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US Oncology Reports Fourth Quarter and Fiscal Year 2007 Results
Date:2/28/2008

of the practices' results, improve consistency with other agreements and to encourage practice growth and efficiency.

In addition, a program to promote continued support of initiatives in our pharmaceutical services segment became effective July 1, 2006. As of that date, we began reducing management fees paid to the Company by affiliated practices based upon compliance with distribution efficiency guidelines established by the Company and the profitability of the pharmaceutical services segment. For the third and fourth quarters of 2007, the management fee reduction amounted to $6.4 million and $7.8 million, respectively. For the fourth quarter of 2006, the management fee reductions amounted to $4.6 million. For the year, the management fee reduction amounted to $24.6 million in 2007 and $8.9 million for the six months ended December 31, 2006. The benefit of the efficiency performance is reflected in the operating results of the pharmaceutical services segment.

Cancer Center Services

Cancer center services revenue in the fourth quarter of 2007 was $87.1 million, an increase of $5.3 million, or 6.5 percent, and EBITDA was $29.9 million, an increase of $1.0 million, or 3.5 percent, over the fourth quarter of 2006. These increases reflect a 4.5 percent increase in radiation treatments and diagnostic radiology procedures over the same period in the prior year. Both revenue and EBITDA increased at a rate greater than treatment volumes as a result of expanding services in advanced targeted radiation therapies, such as image guided radiation therapy ("IGRT") and brachytherapy administered by network physicians, which are reimbursed at higher rates than conventional radiation therapy.

Fourth quarter cancer center services revenue decreased $2.0 million, or 2.2 percent, and EBITDA decreased $3.0 million, or 9.1 percent from the third quarter of 2007 reflecting the redistribution of management fees at an affiliated practice between its medical and
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SOURCE US Oncology Holdings, Inc.
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