share for the years ended December 31, 2001, 2000 and 1999, as set forth in Note 12 in Item 8. "Financial Statements and Supplementary Data".
During 2001, the Company entered into the subrogation outsourcing market that serves property and casualty ("P&C") insurers. The Company is offering its services to the P&C market under the brand name "TransPaC Solutions". The Company has established a full-time direct sales force of three individuals experienced in P&C sales and marketing. Development of TransPaC Solutions during the year ended December 31, 2001, cost the Company approximately $0.8 million in support expenses, with approximately 61.6% of that related to sales and marketing.
The 4.9% increase in recoveries for the year ended December 31, 2000 compared to 1999 resulted primarily from an increase in backlog, which grew 9.0% over the year ended December 31, 1999, and due to the Acquisitions. Because both Acquisitions were closed in the first quarter of 1999, a full year of activity related to the Acquisitions is reported in the results for the year ended December 31, 2000, while slightly less than a full year of activity was included in the 1999 results. This reporting anomaly caused an increase in the recovery growth rate from 1999 to 2000. Recoveries for 2000 grew more slowly than did backlog primarily because the backlog growth was related to the provider bill audit and overpayment recovery services, which typically yield less recoveries than subrogation backlog. Improved productivity in the Company's operations, particularly in a subrogation unit that specializes in large files, resulted in a slight improvement in throughput from 20.8% for 1999 to 20.9% for 2000. Although installed lives decreased from 51.9 million at December 31, 1999 to 48.7 million at December 31, 2000, backlog increased $97.5 million from $1,084.5 million at December 31, 1999 to $1,182.0 million at December 31, 2000. The reason that backlog increased during the same period in which lives installed decreased is that the Company typically continues to make recoveries on the backlog of terminated clients that exists as of the contract termination date, until that backlog is exhausted (i.e., usually 5 to 6 years), but removes terminated clients from the category of "lives installed" as of the contract termination date.
Net cash provided by investing activities in the year ended December 31, 2001 includes $2.6 million released from restricted cash related to the earnout provision of the Subro Audit Acquisition. Capital expenditures for the year ended December 31, 2001 were approximately $3.8 million. Disposals of property and equipment of $2.6 million included the sale of a building owned in Wisconsin. During 2002, the Company anticipates capital expenditures approximating $3.5 million to meet the requirements of the Company's growing revenue base and development activities.
Effective November 6, 2001, the Company adopted Statement of Financial Accounting Standards No. 133, "Accounting for Derivative Instruments and Hedging Activities" (SFAS 133), as amended by Statement of Financial Account Standard No 138, "Accounting for Certain Derivative Instruments and Certain Hedging Activities -- an Amendment of FAS 133". SFAS 133 requires that all derivatives, including interest rate swap agreements, be recognized on the balance sheet at their fair value. Derivatives that are not hedges must be recorded at fair value through earnings. If a derivative is a hedge, depending on the nature of the hedge, changes in the fair value of the derivative are either offset against the change in fair value of the underlying assets or liabilities through earnings or recognized in other comprehensive income until the underlying hedge item is recognized in earnings. The ineffective portion of a derivative's change in fair value is to be immediately recognized in earnings. See Note 11 "Derivatives".
The Company has entered into a contract for legal services with a professional service corporation, Sharps & Associates, PSC, that is wholly owned by one of the Company's officers. This arrangement exists solely for the benefit of the Company and its purpose is to minimize the costs of legal services purchased by the Company on behalf of its clients. Mr. Sharps receives no financial or other personal benefit from his ownership of the firm. For the years ended December 31, 2001, 2000 and 1999, approximately $3,385,000, $2,484,000 and $2,040,000, respectively, was paid to this law firm for such legal services (which equates to a rate of approximately $40 per hour), including all employees and expenses.
promissory note evidencing the prior debt. The Amended Promissory Note provides for mandatory prepayments from certain of the proceeds received by Mr. McGinnis from his sale of the Company's securities and any related transactions. At December 31, 2001 and 2000, the promissory note of $886,520 and accrued interest of $86,195 and $25,800 were outstanding, respectively. Mr. McGinnis used the proceeds of these loans to repay debts originally incurred by him to pay income taxes related to the ordinary income deemed to have been received by him on account of Common Stock granted to him in connection with the initial public offering of the Company's stock in May 1997, and to purchase additional stock in the initial public offering.