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The Company previously announced the decision to exit the anesthesiamanagement services business line. During the first nine months of 2007, theCompany worked to transition its existing relationships within this operationand the final phase of this business line disposal was substantially completedduring the third quarter of 2007. As a result of this progress and inaccordance with relevant accounting guidance, the operating results of theanesthesia management operations are reported as discontinued operations inthe statement of operations for all periods presented in this release.
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Net revenue less provision for uncollectibles ("revenue less provision")in the third quarter of 2007 increased 11.1% to $314.6 million from $283.3million in the corresponding period of 2006. Same contract revenue lessprovision for the quarter increased by 6.8% to $260.2 million from $243.7million in the corresponding period of 2006. New sales, net of contracts thatterminated in the period, and acquisitions contributed $13.6 million and $1.2million of growth between corresponding periods, respectively. Net earningswere $15.4 million in the third quarter of 2007, compared to $4.5 million inthe third quarter of 2006. Included in net earnings for the third quarter of2007 was a loss from discontinued operations (net of tax benefit) of $152,000.For the third quarter of 2006, earnings from discontinued operations (net oftax expense) were $105,000.
Based upon the results of the Company's most recent actuarial studycompleted in October 2007, third quarter 2007 financial results reflect areduction in professional liability reserves related to prior years of $12.5million. The professional liability reserve adjustment recognized in thethird quarter of 2007 resulted from an improved actuarial view of prior yearloss estimates due primarily to positive trends in overall frequency of claimsand favorable changes in loss development assumptions.
Net revenue less provision for the nine months ended September 30, 2007increased 13.6% to $918.5 million from $808.6 million in the correspondingperiod of 2006. Same contract revenue less provision for the first ninemonths of 2007 increased 6.7% to $725.0 million from $679.3 million in thecorresponding period of 2006. New sales, net of contracts that terminated inthe period, contributed $35.8 million of the period over period growth andacquisitions contributed $28.4 million of growth between correspondingperiods. Net earnings were $42.1 million for the first nine months of 2007compared to $11.6 million in the corresponding period of 2006. Included innet earnings for the nine months ended September 2007 and 2006 were lossesfrom discontinued operations (net of tax benefit) of $0.5 million and $6.9million, respectively.
Also included in the financial results for the nine months ended September30, 2007 and 2006 were reductions of professional liability reserves relatedto prior years of $32.1 million and $12.1 million, respectively, resultingfrom the Company's semiannual actuarial studies completed in the first andthird quarter of each year.
As of September 30, 2007, the Company had cash and cash equivalents ofapproximately $19.8 million and revolving credit facility borrowingavailability of $125.0 million (without giving effect to $7.1 million ofundrawn letters of credit). During the third quarter of 2007, the Companymade a scheduled debt payment of $1.1 million. As a result, the Company'stotal outstanding debt as of September 30, 2007 was $632.6 million and therewere no amounts outstanding under the revolving credit facility. Cash flowprovided by operations (after interest, taxes and changes in working capital)for the nine months ended Septemb
