|   |   | Year ended December 31, 2009 |   |   |   |   |   |   |   |
|   |   | First quarter                |   | $      | 15.52  |   | $      | 7.01   |   |
|   |   | Second quarter               |   |   | 14.78  |   |   | 8.27   |   |
|   |   | Third quarter                |   |   | 16.86  |   |   | 12.03  |   |
|   |   | Fourth quarter               |   |   | 19.44  |   |   | 13.31  |   |

----

| Period                |   |   | Total Number of Shares Purchased |   |   |   | Average Price Paid  per Share |   |   |   | Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs (1) |         |   |   | Maximum Approximate Dollar Value of Shares that May Yet Be Purchased Under the Plans or Programs (1) |   |
|-----------------------|--------|--------|----------------------------------|--------|--------|--------|-----------------------------------------|--------|--------|--------|--------------------------------------------------------------------------------------|--------------|--------|--------|------------------------------------------------------------------------------------------------------|--------|
|                  |   |   |                             |   |   |   |                                    |   |   |   |                                                                                 |         |   |   |                                                                                                 |   |   |   |
| October 1 through 31  |   |   | 10,000                           |   |   |   |                                    | $10.34 |   |   |                                                                                 |  10,000 |   |   |                                                                                                 |   | $59,896,600 |   |
| November 1 through 30 |   |   | 182,200                          |   |   |   |                                    | $10.64 |   |   |                                                                                 | 192,200      |   |   |                                                                                                 |   | $57,957,992 |   |
| December 1 through 31 |   |   | 237,454                          |   |   |   |                                    | $10.33 |   |   |                                                                                 | 429,654      |   |   |                                                                                                 |   | $55,505,092 |   |
|                  |   |   |                             |   |   |   |                                    |   |   |   |                                                                                 |         |   |   |                                                                                                 |   |   |   |
| Total                 |   |   | 429,654                          |   |   |   |                                    |   |   |   |                                                                                 |         |   |   |                                                                                                 |   |   |   |

----

| (In thousands, except per share data)                                        |   | Year Ended December 31, |   |   | Year Ended December 31, |   |   | Four Months  Ended December 31, |    |   |   | Year Ended August 31, |   |    |
|------------------------------------------------------------------------------|--------|-------------------------|--------|--------|-------------------------|--------|--------|-------------------------------------------|---------|--------|--------|-----------------------|--------|---------|
|                                                                         |   | 2010                    |   |   | 2009                    |   |   | 2008                                      |    |   |   |  2008            |   |    |   | 2007 |   |   |   | 2006 |   |   |
|                                                                         |   | (1)                     |   |   | (1)                     |   |   | (1)                                       |    |   |   | (1)                   |   |    |   |  (1) |   |   |   |   |   |   |
| Operating Results:                                                           |   |                    |   |   |                    |   |   |                                      |    |   |   |                  |   |    |   |   |   |   |   |   |   |   |   |   |   |   |
| Revenues                                                                     | $      | 720,333                 |   | $      | 717,426                 |   |   | $                                         | 244,737 |   |   |                  | $      | 736,243 |   |   |   | $ | 615,586 |   |   |   | $ | 412,308 |   |   |
| Cost of services (exclusive of depreciation and amortization included below) |   | 493,713                 |   |   | 522,999                 |   |   |                                      | 177,651 |   |   |                  |   | 503,940 |   |   |   |   | 417,721 |   |   |   |   | 281,161 |   |   |
| Selling, general and administrative expenses                                 |   | 72,830                  |   |   | 71,535                  |   |   |                                      | 27,790  |   |   |                  |   | 71,342  |   |   |   |   | 67,352 |   |   |   |   | 44,417 |   |   |
| Depreciation and amortization                                                |   | 52,756                  |   |   | 49,289                  |   |   |                                      | 16,188  |   |   |                  |   | 47,479  |   |   |   |   | 37,044 |   |   |   |   | 24,517 |   |   |
| Impairment loss                                                              |   | —                 |   |   | —                 |   |   |                                      | 4,344   |   |   |                  |   | — |   |   |   |   | — |   |   |   |   | — |   |   |
| Restructuring and related charges                                            |   | 10,258                  |   |   | —                 |   |   |                                      | 10,264  |   |   |                  |   | — |   |   |   |   | — |   |   |   |   | — |   |   |
| Operating income                                                             | $      | 90,776                  |   | $      | 73,603                  |   |   | $                                         | 8,500   |   |   |                  | $      | 113,482 |   |   |   | $ | 93,469 |   |   |   | $ | 62,213 |   |   |
| Gain on sale of investment                                                   |   | (1,163                  | )      |   | (2,581                  | )      |   |                                      | — |   |   |                  |   | — |   |   |   |   | — |   |   |   |   | — |   |   |
| Interest expense                                                             |   | 14,164                  |   |   | 15,717                  |   |   |                                      | 6,757   |   |   |                  |   | 20,927  |   |   |   |   | 18,185 |   |   |   |   | 1,053 |   |   |
| Legal settlement and related costs                                           |   | —                 |   |   | 39,956                  |   |   |                                      | — |   |   |                  |   | — |   |   |   |   | — |   |   |   |   | — |   |   |
|                                                                         |   |                    |   |   |                    |   |   |                                      |    |   |   |                  |   |    |   |   |   |   |   |   |   |   |   |   |   |   |
| Income before income taxes                                                   | $      | 77,775                  |   | $      | 20,511                  |   |   | $                                         | 1,743   |   |   |                  | $      | 92,555  |   |   |   | $ | 75,284 |   |   |   | $ | 61,160 |   |   |
| Income tax expense                                                           |   | 30,445                  |   |   | 10,137                  |   |   |                                      | 1,009   |   |   |                  |   | 37,740  |   |   |   |   | 30,163 |   |   |   |   | 24,009 |   |   |
| Net income                                                                   | $      | 47,330                  |   | $      | 10,374                  |   |   | $                                         | 734     |   |   |                  | $      | 54,815  |   |   |   | $ | 45,121 |   |   |   | $ | 37,151 |   |   |
|                                                                         |   |                    |   |   |                    |   |   |                                      |    |   |   |                  |   |    |   |   |   |   |   |   |   |   |   |   |   |   |
| Basic income per share: (1)                                                  | $      | 1.39                    |   | $      | 0.31                    |   |   | $                                         | 0.02    |   |   |                  | $      | 1.57    |   |   |   | $ | 1.29 |   |   |   | $ | 1.08 |   |   |
|                                                                         |   |                    |   |   |                    |   |   |                                      |    |   |   |                  |   |    |   |   |   |   |   |   |   |   |   |   |   |   |
| Diluted income per share: (1)                                                | $      | 1.36                    |   | $      | 0.30                    |   |   | $                                         | 0.02    |   |   |                  | $      | 1.50    |   |   |   | $ | 1.22 |   |   |   | $ | 1.02 |   |   |
|                                                                         |   |                    |   |   |                    |   |   |                                      |    |   |   |                  |   |    |   |   |   |   |   |   |   |   |   |   |   |   |
| Weighted average common shares and                                           |   |                    |   |   |                    |   |   |                                      |    |   |   |                  |   |    |   |   |   |   |   |   |   |   |   |   |   |   |
| equivalents:                                                                 |   |                    |   |   |                    |   |   |                                      |    |   |   |                  |   |    |   |   |   |   |   |   |   |   |   |   |   |   |
| Basic                                                                        |   | 34,129                  |   |   | 33,730                  |   |   |                                      | 33,616  |   |   |                  |   | 34,977  |   |   |   |   | 35,049 |   |   |   |   | 34,348 |   |   |
| Diluted                                                                      |   | 34,902                  |   |   | 34,359                  |   |   |                                      | 34,038  |   |   |                  |   | 36,597  |   |   |   |   | 37,002 |   |   |   |   | 36,379 |   |   |
|                                                                         |   |                    |   |   |                    |   |   |                                      |    |   |   |                  |   |    |   |   |   |   |   |   |   |   |   |   |   |   |
| Balance Sheet Data:                                                          |   |                    |   |   |                    |   |   |                                      |    |   |   |                  |   |    |   |   |   |   |   |   |   |   |   |   |   |   |
| Cash and cash equivalents                                                    | $      | 1,064                   |   | $      | 2,356                   |   |   | $                                         | 5,157   |   |   |                  | $      | 35,242  |   |   |   | $ | 47,655 |   |   |   | $ | 154,792 |   |   |
| Working capital (deficit)                                                    |   | 547                     |   |   | (44,296                 | )      |   |                                      | (6,034  | )      |   |                  |   | 21,276  |   |   |   |   | 10,792 |   |   |   |   | 124,469 |   |   |
| Total assets                                                                 |   | 861,689                 |   |   | 882,366                 |   |   |                                      | 883,090 |   |   |                  |   | 906,813 |   |   |   |   | 828,845 |   |   |   |   | 382,386 |   |   |
| Long-term debt                                                               |   | 243,425                 |   |   | 254,345                 |   |   |                                      | 304,372 |   |   |                  |   | 345,395 |   |   |   |   | 297,059 |   |   |   |   | 236 |   |   |
| Other long-term liabilities                                                  |   | 39,140                  |   |   | 42,615                  |   |   |                                      | 39,533  |   |   |                  |   | 31,227  |   |   |   |   | 14,388 |   |   |   |   | 10,853 |   |   |
| Stockholders’ equity                                                   |   | 430,841                 |   |   | 377,277                 |   |   |                                      | 357,036 |   |   |                  |   | 354,334 |   |   |   |   | 362,750 |   |   |   |   | 274,873 |   |   |
|                                                                         |   |                    |   |   |                    |   |   |                                      |    |   |   |                  |   |    |   |   |   |   |   |   |   |   |   |   |   |   |
| Other Operating Data:                                                        |   |                    |   |   |                    |   |   |                                      |    |   |   |                  |   |    |   |   |   |   |   |   |   |   |   |   |   |   |
| Annualized revenue in backlog                                                | $      | 37,100                  |   | $      | 32,400                  |   |   | $                                         | 35,900  |   |   |                  | $      | 13,600  |   |   |   | $ | 39,900 |   |   |   | $ | 6,625 |   |   |

| (1) | Includes operating results, balance sheet data, and other operating data of Axia Health Management, Inc. since the date of the acquisition, which was December 1, 2006. |
|-----|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

|   | · | fostering wellness and disease prevention through total population screening, well-being assessments and supportive interventions; and |
|--------|--------|----------------------------------------------------------------------------------------------------------------------------------------|

|   | · | providing access to health improvement programs, such as fitness, weight management, and complementary and alternative medicine. |
|--------|--------|----------------------------------------------------------------------------------------------------------------------------------|

|   | · | promoting the change and improvement of the lifestyle behaviors that lead to poor health or chronic conditions; and |
|--------|--------|---------------------------------------------------------------------------------------------------------------------|

|   | · | providing educational materials and personal interactions with highly trained nurses and other healthcare professionals to create and sustain healthier behaviors for those individuals at-risk or in the early stages of chronic conditions. |
|--------|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

|   | · | incorporating the latest, evidence-based clinical guidelines into interventions to optimize patient health outcomes; |
|--------|--------|----------------------------------------------------------------------------------------------------------------------|

|   | · | developing care support plans and motivating members to set attainable goals for themselves; |
|--------|--------|----------------------------------------------------------------------------------------------|

|   | · | providing local market resources to address acute episodic interventions; |
|--------|--------|---------------------------------------------------------------------------|

|   | · | coordinating members’ care with their healthcare providers; |
|--------|--------|-------------------------------------------------------------------|

|   | · | providing software licensing and management consulting in support of well-being improvement services; and |
|--------|--------|-----------------------------------------------------------------------------------------------------------|

|   | · | providing high-risk care management for members at risk for hospitalization due to complex conditions. |
|--------|--------|--------------------------------------------------------------------------------------------------------|

|   | ·· | our ability to sign and implement new contracts for our solutions;our ability to accurately forecast the costs required to fully implement new contracts; |
|--------|--------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

|   | · | our ability to retain existing customers and to renew or maintain contracts with our customers under existing terms or restructure these contracts on terms that would not have a material negative impact on our results of operations; |
|--------|--------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | our ability to accurately forecast performance and the timing of revenue recognition under the terms of our customer contracts ahead of data collection and reconciliation in order to provide forward-looking guidance; |
|--------|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | the impact of PPACA on our operations and/or the demand for our services; |
|--------|--------|---------------------------------------------------------------------------|

|   | · | the impact of any new or proposed legislation, regulations and interpretations relating to the Medicare Prescription Drug, Improvement, and Modernization Act of 2003, including the potential expansion to Phase II for Medicare Health Support programs and any legislative or regulatory changes with respect to Medicare Advantage; |
|--------|--------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | our ability to anticipate the rate of market acceptance of our solutions in potential international markets; |
|--------|--------|--------------------------------------------------------------------------------------------------------------|

|   | · | our ability to accurately forecast the costs necessary to implement our strategy of establishing a presence in international markets; |
|--------|--------|---------------------------------------------------------------------------------------------------------------------------------------|

|   | · | the risks associated with foreign currency exchange rate fluctuations and our ability to hedge against such fluctuations; |
|--------|--------|---------------------------------------------------------------------------------------------------------------------------|

|   | · | the risks associated with deriving a significant concentration of our revenues from a limited number of customers; |
|--------|--------|-------------------------------------------------------------------------------------------------------------------------|

|   | · | our ability to achieve the contractually required cost savings and clinical outcomes improvements and reach mutual agreement with customers with respect to cost savings, or to achieve such savings and improvements within the time frames contemplated by us; |
|--------|--------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | our ability to achieve estimated annualized revenue in backlog in the manner and within the timeframe we expect, which is based on certain estimates regarding the implementation of our services; |
|--------|--------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | our ability and/or the ability of our customers to enroll participants and to estimate their level of enrollment and participation in our programs in a manner and within the timeframe anticipated by us; |
|--------|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | the ability of our customers to provide timely and accurate data that is essential to the operation and measurement of our performance under the terms of our contracts; |
|--------|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | our ability to favorably resolve contract billing and interpretation issues with our customers; |
|--------|--------|-----------------------------------------------------------------------------------------------------------|

|   | · | our ability to service our debt and make principal and interest payments as those payments become due; |
|--------|--------|--------------------------------------------------------------------------------------------------------|

|   | · | the risks associated with changes in macroeconomic conditions, which may reduce the demand and/or the timing of purchases for our services from customers or potential customers, reduce the number of covered lives of our existing customers, or restrict our ability to obtain additional financing; |
|--------|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | counterparty risk associated with our interest rate swap agreements and foreign currency exchange contracts; |
|--------|--------|--------------------------------------------------------------------------------------------------------------|

|   | · | our ability to integrate acquired businesses or technologies into our business and to accurately forecast the related costs; |
|--------|--------|------------------------------------------------------------------------------------------------------------------------------|

|   | · | the impact of any impairment of our goodwill or other intangible assets; |
|--------|--------|--------------------------------------------------------------------------|

|   | · | our ability to develop new products and deliver outcomes on those products; |
|--------|--------|-----------------------------------------------------------------------------|

|   | · | our ability to implement our new integrated data and technology solutions platform within the required timeframe and expected cost estimates; |
|--------|--------|-----------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | our ability to obtain adequate financing to provide the capital that may be necessary to support our operations and to support or guarantee our performance under new contracts; |
|--------|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | unusual and unforeseen patterns of healthcare utilization by individuals with diseases or conditions for which we provide services; |
|--------|--------|-------------------------------------------------------------------------------------------------------------------------------------|

|   | · | the ability of our customers to maintain the number of covered lives enrolled in the plans during the terms of our agreements; |
|--------|--------|-------------------------------------------------------------------------------------------------------------------------------------|

|   | · | the impact of legal proceedings involving us and/or our subsidiaries; |
|--------|--------|-----------------------------------------------------------------------|

----

|   | · | the impact of future state, federal, and international legislation and regulations applicable to our business, including PPACA, on our ability to deliver our services and on the financial health of our customers and their willingness to purchase our services; |
|--------|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | ··  | current geopolitical turmoil, the continuing threat of domestic or international terrorism, and the potential emergence of a health pandemic; andother risks detailed in this Annual Report on Form 10-K, including those set forth in Item 1A. |
|--------|--------------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

----

----

|     · | adopt or maintain healthy behaviors; |
|--------------------------------|--------------------------------------|

|     · | reduce health-related risk factors; and |
|--------------------------------|-----------------------------------------|

|     · | optimize care for identified health conditions. |
|--------------------------------|-------------------------------------------------|

----

----

|   |                                                                         |   | Year EndedDecember 31, |   | Four Months Ended December 31, |   | Year Ended |   |    |
|--------|------------------------------------------------------------------------------|--------|------------------------|--------|--------------------------------|--------|------------|--------|---------|
|   |                                                                         |   |                   |   | August 31,                     |   |       |
|   |                                                                         |   | 2010                   |   | 2009                           |   | 2008       |   | 2007    |   | 2008 |   |   |
|   |                                                                         |   |                   |   |                           |   |       |   |    |   |   |   |   |
|   | Revenues                                                                     |   | 100.0                  | %      | 100.0                          | %      | 100.0      | %      | 100.0   | % | 100.0 | % |   |
|   | Cost of services (exclusive of depreciation and amortization included below) |   | 68.5                   | %      | 72.9                           | %      | 72.6       | %      | 69.9    | % | 68.4 | % |   |
|   | Selling, general and administrative expenses                                 |   | 10.1                   | %      | 10.0                           | %      | 11.4       | %      | 9.3     | % | 9.7 | % |   |
|   | Depreciation and amortization                                                |   | 7.3                    | %      | 6.9                            | %      | 6.6        | %      | 5.8     | % | 6.4 | % |   |
|   | Impairment loss                                                              |   | —                |   | —                        |   | 1.8        | %      | — |   | — |   |   |
|   | Restructuring and related charges                                            |   | 1.4                    | %      | —                        |   | 4.2        | %      | — |   | — |   |   |
|   | Operating income (1)                                                         |   | 12.6                   | %      | 10.3                           | %      | 3.5        | %      | 15.0    | % | 15.4 | % |   |
|   |                                                                         |   |                   |   |                           |   |       |   |    |   |   |   |   |
|   | Gain on sale of investment                                                   |   | (0.2                   | )%     | (0.4                           | )%     | —    |   | — |   | — |   |   |
|   | Interest expense                                                             |   | 2.0                    | %      | 2.2                            | %      | 2.8        | %      | 3.0     | % | 2.8 | % |   |
|   | Legal settlement                                                             |   | —                |   | 5.6                            | %      | —    |   | — |   | — |   |   |
|   |                                                                         |   |                   |   |                           |   |       |   |    |   |   |   |   |
|   | Income before income taxes                                                   |   | 10.8                   | %      | 2.9                            | %      | 0.7        | %      | 11.9    | % | 12.6 | % |   |
|   | Income tax expense                                                           |   | 4.2                    | %      | 1.4                            | %      | 0.4        | %      | 4.9     | % | 5.1 | % |   |
|   |                                                                         |   |                   |   |                           |   |       |   |    |   |   |   |   |
|   | Net income (1)                                                               |   | 6.6                    | %      | 1.4                            | %      | 0.3        | %      | 7.0     | % | 7.4 | % |   |

|   | · | the commencement of contracts with new customers; |
|--------|--------|---------------------------------------------------|

|   | · | the recognition of revenues in connection with a final settlement with CMS associated with our participation in two Medicare Health Support programs; and |
|--------|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | an increase in participation in our fitness center programs as well as in the number of members eligible to participate in such programs. |
|--------|--------|-------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | contract restructurings and terminations with certain customers; and |
|--------|--------|----------------------------------------------------------------------|

|   | · | a decrease in performance-based revenues due to our inability to measure and achieve performance targets on certain contracts during fiscal 2010. |
|--------|--------|---------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | contract restructurings and terminations with certain customers; and |
|--------|--------|----------------------------------------------------------------------|

|   | · | decreased revenues related to our Medicare Health Support programs, which ended in January and July 2008, respectively. |
|--------|--------|-------------------------------------------------------------------------------------------------------------------------|

----

|   | · | the commencement of contracts with new customers; |
|--------|--------|---------------------------------------------------|

|   | · | an increase in participation in our fitness center programs as well as in the number of members eligible to participate in such programs; |
|--------|--------|-------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | growth in the number of self-insured employer lives under existing customer contracts; |
|--------|--------|----------------------------------------------------------------------------------------|

|   | · | increased performance-based revenues due to our ability to measure and achieve performance targets on certain contracts during fiscal 2009; and |
|--------|--------|-------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | increased membership in customers’ existing programs. |
|--------|--------|-------------------------------------------------------------|

|   | · | the commencement of new contracts; |
|--------|--------|------------------------------------|

|   | · | growth in the number of self-insured employers on behalf of our health plan customers; and |
|--------|--------|--------------------------------------------------------------------------------------------|

|   | · | the addition of new programs or the expansion of existing programs into additional populations with existing customers. |
|--------|--------|-------------------------------------------------------------------------------------------------------------------------|

|   | · | a decrease in the level of short-term incentive compensation based on the Company’s year-to-date financial performance against established internal targets for these periods; |
|--------|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | a decrease in salaries and benefits expense, primarily due to 1) a restructuring of the Company, which was largely completed during the fourth quarter of calendar 2008 but for which some employee terminations continued into early 2009; 2) certain employee reductions in 2010; and 3) a net decrease in health insurance costs related to changes in employee medical plan design, which included a number of wellness initiatives aimed at improving employee health, in 2010; and |
|--------|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|    | · | cost savings related to certain operational efficiencies. |
|--------------|--------|-----------------------------------------------------------|

|   | · | an increase in consulting expenses primarily related to implementation of our new Embrace platform and the implementation of our first total population health contract; and |
|--------|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | a higher portion of our revenue being generated by fitness center and certain health improvement programs, which typically have a higher cost of services as a percentage of revenue than our other programs. |
|--------|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

|   | · | an increased portion of our revenue generated by fitness center and certain health improvement programs, which typically have a higher cost of services as a percentage of revenue than our other programs; |
|--------|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | the addition of certain participating locations to our fitness center network that have a higher cost of services as a percentage of revenue; |
|--------|--------|-----------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | contract restructurings with certain customers that resulted in either decreased revenues or lower per member fees without a proportional corresponding decrease in costs; and |
|--------|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | an increase in the level of short-term incentive compensation based on the Company’s financial performance against established internal targets during these periods. |
|--------|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | a decrease in salaries and benefits expense, primarily due to a restructuring of the Company that was largely completed during the fourth calendar quarter of 2008 and a decrease in health insurance costs related to changes in employee medical plan design in fiscal 2009, which included a number of wellness initiatives aimed at improving employee health; and |
|--------|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | cost savings related to certain cost management initiatives. |
|--------|--------|--------------------------------------------------------------|

|   | · | the completion of an offer to purchase from our employees, excluding the chief executive officer and Board of Directors, outstanding options to acquire shares of common stock of the Company that were granted between September 1, 2004 and August 15, 2008 under our shareholder-approved stock option plans (the “Tender Offer”) on December 30, 2008.  The Tender Offer resulted in additional stock-based compensation expense within cost of services of $7.4 million, representing the remaining compensation cost for these options as measured at the grant date but not yet recognized prior to the completion of the Tender Offer; |
|--------|--------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | increased member utilization of fitness centers for contracts for which we receive a fixed fee per member; |
|--------|--------|------------------------------------------------------------------------------------------------------------|

|   | · | contract restructurings with certain customers, as noted above, that resulted in decreased revenues without a proportional corresponding decrease in costs; and |
|--------|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | increased costs related to information technology hosting security and storage for the four months ended December 31, 2008. |
|--------|--------|-----------------------------------------------------------------------------------------------------------------------------|

|   | · | decreased costs related to the two Medicare Health Support programs in which we participated, which ended in January 2008 and July 2008, respectively; and |
|--------|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | cost savings related to certain cost management initiatives. |
|--------|--------|--------------------------------------------------------------|

----

|   | · | a net increase in salaries and benefits expense, primarily due to the Company restructuring in the fourth calendar quarter of 2008, which included an increased focus on research and development activities, resulting in an increase in personnel dedicated to these activities that more than offset the reduction in headcount resulting from this restructuring and other workforce reductions; and |
|--------|--------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | an increase in the level of short-term incentive compensation based on the Company’s financial performance against established internal targets during these periods. |
|--------|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

----

|   | · | payments during fiscal 2010 related to short-term incentive compensation earned and accrued over the sixteen months ended December 31, 2009; |
|--------|--------|----------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | payments during fiscal 2010 related to a final settlement with CMS; and |
|--------|--------|-------------------------------------------------------------------------|

|   | · | payments during 2010 related to several significant vendor invoices accrued at December 31, 2009. |
|--------|--------|---------------------------------------------------------------------------------------------------|

|   | · | payments during fiscal 2009 related to the aforementioned legal settlement and related costs and fees; |
|--------|--------|--------------------------------------------------------------------------------------------------------|

|   | · | payments during fiscal 2009 related to a restructuring of the Company that was largely completed during the fourth quarter of calendar 2008, which primarily consisted of severance costs and costs associated with capacity consolidation; and |
|--------|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | income tax payments, which were higher during fiscal 2009 primarily due to a change in the timing of estimated tax payments resulting from the change in our fiscal year. |
|--------|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

----

|   |                                    |   | Payments Due By Year Ended December 31, |   |
|--------|-----------------------------------------|--------|-----------------------------------------|--------|
|   | (In $000s)                              |   |                                    |   | 2012 - |   | 2014 - |   | 2016 and |   |   |   |
|   |                                    |   | 2011                                    |   | 2013 |   | 2015 |   | After |   | Total |   |
|   | Deferred compensation plan payments (1) |   | $                                       | 3,675  |   | $ | 10,455 |   | $ | 993 |   | $ | 5,516 |   | $ | 20,639 |   |   |
|   | Long-term debt (2)                      |   |                                    | 15,167 |   |   | 260,332 |   |   | — |   |   | — |   |   | 275,499 |   |   |
|   | Operating lease obligations (3)         |   |                                    | 15,043 |   |   | 25,900 |   |   | 19,769 |   |   | 48,289 |   |   | 109,001 |   |   |
|   | Capital lease obligations (4)           |   |                                    | 1,580  |   |   | 3,160 |   |   | 1,185 |   |   | — |   |   | 5,925 |   |   |
|   | Purchase obligations                    |   |                                    | 9,432  |   |   | — |   |   | — |   |   | — |   |   | 9,432 |   |   |
|   | Other contractual cash obligations (5)  |   |                                    | 15,952 |   |   | 13,921 |   |   | 2,000 |   |   | 17,000 |   |   | 48,873 |   |   |
|   | Total contractual cash obligations (6)  |   | $                                       | 60,849 |   | $ | 313,768 |   | $ | 23,947 |   | $ | 70,805 |   | $ | 469,369 |   |   |

----

----

----

|                                                             |   | December 31, |     |   |   | December 31, |   |
|------------------------------------------------------------------|--------|--------------|----------|--------|--------|--------------|--------|
|                                                             |   | 2010         |     |   |   | 2009         |   |
| Current assets:                                                  |   |         |     |   |   |         |   |   |   |
| Cash and cash equivalents                                        |   | $            | 1,064    |   |   |         | $      | 2,356 |   |
| Accounts receivable, net                                         |   |         | 89,108   |   |   |         |   | 100,833 |   |
| Prepaid expenses                                                 |   |         | 12,577   |   |   |         |   | 10,433 |   |
| Other current assets                                             |   |         | 3,064    |   |   |         |   | 4,945 |   |
| Income taxes receivable                                          |   |         | 8,695    |   |   |         |   | 6,452 |   |
| Deferred tax asset                                               |   |         | 11,272   |   |   |         |   | 24,197 |   |
| Total current assets                                             |   |         | 125,780  |   |   |         |   | 149,216 |   |
|                                                             |   |         |     |   |   |         |   |   |   |
| Property and equipment:                                          |   |         |     |   |   |         |   |   |   |
| Leasehold improvements                                           |   |         | 40,662   |   |   |         |   | 40,609 |   |
| Computer equipment and related software                          |   |         | 207,077  |   |   |         |   | 166,448 |   |
| Furniture and office equipment                                   |   |         | 27,328   |   |   |         |   | 28,096 |   |
| Capital projects in process                                      |   |         | 10,117   |   |   |         |   | 23,052 |   |
|                                                             |   |         | 285,184  |   |   |         |   | 258,205 |   |
| Less accumulated depreciation                                    |   |         | (154,528 | )      |   |         |   | (134,046 | ) |
|                                                             |   |         | 130,656  |   |   |         |   | 124,159 |   |
|                                                             |   |         |     |   |   |         |   |   |   |
| Other assets                                                     |   |         | 14,733   |   |   |         |   | 11,498 |   |
|                                                             |   |         |     |   |   |         |   |   |   |
| Customer contracts, net                                          |   |         | 23,654   |   |   |         |   | 29,343 |   |
| Other intangible assets, net                                     |   |         | 70,601   |   |   |         |   | 71,704 |   |
| Goodwill, net                                                    |   |         | 496,265  |   |   |         |   | 496,446 |   |
|                                                             |   |         |     |   |   |         |   |   |   |
| Total assets                                                     |   | $            | 861,689  |   |   |         | $      | 882,366 |   |
|                                                             |   |         |     |   |   |         |   |   |   |
| See accompanying notes to the consolidated financial statements. |   |         |     |   |   |         |

----

|                                                             |   | December 31,  |   |   |   | December 31,  |   |
|------------------------------------------------------------------|--------|---------------|--------|--------|--------|---------------|--------|
|                                                             |   | 2010          |   |   |   | 2009          |   |
| Current liabilities:                                             |   |          |   |   |   |          |   |
| Accounts payable                                                 | $      | 22,555        |   |   | $      | 29,171        |   |
| Accrued salaries and benefits                                    |   | 39,157        |   |   |   | 58,212        |   |
| Accrued liabilities                                              |   | 31,532        |   |   |   | 25,004        |   |
| Deferred revenue                                                 |   | 5,931         |   |   |   | 4,639         |   |
| Contract billings in excess of earned revenue                    |   | 18,814        |   |   |   | 70,440        |   |
| Current portion of long-term debt                                |   | 3,935         |   |   |   | 2,192         |   |
| Current portion of long-term liabilities                         |   | 3,309         |   |   |   | 3,854         |   |
| Total current liabilities                                        |   | 125,233       |   |   |   | 193,512       |   |
|                                                             |   |          |   |   |   |          |   |
| Long-term debt                                                   |   | 243,425       |   |   |   | 254,345       |   |
| Long-term deferred tax liability                                 |   | 23,050        |   |   |   | 14,617        |   |
| Other long-term liabilities                                      |   | 39,140        |   |   |   | 42,615        |   |
|                                                             |   |          |   |   |   |          |   |
| Stockholders’ equity:                                      |   |          |   |   |   |          |   |
| Preferred stock                                                  |   |          |   |   |   |          |   |
| $.001 par value, 5,000,000 shares                                |   |          |   |   |   |          |   |
| authorized, none outstanding                                     |   |  — |   |   |   |  — |   |
| Common stock                                                     |   |          |   |   |   |          |   |
| $.001 par value, 120,000,000 and 75,000,000 shares authorized,   |   |          |   |   |   |          |   |
| 34,018,706 and 33,858,917 shares outstanding                     |   | 34            |   |   |   | 34            |   |
| Additional paid-in capital                                       |   | 232,524       |   |   |   | 222,472       |   |
| Retained earnings                                                |   | 206,210       |   |   |   | 158,880       |   |
| Treasury stock, at cost, 429,654 and 0 shares in treasury        |   | (4,494        | )      |   |   | —       |   |
| Accumulated other comprehensive loss                             |   | (3,433        | )      |   |   | (4,109        | )      |
| Total stockholders’ equity                                 |   | 430,841       |   |   |   | 377,277       |   |
|                                                             |   |          |   |   |   |          |   |
| Total liabilities and stockholders’ equity                 | $      | 861,689       |   |   | $      | 882,366       |   |
|                                                             |   |          |   |   |   |          |   |
| See accompanying notes to the consolidated financial statements. |   |          |   |   |   |

----

|                                                                                                                                  |   |                                                             |   |   |  Year Ended December 31, |   |    | Four Months Ended December 31, |   |    |   |   | Year Ended August 31, |   |
|---------------------------------------------------------------------------------------------------------------------------------------|--------|------------------------------------------------------------------|--------|--------|-------------------------------|--------|---------|--------------------------------|--------|---------|--------|--------|-----------------------|--------|
|                                                                                                                                  |   |                                                             |   |   | 2010                          |   | 2009    |                           |   | 2008    |   |   |                  |   | 2008 |   |   |
| Revenues                                                                                                                              |   |                                                             |   | $      | 720,333                       | $      | 717,426 |                           | $      | 244,737 |   |   |                  | $      | 736,243 |   |   |
| Cost of services (exclusive of depreciation and amortization of $39,203, $35,433, $11,805, and $34,105, respectively, included below) |   |                                                             |   |   | 493,713                       |   | 522,999 |                           |   | 177,651 |   |   |                  |   | 503,940 |   |   |
| Selling, general and administrative expenses                                                                                          |   |                                                             |   |   | 72,830                        |   | 71,535  |                           |   | 27,790  |   |   |                  |   | 71,342 |   |   |
| Depreciation and amortization                                                                                                         |   |                                                             |   |   | 52,756                        |   | 49,289  |                           |   | 16,188  |   |   |                  |   | 47,479 |   |   |
| Impairment loss                                                                                                                       |   |                                                             |   |   | —                       |   | — |                           |   | 4,344   |   |   |                  |   | — |   |   |
| Restructuring and related charges                                                                                                     |   |                                                             |   |   | 10,258                        |   | — |                           |   | 10,264  |   |   |                  |   | — |   |   |
|                                                                                                                                  |   |                                                             |   |   |                          |   |    |                           |   |    |   |   |                  |   |   |   |   |
| Operating income                                                                                                                      |   |                                                             |   |   | 90,776                        |   | 73,603  |                           |   | 8,500   |   |   |                  |   | 113,482 |   |   |
| Gain on sale of investment                                                                                                            |   |                                                             |   |   | (1,163                        | )      | (2,581  | )                              |   | — |   |   |                  |   |  — |   |   |
| Interest expense                                                                                                                      |   |                                                             |   |   | 14,164                        |   | 15,717  |                           |   | 6,757   |   |   |                  |   | 20,927 |   |   |
| Legal settlement and related costs                                                                                                    |   |                                                             |   |   | —                       |   | 39,956  |                           |   | — |   |   |                  |   | — |   |   |
|                                                                                                                                  |   |                                                             |   |   |                          |   |    |                           |   |    |   |   |                  |   |   |   |   |
| Income before income taxes                                                                                                            |   |                                                             |   |   | 77,775                        |   | 20,511  |                           |   | 1,743   |   |   |                  |   | 92,555 |   |   |
| Income tax expense                                                                                                                    |   |                                                             |   |   | 30,445                        |   | 10,137  |                           |   | 1,009   |   |   |                  |   | 37,740 |   |   |
|                                                                                                                                  |   |                                                             |   |   |                          |   |    |                           |   |    |   |   |                  |   |   |   |   |
| Net income                                                                                                                            |   |                                                             |   | $      | 47,330                        | $      | 10,374  |                           | $      | 734     |   |   |                  | $      | 54,815 |   |   |
|                                                                                                                                  |   |                                                             |   |   |                          |   |    |                           |   |    |   |   |                  |   |   |   |   |
| Earnings per share:                                                                                                                   |   |                                                             |   |   |                          |   |    |                           |   |    |   |   |                  |   |   |   |   |
| Basic                                                                                                                                 |   |                                                             |   | $      | 1.39                          | $      | 0.31    |                           | $      | 0.02    |   |   |                  | $      | 1.57 |   |   |
|                                                                                                                                  |   |                                                             |   |   |                          |   |    |                           |   |    |   |   |                  |   |   |   |   |
| Diluted                                                                                                                               |   |                                                             |   | $      | 1.36                          | $      | 0.30    |                           | $      | 0.02    |   |   |                  | $      | 1.50 |   |   |
|                                                                                                                                  |   |                                                             |   |   |                          |   |    |                           |   |    |   |   |                  |   |   |   |   |
|                                                                                                                                  |   |                                                             |   |   |                          |   |    |                           |   |    |   |   |                  |   |   |   |   |
| Weighted average common shares and equivalents                                                                                        |   |                                                             |   |   |                          |   |    |                           |   |    |   |   |                  |   |   |   |   |
| Basic                                                                                                                                 |   |                                                             |   |   | 34,129                        |   | 33,730  |                           |   | 33,616  |   |   |                  |   | 34,977 |   |   |
| Diluted                                                                                                                               |   |                                                             |   |   | 34,902                        |   | 34,359  |                           |   | 34,038  |   |   |                  |   | 36,597 |   |   |
|                                                                                                                                  |   |                                                             |   |   |                          |   |    |                           |   |    |   |   |                  |   |   |   |   |
|                                                                                                                                  |   | See accompanying notes to the consolidated financial statements. |   |   |                          |   |    |                           |   |

----

|                                                  |   |      |          |   |   |                |   |     |          |     | Accumulated   |          |   |    |
|-------------------------------------------------------|--------|-----------|---------------|--------|--------|---------------------|--------|----------|---------------|----------|---------------|---------------|--------|---------|
|                                                  |   |      |          |   |   | Additional          |   |     |          |     | Other         |          |   |    |
|                                                  |   | Preferred |          | Common |   | Paid-in             |   | Retained |          | Treasury | Comprehensive |          |   |    |
|                                                  |   | Stock     |          | Stock  |   | Capital             |   | Earnings |          | Stock    | Income (Loss) |          | Total  |    |
| Balance, August 31, 2007                              |   |      | $—      |   |   | $35                 |   |     | $188,126      |     |          | $174,641      |   | — |   | $(52 | ) |   | $362,750 |   |
| Cumulative effect of a change in accounting           |   |      |          |   |   |                |   |     |          |     |          |          |   |    |   |   |   |   |   |   |
| principle – adoption of FIN 48                  |   |      | —       |   |   |                |   |     | —       |     |          | (687          | )      | — |   | — |   |   | (687 | ) |
| Comprehensive income:                                 |   |      |          |   |   |                |   |     |          |     |          |          |   |    |   |   |   |   |   |   |
| Net income                                            |   |      | —       |   |   |  —       |   |     |  — |     |          | 54,815        |   | — |   |  — |   |   | 54,815 |   |
| Net change in fair value of interest rate             |   |      |          |   |   |                |   |     |          |     |          |          |   |    |   |   |   |   |   |   |
| swap, net of income tax benefit of $1,064             |   |      | —       |   |   |  —       |   |     |  — |     |          |  — |   | — |   | (1,510 | ) |   | (1,510 | ) |
| Foreign currency translation adjustment               |   |      | —       |   |   |  —       |   |     |  — |     |          | —       |   | — |   | 172 |   |   | 172 |   |
| Total comprehensive income                            |   |      |          |   |   |                |   |     |          |     |          |          |   |    |   |   |   |   | 53,477 |   |
| Repurchases of common stock                           |   |      |  — |   |   | (2                  | )      |     | (13,341       | )        |          | (80,997       | )      | — |   | — |   |   | (94,340 | ) |
| Exercise of stock options and other                   |   |      |  — |   |   |  1             |   |     | 6,710         |     |          |  — |   | — |   |  — |   |   | 6,711 |   |
| Tax benefit of option exercises                       |   |      |  — |   |   |  —       |   |     | 9,893         |     |          |  — |   | — |   |  — |   |   | 9,893 |   |
| Share-based employee compensation expense             |   |      |  — |   |   |  —       |   |     | 16,530        |     |          |  — |   | — |   |  — |   |   | 16,530 |   |
| Balance, August 31, 2008                              |   |      | $—      |   |   | $34                 |   |     | $207,918      |     |          | $147,772      |   | — |   |  $(1,390 | ) |   | $354,334 |   |
| Comprehensive income:                                 |   |      |          |   |   |                |   |     |          |     |          |          |   |    |   |   |   |   |   |   |
| Net income                                            |   |      | —       |   |   | —             |   |     | —       |     |          | 734           |   | — |   | — |   |   | 734 |   |
| Net change in fair value of interest rate             |   |      |          |   |   |                |   |     |          |     |          |          |   |    |   |   |   |   |   |   |
| swaps, net of income tax benefit of $3,371            |   |      | —       |   |   | —             |   |     | —       |     |          | —       |   | — |   | (5,007 | ) |   | (5,007 | ) |
| Change in fair value of investment, net of            |   |      |          |   |   |                |   |     |          |     |          |          |   |    |   |   |   |   |   |   |
| income taxes of $1,094                                |   |      | —       |   |   | —             |   |     | —       |     |          | —       |   | — |   | 1,607 |   |   | 1,607 |   |
| Foreign currency translation adjustment               |   |      | —       |   |   | —             |   |     | —       |     |          | —       |   | — |   | (175 | ) |   | (175 | ) |
| Total comprehensive loss                              |   |      |          |   |   |                |   |     |          |     |          |          |   |    |   |   |   |   | (2,841 | ) |
| Write-off of deferred tax assets related to the       |   |      |          |   |   |                |   |     |          |     |          |          |   |    |   |   |   |   |   |   |
|    repurchase of stock options         |   |      | —       |   |   | —             |   |     | (9,088        | )        |          | —       |   | — |   | — |   |   | (9,088 | ) |
| Exercise of stock options                             |   |      | —       |   |   | —             |   |     | 56            |     |          | —       |   | — |   | — |   |   | 56 |   |
| Tax effect of option exercises                        |   |      | —       |   |   | —             |   |     | (340          | )        |          | —       |   | — |   | — |   |   | (340 | ) |
| Share-based employee compensation expense             |   |      | —       |   |   | —             |   |     | 14,915        |     |          | —       |   | — |   | — |   |   | 14,915 |   |
| Balance, December 31, 2008                            |   |      | $—      |   |   | $34                 |   |     | $213,461      |     |          | $148,506      |   | — |   |  $(4,965 | ) |   | $357,036 |   |
| Comprehensive income:                                 |   |      |          |   |   |                |   |     |          |     |          |          |   |    |   |   |   |   |   |   |
| Net income                                            |   |      | —       |   |   | —             |   |     | —       |     |          | 10,374        |   | — |   | — |   |   | 10,374 |   |
| Net change in fair value of interest rate             |   |      |          |   |   |                |   |     |          |     |          |          |   |    |   |   |   |   |   |   |
| swaps, net of income taxes of $1,783                  |   |      | —       |   |   | —             |   |     | —       |     |          | —       |   | — |   | 2,418 |   |   | 2,418 |   |
| Change in fair value of investment, net of            |   |      |          |   |   |                |   |     |          |     |          |          |   |    |   |   |   |   |   |   |
| income tax benefit of $49                             |   |      | —       |   |   | —             |   |     | —       |     |          | —       |   | — |   | (71 | ) |   | (71 | ) |
| Sale of investment, net of income taxes of            |   |      |          |   |   |                |   |     |          |     |          |          |   |    |   |   |   |   |   |   |
| $1,045                                                |   |      | —       |   |   | —             |   |     | —       |     |          | —       |   | — |   | (1,536 | ) |   | (1,536 | ) |
| Foreign currency translation adjustment               |   |      | —       |   |   | —             |   |     | —       |     |          | —       |   | — |   | 45 |   |   | 45 |   |
| Total comprehensive income                            |   |      |          |   |   |                |   |     |          |     |          |          |   |    |   |   |   |   | 11,230 |   |
| Repurchase of stock options                           |   |      | —       |   |   | —             |   |     | (736          | )        |          | —       |   | — |   | — |   |   | (736 | ) |
| Exercise of stock options                             |   |      |  — |   |   | —             |   |     | 727           |     |          |  — |   | — |   |  — |   |   | 727 |   |
| Tax effect of option exercises                        |   |      |  — |   |   |  —       |   |     | (1,193        | )        |          |  — |   | — |   |  — |   |   | (1,193 | ) |
| Share-based employee compensation expense             |   |      |  — |   |   |  —       |   |     | 10,213        |     |          |  — |   | — |   |  — |   |   | 10,213 |   |
|                                                  |   |      |          |   |   |                |   |     |          |     |          |          |   |    |   |   |   |   |   |   |
| Balance, December 31, 2009                            |   |      | $—      |   |   | $34                 |   |     | $222,472      |     |          | $158,880      |   | — |   |  $(4,109 | ) |   | $377,277 |   |
| Comprehensive income:                                 |   |      |          |   |   |                |   |     |          |     |          |          |   |    |   |   |   |   |   |   |
| Net income                                            |   |      | —       |   |   |  —       |   |     |  — |     |          | 47,330        |   | — |   |  — |   |   | 47,330 |   |
| Net change in fair value of interest rate             |   |      |          |   |   |                |   |     |          |     |          |          |   |    |   |   |   |   |   |   |
| swap, net of income taxes of $12                      |   |      | —       |   |   |  —       |   |     |  — |     |          |  — |   | — |   | 20 |   |   | 20 |   |
| Foreign currency translation adjustment               |   |      | —       |   |   |  —       |   |     |  — |     |          | —       |   | — |   | 656 |   |   | 656 |   |
| Total comprehensive income                            |   |      |          |   |   |                |   |     |          |     |          |          |   |    |   |   |   |   | 48,006 |   |
| Repurchases of common stock                           |   |      |  — |   |   | —             |   |     | —       |     |          | —       |   | (4,494  | ) | — |   |   | (4,494 | ) |
| Exercise of stock options                             |   |      |  — |   |   |   — |   |     | 1,133         |     |          |  — |   | — |   |  — |   |   | 1,133 |   |
| Tax effect of stock options and restrictedstock units |   |      |  — |   |   |  —       |   |     | (2,531        | )        |          |  — |   | — |   |  — |   |   | (2,531 | ) |
| Share-based employee compensation expense             |   |      |  — |   |   |  —       |   |     | 11,450        |     |          |  — |   | — |   |  — |   |   | 11,450 |   |
| Balance, December 31, 2010                            |   |      | $—      |   |   | $34                 |   |     | $232,524      |     |          | $206,210      |   | $(4,494 | ) |  $(3,433 | ) |   | $430,841 |   |

----

|   |                                                                            |   | Year Ended December 31, |    | Four Months Ended December 31, |     | Year Ended August 31, |    |
|--------|---------------------------------------------------------------------------------|--------|-------------------------|---------|--------------------------------|----------|-----------------------|---------|
|   |                                                                            |   | 2010                    |    |                           | 2009     |                  | 2008    |   | 2008 |   |
|   |                                                                            |   |                    |    |                           |     |                  |    |   |   |   |   |   |
|   | Cash flows from operating activities:                                           |   |                    |    |                           |     |                  |    |   |   |   |   |   |
|   | Net income                                                                      | $      | 47,330                  |    | $                              | 10,374   |                  | $       | 734 |   | $ | 54,815 |   |
|   | Adjustments to reconcile net income to net cash provided by                     |   |                    |    |                           |     |                  |    |   |   |   |   |   |
|   | operating activities, net of business acquisitions:                             |   |                    |    |                           |     |                  |    |   |   |   |   |   |
|   | Depreciation and amortization                                                   |   | 52,756                  |    |                           | 49,289   |                  |    | 16,188 |   |   | 47,479 |   |
|   | Gain on sale of investment                                                      |   | (1,163                  | )  |                           | (2,581   | )                |    |  - |   |   |  - |   |
|   | Loss on disposal of property and equipment                                      |   | 160                     |    |                           | 1,584    |                  |    | 1,568 |   |   |  - |   |
|   | Impairment loss                                                                 |   |  -                 |    |                           |  -  |                  |    | 4,344 |   |   |  - |   |
|   | Amortization of deferred loan costs                                             |   | 1,827                   |    |                           | 1,518    |                  |    | 415 |   |   | 1,168 |   |
|   | Share-based employee compensation expense                                       |   | 11,450                  |    |                           | 10,213   |                  |    | 14,915 |   |   | 16,530 |   |
|   | Excess tax benefits from share-based payment arrangements                       |   | (1,067                  | )       |                           | (381     | )                     |    | (68 | ) |   | (9,480 | ) |
|   | Decrease (increase) in accounts receivable, net                                 |   | 12,207                  |    |                           | 14,352   |                  |    | (1,796 | ) |   | (33,131 | ) |
|   | (Increase) decrease in other current assets                                     |   | (159                    | )       |                           | (1,972   | )                     |    | (3,011 | ) |   | 3,927 |   |
|   | (Decrease) increase in accounts payable                                         |   | (2,256                  | )       |                           | 6,565    |                  |    | (3,620 | ) |   | 2,516 |   |
|   | (Decrease) increase in accrued salaries and benefits                            |   | (19,715                 | )  |                           | 24,991   |                  |    | 1,549 |   |   | 12,652 |   |
|   | (Decrease) increase in other current liabilities                                |   | (45,206                 | )       |                           | (11,067  | )                     |    | 3,374 |   |   | 11,491 |   |
|   | Deferred income taxes                                                           |   | 16,682                  |    |                           | 8,076    |                  |    | (14,133 | ) |   | (10,835 | ) |
|   | Other                                                                           |   | 4,424                   |    |                           | 6,049    |                  |    | 1,672 |   |   | 11,761 |   |
|   | (Increase) decrease in other assets                                             |   | (1,121                  | )  |                           | (172     | )                |    | 540 |   |   | (1,367 | ) |
|   | Payments on other long-term liabilities                                         |   | (3,262                  | )       |                           | (3,970   | )                     |    | (504 | ) |   | (2,220 | ) |
|   | Net cash flows provided by operating activities                                 |   | 72,887                  |    |                           | 112,868  |                  |    | 22,167 |   |   | 105,306 |   |
|   |                                                                            |   |                    |    |                           |     |                  |    |   |   |   |   |   |
|   | Cash flows from investing activities:                                           |   |                    |    |                           |     |                  |    |   |   |   |   |   |
|   | Acquisition of property and equipment                                           |   | (44,431                 | )       |                           | (49,110  | )                     |    | (13,753 | ) |   | (82,521 | ) |
|   | Sale of investment                                                              |   | 1,163                   |    |                           | 11,626   |                  |    |  - |   |   |  - |   |
|   | Business acquisitions, net of cash acquired, and equity investments             |   | -                       |    |                           | (19,486  | )                     |    | (449 | ) |   |  - |   |
|   | Change in restricted cash                                                       |   | -                       |    |                           | (538     | )                |    |  - |   |   | (452 | ) |
|   | Other                                                                           |   | (5,581                  | )  |                           | (4,918   | )                |    | (2,208 | ) |   | (3,690 | ) |
|   | Net cash flows used in investing activities                                     |   | (48,849                 | )       |                           | (62,426  | )                     |    | (16,410 | ) |   | (86,663 | ) |
|   |                                                                            |   |                    |    |                           |     |                  |    |   |   |   |   |   |
|   | Cash flows from financing activities:                                           |   |                    |    |                           |     |                  |    |   |   |   |   |   |
|   | Proceeds from issuance of long-term debt                                        |   | 656,997                 |    |                           | 405,400  |                  |    | 55,000 |   |   | 85,420 |   |
|   | Deferred loan costs                                                             |   | (3,219                  | )  |                           | (784     | )                |    | (290 | ) |   |  - |   |
|   | Repurchases of common stock                                                     |   |  (4,494            | )  |                           |  -  |                  |  - |  - |   |   | (94,340 | ) |
|   | Repurchase of stock options                                                     |   |  -                 |    |                           | (736     | )                     |    |  - |   |   |  - |   |
|   | Excess tax benefits from share-based payment arrangements                       |   | 1,067                   |    |                           | 381      |                  |    | 68 |   |   | 9,480 |   |
|   | Exercise of stock options                                                       |   | 1,133                   |    |                           | 727      |                  |    | 56 |   |   | 6,711 |   |
|   | Payments of long-term debt                                                      |   | (673,188                | )  |                           | (457,303 | )                     |    | (96,825 | )  |   | (38,327 | ) |
|   | Change in outstanding checks and other                                          |   | (3,717                  | )  |                           | (1,113   | )                     |    | 6,149 |   |   |  - |   |
|   | Net cash flows used in financing activities                                     |   | (25,421                 | )  |                           | (53,428  | )                |    | (35,842 | ) |   | (31,056 | ) |
|   |                                                                            |   |                    |    |                           |     |                  |    |   |   |   |   |   |
|   | Effect of exchange rate changes on cash                                         |   | 91                      |    |                           | 185      |                  |    |  - |   |   |  - |   |
|   |                                                                            |   |                    |    |                           |     |                  |    |   |   |   |   |   |
|   | Net decrease in cash and cash equivalents                                       |   | (1,292                  | )  |                           | (2,801   | )                |    | (30,085 | ) |   | (12,413 | ) |
|   |                                                                            |   |                    |    |                           |     |                  |    |   |   |   |   |   |
|   | Cash and cash equivalents, beginning of period                                  |   | 2,356                   |    |                           | 5,157    |                  |    | 35,242 |   |   | 47,655 |   |
|   |                                                                            |   |                    |    |                           |     |                  |    |   |   |   |   |   |
|   | Cash and cash equivalents, end of period                                        |   | 1,064                   |    |                           | 2,356    |                  |    | 5,157 |   |   | 35,242 |   |
|   |                                                                            |   |                    |    |                           |     |                  |    |   |   |   |   |   |
|   | Supplemental disclosure of cash flow information:                               |   |                    |    |                           |     |                  |    |   |   |   |   |   |
|   | Cash paid during the period for interest                                        | $      | 12,137                  |    | $                              | 12,717   |                  | $       | 8,297 |   | $ | 19,117 |   |
|   | Cash paid during the period for income taxes                                    | $      | 13,231                  |    | $                              | 18,390   |                  | $       | 10,914 |   | $ | 41,249 |   |
|   |                                                                            |   |                    |    |                           |     |                  |    |   |   |   |   |   |
|   | Noncash Activities:                                                             |   |                    |    |                           |     |                  |    |   |   |   |   |   |
|   | Assets acquired through capital lease obligation and exchange of noncash assets | $      | 8,435                   |    |                           |  -  |                  |    |  - |   |   |  - |   |
|   |                                                                            |   |                    |    |                           |     |                  |    |   |   |   |   |   |
|   | See accompanying notes to the consolidated financial statements.                |   |                    |    |                           |     |                  |    |   |   |   |   |

----

----

----

----

----

|   | (In $000s)                             |   |   |   |    |
|--------|----------------------------------------|--------|--------|--------|---------|
|   | Balance, August 31, 2008               |   |   | $      | 484,305 |   |
|   | Earn-out payments                      |   |   |   | 291     |   |
|   | Balance, December 31, 2008             |   |   |   | 484,596 |   |
|   | HealthHonors purchase                  |   |   |   | 11,850  |   |
|   | Balance, December 31, 2009             |   |   |   | 496,446 |   |
|   | HealthHonors purchase price adjustment |   |   |   | (181    | ) |
|   | Balance, December 31, 2010             |   |   | $      | 496,265 |   |

|   |                              |   | Gross Carrying |    |   | Accumulated  |   |   |   |   |
|--------|-----------------------------------|--------|----------------|---------|--------|--------------|--------|--------|--------|--------|
|   | (In $000s)                        |   | Amount         |    |   | Amortization |   |   | Net    |   |
|   |                              |   |           |    |   |         |   |   |   |   |
|   | Customer contracts                |   | $              | 55,240  |   |         | $      | 31,586 |   |   | $ | 23,654 |   |
|   | Acquired technology               |   |           | 26,757  |   |         |   | 21,090 |   |   |   | 5,667 |   |
|   | Patents                           |   |           | 23,987  |   |         |   | 7,771  |   |   |   | 16,216 |   |
|   | Distributor and provider networks |   |           | 8,709   |   |         |   | 4,986  |   |   |   | 3,723 |   |
|   | Other                             |   |           | 17,487  |   |         |   | 2,442  |   |   |   | 15,045 |   |
|   | Total                             |   | $              | 132,180 |   |         | $      | 67,875 |   |   | $ | 64,305 |   |

|   |                              |   | Gross Carrying |    |   | Accumulated  |   |   |   |   |
|--------|-----------------------------------|--------|----------------|---------|--------|--------------|--------|--------|--------|--------|
|   | (In $000s)                        |   | Amount         |    |   | Amortization |   |   | Net    |   |
|   |                              |   |           |    |   |         |   |   |   |   |
|   | Customer contracts                |   | $              | 55,240  |   |         | $      | 25,897 |   |   | $ | 29,343 |   |
|   | Acquired technology               |   |           | 26,757  |   |         |   | 19,009 |   |   |   | 7,748 |   |
|   | Patents                           |   |           | 23,405  |   |         |   | 5,419  |   |   |   | 17,986 |   |
|   | Distributor and provider networks |   |           | 8,709   |   |         |   | 3,765  |   |   |   | 4,944 |   |
|   | Other                             |   |           | 12,486  |   |         |   | 1,410  |   |   |   | 11,076 |   |
|   | Total                             |   | $              | 126,597 |   |         | $      | 55,500 |   |   | $ | 71,097 |   |

----

|   | (In $000s)                    |   |   |
|--------|-------------------------------|--------|--------|
|   | Year ending December 31,      |   |   |
|   | 2011                          | $      | 12,416 |   |
|   | 2012                          |   | 10,511 |   |
|   | 2013                          |   | 10,389 |   |
|   | 2014                          |   | 9,410  |   |
|   | 2015                          |   | 6,150  |   |
|   | 2016 and thereafter           |   | 15,429 |   |
|   |     Total | $      | 64,305 |   |

|   | (In $000s)     |   |   Year Ended December 31, |   | Four Months Ended December 31, |   | Year Ended August 31, |   |    |
|--------|----------------|--------|-------------------------------------|--------|--------------------------------|--------|-----------------------|--------|---------|
|   |           |   | 2010                                |   | 2009                           |   | 2008                  |   | 2008    |   |
|   |           |   |                                |   |                           |   |                  |   |    |   |   |
|   | Current taxes  |   |                                |   |                           |   |                  |   |    |   |   |   |   |
|   | Federal        | $      | 8,810                               |   | $                              | 835    |                  | $      | 11,946  |   | $ | 47,147 |   |
|   | State          |   | 2,719                               |   |                           | 754    |                  |   | 2,827   |   |   | 9,569 |   |
|   | Deferred taxes |   |                                |   |                           |   |                  |   |    |   |   |   |   |
|   | Federal        |   | 16,952                              |   |                           | 7,638  |                  |   | (11,308 | ) |   | (15,500 | ) |
|   | State          |   | 1,964                               |   |                           | 910    |                  |   | (2,456  | ) |   | (3,476 | ) |
|   | Total          |   | 30,445                              |   | $                              | 10,137 |                  | $      | 1,009   |   | $ | 37,740 |   |

----

|   | (In $000s)                           |   | December 31, |    |   |   | December 31, |     |
|--------|--------------------------------------|--------|--------------|---------|--------|--------|--------------|----------|
|   |                                 |   | 2010         |    |   |   | 2009         |     |
|   |                                 |   |         |    |   |   |         |     |
|   | Deferred tax asset:                  |   |         |    |   |   |         |     |   |   |
|   | Accruals and reserves                |   | $            | 12,174  |   |   |         | $        | 10,710 |   |
|   | Deferred compensation                |   |         | 12,129  |   |   |         |     | 9,253 |   |
|   | Share-based payments                 |   |         | 15,594  |   |   |         |     | 15,877 |   |
|   | Net operating loss carryforwards     |   |         | 7,142   |   |   |         |     | 8,344 |   |
|   | Other assets and liabilities         |   |         | 2,780   |   |   |         |     | 3,381 |   |
|   | Advance receipts                     |   |         | — |   |   |         |     | 14,220 |   |
|   |                                 |   |         | 49,819  |   |   |         |     | 61,785 |   |
|   | Valuation allowance                  |   |         | (1,985  | )      |   |         |     | (1,648 | ) |
|   |                                 |   |   $     | 47,834  |   |   |         |   $ | 60,137 |   |
|   | Deferred tax liability:              |   |         |    |   |   |         |     |   |   |
|   | Property and equipment               |   |   $     | (34,976 | )      |   |         |   $ | (22,668 | ) |
|   | Intangible assets                    |   |         | (24,115 | )      |   |         |     | (27,805 | ) |
|   | Other assets and liabilities         |   |         | (521    | )      |   |         |     | (84 | ) |
|   |                                 |   |         | (59,612 | )      |   |         |     | (50,557 | ) |
|   | Net deferred tax asset (liability)   |   | $            | (11,778 | )      |   |         | $        | 9,580 |   |
|   |                                 |   |         |    |   |   |         |     |   |   |
|   | Net current deferred tax asset       |   | $            | 11,272  |   |   |         | $        | 24,197 |   |
|   | Net long-term deferred tax liability |   |         | (23,050 | )      |   |         |     | (14,617 | ) |
|   |                                 |   | $            | (11,778 | )      |   |         | $        | 9,580 |   |

----

|   | (In $000s)                                          |   |    Year Ended December 31, |   | Four Months Ended December 31, |   | Year Ended August 31, |   |   |   |
|--------|-----------------------------------------------------|--------|-------------------------------------------|--------|--------------------------------|--------|-----------------------|--------|--------|--------|
|   |                                                |   | 2010                                      |   | 2009                           |   | 2008                  |   | 2008   |   |   |
|   |                                                |   |                                      |   |                           |   |                  |   |   |   |   |   |
|   | Statutory federal income tax                        | $      | 27,221                                    |   | $                              | 7,179  |                  | $      | 610    |   | $ | 32,394 |   |   |
|   | State income taxes, less federal income tax benefit |   | 3,318                                     |   |                           | 970    |                  |   | 62     |   |   | 3,910 |   |   |
|   | Other                                               |   | (94                                       | )      |                           | 1,988  |                  |   | 337    |   |   | 1,436 |   |   |
|   | Income tax expense                                  | $      | 30,445                                    |   | $                              | 10,137 |                  | $      | 1,009  |   | $ | 37,740 |   |   |

|   | (In $000s)                                                           |   |   |   |   |
|--------|----------------------------------------------------------------------|--------|--------|--------|--------|
|   |                                                                 |   |   |   |   |
|   | Unrecognized tax benefits at September 1, 2007                       | $      | 11,050 |   |   |
|   | Decreases based on tax positions related to fiscal 2008              |   | (8,534 | )      |   |
|   | Lapse of statutes of limitation                                      |   | (140   | )      |   |
|   | Unrecognized tax benefits at August 31, 2008 and December 31, 2008   |   | 2,376  |   |   |
|   | Change based upon settlements with taxing authorities                |   | (2,376 | )      |   |
|   | Increases based upon tax positions related to fiscal 2009            |   | 1,072  |   |   |
|   | Unrecognized tax benefits at December 31, 2009 and December 31, 2010 | $      | 1,072  |   |   |

----

|   |                                                           |   | December 31, 2010                   |                          | December 31, 2009 |                                |   |
|--------|----------------------------------------------------------------|--------|-------------------------------------|-------------------------------|-------------------|-------------------------------------|--------|
|   | (In $000s)                                                     |   | Foreign currency exchange contracts | Interest rate swap agreements |              | Foreign currency exchange contracts |   | Interest rate swap agreements |   |   |
|   | Assets:                                                        |   |                                |                          |              |                                |   |   |   |   |
|   |                                                           |   |                                |                          |              |                                |   |   |   |   |
|   |   Derivatives not designated as hedging instruments: |   |                                |                          |              |                                |   |   |   |   |
|   |      Other current assets             |   | $136                                | $—                      |              | $—                            |   | $— |   |   |
|   |                                                           |   |                                |                          |              |                                |   |   |   |   |
|   |   Derivatives designated as hedging instruments:     |   |                                |                          |              |                                |   |   |   |   |
|   |      Other assets                     |   | —                             | —                       |              | —                             |   | 88 |   |   |
|   | Total assets                                                   |   | $136                                | $—                      |              | $—                            |   | $88 |   |   |
|   |                                                           |   |                                |                          |              |                                |   |   |   |   |
|   |  Liabilities:                                             |   |                                |                          |              |                                |   |   |   |   |
|   |   Derivatives not designated as hedging instruments: |   |                                |                          |              |                                |   |   |   |   |
|   |      Accrued liabilities              |   | $245                                | $—                      |              | $12                                 |   | $— |   |   |
|   |                                                           |   |                                |                          |              |                                |   |   |   |   |
|   |   Derivatives designated as hedging instruments:     |   |                                |                          |              |                                |   |   |   |   |
|   |      Accrued liabilities              |   | —                             | 4,465                         |              | —                             |   | 236 |   |   |
|   |      Other long-term liabilities      |   | —                             | 2,593                         |              | —                             |   | 6,942 |   |   |
|   | Total liabilities                                              |   | $245                                | $7,058                        |              | $12                                 |   | $7,178 |   |   |
|   |                                                           |   |                                |                          |              |                                |   |   |   |   |

----

|                                                                  |   |   | Year Ended December 31, 2010                                                           |                                                                                      | Year Ended December 31, 2009                                                            |
|-----------------------------------------------------------------------|--------|--------|----------------------------------------------------------------------------------------|-------------------------------------------------------------------------------------------|-----------------------------------------------------------------------------------------|
|     Derivatives inCash Flow Hedging Relationships |   |   | Amount of Gain (Loss) Recognized in Accumulated OCI on Derivatives (Effective Portion) | Location of Gain (Loss) Reclassified from Accumulated OCI into Income (Effective Portion) | Amount of Gain (Loss) Reclassified from Accumulated OCI into Income (Effective Portion) |   |  Amount of Gain (Loss) Recognized in Accumulated OCI on Derivatives (Effective Portion) |   | Location of Gain (Loss) Reclassified from Accumulated OCI into Income (Effective Portion) |   |  Amount of Gain (Loss) Reclassified from Accumulated OCI into Income (Effective Portion) |
| Interest rate swap agreements, gross of tax effect                    |   |   |  $(5,614)                                                                         | Interest expense                                                                          |  $(5,646)                                                                     |   | $(2,541) |   | Interest expense |   | $(6,742)  |

----

|   | Level 1:  Quoted prices in active markets for identical assets or liabilities;                                                                                                                                                                                                                                                                                                   |   |
|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|
|   | Level 2:  Quoted prices for similar instruments in active markets; quoted prices for identical or similar instruments in markets that are not active; and model-based valuation techniques in which all significant assumptions are observable in the market or can be corroborated by observable market data for substantially the full term of the assets or liabilities; and  |   |
|   | Level 3:  Unobservable inputs that are supported by little or no market activity and typically reflect management’s estimates of assumptions that market participants would use in pricing the asset or liability.                                                                                                                                                              |   |

|   | (In 000s)December 31, 2010          |   |   |    Level 2 |   |   |    Level 3 |   |   |  Gross Fair Value |   |   |    Netting (1) |   |   |   Net Fair Value |   |   |   |
|--------|-------------------------------------|--------|--------|---------------------------|--------|--------|---------------------------|--------|--------|------------------------|--------|--------|-------------------------------|--------|--------|----------------------------|--------|--------|--------|
|   | Assets:                             |   |   |                      |   |   |                      |   |   |                   |   |   |                          |   |   |                       |   |   |   |
|   | Foreign currency exchange contracts |   | $      | 136                       |   | $      | —                   |   | $      | 136                    |   | $      | (116                          | )      | $      | 20                         |   |   |   |
|   | Liabilities:                        |   |   |                      |   |   |                      |   |   |                   |   |   |                          |   |   |                       |   |   |   |
|   | Foreign currency exchange contracts |   | $      | 245                       |   | $      | —                   |   | $      | 245                    |   | $      | (116                          | )      | $      | 129                        |   |   |   |
|   | Interest rate swap agreements       |   |   | 7,058                     |   |   | —                   |   |   | 7,058                  |   |   | —                       |   |   | 7,058                      |   |   |   |
|   | Contingent consideration liability  |   |   | —                   |   |   | —                   |   |   | —                |   |   | —                       |   |   | —                    |   |   |   |

|   | (In 000s)December 31, 2009          |   |   |    Level 2 |   |   |    Level 3 |   |   |  Gross Fair Value |   |   |    Netting (1) |   |   |   Net Fair Value |   |   |   |
|--------|-------------------------------------|--------|--------|---------------------------|--------|--------|---------------------------|--------|--------|------------------------|--------|--------|-------------------------------|--------|--------|----------------------------|--------|--------|--------|
|   | Assets:                             |   |   |                      |   |   |                      |   |   |                   |   |   |                          |   |   |                       |   |   |   |
|   | Interest rate swap agreements       |   | $      | 88                        |   | $      | —                   |   | $      | 88                     |   | $      | —                       |   | $      | 88                         |   |   |   |
|   | Liabilities:                        |   |   |                      |   |   |                      |   |   |                   |   |   |                          |   |   |                       |   |   |   |
|   | Foreign currency exchange contracts |   | $      | 12                        |   | $      | —                   |   | $      | 12                     |   | $      | —                       |   | $      | 12                         |   |   |   |
|   | Interest rate swap agreements       |   |   | 7,178                     |   |   | —                   |   |   | 7,178                  |   |   | —                       |   |   | 7,178                      |   |   |   |
|   | Contingent consideration liability  |   |   | —                   |   |   | 3,043                     |   |   | 3,043                  |   |   | —                       |   |   | 3,043                      |   |   |   |

----

|   | (In $000s)                 |   |   |   | ContingentConsideration Liability  |   |   |
|--------|----------------------------|--------|--------|--------|-----------------------------------------|--------|--------|
|   | Balance, January 1, 2010   |   |   | $      | 3,043                                   |   |   |
|   | Adjustment to liability    |   |   |   | 3,043                                   |   |   |
|   | Balance, December 31, 2010 |   |   | $      | —                                 |   |   |

| ·   | reporting units measured at fair value in the first step of a goodwill impairment test; and |
|--------------------|---------------------------------------------------------------------------------------------|

| ·   | indefinite-lived intangible assets measured at fair value for impairment assessment. |
|--------------------|--------------------------------------------------------------------------------------|

|   | · | Cash and cash equivalents – The carrying amount of $1.1 million approximates fair value because of the short maturity of those instruments (less than three months). |
|--------|--------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | Long-term debt –The estimated fair value of outstanding borrowings under our credit agreement is based on the average of the prices set by the issuing bank given current market conditions and is not necessarily indicative of the amount we could realize in a current market exchange. The estimated fair value and carrying amount of outstanding borrowings under the Fourth Amended Credit Agreement at December 31, 2010 are $223.4 million and $241.3 million, respectively. |
|--------|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

|   | (In $000s)                    |   |   |    |
|--------|-------------------------------|--------|--------|---------|
|   | Year ending December 31,      |   |   |    |
|   | 2011                          |   | $      | 2,000   |   |
|   | 2012                          |   |   | 2,000   |   |
|   | 2013                          |   |   | 237,300 |   |
|   | 2014                          |   |   | — |   |
|   | 2015                          |   |   | — |   |
|   | 2016 and thereafter           |   |   | — |   |
|   |     Total |   | $      | 241,300 |   |

----

|   |   | (In 000s)                                                      |   |    |   |   |   |   |   |
|--------|--------|----------------------------------------------------------------|--------|---------|--------|--------|--------|--------|--------|
|   |   |                                                           |   |    |   |   |   |   |   |
|   |   | Accrued restructuring and related charges at January 1, 2010   | $      | — |   |   |   |   |   |
|   |   | Additions                                                      |   | 8,507   |   |   |   |   |   |
|   |   | Payments                                                       |   | (900    | )      |   |   |   |   |
|   |   | Accrued restructuring and related charges at December 31, 2010 | $      | 7,607   |   |   |   |   |   |
|   |

----

----

----

----

|   | (In $000s)                              |   | Capital |   | Operating |    |
|--------|-----------------------------------------|--------|---------|--------|-----------|---------|
|   | Year ending December 31,                |   | Leases  |   | Leases    |    |
|   | 2011                                    | $      | 1,580   |   | $         | 14,435  |   |
|   | 2012                                    |   | 1,580   |   |      | 13,049  |   |
|   | 2013                                    |   | 1,580   |   |      | 11,578  |   |
|   | 2014                                    |   | 1,185   |   |      | 10,339  |   |
|   | 2015                                    |   | — |   |      | 9,429   |   |
|   | 2016 and thereafter                     |   | — |   |      | 48,289  |   |
|   | Total minimum lease payments            |   | 5,925   |   | $         | 107,119 |   |
|   | Less amount representing interest       |   | (631    | )      |      |    |   |
|   | Present value of minimum lease payments |   | 5,294   |   |      |    |   |
|   | Less current portion                    |   | (1,290  | )      |      |    |   |
|   |                                    | $      | 4,004   |   |      |    |   |

----

|   |                                                                              |   | Year Ended   |   | Four Months Ended |    | Year Ended   |   |
|--------|-----------------------------------------------------------------------------------|--------|--------------|--------|-------------------|---------|--------------|--------|
|   |                                                                              |   | December 31, |   | December 31,      |    | December 31, |   | August 31, |   |
|   | (In millions)                                                                     |   | 2010         |   | 2009              |    | 2008         |   | 2008 |   |
|   | Total share-based compensation                                                    | $      | 11.5         |   | $                 | 10.2    |         | $      | 14.9 | (1) | $ | 16.5 |   |
|   | Share-based compensation included in cost of services                             |   | 5.0          |   |              | 4.4     |         |   | 10.0 |   |   | 8.0 |   |
|   | Share-based compensation included in selling, general and administrative expenses |   | 5.0          |   |              | 5.8     |         |   | 6.5 |   |   | 8.5 |   |
|   | Share-based compensation included in restructuring and related charges            |   | 1.5          |   |              | — |         |   | (1.6 | ) |   | — |   |
|   | Total income tax benefit recognized                                               |   | 4.5          |   |              | 4.0     |         |   | 5.9 |   |   | 6.5 |   |

|   |                                              |   |   |   Year EndedDecember 31, |   |   | Four Months Ended December 31, |   |   |   | Year Ended August 31, |   |
|--------|---------------------------------------------------|--------|--------|------------------------------------|--------|--------|--------------------------------|--------|--------|--------|-----------------------|--------|
|   |                                              |   |   | 2010                               |   | 2009   |                           |   | 2008   |   |                  |   | 2008 |   |
|   | Weighted average grant-date fair value of options |   | $      | 7.22                               |   | $      | 6.72                           |   |   | $      | 4.97                  |   |   |   | $ | 22.16 |   |
|   |                                              |   |   |                               |   |   |                           |   |   |   |                  |   |   |   |   |   |   |
|   | Assumptions:                                      |   |   |                               |   |   |                           |   |   |   |                  |   |   |   |   |   |   |
|   | Expected volatility                               |   |   | 51.9                               | %      |   | 51.6                           | %      |   |   | 46.5                  | %      |   |   |   | 37.8 | % |
|   | Expected dividends                                |   |   | —                            |   |   | —                        |   |   |   | —               |   |   |   |   | — |   |
|   | Expected term (in years)                          |   |   | 5.5                                |   |   | 6.1                            |   |   |   | 5.1                   |   |   |   |   | 6.6 |   |
|   | Risk-free rate                                    |   |   | 3.2                                | %      |   | 2.5                            | %      |   |   | 3.6                   | %      |   |   |   | 4.2 | % |

----

|   | Options                          |   | Shares (000s) |   |   |   | WeightedAverage ExercisePrice |   |   |   | Weighted AverageRemainingContractual Term |   |   |   | Aggregate Intrinsic Value ($000s) |   |
|--------|----------------------------------|--------|---------------|--------|--------|--------|-------------------------------|--------|--------|--------|------------------------------------------------|--------|--------|--------|-----------------------------------|--------|
|   | Outstanding at January 1, 2010   |   | 4,936         |   |   |   | $                             | 18.46  |   |   |                                           |   |   |   |                              |   |   |   |
|   | Granted                          |   | 1,848         |   |   |   |                          | 12.53  |   |   |                                           |   |   |   |                              |   |   |   |
|   | Exercised                        |   | (223          | )      |   |   |                          | 4.96   |   |   |                                           |   |   |   |                              |   |   |   |
|   | Forfeited or expired             |   | (353          | )      |   |   |                          | 19.46  |   |   |                                           |   |   |   |                              |   |   |   |
|   | Outstanding at December 31, 2010 |   | 6,208         |   |   |   |                          | 17.12  |   |   |                                           | 5.5    |   |   |                              | $      | 3,619 |   |
|   | Exercisable at December 31, 2010 |   | 3,569         |   |   |   |                          | 19.45  |   |   |                                           | 3.2    |   |   |                              | $      | 2,281 |   |

|   | Nonvested Shares               |   | Shares (000s) |   | Weighted Average Grant Date Fair Value |   |
|--------|--------------------------------|--------|---------------|--------|----------------------------------------|--------|
|   | Nonvested at January 1, 2010   |   | 1,015         |   | $                                      | 22.21  |   |
|   | Granted                        |   | 629           |   |                                   | 11.32  |   |
|   | Vested                         |   | (414          | )      |                                   | 24.18  |   |
|   | Forfeited                      |   | (77           | )      |                                   | 25.86  |   |
|   | Nonvested at December 31, 2010 |   | 1,153         |   | $                                      | 15.29  |   |

----

| Period                |   |   | Total Number of Shares Purchased |   |   |   | Average Price Paid  per Share |   |   |   | Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs (1) |         |   |   | Maximum Approximate Dollar Value of Shares that May Yet Be Purchased Under the Plans or Programs (1) |   |
|-----------------------|--------|--------|----------------------------------|--------|--------|--------|-----------------------------------------|--------|--------|--------|--------------------------------------------------------------------------------------|--------------|--------|--------|------------------------------------------------------------------------------------------------------|--------|
|                  |   |   |                             |   |   |   |                                    |   |   |   |                                                                                 |         |   |   |                                                                                                 |   |   |   |
| October 1 through 31  |   |   | 10,000                           |   |   |   |                                    | $10.34 |   |   |                                                                                 |  10,000 |   |   |                                                                                                 |   | $59,896,600 |   |
| November 1 through 30 |   |   | 182,200                          |   |   |   |                                    | $10.64 |   |   |                                                                                 | 192,200      |   |   |                                                                                                 |   | $57,957,992 |   |
| December 1 through 31 |   |   | 237,454                          |   |   |   |                                    | $10.33 |   |   |                                                                                 | 429,654      |   |   |                                                                                                 |   | $55,505,092 |   |
|                  |   |   |                             |   |   |   |                                    |   |   |   |                                                                                 |         |   |   |                                                                                                 |   |   |   |
| Total                 |   |   | 429,654                          |   |   |   |                                    |   |   |   |                                                                                 |         |   |   |                                                                                                 |   |   |   |

----

|     |          (In 000s except per share data)                                  |   |   |  Year Ended December 31, |   | Four Months Ended December 31, |   |   | Year Ended August 31, |   |   |   |
|--------------------|-----------------------------------------------------------------------------------------------------------------------------|--------|--------|-------------------------------|--------|--------------------------------|--------|--------|-----------------------|--------|--------|--------|
|               | Numerator:                                                                                                                  |   |   | 2010                          |   | 2009                           |   | 2008   |                  |   | 2008   |   |   |   |
|               | Net income - numerator for basic earnings per share                                                                         |   | $      | 47,330                        |   | $                              | 10,374 |   | $                     | 734    |   |   | $ | 54,815 |   |   |   |
|               |                                                                                                                        |   |   |                          |   |                           |   |   |                  |   |   |   |   |   |   |   |   |
|               | Denominator:                                                                                                                |   |   |                          |   |                           |   |   |                  |   |   |   |   |   |   |   |   |
|               | Shares used for basic earnings per share                                                                                    |   |   | 34,129                        |   |                           | 33,730 |   |                  | 33,616 |   |   |   | 34,977 |   |   |   |
|               | Effect of dilutive stock options and restricted stock units outstanding:                                                    |   |   |                          |   |                           |   |   |                  |   |   |   |   |   |   |   |   |
|               | Non-qualified stock options                                                                                                 |   |   | 384                           |   |                           | 336    |   |                  | 270    |   |   |   | 1,477 |   |   |   |
|               | Restricted stock units                                                                                                      |   |   | 389                           |   |                           | 293    |   |                  | 152    |   |   |   | 143 |   |   |   |
|               | Shares used for diluted earnings per share                                                                                  |   |   | 34,902                        |   |                           | 34,359 |   |                  | 34,038 |   |   |   | 36,597 |   |   |   |
|               |                                                                                                                        |   |   |                          |   |                           |   |   |                  |   |   |   |   |   |   |   |   |
|               | Earnings per share:                                                                                                         |   |   |                          |   |                           |   |   |                  |   |   |   |   |   |   |   |   |
|               | Basic                                                                                                                       |   | $      | 1.39                          |   | $                              | 0.31   |   | $                     | 0.02   |   |   | $ | 1.57 |   |   |   |
|               | Diluted                                                                                                                     |   | $      | 1.36                          |   | $                              | 0.30   |   | $                     | 0.02   |   |   | $ | 1.50 |   |   |   |
|               |                                                                                                                        |   |   |                          |   |                           |   |   |                  |   |   |   |   |   |   |   |   |
|               | Dilutive securities outstanding not included in the computation of earnings per share because their effect is antidilutive: |   |   |                          |   |                           |   |   |                  |   |   |   |   |   |   |   |   |
|               |         Non-qualified stock options                                                 |   |   | 3,863                         |   |                           | 3,521  |   |                  | 2,820  |   |   |   | 1,547 |   |   |   |
|               |         Restricted stock units                                                      |   |   | 81                            |   |                           | 186    |   |                  | 268    |   |   |   | 111 |   |   |   |

----

|   | (In 000s except per share data)                               |   |   | Four Months Ended December 31, 2007 |   |   |
|--------|---------------------------------------------------------------|--------|--------|-------------------------------------|--------|--------|
|   | Revenues                                                      |   | $      | 234,277                             |   |   |
|   | Cost of services (exclusive of depreciation and amortization) |   |   | 163,750                             |   |   |
|   | Selling, general and administrative expenses                  |   |   | 21,741                              |   |   |
|   | Depreciation and amortization                                 |   |   | 13,682                              |   |   |
|   |                                                          |   |   |                                |   |   |
|   | Operating income                                              |   |   | 35,104                              |   |   |
|   | Interest expense                                              |   |   | 7,118                               |   |   |
|   |                                                          |   |   |                                |   |   |
|   | Income before income taxes                                    |   |   | 27,986                              |   |   |
|   | Income tax expense                                            |   |   | 11,506                              |   |   |
|   |                                                          |   |   |                                |   |   |
|   | Net income                                                    |   | $      | 16,480                              |   |   |
|   |                                                          |   |   |                                |   |   |
|   | Earnings per share:                                           |   |   |                                |   |   |
|   | Basic                                                         |   | $      | 0.46                                |   |   |
|   |                                                          |   |   |                                |   |   |
|   | Diluted                                                       |   | $      | 0.44                                |   |   |
|   |                                                          |   |   |                                |   |   |
|   | Weighted average common shares and equivalents                |   |   |                                |   |   |
|   | Basic                                                         |   |   | 35,770                              |   |   |
|   | Diluted                                                       |   |   | 37,739                              |   |   |

----

|   | (In 000s)                                                                                           | Four Months EndedDecember 31, 2007 |    |
|--------|-----------------------------------------------------------------------------------------------------|------------------------------------|---------|
|   |                                                                                                |                               |    |   |
|   | Cash flows from operating activities:                                                               |                               |    |   |
|   | Net income                                                                                          | $                                  | 16,480  |   |
|   | Adjustments to reconcile net income to net cash  provided by operating activities, net of |                               |    |   |
|   | business acquisitions:                                                                              |                               |    |   |
|   | Depreciation and amortization                                                                       |                               | 13,682  |   |
|   | Loss on disposal of property and equipment                                                          |                               | 221     |   |
|   | Amortization of deferred loan costs                                                                 |                               | 389     |   |
|   | Share-based employee compensation expense                                                           |                               | 5,057   |   |
|   | Excess tax benefits from share-based payment arrangements                                           |                               | (6,072  | ) |
|   | Increase in accounts receivable, net                                                                |                               | (12,084 | ) |
|   | Decrease in other current assets                                                                    |                               | 1,513   |   |
|   | Decrease in accounts payable                                                                        |                               | (2,429  | ) |
|   | Increase in accrued salaries and benefits                                                           |                               | 1,848   |   |
|   | Increase  in other current liabilities                                                    |                               | 10,257  |   |
|   | Deferred income taxes                                                                               |                               | (3,025  | ) |
|   | Other                                                                                               |                               | 3,951   |   |
|   | Decrease in other assets                                                                            |                               | 303     |   |
|   | Payments on other long-term liabilities                                                             |                               | (111    | ) |
|   | Net cash flows provided by operating activities                                                     |                               | 29,980  |   |
|   |                                                                                                |                               |    |   |
|   | Cash flows from investing activities:                                                               |                               |    |   |
|   | Acquisition of property and equipment                                                               |                               | (25,045 | ) |
|   | Acquisitions, net of cash acquired                                                                  |                               | (15     | ) |
|   | Net cash flows used in investing activities                                                         |                               | (25,060 | ) |
|   |                                                                                                |                               |    |   |
|   | Cash flows from financing activities:                                                               |                               |    |   |
|   | Repurchases of common stock                                                                         |                               | (132    | ) |
|   | Excess tax benefits from share-based payment arrangements                                           |                               | 6,072   |   |
|   | Exercise of stock options                                                                           |                               | 3,070   |   |
|   | Payments of long-term debt                                                                          |                               | (21,070 | ) |
|   | Net cash flows used in financing activities                                                         |                               | (12,060 | ) |
|   |                                                                                                |                               |    |   |
|   | Net decrease in cash and cash equivalents                                                           |                               | (7,140  | ) |
|   |                                                                                                |                               |    |   |
|   | Cash and cash equivalents, beginning of period                                                      |                               | 47,655  |   |
|   |                                                                                                |                               |    |   |
|   | Cash and cash equivalents, end of period                                                            | $                                  | 40,515  |   |

----

----

| (In thousands, except per share data) |   |   |   |   |    |   |   |   |   |    |   |   |   |   |    |   |   |
|---------------------------------------|--------|--------|--------|--------|---------|--------|--------|--------|--------|---------|--------|--------|--------|--------|---------|--------|--------|
|                                  |   |   |   |   |    |   |   |   |   |    |   |   |   |   |    |   |   |
| Twelve Months EndedDecember 31, 2010  |   |   |   | First  |    |   |   | Second |   |    |   | Third  |   |   |    | Fourth |   |
|                                  |   |   |   |   |    |   |   |   |   | (1)     |   |   |   |   |    |   |   |   |   | (2) |   |
| Revenues                              |   |   |   | $      | 178,999 |   |   |   | $      | 175,523 |   |   |   | $      | 170,487 |   |   |   | $ | 195,324 |   |
| Gross margin                          |   |   |   | $      | 39,898  |   |   |   | $      | 43,610  |   |   |   | $      | 41,492  |   |   |   | $ | 62,417 |   |
| Income before income taxes            |   |   |   | $      | 15,920  |   |   |   | $      | 19,045  |   |   |   | $      | 17,122  |   |   |   | $ | 25,687 |   |
| Net income                            |   |   |   | $      | 9,414   |   |   |   | $      | 11,838  |   |   |   | $      | 10,524  |   |   |   | $ | 15,554 |   |
|                                  |   |   |   |   |    |   |   |   |   |    |   |   |   |   |    |   |   |   |   |   |   |
| Basic earnings per share (3)          |   |   |   | $      | 0.28    |   |   |   | $      | 0.35    |   |   |   | $      | 0.31    |   |   |   | $ | 0.45 |   |
| Diluted earnings per share (3)        |   |   |   | $      | 0.27    |   |   |   | $      | 0.34    |   |   |   | $      | 0.30    |   |   |   | $ | 0.45 |   |
|                                  |   |   |   |   |    |   |   |   |   |    |   |   |   |   |    |   |   |   |   |   |   |
| Twelve Months EndedDecember 31, 2009  |   |   |   | First  |    |   |   | Second |   |    |   | Third  |   |   |    | Fourth |   |
|                                  |   |   |   |   | (4)     |   |   |   |   |    |   |   |   |   |    |   |   |   |   |   |   |
| Revenues                              |   |   |   | $      | 182,736 |   |   |   | $      | 177,836 |   |   |   | $      | 181,642 |   |   |   | $ | 175,212 |   |
| Gross margin                          |   |   |   | $      | 41,112  |   |   |   | $      | 41,534  |   |   |   | $      | 40,627  |   |   |   | $ | 35,720 |   |
| Income (loss) before income taxes     |   |   |   | $      | (22,572 | )      |   |   | $      | 15,534  |   |   |   | $      | 15,484  |   |   |   | $ | 12,065 |   |
| Net income (loss)                     |   |   |   | $      | (14,813 | )      |   |   | $      | 8,876   |   |   |   | $      | 8,802   |   |   |   | $ | 7,509 |   |
|                                  |   |   |   |   |    |   |   |   |   |    |   |   |   |   |    |   |   |   |   |   |   |
| Basic earnings (loss) per share (3)   |   |   |   | $      | (0.44   | )      |   |   | $      | 0.26    |   |   |   | $      | 0.26    |   |   |   | $ | 0.22 |   |
| Diluted earnings (loss) per share (3) |   |   |   | $      | (0.44   | )(5)   |   |   | $      | 0.26    |   |   |   | $      | 0.26    |   |   |   | $ | 0.22 |   |
|                                  |   |   |   |   |    |   |   |   |   |    |   |   |   |   |    |   |   |   |   |   |   |

| (1)   | Includes revenues related to an adjustment to a multi-year earn-out arrangement in connection with a business combination entered into during the fourth quarter of 2009 of $1.5 million and an investment gain of $1.2 million. |
|-----------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (2)   | Includes revenues related to an adjustment to a multi-year earn-out arrangement in connection with a business combination entered into during the fourth quarter of 2009 of $1.5 million, restructuring charges of $10.3 million (which were presented as a separate line item in the consolidated statement of operations), and revenues of $22.3 million and expenses of $1.0 million attributable to a settlement with CMS. |
|-----------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (3)   | We calculated earnings per share for each of the quarters based on the weighted average number of shares and dilutive options outstanding for each period.  Accordingly, the sum of the quarters may not necessarily be equal to the full year income per share. |
|-----------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (4)   | Includes a legal settlement of approximately $40.0 million (which was presented as a separate line item in the consolidated statement of operations). |
|-----------------|-------------------------------------------------------------------------------------------------------------------------------------------------------|

| (5)   | The assumed exercise of stock-based compensation awards for this period was not considered because the impact would have been anti-dilutive. |
|-----------------|----------------------------------------------------------------------------------------------------------------------------------------------|

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| (a) | The following documents are filed as part of this Annual Report on Form 10-K: |
|-----|-------------------------------------------------------------------------------|

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| 2.1    |   | Stock Purchase Agreement dated October 11, 2006 among Healthways, Inc., Axia Health Management, Inc., and Axia Health Management LLC [incorporated herein by reference to Exhibit 2.1 to the Company’s Current Report on Form 8-K dated December 1, 2006]                                                                                                                                                                                                                       |
|--------|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |
| 3.1    |   | Restated Certificate of Incorporation for Healthways, Inc., as amended [incorporated by reference to Exhibit 3.1 to Form 10-Q of the Company’s fiscal quarter ended February 29, 2008]                                                                                                                                                                                                                                                                                          |
|   |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |
| 3.2    |   | Bylaws, as amended [incorporated by reference to Exhibit 3.1 to Form 10-Q of the Company’s fiscal quarter ended February 29, 2004]                                                                                                                                                                                                                                                                                                                                              |
|   |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |
| 3.3    |   | Amendment to bylaws, as amended [incorporated by reference to Exhibit 3.1 to the Company’s Current Report on Form 8-K dated November 15, 2007]                                                                                                                                                                                                                                                                                                                                  |
|   |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |
| 3.4    |   | Amendment No. 2 to bylaws, as amended [incorporated by reference to Exhibit 3.1 to the Company’s Current Report on Form 8-K dated September 3, 2008]                                                                                                                                                                                                                                                                                                                            |
|   |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |
| 4.1    |   | Article IV of the Company's Restated Certificate of Incorporation (included in Exhibit 3.1)                                                                                                                                                                                                                                                                                                                                                                                           |
|   |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |
| 4.2    |   | Rights Agreement, dated June 19, 2000, between American Healthways, Inc. and SunTrust Bank, including the Form of Rights Certificate (Exhibit A), the Form of Summary of Rights (Exhibit B) and the Form of Certificate of Amendment to the Restated Certificate of Incorporation of American Healthways, Inc. (Exhibit C) [incorporated herein by reference to Exhibit 4 to the Company’s Current Report on Form 8-K dated June 21, 2000]                                      |
|   |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |
| 4.3    |   | Amendment No. 1 to Rights Agreement, dated June 15, 2004, between American Healthways, Inc. and SunTrust Bank [incorporated herein by reference to Exhibit 4 to the Company’s Current Report on Form 8-K dated June 17, 2004]                                                                                                                                                                                                                                                   |
|   |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |
| 4.4    |   | Amendment No. 2 to Rights Agreement, dated July 19, 2006, between Healthways, Inc. and SunTrust Bank [incorporated herein by reference to Exhibit 4.1 to the Company’s Current Report on Form 8-K dated July 19, 2006]                                                                                                                                                                                                                                                          |
|   |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |
| 10.1   |   | Fourth Amended and Restated Revolving Credit and Term Loan Agreement (“Fourth Amended Credit Agreement”) between the Company and SunTrust Bank as Administrative Agent, U.S. Bank National Association and Regions Bank as Co-Documentation Agents, and JPMorgan Chase Bank, N.A., and Fifth Third Bank, N.A. as Co-Syndication Agents dated March 30, 2010 [incorporated by reference to Exhibit 10.1 to Company’s Current Report on Form 8-K dated April 5, 2010] |

----

|                                        |   |                                                                                                                                                                                                                                   |
|---------------------------------------------|--------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| 10.2                                        |   | Office Lease by and between Healthways, Inc. and Highwoods/Tennessee Holdings, L.P., dated as of May 4, 2006 [incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K dated May 5, 2006]           |
|                                        |   |                                                                                                                                                                                                                                   |
| Management Contracts and Compensatory Plans |
|                                        |   |                                                                                                                                                                                                                                   |
| 10.3                                        |   | Employment Agreement dated December 19, 2008 between the Company and Ben R. Leedle, Jr. [incorporated by reference to Exhibit 10.1 to the Company’s Form 10-QT of the Company’s transition period ended December 31, 2008] |
|                                        |   |                                                                                                                                                                                                                                   |
| 10.4                                        |   | Employment Agreement dated December 19, 2008 between the Company and Mary A. Chaput [incorporated by reference to Exhibit 10.2 to the Company’s Form 10-QT of the Company’s transition period ended December 31, 2008]     |
|                                        |   |                                                                                                                                                                                                                                   |
| 10.5                                        |   | Transition Employment Agreement dated December 31, 2010 between the Company and Mary A. Chaput [incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K dated January 6, 2011]                     |
|                                        |   |                                                                                                                                                                                                                                   |
| 10.6                                        |   | Employment Agreement dated December 19, 2008 between the Company and Anne Wilkins [incorporated by reference to Exhibit 10.1 to Form 10-Q of the Company’s fiscal quarter ended March 31, 2010]                                  |
|                                        |   |                                                                                                                                                                                                                                   |
| 10.7                                        |   | Employment Agreement dated December 10, 2008 between the Company and Matthew Kelliher [incorporated by reference to Exhibit 10.4 to Form 10-QT of the Company’s transition period ended December 31, 2008]                       |
|                                        |   |                                                                                                                                                                                                                                   |
| 10.8                                        |   | Employment Agreement dated October 11, 2008 between the Company and Stefen F. Brueckner [incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K dated October 16, 2008]                           |
|                                        |   |                                                                                                                                                                                                                                   |
| 10.9                                        |   | Employment Agreement dated December 31, 2010 between the Company and Alfred Lumsdaine [incorporated by reference to Exhibit 10.2 to the Company’s Current Report on Form 8-K dated January 6, 2011]                              |
|                                        |   |                                                                                                                                                                                                                                   |
| 10.10                                       |   | Employment Agreement dated December 31, 2010 between the Company and Thomas Cox                                                                                                                                                        |
|                                        |   |                                                                                                                                                                                                                                   |
| 10.11                                       |   | Employment Agreement dated March 8, 2011 between the Company and James W. Elrod                                                                                                                                                        |
|                                        |   |                                                                                                                                                                                                                                   |
| 10.12                                       |   | Long-term performance award agreement dated September 28, 2006 between the Company and Matthew E. Kelliher [incorporated by reference to Exhibit 10.2 to Form 10-Q of the Company’s fiscal quarter ended February 28, 2007]      |
|                                        |   |                                                                                                                                                                                                                                   |

----

| 10.13  |   | Long-term performance award agreement dated October 26, 2010 between the Company and Matthew E. Kelliher [incorporated by reference to Exhibit 10.1 to Form 10-Q of the Company’s fiscal quarter ended September 30, 2010]     |
|--------|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   |   |                                                                                                                                                                                                                                 |
| 10.14  |   | Capital Accumulation Plan, as amended and restated [incorporated by reference to Exhibit 10.4 to Form 10-Q of the Company’s fiscal quarter ended June 30, 2010]                                                                |
|   |   |                                                                                                                                                                                                                                 |
| 10.15  |   | Form of Indemnification Agreement by and among the Company and the Company's directors [incorporated by reference to Exhibit 10.15 to Registration Statement on Form S-1 (Registration No. 33-41119)]                                |
|   |   |                                                                                                                                                                                                                                 |
| 10.16  |   | 2007 Stock Incentive Plan, as amended [incorporated by reference to Exhibit 10.1 to Form 10-Q of the Company’s fiscal quarter ended June 30, 2010]                                                                             |
|   |   |                                                                                                                                                                                                                                 |
| 10.17  |   | 1996 Stock Incentive Plan, as amended  [incorporated by reference to Exhibit 10.20 to Form 10-K of the Company’s fiscal year ended August 31, 2006]                                                                  |
|   |   |                                                                                                                                                                                                                                 |
| 10.18  |   | 2001 Amended and Restated Stock Option Plan, as amended  [incorporated by reference to Exhibit 10.21 to Form 10-K of the Company’s fiscal year ended August 31, 2006]                                                |
|   |   |                                                                                                                                                                                                                                 |
| 10.19  |   | Form of Non-Qualified Stock Option Agreement under the Company’s 2007 Stock Incentive Plan [incorporated by reference to Exhibit 10.24 to Form 10-K of the Company’s fiscal year ended August 31, 2007]                  |
|   |   |                                                                                                                                                                                                                                 |
| 10.20  |   | Form of Restricted Stock Unit Award Agreement under the Company’s 2007 Stock Incentive Plan [incorporated by reference to Exhibit 10.25 to Form 10-K of the Company’s fiscal year ended August 31, 2007]                 |
|   |   |                                                                                                                                                                                                                                 |
| 10.21  |   | Form of Non-Qualified Stock Option Agreement (for Directors) under the Company’s 2007 Stock Incentive Plan [incorporated by reference to Exhibit 10.2 to Form 10-Q of the Company’s fiscal quarter ended June 30, 2010]  |
|   |   |                                                                                                                                                                                                                                 |
| 10.22  |   | Form of Restricted Stock Unit Award Agreement (for Directors) under the Company’s 2007 Stock Incentive Plan [incorporated by reference to Exhibit 10.3 to Form 10-Q of the Company’s fiscal quarter ended June 30, 2010] |
|   |   |                                                                                                                                                                                                                                 |
| 10.23  |   | 2007 Stock Incentive Plan Performance Cash Award Agreement [incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K dated March 4, 2009]                                                         |
|   |   |                                                                                                                                                                                                                                 |
| 21     |   | Subsidiary List                                                                                                                                                                                                                      |
|   |   |                                                                                                                                                                                                                                 |
| 23     |   | Consent of Ernst & Young LLP                                                                                                                                                                                                     |
|   |   |                                                                                                                                                                                                                                 |

----

| 31.1   |   | Certification pursuant to section 302 of the Sarbanes-Oxley Act of 2002 made by Ben R. Leedle, Jr., Chief Executive Officer                                                                                            |
|--------|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   |   |                                                                                                                                                                                                                   |
| 31.2   |   | Certification pursuant to section 302 of the Sarbanes-Oxley Act of 2002 made by Alfred Lumsdaine, Chief Financial Officer                                                                                              |
|   |   |                                                                                                                                                                                                                   |
| 32     |   | Certification Pursuant to 18 U.S.C section 1350 as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 made by Ben R. Leedle, Jr., Chief Executive Officer and Alfred Lumsdaine, Chief Financial Officer |

| (b) | Exhibits |
|-----|----------|

|   | Refer to Item 15(a)(3) above. |
|--------|-------------------------------|

| (c) | Not applicable |
|-----|----------------|

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|           |   | HEALTHWAYS, INC                                                                                                                                                                                                     |
|----------------|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|           |   |                                                                                                                                                                                                                |
| March 15, 2011 |   | By: /s/ Ben R. Leedle, Jr.            Ben R. Leedle, Jr.            Chief Executive Officer |

| Signature                                                            |   | Title                                                       |   | Date                       |
|----------------------------------------------------------------------|--------|-------------------------------------------------------------|--------|----------------------------|
|                                                                 |   |                                                        |   |                       |
| /s/ Ben R. Leedle, Jr.                                               |   | Chief Executive Officer and Director (Principal             |   |  March 15, 2011       |
|     Ben R. Leedle, Jr.                           |   | Executive Officer)                                          |   |                       |
|  /s/ Alfred Lumsdaine                                           |   |  Chief Financial Officer (Principal Financial Officer) |   |  March 15, 2011       |
|     Alfred Lumsdaine /s/ Thomas G. Cigarran |   |   Chairman of the Board and Director              |   |   March 15, 2011 |
|     Thomas G. Cigarran                           |   |                                                        |   |                       |
|                                                                 |   |                                                        |   |                       |
| /s/ John A. Wickens                                                  |   | Director                                                    |   | March 15, 2011             |
|     John A. Wickens                              |   |                                                        |   |                       |
|                                                                 |   |                                                        |   |                       |
| /s/ William D. Novelli                                               |   | Director                                                    |   | March 15, 2011             |
|     William D. Novelli                           |   |                                                        |   |                       |
|                                                                 |   |                                                        |   |                       |
| /s/ William C. O’Neil, Jr.                                     |   | Director                                                    |   | March 15, 2011             |
|     William C. O'Neil, Jr.                       |   |                                                        |   |                       |
|                                                                 |   |                                                        |   |                       |
| /s/ John W. Ballantine                                               |   | Director                                                    |   | March 15, 2011             |
|    John W. Ballantine                                 |   |                                                        |   |                       |
|                                                                 |   |                                                        |   |                       |
| /s/ Mary Jane England, M.D.                                          |   | Director                                                    |   | March 15, 2011             |
|    Mary Jane England, M.D.                            |   |                                                        |   |                       |
|                                                                 |   |                                                        |   |                       |
| /s/ Alison Taunton-Rigby                                             |   | Director                                                    |   | March 15, 2011             |
|    Alison Taunton-Rigby                               |   |                                                        |   |                       |
|                                                                 |   |                                                        |   |                       |
| /s/ Jay C. Bisgard, M.D.                                             |   | Director                                                    |   | March 15, 2011             |
|     Jay C. Bisgard, M.D.                         |   |                                                        |   |                       |
|                                                                 |   |                                                        |   |                       |
| /s/ C. Warren Neel                                                   |   | Director                                                    |   | March 15, 2011             |
|    C. Warren Neel                                     |   |                                                        |   |                       |
|                                                                 |   |                                                        |   |                       |