##### Table of Contents



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 February 28, 2006
 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
 (630) 848-3000
 þ o
  Large accelerated filer þ
    
    Accelerated filer o
    
    Non-accelerated filer o
 o þ
 
 þ o




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LAIDLAW INTERNATIONAL, INC.
 Page No.PART I. FINANCIAL INFORMATIONItem 1. Financial Statements:Consolidated Balance Sheets as of February 28, 2006 (Unaudited) and August 31, 2005
    
    
    2Consolidated Statements of Operations for the Three and Six Months Ended February 28, 2006 and 2005 (Unaudited)
    
    
    4Consolidated Statements of Cash Flows for the Six Months Ended February 28, 2006 and 2005 (Unaudited)
    
    
    5Notes to Consolidated Financial Statements (Unaudited)
    
    
    6Item 2. Managements Discussion and Analysis of Financial Condition and Results of Operations
    
    
    13Item 3. Quantitative and Qualitative Disclosures About Market Risk
    
    
    19Item 4. Controls and Procedures
    
    
    19PART II. OTHER INFORMATIONItem 1. Legal Proceedings
    
    
    20Item 1A. Risk Factors
    
    
    21Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
    
    
    21Item 4. Submission of Matters to a Vote of Security Holders
    
    
    21Item 6. Exhibits
    
    
    22SIGNATURES
    
    
    23302 Certification of Principal Executive Officer's302 Certification of Principal Financial Officer906 Certification
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PART I.  FINANCIAL INFORMATION
 
 Item 1. Financial Statements
 LAIDLAW INTERNATIONAL, INC.
 
 CONSOLIDATED BALANCE SHEETS
 ($ in millions)
 February 28,
    
    
    August 31,2006
    
    
    2005(unaudited)ASSETSCurrent assetsCash and cash equivalents
    
    $
    155.2
    
    
    $
    217.3Accounts receivable
    
    
    320.9
    
    
    
    202.6Insurance collateral
    
    
    85.0
    
    
    
    81.9Parts and supplies
    
    
    34.0
    
    
    
    32.5Deferred income tax assets
    
    
    47.2
    
    
    
    42.4Other current assets
    
    
    27.5
    
    
    
    29.2Total current assets
    
    
    669.8
    
    
    
    605.9Property and equipmentLand
    
    
    169.2
    
    
    
    166.9Buildings
    
    
    184.8
    
    
    
    176.1Vehicles
    
    
    1,582.2
    
    
    
    1,447.2Other
    
    
    122.4
    
    
    
    116.42,058.6
    
    
    
    1,906.6Less: Accumulated depreciation
    
    
    (577.8
    )
    
    
    (471.5
    )1,480.8
    
    
    
    1,435.1Other assetsInsurance collateral
    
    
    373.4
    
    
    
    392.2Other long-term investments
    
    
    40.6
    
    
    
    40.3Contracts and customer relationships
    
    
    70.3
    
    
    
    73.4Deferred income tax assets
    
    
    290.8
    
    
    
    350.3Deferred charges and other assets
    
    
    10.0
    
    
    
    11.5785.1
    
    
    
    867.7Total assets
    
    $
    2,935.7
    
    
    $
    2,908.7
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LAIDLAW INTERNATIONAL, INC.
CONSOLIDATED BALANCE SHEETS
($ in millions)
 February 28,
    
    
    August 31,2006
    
    
    2005(unaudited)LIABILITIESCurrent liabilitiesAccounts payable
    
    $
    87.5
    
    
    $
    86.4Accrued employee compensation
    
    
    110.0
    
    
    
    105.7Other accrued liabilities
    
    
    101.5
    
    
    
    86.9Current portion of insurance reserves
    
    
    143.8
    
    
    
    141.6Current portion of long-term debt
    
    
    34.2
    
    
    
    27.8Total current liabilities
    
    
    477.0
    
    
    
    448.4Long-term debt
    
    
    270.8
    
    
    
    286.6Insurance reserves
    
    
    348.9
    
    
    
    344.4Pension liability
    
    
    127.1
    
    
    
    128.4Other long-term liabilities
    
    
    77.1
    
    
    
    100.7Total liabilities
    
    
    1,300.9
    
    
    
    1,308.5SHAREHOLDERS EQUITYCommon shares; $0.01 par value per share;
issued and outstanding 98.8 million
(August 31, 2005  100.2 million)
    
    
    1.0
    
    
    
    1.0Additional paid in capital
    
    
    1,272.6
    
    
    
    1,315.9Accumulated other comprehensive income
    
    
    49.7
    
    
    
    34.1Retained earnings
    
    
    311.5
    
    
    
    249.2Total shareholders equity
    
    
    1,634.8
    
    
    
    1,600.2Total liabilities and shareholders equity
    
    $
    2,935.7
    
    
    $
    2,908.7
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LAIDLAW INTERNATIONAL, INC.
 
 CONSOLIDATED STATEMENTS OF OPERATIONS
 ($ in millions except per share amounts)
 (unaudited)
 Three Months Ended
    
    
    Six Months EndedFebruary 28,
    
    
    February 28,2006
    
    
    2005
    
    
    2006
    
    
    2005Revenue
    
    $
    789.0
    
    
    $
    763.7
    
    
    $
    1,635.8
    
    
    $
    1,577.4Compensation expense
    
    
    396.0
    
    
    
    390.1
    
    
    
    802.7
    
    
    
    793.7Vehicle related costs
    
    
    61.8
    
    
    
    63.8
    
    
    
    124.9
    
    
    
    127.1Fuel
    
    
    60.3
    
    
    
    48.0
    
    
    
    125.6
    
    
    
    98.9Insurance and accident claim costs
    
    
    34.5
    
    
    
    34.1
    
    
    
    81.6
    
    
    
    90.2Occupancy costs
    
    
    41.9
    
    
    
    39.9
    
    
    
    80.6
    
    
    
    77.1Depreciation and amortization
    
    
    57.1
    
    
    
    65.0
    
    
    
    115.7
    
    
    
    133.2Other operating expenses
    
    
    72.1
    
    
    
    71.9
    
    
    
    142.7
    
    
    
    147.2Operating income
    
    
    65.3
    
    
    
    50.9
    
    
    
    162.0
    
    
    
    110.0Interest expense
    
    
    (5.4
    )
    
    
    (19.8
    )
    
    
    (10.9
    )
    
    
    (39.1
    )Other income, net
    
    
    2.0
    
    
    
    3.6
    
    
    
    3.8
    
    
    
    5.0Income from continuing operations
before income taxes
    
    
    61.9
    
    
    
    34.7
    
    
    
    154.9
    
    
    
    75.9Income tax expense
    
    
    (24.1
    )
    
    
    (14.0
    )
    
    
    (59.1
    )
    
    
    (30.4
    )Income from continuing operations
    
    
    37.8
    
    
    
    20.7
    
    
    
    95.8
    
    
    
    45.5Income (loss) from discontinued
operations
    
    
    (3.8
    )
    
    
    215.5
    
    
    
    (3.5
    )
    
    
    221.1Net income
    
    $
    34.0
    
    
    $
    236.2
    
    
    $
    92.3
    
    
    $
    266.6Basic earnings (loss) per shareContinuing operations
    
    $
    0.38
    
    
    $
    0.21
    
    
    $
    0.96
    
    
    $
    0.45Discontinued operations
    
    
    (0.04
    )
    
    
    2.15
    
    
    
    (0.04
    )
    
    
    2.21Net income
    
    $
    0.34
    
    
    $
    2.36
    
    
    $
    0.92
    
    
    $
    2.66Diluted earnings (loss) per shareContinuing operations
    
    $
    0.38
    
    
    $
    0.20
    
    
    $
    0.96
    
    
    $
    0.44Discontinued operations
    
    
    (0.04
    )
    
    
    2.08
    
    
    
    (0.04
    )
    
    
    2.13Net income
    
    $
    0.34
    
    
    $
    2.28
    
    
    $
    0.92
    
    
    $
    2.57Dividends per share
    
    $
    0.15
    
    
    $
    
    
    
    $
    0.30
    
    
    $
    Average shares outstanding
    
    
    99.8
    
    
    
    100.2
    
    
    
    100.0
    
    
    
    100.1Effect of dilutive securities
    
    
    0.4
    
    
    
    3.6
    
    
    
    0.4
    
    
    
    3.8Average diluted shares outstanding
    
    
    100.2
    
    
    
    103.8
    
    
    
    100.4
    
    
    
    103.9
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LAIDLAW INTERNATIONAL, INC.
 
 CONSOLIDATED STATEMENTS OF CASH FLOWS
 ($ in millions)
 (unaudited)
 Six Months Ended February 28,2006
    
    
    2005Operating activitiesNet income
    
    $
    92.3
    
    
    $
    266.6Loss (income) from discontinued operations
    
    
    3.5
    
    
    
    (221.1
    )Non-cash adjustments to net income
Depreciation and amortization
    
    
    115.7
    
    
    
    133.2Deferred income taxes
    
    
    57.6
    
    
    
    28.8Other non-cash items
    
    
    5.9
    
    
    
    10.1Net change in certain operating assets and liabilitiesAccounts receivable
    
    
    (117.8
    )
    
    
    (130.0
    )Insurance collateral
    
    
    10.6
    
    
    
    (23.7
    )Accounts payable and accrued liabilities
    
    
    8.4
    
    
    
    (6.0
    )Insurance reserves
    
    
    6.7
    
    
    
    (11.7
    )Other assets and liabilities
    
    
    (23.4
    )
    
    
    8.0Net cash provided by operating activities
    
    $
    159.5
    
    
    $
    54.2Investing activitiesPurchase of property and equipment
    
    $
    (156.1
    )
    
    $
    (59.7
    )Proceeds from sale of property and equipment
    
    
    15.3
    
    
    
    7.1Net decrease in performance bond collateral
    
    
    0.5
    
    
    
    9.9Net (increase) decrease in other investments
    
    
    (0.7
    )
    
    
    4.8Expended on acquisitions
    
    
    
    
    
    
    (1.6
    )Net proceeds from sale of businesses
    
    
    
    
    
    
    789.1Net cash (used) provided by investing activities
    
    $
    (141.0
    )
    
    $
    749.6Financing activitiesRepurchase of common stock
    
    $
    (41.7
    )
    
    $
    (84.5
    )Dividend payment
    
    
    (30.0
    )
    
    
    Net decrease in other long-term debt
    
    
    (9.4
    )
    
    
    (1.8
    )Pay down Term B debt
    
    
    
    
    
    
    (593.8
    )Decrease in credit facility cash collateral
    
    
    
    
    
    
    40.0Net cash used by financing activities
    
    $
    (81.1
    )
    
    $
    (640.1
    )Discontinued operations (revised  see note 8)Operating cash flows
    
    $
    0.5
    
    
    $
    (4.1
    )Investing cash flows
    
    
    
    
    
    
    (15.0
    )Financing cash flows
    
    
    
    
    
    
    (2.4
    )Net cash provided (used) by discontinued operations
    
    $
    0.5
    
    
    $
    (21.5
    )Net (decrease) increase in cash and cash equivalents
    
    $
    (62.1
    )
    
    $
    142.2Cash and
cash equivalents  beginning of period
    
    
    217.3
    
    
    
    154.2Cash and
cash equivalents  end of period
    
    $
    155.2
    
    
    $
    296.4
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LAIDLAW INTERNATIONAL, INC.
 
 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
 FOR THE THREE AND SIX MONTH PERIODS ENDED FEBRUARY 28, 2006
 (Unaudited)
 Note 1
 Corporate overview and basis of presentation
 Corporate overview
  Basis of presentation
   New Accounting Standards
  6




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Note 2
 Comprehensive income
  Three Months Ended
    
    
    Six Months EndedFebruary 28,
    
    
    February 28,2006
    
    
    2005
    
    
    2006
    
    
    2005Net income
    
    $
    34.0
    
    
    $
    236.2
    
    
    $
    92.3
    
    
    $
    266.6Net unrealized gain
(loss) on securities
    
    
    1.6
    
    
    
    (0.4
    )
    
    
    (3.2
    )
    
    
    (1.1
    )Net gain (loss) on
interest rate swaps
    
    
    0.5
    
    
    
    (0.4
    )
    
    
    1.9
    
    
    
    0.3Foreign currency
translation
adjustments
    
    
    9.7
    
    
    
    (13.4
    )
    
    
    16.9
    
    
    
    26.5Total comprehensive income
    
    $
    45.8
    
    
    $
    222.0
    
    
    $
    107.9
    
    
    $
    292.3
 Note 3
 Discontinued operations
   Three Months Ended
    
    
    Six Months EndedFebruary 28,
    
    
    February 28,2006
    
    
    2005
    
    
    2006
    
    
    2005Revenue
    
    $
    
    
    
    $
    282.6
    
    
    $
    
    
    
    $
    696.2Pre-tax income from operations
    
    
    
    
    
    
    8.6
    
    
    
    0.4
    
    
    
    18.5Provision for income taxes
    
    
    
    
    
    
    (3.5
    )
    
    
    (0.1
    )
    
    
    (7.8
    )Income from operations
    
    
    
    
    
    
    5.1
    
    
    
    0.3
    
    
    
    10.7Pre-tax gain (loss) on sale of
businesses
    
    
    (3.8
    )
    
    
    201.0
    
    
    
    (3.8
    )
    
    
    201.0Income tax benefit
    
    
    
    
    
    
    9.4
    
    
    
    
    
    
    
    9.4Gain (loss) on sale after taxes
    
    
    (3.8
    )
    
    
    210.4
    
    
    
    (3.8
    )
    
    
    210.4Income (loss) from
discontinued operations
    
    $
    (3.8
    )
    
    $
    215.5
    
    
    $
    (3.5
    )
    
    $
    221.1
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Note 4
 Stock awards and options
  Stock
options
 Restricted
Shares
 Deferred
Shares
 Note 5
 Pension plans
  Three Months Ended
    
    
    Six Months EndedFebruary 28,
    
    
    February 28,2006
    
    
    2005
    
    
    2006
    
    
    2005Components of net pension
benefit costService cost
    
    $
    3.3
    
    
    $
    2.2
    
    
    $
    5.5
    
    
    $
    4.3Interest cost
    
    
    14.0
    
    
    
    14.4
    
    
    
    26.2
    
    
    
    28.7Expected return on plan assets
    
    
    (14.9
    )
    
    
    (14.1
    )
    
    
    (27.5
    )
    
    
    (28.5
    )Net pension benefit cost
    
    $
    2.4
    
    
    $
    2.5
    
    
    $
    4.2
    
    
    $
    4.5
 8




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Note 6
 Material contingencies
 Legal proceedings
 Contingent Liabilities Relating to Sale of AMR
     Other
  9




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Environmental matters
  Income tax matters
  Note 7
 Insurance proceeds
   10




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Note 8
 Cash flows from discontinued operations
  PredecessorCompanyThree
    
    
    
    NineMonths
    
    
    
    MonthsEnded
    
    
    
    EndedYear ended August 31,
    
    
    August 31,
    
    
    
    May 31,2005
    
    
    2004
    
    
    2003
    
    
    
    2003Discontinued operationsOperating activities
    
    $
    (1.8
    )
    
    $
    56.1
    
    
    $
    30.8
    
    
    
    $
    92.7Investing activities
    
    
    (15.0
    )
    
    
    (42.0
    )
    
    
    (15.5
    )
    
    
    
    (34.3
    )Financing activities
    
    
    (2.4
    )
    
    
    (7.4
    )
    
    
    (1.8
    )
    
    
    
    (11.5
    )Total cash flows
provided (used) by
discontinued
operations
    
    $
    (19.2
    )
    
    $
    6.7
    
    
    $
    13.5
    
    
    
    $
    46.9
 Note 9
 Repurchase of common stock
  11




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Note
10  Segment information
  Three Months Ended
    
    
    Six Months EndedFebruary 28,
    
    
    February 28,2006
    
    
    2005
    
    
    2006
    
    
    2005Education servicesRevenue
    
    $
    420.5
    
    
    $
    405.1
    
    
    $
    884.2
    
    
    $
    857.0EBITDA
    
    
    91.9
    
    
    
    85.9
    
    
    
    207.3
    
    
    
    198.1GreyhoundRevenue
    
    $
    293.8
    
    
    $
    284.7
    
    
    $
    598.4
    
    
    $
    569.5EBITDA
    
    
    26.3
    
    
    
    25.1
    
    
    
    61.2
    
    
    
    36.9Public transitRevenue
    
    $
    74.7
    
    
    $
    73.9
    
    
    $
    153.2
    
    
    $
    150.9EBITDA
    
    
    4.2
    
    
    
    4.9
    
    
    
    9.2
    
    
    
    8.2Consolidated TotalRevenue
    
    $
    789.0
    
    
    $
    763.7
    
    
    $
    1,635.8
    
    
    $
    1,577.4EBITDA
    
    
    122.4
    
    
    
    115.9
    
    
    
    277.7
    
    
    
    243.2Depreciation and amortization expense
    
    
    (57.1
    )
    
    
    (65.0
    )
    
    
    (115.7
    )
    
    
    (133.2
    )Operating income
    
    
    65.3
    
    
    
    50.9
    
    
    
    162.0
    
    
    
    110.0Interest expense
    
    
    (5.4
    )
    
    
    (19.8
    )
    
    
    (10.9
    )
    
    
    (39.1
    )Other income, net
    
    
    2.0
    
    
    
    3.6
    
    
    
    3.8
    
    
    
    5.0Income tax expense
    
    
    (24.1
    )
    
    
    (14.0
    )
    
    
    (59.1
    )
    
    
    (30.4
    )Income (loss) from discontinued
operations
    
    
    (3.8
    )
    
    
    215.5
    
    
    
    (3.5
    )
    
    
    221.1Net income
    
    $
    34.0
    
    
    $
    236.2
    
    
    $
    92.3
    
    
    $
    266.6
  12




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ITEM 2.
    
    MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
 General
 Corporate overview
  Non-GAAP Measure
   Three Months Ended
    
    
    Six Months EndedFebruary 28,
    
    
    February 28,2006
    
    
    2005
    
    
    2006
    
    
    2005EBITDA
    
    $
    122.4
    
    
    $
    115.9
    
    
    $
    277.7
    
    
    $
    243.2Depreciation and amortization
    
    
    (57.1
    )
    
    
    (65.0
    )
    
    
    (115.7
    )
    
    
    (133.2
    )Interest expense
    
    
    (5.4
    )
    
    
    (19.8
    )
    
    
    (10.9
    )
    
    
    (39.1
    )Other income, net
    
    
    2.0
    
    
    
    3.6
    
    
    
    3.8
    
    
    
    5.0Income tax expense
    
    
    (24.1
    )
    
    
    (14.0
    )
    
    
    (59.1
    )
    
    
    (30.4
    )Income from continuing operations
    
    $
    37.8
    
    
    $
    20.7
    
    
    $
    95.8
    
    
    $
    45.5
 13




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Results of Operations
 Percentage of revenue
 Three Months Ended
    
    
    Six Months EndedFebruary 28,
    
    
    February 28,2006
    
    
    2005
    
    
    2006
    
    
    2005Revenue
    
    
    100.0
    %
    
    
    100.0
    %
    
    
    100.0
    %
    
    
    100.0
    %Compensation expense
    
    
    50.3
    
    
    
    51.0
    
    
    
    49.1
    
    
    
    50.3Vehicle related costs
    
    
    7.8
    
    
    
    8.4
    
    
    
    7.6
    
    
    
    8.1Fuel
    
    
    7.6
    
    
    
    6.3
    
    
    
    7.7
    
    
    
    6.3Insurance and accident claim costs
    
    
    4.4
    
    
    
    4.5
    
    
    
    5.0
    
    
    
    5.7Occupancy costs
    
    
    5.3
    
    
    
    5.2
    
    
    
    4.9
    
    
    
    4.9Depreciation and amortization
    
    
    7.2
    
    
    
    8.5
    
    
    
    7.1
    
    
    
    8.4Other operating expenses
    
    
    9.1
    
    
    
    9.4
    
    
    
    8.7
    
    
    
    9.3Operating income
    
    
    8.3
    
    
    
    6.7
    
    
    
    9.9
    
    
    
    7.0Interest expense
    
    
    (0.8
    )
    
    
    (2.7
    )
    
    
    (0.6
    )
    
    
    (2.5
    )Other income, net
    
    
    0.3
    
    
    
    0.5
    
    
    
    0.2
    
    
    
    0.3Income from continuing operations
before income taxes
    
    
    7.8
    
    
    
    4.5
    
    
    
    9.5
    
    
    
    4.8Income tax expense
    
    
    (3.0
    )
    
    
    (1.8
    )
    
    
    (3.6
    )
    
    
    (1.9
    )Income from continuing operations
    
    
    4.8
    
    
    
    2.7
    
    
    
    5.9
    
    
    
    2.9Income (loss) from discontinued
operations
    
    
    (0.5
    )
    
    
    28.2
    
    
    
    (0.3
    )
    
    
    14.0Net income
    
    
    4.3
    %
    
    
    30.9
    %
    
    
    5.6
    %
    
    
    16.9
    %
 Revenue, EBITDA and EBITDA margins by business segment are as follows ($ in millions):
 Three Months Ended
    
    
    Six Months EndedFebruary 28,
    
    
    February 28,2006
    
    
    2005
    
    
    2006
    
    
    2005RevenueEducation services
    
    $
    420.5
    
    
    $
    405.1
    
    
    $
    884.2
    
    
    $
    857.0Greyhound
    
    
    293.8
    
    
    
    284.7
    
    
    
    598.4
    
    
    
    569.5Public transit services
    
    
    74.7
    
    
    
    73.9
    
    
    
    153.2
    
    
    
    150.9Total
    
    $
    789.0
    
    
    $
    763.7
    
    
    $
    1,635.8
    
    
    $
    1,577.4EBITDAEducation services
    
    $
    91.9
    
    
    $
    85.9
    
    
    $
    207.3
    
    
    $
    198.1Greyhound
    
    
    26.3
    
    
    
    25.1
    
    
    
    61.2
    
    
    
    36.9Public transit services
    
    
    4.2
    
    
    
    4.9
    
    
    
    9.2
    
    
    
    8.2Total
    
    $
    122.4
    
    
    $
    115.9
    
    
    $
    277.7
    
    
    $
    243.2EBITDA MarginsEducation services
    
    
    21.9
    %
    
    
    21.2
    %
    
    
    23.4
    %
    
    
    23.1
    %Greyhound
    
    
    9.0
    
    
    
    8.8
    
    
    
    10.2
    
    
    
    6.5Public transit services
    
    
    5.6
    
    
    
    6.6
    
    
    
    6.0
    
    
    
    5.4Total
    
    
    15.5
    
    
    
    15.2
    
    
    
    17.0
    
    
    
    15.4
 14




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##### Table of Contents



Revenue and EBITDA by business segment
 Education services
   Greyhound
   Public transit
   15




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##### Table of Contents



Depreciation and amortization expense
  Three Months Ended
    
    
    Six Months EndedFebruary 28,
    
    
    February 28,2006
    
    
    2005
    
    
    2006
    
    
    2005Education services
    
    $
    35.2
    
    
    $
    44.3
    
    
    $
    73.1
    
    
    $
    94.7Greyhound
    
    
    19.6
    
    
    
    18.1
    
    
    
    37.8
    
    
    
    33.3Public Transit services
    
    
    2.3
    
    
    
    2.6
    
    
    
    4.8
    
    
    
    5.2Total
    
    $
    57.1
    
    
    $
    65.0
    
    
    $
    115.7
    
    
    $
    133.2
  Interest expense
  Other income, net
  Income tax expense
  16




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##### Table of Contents



Discontinued operations
   Liquidity and capital resources
      Commitments and contingencies
  17




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##### Table of Contents



Forward-looking statements
  
    
    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;
    
    Costs and risks associated with litigation;
    
    Changes in interpretations of existing, or the adoption of new, legislation,
regulations or other laws;
    
    The potential for rising labor costs and actions taken by organized labor unions;
    
    Continued increases in prices of fuel and potential shortages;
    
    Control of costs related to accident and other risk management claims;
    
    Terrorism and other acts of violence;
    
    The ability to produce sufficient future taxable income to allow us to recover
our deferred tax assets;
    
    The ability to repurchase the Companys common stock;
    
    Potential changes in the mix of businesses we operate; and
    
    The inability to earn sufficient returns on pension plan assets thus requiring
increased funding.
  18




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##### Table of Contents



LAIDLAW INTERNATIONAL, INC.
 
 Item 3. Quantitative and Qualitative Disclosures About Market Risk
   
 Item 4. Controls and Procedures
   19




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##### Table of Contents



LAIDLAW INTERNATIONAL, INC.
 
 PART II. OTHER INFORMATION
 
 Item 1. Legal proceedings
 Contingent Liabilities Relating to Sale of AMR
     Other
  20




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##### Table of Contents



Item 1A. Risk factors
  
 Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
 (c) Purchases of Equity Securities by the Issuer
   Total number
    
    Approximateof shares
    
    dollar value ofpurchased as
    
    shares thatpart of a
    
    may yet beTotal number
    
    
    
    
    
    publicly
    
    purchasedof shares
    
    Average price
    
    announced
    
    under thepurchased
    
    paid per share
    
    program
    
    programRepurchase period
    
    
    
    
    
    
    
    
    
    
    
    
    
    (million)January 5
 January 31
    
    
    978,700
    
    
    $
    27.14
    
    
    
    978,700
    
    
    $
    173.4February 1
 February 28
    
    
    712,500
    
    
    
    27.18
    
    
    
    712,500
    
    
    
    154.1Total
    
    
    1,691,200
    
    
    
    27.16
    
    
    
    1,691,200
    
    
    
    154.1
 
 Item 4. Submission of Matters to a Vote of Security Holders
   Number of VotesAuthorityFor
    
    WithheldKevin E. Benson
    
    
    93,365,149
    
    
    
    1,123,224Lawrence M. Nagin
    
    
    93,365,149
    
    
    
    1,123,224Peter E. Stangl
    
    
    87,662,024
    
    
    
    6,826,349
  21




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##### Table of Contents



Item 6. 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)
 22




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##### Table of Contents



SIGNATURES
  LAIDLAW INTERNATIONAL, INC.By: /s/ Douglas A. CartyDate: April 7, 2006
    
    Douglas A. CartyExecutive Vice President and Chief Financial
OfficerDuly Authorized Officer and Principal Financial
Officer
 23