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UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549
 FORM 10-Q QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (d) OF
THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended November 30, 2004 Commission file number 000-13109 LAIDLAW INTERNATIONAL, INC.  DELAWARE
    
    98-0390488(State or other jurisdiction of
    
    (I.R.S. Employerincorporation or organization)
    
    Identification No.)
 55 Shuman Boulevard, Suite 400
Naperville, Illinois, 60563
(Address of principal executive offices) Registrants telephone number, including area code (630) 848-3000 Indicate by check mark whether the registrant (1) has filed all reports required to be filed
by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or
for such shorter period that the registrant was required to file such reports), and (2) has been
subject to such filing requirements for the past 90 days. YES
þ NO o Indicate by check mark whether the registrant is an accelerated filer (as defined in Rule
12b-2 of the Exchange Act). YES þ
NO o APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY
PROCEEDINGS DURING THE PRECEDING FIVE YEARS: Indicate by check mark whether the registrant has filed all documents and reports required to
be filed by Sections 12, 13 or 15(d) of the Securities Exchange Act of 1934 subsequent to the
distribution of securities under a plan confirmed by a court. YES
þ NO o As of December 31, 2004, there were 103,988,731 shares of common stock, par value $0.01 per
share, outstanding.




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LAIDLAW INTERNATIONAL, INC. Page No.PART I.
    
    FINANCIAL INFORMATIONItem 1.
    
    Financial Statements:Consolidated Balance
Sheets as of November 30, 2004 (Unaudited) and August 31, 2004
    
    
    2Consolidated
Statements of Operations for the Three Months Ended November 30, 2004
and 2003 (Unaudited)
    
    
    4Consolidated
Statements of Comprehensive Income for the Three Months Ended
November 30, 2004 and 2003 (Unaudited)
    
    
    5Consolidated
Statements of Cash Flows for the Three Months Ended November 30, 2004
and 2003 (Unaudited)
    
    
    6Notes to Consolidated Financial Statements (Unaudited)
    
    
    7Item 2.
    
    Managements Discussion and Analysis of Financial Condition and Results of Operations
    
    
    22Item 3.
    
    Quantitative and Qualitative Disclosures About Market Risk
    
    
    29Item 4.
    
    Controls and Procedures
    
    
    29PART II.
    
    OTHER INFORMATIONItem 1.
    
    Legal Proceedings
    
    
    30Item 6.
    
    Exhibits and Reports on Form 8-K
    
    
    31SIGNATURES
    
    
    32Section 302 CertificationSection 302 CertificationSection 906 Certification
 1




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PART I.  FINANCIAL INFORMATION 
 Item 1. Financial Statements LAIDLAW INTERNATIONAL, INC. 
 CONSOLIDATED BALANCE SHEETS
 ($ in millions)
 November 30,
    
    
    August 31,2004
    
    
    2004(unaudited)ASSETSCurrent assetsCash and cash equivalents
    
    $
    99.4
    
    
    $
    158.0Restricted cash and cash equivalents
    
    
    92.2
    
    
    
    95.0Short-term deposits and marketable securities
    
    
    12.6
    
    
    
    17.4Accounts receivable
    
    
    742.3
    
    
    
    588.0Parts and supplies
    
    
    51.7
    
    
    
    50.6Deferred income tax assets
    
    
    56.5
    
    
    
    75.5Other current assets
    
    
    45.8
    
    
    
    47.4Total current assets
    
    
    1,100.5
    
    
    
    1,031.9Long-term investments
    
    
    637.3
    
    
    
    608.6Property and equipmentLand
    
    
    189.6
    
    
    
    186.2Buildings
    
    
    177.7
    
    
    
    171.9Vehicles
    
    
    1,428.1
    
    
    
    1,381.1Other
    
    
    188.1
    
    
    
    182.71,983.5
    
    
    
    1,921.9Less: Accumulated depreciation
    
    
    377.4
    
    
    
    296.11,606.1
    
    
    
    1,625.8Other assetsGoodwill
    
    
    139.1
    
    
    
    139.1Contracts and customer relationships
    
    
    199.3
    
    
    
    203.0Deferred income tax assets
    
    
    235.0
    
    
    
    228.5Deferred charges and other assets
    
    
    66.2
    
    
    
    68.3639.6
    
    
    
    638.9Total assets
    
    $
    3,983.5
    
    
    $
    3,905.2
 The accompanying notes are an integral part of these statements. 2




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LAIDLAW INTERNATIONAL, INC.
CONSOLIDATED BALANCE SHEETS
($ in millions) November 30,
    
    
    August 31,2004
    
    
    2004(unaudited)LIABILITIESCurrent liabilitiesAccounts payable
    
    $
    102.1
    
    
    $
    115.0Accrued liabilities
    
    
    525.1
    
    
    
    535.2Current portion of long-term debt
    
    
    36.8
    
    
    
    36.4Total current liabilities
    
    
    664.0
    
    
    
    686.6Long-term debt
    
    
    1,129.4
    
    
    
    1,114.2Pension liability
    
    
    184.5
    
    
    
    188.3Other long-term liabilities
    
    
    557.3
    
    
    
    539.6Total liabilities
    
    
    2,535.2
    
    
    
    2,528.7SHAREHOLDERS EQUITYCommon shares; $0.01 par value per share;
issued and outstanding 104.0 million
(August 31, 2004  103.8 million)
    
    
    1.0
    
    
    
    1.0Additional paid in capital
    
    
    1,362.4
    
    
    
    1,360.9Common
shares held in trust; 3.8 million issued
    
    
    (50.0
    )
    
    
    (50.0
    )Accumulated other comprehensive income
    
    
    52.7
    
    
    
    12.8Retained earnings
    
    
    82.2
    
    
    
    51.8Total shareholders equity
    
    
    1,448.3
    
    
    
    1,376.5Total liabilities and shareholders equity
    
    $
    3,983.5
    
    
    $
    3,905.2
 The accompanying notes are an integral part of these statements. 3




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LAIDLAW INTERNATIONAL, INC. 
 CONSOLIDATED STATEMENTS OF OPERATIONS
 ($ in millions except per share amounts)
 (unaudited)
 Three Months Ended November 30,2004
    
    
    2003Revenue
    
    $
    1,227.3
    
    
    $
    1,210.3Compensation expense
    
    
    688.7
    
    
    
    685.0Accident claims and professional liability expenses
    
    
    80.0
    
    
    
    89.6Vehicle related costs
    
    
    68.2
    
    
    
    69.9Occupancy costs
    
    
    48.9
    
    
    
    49.9Fuel
    
    
    56.5
    
    
    
    44.4Depreciation
    
    
    76.5
    
    
    
    76.1Amortization
    
    
    4.7
    
    
    
    4.6Other operating expenses
    
    
    123.7
    
    
    
    121.3Operating income
    
    
    80.1
    
    
    
    69.5Interest expense
    
    
    (30.4
    )
    
    
    (32.7
    )Other income, net
    
    
    1.4
    
    
    
    0.9Income before income taxes
    
    
    51.1
    
    
    
    37.7Income tax expense
    
    
    (20.7
    )
    
    
    (15.1
    )Net income
    
    $
    30.4
    
    
    $
    22.6Basic earnings per share
    
    $
    0.30
    
    
    $
    0.23Diluted earnings per share
    
    $
    0.29
    
    
    $
    0.22
 The accompanying notes are an integral part of these statements. 4




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LAIDLAW INTERNATIONAL, INC. 
 CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
 ($ in millions)
 (unaudited)
 Three Months Ended November 30,2004
    
    
    2003Net income
    
    $
    30.4
    
    
    $
    22.6Net unrealized gains (losses) on securities
    
    
    (0.7
    )
    
    
    2.0Net unrealized gain in interest rate swap
    
    
    0.7
    
    
    
    Foreign currency translation adjustments
    
    
    39.9
    
    
    
    23.1Comprehensive income
    
    $
    70.3
    
    
    $
    47.7
 The accompanying notes are an integral part of these statements. 5




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LAIDLAW INTERNATIONAL, INC. 
 CONSOLIDATED STATEMENTS OF CASH FLOWS
 ($ in millions)
 (unaudited)
 Three Months Ended November 30,2004
    
    
    2003Operating activitiesNet income
    
    $
    30.4
    
    
    $
    22.6Non-cash items included in net income:Depreciation and amortization
    
    
    81.2
    
    
    
    80.7Deferred income taxes
    
    
    19.7
    
    
    
    14.1Other items
    
    
    5.9
    
    
    
    3.8Increase in claims liability and professional liability
insurance accruals
    
    
    9.4
    
    
    
    5.8Cash used in financing other working capital items
    
    
    (180.2
    )
    
    
    (180.1
    )Change in pension liability
    
    
    (3.6
    )
    
    
    0.3Decrease (increase) in restricted cash and cash equivalents
    
    
    (6.5
    )
    
    
    1.2Net cash used in operating activities
    
    $
    (43.7
    )
    
    $
    (51.6
    )Investing activitiesPurchase of property, equipment and other assets,
net of proceeds from sale
    
    $
    (22.9
    )
    
    $
    (39.3
    )Net increase in investments
    
    
    (5.0
    )
    
    
    (7.7
    )Net cash used in investing activities
    
    $
    (27.9
    )
    
    $
    (47.0
    )Financing activitiesNet increase in long-term debt
    
    $
    13.2
    
    
    $
    69.4Net increase (decrease) in other long-term liabilities
    
    
    (0.2
    )
    
    
    4.0Net cash provided by financing activities
    
    $
    13.0
    
    
    $
    73.4Net decrease in cash and cash equivalents
    
    $
    (58.6
    )
    
    $
    (25.2
    )Cash and cash equivalents  beginning of period*
    
    
    158.0
    
    
    
    100.3Cash and cash equivalents  end of period*
    
    $
    99.4
    
    
    $
    75.1
 *These amounts represent the unrestricted cash and cash equivalents The accompanying notes are an integral part of these statements. 6




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LAIDLAW INTERNATIONAL, INC. 
 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
 FOR THE THREE MONTH PERIOD ENDED NOVEMBER 30, 2004
 Note 1  Corporate overview and basis of presentation Corporate overview Laidlaw International, Inc. (the Company) operates in five reportable business segments:
education services, public transit services, Greyhound, healthcare transportation services and
emergency management services. The education services segment provides school bus transportation,
including scheduled home-to-school, extra-curricular and charter and transit school bus services,
throughout the United States and Canada. The public transit services segment provides fixed-route
municipal bus service and paratransit bus transportation for riders with disabilities. Greyhound, a
national provider of inter-city bus transportation in the United States and Canada, provides
scheduled passenger service, package delivery service, charter bus service and, in certain
terminals, food service. The healthcare transportation service segment provides critical care
transportation services, non-emergency ambulance and transfer services and emergency response
services in the United States. The emergency management services segment provides outsourced
emergency department physician services throughout the United States. Basis of presentation The accompanying interim consolidated financial statements of the Company have been prepared in
accordance with accounting principles generally accepted in the United States for interim reporting
and accordingly, do not include all of the disclosures required for annual financial statements.
In the opinion of management, all adjustments considered necessary for fair presentation have been
included. All such adjustments are of a normal, recurring nature. Operating results for the three
months ended November 30, 2004 are not necessarily indicative of the results that may be expected
for the full year ending August 31, 2005. For further information, see the Companys consolidated
financial statements, including the accounting policies and notes thereto, included in the
Companys Annual Report on Form 10-K for the fiscal year ended August 31, 2004. Certain prior period amounts have been reclassified to conform to the current period presentation. Note 2  Accounts receivable and revenue Trade accounts receivable as of November 30, 2004 are net of $623.3 million (August 31, 2004 -
$588.6 million) of allowances for uncompensated care and contractual allowances in the Companys
healthcare transportation and emergency management business segments and net of an allowance for
doubtful accounts of $5.8 million (August 31, 2004  $4.9 million) in the Companys other three
reportable segments. Note 3  Intangible assets The contracts and customer relationships are net of $27.4 million of accumulated amortization at
November 30, 2004 (August 31, 2004  $22.5 million). Included in deferred charges and other assets are radio frequency licenses totalling $12.0 million
at November 30, 2004 (August 31, 2004  $12.0 million). The licenses are considered to be assets
with indefinite lives and as such, are not amortized. 7




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Note 4  Stock awards and options Pursuant to the Companys 2003 Equity and Performance Incentive Plan, the Company issued stock
based compensation to various employees and non-employee directors. These grants to employees
represent the long-term incentive portion of the Companys overall compensation plan for
management. The Company accounts for all stock-based compensation based on estimated fair value at
the date of issue and recorded an expense related to these plans of approximately $1.5 million
during the three month period ended November 30, 2004. A summary of stock based compensation
issued during the current fiscal year is as follows: Stock options On December 8, 2004, the Company issued 452,625 non-qualified stock
options to employees and non-employee directors with a strike price of $18.85 per share. The grant
price was equal to the fair market value of the Companys stock at the date of grant. The stock
options have a ten-year life and vest ratably over three years. Restricted Shares On December 8, 2004, the Company issued 25,313 shares of restricted
common stock to non-employee directors. The restricted shares vest at the end of a three-year
period and during the vesting period the participant has the rights of a shareholder with respect
to voting and dividend rights but is restricted from transferring the shares. Deferred Shares Deferred shares are issued to key employees and vest ratably over a
four-year period. On each vesting date the employee receives common stock of the Company equal in
number to the deferred shares that have vested. Upon delivery of the Company common stock an equal
number of deferred shares are terminated. The participant has no voting rights with the deferred
shares. During the three months ended November 30, 2004, 153,933 of previously issued deferred
shares vested and the common shares were issued to the employees. On December 8, 2004, the Company
issued 275,000 deferred shares. Note 5  Pension plans The Company, collectively with all of its wholly-owned U.S. subsidiaries, including Greyhound (the
Laidlaw Group), is party to an agreement with the Pension Benefit Guaranty Corporation (PBGC)
regarding the funding levels of the Companys pension plans (the PBGC Agreement). Under the PBGC
Agreement, 3.8 million shares of the Companys common stock were issued to a trust formed for the
benefit of the pension plans (the Pension Plan Trust). The trustee of the Pension Plan Trust is
to sell the stock at the Companys direction, but in no event later than April 15, 2005, with all
net proceeds from the stock sales being contributed directly to the pension plans. As discussed in
Note 9  Subsequent events, the Company intends to use a portion of the proceeds from the sale of
the healthcare companies to purchase some or all of these shares. If the net proceeds from the stock sales exceed $50 million, the excess amount may be credited
against any future required minimum funding obligations. If the net proceeds from the stock sales
are less than $50 million, the Laidlaw Group will be required to contribute the amount of the
shortfall in cash to the pension plans by April 15, 2005. At November 30, 2004, all 3.8 million
shares of Laidlaw common stock remained in the Pension Plan Trust. Based upon the closing price of
the common stock on the NYSE, the shares had an aggregate market value of $80.8 million at December
31, 2004 8




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The components of net periodic benefit cost for the Companys pension plans were as follows: Three Months Ended November 30,($ in millions)
    
    2004
    
    
    2003Components of net pension benefit costService cost
    
    $
    2.1
    
    
    $
    1.4Interest cost
    
    
    14.3
    
    
    
    13.6Expected return on plan assets
    
    
    (14.4
    )
    
    
    (12.8
    )Net pension benefit cost
    
    $
    2.0
    
    
    $
    2.2
 Note 6  Material contingencies Legal proceedings Health Care The Companys healthcare businesses are subject to the Medicare and Medicaid fraud and abuse laws,
which prohibit, among other things, any false claims, or any bribe, kick-back or rebate in return
for the referral of Medicare and Medicaid patients. Violation of these prohibitions may result in
civil and criminal penalties and exclusion from participation in the Medicare and Medicaid
programs. Management has implemented policies and procedures that management believes will assure
that the Company is in substantial compliance with these laws. Laidlaw or its subsidiaries
continually undergo investigations by certain government agencies regarding compliance with
Medicare fraud and abuse statutes. The Company is cooperating with the government agencies
conducting these investigations and is providing requested information to the government agencies.
Other than the investigations described in the following two paragraphs, management believes that
the outcome of any of these investigations would not have a material adverse effect on the Company. On May 9, 2002, the Companys wholly owned subsidiary American Medical Response Inc. (AMR)
received a subpoena duces tecum from the Office of Inspector General for the United States
Department of Health and Human Services (HHS). The subpoena requested copies of documents for
the period from January 1993 through May 2002. The subpoena required AMR to produce a broad range
of documents relating to Huguley Hospital and Regional Emergency Services contracts in Texas,
Georgia and Colorado. The claims in Texas were resolved in fiscal 2004 pursuant to a settlement
agreement whereby AMR was required to pay $5 million. The government investigations in Georgia and
Colorado are continuing. During the first quarter of fiscal 2004, AMR was advised by the U.S. Department of Justice (DOJ),
that it was investigating certain business practices at AMR. The specific practices at issue were
(1) whether ambulance transports involving Medicare eligible patients complied with the medically
necessary requirement imposed by Medicare regulations, (2) whether patient signatures, when
required, were properly obtained from Medicare eligible patients; and (3) whether discounts in
violation of the Federal Anti-Kickback Act were provided by AMR in exchange for referrals involving
Medicare eligible patients. At this juncture, it is not possible to predict the ultimate
conclusion of the investigations described in this and the preceding paragraph, nor is it possible
to calculate any possible financial exposure, if any, to the Company. Greyhound Default Judgment On September 20, 2004, the Companys wholly owned subsidiary Greyhound Lines, Inc. (Greyhound)
responded to proceedings brought in Georgia state court in August 2004 (August Proceedings)
seeking to enforce a default garnishment judgment on funds in a Greyhound bank account. While this
action has since been dismissed, it stemmed from an October 1995 default judgment in the amount of
approximately $7 million (1995 Judgment) 9




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against Gary Jones, a former consultant to Greyhound. More than four years later, in October 2000,
the plaintiff who obtained the 1995 Judgment (Plaintiff) began garnishment proceedings against
Greyhound in Georgia state court seeking to recover amounts owed to Gary Jones, who then allegedly
owed the Plaintiff the amount of approximately $11 million based on the 1995 Judgment plus
post-judgment interest. On May 2, 2001, a default judgment for $11 million (Default Judgment)
was entered by the Georgia state court against Greyhound. Greyhound first learned of the Default
Judgment through the August Proceedings and, therefore, was unaware of the garnishment and the
Default Judgment and inadvertently failed to contest it. Had the garnishment been timely answered,
Greyhound believes that the amount due in response to the garnishment summons would not have
exceeded $1,500. It is now alleged that Greyhound is liable to the Plaintiff in the amount of $15 million, based on
the $11 million Default Judgment plus post-judgment interest. Greyhound has filed a Motion to
Vacate the Default Judgment in the Court where such judgment was rendered. Based on several legal
grounds, Greyhound believes that the Default Judgment is null and void and not enforceable.
Greyhound intends to vigorously defend its interests in the litigation. Also refer to the
discussion of the potential impact of this litigation on the Greyhound Facility included below. Other The Company is also a defendant in various lawsuits arising in the ordinary course of business,
primarily cases involving personal injury, property damage or employment related claims. Some of
these actions are covered to varying degrees by insurance policies. Based on an assessment of
known claims and our historical claims payout pattern, management believes that there is no
proceeding either threatened or pending against us relating to personal injury and/or property
damage claims and/or employment related claims that would have a material adverse effect on the
Company. Greyhound Facility Greyhound is party to a revolving credit facility to fund working capital needs and for general
corporate purposes (the Greyhound Facility) that expires on October 24, 2006. The Greyhound
Facility is subject to certain affirmative and negative operating and financial covenants,
including maximum total debt to cash flow ratio; minimum cash flow to interest expense ratio;
minimum cash flow; limitation on non-bus capital expenditures; limitations on additional liens,
indebtedness, guarantees, asset disposals, advances, investments and loans; and restrictions on the
redemption or retirement of certain subordinated indebtedness or equity interests, payment of
dividends and transactions with affiliates, including Laidlaw International, Inc. Although
Greyhounds most recent financial forecast indicates they will remain in compliance with the
financial covenants under the Greyhound Facility, increases in fuel prices, softness in
discretionary travel or other unforeseen events or changes in assumptions may occur and result in
material differences between Greyhounds future results and the current financial forecast. Those
differences could result in management concluding in the future that Greyhound may not be able to
remain in compliance with the financial covenants under the Greyhound Facility. As described above in Legal proceedings, in August 2004, Greyhound became aware of proceedings
brought in Georgia state court seeking to enforce a default garnishment judgment. Although
Greyhound is seeking to overturn the Default Judgment, unless and until it is declared void,
stayed, bonded or paid, the Default Judgment could be deemed to be an event of default under the
Greyhound Facility. To date, Greyhounds lenders have indicated they do not wish to give notice of
default or accelerate the repayment of Greyhounds outstanding obligations under the Greyhound
Facility. Any accelerated repayment of Greyhounds indebtedness could cause defaults under
Greyhounds other debt agreements and force Greyhound to refinance and/or renegotiate all or a
significant portion of its outstanding indebtedness. Should the Greyhound Facility be accelerated
and Greyhound is unable to renegotiate or refinance its outstanding 10




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indebtedness, then Greyhound may not be able to satisfy its obligations as they become due and may
not be able to continue as a going concern. If the going concern basis on which Greyhounds
consolidated financial statements were prepared was not appropriate for those consolidated
financial statements, then significant adjustments would need to be made to the carrying value of
the assets and liabilities, the reported revenue and expenses and balance sheet classifications
used by Greyhound. Accordingly, if such changes were made to Greyhounds consolidated financial
statements, significant adjustments would be required to the Companys consolidated financial
statements. Compliance by the Company with the financial and other covenants in its senior secured credit
facility is generally not dependent on the financial results or financial condition of Greyhound,
as Greyhounds performance has been excluded for purposes of determining compliance with such
provisions. Moreover, consistent with the intent to exclude events solely related to Greyhound,
the Companys senior secured credit facility specifies that a default by Greyhound under the
Greyhound Facility or a bankruptcy filing by Greyhound would not be an event of default under the
Companys senior secured credit facility. However, should Greyhound be unable to continue as a going concern, the Company may be required to
honor certain of Greyhounds lease commitments and pension obligations. The Companys management
believes that any required expenditures with respect to such liabilities would not materially
impact the Companys financial condition. Environmental matters The Companys operations are subject to various federal, state, local and foreign laws and
regulations relating to environmental matters, including those concerning emissions to the air;
waste water discharges; storage, treatment and disposal of waste and remediation of soil and ground
water contamination. The Company has incurred, and expects to incur, costs for its operations to
comply with these legal requirements, and these costs could increase in the future. In particular,
the Company has been named as a potentially responsible party under the United States
Comprehensive Environmental Response, Compensation and Liability Act of 1980, as amended, at
various third-party sites at which our waste was allegedly disposed. In addition, management is
investigating or engaged in remediation of past contamination at other sites used in the
businesses. The Company records liabilities when environmental liabilities are either known or
considered probable and can be reasonably estimated. On an ongoing basis, management assesses and
evaluates environmental risk and, when necessary, conducts appropriate corrective measures. As of
the date of this report, management believes that adequate accruals have been made related to all
known environmental matters, however actual environmental liabilities could differ significantly
from these estimates. Income tax matters The respective tax authorities, in the normal course, audit previous tax filings. It is not
possible at this time to predict the final outcome of these audits or to establish a reasonable
estimate of possible additional taxes owing, if any. Contingent bonuses The Company and two of its subsidiaries, AMR and EmCare Holdings, Inc. (EmCare), are parties to
an employment agreement effective October 1, 2002 with William A. Sanger under which Mr. Sanger
serves as President and Chief Executive Officer of AMR and as Chief Executive Officer of EmCare.
Pursuant to the agreement, Mr. Sanger is entitled to a bonus payment upon a sale, or an initial
public offering, of the stock of AMR and/or EmCare. This bonus is also payable if Mr. Sanger
remains employed on October 1, 2007 and neither a sale nor an initial public offering has occurred.
With respect to AMR, the bonus is equal to 5% of the enterprise value of AMR in excess of $410
million at the time of the event that entitles Mr. 11




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Sanger to the payment. With respect to EmCare, the bonus is equal to 5% of the enterprise value of
EmCare in excess of $125 million at the time of the event that entitles Mr. Sanger to the payment. EmCare Holdings, Inc. is party to an employment agreement effective April 1, 2003 with Don S.
Harvey under which Mr. Harvey serves as President and Chief Operating Officer of EmCare. Pursuant
to the agreement, Mr. Harvey is entitled to a bonus payment upon a sale of, or an initial public
offering of, the stock of EmCare, provided Mr. Harvey remains employed under the agreement upon the
occurrence of such event. The bonus is equal to 2% of the enterprise value of EmCare in excess of
$125 million at the time of the event that entitles Mr. Harvey to the payment. As discussed in Note 9  Subsequent events, on December 6, 2004 the Company announced that it had
entered into definitive agreements to sell both of its healthcare companies, AMR and EmCare.
Completion of the sales transaction, anticipated no later than the end of March 2005, would trigger
the payment of these bonuses in accordance with the employment agreements. Note 7  Earnings per share The basic earnings per share figures are calculated using the weighted average number of shares
outstanding during the respective periods. The diluted earnings per share for the three month
periods ended November 30, 2004 and 2003 assumes the sale on the open market of the Companys
common shares held in trust and the dilutive effect of the Companys stock based compensation. Three Months Ended November 30,(in millions except per share amounts)
    
    2004
    
    
    2003Net earnings available to common shareholders
    
    $
    30.4
    
    
    $
    22.6Weighted average number of common shares outstandingBasic
    
    
    100.0
    
    
    
    100.0Shares held in pension plan trust
    
    
    3.8
    
    
    
    3.8Stock based compensation
    
    
    0.3
    
    
    
    Diluted
    
    
    104.1
    
    
    
    103.8Net earnings per common shareBasic
    
    $
    0.30
    
    
    $
    0.23Diluted
    
    $
    0.29
    
    
    $
    0.22
 12




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##### Table of Contents



Note 8  Segment information The Company has five reportable segments: education services, public transit services, Greyhound,
healthcare transportation services and emergency management services. Revenues and EBITDA
(operating income before depreciation and amortization) of the segments for the three months ended
November 30, 2004 and 2003 are as follows: Three Months Ended November 30,($ in millions)
    
    2004
    
    
    2003Education servicesRevenue
    
    $
    451.9
    
    
    $
    455.7EBITDA
    
    
    114.2
    
    
    
    109.5Public transit servicesRevenue
    
    $
    77.0
    
    
    $
    72.1EBITDA
    
    
    3.6
    
    
    
    0.5GreyhoundRevenue
    
    $
    284.8
    
    
    $
    287.1EBITDA
    
    
    12.2
    
    
    
    10.6Healthcare transportation servicesRevenue
    
    $
    269.9
    
    
    $
    262.0EBITDA
    
    
    22.8
    
    
    
    19.0Emergency management servicesRevenue
    
    $
    143.7
    
    
    $
    133.4EBITDA
    
    
    8.5
    
    
    
    10.6Consolidated TotalRevenue
    
    $
    1,227.3
    
    
    $
    1,210.3EBITDA
    
    
    161.3
    
    
    
    150.2Depreciation and amortization expense
    
    
    (81.2
    )
    
    
    (80.7
    )Operating income
    
    
    80.1
    
    
    
    69.5Interest expense
    
    
    (30.4
    )
    
    
    (32.7
    )Other income, net
    
    
    1.4
    
    
    
    0.9Income tax expense
    
    
    (20.7
    )
    
    
    (15.1
    )Net income
    
    $
    30.4
    
    
    $
    22.6
 The Companys goodwill balance of $139.1 million (August 31, 2004  $139.1 million) is
composed of goodwill from the Education services segment. Total identifiable assets for each of the reportable segments has not changed materially since
August 31, 2004 with the exception of the education services segment where total identifiable
assets at November 30, 2004 were $1,338.7 million compared to $1,222.8 million at August 31, 2004.
The increase is primarily due to seasonal accounts receivable changes. 13




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##### Table of Contents



Note 9  Subsequent events On December 6, 2004 the Company announced that it had entered into definitive agreements to sell
both of its healthcare companies, AMR and EmCare, to EMSC, Inc., an affiliate of Onex Partners LP
and Onex Corporation, for approximately $818 million. Completion of the transactions is
anticipated to occur by the end of March, 2005, and is subject to normal and customary closing
conditions. Net cash proceeds to the Company are expected to be approximately $775 million after debt assumed
by the buyer and payment of transaction costs. Proceeds from the transactions will be used in part
to retire all outstanding borrowings under the Companys Term B senior secured term facility ($579
million at November 30, 2004). The Company also intends to use a portion of the proceeds from the
sale of the healthcare companies to purchase some or all of the shares held in the Pension Plan
Trust. While the Company will realize a substantial gain on sale, there will be no federal cash
tax obligation as a result of the transactions. 14




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##### Table of Contents



Note 10  Condensed financial statements of restricted subsidiaries Pursuant to the terms of the Companys $406.0 million Senior Notes, the Company is required to
segregate the consolidated results of operations between the subsidiaries of the Company that are
not a party to the agreement, which are comprised of the U.S. based businesses in the Greyhound
segment (the Unrestricted Subsidiaries), and the Company and its remaining subsidiaries (the
Restricted Subsidiaries). Condensed Consolidated Statement of Operations
Three Months Ended November 30, 2004 Restricted
    
    
    Unrestricted
    
    
    Consolidated($ millions)
    
    Subsidiaries
    
    
    Subsidiaries
    
    
    TotalsRevenue
    
    $
    1,004.7
    
    
    $
    222.6
    
    
    $
    1,227.3Compensation expense
    
    
    594.7
    
    
    
    94.0
    
    
    
    688.7Accident claims and professional
liability expenses
    
    
    62.9
    
    
    
    17.1
    
    
    
    80.0Vehicle related costs
    
    
    36.9
    
    
    
    31.3
    
    
    
    68.2Occupancy costs
    
    
    29.4
    
    
    
    19.5
    
    
    
    48.9Fuel
    
    
    37.8
    
    
    
    18.7
    
    
    
    56.5Depreciation
    
    
    64.4
    
    
    
    12.1
    
    
    
    76.5Amortization
    
    
    4.7
    
    
    
    
    
    
    
    4.7Other operating expenses
    
    
    89.4
    
    
    
    34.3
    
    
    
    123.7Operating income (loss)
    
    
    84.5
    
    
    
    (4.4
    )
    
    
    80.1Interest expense
    
    
    (21.7
    )
    
    
    (8.7
    )
    
    
    (30.4
    )Other income, net
    
    
    1.2
    
    
    
    0.2
    
    
    
    1.4Income (loss) before income taxes
    
    
    64.0
    
    
    
    (12.9
    )
    
    
    51.1Income tax benefit (expense)
    
    
    (25.9
    )
    
    
    5.2
    
    
    
    (20.7
    )Net income (loss)
    
    $
    38.1
    
    
    $
    (7.7
    )
    
    $
    30.4
 Condensed Consolidated Statement of Operations
Three Months Ended November 30, 2003 Restricted
    
    
    Unrestricted
    
    
    Consolidated($ millions)
    
    Subsidiaries
    
    
    Subsidiaries
    
    
    TotalsRevenue
    
    $
    980.1
    
    
    $
    230.2
    
    
    $
    1,210.3Compensation expense
    
    
    583.8
    
    
    
    101.2
    
    
    
    685.0Accident claims and professional
liability expenses
    
    
    73.0
    
    
    
    16.6
    
    
    
    89.6Vehicle related costs
    
    
    35.5
    
    
    
    34.4
    
    
    
    69.9Occupancy costs
    
    
    30.1
    
    
    
    19.8
    
    
    
    49.9Fuel
    
    
    30.9
    
    
    
    13.5
    
    
    
    44.4Depreciation
    
    
    65.6
    
    
    
    10.5
    
    
    
    76.1Amortization
    
    
    4.6
    
    
    
    
    
    
    
    4.6Other operating expenses
    
    
    85.4
    
    
    
    35.9
    
    
    
    121.3Operating income (loss)
    
    
    71.2
    
    
    
    (1.7
    )
    
    
    69.5Interest expense
    
    
    (25.9
    )
    
    
    (6.8
    )
    
    
    (32.7
    )Other income (expenses), net
    
    
    1.1
    
    
    
    (0.2
    )
    
    
    0.9Income (loss) before income taxes
    
    
    46.4
    
    
    
    (8.7
    )
    
    
    37.7Income tax benefit (expense)
    
    
    (18.6
    )
    
    
    3.5
    
    
    
    (15.1
    )Net income (loss)
    
    $
    27.8
    
    
    $
    (5.2
    )
    
    $
    22.6
 15




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##### Table of Contents



Condensed Consolidated Statement of Cash Flows
Three Months Ended November 30, 2004 Restricted
    
    
    Unrestricted
    
    
    Consolidated($ millions)
    
    Subsidiaries
    
    
    Subsidiaries
    
    
    TotalsNet cash used in operating activities
    
    $
    (28.4
    )
    
    $
    (15.3
    )
    
    $
    (43.7
    )Cash flows from investing activities:Purchase of property, equipment and other assets,
net of proceeds from sale
    
    $
    (20.8
    )
    
    $
    (2.1
    )
    
    $
    (22.9
    )Net (increase) decrease in investments
    
    
    5.1
    
    
    
    (10.1
    )
    
    
    (5.0
    )Net cash used in investing activities
    
    $
    (15.7
    )
    
    $
    (12.2
    )
    
    $
    (27.9
    )Cash flows from financing activities:Net increase (decrease) in long-term debt
    
    $
    13.5
    
    
    $
    (0.3
    )
    
    $
    13.2Net increase (decrease) in non-current liabilities
    
    
    1.3
    
    
    
    (1.5
    )
    
    
    (0.2
    )Net cash provided by (used in) financing activities
    
    $
    14.8
    
    
    $
    (1.8
    )
    
    $
    13.0Net decrease in cash and cash equivalents
    
    $
    (29.3
    )
    
    $
    (29.3
    )
    
    $
    (58.6
    )Cash and cash equivalents at:Beginning of period
    
    
    98.0
    
    
    
    60.0
    
    
    
    158.0End of period
    
    $
    68.7
    
    
    $
    30.7
    
    
    $
    99.4
 Condensed Consolidated Statement of Cash Flows
Three Months Ended November 30, 2003 Restricted
    
    
    Unrestricted
    
    
    Consolidated($ millions)
    
    Subsidiaries
    
    
    Subsidiaries
    
    
    TotalsNet cash used in operating activities
    
    $
    (49.8
    )
    
    $
    (1.8
    )
    
    $
    (51.6
    )Cash flows from investing activities:Purchase of property, equipment and other assets,
net of proceeds from sale
    
    $
    (32.8
    )
    
    $
    (6.5
    )
    
    $
    (39.3
    )Net increase in investments
    
    
    (6.0
    )
    
    
    (1.7
    )
    
    
    (7.7
    )Net cash used in investing activities
    
    $
    (38.8
    )
    
    $
    (8.2
    )
    
    $
    (47.0
    )Cash flows from financing activities:Net increase (decrease) in long-term debt
    
    $
    85.0
    
    
    $
    (15.6
    )
    
    $
    69.4Net increase in non-current liabilities
    
    
    4.0
    
    
    
    
    
    
    
    4.0Net cash provided by (used in) financing activities
    
    $
    89.0
    
    
    $
    (15.6
    )
    
    $
    73.4Net increase (decrease) in cash and cash equivalents
    
    $
    0.4
    
    
    $
    (25.6
    )
    
    $
    (25.2
    )Cash and cash equivalents at:Beginning of period
    
    
    55.1
    
    
    
    45.2
    
    
    
    100.3End of period
    
    $
    55.5
    
    
    $
    19.6
    
    
    $
    75.1
 16




---



##### Table of Contents



Condensed Consolidated Balance Sheet
November 30, 2004 Restricted
    
    
    Unrestricted
    
    
    Consolidated($ millions)
    
    Subsidiaries
    
    
    Subsidiaries
    
    
    TotalsCurrent assetsCash and cash equivalents
    
    $
    68.7
    
    
    $
    30.7
    
    
    $
    99.4Restricted cash and cash equivalents
    
    
    92.2
    
    
    
    
    
    
    
    92.2Short-term deposits and marketable securities
    
    
    12.6
    
    
    
    
    
    
    
    12.6Accounts receivable
    
    
    714.7
    
    
    
    27.6
    
    
    
    742.3Parts and supplies
    
    
    41.3
    
    
    
    10.4
    
    
    
    51.7Deferred income tax assets
    
    
    37.5
    
    
    
    19.0
    
    
    
    56.5Other current assets
    
    
    33.5
    
    
    
    12.3
    
    
    
    45.8Total current assets
    
    
    1,000.5
    
    
    
    100.0
    
    
    
    1,100.5Long-term investments
    
    
    561.7
    
    
    
    75.6
    
    
    
    637.3Property and equipment
    
    
    1,267.4
    
    
    
    338.7
    
    
    
    1,606.1Goodwill
    
    
    139.1
    
    
    
    
    
    
    
    139.1Contracts and customer relationships
    
    
    199.3
    
    
    
    
    
    
    
    199.3Deferred income tax assets
    
    
    95.7
    
    
    
    139.3
    
    
    
    235.0Deferred charges and other assets
    
    
    57.5
    
    
    
    8.7
    
    
    
    66.2Total assets
    
    $
    3,321.2
    
    
    $
    662.3
    
    
    $
    3,983.5Current liabilitiesAccounts payable
    
    $
    77.0
    
    
    $
    25.1
    
    
    $
    102.1Accrued liabilities
    
    
    414.5
    
    
    
    110.6
    
    
    
    525.1Current portion of long-term debt
    
    
    34.1
    
    
    
    2.7
    
    
    
    36.8Total current liabilities
    
    
    525.6
    
    
    
    138.4
    
    
    
    664.0Long-term debt
    
    
    992.5
    
    
    
    136.9
    
    
    
    1,129.4Pension liability
    
    
    11.6
    
    
    
    172.9
    
    
    
    184.5Other long-term liabilities
    
    
    375.2
    
    
    
    182.1
    
    
    
    557.3Total liabilities
    
    
    1,904.9
    
    
    
    630.3
    
    
    
    2,535.2Shareholders equity
    
    
    1,416.3
    
    
    
    32.0
    
    
    
    1,448.3Total liabilities and shareholders equity
    
    $
    3,321.2
    
    
    $
    662.3
    
    
    $
    3,983.5
 17




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##### Table of Contents



Condensed Consolidated Balance Sheet
August 31, 2004 Restricted
    
    
    Unrestricted
    
    
    Consolidated($ millions)
    
    Subsidiaries
    
    
    Subsidiaries
    
    
    TotalsCurrent assetsCash and cash equivalents
    
    $
    98.0
    
    
    $
    60.0
    
    
    $
    158.0Restricted cash and cash equivalents
    
    
    95.0
    
    
    
    
    
    
    
    95.0Short-term deposits and marketable securities
    
    
    17.4
    
    
    
    
    
    
    
    17.4Accounts receivable
    
    
    558.1
    
    
    
    29.9
    
    
    
    588.0Parts and supplies
    
    
    40.8
    
    
    
    9.8
    
    
    
    50.6Deferred income tax assets
    
    
    52.6
    
    
    
    22.9
    
    
    
    75.5Other current assets
    
    
    37.7
    
    
    
    9.7
    
    
    
    47.4Total current assets
    
    
    899.6
    
    
    
    132.3
    
    
    
    1,031.9Long-term investments
    
    
    543.1
    
    
    
    65.5
    
    
    
    608.6Property and equipment
    
    
    1,277.8
    
    
    
    348.0
    
    
    
    1,625.8Goodwill
    
    
    139.1
    
    
    
    
    
    
    
    139.1Contracts and customer relationships
    
    
    203.0
    
    
    
    
    
    
    
    203.0Deferred income tax assets
    
    
    98.4
    
    
    
    130.1
    
    
    
    228.5Deferred charges and other assets
    
    
    59.3
    
    
    
    9.0
    
    
    
    68.3Total assets
    
    $
    3,220.3
    
    
    $
    684.9
    
    
    $
    3,905.2Current liabilitiesAccounts payable
    
    $
    88.5
    
    
    $
    26.5
    
    
    $
    115.0Accrued liabilities
    
    
    409.4
    
    
    
    125.8
    
    
    
    535.2Current portion of long-term debt
    
    
    34.0
    
    
    
    2.4
    
    
    
    36.4Total current liabilities
    
    
    531.9
    
    
    
    154.7
    
    
    
    686.6Long-term debt
    
    
    978.8
    
    
    
    135.4
    
    
    
    1,114.2Pension liability
    
    
    13.8
    
    
    
    174.5
    
    
    
    188.3Other long-term liabilities
    
    
    359.0
    
    
    
    180.6
    
    
    
    539.6Total liabilities
    
    
    1,883.5
    
    
    
    645.2
    
    
    
    2,528.7Shareholders equity
    
    
    1,336.8
    
    
    
    39.7
    
    
    
    1,376.5Total liabilities and shareholders equity
    
    $
    3,220.3
    
    
    $
    684.9
    
    
    $
    3,905.2
 18




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##### Table of Contents



Note 11  Guarantors of Senior Notes The Companys $406.0 million Senior Notes are guaranteed by the Companys subsidiaries, except for
the Unrestricted Subsidiaries, the Companys Canadian subsidiaries and any of the Companys
insurance subsidiaries. The condensed consolidated financial statements for the guarantors, the
non-guarantors and the parent company (Laidlaw International,
Inc.) are as follows: Condensed Consolidated Statement of Operations
Three months ended November 30, 2004 Parent
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Consolidated($ millions)
    
    Company
    
    
    Guarantors
    
    
    Non-Guarantors
    
    
    Eliminations
    
    
    TotalsRevenue
    
    $
    
    
    
    $
    887.0
    
    
    $
    340.3
    
    
    $
    
    
    
    $
    1,227.3Operating, selling, general and
administrative expenses
    
    
    0.1
    
    
    
    758.3
    
    
    
    307.6
    
    
    
    
    
    
    
    1,066.0Depreciation and amortization expense
    
    
    
    
    
    
    58.2
    
    
    
    23.0
    
    
    
    
    
    
    
    81.2Intercompany management fees (income)
    
    
    
    
    
    
    (1.6
    )
    
    
    1.6
    
    
    
    
    
    
    
    Operating income (loss)
    
    
    (0.1
    )
    
    
    72.1
    
    
    
    8.1
    
    
    
    
    
    
    
    80.1Interest expense
    
    
    (21.2
    )
    
    
    (1.1
    )
    
    
    (8.1
    )
    
    
    
    
    
    
    (30.4
    )Intercompany interest income (expense)
    
    
    (2.4
    )
    
    
    3.1
    
    
    
    (0.7
    )
    
    
    
    
    
    
    Other income, net
    
    
    0.4
    
    
    
    
    
    
    
    1.0
    
    
    
    
    
    
    
    1.4Equity in earnings (loss) of
intercompany investments
    
    
    44.3
    
    
    
    (7.7
    )
    
    
    
    
    
    
    (36.6
    )
    
    
    Income (loss) before income taxes
    
    
    21.0
    
    
    
    66.4
    
    
    
    0.3
    
    
    
    (36.6
    )
    
    
    51.1Income tax benefit (expense)
    
    
    9.4
    
    
    
    (30.0
    )
    
    
    (0.1
    )
    
    
    
    
    
    
    (20.7
    )Net income (loss)
    
    $
    30.4
    
    
    $
    36.4
    
    
    $
    0.2
    
    
    $
    (36.6
    )
    
    $
    30.4
 Condensed Consolidated Statement of Operations
Three months ended November 30, 2003 Parent
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Consolidated($ millions)
    
    Company
    
    
    Guarantors
    
    
    Non-Guarantors
    
    
    Eliminations
    
    
    TotalsRevenue
    
    $
    
    
    
    $
    872.5
    
    
    $
    337.8
    
    
    $
    
    
    
    $
    1,210.3Operating, selling, general and
administrative expenses
    
    
    
    
    
    
    743.3
    
    
    
    316.8
    
    
    
    
    
    
    
    1,060.1Depreciation and amortization expense
    
    
    
    
    
    
    60.2
    
    
    
    20.5
    
    
    
    
    
    
    
    80.7Intercompany management fees (income)
    
    
    
    
    
    
    (0.8
    )
    
    
    0.8
    
    
    
    
    
    
    
    Operating income (loss)
    
    
    
    
    
    
    69.8
    
    
    
    (0.3
    )
    
    
    
    
    
    
    69.5Interest expense
    
    
    (25.4
    )
    
    
    (0.4
    )
    
    
    (6.9
    )
    
    
    
    
    
    
    (32.7
    )Intercompany interest income (expense)
    
    
    (0.5
    )
    
    
    1.1
    
    
    
    (0.6
    )
    
    
    
    
    
    
    Other income, net
    
    
    0.3
    
    
    
    0.3
    
    
    
    0.3
    
    
    
    
    
    
    
    0.9Equity in earnings (loss) of
intercompany investments
    
    
    38.0
    
    
    
    (5.9
    )
    
    
    
    
    
    
    (32.1
    )
    
    
    Income (loss) before income taxes
    
    
    12.4
    
    
    
    64.9
    
    
    
    (7.5
    )
    
    
    (32.1
    )
    
    
    37.7Income tax benefit (expense)
    
    
    10.2
    
    
    
    (28.3
    )
    
    
    3.0
    
    
    
    
    
    
    
    (15.1
    )Net income (loss)
    
    $
    22.6
    
    
    $
    36.6
    
    
    $
    (4.5
    )
    
    $
    (32.1
    )
    
    $
    22.6
 19




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##### Table of Contents



Condensed Consolidated Statement of Cash Flows
Three months ended November 30, 2004 Parent
    
    
    
    
    
    
    Non-
    
    
    Consolidated($ millions)
    
    Company
    
    
    Guarantors
    
    
    Guarantors
    
    
    TotalsNet cash provided by (used in) operating activities
    
    $
    27.2
    
    
    $
    (91.1
    )
    
    $
    20.2
    
    
    $
    (43.7
    )Cash flows from investing activities:Purchases of property, equipment and other
assets, net of proceeds from sale
    
    $
    
    
    
    $
    (18.0
    )
    
    $
    (4.9
    )
    
    $
    (22.9
    )Net decrease (increase) in investments
    
    
    3.8
    
    
    
    3.7
    
    
    
    (12.5
    )
    
    
    (5.0
    )Net cash provided by (used in) investing activities
    
    $
    3.8
    
    
    $
    (14.3
    )
    
    $
    (17.4
    )
    
    $
    (27.9
    )Cash flows from financing activities:Net increase
(decrease) in long-term debt
    
    $
    15.5
    
    
    $
    (1.5
    )
    
    $
    (0.8
    )
    
    $
    13.2Net increase (decrease) in non-current liabilities
    
    
    
    
    
    
    1.5
    
    
    
    (1.7
    )
    
    
    (0.2
    )Increase (decrease) in intercompany advances
    
    
    (80.2
    )
    
    
    103.0
    
    
    
    (22.8
    )
    
    
    Net cash provided by (used in) financing activities
    
    $
    (64.7
    )
    
    $
    103.0
    
    
    $
    (25.3
    )
    
    $
    13.0Net decrease in cash and cash equivalents
    
    $
    (33.7
    )
    
    $
    (2.4
    )
    
    $
    (22.5
    )
    
    $
    (58.6
    )Cash and cash equivalents at:Beginning of period
    
    
    71.5
    
    
    
    8.3
    
    
    
    78.2
    
    
    
    158.0End of period
    
    $
    37.8
    
    
    $
    5.9
    
    
    $
    55.7
    
    
    $
    99.4
 Condensed Consolidated Statement of Cash Flows
Three months ended November 30, 2003 Parent
    
    
    
    
    
    
    Non-
    
    
    Consolidated($ millions)
    
    Company
    
    
    Guarantors
    
    
    Guarantors
    
    
    TotalsNet cash provided by (used in) operating activities
    
    $
    (18.9
    )
    
    $
    (81.8
    )
    
    $
    49.1
    
    
    $
    (51.6
    )Cash flows from investing activities:Purchases of property, equipment and other
assets, net of proceeds from sale
    
    $
    
    
    
    $
    (13.7
    )
    
    $
    (25.6
    )
    
    $
    (39.3
    )Net decrease (increase) in investments
    
    
    1.6
    
    
    
    1.2
    
    
    
    (10.5
    )
    
    
    (7.7
    )Net cash provided by (used in) investing activities
    
    $
    1.6
    
    
    $
    (12.5
    )
    
    $
    (36.1
    )
    
    $
    (47.0
    )Cash flows from financing activities:Net increase
(decrease) in long-term debt
    
    $
    83.8
    
    
    $
    (1.7
    )
    
    $
    (12.7
    )
    
    $
    69.4Net increase
(decrease) in non-current liabilities
    
    
    
    
    
    
    (1.9
    )
    
    
    5.9
    
    
    
    4.0Increase (decrease) in intercompany advances
    
    
    (88.4
    )
    
    
    121.8
    
    
    
    (33.4
    )
    
    
    Net cash provided by (used in) financing activities
    
    $
    (4.6
    )
    
    $
    118.2
    
    
    $
    (40.2
    )
    
    $
    73.4Net increase (decrease) in cash and cash equivalents
    
    $
    (21.9
    )
    
    $
    23.9
    
    
    $
    (27.2
    )
    
    $
    (25.2
    )Cash and cash equivalents at:Beginning of period
    
    
    40.8
    
    
    
    3.8
    
    
    
    55.7
    
    
    
    100.3End of period
    
    $
    18.9
    
    
    $
    27.7
    
    
    $
    28.5
    
    
    $
    75.1
 20




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##### Table of Contents



Condensed Consolidated Balance Sheet
As of November 30, 2004 Parent
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Consolidated($ millions)
    
    Company
    
    
    Guarantors
    
    
    Non-Guarantors
    
    
    Eliminations
    
    
    TotalsCurrent assets
    
    $
    40.8
    
    
    $
    777.6
    
    
    $
    282.1
    
    
    $
    
    
    
    $
    1,100.5Intercompany receivables (payables)
and investments
    
    
    2,280.1
    
    
    
    220.1
    
    
    
    (158.6
    )
    
    
    (2,341.6
    )
    
    
    Long-term investments
    
    
    110.2
    
    
    
    79.3
    
    
    
    447.8
    
    
    
    
    
    
    
    637.3Property and equipment
    
    
    
    
    
    
    934.5
    
    
    
    671.6
    
    
    
    
    
    
    
    1,606.1Goodwill
    
    
    
    
    
    
    139.1
    
    
    
    
    
    
    
    
    
    
    
    139.1Contracts and customer relationships
    
    
    
    
    
    
    197.1
    
    
    
    2.2
    
    
    
    
    
    
    
    199.3Long-term deferred income tax assets
    
    
    7.1
    
    
    
    16.5
    
    
    
    211.4
    
    
    
    
    
    
    
    235.0Deferred charges and other assets
    
    
    40.9
    
    
    
    16.6
    
    
    
    8.7
    
    
    
    
    
    
    
    66.2$
    2,479.1
    
    
    $
    2,380.8
    
    
    $
    1,465.2
    
    
    $
    (2,341.6
    )
    
    $
    3,983.5Current liabilities
    
    $
    45.8
    
    
    $
    293.1
    
    
    $
    325.1
    
    
    $
    
    
    
    $
    664.0Non-current liabilities
    
    
    985.1
    
    
    
    179.8
    
    
    
    706.3
    
    
    
    
    
    
    
    1,871.2Shareholders equity
    
    
    1,448.2
    
    
    
    1,907.9
    
    
    
    433.8
    
    
    
    (2,341.6
    )
    
    
    1,448.3$
    2,479.1
    
    
    $
    2,380.8
    
    
    $
    1,465.2
    
    
    $
    (2,341.6
    )
    
    $
    3,983.5
 Condensed Consolidated Balance Sheet
As of August 31, 2004 Parent
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Consolidated($ millions)
    
    Company
    
    
    Guarantors
    
    
    Non-Guarantors
    
    
    Eliminations
    
    
    TotalsCurrent assets
    
    $
    74.9
    
    
    $
    644.5
    
    
    $
    312.5
    
    
    $
    
    
    
    $
    1,031.9Intercompany
receivables (payables) and investments
    
    
    2,144.6
    
    
    
    284.8
    
    
    
    (163.5
    )
    
    
    (2,265.9
    )
    
    
    Long-term investments
    
    
    114.7
    
    
    
    71.9
    
    
    
    422.0
    
    
    
    
    
    
    
    608.6Property and equipment
    
    
    
    
    
    
    969.1
    
    
    
    656.7
    
    
    
    
    
    
    
    1,625.8Goodwill
    
    
    
    
    
    
    139.1
    
    
    
    
    
    
    
    
    
    
    
    139.1Contracts and customer relationships
    
    
    
    
    
    
    200.8
    
    
    
    2.2
    
    
    
    
    
    
    
    203.0Long-term deferred income tax assets
    
    
    5.9
    
    
    
    27.3
    
    
    
    195.3
    
    
    
    
    
    
    
    228.5Deferred charges and other assets
    
    
    42.8
    
    
    
    16.5
    
    
    
    9.0
    
    
    
    
    
    
    
    68.3$
    2,382.9
    
    
    $
    2,354.0
    
    
    $
    1,434.2
    
    
    $
    (2,265.9
    )
    
    $
    3,905.2Current liabilities
    
    $
    35.7
    
    
    $
    315.6
    
    
    $
    335.3
    
    
    $
    
    
    
    $
    686.6Non-current liabilities
    
    
    970.7
    
    
    
    166.9
    
    
    
    704.5
    
    
    
    
    
    
    
    1,842.1Shareholders equity
    
    
    1,376.5
    
    
    
    1,871.5
    
    
    
    394.4
    
    
    
    (2,265.9
    )
    
    
    1,376.5$
    2,382.9
    
    
    $
    2,354.0
    
    
    $
    1,434.2
    
    
    $
    (2,265.9
    )
    
    $
    3,905.2
 21




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##### Table of Contents



ITEM 2.   MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS 
 General Corporate overview The following discussion and analysis presents factors which affected the Companys consolidated
results of operations for the three month period ended November 30, 2004 compared to the three
month period ended November 30, 2003 and the Companys consolidated financial position at November
30, 2004. The following information should be read in conjunction with the Consolidated Financial
Statements and Notes thereto included in this Form 10-Q and in the Companys Form 10-K for the year
ended August 31, 2004. As used in this Report, all references to the Company, we, us, our
and similar references are to Laidlaw International, Inc. We operate in five reportable segments: education services, public transit services, Greyhound,
healthcare transportation services and emergency management services. See Note 8  Segment
Information of Notes to Consolidated Financial Statements in this Report. Pursuant to the terms of the Companys $406.0 million Senior Notes, the Company is required to
segregate the consolidated results of operations between the Restricted and Unrestricted
Subsidiaries as defined in Note 10  Condensed financial statements of restricted subsidiaries of
the Notes to the Consolidated Financial Statements included in this Report. Non-GAAP Measures EBITDA is presented solely as a supplemental disclosure with respect to liquidity because
management believes it provides useful information regarding our ability to service or incur debt.
EBITDA is not calculated the same way by all companies. We define EBITDA as operating income plus
depreciation and amortization. EBITDA, as reported here, is the same as reported for each of our
segments in Note 8  Segment information of Notes to Consolidated Financial Statements included
in this Report. EBITDA is not intended to represent cash flow for the period, is not presented as
an alternative to operating income as an indicator of operating performance, should not be
considered in isolation or as a substitute for measures of performance prepared in accordance with
generally accepted accounting principles (GAAP) and is not indicative of operating income or cash
flow from operations as determined under GAAP. The following is a reconciliation of our EBITDA to net income and net cash used in operating
activities, the GAAP measures management believes to be most directly comparable to EBITDA: Three Months ended November 30,($ in millions)
    
    2004
    
    
    2003EBITDA
    
    $
    161.3
    
    
    $
    150.2Depreciation and amortization
    
    
    (81.2
    )
    
    
    (80.7
    )Interest expense
    
    
    (30.4
    )
    
    
    (32.7
    )Other income, net
    
    
    1.4
    
    
    
    0.9Income tax expense
    
    
    (20.7
    )
    
    
    (15.1
    )Net income
    
    $
    30.4
    
    
    $
    22.6
 22




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##### Table of Contents



Three Months ended November 30,($ in millions)
    
    2004
    
    
    2003EBITDA
    
    $
    161.3
    
    
    $
    150.2Cash paid for interest
    
    
    (20.0
    )
    
    
    (20.2
    )Cash received (paid) for income taxes
    
    
    (0.6
    )
    
    
    1.1Increase in claims liabilities and professional liability reserves
    
    
    9.4
    
    
    
    5.8Cash used in financing other working capital items
    
    
    (185.5
    )
    
    
    (189.6
    )Decrease (increase) in restricted cash and cash equivalents
    
    
    (6.5
    )
    
    
    1.2Other
    
    
    (1.8
    )
    
    
    (0.1
    )Net cash used in operating activities
    
    $
    (43.7
    )
    
    $
    (51.6
    )Net cash used in investing activities
    
    $
    (27.9
    )
    
    $
    (47.0
    )Net cash provided by financing activities
    
    $
    13.0
    
    
    $
    73.4
 Results of Operations Three months ended November 30, 2004 and 2003 Percentage of RevenueThree Months endedNovember 30,
    
    
    November 30,2004
    
    
    2003Revenue
    
    
    100.0
    %
    
    
    100.0
    %Compensation expense
    
    
    56.1
    
    
    
    56.6Accident claims and professional liability expenses
    
    
    6.5
    
    
    
    7.4Vehicle related costs
    
    
    5.6
    
    
    
    5.8Occupancy costs
    
    
    4.0
    
    
    
    4.1Fuel
    
    
    4.6
    
    
    
    3.7Depreciation
    
    
    6.2
    
    
    
    6.3Amortization
    
    
    0.4
    
    
    
    0.4Other operating expenses
    
    
    10.1
    
    
    
    10.0Operating income
    
    
    6.5
    
    
    
    5.7Interest expense
    
    
    (2.4
    )
    
    
    (2.7
    )Other income, net
    
    
    0.1
    
    
    
    0.1Income before income taxes
    
    
    4.2
    
    
    
    3.1Income tax expense
    
    
    (1.7
    )
    
    
    (1.2
    )Net income
    
    
    2.5
    %
    
    
    1.9
    %
 23




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##### Table of Contents



Revenue The sources of revenue by business segment and by Restricted Subsidiaries and Unrestricted
Subsidiaries are as follows ($ in millions): RevenueThree months ended
    
    
    PercentageNovember 30,
    
    
    November 30,
    
    
    Increase2004
    
    
    2003
    
    
    (Decrease)Education services
    
    $
    451.9
    
    
    $
    455.7
    
    
    
    (0.8
    )%Public Transit services
    
    
    77.0
    
    
    
    72.1
    
    
    
    6.8Greyhound
    
    
    284.8
    
    
    
    287.1
    
    
    
    (0.8
    )Healthcare Transportation services
    
    
    269.9
    
    
    
    262.0
    
    
    
    3.0Emergency Management services
    
    
    143.7
    
    
    
    133.4
    
    
    
    7.7Total
    
    $
    1,227.3
    
    
    $
    1,210.3
    
    
    
    1.4
    %Restricted Subsidiaries
    
    $
    1,004.7
    
    
    $
    980.1
    
    
    
    2.5
    %Unrestricted Subsidiaries
    
    
    222.6
    
    
    
    230.2
    
    
    
    (3.3
    )Total
    
    $
    1,227.3
    
    
    $
    1,210.3
    
    
    
    1.4
    %
 EBITDA EBITDA by segment and by Restricted Subsidiaries and Unrestricted Subsidiaries is as follows ($ in millions): EBITDAThree months ended
    
    
    PercentageNovember 30,
    
    
    November 30,
    
    
    Increase2004
    
    
    2003
    
    
    (Decrease)Education services
    
    $
    114.2
    
    
    $
    109.5
    
    
    
    4.3
    %Public Transit services
    
    
    3.6
    
    
    
    0.5
    
    
    
    620.0Greyhound
    
    
    12.2
    
    
    
    10.6
    
    
    
    15.1Healthcare Transportation services
    
    
    22.8
    
    
    
    19.0
    
    
    
    20.0Emergency Management services
    
    
    8.5
    
    
    
    10.6
    
    
    
    (19.8
    )Total
    
    $
    161.3
    
    
    $
    150.2
    
    
    
    7.4
    %Restricted Subsidiaries
    
    $
    153.6
    
    
    $
    141.4
    
    
    
    8.6
    %Unrestricted Subsidiaries
    
    
    7.7
    
    
    
    8.8
    
    
    
    (12.5
    )Total
    
    $
    161.3
    
    
    $
    150.2
    
    
    
    7.4
    %
 Education services Revenue in the education services segment decreased by $3.8 million from the three months ended
November 30, 2003. Revenue reductions due to fewer operating days and lost contracts were largely
offset by new contracts and price increases and, to a lesser extent, the strengthening of the
Canadian currency relative to the U.S. dollar. The effect of the increase in value of the Canadian
currency mitigated the reduction in revenue by $3.7 million in the quarter. In the three months ended November 30, 2004, EBITDA in the education services segment improved $4.7
million over the three months ended November 30, 2003 primarily due to lower accident claims costs,
somewhat offset by increased fuel expenses. The effect of the increase in the Canadian currency
increased EBITDA 1% over the prior year. 24




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##### Table of Contents



Public transit Revenue in the public transit services segment increased $4.9 million from the three months ended
November 30, 2003. New contracts, net of lost contracts, contributed $2.8 million of revenue in
the first three months of 2004 and the remaining increase was due to volume and price increases
over last year. EBITDA in the public transit services segment in the three months ended November 30, 2004 improved
$3.1 million over the same period in 2003 primarily due to the increase in revenue, lower accident
claims costs and lower compensation costs as a percentage of revenue due to productivity
improvements, somewhat offset by increased fuel expenses. Greyhound Revenue in the Greyhound segment during the three months ended November 30, 2004 declined $2.3
million from the three months ended November 30, 2003, principally due to a decrease in passenger
revenue somewhat offset by an increase in the Canadian exchange rate. Passenger revenue and miles
driven are down due to managements focus on improving profitability by reducing lower yielding
long-distance trips and eliminating low-performing routes or frequencies. Had there been no change
in the exchange rate, revenue would have decreased by $6.5 million for the three months ended
November 30, 2004. In the three months ended November 30, 2004, EBITDA in the Greyhound segment was $1.6 million
higher than the three months ended November 30, 2003. The improvement in Greyhounds EBITDA is
primarily due to managements continued focus on improving revenue per bus mile by increasing
ticket prices, particularly for long haul travel, and reducing operating costs. These actions
reduced compensation costs and vehicle related costs as a percentage of revenue, however, the
improvements were somewhat offset by an increase in fuel costs. Healthcare transportation services The $7.9 million increase in revenue during the three months ended November 30, 2004 in the
healthcare transportation services segment is primarily due to scheduled rate increases for
ambulance transports which more than offset a reduction in total transports quarter over quarter. In the three months ended November 30, 2004, EBITDA in the healthcare transportation services
segment was $3.8 million higher than 2003 principally due to the increased revenue and reduced
accident claim and professional liability costs. Emergency management services The $10.3 million increase in revenue in the emergency management services segment during the three
months ended November 30, 2004 is primarily attributable to an increase in patient visits,
primarily from new contracts and, to a lesser extent, an increase in revenue per visit. The emergency management services segment EBITDA decreased $2.1 million during the three months
ended November 30, 2004 due to an increase in long-term incentive costs, reduced profitability in
our Florida operations due to the effects of hurricanes and higher compensation cost as a
percentage of revenue at certain contracts that had lower than planned patient visits. Staffing
reductions and subsidy improvements have been, or are being, put in place to address the
underperforming contracts. 25




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##### Table of Contents



Restricted Subsidiaries The $24.6 million increase in the Restricted Subsidiaries revenue during the three months ended
November 30, 2004, is primarily a result of the increase in revenue in the public transit services,
healthcare transportation services and emergency management services segments discussed above. In the three months ended November 30, 2004, EBITDA for the Restricted Subsidiaries improved $12.2
million over the three months ended November 30, 2003 primarily due to increases in revenue and
lower accident claims costs, somewhat offset by increased fuel expenses. Unrestricted Subsidiaries The Unrestricted Subsidiaries revenue decreased $7.6 million during the three months ended November
30, 2004, primarily due to reduced passenger revenue and miles driven as discussed in the Greyhound
segment above. In the three months ended November 30, 2004, EBITDA in the Unrestricted Subsidiaries decreased $1.1
million compared to the three months ended November 30, 2003 due to fuel cost increases that more
than offset reductions in other operating cost categories. Depreciation expense Depreciation expense for the three months ended November 30, 2004 increased $0.4 million over the
three months ended November 30, 2003, reflecting a $1.6 million increase in depreciation for the
Unrestricted Subsidiaries and a $1.2 million decrease in depreciation for the Restricted
Subsidiaries. The decline in the Restricted Subsidiaries is principally due to a slight increase
in the estimated useful lives of certain model school buses, while the increase in the Unrestricted
Subsidiaries is principally due to a decrease in the estimated useful lives of Greyhound buses. Amortization expense Amortization expense for the three months ended November 30, 2004 was $4.7 million, an increase of
$0.1 million compared to the same period in 2003. Amortization is primarily related to customer
contracts capitalized under fresh start accounting. Virtually all of the amortization expense was
recorded by the Restricted Subsidiaries. Interest expense In the three months ended November 30, 2004, interest expense decreased $2.3 million compared to
the three months ended November 31, 2003. Approximately $2.0 million of the reduction was due to
lower interest rates on the Term B facility and the remainder was due to lower average borrowings
outstanding. Other income, net Other income, net was $1.4 million in the three months ended November 30, 2004 compared to $0.9
million in the three months ended November 30, 2003. Income tax expense Income tax expense for the three months ended November 31, 2004 was $20.7 million compared to $15.1
million in the three months ended November 30, 2003. The effective tax rate was 40.5% in the first
three months of fiscal 2005 compared to 40.0% in the first three 26




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##### Table of Contents



months of fiscal 2004. Of the $20.7 million provided in the three months ended November 30, 2004,
$1.0 million represents cash taxes payable and the balance reflects the utilization of deferred tax
assets. Liquidity and capital resources For the three months ended November 30, 2004, cash used in operating activities was $43.7 million
compared to $51.6 million in the three months ended November 30, 2003. Net expenditures for the
purchase of capital assets for normal replacement requirements and increases in service was $22.9
million in the three months ended November 30, 2004 compared to $39.3 million for the three months
ended November 30, 2003. The decline in capital expenditures was principally due to the deferral
of some vehicle purchases in our education services segment from the first quarter of fiscal 2005
to later quarters. The Company utilizes a senior secured revolving credit facility (the Revolver) due June 2008 to
finance current operating needs. Under the Revolver, as of November 30, 2004, there were $30.0
million cash borrowings, $13.9 million for the issuance of letters of credit and $64.3 million was
reserved for guarantee obligations on Greyhound vehicle leases, leaving total availability of $91.8
million. Greyhound utilizes its own revolving line of credit (the Greyhound Facility). As of
November 30, 2004, Greyhound had no cash borrowings under the Greyhound Facility, had issued
letters of credit of $61.5 million and had credit availability of $43.6 million. See Note 6 -
Material contingencies for further discussion of the Greyhound Facility. Under the terms of the Companys various debt agreements the Company is required to meet certain
financial covenants, including a fixed charge coverage ratio, leverage ratio, interest coverage
ratio, net tangible asset ratio and maximum senior secured leverage ratio as well as certain
non-financial covenants. Except as discussed in Note 6  Material contingencies regarding the
Greyhound Facility, as of November 30, 2004, the Company was in compliance with all such covenants. The Company requires significant cash flows to finance capital expenditures and to meet its debt
service and other continuing obligations. Although we will continue to be substantially leveraged,
we believe that borrowings under our Revolver, together with existing cash and cash flow from
operations, will be sufficient to fund our anticipated capital expenditures and working capital
requirements for the foreseeable future, including payment obligations under our debt agreements
and other commitments. As discussed in Note 9  Subsequent events, net proceeds realized from the sale of our healthcare
businesses, expected to be approximately $775 million, will be used in part to retire all
outstanding borrowings under the Companys Term B senior secured term facility ($579 million at
November 30, 2004) and also to purchase some or all of the 3.8 million shares held in the Pension
Plan Trust. Commitments and Contingencies Reference is made to Note 21  Commitments and contingencies of Notes to the Consolidated
Financial Statements in the Companys Form 10-K for the year ended August 31, 2004 for a
description of the Companys material commitments. Reference is made to Note 6  Material
contingencies of Notes to Consolidated Financial Statements in this Report for a description of
the Companys material contingencies. 27




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Forward-looking statements Certain statements contained in this report on Form 10-Q, including statements regarding the status
of future operating results and market opportunities and other statements that are not historical
facts, are forward-looking statements within the meaning of the Private Securities Litigation
Reform Act of 1995. These forward-looking statements can be identified by the use of terminology
such as: believe, hope, may, anticipate, should, intend, plan, will, expect, estimate, continue,
project, positioned, strategy and similar expressions. Such statements involve certain risks,
uncertainties and assumptions that include, but are not limited to:  -
    Economic and other market factors, including competitive pressures and changes
in pricing policies;-
    The ability to implement initiatives designed to increase operating
efficiencies or improve results;-
    The successful completion of the sale of its healthcare companies, AMR and
EmCare;-
    Greyhound Lines ability to continue operating as a going concern;-
    Control of costs related to accident and other risk management claims;-
    Costs and risks associated with litigation;-
    Changes in interpretations of existing, or the adoption of new legislation,
regulations or other laws;-
    Changes in homeland security or terrorist activity;-
    Significant restrictive covenants in the Companys and its subsidiaries
various credit facilities;-
    Potential changes in the mix of businesses we operate; and-
    Increases in prices of fuel and shortages. Should one or more of these risks or uncertainties materialize, or should underlying assumptions
prove incorrect, actual outcomes may vary materially from those indicated. In the light of these
risks and uncertainties you are cautioned not to place undue reliance on these forward-looking
statements. The Company undertakes no obligation to publicly update forward-looking statements,
whether as a result of new information, future events or otherwise. You are advised, however, to
consult any further disclosures the Company makes on related subjects as may be detailed in the
Companys other filings made from time to time with the Securities and Exchange Commission. 28




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LAIDLAW INTERNATIONAL, INC. 
 Item 3.   Quantitative and Qualitative Disclosures About Market Risk There have been no material changes in market risk from the disclosures provided in Item 7A.
Quantitative and Qualitative Disclosures About Market Risk as set forth in the Companys Form 10-K
for the year ended August 31, 2004. 
 Item 4.   Controls and Procedures The Company maintains a set of disclosure controls and procedures designed to ensure that
information required to be disclosed by the Company in reports that it files or submits under the
Securities Exchange Act of 1934 is recorded, processed, summarized and reported within the time
periods specified in Securities and Exchange Commission rules and forms. As of the end of the
period covered by this quarterly report, an evaluation was carried out under the supervision and
with the participation of the Companys management, including its Chief Executive Officer and Chief
Financial Officer, of the effectiveness of its disclosure controls and procedures. Based on that
evaluation, the Companys Chief Executive Officer and Chief Financial Officer have concluded that
the Companys disclosure controls and procedures are effective. As previously disclosed in Item 9A of the Companys Annual Report on Form 10-K for the fiscal year
ended August 31, 2004, the Companys internal control over financial reporting had not previously
included quarterly procedures to verify enacted tax rates and adjust the rate used to value our
deferred tax assets for any changes that might have occurred during such quarterly period.
Management determined that this internal control deficiency represented a material weakness, as
defined by the Public Company Accounting Oversight Boards Auditing Standard No.2. Beginning with
the most recent fiscal quarter, quarterly controls and procedures have been strengthened to require
verification of applicable tax rates and adjust, if needed, our effective tax rate for tax changes
enacted during such period by taxing authorities in the jurisdictions in which the Company conducts
business. 29




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LAIDLAW INTERNATIONAL, INC. 
 PART II.   OTHER INFORMATION 
 Item 1.   Legal Proceedings Reference is made to Part I, Item 3 of the Companys Form 10-K for the year ended August 31, 2004
for a description of certain legal proceedings presently pending. There are no material new
matters to report against the Company or its subsidiaries and there have been no material changes
in the previously reported proceedings. 30




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Item 6.   Exhibits and Reports on Form 8-K  (a)
    Exhibits  31.1
    Principal Executive Officers Certifications Pursuant to Section 302 of the
Sarbanes-Oxley Act of 2002.31.2
    Principal Financial Officers Certifications Pursuant to Section 302 of the
Sarbanes-Oxley Act of 2002.32.1
    Certification Pursuant to 18 U.S.C. § 1350 (Section 906 of Sarbanes-Oxley Act
of 2002)  (b)
    Reports on Form 8-K during the quarter ended November 30, 2004Current Report on Form 8-K, dated November 10, 2004, filed with the Securities and Exchange
Commission and relating to the Companys press release announcing its financial results for
the fourth fiscal quarter of 2004, guidance for fiscal 2005 and the intention of the Company
to restate the results of the second and third quarters of 2004 due to changes in the
Canadian tax rates that were not properly reflected in the financial statements as
originally filed in Forms 10-Q. 31




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SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused
this report to be signed on its behalf by the undersigned thereunto duly authorized. LAIDLAW INTERNATIONAL, INC.By:
    
    /s/ Douglas A. CartyDate: January 10, 2005
    
    Douglas A. CartySenior Vice President and Chief Financial Officer
Duly Authorized Officer and Principal Financial
Officer
 32