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UNITED STATES
SECURITIES AND EXCHANGE COMMISSIONWASHINGTON, D.C. 20549

FORM 10-K

|Mark one:                                                          |                                                                                         
|------------------------------------------------------------------ | ----------------------------------------------------------------------------------------
|ý                                                                  | ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934    
|For the year ended December 31, 2007                              
|Or                                                                
|o                                                                  | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|For the transition period
from                                  to

Commission file numbers:
001-32701
333-127115

LOGO

EMERGENCY MEDICAL SERVICES CORPORATION
EMERGENCY MEDICAL SERVICES L.P.(Exact name of Registrant as Specified in its Charter)

|Delaware(State or other jurisdiction of
incorporation or organization)                       |  | 20-3738384
20-2076535(IRS Employer
Identification Number)
|-------------------------------------------------------------------------------------------- |  | ---------------------------------------------------------
|                                                                                             |  |                                                          
|6200 S. Syracuse Way
Suite 200
Greenwood Village, CO(Address of principal executive offices) |  | 80111(Zip Code)                                          

Registrant's
telephone number, including area code:303-495-1200

Securities registered pursuant to Section 12(b) of the Act:

|Title of each classClass A Common Stock, $.01 par value |  | Name of each exchange on which registeredNew York Stock Exchange
|------------------------------------------------------- |  | ----------------------------------------------------------------

Securities
registered pursuant to Section 12(g) of the Act:None

Indicate
by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities
Act. Yes o    No ý

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or 15(d) of the
Act. Yes o    No ý

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 ý    No o

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be
contained, to the best of the registrant's knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment
of this Form 10-K. o

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, or a non-accelerated filer. See definition of
"accelerated filer and large accelerated filer" in Rule 12b-2 of the Exchange Act. (Check one):

|Large accelerated filer o |  | Accelerated filer ý |  | Non-accelerated filer o |  | Smaller reporting company o
|------------------------- |  | ------------------- |  | ----------------------- |  | ---------------------------

Indicate
by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange
Act). Yes o    No ý

As of December 31, 2007, 9,320,347 shares of the Company's class A common stock, par value $0.01 per share, were outstanding. As of
December 31, 2007, the aggregate market value of the voting and non-voting common equity held by non-affiliates of the Company, computed by reference to the closing
price for the registrant's class A common stock on the New York Stock Exchange on such date was approximately $272.9 million (9,320,347 shares at a closing price per share of $29.28).

Shares
of class A common stock outstanding at February 19, 20089,320,347; shares of class B common stock outstanding at February 19,
2008142,545; LP exchangeable units outstanding at February 19, 200832,107,500.

DOCUMENTS INCORPORATED BY REFERENCE

Certain portions of the registrant's definitive proxy statement to be used in connection with its 2008 Annual Meeting of Stockholders and to be filed within
120 days of December 31, 2007 are incorporated by reference into Part III, Items 10-14, of this Form 10-K.



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EMERGENCY MEDICAL SERVICES CORPORATION

INDEX TO ANNUAL REPORT  ON FORM 10-K

FOR THE YEAR ENDED
DECEMBER 31, 2007



|                                                               |          |    |                                                                                                              | Page
|-------------------------------------------------------------- | -------- | -- | ------------------------------------------------------------------------------------------------------------ | ----
|FORWARD-LOOKING STATEMENTS AND FACTORS THAT MAY AFFECT RESULTS |          | 3 
|PART I.                                                        |          |    |                                                                                                              |     
|                                                               | ITEM 1.  |    | BUSINESS                                                                                                     |     
|                                                               | ITEM 1A. |    | RISK FACTORS                                                                                                 |     
|                                                               | ITEM 1B. |    | UNRESOLVED STAFF COMMENTS                                                                                    |     
|                                                               | ITEM 2.  |    | PROPERTIES                                                                                                   |     
|                                                               | ITEM 3.  |    | LEGAL PROCEEDINGS                                                                                            |     
|                                                               | ITEM 4.  |    | SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS                                                          |     
|PART II.                                                       |          |    |                                                                                                              |     
|                                                               | ITEM 5.  |    | MARKET FOR REGISTRANT'S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES |     
|                                                               | ITEM 6.  |    | SELECTED FINANCIAL DATA                                                                                      |     
|                                                               | ITEM 7.  |    | MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS                        |     
|                                                               | ITEM 7A. |    | QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK                                                   |     
|                                                               | ITEM 8.  |    | FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA                                                                  |     
|                                                               | ITEM 9.  |    | CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE                         |     
|                                                               | ITEM 9A. |    | CONTROLS AND PROCEDURES                                                                                      |     
|                                                               | ITEM 9B. |    | OTHER INFORMATION                                                                                            |     
|PART III.                                                      |          |    |                                                                                                              |     
|                                                               | ITEM 10. |    | DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT                                                           |     
|                                                               | ITEM 11. |    | EXECUTIVE COMPENSATION                                                                                       |     
|                                                               | ITEM 12. |    | SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS               |     
|                                                               | ITEM 13. |    | CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS                                                               |     
|                                                               | ITEM 14. |    | PRINCIPAL ACCOUNTING FEES AND SERVICES                                                                       |     
|PART IV.                                                       |          |    |                                                                                                              |     
|                                                               | ITEM 15. |    | EXHIBITS AND FINANCIAL STATEMENT SCHEDULES                                                                   |     
|SIGNATURES                                                     |          | 92

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EMERGENCY MEDICAL SERVICES CORPORATION

ANNUAL REPORT ON FORM 10-K

FORWARD-LOOKING STATEMENTS AND FACTORS THAT MAY AFFECT RESULTS

This Annual Report on Form 10-K contains "forward-looking statements." Forward-looking statements give our current expectations or forecasts of
future events. Forward-looking statements generally can be identified by the use of forward-looking terminology such as "may," "will," "expect," "intend," "estimate," "anticipate," "believe,"
"project," or "continue," or other similar words. These statements reflect management's current views with respect to future events and are subject to risks and uncertainties, both known and unknown.
Our actual results may vary materially from those anticipated in forward-looking statements. We caution investors not to place undue reliance on any forward-looking statements.

Important
factors that could cause actual results to differ materially from forward-looking statements include, but are not limited to:



These
factors are not exhaustive, and new factors may emerge or changes to the foregoing factors may occur that could impact our business. Except to the extent required by law, we
undertake no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.

Readers
should review carefully Item 1A, "Risk Factors" and Item 7, "Management's Discussion and Analysis of Financial Condition and Results of Operations" in this Annual
Report on Form 10-K for a more complete discussion of these and other factors that may affect our business.

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PART I.

ITEM 1.    BUSINESS

Company Overview

Emergency Medical Services Corporation ("EMSC", "we", "us", "our", or the "Company") is a leading provider of emergency medical services in the United States. We
operate our business and market our services under the AMR and EmCare brands, which represent American Medical Response, Inc. and EmCare Holdings Inc., respectively. AMR, with more than
50 years of operating history, is the leading provider of ambulance services in the United States based on net revenue and number of transports. EmCare, with more than 30 years of
operating history, is the leading provider of outsourced emergency department staffing and related management services in the United States, based on number of contracts with hospitals and affiliated
physician groups. Approximately 88% of our net revenue for the year ended December 31, 2007 was generated under exclusive contracts. During 2007, we provided emergency medical services to
approximately 10.6 million patients in more than 2,000 communities nationwide and generated net revenue of $2.1 billion, of which AMR and EmCare represented 58% and 42%, respectively.
All references in this Item to number of contracts and employees are as of December 31, 2007.

We
offer a broad range of essential emergency medical services through our two business segments:

|                                          |  | AMR                                           |  | EmCare                                                       
|----------------------------------------- |  | --------------------------------------------- |  | -------------------------------------------------------------
|Core Services:                            |  | Pre- and post-hospital medical transportation |  | Hospital-based physician services                            
|                                          |  | Emergency ("911") ambulance transports        |  | Emergency department staffing and related management services
|                                          |  | Non-emergency ambulance transports            |  | Hospitalist, radiology and inpatient services                
|Customers:                                |  | Communities                                   |  | Hospitals                                                    
|                                          |  | Government agencies                           |  | Independent physician groups                                 
|                                          |  | Healthcare facilities                         |  | Attending medical staff                                      
|                                          |  | Insurers                                      |  |                                                              
|National Market Position:                 |  | #1 provider of ambulance transports           |  | #1 provider of outsourced emergency department services      
|                                          |  | 8% share of total ambulance market            |  | 8% share of emergency department services market             
|                                          |  | 21% of private provider ambulance market      |  | 12% of outsourced emergency department services market       
|Number of Contracts at December 31, 2007: |  | 167 "911" contracts                           |  | 395 hospital contracts                                       
|                                          |  | 3,100 non-emergency transport arrangements    |  |                                                              
|Volume for year ended December 31, 2007:  |  | 3.4 million transports                        |  | 7.2 million patient visits                                   

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General Development of our Business

Company History

AMR was founded in 1992 through the consolidation of several well-established regional ambulance companies, and since then has grown organically and
through more than 200 acquisitions. In February 1997, AMR merged with another leading ambulance company and became the largest ambulance service provider in the United States.

EmCare
was founded in Dallas, Texas, in 1972 and initially grew by providing emergency department staffing and related management services to larger hospitals in the Texas marketplace.
EmCare then expanded its presence nationally, primarily through a series of acquisitions in the 1990's.

AMR
and EmCare were acquired by Laidlaw International, Inc., previously Laidlaw Inc., or Laidlaw, in 1997 and became wholly-owned subsidiaries.

Effective
January 31, 2005, an investor group led by Onex Partners LP and Onex Corporation, or Onex, and including members of our management, purchased our operating
subsidiariesAMR and EmCarefrom Laidlaw through a holding company, Emergency Medical Services L.P., or EMS LP, a limited partnership formed at the time of this
acquisition. See note 1to the Consolidated Financial Statements included in Part II, Item 8 of this Form 10-K.

From
the completion of our acquisition of AMR and EmCare, we operated through the holding company, EMS LP, until the formation of EMSC, which is a Delaware corporation. A
re-organization was effected concurrently with our initial public offering of common stock on December 21, 2005, which resulted in AMR, EmCare and EMS LP becoming
subsidiaries of EMSC, and EMSC controlling 100% of the voting power of EMS LP. We own 22.8%, and Onex owns 77.2%, of the equity in EMS LP. Onex's equity interest is held
through LP exchangeable units that are immediately exchangeable for, and substantially equivalent to, our class B common stock.

Description of our Business

Emergency Medical Services Industry

We operate in the ambulance and emergency department services markets, two large and growing segments of the emergency medical services market. By law, most
communities are required to provide emergency ambulance services and most hospitals are required to provide emergency department services. Emergency medical services are a core component of the range
of care a patient could potentially receive in the pre-hospital and hospital-based settings. Accordingly, we believe that expenditures for emergency medical services will continue to
correlate closely to growth in the U.S. hospital market and that the following key factors will continue to drive growth in our emergency medical services markets:



Additional
factors that may affect the emergency medical services industry are described elsewhere in this report. See Item 1A, "Risk FactorsRisk Factors Related to
Healthcare Regulation" and "BusinessRegulatory Matters."

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Ambulance Services

We believe the ambulance services market represents annual expenditures of approximately $13 billion. The ambulance services market is highly fragmented,
with more than 15,000 private, public and not-for-profit service providers accounting for an estimated 39 million ambulance transports in 2006. There are a limited
number of regional ambulance providers and we are one of only two national ambulance providers.

Ambulance
services encompass both 911 emergency response and non-emergency transport services, including critical care transfers, wheelchair transports and other
inter-facility transports. Emergency response services include the dispatch of ambulances equipped with life support equipment and staffed with paramedics and/or emergency medical technicians, or
EMTs, to provide immediate medical care to injured or ill patients. Non-emergency services utilize paramedics and/or EMTs to transport patients between healthcare facilities or between
facilities and patient residences.

911
emergency response services are provided primarily under long-term contracts with communities and government agencies. Non-emergency services generally are
provided pursuant to non-exclusive contracts with healthcare facilities, managed care and insurance companies. Usage tends to be controlled by the facility discharge planners, nurses and
physicians who are responsible for requesting transport services. Non-emergency services are provided primarily by private ambulance companies. Quality of service, dependability and name
recognition are critical factors in winning non-emergency business.

Emergency Department Services

We believe the physician reimbursement component of the emergency department services market represents annual expenditures of approximately $10 billion.
There are approximately 4,880 hospitals in the United States that operate emergency departments, of which approximately 65% of these hospitals outsource their physician staffing and management for
this department. The market for outsourced emergency department staffing and related management services is highly fragmented, with more than 800 national, regional and local providers. We believe we
are one of only 6 national providers.

Between
1995 and 2005, the total number of patient visits to hospital emergency departments increased from 96 million to 115 million, an increase of approximately 20%. At
the same time, the number of hospital emergency departments declined 9%. As a result, the average number of patient visits per hospital emergency department increased substantially during that period.
We believe these trends are resulting in an increased focus by hospitals on their emergency departments.

Business Segments and Services

We operate our business and market our services under our two business segments: AMR and EmCare. We provide ambulance transport services in 37 states and the
District of Columbia and provide services to emergency department and hospitalist programs in 40 states.

The
following is a detailed business description for our two business segments.

AMERICAN MEDICAL RESPONSE

American Medical Response, Inc., or AMR, is the leading provider of ambulance services in the United States. AMR and our predecessor companies have been
providing services to some communities for more than 50 years. As of December 31, 2007 we had an 8% share of the total ambulance services market and a 21% share of the private provider
ambulance market. During 2007, AMR treated and transported approximately 3.4 million patients in 37 states utilizing more than 4,200 vehicles that operated out of more than 200 sites. AMR has
approximately 3,300 contracts with communities, government agencies, healthcare providers and insurers to provide ambulance transport services. AMR's

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broad
geographic footprint enables us to contract on a national and regional basis with managed care and insurance companies.

For
2007, approximately 56% of AMR's net revenue was generated from emergency 911 ambulance services, which include treating and stabilizing patients, transporting the patient to a
hospital or other healthcare facility and providing attendant medical care en-route. Non-emergency ambulance services, including critical care transfer, wheelchair transports
and other interfacility transports, accounted for 31% of AMR's net revenue for the same period, with the balance generated from the provision of training, dispatch centers and other services to
communities and public safety agencies and from revenue associated with fixed-wing medical transportation services. In 2007, we completed acquisitions including Abbott Ambulance based in
St. Louis, Missouri and MedicWest Ambulance based in Las Vegas, Nevada.

As
derived from our annual consolidated financial statements found elsewhere in this report, AMR's revenues, income from operations, and total assets were as follows for each of the
periods indicated (amounts in thousands):

As of and for theYear
ended
December 31,
2007

Year
ended
December 31,
2006

Eleven months
ended
December 31,
2005Net revenue

$
1,219,212

$
1,189,447

$
1,059,725Income from operations


33,284


35,203


47,593Total identifiable assets


870,845


817,715


807,874


See
Item 7, "Management's Discussion and Analysis of Financial Condition and Results of Operations" for further information on AMR's financial results.

We
provide substantially all of our ambulance services under our AMR brand name. We operate under other names when required to do so by local statute or contractual agreement.

Services

We provide a full range of emergency and non-emergency ambulance transport and related services, which include:

Emergency Response Services (911).We provide emergency response services primarily under long-term exclusive
contracts with communities and hospitals. Our contracts typically stipulate that we must respond to 911 calls in the designated area within a specified response time. We utilize two types of ambulance
unitsAdvanced Life Support, or ALS, units and Basic Life Support, or BLS, units. ALS units, which are staffed by two paramedics or one paramedic and an emergency medical technician, or
EMT, are equipped with high-acuity life support equipment such as cardiac monitors, defibrillators and oxygen delivery systems, and carry pharmaceutical and medical supplies. BLS units are
generally staffed by two EMTs and are outfitted with medical supplies and equipment necessary to administer first aid and basic medical treatment. The decision to dispatch an ALS or BLS unit is
determined by our contractual requirements, as well as by the nature of the patient's medical situation.

Under
certain of our 911 emergency response contracts, we are the first responder to an emergency scene. However, under most of our 911 contracts, the local fire department is the first
responder. In these situations, the fire department typically begins stabilization of the patient. Upon our arrival, we continue stabilization through the provision of attendant medical care and
transport the patient to the closest appropriate healthcare facility. In certain communities where the fire department historically has been responsible for both first response and emergency services,
we seek to develop public/private partnerships with fire departments rather than compete with them to provide the

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emergency
transport service. These partnerships emphasize collaboration with the fire departments and afford us the opportunity to provide 911 emergency services in communities that, for a variety of
reasons, may not otherwise have outsourced this service to a private provider. In most instances, the provision of emergency services under our partnerships closely resembles that of our most common
911 contracts described above. The public/private partnerships lower our costs by reducing the number of full-time paramedics we would otherwise require. We estimate that the 911 contracts
that encompass these public/private partnerships represented approximately 17% of AMR's net revenue for fiscal 2007.

Non-Emergency Transport Services.We provide transportation to patients requiring ambulance or wheelchair
transport with varying degrees of medical care needs between healthcare facilities or between healthcare facilities and their homes. Unlike emergency response services, which typically are provided by
communities or private providers under exclusive or semi-exclusive contracts, non-emergency transportation usually involves multiple contract providers at a given facility,
with one or more of the competitors designated as the "preferred" provider. Non-emergency transport business generally is awarded by a healthcare facility, such as a hospital or nursing
home, or a healthcare payor, such as an HMO, managed care organization or insurance company.

Non-emergency
transport services include: (i) inter-facility critical care transport, (ii) wheelchair and stretcher-car transports, and
(iii) other inter-facility transports.



Other Services.In addition to our 911 emergency and non-emergency ambulance services, we provide the following
services:



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Medical Personnel and Quality Assurance

Approximately 72% of our 18,000 employees have daily contact with patients, including approximately 5,200 paramedics, 7,500 EMTs and 300 nurses. Paramedics and
EMTs must be state-certified to transport patients and perform emergency care services. Certification as an EMT requires completion of a minimum of 140 hours of training in a program designated
by the United States Department of Transportation, such as those offered at our training institute, NCTI. Once this program is completed, state-certified EMTs are then eligible to participate in a
state-certified paramedic training program. The average paramedic program involves over 1,000 hours of academic training in advanced life support and assessment skills.

In
most communities, local physician advisory boards develop medical protocols to be followed by paramedics and EMTs in a service area. In addition, instructions are conveyed on a
case-by-case basis through direct communications between the ambulance crew and hospital emergency room physicians during the administration of advanced life support
procedures. Both paramedics and EMTs must complete continuing education programs and, in some cases, state supervised refresher training examinations to maintain their certifications.

We
maintain a commitment to provide high quality pre- and post-hospital emergency medical care. In each location in which we provide services, a physician
associated with a hospital we serve monitors adherence to medical protocol and conducts periodic audits of the care provided. In addition, we hold retrospective care audits with our employees to
evaluate compliance with medical and performance standards.

Our
commitment to quality is reflected in the fact that 16 of our dispatch centers across the country are accredited by the Commission on Accreditation of Ambulance Services, or CAAS,
representing 15% of the total CAAS accredited centers. CAAS is a joint program between the American Ambulance Association and the American College of Emergency Physicians. The accreditation process is
voluntary and evaluates numerous qualitative factors in the delivery of services. We believe communities and managed care providers increasingly consider accreditation as one of the criteria in
awarding contracts.

Billing and Collections

Our internal patient billing services, or PBS, offices located across the United States invoice and collect for our services. We receive payment from the
following sources:



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The
table below presents the approximate percentages of AMR's net revenue from the following sources:

Percentage of AMR
Net RevenueYear
ended
December 31,
2007

Year
ended
December 31,
2006

Eleven months
ended
December 31,
2005Medicare

31
%
31
%
31
%Medicaid

6

6

6Commercial insurance/ managed care

44

47

47Self-pay

5

5

5Subsidies/ fees

14

11

11Total net revenue

100
%
100
%
100
%


See
"BusinessRegulatory MattersMedicare, Medicaid and Other Government Program Reimbursement" for additional information on reimbursement from Medicare,
Medicaid and other government-sponsored programs.

We
have substantial experience in processing claims to third party payors and employ a billing staff trained in third party coverage and reimbursement procedures. Our integrated billing
and collection systems allow us to tailor the submission of claims to Medicare, Medicaid and certain other third party
payors and has the capability to electronically submit claims to the extent third party payors' systems permit. This system also provides for tracking of accounts receivable and status pending
payment.

Companies
in the ambulance services industry maintain significant provisions for doubtful accounts compared to companies in other industries. Collection of complete and accurate patient
billing information during an emergency service call is sometimes difficult, and incomplete information hinders post-service collection efforts. In addition, we cannot evaluate the
creditworthiness of patients requiring emergency transport services. Our allowance for doubtful accounts generally is higher for transports resulting from emergency ambulance calls than for
non-emergency ambulance requests. See Item 1A, "Risk FactorsRisk Factors Related to Healthcare RegulationChanges in the rates or methods of third party
reimbursements may adversely affect our revenue and operations."

State
licensing requirements, as well as contracts with communities and healthcare facilities, typically require us to provide ambulance services without regard to a patient's insurance
coverage or ability to pay. As a result, we often receive partial or no compensation for services provided to patients who are not covered by Medicare, Medicaid or private insurance. The anticipated
level of uncompensated care and uncollectible accounts is considered in negotiating a government-paid subsidy to provide for uncompensated care, and permitted rates under contracts with a
community or government agency.

A
significant portion of our ambulance transport revenue is derived from Medicare payments. The Balanced Budget Act of 1997, or BBA, modified Medicare reimbursement rates for emergency
transportation with the introduction of a national fee schedule. The BBA provided for a phase-in of the national fee schedule by blending the new national fee schedule rates with ambulance
service suppliers' pre-existing "reasonable charge" reimbursement rates. The BBA provided for this phase-in period to begin on April 1, 2002, and full transition to the
national fee schedule rates became effective on January 1, 2006. In some regions, the national fee schedule would have resulted in a decrease in Medicare reimbursement rates of approximately
25% by the end of the phase-in period. Partially in response to the dramatic decrease in rates dictated by the BBA in some regions, the Medicare Prescription Drug Improvement and
Modernization Act of 2003, or the Medicare Modernization Act, established regional rates, certain of which are higher than the BBA's national rates, and provided for

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the
blending of the regional and national rates until January 1, 2010. Other rate provisions included in the Medicare Modernization Act provided further temporary mitigation of the impact of
the BBA decreases, including a provision that provided for 1% to 2% increases for blended rates for the period from January 1, 2004 through December 31, 2006. Because the Medicare
Modernization Act relief is of limited duration, we continue to pursue strategies to offset the decreases mandated by the BBA, including seeking fee and subsidy increases.

We
estimate that the impact of the ambulance service rate decreases under the national fee schedule mandated under the BBA, as modified by the phase-in provisions of the
Medicare Modernization Act, resulted in an increase in AMR's net revenue of approximately $16 million during calendar year 2005, a decrease in AMR's net revenue of approximately
$17 million in 2006, and in a decrease in AMR's net revenue of approximately $7 million in 2007. Based upon the current Medicare transport mix, we expect a further increase in our net
revenue totaling approximately $5 million for the period 2008 through 2010. We have been able to substantially mitigate the phase-in reductions of the BBA through additional fee and
subsidy increases. As a 911 emergency response provider, we are uniquely positioned to offset changes in reimbursement by requesting increases in the rates we are permitted to charge for 911 services
from the communities we serve. In response, these communities often permit us to increase rates for ambulance services from patients and their third party payors in order to ensure the maintenance of
required community-wide 911 emergency response services. While these rate increases do not result in higher payments from Medicare and certain other public or private payors, overall they
increase our revenue.

See
"Regulatory MattersMedicare, Medicaid and Other Government Program Reimbursement" for additional information on reimbursement from Medicare, Medicaid and other
government-sponsored programs.

Contracts

Emergency Transport.As of December 31, 2007, we had 167 contracts with communities and government agencies to provide
911 emergency response services. Contracts with communities to provide emergency transport services are typically exclusive, three to five years in length and generally are obtained through a
competitive bidding process. In some instances where we are the existing provider, communities elect to renegotiate existing contracts rather than initiate new bidding processes. Our 911 contracts
often contain options for earned extensions or evergreen provisions. In fiscal year ended December 31, 2007, our top ten 911 contracts accounted for approximately $294 million, or 24% of
AMR's net revenue. We have served these ten customers on a continual basis for an average of 30 years.

Our
911 emergency response arrangements typically specify maximum fees we may charge and set forth minimum requirements, such as response times, staffing levels, types of vehicles and
equipment, quality assurance and insurance coverage. Communities and government agencies may also require us to provide a performance bond or other assurances of financial responsibility. The rates we
are permitted to charge for services under a contract for emergency ambulance services and the amount of the subsidy, if any, we receive from a community or government agency depend in large part on
the nature of the services we provide, payor mix and performance requirements.

Non-Emergency Transport.We have approximately 3,100 arrangements to provide non-emergency ambulance
services with hospitals, nursing homes and other healthcare facilities that require a stable and reliable source of medical transportation for their patients. These contracts typically designate us as
the preferred ambulance service provider of non-emergency ambulance services to those facilities and permit us to charge a base fee, mileage reimbursement, and additional fees for the use
of particular medical equipment and supplies. We have historically provided a significant portion of our non-emergency transports to facilities and organizations in competitive markets
without specific contracts.

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Non-emergency
transports often are provided to managed care or insurance plan members who are stabilized at the closest available hospital and are then moved to facilities
within their health plan's network. We believe the increased prevalence of managed care benefits larger ambulance service providers, which can service a higher percentage of a managed care provider's
members. This allows the managed care provider to reduce its number of vendors, thus reducing administrative costs and allowing it to negotiate more favorable rates with healthcare facilities. Our
scale and broad geographic footprint enable us to contract on a national and regional basis with managed care and insurance companies. We have contracts with large healthcare networks and insurers
including Kaiser, Aetna, Healthnet, Cigna and SummaCare.

We
believe that communities, government agencies, healthcare facilities, managed care companies and insurers consider the quality of care, historical response time performance and total
cost to be among the most important factors in awarding and renewing contracts.

Dispatch and Communications

Dispatch centers control the deployment and dispatch of ambulances in response to calls through the use of sophisticated communications equipment 24 hours
a day, seven days a week. In many operating sites, we communicate with our vehicles over dedicated radio frequencies licensed by the Federal Communications Commission. In certain service areas with a
large volume of calls, we analyze data on traffic patterns, demographics, usage frequency and similar factors with the aid of System Status Management, or SSM technology, to help determine optimal
ambulance deployment and selection. In addition to dispatching our own ambulances, we also provide dispatching service for 53 communities where we are not an ambulance service provider. Our dispatch
centers are staffed by EMTs and other experienced personnel who use local medical protocols to analyze and triage a medical situation and determine the best mode of transport.

Emergency Transport.Depending on the emergency medical dispatch system used in a designated service area, the public
authority that receives 911 emergency medical calls either dispatches our ambulances directly from the public control center or communicates information regarding the location and type of medical
emergency to our control center which, in turn, dispatches ambulances to the scene. While the ambulance is en-route to the scene, the ambulance receives information concerning the
patient's condition prior to the ambulance's arrival at the scene. Our communication systems allow the ambulance crew to communicate directly with the destination hospital to alert hospital medical
personnel of the arrival of the patient and the patient's condition and to receive instructions directly from emergency room personnel on specific pre-hospital medical treatment. These
systems also facilitate close and direct coordination with other emergency service providers, such as the appropriate police and fire departments, which also may be responding to a call.

Non-Emergency Transport.Requests for non-emergency transports typically are made by physicians,
nurses, case managers and hospital discharge coordinators who are interested primarily in prompt ambulance arrival at the requested pick-up time. We are also offering on-line,
web-enabled transportation ordering to certain facilities. We use our Millennium software to track and manage requests for transportation services for large healthcare facilities and
managed care companies.

Management Information Systems

We support our operations with integrated information systems and standardized procedures that enable us to efficiently manage the billing and collections
processes and financial support functions. Our recently developed technology solutions provide information for operations personnel, including real-time operating statistics, tracking of
strategic plan initiatives, electronic purchasing and inventory management solutions.

12

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We
have three management information systems that we believe have significantly enhanced our operationsour e-PCR technology, an electronic record-keeping system;
our Millennium call-taking system, a call-taking application that tracks and manages requests for transportation services for large healthcare facilities and managed care
companies; and our SSM ambulance positioning system, a technology which enables us to use historical data on fleet usage patterns to predict where our emergency transport services are likely to be
required.

Sales and Marketing

Our 115-person sales and marketing team is focused on contract retention as well as generating new sales. Many new sales opportunities occur through
referrals from our existing client base. These team members are frequently former paramedics or EMTs who began their careers in the emergency transportation industry and are therefore
well-qualified to understand the needs of our customers. Our sales force is incentivized through a compensation package that includes base salary and bonus potential based on achieving
specified performance targets.

We
respond to requests for proposals that generally include demographic information of the community or facilities, response time parameters, vehicle and equipment requirements, the
length of the contract, the minimum qualifications of bidders, billing information, selection criteria and the format to be followed in the bid. Prior to responding to a request for proposal, AMR's
management team ensures that the proposal is in line with certain financial and service parameters. Management evaluates all aspects of each proposal, including financial projections, staffing models,
resource requirements and competition, to determine how to best achieve our business objectives and the customer goals.

Risk Management

We train and educate all new employees about our safety programs including, among others, emergency vehicle operations, various medical protocols, use of
equipment and patient focused care and advocacy. Our safety training also involves continuing education programs and a monthly safety awareness campaign. We also work directly with manufacturers to
design equipment modifications that enhance both patient and clinician safety.

Our
safety and risk management team develops and executes strategic planning initiatives focused on mitigating the factors that drive losses in our operations. We aggressively
investigate and respond to all incidents we believe may result in a claim. Operations supervisors submit documentation of such incidents to the third party administrator handling the claim. We have a
dedicated liability unit with our third party administrator which actively engages with our staff to gain valuable information for closure of claims. Information from the claims database is an
important resource for identifying trends and developing future safety initiatives.

We
utilize an on-board monitoring system, Road Safety, which measures operator performance against our safe driving standards. Our operations using Road Safety have
experienced improved driving behaviors within 90 days of installation. Road Safety has been implemented in approximately 60% of our vehicles in emergency response markets.

Competition

Our predominant competitors are fire departments, with approximately 34% of the ambulance transport services market. Firefighters have traditionally acted as the
first responders during emergencies, and in many communities provide emergency medical care and transport as well. In many communities we have established public/private partnerships, in which we
integrate our transport services with the first responder services of the local fire department. We believe these public/private

13

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partnerships
provide a model for us to collaborate with fire departments to increase the number of communities we serve.

Competition
in the ambulance transport market is based primarily on:



Our
largest competitor, Rural/Metro Corporation, is the only other national provider of ambulance transport services and generates ambulance transport revenue less than half of AMR's net
revenue. Other private provider competitors include Southwest Ambulance in Arizona and New Mexico, Acadian Ambulance Service in Louisiana and small, locally owned operators that principally serve the
inter-facility transport market.

Insurance

Workers Compensation, Auto and General Liability.We have retained liability for the first $1 million to
$2 million of the loss under these programs since September 1, 2001, managed either through ACE American Insurance Co. or through American International Group, Inc., or AIG. Generally,
our umbrella policies covering claims that exceed our deductible levels have an annual cap of approximately $100 million. For periods prior to September 1, 2001, we were fully insured
for our workers compensation, auto and general liability programs through Laidlaw's captive insurance program.

Professional Liability.Since April 15, 2001, we have a self-insured retention for our professional
liability coverage, which covers the first $2 million for the policy year ending April 15, 2002, and covers the first $5 to $5.5 million for policy periods after April 15,
2002. We have umbrella policies with third party insurers covering claims exceeding these retention levels with an aggregate cap of $10 million for each separate policy period. For periods
prior to April 15, 2001, we are insured for our professional liability claims through third party insurers.

Environmental Matters

We are subject to federal, state and local laws and regulations relating to the presence of hazardous materials and pollution and the protection of the
environment, including those governing emissions to air, discharges to water, storage, treatment and disposal of wastes, including medical waste, remediation of contaminated sites, and protection of
worker health and safety. We believe our current operations are in substantial compliance with all applicable environmental requirements and that we maintain all material permits required to operate
our business.

Certain
environmental laws impose strict, and under certain circumstances joint and several, liability for investigation and remediation of the release of regulated substances into the
environment. Such liability can be imposed on current or former owners or operators of contaminated sites, or on persons who dispose or arrange for disposal of wastes at a contaminated site. Releases
have occurred at a few of the facilities we lease as a result of historical practices of the owners or former operators. Based on available information, we do not believe that any known compliance
obligations, releases or investigations under environmental laws or regulations will have a material adverse effect on our business, financial position and results of operations. However, there can be
no guarantee that these releases or newly discovered information, more stringent enforcement of or changes in environmental

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requirements,
or our inability to enforce available indemnification agreements will not result in significant costs.

Employees

The following is the break down of our employees by job classification as of December 31, 2007.

Job Classification

Full-time

Part-time

TotalParamedics

3,373

1,853

5,226Emergency medical technicians

4,986

2,514

7,500Nurses

122

137

259Support personnel

4,430

600

5,030Total

12,911

5,104

18,015


Approximately
47% of our employees are represented by 41 collective bargaining agreements. Thirteen of these collective bargaining agreements, representing approximately 4,600 employees,
are subject to renegotiation in 2008. We believe we have a good relationship with our employees and have never experienced any union-related work stoppages.

EMCARE

EmCare is the largest provider of outsourced emergency department staffing and related management services to healthcare facilities in the United States. As of
December 31, 2007, EmCare had an 8% share of the total emergency department services market and a 12% share of the outsourced emergency department services market. During the fiscal year ended
December 31, 2007, EmCare had approximately 7.2 million patient visits in 40 states. EmCare has 395 contracts with hospitals and independent physician groups to provide emergency
department, radiology and hospitalist staffing, management and other administrative services. We have added 144 net new contracts since 2001.

EmCare
provides emergency department staffing, hospitalist and radiology services, and related management services to healthcare facilities. We recruit and hire or subcontract with
physicians and other healthcare professionals, who then provide professional services to the hospitals with whom we contract. We also have practice support agreements with independent physician groups
and hospitals pursuant to which we provide unbundled management services such as billing and collection, recruiting, risk management and certain other administrative services.

In
addition, we have become a leading provider of hospitalist services. A hospitalist is a physician who specializes in the care of acutely ill patients in an in-patient
setting. While we have provided limited hospitalist services for the past 12 years, it is only in the last four years that we have focused on expanding this program.

As
derived from our annual consolidated financial statements found elsewhere in this report, EmCare's revenues, income from operations, and total assets were as follows for each of the
periods indicated (amounts in thousands):

As of and for theYear
ended
December 31,
2007

Year
ended
December 31,
2006

Eleven months
ended
December 31,
2005Net revenue

$
887,781

$
744,758

$
595,760Income from operations


99,295


66,513


31,772Total identifiable assets


558,272


446,590


443,435


15

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See
Item 7, "Management's Discussion and Analysis of Financial Condition and Results of Operations" for further information on EmCare's financial results.

Services

We provide a full range of outsourced physician staffing and related management services for emergency department and hospitalist programs, which include:

Contract Management.We utilize an integrated approach to contract management that involves physicians,
non-clinical business experts, and operational and quality assurance specialists. An on-site medical director is responsible for the day-to-day
oversight of the operation, including clinical quality, and works closely with the hospital's management in developing strategic initiatives and objectives. The regional director of operations, which
is a clinical position, provides systems analysis and improvement plans. A quality manager develops site-specific quality improvement programs, and a practice improvement staff focuses on
chart documentation and physician utilization patterns. The regional-based management staff provides support for these efforts and ensures that each customer's expectations are identified, that
service plans are developed and executed to meet those expectations, and that the Company's and the customer's financial objectives are achieved.

Staffing.We provide a full range of staffing services to meet the unique needs of each healthcare facility. Our dedicated
clinical teams include qualified, career-oriented physicians and other healthcare professionals responsible for the delivery of high quality, cost-effective care. These teams also rely on
managerial personnel, many of whom have clinical experience, who oversee the administration and operations of the clinical area. Ensuring that each contract is staffed with the appropriately qualified
physicians and that coverage is provided without any service deficiencies is critical to the success of the contract.

Recruiting.Many healthcare facilities lack the dedicated resources necessary to identify and attract specialized,
career-oriented physicians. We have committed significant resources to the development of EmSource, a proprietary national physician database that we utilize in our recruiting programs across the
country. Our marketing and recruiting staff continuously updates our database of more than 800,000 physicians with relevant data and contact information to allow us to match potential physician
candidates to specific openings based upon personal preferences. This targeted recruiting method increases the success and efficiency of our recruiters, and we believe significantly increases our
physician retention rates. We actively recruit physicians through various media options including telemarketing, direct mail, conventions, journal advertising and our internet site.

Scheduling.Our scheduling departments assist our medical directors in scheduling physicians and other healthcare
professionals in accordance with the coverage model at each facility. We provide 24-hour service to ensure that unscheduled shift vacancies, due to situations such as physician illness and
personal emergencies, are filled with alternative coverage.

Payroll Administration and Benefits.We provide payroll administration services for the physicians and other healthcare
professionals with whom we contract to provide services at customer sites. Additionally, healthcare facilities benefit from the elimination of the overhead costs associated with the administration of
payroll and, where applicable, employee benefits.

Customer Satisfaction Programs.We design and implement customized patient satisfaction programs for our hospital customers.
These programs are designed to improve patient satisfaction through the use of communication, family inclusion and hospitality techniques. These programs are delivered to the clinical and
non-clinical members of the hospital emergency department.

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Other Services.We provide a substantial portion of our services to hospitals through our affiliate physician groups. There
are situations in which hospitals and physicians are interested in receiving stand-alone management services such as billing and collection, scheduling, recruitment and risk management, and at times
we unbundle our services to meet this need. Pursuant to these practice support agreements, which generally will have a term of one to three years, we provide these services to independent physician
groups and healthcare facilities. During 2007, we had 13 practice support agreements which generated $14.9 million in net revenue.

Operational Assessments.We undertake operational assessments for our hospital customers that include comprehensive reviews
of critical operational matrices, including turnaround times, triage systems, "left without being seen," throughput times and operating systems. These assessments establish baseline values and develop
and implement process improvement programs, and then we monitor the success of the initiatives.

Practice Improvement.We provide ongoing comprehensive documentation review and training for our affiliated physicians. We
review certain statistical indicators that allow us to provide specific training to individual physicians regarding documentation, and we tailor training for broader groups of physicians as we see
trends developing in documentation-related areas. Our training focuses on the completeness of the medical record or chart, specific payor requirements, and government rules and regulations.

Risk Management

We utilize our risk management department, senior medical leadership and on-site medical directors to conduct aggressive risk management and quality
assurance programs. We take a proactive role in promoting early reporting, evaluation and resolution of incidents that may evolve into claims. Our risk management function is designed to mitigate risk
associated with the delivery of care and to prevent or minimize costs associated with medical professional liability claims and includes:

Incident Reporting Systems.We have established a comprehensive support system for medical professionals. Our Risk Management
Hotline provides each physician with the ability to discuss medical issues with a peer. In the event of a negative patient outcome, the physician may discuss legal and medical issues in anticipation
of litigation directly with an EmCare attorney experienced with medical malpractice issues.

Tracking and Trending Claims.We have an extensive claims database developed from our experience in the emergency department
setting. From this database, we track multiple data points on each professional liability claim. We utilize the database to identify claim trends and risk factors so that we can better target our risk
management initiatives. Each year, we target the medical conditions associated with our most frequent professional liability claims, and provide detailed education to assist our affiliated medical
professionals in treating these medical conditions.

Professional Risk Assessment.We conduct risk assessments of our medical professionals. Typically, a risk assessment includes
a thorough review of professional liability claims against the professional, assessment of issues raised by hospital risk management and identification of areas where additional education may be
advantageous for the professional.

Hospital Risk Assessment.We conduct risk assessments of potential hospital customers in conjunction with our sales and
contracting process. As part of the risk assessment, registered nurses or physicians employed by us conduct a detailed analysis of the hospital's operations affecting the emergency department or
hospitalist services, including the triage procedures, on-call coverage, transfer procedures, nursing staffing and related matters in an effort to address risk factors contractually during
negotiations with potential customer hospitals.

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Clinical Fail-Safe Programs.We review and identify key risk areas which we believe may result in increased
incidence of patient injuries and resulting claims against us and our affiliated medical professionals. We continue to develop "fail-safe" clinical tools and make them available to our
affiliated physicians for use in conjunction with their practice and to our customer hospitals for use as a part of their peer review process. These "fail-safe" tools assist physicians in
identifying common patient attributes and complaints that may identify the patient as being at high risk for certain conditions (e.g., a heart attack).

Quality Improvement Programs.Our medical directors are actively engaged in their respective hospital's quality improvement
committees and initiatives. In addition, we provide tools that provide guidance to the medical directors on how to conduct quality reviews of their physicians and help them track their physicians'
medical practices.

Physician Education Programs.Our wholly owned subsidiary, Emergency Medical Education Systems, Inc., or EMEDS,
conducts physician education through risk management and board review conferences and on-line teaching modules. Our affiliated medical professionals can access EMEDS to obtain valuable
medical information. Our internal continuing education services are fully accredited by
the Accreditation Council for Continuing Medical Education. This allows us to grant our physicians and nurses continuing education credits for internally developed educational programs at a lower cost
than if such credits were earned through external programs.

Proactive Professional Liability Claims Handling.We utilize a third party claims administrator to manage professional
liability claims against companies and medical professionals covered under our insurance program. For each case, detailed reports are reviewed to ensure proactively that the defense is comprehensive
and aggressive. Each professional liability claim brought against an EmCare affiliated medical professional or EmCare affiliated company is reviewed by EmCare's Claims Committee, consisting of
physicians, attorneys and company executives, before any resolution of the claim. The Claims Committee periodically instructs EmCare's risk management department to undertake an analysis of particular
physicians or hospital locations associated with a given claim.

Billing and Collections

We receive payment for patient services from:



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The
table below presents the approximate percentages of EmCare's net revenue from the following sources:

Percentage of EmCare
Net RevenueYear
ended
December 31,
2007

Year
ended
December 31,
2006

Eleven months
ended
December 31,
2005Medicare

17
%
18
%
18
%Medicaid

3

3

3Commercial insurance/ managed care

54

53

54Self-pay

3

4

3Subsidies/ fees

23

22

22Total net revenue

100
%
100
%
100
%


See
"BusinessRegulatory MattersMedicare, Medicaid and Other Government Program Reimbursement" for additional information on reimbursement from Medicare,
Medicaid and other government-sponsored programs.

We
code and bill for physician services through our wholly-owned subsidiary, Reimbursement Technologies, Inc. We utilize state-of-the-art
document imaging and paperless workflow processes to expedite the billing cycle and improve compliance and customer service.

We
do substantially all of the billing for our affiliated physicians, and we have extensive experience in processing claims to third party payors. We employ a billing staff of
approximately 740 employees who are trained in third party coverage and reimbursement procedures. Our integrated billing and collection system uses proprietary software to tailor the submission of
claims to Medicare, Medicaid and certain other third party payors and has the capability to electronically submit most claims to the third party payors' systems. We forward uncollected accounts
electronically to two outside collection agencies automatically, based on established parameters. Each of these collection agencies have on-site employees working at our
in-house billing company to assist in providing patients with quality customer service.

Contracts

We have contracts with (i) hospital customers to provide professional staffing and related management services, (ii) healthcare facilities and
independent physician groups to provide management services, and (iii) affiliated physician groups and medical professionals to provide management services and various benefits.

We
deliver services to our hospital customers and their patients through two principal types of contractual arrangements. EmCare or a subsidiary most frequently contracts directly with
the hospital to provide physician staffing and management services. In some instances, a physician-owned professional corporation contracts with the hospital to provide physician staffing and
management services, and the professional corporation, in turn, contracts with us for a wide range of management and administrative services, including billing, scheduling support, accounting and
other services. The professional corporation pays our management fee out of the fees it collects from patients, third party payors and, in some cases, the hospital customer. Our physicians and other
healthcare professionals who provide services under these hospital contracts do so pursuant to independent contractor or employment agreements with us, or pursuant to arrangements with the
professional corporation that has a management agreement with us. We refer to all of these physicians as our affiliated physicians, and these physicians and other individuals as our healthcare
professionals.

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Hospital and Practice Support Contracts.As of December 31, 2007, EmCare provides services under 395 contracts.
Generally, the agreements with the hospitals are awarded on a competitive basis, and have an initial term of three years with one-year automatic renewals and termination by either party on
specified notice.

Our
contracts with hospitals provide for one of three payment models:



In
all cases, the hospitals are responsible for billing and collecting for non-physician-related services.

We
have established long-term relationships with some of the largest healthcare service providers. None of these customers represent revenue that amounts to 10% of our total
net revenue for the years ended December 31, 2007 and 2006, or fiscal year ended December 31, 2005. Our top ten hospital emergency department contracts represent $96.0 million, or
11%, of EmCare's net revenue for the year ended December 31, 2007. We have maintained our relationships with these customers for an average of 16 years.

Affiliated Physician Group Contracts.In most states, we contract directly with our hospital customers to provide physician
staffing and related management services. We, in turn, contract with a professional corporation that is wholly-owned by one or more physicians, which we refer to as an affiliated physician group, or
with independent contractor physicians. It is these physicians who provide the medical
professional services. We then provide comprehensive management services to the physicians. We typically provide professional liability and workers compensation coverage to our affiliated physicians.

Certain
states have laws that prohibit or restrict unlicensed persons or business entities from practicing medicine. The laws vary in scope and application from state to state. Some of
these states may prohibit us from contracting directly with hospitals or physicians to provide professional medical services. In those states, the affiliated physician groups contract with the
hospital, as well as all medical professionals. We provide management services to the affiliated physician groups.

Medical Professional Contracts.We contract with healthcare professionals as either independent contractors or employees to
provide services to our customers. The healthcare professionals generally are paid an hourly rate for each hour of coverage, a variable rate based upon productivity or other objective criteria, or a
combination of both a fixed hourly rate and a variable rate component. We typically arrange for professional liability and workers compensation coverage for our healthcare professionals.

The
contracts with healthcare professionals typically have one-year terms with automatic renewal clauses for additional one-year terms. The contracts can be
terminated with cause for various reasons, and usually contain provisions allowing for termination without cause by either party upon 90 days' notice. Agreements with physicians generally
contain a non-compete or non-solicitation provision and, in the case of medical directors, a non-compete provision. The enforceability of these provisions varies
from state to state.

Management Information Systems

We have invested in scalable information systems and proprietary software packages designed to allow us to grow efficiently and to deliver and implement our "best
practice" procedures nationally,

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while
retaining local and regional flexibility. We have developed and implemented several proprietary applications that we believe provide us with a competitive advantage in our operations.

Sales and Marketing

Contracts for outsourced emergency department and hospitalist services are obtained through strategic marketing programs and responses to requests for proposals.
EmCare's business development team includes Practice Development representatives located throughout the United States who are responsible for developing sales and acquisition opportunities for the
operating group in his or her territory. A significant portion of the compensation program for these sales professionals is commission-based, based on the profitability of the contracts they sell.
Leads are generated through regular marketing efforts by our business development group, our website, journal advertising and a lead referral program. Each Practice Development representative is
responsible for working with the regional chief executive officer to structure and provide customer proposals for new prospects in their respective regions.

Emergency
medicine practices vary among healthcare facilities. A healthcare facility request for proposal generally will include demographic information of the facility department, a
list of services to be performed, the length of the contract, the minimum qualifications of bidders, billing information, selection criteria and the format to be followed in the bid. Prior to
responding to a request for proposal, EmCare's senior management ensures that the proposal is consistent with certain financial parameters. Senior management evaluates all aspects of each proposal,
including financial projections, staffing model, resource requirements and competition, to determine how to best achieve our business objectives and the customer goals.

Competition

The market for outsourced emergency department staffing and related management services is highly fragmented, with more than 800 national, regional and local
providers handling an estimated 115 million patient visits in 2005. There are more than 4,800 hospitals in the United States with emergency departments, of which approximately 65% currently
outsource physician services. Of these hospitals that outsource, we believe approximately 50% contract with a local provider, 22% contract with regional provider and 28% contract with a national
provider.

Team
Health is our largest competitor and has the second largest share of the emergency department services market with an approximately 5% share. Other national providers of outsourced
emergency department services are Sterling Healthcare, National Emergency Service and the Schumacher Group.

Insurance

Professional Liability Program.For the period January 1, 2002 through December 31, 2007, our professional
liability insurance program provided claims made insurance coverage with limits of $1 million per loss event, with a $3 million annual per physician aggregate, for all medical
professionals whom we have agreed to cover under our professional liability insurance program. Our subsidiaries and affiliated corporate entities are provided with coverage of $1 million per
loss event and share a $10 million annual corporate aggregate.

For
the 2002 through 2007 calendar years, Columbia Casualty Company and Continental Casualty Company, collectively referred to as CCC, provided our professional liability insurance
coverage. The CCC policies have a retroactive date of January 1, 2001, thereby covering all claims occurring during the 2001 calendar year but reported in each of the 2002 through 2005 calendar
years. We also procured coverage on a regional basis under separate policies of insurance for the calendar years 2001 through 2007, and have comparable coverage in calendar year 2008.

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Captive Insurance Arrangement.On December 10, 2001, we formed EMCA Insurance Company, Ltd., or EMCA, as a
wholly owned subsidiary under the Companies Law of the Cayman Islands. EMCA reinsures CCC for all losses associated with the CCC insurance policies under the professional liability insurance program,
and provides collateral for the reinsurance arrangement through a trust agreement.

Workers Compensation Program.For the period September 1, 2002 through August 31, 2004, we procured workers
compensation insurance coverage for employees of EmCare and affiliated physician groups through Continental Casualty Company. Continental reinsures a portion of this workers compensation exposure, on
both a per claim and an aggregate basis, with EMCA.

From
September 1, 2004 through August 31, 2007, EmCare insured its workers compensation exposure through The Travelers Indemnity Company, which reinsured a portion of the
exposure with EMCA. From September 1, 2007, EmCare has insured, and continues to insure, its workers compensation exposure through AIG.

Employees and Independent Contractors

The following is the break down of our active affiliated physicians, independent contractors and employees by job classification as of December 31, 2007.

Job Classification

Full-time

Part-time

TotalPhysicians

1,436

2,080

3,516Physician assistants

209

239

448Nurse practitioners

114

149

263Non-clinical employees

1,183

234

1,417Total

2,942

2,702

5,644


We
believe that our relations with our employees and independent contractors are good. None of our physicians, physician assistants, nurse practitioners or non-clinical
employees are subject to any collective bargaining agreement.

We
offer our physicians substantial flexibility in terms of type of facility, scheduling of work hours, benefit packages, opportunities for relocation and career development. This
flexibility, combined with fewer administrative burdens, improves physician retention rates and stabilizes our contract base.

EMSC Competitive Strengths

We believe the following competitive strengths position our company to capitalize on the favorable trends occurring within the healthcare industry and the
emergency medical services markets.

Leading, Established Provider of Emergency Medical Services.We are a leading provider of emergency medical services in the
United States. We believe our track record of consistently meeting or exceeding our customers' service expectations, coupled with our ability to leverage our infrastructure and technology to drive
increased productivity and efficiency, have contributed to our ability to retain existing and win new contracts.

Significant Scale and Geographic Presence.We believe our significant scale and broad geographic presence provide a
competitive advantage over local and regional providers in most areas, including our cost efficiencies and broad program offerings, our ability to enter into national and regional contracts with
managed care organizations and insurance companies, and our ability to recruit and retain quality personnel.

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Long-Term Relationships with Existing Customers.We believe our long-term,
well-established relationships with communities and healthcare facilities enhance our ability to retain existing customers and win new contracts.

Strong Financial Performance.One of the key factors our potential customers evaluate is financial stability. We believe the
quality and breadth of our service offerings has allowed us to increase our net revenue at a faster rate than the market for emergency medical services. We believe our ability to demonstrate
consistently strong financial performance will continue to differentiate our company and provide a competitive advantage in winning new contracts and renewing existing contracts.

Focus on Risk Management.Our risk management initiatives are enhanced by the use of our professional liability claims
database and comprehensive claims management. We analyze this data to demonstrate
claim trends on a national, hospital, physician and procedure level, helping to manage and mitigate risk exposure. AMR's risk/safety program is aimed at reducing worker injuries through training and
improved equipment, and increasing vehicle safety through the use of technology.

Investment in Core Technologies.We utilize technology as a means to enhance the quality, reduce the cost of our service
offerings, more effectively manage risk and improve our profitability. AMR uses proprietary technology to improve chart documentation, determine transportation service levels and track response times
and other data for hospitals. EmCare uses proprietary physician recruitment software to improve recruitment efficiency and retention rates.

Business Strategy

Increase Revenue from Existing Customers.We believe our long track record of delivering excellent service and quality
patient care, as well as the breadth of our services, creates opportunities for us to increase revenue from our existing customer base. We have established strategies aimed at assisting communities
and facilities to manage their cost of emergency medical services.

Grow Our Customer Base.We believe we have a unique competency in the treatment, management and billing of episodic and
unscheduled care. We believe our long operating history, significant scope and scale and leading market position provide us with new and expanded opportunities to grow our customer base.

Pursue Select Acquisition Opportunities.The emergency medical services industry is highly fragmented, with only a few large
national providers, and presents opportunities for consolidation. We plan to pursue select acquisitions in our existing business segments, including acquisitions to enhance our presence in existing
markets and our entry into new geographic markets. We will also explore the acquisition of complementary businesses and seek opportunities to expand the scope of services in which we can leverage our
core competencies.

Utilize Technology to Differentiate Our Services and Improve Operating Efficiencies.We intend to continue to invest in
technologies that broaden our services in the marketplace, improve patient care, enhance our billing efficiencies and increase our profitability.

Continued Focus on Risk Management.We will continue to conduct aggressive risk management programs for loss prevention and
early intervention. We will continue to develop and utilize clinical "fail safes" and use technology in our ambulances to reduce vehicular incidents.

Regulatory Matters

As a participant in the healthcare industry, our operations and relationships with healthcare providers such as hospitals, other healthcare facilities and
healthcare professionals are subject to extensive and increasing regulation by numerous federal and state government entities as well as local

23

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government
agencies. Specifically, but without limitation, we are subject to the following laws and regulations.

Medicare, Medicaid and Other Government Reimbursement Programs

We derive a significant portion of our revenue from services rendered to beneficiaries of Medicare, Medicaid and other government-sponsored healthcare programs.
For fiscal 2007, we received approximately 25% of our net revenue from Medicare and 5% from Medicaid. To participate in these programs, we must comply with stringent and often complex enrollment and
reimbursement requirements from the federal and state governments. We are subject to governmental reviews and audits of our bills and claims for reimbursement. Retroactive adjustments to amounts
previously reimbursed from these programs can and do occur on a regular basis as a result of these reviews and audits. In addition, these programs are subject to statutory and regulatory changes,
administrative rulings, interpretations and determinations, all of which may materially increase or decrease the payments we receive for our services as well as affect the cost of providing services.
In recent years, Congress has consistently attempted to curb federal spending on such programs.

Reimbursement
to us typically is conditioned on our providing the correct procedure and diagnosis codes and properly documenting both the service itself and the medical necessity for the
service. Incorrect or incomplete documentation and billing information, or the incorrect selection of codes for the level of service provided, could result in non-payment for services
rendered or lead to allegations of billing fraud. Moreover, third party payors may disallow, in whole or in part, requests for reimbursement based on determinations that certain amounts are not
reimbursable, they were for services provided that were not medically necessary, there was a lack of sufficient supporting documentation, or for a number of other reasons. Retroactive adjustments,
recoupments or refund demands may change amounts realized from third party payors. Additional factors that could complicate our billing include:



Due
to the nature of our business and our participation in the Medicare and Medicaid reimbursement programs, we are involved from time to time in regulatory reviews, audits or
investigations by government agencies of matters such as compliance with billing regulations and rules. We may be required to repay these agencies if a finding is made that we were incorrectly
reimbursed, or we may lose eligibility for certain programs in the event of certain types of non-compliance. Delays and uncertainties in the reimbursement process adversely affect our
level of accounts receivable, increase the overall cost of collection, and may adversely affect our working capital and cause us to incur additional borrowing costs. Unfavorable resolutions of pending
or future regulatory reviews or investigations, either individually or in the aggregate, could have a material adverse effect on our business, financial condition and results of operations.

We
establish an allowance for discounts applicable to Medicare, Medicaid and other third party payors and for doubtful accounts based on credit risk applicable to certain types of
payors, historical trends, and other relevant information. We review our allowance for doubtful accounts on an ongoing basis and may increase or decrease such allowance from time to time, including in
those instances when we determine that the level of effort and cost of collection of certain accounts receivable is unacceptable.

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We
believe that regulatory trends in cost containment will continue. We cannot assure you that we will be able to offset reduced operating margins through cost reductions, increased
volume, the introduction of additional procedures or otherwise.

Ambulance Services Fee Schedule.In February 2002, the Health Care Financing Administration, now renamed the Centers for
Medicare and Medicaid Services, or CMS, issued the Medicare Ambulance Fee Schedule Final Rule, or Final Rule, that revised Medicare policy on the coverage of ambulance transport services, effective
April 1, 2002. The Final Rule was the result of a mandate under the Balanced Budget Act of 1997, or BBA, to establish a national fee schedule for payment of ambulance transport services that
would control increases in expenditures under Part B of the Medicare program,
establish definitions for ambulance transport services that link payments to the type of services furnished, consider appropriate regional and operational differences and consider adjustments to
account for inflation, among other provisions.

The
Final Rule provided for a five-year phase-in of a national fee schedule, beginning April 1, 2002. Prior to that date, Medicare used a charge-based
reimbursement system for ambulance transport services and reimbursed 80% of charges determined to be reasonable, subject to the limits fixed for the particular geographic area. The patient was
responsible for co-pay amounts, deductibles and the remaining balance of the transport cost, if we did not accept the assigned reimbursement, and Medicare required us to expend reasonable
efforts to collect the balance. In determining reasonable charges, Medicare considered and applied the lowest of various charge factors, including the actual charge, the customary charge, the
prevailing charge in the same locality, the amount of reimbursement for comparable services, and the inflation-indexed charge limit.

On
April 1, 2002, the Final Rule became effective. The Final Rule categorizes seven levels of ground ambulance services, ranging from basic life support to specialty care
transport, and two categories of air ambulance services. Ground providers are paid based on a base rate conversion factor multiplied by the number of relative value units assigned to each level of
transport, plus an additional amount for each mile of patient transport. The base rate conversion factor for services to Medicare patients is adjusted each year by the Consumer Price Index. Additional
adjustments to the base rate conversion factor are included to recognize differences in relative practice costs among geographic areas, and higher transportation costs that may be incurred by
ambulance providers in rural areas with low population density. The Final Rule requires ambulance providers to accept assignment on Medicare claims, which means a provider must accept Medicare's
allowed reimbursement rate as full payment. Medicare typically reimburses 80% of that rate and the remaining 20% is collectible from a secondary insurance or the patient. Originally, the Final Rule
called for a five-year phase-in period to allow providers time to adjust to the new payment rates. The national fee schedule was to be phased in at 20% increments each year,
with payments being made at 100% of the national fee schedule in 2006 and thereafter.

With
the passage of the Medicare Modernization Act, temporary modifications were made to the amounts payable under the ambulance fee schedule in order to mitigate decreases in
reimbursement in some regions caused by the Final Rule. The Medicare Modernization Act established regional fee schedules based on historic costs in each region. Effective July 1, 2004, in
those regions where the regional fee schedule exceeds the national fee schedule, the regional fee schedule is blended with the national fee schedule on a temporary basis, until 2010. In addition to
the regional fee schedule change, the Medicare Modernization Act included other provisions for additional reimbursement for ambulance transport services provided to Medicare patients. Among other
relief, the Medicare Modernization Act provided for a 1% increase in reimbursement for urban transports and a 2% increase for rural transports for the remainder of the original phase-in
period of the national ambulance fee schedule, through December 31, 2006.

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We
estimate that the impact of the ambulance service rate decreases under the national fee schedule, as modified by the provisions of the Medicare Modernization Act, resulted in an
increase in AMR's net revenue of approximately $16 million during calendar year 2005, a decrease in AMR's net revenue of approximately $17 million in 2006 and resulted in a decrease in
AMR's net revenue of approximately $7 million in 2007. Based upon the current Medicare transport mix, we expect a further increase in our net revenue totaling approximately $5 million
for the period 2008 through 2010. We cannot predict whether Congress may make further refinements and technical corrections to the law or pass a new cost containment statute in a manner and in a form
that could adversely impact our business.

Local Ambulance Rate Regulation.State or local government regulations or administrative policies regulate rate structures in
some states in which we provide ambulance transport services. For example, in certain service areas in which we are the exclusive provider of ambulance transport services, the community sets the rates
for emergency ambulance services pursuant to an ordinance or master contract and may also establish the rates for general ambulance services that we are permitted to charge. We may be unable to
receive ambulance service rate increases on a timely basis where rates are regulated or to establish or maintain satisfactory rate structures where rates are not regulated.

Medicare Physician Fee Schedule.Medicare pays for all physician services based upon a national fee schedule, or Fee
Schedule, which contains a list of uniform rates. The payment rates under the Fee Schedule are determined based on: (1) national uniform relative value units for the services provided,
(2) a geographic adjustment factor and (3) a conversion factor. Payment rates under the Fee Schedule are updated annually. The initial element in each year's update calculation is the
Medicare Economic Index, or MEI, which is a government index of practice cost inflation. The update is then adjusted up or down from the MEI based on a target-setting formula system called the
Sustainable Growth Rate, or SGR. The SGR is a target rate of growth in spending for physician services which is intended to control the growth of Medicare expenditures for physicians' services. The
Fee Schedule update is adjusted to reflect the comparison of actual expenditures to target expenditures. Because one of the factors for calculating the SGR system is linked to the U.S. gross domestic
product, the SGR formula may result in a negative payment update if growth in Medicare beneficiaries' use of services exceeds GDP growth. Since 2002, the SGR formula has resulted in negative payment
updates under the Fee Schedule which required Congress to take legislative action to reverse the scheduled payment cuts. In late 2007, Congress passed legislation to prevent a scheduled 10.1%
reduction in 2008 Medicare physician payments. The legislation, which expires June 30, 2008, provides for a 0.5% increase in the physician Fee Schedule and a decrease in the percentage of work
relative value units used in determining physician payment rates. We estimate the net impact of the legislation to be a 1% reduction in Medicare physician payments during the first six months
of 2008. Absent additional legislative action by Congress, the scheduled 10.1% reduction in Medicare physician payments will be effective July 1, 2008. The 2006 Medicare Trustees report
predicts a total of nearly 40 percent in cuts of Medicare physician payment rates by 2016. Unless Congress takes additional action in the future to modify or reform the mechanism by which the
Fee Schedule payment rates are updated, significant reductions in Medicare reimbursement will continue to occur annually, and these reductions could have a material adverse effect on our business,
financial condition and results of operations.

Medicare Reassignment.The Medicare program prohibits the reassignment of Medicare payments due to a physician or other
healthcare provider to any other person or entity unless the billing arrangement between that physician or other healthcare provider and the other person or entity falls within an enumerated exception
to the Medicare reassignment prohibition. Historically, there was no exception that allowed us to receive directly Medicare payments related to the services of independent contractor physicians.
However, the Medicare Modernization Act amended the Medicare reassignment statute as of December 8, 2003 and now permits our independent contractor physicians to reassign their Medicare
receivables to us under certain circumstances. In 2004, CMS promulgated regulations

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implementing
this statutory change. The regulations impose two additional program integrity safeguard requirements on reassignments made under the independent contractor exception. These require that
both the entity receiving payment and the physician be jointly and severally responsible for any Medicare overpayment to that entity; and the physician have unrestricted access to claims submitted by
an entity for services provided by the physician. We have taken steps to ensure all reassignments by independent contractor physicians comply with these regulatory requirements.

Rules Applicable to Midlevel Practitioners.EmCare utilizes physician assistants and nurse practitioners, sometimes referred
to collectively as "midlevel practitioners," to provide care under the supervision of our physicians. State and federal laws require that such supervision be performed and documented using specific
procedures. For example, in some states some or all of the midlevel practitioner's chart entries must be countersigned. Under applicable Medicare rules, in certain cases, a midlevel practitioner's
services are reimbursed at a rate equal to 85% of the physician fee schedule amount. However, when a midlevel practitioner assists a physician who is directly and personally involved in the patient's
care, we often bill for the services of the physician at the full physician fee schedule rates and do not bill separately for the midlevel practitioner's services. We believe our billing and
documentation practices related to our use of midlevel practitioners comply with applicable state and federal laws, but we cannot assure you that enforcement authorities will not find that our
practices violate such laws.

Ambulance Rates Payable by Medicare HMOs.One of the changes made by ambulance fee schedule Final Rule was to require
ambulance providers to "accept assignment" from Medicare and Medicare HMOs. Medicare HMOs are private insurance companies which operate managed care plans that enroll Medicare beneficiaries who elect
to enroll in a plan in lieu of regular Medicare coverage. When a provider accepts assignment, it agrees to accept the rate established by Medicare as payment in full for services covered by Medicare
or the Medicare HMO and to write off the balance of its charges. Prior to the implementation of the Final Rule, ambulance providers were not required to accept assignment and could obtain payment from
Medicare patients or Medicare HMOs for the provider's full charges, which typically are higher than the Medicare rate. When the requirement to accept assignment became effective on April 1,
2002, many Medicare HMOs continued to pay ambulance providers their full charges, even though they could have paid them the Medicare rate. Many Medicare HMOs subsequently have taken the position that
the amount paid to such providers in excess of the Medicare rate constituted an overpayment that must be refunded by the provider. We have received such refund demands from some Medicare HMOs and, in
order to minimize litigation costs, have agreed to partial repayment of amounts received from the plans in excess of the Medicare rate. We have no reason to believe that additional HMOs will make such
demands, but we cannot assure you that there will be no further demands.

The SNF Prospective Payment System.Under the Medicare prospective payment system, or PPS, applicable to skilled nursing
facilities, or SNFs, the SNFs are financially responsible for some ancillary services, including certain ambulance transports, or PPS transports, rendered to certain of their Medicare patients.
Ambulance companies must bill the SNF, rather than Medicare, for PPS transports, but may bill Medicare for other covered transports provided to the SNF's Medicare patients. Ambulance companies are
responsible for obtaining sufficient information from the SNF to determine which transports are PPS transports and which ones may be billed to Medicare. The Office of Inspector General of the
Department of Health and Human Services, or the OIG, has issued two industry-wide audit reports indicating that, in many cases, SNFs do not provide, or ambulance companies and other
ancillary service providers do not obtain, sufficient information to make this determination accurately. As a result, the OIG asserts that some PPS transports that should have been billed by ambulance
providers to SNFs have been improperly billed to Medicare. The OIG has recommended that Medicare recoup the amounts paid to ancillary service providers, including ambulance companies, for such
services. Although we believe AMR currently has procedures in place to correctly identify and bill for

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PPS
transports, we cannot assure you that AMR will not be subject to such recoupments and other possible penalties.

Paramedic Intercepts.Medicare regulations permit ambulance transport providers to subcontract with other organizations for
paramedic services. Generally, only the transport provider may bill Medicare, and the paramedic services subcontractor must receive any payment to which it is entitled from that provider. Based on
these rules, in some jurisdictions we have established "paramedic intercept" arrangements in which we may provide paramedic services to a municipal or volunteer transport provider. Although we believe
AMR currently has procedures in place to assure that we do not bill Medicare directly for paramedic intercept services we provide, we cannot assure you that enforcement agencies will not find that we
have failed to comply with these requirements.

Patient Signatures.Medicare regulations require that providers obtain the signature of the patient or, if the patient is
unable to provide a signature, the signature of a representative as defined in the regulations, prior to submitting a claim for payment from Medicare. Historically, until January 1, 2008, an
exception existed for situations where it is not reasonably possible to obtain a patient or representative signature, provided that the reason for the exception is clearly documented. This exception
has historically been interpreted as applying to both emergency and non-emergency transports. Effective January 1, 2008, these regulations have been revised and reinterpreted by CMS to limit
this exception to emergency transports, provided the ambulance company obtains the signature of a representative of the receiving facility, or other specified documentation from that facility as proof
of transport and maintains certain other documentation. If we are unable to obtain the signature of a Medicare non-emergency patient or a qualified representative, we may not bill Medicare for the
transport and must seek payment directly from the patient. These revised requirements will exacerbate the difficulty ambulance providers have historically had in complying with the patient signature
requirements. These changes could adversely impact our cash flow because of the delays that may occur in obtaining signatures from non-emergency patients or their representatives, or our inability to
bill Medicare when we are unable to do so. Further, although we believe AMR currently has procedures in place to assure that these signature requirements are met, we cannot assure you that enforcement
agencies will not find that we have failed to comply with these requirements.

Physician Certification Statements.Under applicable Medicare rules, ambulance providers are required to obtain a
certification of medical necessity from the ordering physician in order to bill Medicare for repetitive non-emergency transports provided to patients with chronic conditions, such as
end-stage renal disease. For certain other non-emergency transports, ambulance providers are required to attempt to obtain a certification of medical necessity from a physician
or certain other practitioners. In the event the provider is not able to obtain such certification within 21 days, it may submit a claim for the transport if it can document reasonable attempts
to obtain the certification. Acceptable documentation includes any U.S. postal document (e.g., signed return receipt or Postal Service Proof of Service Form) showing that the ordering
practitioner was sent a request for the certification. Although we believe AMR currently has procedures in place to assure we are in compliance with these requirements, we cannot assure you that
enforcement agencies will not find that we have failed to comply.

Coordination of Benefits Rules.When our services are covered by multiple third party payors, such as a primary and a
secondary payor, financial responsibility must be allocated among the multiple payors in a process known as "coordination of benefits," or COB. The rules governing COB are complex, particularly when
one of the payors is Medicare or another government program. Under these rules, in some cases Medicare or other government payors can be billed as a "secondary payor" only after recourse to a primary
payor (e.g., a liability insurer) has been exhausted. In some instances, multiple payors may reimburse us an amount which, in the aggregate, exceeds the amount to which we are entitled. In such
cases, we are obligated to process a refund. If we improperly bill Medicare or

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other
government payors as the primary payor when that program should be billed as the secondary payor, or if we fail to process a refund when required, we may be subject to civil or criminal
penalties. Although we believe we currently have procedures in place to assure that we comply with applicable COB rules, and that we process refunds when we receive overpayments, we cannot assure you
that payors or enforcement agencies will not find that we have violated these requirements.

Consequences of Noncompliance.In the event any of our billing and collection practices, including but not limited to those
described above, violate applicable laws such as those described below, we could be subject to refund demands and recoupments. If our violations are deemed to be willful, knowing or reckless, we may
be subject to civil and criminal penalties under the False Claims Act or other statutes, including exclusion from federal and state healthcare programs. To the extent that the complexity associated
with billing for our services causes delays in our cash collections, we assume the financial risk of increased carrying costs associated with the aging of our accounts receivable as well as increased
potential for bad debts which could have a material adverse effect on our revenue, provision for uncompensated care and cash flow.

Federal False Claims Act

Both federal and state government agencies have continued civil and criminal enforcement efforts as part of numerous ongoing investigations of healthcare
companies, and their executives and managers. Although there are a number of civil and criminal statutes that can be applied to healthcare providers, a significant number of these investigations
involve the federal False Claims Act. These investigations can be initiated not only by the government but also by a private party asserting direct knowledge of fraud. These "qui tam" whistleblower
lawsuits may be initiated against any person or entity alleging such person or entity has knowingly or recklessly presented, or caused to be presented, a false or fraudulent request for payment from
the federal government, or has made a false statement or used a false record to get a claim approved. Penalties for False Claims Act violations include fines ranging from $5,500 to $11,000 for each
false claim, plus up to three times the amount of damages sustained by the federal government. A False Claims Act violation may provide the basis for exclusion from the federally-funded healthcare
programs. In addition, some states have adopted similar insurance fraud, whistleblower and false claims provisions.

The
government and some courts have taken the position that claims presented in violation of the various statutes, including the federal Anti-Kickback Statute and the Stark
Law, described below, can be considered a violation of the federal False Claims Act based on the contention that a provider impliedly certifies compliance with all applicable laws, regulations and
other rules when submitting claims for reimbursement.

Federal Anti-Kickback Statute

We are subject to the federal Anti-Kickback Statute. The Anti-Kickback Statute is broadly worded and prohibits the knowing and willful
offer, payment, solicitation or receipt of any form of remuneration in return for, or to induce, (1) the referral of a person covered by Medicare, Medicaid or other governmental programs,
(2) the furnishing or arranging for the furnishing of items or services reimbursable under Medicare, Medicaid or other governmental programs or (3) the purchasing, leasing or ordering or
arranging or recommending purchasing, leasing or ordering of any item or service reimbursable under Medicare, Medicaid or other governmental programs. Certain federal courts have held that the
Anti-Kickback Statute can be violated if "one purpose" of a payment is to induce referrals. Violations of the Anti-Kickback Statute can result in exclusion from Medicare,
Medicaid or other governmental programs as well as civil and criminal penalties, including fines of up to $50,000 per violation and three times the amount of the unlawful remuneration. Imposition of
any of these remedies could have a material adverse effect on our business, financial condition and results of operations. In addition to a few statutory exceptions, the OIG has published safe harbor
regulations

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that
outline categories of activities that are deemed protected from prosecution under the Anti-Kickback Statute provided all applicable criteria are met. The failure of a financial
relationship to meet all of the applicable safe harbor criteria does not necessarily mean that the particular arrangement violates the Anti-Kickback Statute. In order to obtain additional
clarification on arrangements that may not be subject to a statutory exception or may not satisfy the criteria of a safe harbor, Congress established a process under the Health Insurance Portability
and Accountability Act of 1996 in which parties can seek an advisory opinion from the OIG.

We
and others in the healthcare community have taken advantage of the advisory opinion process, and a number of advisory opinions have addressed issues that pertain to our various
operations, such as discounted ambulance services being provided to skilled nursing facilities, patient co-payment responsibilities, compensation methodologies under a management services
arrangement, and ambulance restocking arrangements. In a number of these advisory opinions the government concluded that such arrangements could be problematic if the requisite intent were present.
Although advisory opinions are binding only on HHS and the requesting party or parties, when new advisory opinions are issued, regardless of the requestor, we review them and their application to our
operations as part of our ongoing corporate compliance program and endeavor to make appropriate changes where we perceive the need to do so. See "Corporate Compliance Program and
Corporate Integrity Obligations."

Health
facilities such as hospitals and nursing homes refer two categories of ambulance transports to us and other ambulance companies: (1) transports for which the facility must
pay the ambulance company, and (2) transports which the ambulance company can bill directly to Medicare or other public or private payors. In Advisory Opinion 99-2, which we
requested, the OIG addressed the issue of whether substantial contractual discounts provided to nursing homes on the transports for which the nursing homes are financially responsible may violate the
Anti-Kickback Statute when the ambulance company also receives referrals of Medicare and other government-funded transports.
The OIG opined that such discounts implicate the Anti-Kickback Statute if even one purpose of the discounts is to induce the referral of the transports paid for by Medicare and other
federal programs. The OIG further indicated that a violation may exist even if there is no contractual obligation on the part of the facility to refer federally funded patients, and even if similar
discounts are provided by other ambulance companies in the same marketplace. Following our receipt of this Advisory Opinion in March of 1999, we took steps to bring our contracts with health
facilities into compliance with the OIG's views. In 2006, we entered into a settlement with the U.S. Department of Justice and a Corporate Integrity Agreement to settle allegations that certain of our
hospital and nursing home contracts in effect in Texas in periods prior to 2002 contained discounts in violation of the federal Anti-Kickback Statute. See Item 3, "Legal
Proceedings".

The
OIG has also addressed potential violations of the Anti-Kickback Statute (as well as other risk areas) in its Compliance Program Guidance for Ambulance Suppliers. In
addition to discount arrangements with health facilities, the OIG notes that arrangements between local governmental agencies that control 911 patient referrals and ambulance companies which receive
such referrals may violate the Anti-Kickback Statute if the ambulance companies provide inappropriate remuneration in exchange for such referrals. Although we believe we have structured
our arrangements with local agencies in a manner which complies with the Anti-Kickback Statute, we cannot assure you that enforcement agencies will not find that some of those arrangements
violate that statute.

Fee-Splitting; Corporate Practice of Medicine

EmCare employs or contracts with physicians or physician-owned professional corporations to deliver services to our hospital customers and their patients. We
frequently enter into management services contracts with these physicians and professional corporations pursuant to which we provide them with billing, scheduling and a wide range of other services,
and they pay us for those services out

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of
the fees they collect from patients and third-party payors. These activities are subject to various state laws that prohibit the practice of medicine by corporations and are intended to prevent
unlicensed persons from interfering with or influencing the physician's professional judgment and the sharing of professional services income with nonprofessional or business interests. Activities
other than those directly related to the delivery of healthcare may be considered an element of the practice of medicine in many states. Under the corporate practice of medicine restrictions of
certain states, decisions and activities such as scheduling, contracting, setting rates and the hiring and management of non-clinical personnel may implicate the restrictions on corporate
practice of medicine. In such states, we maintain long-term management contracts with affiliated physician groups, which employ or contract with physicians to provide physician services.
We believe that we are in material compliance with applicable state laws relating to the corporate practice of medicine and fee-splitting. However, regulatory authorities or other parties,
including our affiliated physicians, may assert that, despite these arrangements, we are engaged in the corporate practice of medicine or that our contractual arrangements with affiliated physician
groups constitute unlawful fee-splitting. In this event, we could be subject to adverse judicial or administrative interpretations, to civil or criminal penalties, our contracts could be
found legally invalid and unenforceable or we could be required to restructure our contractual arrangements with our affiliated physician groups.

Federal Stark Law

We are also subject to a provision of the Social Security Act, commonly known as the "Stark Law." Where applicable, this law prohibits a physician from referring
Medicare patients to an entity providing "designated health services" if the physician or a member of such physician's immediate family has a "financial relationship" with the entity, unless an
exception applies. The penalties for violating the Stark Law include the denial of payment for services ordered in violation of the statute, mandatory refunds of any sums paid for such services, civil
penalties of up to $15,000 for each violation and twice the dollar value of each such service and possible exclusion from future participation in the federally-funded healthcare programs. A person who
engages in a scheme to circumvent the Stark Law's prohibitions may be fined up to $100,000 for each applicable arrangement or scheme. Although we believe that we have structured our agreements with
physicians so as to not violate the Stark Law and related regulations, a determination of liability under the Stark Law could have an adverse effect on our business, financial condition and results of
operations.

Other Federal Healthcare Fraud and Abuse Laws

We are also subject to other federal healthcare fraud and abuse laws. Under the Health Insurance Portability and Accountability Act of 1996, there are two
additional federal crimes that could have an impact on our business: "Healthcare Fraud" and "False Statements Relating to Healthcare Matters." The Healthcare Fraud statute prohibits knowingly and
recklessly executing a scheme or artifice to defraud any healthcare benefit program, including private payors. A violation of this statute is a felony and may result in fines, imprisonment and/or
exclusion from government-sponsored programs. The False Statements Relating to Healthcare Matters statute prohibits knowingly and willfully falsifying, concealing or covering up a material fact by any
trick, scheme or device or making any materially false, fictitious or fraudulent statement in connection with the delivery of or payment for healthcare benefits, items or services. A violation of this
statute is a felony and may result in fines and/or imprisonment. This statute could be used by the government to assert criminal liability if a healthcare provider knowingly fails to refund an
overpayment.

Another
statute, commonly referred to as the Civil Monetary Penalties Law, imposes civil administrative sanctions for, among other violations, inappropriate billing of services to
federally funded healthcare programs, inappropriately reducing hospital care lengths of stay for such patients, and employing or contracting with individuals or entities who are excluded from
participation in federally funded healthcare programs.

Although
we intend and endeavor to conduct our business in compliance with all applicable fraud and abuse laws, we cannot assure you that our arrangements or business practices will not
be subject to government scrutiny or be found to violate applicable fraud and abuse laws.

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Administrative Simplification Provisions of the Health Insurance Portability and Accountability Act of 1996

The Administrative Simplification Provisions of the Health Insurance Portability and Accountability Act of 1996, or HIPAA, required the Department of Health and
Human Services, or HHS, to adopt standards to protect the privacy and security of health-related information. All healthcare providers were required to be compliant with the new federal privacy
requirements enacted by HHS no later than April 14, 2003. We believe we have taken reasonable measures to comply with these requirements.

The
HIPAA privacy requirements contain detailed requirements regarding the use and disclosure of individually identifiable health information. Improper use or disclosure of identifiable
health information covered by the HIPAA privacy regulations can result in the following civil and criminal penalties: (1) civil money penalties for HIPAA privacy violations are $100 per
incident, to a maximum of $25,000, per person, per year, per standard violated; (2) a person who knowingly and in violation of the HIPAA privacy regulations obtains individually identifiable
health information or discloses such information to another person may be fined up to $50,000 and imprisoned up to one year, or both; (3) if the offense is committed under false pretenses, the
fine may be up to $100,000 and imprisonment for up to five years; and (4) if the offense is done with the intent to sell, transfer or use individually identifiable health information for
commercial advantage, personal gain or malicious harm, the fine may be up to $250,000 and imprisonment for up to ten years.

In
addition to enacting the foregoing privacy requirements, HHS issued a final rule creating security requirements for healthcare providers and other covered entities on
February 20, 2003. The final security rule required covered entities to meet specified standards by April 25, 2005. The security standards contained in the final rule do not require the
use of specific technologies (e.g., no specific hardware or software is required), but instead require healthcare providers and other covered entities to comply with certain minimum security
procedures in order to protect data integrity, confidentiality and availability. We believe we have taken reasonable steps to comply with these standards.

HIPAA
also required HHS to adopt national standards establishing electronic transaction standards that all healthcare providers must use when submitting or receiving certain healthcare
transactions electronically. Although these standards were to become effective October 2002, Congress extended the compliance deadline until October 2003 for organizations, such as ours, that
submitted a request for an extension. We believe we have taken reasonable steps to comply with these standards.

Fair Debt Collection Practices Act

Some of our operations may be subject to compliance with certain provisions of the Fair Debt Collection Practices Act and comparable statutes in many states.
Under the Fair Debt Collection Practices Act, a third party collection company is restricted in the methods it uses to contact consumer debtors and elicit payments with respect to placed accounts.
Requirements under state collection agency statutes vary, with most requiring compliance similar to that required under the Fair Debt Collection Practices Act. We believe we are in substantial
compliance with the Fair Debt Collection Practices Act and comparable state statutes where applicable.

State Fraud and Abuse Provisions

We are subject to state fraud and abuse statutes and regulations. Most of the states in which we operate have adopted a form of anti-kickback law,
almost all of those states also have adopted self-referral laws and some have adopted separate false claims or insurance fraud provisions. The scope of these laws and the interpretations
of them vary from state to state and are enforced by state courts and regulatory authorities, each with broad discretion. Generally, state laws cover all healthcare services and not just those covered
under a federally-funded healthcare program. A determination of liability under such laws could result in fines and penalties and restrictions on our ability to operate in these jurisdictions.

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Although
we intend and endeavor to conduct our business in compliance with all applicable fraud and abuse laws, we cannot assure you that our arrangements or business practices will not
be subject to government scrutiny or be found to violate applicable fraud and abuse laws.

Licensing, Certification, Accreditation and Related Laws and Guidelines

In certain jurisdictions, changes in our ownership structure require pre- or post-notification to governmental licensing and certification
agencies. Relevant laws and regulations may also require reapplication and approval to maintain or renew our operating authorities or require formal application and approval to continue providing
services under certain government contracts. For example, in connection with our acquisition of AMR from Laidlaw, two of our
subsidiaries were required to apply for state and local ambulance operating authority in New York. See Item 1A, "Risk FactorsRisk Factors Related to Healthcare
RegulationChanges in our ownership structure and operations require us to comply with numerous notification and reapplication requirements in order to maintain our licensure,
certification or other authority to operate, and failure to do so, or an allegation that we have failed to do so, can result in payment delays, forfeiture of payment or civil and criminal penalties."

We
and our affiliated physicians are subject to various federal, state and local licensing and certification laws and regulations and accreditation standards and other laws, relating to,
among other things, the adequacy of medical care, equipment, personnel and operating policies and procedures. We are also subject to periodic inspection by governmental and other authorities to assure
continued compliance with the various standards necessary for licensing and accreditations. Failure to comply with these laws and regulations could result in our services being found to be non
reimbursable or prior payments being subject to recoupments, and can give rise to civil or criminal penalties. We have taken steps we believe were required to retain or obtain all requisite licensure
and operating authorities. While we have made reasonable efforts to substantially comply with federal, state and local licensing and certification laws and regulations and standards as we interpret
them, we cannot assure you that agencies that administer these programs will not find that we have failed to comply in some material respects.

Because
we perform services at hospitals and other types of healthcare facilities, we and our affiliated physicians may be subject to laws which are applicable to those entities. For
example, our operations are impacted by the Emergency Medical Treatment and Active Labor Act of 1986, which prohibits "patient dumping" by requiring hospitals and hospital emergency departments and
others to assess and stabilize any patient presenting to the hospital's emergency department or urgent care center requesting care for an emergency medical condition, regardless of the patient's
ability to pay. Many states in which we operate have similar state law provisions concerning patient dumping. Violations of the Emergency Medical Treatment and Active Labor Act of 1986 can result in
civil penalties and exclusion of the offending physician from the Medicare and Medicaid programs.

In
addition to the Emergency Medical Treatment and Active Labor Act of 1986 and its state law equivalents, significant aspects of our operations are affected by state and federal
statutes and regulations governing workplace health and safety, dispensing of controlled substances and the disposal of medical waste. Changes in ethical guidelines and operating standards of
professional and trade associations and private accreditation commissions such as the American Medical Association and the Joint Commission on Accreditation of Healthcare Organizations may also affect
our operations. We believe our operations as currently conducted are in substantial compliance with these laws and guidelines.

EmCare's
professional liability insurance program, under which insurance is provided for most of our affiliated medical professionals and professional and corporate entities, is
reinsured through our wholly-owned subsidiary, EMCA Insurance Company, Ltd. The activities associated with the business of insurance, and the companies involved in such activities, are closely
regulated. Failure to comply with applicable laws and regulations can result in civil and criminal fines and penalties and loss of licensure.

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While
we have made reasonable efforts to substantially comply with these laws and regulations, and utilize licensed insurance professionals where necessary or appropriate, we cannot
assure you that we will not be found to have violated these laws and regulations in some material respects.

Antitrust Laws

Antitrust laws such as the Sherman Act and state counterparts prohibit anticompetitive conduct by separate competitors, such as price fixing or the division of
markets. Our physician contracts include contracts with individual physicians and with physicians organized as separate legal professional entities (e.g., professional medical corporations).
Antitrust laws may deem each such physician/entity to be separate, both from EmCare and from each other and, accordingly, each such physician/practice is subject to antitrust laws that prohibit
anti-competitive conduct between or among separate legal entities or individuals. Although we believe we have structured our physician contracts to substantially comply with these laws, we
cannot assure you that antitrust regulatory agencies or a court would not find us to be non-compliant.

Corporate Compliance Program and Corporate Integrity Obligations

We have developed a corporate compliance program in an effort to monitor compliance with federal and state laws and regulations applicable to healthcare entities,
to ensure that we maintain high standards of conduct in the operation of our business and to implement policies and procedures so that employees act in compliance with all applicable laws, regulations
and Company policies. Our program also attempts to monitor compliance with our Corporate Compliance Plan, which details our standards for: (1) business ethics, (2) compliance with
applicable federal, state and local laws, and (3) business conduct. We have an Ethics and Compliance Department whose focus is to prevent, detect and mitigate regulatory risks. We attempt to
accomplish this mission through:



The
OIG has issued a series of Compliance Program Guidance documents in which the OIG has set out the elements of an effective compliance program. We believe our compliance program has
been structured appropriately in light of this guidance. The primary compliance program components recommended by the OIG, all of which we have attempted to implement, include:



Our
corporate compliance program is based on the overall goal of promoting a culture that encourages employees to conduct activities with integrity, dignity and care for those we serve,
and in compliance with all applicable laws and policies. Notwithstanding the foregoing, we audit compliance with our compliance program on a sample basis. Although such an approach reflects a
reasonable and

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accepted
approach in the industry, we cannot assure you that our program will detect and rectify all compliance issues in all markets and for all time periods.

As
do other healthcare companies which operate effective compliance programs, from time to time we identify practices that may have resulted in Medicare or Medicaid overpayments or other
regulatory issues. For example, we have previously identified situations in which we may have inadvertently utilized incorrect billing codes for some of the services we have billed to government
programs such as Medicare or Medicaid, or billed for services which may not meet medical necessity guidelines. In such cases, if appropriate, it is our practice to disclose the issue to the affected
government programs and to refund any resulting overpayments. The government usually accepts such disclosures and repayments without taking further enforcement action, and we generally expect that to
be the case with respect to our past and future disclosures and repayments. However, it is possible that such disclosures or repayments will result in allegations by the government that we have
violated the False Claims Act or other laws, leading to investigations and possibly civil or criminal enforcement actions.

When
the United States government settles a case involving allegations of billing misconduct with a healthcare provider, it typically requires the provider to enter into a Corporate
Integrity Agreement, or CIA, with the OIG for a set period of years. As a condition to settlement of government investigations, certain of our operations are subject to two separate CIAs with the OIG
which, combined, cover the period July 2004 through September 2011. As part of these CIAs, AMR is required to establish and maintain a compliance program that includes the following elements:
(1) a compliance officer and committee, (2) written standards including a code of conduct and policies and procedures, (3) general and specific training and education,
(4) claims review by an independent review organization, (5) disclosure program for reporting of compliance issues or questions, (6) screening and removal processes for ineligible
persons, (7) notification of government investigations or legal proceedings, (8) establishment of safeguards applicable to our contracting processes and (9) reporting of
overpayments and other "reportable events." In addition to these CIAs, one of our other operations recently completed the term of a three year CIA.

If
we fail or if we are accused of failing to comply with the terms of our existing CIAs, we may be subject to additional litigation or other government actions, including being excluded
from participating in the Medicare program and other federal healthcare programs. If we enter into any settlements with the U.S. government in the future we may be required to enter into additional
CIAs.

See
Item 1A, "Risk FactorsRisk Factors Related to Healthcare Regulation" for additional information related to regulatory matters.

Internet Website

Our website address iswww.emsc.net. Under the "Investor Relations" heading on our website we make available, free
of charge, our annual reports on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K, registration statements, proxy
statements, and amendments to those reports filed or furnished pursuant to Section 13(a) or 15(d) of the Securities and Exchange Act of 1934 ("Exchange Act") as soon as reasonably practicable
after such forms are electronically filed with or furnished to the SEC. The SEC maintains an internet website, www.sec.gov, that contains reports, proxy and information statements, and other
information regarding issuers that file electronically with the SEC. Copies of materials that we file with the SEC can also be obtained at the SEC's Public Reference Room at 100 F Street, N.E.,
Washington, D.C. 20549. Information on the operation of the SEC's Public Reference Room can be obtained by calling the SEC at 1-800-SEC-0330.

Copies
of our key corporate governance documents, code of ethics, and charters of our audit, compensation, compliance, and corporate governance and nominating committees are also
available on our websitewww.emsc.netunder the headings "Corporate Governance" and "Code of Business Conduct and Ethics."

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The
website addresses for our business segments arewww.amr.netandwww.emcare.com.

Information
contained on these websites is not part of this Annual Report on Form 10-K and is not incorporated in this Report by reference.

ITEM 1A.    RISK FACTORS

You should carefully consider the factors described below, in addition to the other information set forth in this Annual Report, when evaluating us and our
business. Additional risks and uncertainties not presently known to us or that we currently believe to be immaterial may also materially and adversely affect our business operations. Any of the
following risks could materially adversely affect our business, financial condition or results of operations.

Risk Factors Related to our Capital Structure

The interests of our controlling stockholders may conflict with interests of other stockholders.

Onex Partners LP and other entities affiliated with Onex Corporation, which we refer to together as the Onex entities, own all of our outstanding LP
exchangeable units, which are exchangeable at any time, at the option of the holder, for our class B common stock. Our class A common stock has one vote per share, while our
class B common stock has ten votes per share (reducing to one vote per share under certain limited circumstances), on all matters to be voted on by our stockholders. Prior to the exchange for
class B common stock, the holders of the LP exchangeable units will be able to exercise the same voting rights with respect to EMSC as they would have after the exchange through a share
of class B special voting stock. As a result, the Onex entities control approximately 97% of our combined voting power. Accordingly, the Onex entities exercise a controlling influence over our
business and affairs and have the power to determine all matters submitted to a vote of our stockholders, including the election of directors, the removal of directors, and approval of significant
corporate transactions such as amendments to our certificate of incorporation, mergers and the sale of all or substantially all of our assets. The Onex entities could cause corporate actions to be
taken even if the interests of these entities conflict with the interests of our other stockholders. This concentration of voting power could have the effect of deterring or preventing a change in
control of EMSC that might otherwise be beneficial to our stockholders. Gerald W. Schwartz, the Chairman, President and Chief Executive Officer of Onex Corporation, owns shares representing a majority
of the voting rights of the shares of Onex Corporation.

Onex has the voting power to elect our entire board of directors and to remove any director or our entire board without cause.

Although our current board includes "independent directors", so long as the Onex entities control more than 50% of our combined voting power we are exempt from
the NYSE rule that requires that a board be comprised of a majority of "independent directors". Onex may have a controlling influence over our board, as Onex has sufficient voting power to elect the
entire board, and our certificate of incorporation permits stockholders to remove directors at any time with or without cause.

As a holding company, our only material asset is our equity interest in EMS LP and our only source of revenue is distributions from
EMS LP. Because the Onex entities have the voting power to control our board of directors, they could influence us, as the general partner of EMS LP, to take action at the level of
EMS LP that would benefit the Onex entities and conflict with the interest of our class A stockholders.

We are a holding company, and we have no material assets other than our direct ownership of a 22.8% equity interest in EMS LP. EMS LP is our only
source of cash flow from operations. The Onex entities hold their equity interest in us through LP exchangeable units of EMS LP. As our controlling stockholder, Onex could limit
distributions to us from EMS LP, and cause us to amend the EMS LP

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partnership
agreement in a manner that would be beneficial to the Onex entities, as limited partners of EMS LP, and detrimental to our class A stockholders.

Any
decrease in our distributions from EMS LP would have a negative effect on our cash flow. In order to minimize this conflict, the EMS LP partnership agreement requires
that the partnership reimburse us for all of our expenses, including all employee costs and the expenses we incur as a public company, and provides further that no distributions may be made to the
Onex entities, as the holders of LP exchangeable units, unless we pay an economically equivalent dividend to all holders of our common stock.

The
EMS LP partnership agreement provides that amendments to that agreement may only be proposed and authorized by us, as the general partner. The Onex entities could seek to
influence our board's action with respect to any amendment and we, as the general partner of EMS LP, owe a fiduciary duty to the limited partners of the partnership. Our board also owes a
fiduciary duty to our common stockholders. Because of the inherent conflict of interest we face between our fiduciary duty to our stockholders, including our class A stockholders, and the Onex
entities, as limited partners in EMS LP, the EMS LP partnership agreement provides that, if there is any conflict of interest of the limited partners and our common stockholders, our
board may, in the exercise of its business judgment, cause us to act in the best interests of our stockholders.

We are party to a management agreement with an affiliate of Onex which permits us to increase substantially the fee we pay to that affiliate.

The management agreement between our subsidiaries, AMR and EmCare, and an Onex affiliate provides that the annual fee may be increased from $1.0 million to
$2.0 million, which amount represents a significant percentage of our net income. Such an increase would be detrimental to the interest of our class A stockholders if the fee were
disproportionate to the benefit we derive from the services the Onex affiliate performs. In order to minimize this potential conflict of interest, the agreement requires
that any increase in the fee be approved by a majority of the members of the boards of AMR and EmCare who are not affiliated with Onex. As long as the Onex entities control more than 50% of our
combined voting power, they may be able to exercise a controlling influence over the election of the boards of AMR and EmCare.

Our substantial indebtedness could adversely affect our financial condition and our ability to operate our business.

We have a substantial amount of debt. At December 31, 2007, we had total debt of $483 million, including $224 million of borrowings under the
term loan portion of our senior secured credit facility, $250 million of our senior subordinated notes and $6 million of capital lease obligations. We had no borrowings outstanding under
our revolving credit facility and we had $30 million of letters of credit outstanding. In addition, subject to restrictions in the indenture governing our notes and the credit agreement
governing our senior secured credit facility, we may incur additional debt.

Our
substantial debt could have important consequences to you, including the following:



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Furthermore,
all of our debt under our senior secured credit facility bears interest at variable rates. If these rates were to increase significantly, our ability to borrow additional
funds may be reduced and the risks related to our substantial debt would intensify.

Servicing our debt will require a significant amount of cash. Our ability to generate sufficient cash depends on numerous factors beyond our control,
and we may be unable to generate sufficient cash flow to service our debt obligations.

Our business may not generate sufficient cash flow from operating activities. The cash we require to meet contractual obligations in 2008, including our debt
service, will total approximately $85 million. Our ability to make payments on and to refinance our debt and to fund planned capital expenditures will depend on our ability to generate cash in
the future. To some extent, this is subject to general economic, financial, competitive, legislative, regulatory and other factors that are beyond our control. Lower net revenues, or higher provision
for uncollectible, generally will reduce our cash flow.

If
we are unable to generate sufficient cash flow to service our debt and meet our other commitments, we may need to refinance all or a portion of our debt, sell material assets or
operations or raise additional debt or equity capital. We cannot assure you that we could effect any of these actions on a timely basis, on commercially reasonable terms or at all, or that these
actions would be sufficient to meet our capital requirements. In addition, the terms of our existing or future debt agreements may restrict us from effecting any of these alternatives.

Restrictive covenants in our senior secured credit facility and the indenture governing our senior subordinated notes may restrict our ability to pursue
our business strategies.

Our senior secured credit facility and the indenture governing our senior subordinated notes limit our ability, among other things, to:



Our
ability to comply with these covenants may be affected by events beyond our control, and any material deviations from our forecasts could require us to seek waivers or amendments of
covenants, alternative sources of financing or reductions in expenditures. We cannot assure you that such waivers, amendments or alternative financings could be obtained, or, if obtained, would be on
terms acceptable to us.

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In
addition, the credit agreement governing our senior secured credit facility requires us to meet certain financial ratios and restricts our ability to make capital expenditures or
prepay certain other debt. We may not be able to maintain these ratios, and the restrictions could limit our ability to plan for or react to market conditions or meet extraordinary capital needs or
otherwise restrict corporate activities.

If
a breach of any covenant or restriction contained in our financing agreements results in an event of default, those lenders could discontinue lending, accelerate the related debt
(which would accelerate other debt) and declare all borrowings outstanding thereunder to be due and payable. In addition, the lenders could terminate any commitments they had made to supply us with
additional funds. In the event of an acceleration of our debt, we may not have or be able to obtain sufficient funds to make any accelerated debt payments.

Our obligations under our senior secured credit facility are secured by substantially all of our assets.

Our obligations under our senior secured credit facility are secured by liens on substantially all of our assets, and the guarantees of our subsidiaries under our
senior secured credit facility are secured by liens on substantially all of those subsidiaries' assets. If we become insolvent or are liquidated, or if payment under our senior secured credit facility
or of other secured obligations is accelerated, the lenders under our senior secured credit facility or the obligees with respect to the other secured obligations will be entitled to exercise the
remedies available to a secured lender under applicable law and the applicable agreements and instruments, including the right to foreclose on all of our assets.

Risk Factors Related to Our Business

We could be subject to lawsuits for which we are not fully reserved.

In recent years, physicians, hospitals and other participants in the healthcare industry have become subject to an increasing number of lawsuits alleging medical
malpractice and related legal theories such as negligent hiring, supervision and credentialing. Similarly, ambulance transport services may result in lawsuits concerning vehicle collisions and
personal injuries, patient care incidents and employee job-related injuries. Some of these lawsuits may involve large claim amounts and substantial defense costs.

EmCare
procures professional liability insurance coverage for most of its affiliated medical professionals and professional and corporate entities. Beginning January 1, 2002, this
insurance coverage has been provided by affiliates of CNA Insurance Company, which then reinsure the entire program, primarily through EmCare's wholly-owned subsidiary, EMCA Insurance
Company, Ltd., or EMCA. Workers compensation coverage for EmCare's employees and applicable affiliated medical professionals is provided under a similar structure for the period through
August 31, 2007. From September 1, 2004 to the closing date of our acquisition of AMR and EmCare, AMR obtained insurance coverage for losses with respect to workers compensation, auto
and general liability claims through Laidlaw's captive insurance program. In 2007 AMR transferred the Laidlaw insurance coverage to AIG and currently has a self-insurance program fronted
by an unrelated third party for all of its insurance programs subsequent to September 1, 2001. AMR retains the risk of loss under this coverage. Under these insurance programs, we establish
reserves, using actuarial estimates, for all losses covered under the policies. Moreover, in the normal course of our business, we are involved in lawsuits, claims, audits and investigations,
including those arising out of our billing and marketing practices, employment disputes, contractual claims and other business disputes for which we may have no insurance coverage, and which are not
subject to actuarial estimates. The outcome of these matters could have a material effect on our results of operations in the period when we identify the matter, and the ultimate outcome could have a
material adverse effect on our financial position, results of operations, or cash flows.

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Our
liability to pay for EmCare's insurance program losses is collateralized by funds held through EMCA and, to the extent these losses exceed the collateral and assets of EMCA or the
limits of our insurance policies, will have to be funded by us. Should our AMR losses with respect to such claims exceed the collateral held by Laidlaw in connection with our
self-insurance program or the limits of our insurance policies, we will have to fund such amounts. See Item 1, "BusinessAmerican Medical ResponseInsurance"
and "BusinessEmCareInsurance."

We are subject to a variety of federal, state and local laws and regulatory regimes, including a variety of labor laws and regulations. Failure to
comply with laws and regulations could subject us to, among other things, penalties and legal expenses which could have a materially adverse effect on our business.

We are subject to various federal, state, and local laws and regulations including, but not limited to ERISA, and regulations promulgated by the Internal Revenue
Service, the United States Department of Labor and the Occupational Safety and Health Administration. We are also subject to a variety of federal and state employment and labor laws and regulations,
including the Americans with Disabilities Act, the Federal Fair Labor Standards Act, the Worker Adjustment and Restructuring Notification Act, or WARN Act, and other regulations related to working
conditions, wage-hour pay, overtime pay, family leave, employee benefits, antidiscrimination, termination of employment, safety standards and other workplace regulations.

Failure
to properly adhere to these and other applicable laws and regulations could result in investigations, the imposition of penalties or adverse legal judgments by public or private
plaintiffs, and our business, financial condition and results of operations could be materially adversely affected. Similarly, our business, financial condition and results of operations could be
materially adversely affected by the cost of complying with newly-implemented laws and regulations.

In
addition, from time to time we have received, and expect to continue to receive, correspondence from former employees terminated by us who threaten to bring claims against us alleging
that we have violated one or more labor and employment regulations. In certain instances former employees have brought claims against us and we expect that we will encounter similar actions against us
in the future. An adverse outcome in any such litigation could require us to pay contractual damages, compensatory damages, punitive damages, attorneys' fees and costs.

The reserves we establish with respect to our losses covered under our insurance programs are subject to inherent uncertainties.

In connection with our insurance programs, we establish reserves for losses and related expenses, which represent estimates involving actuarial and statistical
projections, at a given point in time, of our expectations of the ultimate resolution and administration costs of losses we have incurred in respect of our liability risks. Insurance reserves
inherently are subject to uncertainty. Our reserves are based on historical claims, demographic factors, industry trends, severity and exposure factors and other actuarial assumptions calculated by an
independent actuary firm. The independent actuary firm performs studies of projected ultimate losses on an annual basis and provides quarterly updates to those projections. We use these actuarial
estimates to determine appropriate reserves. Our reserves could be significantly affected if current and future occurrences differ from historical claim trends and expectations. While we monitor
claims closely when we estimate reserves, the complexity of the claims and the wide range of potential outcomes may hamper timely adjustments to the assumptions we use in these estimates. Actual
losses and related expenses may deviate, individually and in the aggregate, from the reserve estimates reflected in our financial statements. If we determine that our estimated reserves are
inadequate, we will be required to increase reserves at the time of the determination, which would result in a reduction in our net income in the period in which the deficiency is determined. See
Item 7, "Management's Discussion and Analysis of Financial Condition and Results of OperationsCritical

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Accounting
PoliciesClaims Liability and Professional Liability Reserves" and note 16 of the notes to our financial statements included in Item 8.

Insurance coverage for some of our losses may be inadequate and may be subject to the credit risk of commercial insurance companies.

Some of our insurance coverage, for periods prior to the initiation of our self-insurance programs as well as portions of our current insurance
coverage, is through various third party insurers. To the extent we hold policies to cover certain groups of claims, but either did not obtain sufficient insurance limits, did not buy an extended
reporting period policy, where applicable, or the issuing insurance company is no longer viable, we may be responsible for losses attributable to such claims. Furthermore, for our losses that are
insured or reinsured through commercial insurance companies, we are subject to the "credit risk" of those insurance companies. While we believe our commercial insurance company providers currently are
creditworthy, there can be no assurance that such insurance companies will remain so in the future.

We are subject to decreases in our revenue and profit margin under our fee-for-service contracts, where we bear the risk of
changes in volume, payor mix and third party reimbursement rates.

In our fee-for-service arrangements, which generated approximately 81% of our net revenue for the fiscal year ended December 31,
2007, we, or our affiliated physicians, collect the fees for transports and physician services. Under these arrangements, we assume financial risks related to changes in the mix of insured and
uninsured patients and patients covered by government-sponsored healthcare programs, third party reimbursement rates and transports and patient volume. In some cases our revenue decreases if our
volume or reimbursement decreases, but our expenses may not decrease proportionately. See "Risk Factors Related to Healthcare RegulationChanges in the rates or methods of
third party reimbursements may adversely affect our revenue and operations." In addition, fee-for-service contracts have less favorable cash flow characteristics in the
start-up phase than traditional flat-rate contracts due to longer collection periods.

We
collect a smaller portion of our fees for services rendered to uninsured patients than for services rendered to insured patients. Our credit risk related to services provided to
uninsured individuals is exacerbated because the law requires communities to provide 911 emergency response services and hospital emergency departments to treat all patients presenting to the
emergency department seeking care for an emergency medical condition regardless of their ability to pay. We also believe uninsured patients are more likely to seek care at hospital emergency
departments because they frequently do not have a primary care physician with whom to consult.

We may not be able to successfully recruit and retain physicians and other healthcare professionals with the qualifications and attributes desired by us
and our customers.

Our ability to recruit and retain affiliated physicians and other healthcare professionals significantly affects our performance under our contracts. In the
recent past, our customer hospitals have increasingly demanded a greater degree of specialized skills, training and experience in the healthcare professionals providing services under their contracts
with us. This decreases the number of healthcare professionals who may be permitted to staff our contracts. Moreover, because of the scope of the geographic and demographic diversity of the hospitals
and other facilities with which we contract, we must recruit healthcare professionals, and particularly physicians, to staff a broad spectrum of contracts. We have had difficulty in the past
recruiting physicians to staff contracts in some regions of the country and at some less economically advantaged hospitals. Moreover, we compete with other entities to recruit and retain qualified
physicians and other healthcare professionals to deliver clinical services. Our future success in retaining and winning new hospital contracts depends on our ability to recruit and retain healthcare
professionals to maintain and expand our operations.

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Our non-compete agreements and other restrictive covenants involving physicians may not be enforceable.

We have contracts with physicians and professional corporations in many states. Some of these contracts, as well as our contracts with hospitals, include
provisions preventing these physicians and professional corporations from competing with us both during and after the term of our relationship with them. The law governing non-compete
agreements and other forms of restrictive covenants varies from state to state. Some states are reluctant to strictly enforce non-compete agreements and restrictive covenants applicable to
physicians. There can be no assurance that our non-compete agreements related to affiliated physicians and professional corporations will not be successfully challenged as unenforceable in
certain states. In such event, we would be unable to prevent former affiliated physicians and professional corporations from competing with us, potentially resulting in the loss of some of our
hospital contracts.

We are required to make significant capital expenditures for our ambulance services business in order to remain competitive.

Our capital expenditure requirements primarily relate to maintaining and upgrading our vehicle fleet and medical equipment to serve our customers and remain
competitive. The aging of our vehicle fleet requires us to make regular capital expenditures to maintain our current level of service. Our capital expenditures totaled $38 million and
$60 million in the years ended December 31, 2007 and 2006, respectively, and $49 million in the eleven months ended December 31, 2005. In addition, changing competitive
conditions or the emergence of any significant advances in medical technology could require us to invest significant capital in additional equipment or capacity in order to remain competitive. If we
are unable to fund any such investment or otherwise fail to invest in new vehicles or medical equipment, our business, financial condition or results of operations could be materially and adversely
affected.

We depend on our senior management and may not be able to retain those employees or recruit additional qualified personnel.

We depend on our senior management. The loss of services of any of the members of our senior management could adversely affect our business until a suitable
replacement can be found. There may
be a limited number of persons with the requisite skills to serve in these positions, and we cannot assure you that we would be able to identify or employ such qualified personnel on acceptable terms.

Our revenue would be adversely affected if we lose existing contracts.

A significant portion of our growth historically has resulted from increases in the number of emergency and non-emergency transports, and the number
of patient visits and fees for services we provide under existing contracts, and the addition of new contracts. Substantially all of our net revenue in the year ended December 31, 2007 was
generated under contracts, including exclusive contracts that accounted for approximately 88% of our fiscal 2007 net revenue. Our contracts with hospitals generally have terms of three years and the
term of our contracts with communities to provide 911 services generally ranges from three to five years. Most of our contracts are terminable by either of the parties upon notice of as little as
30 days. Any of our contracts may not be renewed or, if renewed, may contain terms that are not as favorable to us as our current contracts. We cannot assure you that we will be successful in
retaining our existing contracts or that any loss of contracts would not have a material adverse effect on our business, financial condition and results of operations. Furthermore, certain of our
contracts will expire during each fiscal period, and we may be required to seek renewal of these contracts through a formal bidding process that often requires written responses to a Request for
Proposal, or RFP. We cannot assure you that we will be successful in retaining such contracts or that we will retain them on terms that are as favorable as present terms.

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We may not accurately assess the costs we will incur under new contracts.

Our new contracts increasingly involve a competitive bidding process. When we obtain new contracts, we must accurately assess the costs we will incur in providing
services in order to realize adequate profit margins and otherwise meet our financial and strategic objectives. Increasing pressures from healthcare payors to restrict or reduce reimbursement rates at
a time when the costs of providing medical services continue to increase make assessing the costs associated with the pricing of new contracts, as well as maintenance of existing contracts, more
difficult. In addition, integrating new contracts, particularly those in new geographic locations, could prove more costly, and could require more management time, than we anticipate. Our failure to
accurately predict costs or to negotiate an adequate profit margin could have a material adverse effect on our business, financial condition and results of operations.

The high level of competition in our segments of the market for emergency medical services could adversely affect our contract and revenue base.

AMR.The market for providing ambulance transport services to municipalities, other healthcare providers and third party
payors is highly competitive. In providing ambulance transport services, we compete with governmental entities (including cities and fire districts), hospitals, local and volunteer private providers,
and with several large national and regional providers, such as Rural/Metro Corporation, Southwest Ambulance and Acadian Ambulance. In many communities, our most important competitors are the local
fire departments, which in many cases have acted traditionally as the first response providers during emergencies, and have been able to expand their scope of services to include emergency ambulance
transport and do not wish to give up their franchises to a private competitor.

EmCare.The market for providing outsourced physician staffing and related management services to hospitals and clinics is
highly competitive. Such competition could adversely affect our ability to obtain new contracts, retain existing contracts and increase or maintain profit margins. We compete with both national and
regional enterprises such as Team Health, Sterling Healthcare, The Schumacher Group and National Emergency Services Healthcare Group, some of which may have greater financial and other resources
available to them, greater access to physicians and/or greater access to potential customers. We also compete against local physician groups and self-operated hospital emergency
departments for satisfying staffing and scheduling needs.

Our business depends on numerous complex information systems, and any failure to successfully maintain these systems or implement new systems could
materially harm our operations.

We depend on complex, integrated information systems and standardized procedures for operational and financial information and our billing operations. We may not
have the necessary resources to enhance existing information systems or implement new systems where necessary to handle our volume and changing needs. Furthermore, we may experience unanticipated
delays, complications and expenses in implementing, integrating and operating our systems, including the integration of our AMR and EmCare systems. Any interruptions in operations during periods of
implementation would adversely affect our ability to properly allocate resources and process billing information in a timely manner, which could result in customer dissatisfaction and delayed cash
flow. We also use the development and implementation of sophisticated and specialized technology to differentiate our services from our competitors and improve our profitability. The failure to
successfully implement and maintain operational, financial and billing information systems could have an adverse effect on our ability to obtain new business, retain existing business and maintain or
increase our profit margins.

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If we fail to implement our business strategy, our financial performance and our growth could be materially and adversely affected.

Our future financial performance and success are dependent in large part upon our ability to implement our business strategy successfully. Our business strategy
envisions several initiatives, including increasing revenue from existing customers, growing our customer base, pursuing select acquisitions, implementing cost rationalization initiatives, focusing on
risk mitigation and utilizing technology to differentiate our services and improve profitability. We may not be able to implement our business strategy successfully or achieve the anticipated benefits
of our business plan. If we are unable to do so, our long-term growth and profitability may be adversely affected. Even if we are able to implement some or all of the initiatives of our
business plan successfully, our operating results may not improve to the extent we anticipate, or at all.

Implementation
of our business strategy could also be affected by a number of factors beyond our control, such as increased competition, legal developments, government regulation,
general economic conditions or increased operating costs or expenses. In addition, to the extent we have misjudged the nature and extent of industry trends or our competition, we may have difficulty
in achieving our strategic objectives. Any failure to implement our business strategy successfully may adversely affect our business, financial condition and results of operations and thus our ability
to service our debt. In addition, we may decide to alter or discontinue certain aspects of our business strategy at any time.

A successful challenge by tax authorities to our treatment of certain physicians as independent contractors could require us to pay past taxes and
penalties.

As of December 31, 2007, we contracted with approximately 1,860 physicians as independent contractors to fulfill our contractual obligations to customers.
Because we treat them as independent contractors rather than as employees, we do not (i) withhold federal or state income or other employment related taxes from the compensation that we pay to
them, (ii) make federal or state unemployment tax or Federal Insurance Contributions Act payments (except as described below), (iii) provide workers compensation insurance with respect
to such affiliated physicians (except in states that require us to do so even for independent contractors), or (iv) allow them to participate in benefits and retirement programs available to
employed physicians. Our contracts with our independent contractor physicians obligate these physicians to pay these taxes and other costs. Whether these physicians are properly classified as
independent contractors depends upon the facts and circumstances of our relationship with them. It is possible that the nature of our relationship with these physicians would support a challenge to
our classification of them. If such a challenge by federal or state taxing authorities were successful, and the physicians at issue were instead treated as employees, we could be adversely affected
and liable
for past taxes and penalties to the extent that the physicians did not fulfill their contractual obligations to pay those taxes. Under current federal tax law, however, even if our treatment were
successfully challenged, if our current treatment were found to be consistent with a long-standing practice of a significant segment of our industry and we meet certain other requirements,
it is possible (but not certain) that our treatment of the physicians would qualify under a "safe harbor" and, consequently, we would be protected from the imposition of past taxes and penalties. In
the recent past, however, there have been proposals to eliminate the safe harbor and similar proposals could be made in the future.

We may make acquisitions which could divert the attention of management and which may not be integrated successfully into our existing business.

We may pursue acquisitions to increase our market penetration, enter new geographic markets and expand the scope of services we provide. We cannot assure you that
we will identify suitable acquisition candidates, that acquisitions will be completed on acceptable terms, that our due diligence process will uncover all potential liabilities or issues affecting our
integration process, or that we will be able to

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integrate
successfully the operations of any acquired business into our existing business. Furthermore, acquisitions into new geographic markets and services may require us to comply with new and
unfamiliar legal and regulatory requirements, which could impose substantial obligations on us and our management, cause us to expend additional time and resources, and increase our exposure to
penalties or fines for non-compliance with such requirements. The acquisitions could be of significant size and involve operations in multiple jurisdictions. The acquisition and
integration of another business would divert management attention from other business activities. This diversion, together with other difficulties we may incur in integrating an acquired business,
could have a material adverse effect on our business, financial condition and results of operations. In addition, we may borrow money or issue capital stock to finance acquisitions. Such borrowings
might not be available on terms as favorable to us as our current borrowing terms and may increase our leverage, and the issuance of capital stock could dilute the interests of our stockholders.

If Laidlaw is unwilling or unable to satisfy any indemnification claims made by us pursuant to the purchase agreements relating to the acquisition of
AMR and EmCare, we will be forced to satisfy such claims ourselves.

Laidlaw has agreed to indemnify us for certain claims or legal actions brought against us arising out of the operations of AMR and EmCare prior to the closing
date of the acquisition. If we make a claim against Laidlaw, and Laidlaw is unwilling or unable to satisfy such claim, we would be required to satisfy the claim ourselves and, as a result, our
financial condition may be adversely affected.

Many of our employees are represented by labor unions and any work stoppage could adversely affect our business.

Approximately 47% of AMR's employees are represented by 41 collective bargaining agreements. Thirteen of these collective bargaining agreements, representing
approximately 4,600 employees, are subject to renegotiation in 2008. Although we believe our relations with our employees are good, we cannot assure you that we will be able to negotiate a
satisfactory renewal of these collective bargaining agreements or that our employee relations will remain stable.

Risk Factors Related to Healthcare Regulation

We conduct business in a heavily regulated industry and if we fail to comply with these laws and government regulations, we could incur penalties or be
required to make significant changes to our operations.

The healthcare industry is heavily regulated and closely scrutinized by federal, state and local governments. Comprehensive statutes and regulations govern the
manner in which we provide and bill for services, our contractual relationships with our physicians and customers, our marketing activities and other aspects of our operations. Failure to comply with
these laws can result in civil and criminal penalties such as fines, damages and exclusion from the Medicare and Medicaid programs. The risk of our being found in violation of these laws and
regulations is increased by the fact that many of them have not been fully interpreted by the regulatory authorities or the courts, and their provisions are sometimes open to a variety of
interpretations. Any action against us for violation of these laws or regulations, even if we successfully defend against it, could cause us to incur significant legal expenses and divert our
management's attention from the operation of our business.

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Our practitioners and our customers are also subject to ethical guidelines and operating standards of professional and trade associations and private accreditation agencies. Compliance
with these guidelines and standards is often required by our contracts with our customers or to maintain our reputation.

The
laws, regulations and standards governing the provision of healthcare services may change significantly in the future. We cannot assure you that any new or changed healthcare laws,
regulations or standards will not materially adversely affect our business. We cannot assure you that a review of our business by judicial, law enforcement, regulatory or accreditation authorities
will not result in a determination that could adversely affect our operations.

We are subject to comprehensive and complex laws and rules that govern the manner in which we bill and are paid for our services by third party payors,
and the failure to comply with these rules, or allegations that we have failed to do so, can result in civil or criminal sanctions, including exclusion from federal and state healthcare programs.

Like most healthcare providers, the majority of our services are paid for by private and governmental third party payors, such as Medicare and Medicaid. These
third party payors typically have differing and complex billing and documentation requirements that we must meet in order to receive payment for our services. Reimbursement to us is typically
conditioned on our providing the correct procedure and diagnostic codes and properly documenting the services themselves, including the level of service provided, the medical necessity for the
services, and the identity of the practitioner who provided the service.

We
must also comply with numerous other laws applicable to our documentation and the claims we submit for payment, including but not limited to (1) "coordination of benefits" rules that
dictate which payor we must bill first when a patient has potential coverage from multiple payors; (2) requirements that we obtain the signature of the patient or patient representative, or, in
certain cases, the documentation, prior to submitting a claim; (3) requirements that we make repayment to any payor which pays us more than the amount to which we are entitled;
(4) requirements that we bill a hospital or nursing home, rather than Medicare, for certain ambulance transports provided to Medicare patients of such facilities; (5) "reassignment" rules
governing our ability to bill and collect professional fees on behalf of our physicians;(6) requirements that our electronic claims for payment be submitted using certain standardized transaction
codes and formats; and (7) laws requiring us to handle all health and financial information of our patients in a manner that complies with specified security and privacy
standards. See Item 1, "BusinessRegulatory MattersMedicare, Medicaid and Other Government Reimbursement Programs."

Governmental
and private third party payors and other enforcement agencies carefully audit and monitor our compliance with these and other applicable rules, and in some cases in the past
have found that we were not in compliance. We have received in the past, and expect to receive in the future, repayment demands from third party payors based on allegations that our services were not
medically necessary, were billed at an improper level, or otherwise violated applicable billing requirements. See Item 3, "Legal Proceedings." Our failure to comply with the billing and other
rules applicable to us could result in non-payment for services rendered or refunds of amounts previously paid for such services. In addition, non-compliance with these rules
may cause us to incur civil and criminal penalties, including fines, imprisonment and exclusion from government healthcare programs such as Medicare and Medicaid, under a number of state and federal
laws. These laws include the federal False Claims Act, the Health Insurance Portability and Accountability Act of 1996, the federal Anti-Kickback Statute, the Balanced Budget Act of 1997
and other provisions of federal, state and local law.

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In
addition, from time to time we self-identify practices that may have resulted in Medicare or Medicaid overpayments or other regulatory issues. For example, we have
previously identified situations in which we may have inadvertently utilized incorrect billing codes for some of the services we have billed to government programs such as Medicare or Medicaid. In
such cases, if appropriate, it is our practice to disclose the issue to the affected government programs and to refund any resulting overpayments. Although the government usually accepts such
disclosures and repayments without taking further enforcement action, it is possible that such disclosures or repayments will result in allegations by the government that we have violated the False
Claims Act or other laws, leading to investigations and possibly civil or criminal enforcement actions. See Item 1, "BusinessRegulatory MattersCorporate Compliance
Program and Corporate Integrity Obligations."

If
our operations are found to be in violation of these or any of the other laws which govern our activities, any resulting penalties, damages, fines or other sanctions could adversely
affect our ability to operate our business and our financial results. See Item 1, "BusinessRegulatory MattersFederal False Claims Act" and "BusinessOther
Healthcare Fraud and Abuse Laws."

Changes in the rates or methods of third party reimbursements may adversely affect our revenue and operations.

We derive a majority of our revenue from direct billings to patients and third party payors such as Medicare, Medicaid and private health insurance companies. As
a result, any changes in the rates or methods of reimbursement for the services we provide could have a significant adverse impact on our revenue and financial results.

Government
funding for healthcare programs is subject to statutory and regulatory changes, administrative rulings, interpretations of policy and determinations by intermediaries and
governmental funding restrictions, all of which could materially impact program coverage and reimbursements for both ambulance and physician services. In recent years, Congress has consistently
attempted to curb spending on Medicare, Medicaid and other programs funded in whole or part by the federal government. State and local governments have also attempted to curb spending on those
programs for which they are wholly or partly responsible. This has resulted in cost containment measures such as the imposition of new fee schedules that have lowered reimbursement for some of our
services and restricted the rate of increase for others, and new utilization controls that limit coverage of our services. For example, we estimate that the impact of a national fee schedule
promulgated in 2002, as modified by subsequent legislation, resulted in an increase in AMR's net revenue of approximately $16 million for calendar 2005, a decrease in AMR's net revenue of
approximately $17 million in 2006, and a decrease in AMR's net revenue of approximately $7 million in 2007. Based upon the current Medicare transport mix, we expect a further increase in
our net revenue totaling approximately $5 million for the period 2008 through 2010. See Item 1, "BusinessRegulatory MattersMedicare, Medicaid and Other
Government Reimbursement Programs."

In
addition, state and local government regulations or administrative policies regulate ambulance rate structures in some jurisdictions in which we conduct transport services. We may be
unable to receive ambulance service rate increases on a timely basis where rates are regulated, or to establish or maintain satisfactory rate structures where rates are not regulated.

We
believe that regulatory trends in cost containment will continue. We cannot assure you that we will be able to offset reduced operating margins through cost reductions, increased
volume, the introduction of additional procedures or otherwise. In addition, we cannot assure you that federal, state and local governments will not impose reductions in the fee schedules or rate
regulations applicable to our services in the future. Any such reductions could have a material adverse effect on our business, financial condition or results of operations.

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If current or future laws or regulations force us to restructure our arrangements with physicians, professional corporations and hospitals, we may incur
additional costs, lose contracts and suffer a reduction in net revenue under existing contracts, and we may need to refinance our debt or obtain debt holder consent.

A number of laws bear on our contractual relationships with our physicians. There is a risk that state authorities in some jurisdictions may find that these
contractual relationships violate laws prohibiting the corporate practice of medicine and fee-splitting prohibitions. These laws prohibit the practice of medicine by general business
corporations and are intended to prevent unlicensed persons or entities from interfering with or inappropriately influencing the physician's professional judgment. They may also prevent the sharing of
professional services income with non-professional or business interests. From time to time, including recently, we have been involved in litigation in which private litigants have raised
these issues. See Item 1, "BusinessRegulatory MattersFee-Splitting; Corporate Practice of Medicine."

Our
physician contracts include contracts with individual physicians and with physicians organized as separate legal professional entities
(e.g.,professional medical corporations). Antitrust laws may deem each such physician/entity to be separate, both from EmCare and from each
other and, accordingly, each such physician/practice is subject to a wide range of laws that prohibit anti-competitive conduct between or among separate legal entities or individuals. A
review or action by regulatory authorities or the courts could force us to terminate or modify our contractual relationships with physicians and affiliated medical groups or revise them in a manner
that could be materially adverse to our business. See Item 1, "BusinessRegulatory MattersAntitrust Laws."

Various
licensing and certification laws, regulations and standards apply to us, our affiliated physicians and our relationships with our affiliated physicians. Failure to comply with
these laws and regulations could result in our services being found to be non-reimbursable or prior payments being subject to recoupment, and can give rise to civil or criminal penalties.
We are pursuing steps we believe we must take to retain or obtain all requisite licensure and operating authorities. While we have made reasonable efforts to substantially comply with federal, state
and local licensing and certification laws and regulations and standards as we interpret them, we cannot assure you that agencies that administer these programs will not find that we have failed to
comply in some material respects.

EmCare's
professional liability insurance program, under which insurance is provided for most of our affiliated medical professionals and professional and corporate entities, is
reinsured through our wholly-owned subsidiary, EMCA Insurance Company, Ltd. The activities associated with the business of insurance, and the companies involved in such activities, are closely
regulated. Failure to comply with the laws and regulations can result in civil and criminal fines and penalties and loss of licensure. While we have made reasonable efforts to substantially comply
with these laws and regulations, and utilize licensed insurance professionals where necessary or appropriate, we cannot assure you that we will not be found to have violated these laws and regulations
in some material respects.

Adverse
judicial or administrative interpretations could result in a finding that we are not in compliance with one or more of these laws and rules that affect our relationships with our
physicians.

These
laws and rules, and their interpretations, may also change in the future. Any adverse interpretations or changes could force us to restructure our relationships with physicians,
professional corporations or our hospital customers, or to restructure our operations. This could cause our operating costs to increase significantly. A restructuring could also result in a loss of
contracts or a reduction in revenue under existing contracts. Moreover, if we are required to modify our structure and organization to comply with these laws and rules, our financing agreements may
prohibit such modifications and require us to obtain the consent of the holders of such debt or require the refinancing of such debt.

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Our contracts with healthcare facilities and marketing practices are subject to the federal Anti-Kickback Statute, and we recently entered
into a settlement for alleged violations of that statute.

We are subject to the federal Anti-Kickback Statute, which prohibits the knowing and willful offer, payment, solicitation or receipt of any form of
"remuneration" in return for, or to induce, the referral of business or ordering of services paid for by Medicare or other federal programs. "Remuneration" potentially includes discounts and
in-kind goods or services, as well as cash. Certain federal courts have held that the Anti-Kickback Statute can be violated if "one purpose" of a payment is to induce
referrals. Violations of the Anti-Kickback Statute can result in imprisonment, civil or criminal fines or exclusion from Medicare and other governmental programs.

In
1999, the Office of Inspector General of the Department of Health and Human Services, or the OIG, issued an Advisory Opinion indicating that discounts provided to health facilities on
the transports for which they are financially responsible potentially violate the Anti-Kickback Statute when the ambulance company also receives referrals of Medicare and other
government-funded transports from the facility. The OIG has clarified that not all discounts violate the Anti-Kickback Statute, but that the statute may be violated if part of the purpose
of the discount is to induce the referral of the transports paid for by Medicare or other federal programs, and the discount does not meet certain "safe harbor" conditions. In the Advisory Opinion and
subsequent pronouncements, the OIG has provided guidance to ambulance companies to help them avoid unlawful discounts. See Item 1, "BusinessRegulatory MattersFederal
Anti-Kickback Statute."

Like
other ambulance companies, we have provided discounts to our healthcare facility customers (nursing home and hospital) in certain circumstances. We have attempted to comply with
applicable law when such discounts are provided. However, the government alleged that certain of our hospital and nursing home contracts in effect in Texas in periods prior to 2002 contained discounts
in violation of the federal Anti-Kickback Statute, and in 2006 we entered into a settlement with the government regarding these allegations. The settlement included a CIA.

There
can be no assurance that other investigations or legal action related to our contracting practices will not be pursued against AMR in other jurisdictions or for different time
frames. See Item 1, "BusinessAmerican Medical ResponseLegal Matters." If we are found to have violated the Anti-Kickback Statute, we may be subject to
civil or criminal penalties, including exclusion from the Medicare or Medicaid programs, or may be required to enter into settlement agreements with the government to avoid such sanctions. Typically,
such settlement agreements require substantial payments to the government in exchange for the government to release its claims, and may also require us to enter into a CIA. See Item 1,
"BusinessRegulatory MattersCorporate Compliance Program and Corporate Integrity Obligations."

In
addition to AMR's contracts with healthcare facilities, other marketing practices or transactions entered into by AMR and EmCare may implicate the Anti-Kickback Statute.
Although we have attempted to structure our past and current marketing initiatives and business relationships to comply with the Anti-Kickback Statute, we cannot assure you that the OIG or
other authorities will not find that our marketing practices and relationships violate the statute.

Changes in our ownership structure and operations require us to comply with numerous notification and reapplication requirements in order to maintain
our licensure, certification or other authority to operate, and failure to do so, or an allegation that we have failed to do so, can result in payment delays, forfeiture of payment or civil and
criminal penalties.

We and our affiliated physicians are subject to various federal, state and local licensing and certification laws with which we must comply in order to maintain
authorization to provide, or receive payment for, our services. For example, Medicare and Medicaid require that we complete and periodically update enrollment forms in order to obtain and maintain
certification to participate in

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programs.
Compliance with these requirements is complicated by the fact that they differ from jurisdiction to jurisdiction, and in some cases are not uniformly applied or interpreted even within the
same jurisdiction. Failure to comply with these requirements can lead not only to delays in payment and refund requests, but in extreme cases can give rise to civil or criminal penalties.

In
certain jurisdictions, changes in our ownership structure require pre- or post-notification to governmental licensing and certification agencies, or agencies
with
which we have contracts. Relevant laws in some jurisdictions may also require re-application or re-enrollment and approval to maintain or renew our licensure, certification,
contracts or other operating authority. The change in corporate structure and ownership in connection with our initial public offering required us to give notice, re-enroll or make other
applications for authority to continue operating in various jurisdictions or to continue receiving payment from their Medicaid or other payment programs.

While
we have made reasonable efforts to substantially comply with these requirements, we cannot assure you that the agencies that administer these programs or have awarded us contracts
will not find that we have failed to comply in some material respects. A finding of non-compliance and any resulting payment delays, refund demands or other sanctions could have a material
adverse effect on our business, financial condition or results of operations.

If we fail to comply with the terms of our settlement agreements with the government, we could be subject to additional litigation or other governmental
actions which could be harmful to our business.

In the last five years, we have entered into five settlement agreements with the United States government. In June 2002, one of our subsidiaries, AMR of
Massachusetts, entered into a settlement agreement to resolve a number of allegations, including allegations related to billing and documentation practices. In February 2003, another subsidiary, AMR
of South Dakota, entered into a settlement agreement to resolve allegations that it incorrectly billed for transports performed by other providers when an AMR paramedic accompanied the patient during
transport, and that it billed for certain non-emergency transports using emergency codes. In July 2004, our subsidiary, American Medical Response West, entered into a settlement agreement
in connection with billing matters related to emergency transports and specialized services. In August 2004, AMR entered into a settlement agreement on behalf of a subsidiary, Regional Emergency
Services LP, or RES, to resolve allegations of violations of the False Claims Act by RES and a hospital system based on the absence of certificates of medical necessity and other
non-compliant billing practices. In September 2006, AMR entered into a settlement agreement to resolve allegations that AMR subsidiaries provided discounts to healthcare facilities in
Texas in periods prior to 2002 in violation of the Federal Anti-Kickback Statute. See Item 3, "Legal Proceedings."

As
part of the settlement AMR West entered into with the government, we entered into a Corporate Integrity Agreement, or CIA, which is still in effect. Pursuant to this CIA, we are
required to establish and maintain a compliance program which includes, among other elements, the appointment of a compliance officer and committee, review by an independent review organization, and
reporting of overpayments and other "reportable events." In connection with the September 2006 settlement for AMR, we also entered into a CIA which requires us to maintain a compliance program which
includes the training of employees and safeguards involving our contracting process nationwide (including tracking of contractual arrangements in Texas). AMR of Massachusetts entered into a CIA in
connection with its June 2002 settlement, the term of which has expired. See Item 1, "BusinessRegulatory MattersCorporate Compliance Program and Corporate Integrity
Obligations."

We
cannot assure you that the CIAs or the compliance program we have initiated has prevented, or will prevent, any repetition of the conduct or allegations that were the subject of these
settlement agreements, or that the government will not raise similar allegations in other jurisdictions or for other periods of time. If such allegations are raised, or if we fail to comply with the
terms of the CIAs, we

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may
be subject to fines and other contractual and regulatory remedies specified in the CIAs or by applicable laws, including exclusion from the Medicare program and other federal and state healthcare
programs. Such actions could have a material adverse effect on the conduct of our business, our financial condition or our results of operations.

If we are unable to effectively adapt to changes in the healthcare industry, our business may be harmed.

Political, economic and regulatory influences are subjecting the healthcare industry in the United States to fundamental change. We anticipate that Congress and
state legislatures may continue to review and assess alternative healthcare delivery and payment systems and may in the future propose and adopt legislation effecting fundamental changes in the
healthcare delivery system.

We
cannot assure you as to the ultimate content, timing or effect of changes, nor is it possible at this time to estimate the impact of potential legislation. Further, it is possible
that future legislation enacted by Congress or state legislatures could adversely affect our business or could change the operating environment of our customers. It is possible that changes to the
Medicare or other government reimbursement programs may serve as precedent to similar changes in other payors' reimbursement policies in a manner adverse to us. Similarly, changes in private payor
reimbursement programs could lead to adverse changes in Medicare and other government payor programs which could have a material adverse effect on our business, financial condition or results of
operations.

Risk Factors Related to Our Corporate Governance

Our certificate of incorporation and our by-laws contain provisions that could discourage another company from acquiring us and may prevent
attempts by our stockholders to replace or remove our current management.

Provisions of our certificate of incorporation and our by-laws may discourage, delay or prevent a merger or acquisition that stockholders may consider
favorable, including transactions in which you might otherwise receive a premium for your shares. In addition, these provisions may frustrate or prevent any attempts by our stockholders to replace or
remove our current management by making it more difficult for stockholders to replace or remove our current board of directors. These provisions include:



We are a "controlled company" within the meaning of the New York Stock Exchange rules and, as a result, qualify for, and intend to rely on, exemptions
from certain corporate governance requirements.

Because the Onex entities own more than 50% of our combined voting power, we are deemed a "controlled company" under the rules of the New York Stock Exchange, or
the NYSE. As a result, we qualify for, and rely upon, the "controlled company" exception to the board of directors and committee composition requirements under the rules of the NYSE. Pursuant to this
exception, we are exempt

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from
rules that would otherwise require that our board of directors be comprised of a majority of "independent directors," and that our compensation committee and corporate governance and nominating
committee be comprised solely of "independent directors" (as defined under the rules of the NYSE), so long as the Onex entities continue to own more than 50% of our combined voting power.

ITEM 1B.    UNRESOLVED STAFF COMMENTS

Not applicable.

ITEM 2.    PROPERTIES

We lease approximately 70,000 square feet in an office building at 6200 S. Syracuse Way, Greenwood Village, Colorado for the AMR and EMSC corporate headquarters
and which also serves as one of AMR's billing offices. Our leases for our business segments are described below.

AMR

Facilities.In addition to the corporate headquarters, we also lease approximately 568 administrative facilities and other
facilities used principally for ambulance basing, garaging and maintenance in those areas in which we provide ambulance services. We own 12 facilities used principally for administrative services and
stationing for our ambulances. We believe our present facilities are sufficient to meet our current and projected needs, and that suitable space is readily available should our need for space
increase. Our leases expire at various dates through 2017.

Vehicle Fleet.We operate approximately 4,200 vehicles. Of these, 77% are ambulances, 13% are wheelchair vans and 10% are
support vehicles. As of December 31, 2007, we owned approximately 90% of our vehicles and leased the balance. We replace ambulances based upon age and usage, but generally every eight to ten
years. The average age of our existing ambulance fleet is approximately 5 years. We primarily use in-house maintenance services to maintain our fleet. In those operations where our
fleet is small and quality external maintenance services that agree to maintain our fleet in accordance with AMR standards are available, we utilize these maintenance services. We are exploring ways
to decrease our overall capital expenditures for vehicles, including major refurbishing and overhaul of our vehicles to extend their useful life.

EmCare

Facilities.We lease approximately 49,000 square feet in an office building at 1717 Main Street, Dallas, Texas, for
certain of EmCare's key support functions and regional operations. We also lease 15 facilities to house administrative, billing and other support functions for other regional operations. We
believe our present facilities are sufficient to meet our current and projected needs, and that suitable space is readily available should our need for space increase. Our leases expire at various
dates through 2016.

We
lease approximately 106,000 square feet in a business park located at 1000 River Road, Conshohocken, Pennsylvania, for certain key billing and support functions. We believe our
present facilities are sufficient to meet our current and projected needs, and that suitable space is readily available should our need for space increase. Our primary lease expires in 2009 with the
right to renew for two additional terms of five years each.

ITEM 3.    LEGAL PROCEEDINGS

We are subject to litigation arising in the ordinary course of our business, including litigation principally relating to professional liability, auto accident
and workers compensation claims. There can

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be
no assurance that our insurance coverage will be adequate to cover all liabilities occurring out of such claims. In the opinion of management, we are not engaged in any legal proceedings that we
expect will have a material adverse effect on our business, financial condition, cash flows or results of our operations other than as set forth below.

From
time to time, in the ordinary course of business and like others in the industry, we receive requests for information from government agencies in connection with their regulatory or
investigational authority. Such requests can include subpoenas or demand letters for documents to assist the government in audits or investigations. We review such requests and notices and take
appropriate action. We have been subject to certain requests for information and investigations in the past and could be subject to such requests for information and investigations in the future.

We
are subject to the Medicare and Medicaid fraud and abuse laws, which prohibit, among other things, any false claims, or any bribe, kick-back, rebate or other remuneration,
in cash or in kind, 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. We have implemented policies and procedures that management believes will assure that we are in substantial compliance with these laws, but we cannot assure you that
the government or a court will not find that some of our business practices violate these laws.

During
the first quarter of fiscal 2004 we were advised by the DOJ that it was investigating certain business practices at AMR including whether discounts in violation of the federal
Anti-Kickback Statute were provided by AMR in exchange for referrals involving Medicare eligible patients. Specifically, the government alleged that certain of our hospital and nursing
home contracts in effect in Texas in periods prior to 2002 contained discounts in violation of the federal Anti-Kickback Statute. We negotiated a settlement with the government pursuant to
which we paid $9 million and obtained a release from the U.S. Government of all claims related to such conduct alleged to have occurred in Texas in periods prior to 2002. In connection with the
settlement, we entered into a Corporate Integrity Agreement, or CIA, which will be effective for a period of five years beginning September 12, 2006. Pursuant to the CIA, we are required to
maintain a compliance program which includes, among other elements, the appointment of a compliance officer and committee; training of employees nationwide; safeguards for our contracting processes
nationwide, including tracking of contractual arrangements in Texas; review by an independent review organization and reporting of certain reportable events. Under the provisions of our purchase
agreement for the acquisition of AMR, we and Laidlaw shared responsibility for the settlement amount and certain of the costs associated with the CIA. There can be no assurance that other
investigations or legal action related to our contracting practices will not be pursued against AMR in other jurisdictions or for different time frames.

On
December 13, 2005, a lawsuit purporting to be a class action was commenced against AMR in Spokane, Washington, in Washington State Court, Spokane County. The complaint alleges
that AMR billed patients and third party payors for transports it conducted between 1998 and 2005 at a higher level than contractually permitted. The court has certified a class in this case, but the
size and membership of the class has not yet been determined. At this time, AMR does not believe that any incorrect billings are material in amount.

AMR
and the City of Stockton, California are parties to litigation regarding the terms and enforceability of a memorandum of understanding and a related joint venture agreement between
the parties to present a joint bid in response to a request for proposals to provide emergency ambulance services in the County of San Joaquin, California. The suit was filed on June 28, 2005,
in the United States District Court for the Eastern District of California. The parties were unable to agree on the final terms of a joint bid. AMR has been awarded the San Joaquin contract. While we
are unable at this time to estimate the amount of potential damages, we believe that Stockton may claim as damages

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a
portion of our profit on the contract or the profit Stockton might have realized had the joint venture proceeded.

On
April 17, 2006, the Office of Inspector General for the United States Department of Health and Human Services, or OIG, finalized its draft report requesting that an AMR
Massachusetts subsidiary reimburse the Medicare program for approximately $1.8 million in alleged overpayments from Medicare for services performed between July 1, 2002 and
December 31, 2002. The OIG claims that these overpayments were made for services that did not meet Medicare medical necessity and reimbursement requirements. On December 10, 2006, we
paid the $1.8 million in alleged overpayments. However, we continue to disagree with the OIG's finding and we have filed an administrative appeal. If we are successful in the administrative
appeal we may be entitled to repayment of all or part of the $1.8 million.

EmCare
entered into a settlement agreement with respect to June Belt, et al. v. EmCare, Inc., et al., (U.S. Ct. App.5th Cir.), brought by a number of nurse
practitioners and physician assistants under the Fair Labor Standards Act. Pursuant to the settlement agreement, which the Court approved in January 2007, EmCare paid $1.7 million in
satisfaction of all claims in the lawsuit, which was previously accrued.

In
December 2006, AMR received a subpoena from the United States Department of Justice, or DOJ. The subpoena requested copies of documents for the period from January 2000 through the
present. The subpoena required us to produce a broad range of documents relating to the operations of certain AMR affiliates in New York. We are in the process of producing documents in response to
the subpoena.

ITEM 4.    SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

There were no matters submitted to a vote of security holders during the fourth quarter of the year ended December 31, 2007.

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PART II.

ITEM 5.    MARKET FOR REGISTRANT'S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES

Shares of our class A common stock have been trading on the New York Stock Exchange ("NYSE"), under the symbol "EMS", since our initial public offering of
such stock on December 16, 2005. There is no established market for our class B common stock or our LP exchangeable units. The following table details the high and low sales
prices of our class A common stock during the years ended December 31, 2007 and 2006.

HIGH

LOWYear ended December 31, 2007:Fourth Quarter

$
35.60

$
26.90Third Quarter


46.00


22.55Second Quarter


43.41


28.23First Quarter

$
29.74

$
19.93Year ended December 31, 2006:Fourth Quarter

$
21.81

$
16.10Third Quarter


16.67


11.57Second Quarter


13.86


11.00First Quarter

$
14.40

$
12.17


On
February 19, 2008, the last sale price of our class A common stock as reported by the NYSE was $27.71 and there were approximately 100 holders of record of our
class A common stock, 3 holders of record of our class B common stock and 5 holders of record of our LP exchangeable units.

We
refer you to our Registration Statement filed on Form S-1 under the Securities Act of 1933 with the Securities and Exchange Commission on December 15, 2005
under the caption "Description of Capital Stock" for a further description of our capital stock.

Dividend Policy

We currently intend to retain any future earnings to support our operations and to fund the development and growth of our business. In addition, the payment of
dividends by us to holders of our common stock is limited by our senior secured credit facility. See Item 7, "Management Discussion and Analysis of Financial Condition and Results of
Operations" and Item 8, "Financial Statements and Supplementary Data." Our future dividend policy will depend on the requirements of financing agreements to which we may be a party. We did not
pay dividends in 2007, 2006 or 2005 and do not intend to pay cash dividends on our common stock in the foreseeable future. Any future determination to pay dividends will be at the discretion of our
board of directors and will depend upon, among other factors, our results of operations, financial condition, capital requirements and contractual restrictions.

Recent Sales of Unregistered Securities

The Company had no sales of unregistered securities in the fiscal year ended December 31, 2007.

Issuer Purchases of Equity Securities

We did not repurchase any shares of our common stock during the year ended December 31, 2007.

Summary of Equity Compensation Plans

We adopted our equity option plan approved by security holders in 2005 in connection with the acquisition of AMR and EmCare. In 2007 we adopted our
Long-Term Incentive Plan, which was

55

---



approved
by our shareholders in 2007, and we ceased to issue options under the previous equity option plan. The compensation committee of our board of directors, or the board itself if there is no
committee, administers the equity option plans.

These
plans provide for the issuance of up to 4,857,907 shares of our class A common stock at December 31, 2007, including 3,347,596 shares that may be issued upon the
exercise of outstanding stock options at a weighted average price of $7.13, and 30,000 shares that may vest pursuant to outstanding restricted stock grants. At December 31, 2007, 1,362,817
shares remain available under the Long-Term Incentive Plan for future grants.

Management Investment and Equity Purchase Plan

In connection with our acquisition of AMR and EmCare, our named executive officers and other members of management purchased an aggregate of 915,750 shares of
class A common stock. Approximately 160 employees and affiliated physicians, physician assistants and nurse practitioners purchased in the aggregate an additional 231,450 shares of
class A common stock pursuant to our equity purchase plan. The 1,147,200 shares held by these investors, including our named executive officers, are
governed by equityholders agreements. These agreements contain restrictions on transfer of the equity. See "Description of Capital StockEquityholder Agreements" in our Registration
Statement under the Securities Act of 1933 filed on Form S-1 with the Securities and Exchange Commission on December 15, 2005 for a description of the transfer restrictions
and "piggyback" registration rights.

Non-Employee Director Compensation Program

Under the terms of our Non-Employee Director Compensation Program, in addition to an annual cash retainer of $50,000, each continuing non-employee
director (other than Robert M. Le Blanc, our Lead Director), effective immediately following each annual meeting of stockholders, will receive a grant of a number of restricted stock units, or RSUs,
having a fair market value of $100,000, based on the closing price of our class A common stock on the business day immediately preceding the grant date. The RSUs will vest on the date of the
next following annual meeting of stockholders, immediately prior to the vote for directors, and will be paid in shares of our class A common stock (one share for each RSU). The number of RSUs
granted to a non-employee director joining the board other than at an annual meeting of stockholders will be pro-rated based on the amount of time remaining until the next
annual meeting of stockholders. This equity component of the non-employee director compensation program became effective as of June 1, 2006, and was approved by the stockholders at
the 2007 annual meeting of stockholders. The number of RSUs issued and outstanding at December 31, 2007 was 42,820 and due to the nature of the plan, the number of shares remaining for future
issuance is indeterminable.

Generally,
a non-employee director will forfeit his annual compensation (both the cash and the equity components) if he does not attend at least 75% of the meetings held in
that year by the board of directors and the board committees on which he serves. The board of directors may waive this requirement if it determines that extenuating circumstances precluded such
attendance. There will be no compensation paid to directors for attendance at individual meetings, for service on committees of the board of directors or for serving as Chair of any such committee.

Employee Stock Purchase Plan and Stock Purchase Plan

Under EMSC's Employee Stock Purchase Plan, or ESPP, 500,000 shares of our class A common stock, par value $.01 per share, are authorized for purchase by
eligible employees of EMSC during designated offering periods. The Compensation Committee of our Board of Directors administers the ESPP, and has sole discretion in determining when offerings will be
made and the terms of each, and to designate which subsidiary corporations of EMSC will be eligible to participate. It also has the

56

---



authority
to construe the ESPP and any purchase rights granted thereunder, and establish, amend and revoke rules and regulations for the administration of the ESPP. As of December 31, 2007, no
offerings had been designated under the ESPP.

Under
the Long-Term Incentive Plan or LTIP, we may also offer and sell up to 500,000 shares of the 2,000,000 shares of our class A common stock issuable under the LTIP
as stock awards to EMSC consultants and employees of professional associations or professional corporations, for which we or our subsidiaries provide management services pursuant to a physician
services agreement. Pursuant to its authority under the LTIP, the Compensation Committee of our Board of Directors established a Stock Purchase Plan, or SPP, under which stock awards may be sold to
such individuals. The purchase price associated with such awards will be determined from time to time pursuant to the LTIP by our Compensation Committee. As of December 31, 2007, no offerings
had been made under the SPP.

Performance Graph

The performance graph comparing cumulative total return among EMSC and certain indexes will be filed in EMSC's annual report for the fiscal year ended
December 31, 2007, which will be filed with the Securities and Exchange Commission within 120 days after December 31, 2007; the performance graph is incorporated herein by
reference.

Offer to Provide Form 10-K

Stockholders may request a complimentary copy of our Annual Report on Form 10-K by mail addressed to our Investor Relations Department at the
following address: Emergency Medical Services Corporation, 6200 South Syracuse Way, Greenwood Village, CO 80111.

ITEM 6.    SELECTED FINANCIAL DATA

The following table sets forth our selected financial data derived from our combined or consolidated financial statements for each of the periods indicated. The
selected financial data presented below should be read in conjunction with Item 7, "Management's Discussion and Analysis of Financial Condition and Results of Operations" and our audited
financial statements and notes thereto appearing in Item 8 of this Report.

Effective
as of January 31, 2005, we acquired AMR and EmCare from Laidlaw and, in connection with the acquisition, we changed our fiscal year to December 31 from
August 31. For all periods prior to the acquisition, the AMR and EmCare businesses formerly owned by Laidlaw are referred to as the "Predecessor."

The
comparability of our selected historical financial data has been affected by a number of significant events and transactions. In 2001, AMR's and EmCare's former parent, Laidlaw, and
certain of its affiliates filed voluntary petitions for reorganization under Chapter 11 of the U.S. Bankruptcy Code. Although subsidiaries of Laidlaw, neither AMR nor EmCare was included in the
bankruptcy filing. Laidlaw emerged from bankruptcy protection in June 2003. Laidlaw applied fresh-start accounting as of June 1, 2003 to AMR and EmCare and pushed down to us our share of the
fresh-start accounting adjustments. As a result of the fresh-start change in the basis of accounting for our underlying assets and liabilities, our results of operations and cash flows have been
separated as pre-June 1, 2003 and post-May 31, 2003.

Financial
data for the nine months ended May 31, 2003 (Pre Fresh-Start Predecessor), three months ended August 31, 2003 (Predecessor) and year ended August 31, 2004
(Predecessor) and the five months ended January 31, 2005 (Predecessor) are derived from our audited combined financial statements. Financial data as of and for the eleven months ended
December 31, 2005 and as of and for

57

---



the
years ended December 31, 2006 and 2007 are derived from our audited consolidated financial statements included in Item 8 of this Report.

|                                                                                     |                      |   |           |            |   |           |            |   |           | Predecessor |   |  |   | Pre Fresh-Start Predecessor |        
|------------------------------------------------------------------------------------ | -------------------- | - | --------- | ---------- | - | --------- | ---------- | - | --------- | ----------- | - |  | - | --------------------------- | -------
|
|
|
|
|
|
|Statement of Operations Data:                                                        |                      |   |           |            |   |           |            |   |           |             |   |  |   |                             |        
|Net revenue                                                                          |                      | $ | 2,106,993 |            | $ | 1,934,205 |            | $ | 1,655,485 |             |   |  | $ | 696,179                     |        
|Compensation and benefits                                                            |                      |   | 1,455,970 |            |   | 1,333,648 |            |   | 1,146,055 |             |   |  |   | 481,305                     |        
|Operating expenses                                                                   |                      |   | 317,518   |            |   | 294,806   |            |   | 233,087   |             |   |  |   | 94,882                      |        
|Insurance expenses                                                                   |                      |   | 66,308    |            |   | 74,258    |            |   | 86,814    |             |   |  |   | 40,310                      |        
|Selling, general and administrative expenses                                         |                      |   | 61,893    |            |   | 57,403    |            |   | 54,262    |             |   |  |   | 21,635                      |        
|Depreciation and amortization expenses                                               |                      |   | 70,483    |            |   | 66,005    |            |   | 54,143    |             |   |  |   | 18,808                      |        
|Restructuring charges                                                                |                      |   | 2,242     |            |   | 6,369     |            |   | 1,781     |             |   |  |   |                            |        
|Laidlaw fees and compensation charges                                                |                      |   |          |            |   |          |            |   |          |             |   |  |   | 19,857                      |        
|Laidlaw reorganization charges                                                       |                      |   |          |            |   |          |            |   |          |             |   |  |   |                            |        
|                                                                                     |                      |   |           |            |   |           |            |   |           |             |   |  |   |                             |        
|Income from operations                                                               |                      |   | 132,579   |            |   | 101,716   |            |   | 79,343    |             |   |  |   | 19,382                      |        
|Interest income from restricted assets                                               |                      |   | 7,143     |            |   | 5,987     |            |   | 4,014     |             |   |  |   | 1,308                       |        
|Interest expense                                                                     |                      |   | (46,948   | )          |   | (45,605   | )          |   | (47,813   | )           |   |  |   | (5,644                      | )      
|Realized gain (loss) on investments                                                  |                      |   | 245       |            |   | (467      | )          |   | (164      | )           |   |  |   |                            |        
|Interest and other income                                                            |                      |   | 2,055     |            |   | 2,346     |            |   | 1,040     |             |   |  |   | 714                         |        
|Loss on early debt extinguishment                                                    |                      |   |          |            |   | (377      | )          |   | (2,040    | )           |   |  |   |                            |        
|Fresh-start accounting adjustments(1)                                                |                      |   |          |            |   |          |            |   |          |             |   |  |   |                            |        
|                                                                                     |                      |   |           |            |   |           |            |   |           |             |   |  |   |                             |        
|Income before income taxes and cumulative effect of a change in accounting principle |                      |   | 95,074    |            |   | 63,600    |            |   | 34,380    |             |   |  |   | 15,760                      |        
|Income tax expense                                                                   |                      |   | (36,104   | )          |   | (24,961   | )          |   | (14,372   | )           |   |  |   | (6,278                      | )      
|                                                                                     |                      |   |           |            |   |           |            |   |           |             |   |  |   |                             |        
|Income (loss) before cumulative effect of a change in accounting principle           |                      |   | 58,970    |            |   | 38,639    |            |   | 20,008    |             |   |  |   | 9,482                       |        
|Cumulative effect of a change in accounting principle(2)                             |                      |   |          |            |   |          |            |   |          |             |   |  |   |                            |        
|Equity in earnings of unconsolidated subsidiary                                      |                      |   | 848       |            |   | 432       |            |   | 59        |             |   |  |   |                            |        
|                                                                                     |                      |   |           |            |   |           |            |   |           |             |   |  |   |                             |        
|Net income (loss)                                                                    |                      | $ | 59,818    |            | $ | 39,071    |            | $ | 20,067    |             |   |  | $ | 9,482                       |        
|                                                                                     |                      |   |           |            |   |           |            |   |           |             |   |  |   |                             |        
|Net income per share:                                                                |                      |   |           |            |   |           |            |   |           |             |   |  |   |                             |        
|                                                                                     | Basic                |   | $         | 1.44       |   | $         | 0.94       |   | $         | 0.56        |   |  |   |                             |        
|                                                                                     | Diluted              |   | $         | 1.39       |   | $         | 0.92       |   | $         | 0.55        |   |  |   |                             |        
|Weighted average number of common shares outstanding:                                |                      |   |           |            |   |           |            |   |           |             |   |  |   |                             |        
|                                                                                     | Basic                |   |           | 41,551,207 |   |           | 41,502,632 |   |           | 33,621,542  |   |  |   |                             |        
|                                                                                     | Diluted              |   |           | 43,146,881 |   |           | 42,528,885 |   |           | 34,282,176  |   |  |   |                             |        
|Other Financial Data:                                                                |                      |   |           |            |   |           |            |   |           |             |   |  |   |                             |        
|Cash flows provided by (used in):                                                    |                      |   |           |            |   |           |            |   |           |             |   |  |   |                             |        
|                                                                                     | Operating activities |   | $         | 97,818     |   | $         | 165,742    |   | $         | 109,963     |   |  |   | $                           | 15,966 
|                                                                                     | Investing activities |   |           | (100,226   | ) |           | (113,127   | ) |           | (909,629    | ) |  |   |                             | (21,667
|                                                                                     | Financing activities |   |           | (8,014     | ) |           | (31,327    | ) |           | 803,083     |   |  |   |                             | 10,856 
|Cash and cash equivalents                                                            |                      |   | 28,914    |            |   | 39,336    |            |   | 18,048    |             |   |  |   | 14,631                      |        
|Total assets                                                                         |                      |   | 1,479,563 |            |   | 1,318,217 |            |   | 1,267,028 |             |   |  |   | 983,510                     |        
|Long-term debt and capital lease obligations, including current maturities           |                      |   | 482,883   |            |   | 479,775   |            |   | 502,184   |             |   |  |   | 11,497                      |        
|Shareholders' or Combined Equity                                                     |                      |   | 449,496   |            |   | 386,040   |            |   | 344,984   |             |   |  |   | 598,277                     |        

---

58

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Quarterly Results

The following table summarizes our unaudited results for each quarter in the years ended December 31, 2007 and 2006 (in thousands, except per share
amounts).

|                                    |  | 2007
|----------------------------------- |  | ----
|
|
|Net revenue                         |  | $   
|Income from operations              |  |     
|Net income                          |  |     
|Basic net income per common share   |  |     
|Diluted net income per common share |  |     

|
|

|                                    |  | 2006
|----------------------------------- |  | ----
|
|
|Net revenue                         |  | $   
|Income from operations              |  |     
|Net income                          |  |     
|Basic net income per common share   |  |     
|Diluted net income per common share |  |     

ITEM 7.    MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

The following discussion of our financial condition and results of operations should be read in conjunction with the audited financial statements and the notes to
the audited financial statements included in Item 8 of this Report and the "Selected Financial Data" included in Item 6 of this Report. The following discussion includes periods before
the acquisition of AMR and EmCare. Accordingly, the discussion and analysis of historical periods do not fully reflect the impact the acquisition of AMR and EmCare have had on us. In addition, this
discussion contains forward-looking statements and involves numerous risks and uncertainties, including, but not limited to, those described in the "Risk Factors" section in Item 1A of this
Report. Our results may differ materially from those anticipated in any forward-looking statements.

Our
financial statements referred to in this Item 7 are included in Item 8 of this Annual Report.

Company Overview

We are a leading provider of emergency medical services in the United States. We operate our business and market our services under the AMR and EmCare brands. AMR
is the leading provider of medical transport services in the United States. EmCare is the leading provider of outsourced emergency department staffing and management services in the United States.
Approximately 88% of our net revenue for the year ended December 31, 2007 was generated under exclusive contracts. During 2007, we provided emergency medical, ambulance and other transport
services to approximately 10.6 million patients in more than 2,000 communities nationwide.

American Medical Response

Over its more than 50 years of operating history, AMR has developed the largest network of ambulance transport services in the United States based on net
revenue and number of transports. AMR has an 8% share of the total ambulance services market and a 21% share of the private provider

59

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ambulance
market. During the year ended December 31, 2007, AMR treated and transported approximately 3.4 million patients in 37 states. As of December 31, 2007, AMR had
approximately 3,300 contracts with communities, government agencies, healthcare providers and insurers to provide ambulance services. For the year ended December 31, 2007, approximately 56% of
AMR's net revenue was generated from emergency 911 ambulance transport services. Non-emergency ambulance transport services, including critical care transfer, wheelchair transports and
other interfacility transports, or IFTs, accounted for 31% of AMR's net revenue for the same period. The balance of net revenue for 2007 was generated from the provision of training, dispatch centers
and other services to communities and public safety agencies and from revenue associated with fixed-wing medical transportation services.

EmCare

Over its more than 30 years of operating history, EmCare has become the largest provider of outsourced emergency department staffing and related management
services to healthcare facilities based on number of contracts with hospitals and affiliated physician groups. EmCare has an 8% share of the total emergency department services market and a 12% share
of the outsourced emergency department services market. During the year ended December 31, 2007, EmCare had approximately 7.2 million patient visits in 40 states.

EmCare
primarily provides emergency department staffing and related management services to healthcare facilities. EmCare recruits and hires or subcontracts with physicians and other
healthcare professionals, who then provide professional services within the healthcare facilities with which we contract. We also provide billing and collection, risk management and other
administrative services to our healthcare professionals and to independent physicians. EmCare has 395 contracts with hospitals and independent physician groups to provide emergency department,
hospitalist and radiology staffing, and related management and other administrative services.

Key Factors and Measures We Use to Evaluate Our Business

The key factors and measures we use to evaluate our business focus on the number of patients we treat and transport and the costs we incur to provide the
necessary care and transportation for each of our patients.

We
evaluate our revenue net of provisions for contractual payor discounts and provisions for uncompensated care. Medicaid, Medicare and certain other payors receive discounts from our
standard charges, which we refer to as contractual discounts. In addition, individuals we treat and transport may be personally responsible for a deductible or co-pay under their third
party payor coverage, and most of our contracts require us to treat and transport patients who have no insurance or other third party payor coverage. Due to the uncertainty regarding collectibility of
charges associated with services we provide to these patients, which we refer to as uncompensated care, our net revenue recognition is based on expected cash collections. Our net revenue is gross
billings after provisions for contractual discounts and estimated uncompensated care. Provisions for contractual discounts and uncompensated care have increased historically primarily as a result of
increases in gross billing rates. The table below summarizes our approximate payor mix as a percentage of both net revenue and total transports and

60

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patient
visits for the years ended December 31, 2007 and 2006 and for the eleven months ended December 31, 2005.

|                                      |  | Percentage of Net Revenue |   | Percentage of Total Volume |  
|------------------------------------- |  | ------------------------- | - | -------------------------- | -
|
|
|
|Medicare                              |  | 24.8                      | % | 25.6                       | %
|Medicaid                              |  | 4.6                       |   | 4.8                        |  
|Commercial insurance and managed care |  | 48.5                      |   | 49.4                       |  
|Self-pay                              |  | 4.6                       |   | 4.8                        |  
|Subsidies and fees                    |  | 17.5                      |   | 15.4                       |  
|                                      |  |                           |   |                            |  
|Total                                 |  | 100.0                     | % | 100.0                      | %
|                                      |  |                           |   |                            |  

In
addition to continually monitoring our payor mix, we also analyze the following measures in each of our business segments:

AMR

Approximately 89% of AMR's net revenue for the year ended December 31, 2007 was transport revenue derived from the treatment and transportation of
patients, including fixed wing medical transportation services, based on billings to third party payors, healthcare facilities and patients. The balance of AMR's net revenue is derived from direct
billings to communities and government agencies for the provision of training, dispatch center and other services. AMR's measures for transport net revenue include:



The
change from period to period in the number of transports is influenced by changes in transports in existing markets from both new and existing facilities we serve for
non-emergency transports, and the effects of general community conditions for emergency transports. The general community conditions may include (1) the timing, location and
severity of influenza, allergens and other annually recurring viruses, (2) severe weather that affects a region's health status and/or infrastructure and (3) community-specific
demographic changes.

The
costs we incur in our AMR business segment consist primarily of compensation and benefits for ambulance crews and support personnel, direct and indirect operating costs to provide

61

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transportation
services, and costs related to accident and insurance claims. AMR's key cost measures include:



We
have focused our risk mitigation efforts on employee training for proper patient handling techniques, development of clinical and medical equipment protocols, driving safety,
implementation of technology to reduce auto incidents and other risk mitigation processes which we believe has resulted in a reduction in the frequency, severity and development of claims.

Depreciation
expense relates primarily to charges for usage of vehicles, computer hardware and software, equipment and other technologies. Amortization expense relates primarily to
intangibles recorded for customer relationships.

EmCare

Of EmCare's net revenue for the year ended December 31, 2007, approximately 99% was derived from our hospital contracts for emergency department staffing,
hospitalist and radiology services and other management services. Of this revenue, approximately 74% was generated from billings to third party payors and patients for patient visits and approximately
26% was generated from billings to hospitals and affiliated physician groups for professional services. EmCare's key net revenue measures are:



The
change from period to period in the number of patient visits under our "same store" contracts is influenced by general community conditions as well as hospital-specific elements,
many of which are beyond our direct control. The general community conditions include (1) the timing, location and

62

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severity
of influenza, allergens and other annually recurring viruses and (2) severe weather that affects a region's health status and/or infrastructure. Hospital-specific elements include the
timing and extent of facility renovations, hospital staffing issues and regulations that affect patient flow through the hospital.

The
costs incurred in our EmCare business segment consist primarily of compensation and benefits for physicians and other professional providers, professional liability costs, and
contract and other support costs. EmCare's key cost measures include:



Depreciation
expense relates primarily to charges for usage of medical equipment, computer hardware and software, and other technologies. Amortization expense relates primarily to
intangibles recorded for customer relationships.

Non-GAAP Measures

Adjusted Earnings Before Interest, Taxes, Depreciation and Amortization ("Adjusted EBITDA")

Adjusted EBITDA is defined as net income before equity in earnings of unconsolidated subsidiary, income tax expense, loss on early debt extinguishment, interest
and other income, realized gain (loss) on investments, interest expense, and depreciation and amortization. Adjusted EBITDA is commonly used by management and investors as a measure of leverage
capacity, debt service ability and liquidity. Adjusted EBITDA is not considered a measure of financial performance under U.S. generally accepted accounting principles, or GAAP, and the items excluded
from Adjusted EBITDA are significant components in understanding and assessing our financial performance. Adjusted EBITDA should not be considered in isolation or as an alternative to such GAAP
measures as net income, cash flows provided by or used in operating, investing or financing activities or other financial statement data presented in our financial statements as an indicator of
financial performance or liquidity. Since Adjusted EBITDA is not a measure determined in accordance with GAAP and is susceptible to varying calculations, Adjusted EBITDA, as presented, may not be
comparable to other similarly titled measures of other companies.

During
the year ended December 31, 2007, we reclassified income earned on insurance related assets as Interest Income from Restricted Assets; such income was previously reported
as a component of insurance expense. Previous amounts have been reclassified to conform to the current year presentation.

The
following tables set forth a reconciliation of Adjusted EBITDA to net income for our company, and reconciliations of Adjusted EBITDA to income from operations for our two operating

63

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segments
and a reconciliation of Adjusted EBITDA to cash flows from operating activities, using data derived from our financial statements for the periods indicated (amounts in thousands):

|                       |                                                 |   |         |         |   | Predecessor/
Successor |         |   |        
|---------------------- | ----------------------------------------------- | - | ------- | ------- | - | ---------------------- | ------- | - | -------
|
|
|
|
|
|Consolidated/Combined  |                                                 |   |         |         |   |                        |         |   |        
|Adjusted EBITDA        |                                                 | $ | 210,205 |         | $ | 173,708                |         | $ | 132,418
|                       | Depreciation and amortization expense           |   |         | (70,483 | ) |                        | (66,005 | ) |        
|                       | Interest income from restricted assets          |   |         | (7,143  | ) |                        | (5,987  | ) |        
|                       |                                                 |   |         |         |   |                        |         |   |        
|Income from operations |                                                 |   | 132,579 |         |   | 101,716                |         |   | 70,192 
|                       | Interest income from restricted assets          |   |         | 7,143   |   |                        | 5,987   |   |        
|                       | Interest expense                                |   |         | (46,948 | ) |                        | (45,605 | ) |        
|                       | Realized gain (loss) on investments             |   |         | 245     |   |                        | (467    | ) |        
|                       | Interest and other income                       |   |         | 2,055   |   |                        | 2,346   |   |        
|                       | Loss on debt extinguishment                     |   |         |        |   |                        | (377    | ) |        
|                       | Equity in earnings of unconsolidated subsidiary |   |         | 848     |   |                        | 432     |   |        
|                       | Income tax expense                              |   |         | (36,104 | ) |                        | (24,961 | ) |        
|                       |                                                 |   |         |         |   |                        |         |   |        
|Net income             |                                                 | $ | 59,818  |         | $ | 39,071                 |         | $ | 13,991 
|                       |                                                 |   |         |         |   |                        |         |   |        
|AMR                    |                                                 |   |         |         |   |                        |         |   |        
|Adjusted EBITDA        |                                                 | $ | 92,725  |         | $ | 90,671                 |         | $ | 94,478 
|                       | Depreciation and amortization expense           |   |         | (56,560 | ) |                        | (53,024 | ) |        
|                       | Interest income from restricted assets          |   |         | (2,881  | ) |                        | (2,444  | ) |        
|                       |                                                 |   |         |         |   |                        |         |   |        
|Income from operations |                                                 | $ | 33,284  |         | $ | 35,203                 |         | $ | 45,249 
|                       |                                                 |   |         |         |   |                        |         |   |        
|EmCare                 |                                                 |   |         |         |   |                        |         |   |        
|Adjusted EBITDA        |                                                 | $ | 117,480 |         | $ | 83,037                 |         | $ | 37,940 
|                       | Depreciation and amortization expense           |   |         | (13,923 | ) |                        | (12,981 | ) |        
|                       | Interest income from restricted assets          |   |         | (4,262  | ) |                        | (3,543  | ) |        
|                       |                                                 |   |         |         |   |                        |         |   |        
|Income from operations |                                                 | $ | 99,295  |         | $ | 66,513                 |         | $ | 24,965 
|                       |                                                 |   |         |         |   |                        |         |   |        

|
|

|                                             |  | Year ended
December 31,
2007 |         | Year ended
December 31,
2006 |   | Eleven months
ended
December 31,
2005 |  
|-------------------------------------------- |  | ---------------------------- | ------- | ---------------------------- | - | ------------------------------------- | -
|Adjusted EBITDA                              |  | $                            | 210,205 |                              | $ | 173,708                               |  
|Interest paid                                |  |                              | (44,874 | )                            |   | (43,506                               | )
|Change in accounts receivable                |  |                              | (74,991 | )                            |   | (4,740                                | )
|Change in other operating assets/liabilities |  |                              | 5,868   |                              |   | 38,072                                |  
|Equity based compensation                    |  |                              | 1,727   |                              |   | 1,431                                 |  
|Other                                        |  |                              | (117    | )                            |   | 777                                   |  
|                                             |  |                              |         |                              |   |                                       |  
|Cash flows provided by operating activities  |  | $                            | 97,818  |                              | $ | 165,742                               |  
|                                             |  |                              |         |                              |   |                                       |  

64

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Factors Affecting Operating Results

Re-Capitalization Activities

On February 10, 2005, an investor group led by Onex Partners LP and Onex Corporation, and including members of our management, purchased our
operating subsidiaries, AMR and EmCare, from Laidlaw International, Inc. To fund the $828.8 million purchase price of these acquisitions, we received equity contributions of
$219.2 million, issued and sold $250.0 million principal amount of senior subordinated
notes, and entered into a $450.0 million senior secured credit agreement comprised of a $100.0 million revolving credit facility and a $350.0 million term loan. We borrowed the
full amount of the term loan and $20.2 million under the revolving credit facility to fund our acquisition of AMR and EmCare, including the payment of related fees and expenses, and we have
used balances outstanding from time to time under the revolving credit facility for working capital purposes. The increase in the outstanding balance of long-term debt in February 2005
resulted in a corresponding increase in interest expense.

On
December 21, 2005, Emergency Medical Services Corporation completed its initial public offering of 8,100,000 shares of class A common stock; trading of those shares
commenced on the New York Stock Exchange on December 16, 2005. We used a significant portion of the net proceeds of $101.9 million from this initial public offering to repay
$99.1 million of debt outstanding under our senior secured credit facility and we used the balance for working capital, capital expenditures and other general corporate purposes. This reduction
to the outstanding balance of long-term debt in December 2005, and additional debt repayments made in 2006 of $19.4 million, have resulted in a corresponding decrease in our
interest costs.

Rate Changes by Government Sponsored Programs

In February 2002, the Health Care Financing Administration, now renamed the Centers for Medicare and Medicaid Services, issued the Medicare Ambulance Fee Schedule
Final Rule, or Final Rule, that revised Medicare policy on the coverage of ambulance transport services, effective April 1, 2002. The Final Rule was the result of a mandate under the Balanced
Budget Act of 1997, or BBA, to establish a national fee schedule for payment of ambulance transport services that would control increases in expenditures under Part B of the Medicare program,
establish definitions for ambulance transport services that link payments to the type of services furnished, consider appropriate regional and operational differences and consider adjustments to
account for inflation, among other provisions. The Final Rule provided for a five-year phase-in of a national fee schedule, beginning April 1, 2002. We estimate that the
impact of the ambulance service rate decreases under the national fee schedule mandated under the BBA, as modified by the phase-in provisions of the Medicare Modernization Act, resulted in
an increase in AMR's net revenue of approximately $16 million during calendar year 2005, resulted in a decrease in AMR's net revenue of approximately $17 million in 2006, and resulted in
a decrease in AMR's net revenue of approximately $7 million in 2007. Based upon the current Medicare transport mix, we expect a further increase in our net revenue totaling approximately
$5 million for the period 2008 through 2010. Although we have been able to substantially mitigate the phased-in reductions of the BBA through additional fee and subsidy increases,
we may not be able to continue to do so.

Medicare
pays for all EmCare physicians' services based upon a national fee schedule. The rate formula may result in significant yearly fluctuations which may be unrelated to changes in
the actual cost of providing physician services.

Changes in Net New Contracts

Our operating results are affected directly by the number of net new contracts we have in a period, reflecting the effects of both new contracts and contract
expirations. We regularly bid for new

65

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contracts,
frequently in a formal competitive bidding process that often requires written responses to a Request for Proposal, or RFP, and, in any fiscal period, certain of our contracts will expire.
We may elect not to seek extension or renewal of a contract if we determine that we cannot do so on favorable terms. With respect to expiring contracts we would like to renew, we may be required to
seek renewal through an RFP, and we may not be successful in retaining any such contracts, or retaining them on terms that are as favorable as present terms.

Hurricane Katrina and our Gulf Coast Operations

AMR provides ambulance services in Gulfport and Biloxi, Mississippi and several other Gulf Coast communities. Although our dispatch center was damaged by
hurricane Katrina and we had damage to a small number of vehicles, we were able to maintain communications through our use of back-up generators and other emergency supplies. We worked
closely with the Federal Emergency Management Agency, or FEMA, and other federal, state and local agencies and deployed additional ambulance transportation resources where they were most needed,
particularly in the coastal areas of Mississippi, Louisiana and Alabama. For the eleven months ended December 31, 2005, revenue derived from additional hurricane-related services was 0.9% of
net revenue and related expenses were 0.9% of total expenses included in income from operations. During 2006, we recorded approximately $2.2 million in additional revenue from hurricane-related
deployment in 2005.

EmCare
operations generally were unaffected by Katrina, with only one facility in the affected area. EmCare deployed additional resources to assist at that facility, and we experienced a
volume increase in certain facilities in adjacent states where evacuees were relocated.

Inflation and Fuel Costs

Certain of our expenses, such as wages and benefits, insurance, fuel and equipment repair and maintenance costs, are subject to normal inflationary pressures.
Although we have generally been able to offset inflationary cost increases through increased operating efficiencies and successful negotiation of fees and subsidies, we can provide no assurance that
we will be able to offset any future inflationary cost increases through similar efficiencies and fee changes.

Fuel
costs represented approximately 12.2% of AMR's operating expenses for the years ended December 31, 2007 and 2006, and 12.5% for the same period in 2005. Increases in fuel
costs, without mitigation through fee and subsidy increases, would continue to adversely affect AMR's operating results.

Critical Accounting Policies

The preparation of financial statements requires management to make estimates and assumptions relating to the reporting of results of operations, financial
condition and related disclosure of contingent assets and liabilities at the date of the financial statements. Actual results may differ from those estimates under different assumptions or conditions.
The following are our most critical accounting policies, which are those that require management's most difficult, subjective and complex judgments, requiring the need to make estimates about the
effect of matters that are inherently uncertain and may change in subsequent periods.

The
following discussion is not intended to represent a comprehensive list of our accounting policies. For a detailed discussion of the application of these and other accounting
policies, see note 2 to our audited financial statements included in Item 8 of this Report.

66

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Claims Liability and Professional Liability Reserves

We are self-insured up to certain limits for costs associated with workers compensation claims, automobile, professional liability claims and general
business liabilities. Reserves are established for estimates of the loss that we will ultimately incur on claims that have been reported but not paid and claims that have been incurred but not
reported. These reserves are based upon independent actuarial valuations, which are updated quarterly. Reserves other than general liability reserves are discounted at a rate commensurate with the
interest rate on monetary assets that essentially are risk free and have a maturity comparable to the underlying liabilities. The actuarial valuations consider a number of factors, including
historical claim payment patterns and changes in case reserves, the assumed rate of increase in healthcare costs and property damage repairs. Historical experience and recent trends in the historical
experience are the most significant factors in the determination of these reserves. We believe the use of actuarial methods to account for these reserves provides a consistent and effective way to
measure these subjective accruals. However, given the magnitude of the claims involved and the length of time until the ultimate cost is known, the use of any estimation technique in
this area is inherently sensitive. Accordingly, our recorded reserves could differ from our ultimate costs related to these claims due to changes in our accident reporting, claims payment and
settlement practices or claims reserve practices, as well as differences between assumed and future cost increases. Accrued unpaid claims and expenses that are expected to be paid within the next
twelve months are classified as current liabilities. All other accrued unpaid claims and expenses are classified as non-current liabilities.

Trade and Other Accounts Receivable

Our internal billing operations have primary responsibility for billing and collecting our accounts receivable. We utilize various processes and procedures in our
collection efforts depending on the payor classification; these efforts include monthly statements, written collection notices and telephonic follow-up procedures for certain accounts. AMR
writes off amounts not collected through our internal collection efforts to our uncompensated care allowance, and sends these receivables to third party collection agencies for further
follow-up collection efforts. To simplify the recording of any third party collection agency recoveries, EmCare classifies accounts sent to third party collection agencies as "delinquent"
within the billing system and they are written off. Accordingly, we record any subsequent collections through third party collection efforts as a recovery, in the case of AMR, and record it against
our "delinquent" status account, in the case of EmCare.

As
we discuss further in our "Revenue Recognition" policy below, we determine our allowances for contractual discounts and uncompensated care based on sophisticated information systems
and financial models, including payor reimbursement schedules, historical write-off experience and other economic data. We record our patient-related accounts receivable net of estimated
allowances for contractual discounts and uncompensated care in the period in which we perform services. We record gross fee-for-service revenue and related receivables based
upon established fee schedule prices. We reduce our recorded revenue and receivables for estimated discounts to patients covered by contractual insurance arrangements, and reduce these further by our
estimate of uncollectible accounts.

Our
provision and allowance for uncompensated care is based primarily on the historical collection and write-off activity of our approximately 10.6 million annual
patient encounters. We extract this data from our billing systems regularly and use it to compare our accounts receivable balances to estimated ultimate collections. Our allowance for uncompensated
care is related principally to receivables we record for self-pay patients and is not recorded on specific accounts due to the volume of individual patient receivables and the thousands of
commercial and managed care contracts.

We
also have other receivables related to facility and community subsidies and contractual receivables for providing staffing to communities for special events. We review these other
receivables

67

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periodically
to determine our expected collections and whether any allowances may be necessary. We write the balance off after we have exhausted all collection efforts.

Revenue Recognition

A significant portion of our revenue is derived from Medicare, Medicaid and private insurance payors that receive discounts from our standard charges, which are
referred to as contractual provisions. Additionally, we are also subject to collection risk for services provided to uninsured patients or for the deductible or co-pay portion of services
for insured patients, which are referred to as uncompensated care. We record our healthcare services revenue net of estimated provisions for contractual allowances and uncompensated care.

Healthcare
reimbursement is complex and may involve lengthy delays. Third party payors are continuing their efforts to control expenditures for healthcare and may disallow, in whole or
in part, claims for reimbursement based on determinations that certain amounts are not reimbursable under plan coverage, were for services provided that were not determined medically necessary, or
insufficient supporting information was provided. In addition, multiple payors with different requirements can be involved with each claim.

Management
utilizes sophisticated information systems and financial models to estimate the provisions for contractual allowances and uncompensated care. The estimate for contractual
allowances is determined on a payor-specific basis and is predominantly based on prior collection experience, adjusted as needed for known changes in reimbursement rates and recent changes in payor
mix and patient acuity factors. The estimate for uncompensated care is based principally on historical collection rates, write-off percentages and accounts receivable agings. These
estimates are analyzed continually and updated by management by monitoring reimbursement rate trends from governmental and private insurance payors, recent trends in collections from
self-pay patients, the ultimate cash collection patterns from all payors, accounts receivable aging trends, operating statistics and ratios, and the overall trends in accounts receivable
write-offs.

Management
also regularly analyzes the ultimate collectibility of accounts receivable after certain stages of the collection cycle using a look-back analysis to determine the
amount of receivables subsequently collected. Retroactive adjustments, which increased revenue for 2007 and 2006, were 1.6% and 1.3% of consolidated net revenue, respectively.

The
evaluation of these factors, as well as the interpretation of governmental regulations and private insurance contract provisions, involves complex, subjective judgments. As a result
of the inherent complexity of these calculations, our actual revenues and net income, and our accounts receivable, could vary significantly from the amounts reported.

Income Taxes

The Company accounts for income taxes under SFAS No. 109Accounting for Income Taxes("SFAS 109").
Deferred income taxes reflect the impact of temporary differences between the reported amounts of assets and liabilities for financial reporting purposes and such amounts as measured by tax laws and
regulations. The deferred tax assets and liabilities represent the future tax return consequences of those differences, which will either be taxable or deductible when the assets and liabilities are
recovered or settled. A valuation allowance is provided for deferred tax assets when management concludes it is more likely than not that some portion of the deferred tax assets will not be
recognized. 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 establish a reasonable
estimate of possible additional taxes owing, if any.

68

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In
connection with the acquisition of AMR and EmCare, the Company made an Internal Revenue Code ("IRC") section 338(h)(10) election for EmCare which eliminated $67 million
of deferred tax assets and stepped-up the tax basis of EmCare's assets to fair value. Differences between book and tax depreciation and amortization for these assets will create future
deferred tax assets or liabilities.

In
July 2006, the FASB issued Interpretation No. 48Accounting for Uncertainty in Income Taxes,an interpretation of
SFAS 109 ("FIN 48"). FIN 48 was adopted by the Company on January 1, 2007. FIN 48 creates a single model to address uncertainty in tax positions, prescribes the
minimum recognition threshold, and provides guidance on derecognition, measurement, classification, interest and penalties, accounting in interim periods, disclosure and transition. FIN 48 also
has expanded disclosure requirements, which include a tabular rollforward of the beginning and ending aggregate unrecognized tax benefits, as well as specific detail related to tax uncertainties for
which it is reasonably possible the amount of unrecognized tax benefit will significantly increase or decrease within twelve months. Upon adoption of FIN 48, the Company reclassified
approximately $41 million to a long-term liability and increased current deferred tax assets.

Goodwill and Other Intangible Assets

Goodwill is not amortized and is required to be tested annually for impairment, or more frequently if changes in circumstances, such as an adverse change to our
business environment, cause us to believe that goodwill may be impaired. Goodwill is allocated at the reporting unit level. If the fair value of the reporting unit falls below the book value of the
reporting unit at an impairment assessment date, an impairment charge would be recorded.

Should
our business environment or other factors change, our goodwill may become impaired and may result in material charges to our income statement.

Definite
life intangible assets are subject to impairment reviews when evidence or triggering events suggest that an impairment may have occurred. Should such triggering events occur
that cause us to review our definite life intangibles, management evaluates the carrying value in relation to the projection of future cash flows of the underlying assets. If deemed necessary, we
would take a charge to earnings for the difference between the carrying value and the estimated fair value. Should factors affecting the value of our definite life intangibles change significantly,
such as declining contract retention rates or reduced contractual cash flows, we may need to record an impairment charge in amounts that are significant to our financial statements.

Results of Operations

Basis of Presentation

The following tables present, for the periods indicated, consolidated or combined results of operations and amounts expressed as a percentage of net revenue. This
information has been derived from: (1) our audited statements of operations for the years ended December 31, 2007 and 2006, and (2) the combination of our audited statement of
operations for the eleven months ended December 31, 2005 and the unaudited combined statement of operations of the Predecessor for the one month ended January 31, 2005, and
(3) our audited statement of operations for the eleven months ended December 31, 2005.

69

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Consolidated and Combined (Predecessor) Results of Operations and as a Percentage of Net Revenue
(dollars in thousands)

|                                                |  |   |           |   |   | Predecessor/
Successor |   |   |          
|----------------------------------------------- |  | - | --------- | - | - | ---------------------- | - | - | ---------
|
|
|
|
|
|Net revenue                                     |  | $ | 2,106,993 |   | $ | 1,934,205              |   | $ | 1,798,554
|Compensation and benefits                       |  |   | 1,455,970 |   |   | 1,333,648              |   |   | 1,249,246
|Operating expenses                              |  |   | 317,518   |   |   | 294,806                |   |   | 251,556  
|Insurance expense                               |  |   | 66,308    |   |   | 74,258                 |   |   | 94,757   
|Selling, general and administrative expenses    |  |   | 61,893    |   |   | 57,403                 |   |   | 58,545   
|Depreciation and amortization expenses          |  |   | 70,483    |   |   | 66,005                 |   |   | 58,015   
|Restructuring charges                           |  |   | 2,242     |   |   | 6,369                  |   |   | 1,781    
|Laidlaw fees and compensation charges(1)        |  |   |          |   |   |                       |   |   | 14,440   
|                                                |  |   |           |   |   |                        |   |   |          
|Segment income from operations                  |  |   | 132,579   |   |   | 101,716                |   |   | 70,214   
|EMSC depreciation                               |  |   |          |   |   |                       |   |   | 22       
|                                                |  |   |           |   |   |                        |   |   |          
|Income from operations                          |  |   | 132,579   |   |   | 101,716                |   |   | 70,192   
|Interest income from restricted assets          |  |   | 7,143     |   |   | 5,987                  |   |   | 4,189    
|Interest expense                                |  |   | (46,948   | ) |   | (45,605                | ) |   | (48,982  
|Realized gain (loss) on investments             |  |   | 245       |   |   | (467                   | ) |   | (151     
|Interest and other income                       |  |   | 2,055     |   |   | 2,346                  |   |   | 1,036    
|Loss on early debt extinguishment               |  |   |          |   |   | (377                   | ) |   | (2,040   
|Equity in earnings of unconsolidated subsidiary |  |   | 848       |   |   | 432                    |   |   | 59       
|Income tax expense                              |  |   | (36,104   | ) |   | (24,961                | ) |   | (10,312  
|                                                |  |   |           |   |   |                        |   |   |          
|Net income                                      |  | $ | 59,818    |   | $ | 39,071                 |   | $ | 13,991   
|                                                |  |   |           |   |   |                        |   |   |          

---

|                                             |  |       |   |       |   | Predecessor/
Successor |   |       |  
|-------------------------------------------- |  | ----- | - | ----- | - | ---------------------- | - | ----- | -
|
|
|
|
|
|Net revenue                                  |  | 100.0 | % | 100.0 | % | 100.0                  | % | 100.0 | %
|Compensation and benefits                    |  | 69.1  |   | 69.0  |   | 69.5                   |   | 69.2  |  
|Operating expenses                           |  | 15.1  |   | 15.2  |   | 14.0                   |   | 14.1  |  
|Insurance expenses                           |  | 3.1   |   | 3.8   |   | 5.3                    |   | 5.2   |  
|Selling, general and administrative expenses |  | 2.9   |   | 3.0   |   | 3.3                    |   | 3.3   |  
|Depreciation and amortization expenses       |  | 3.3   |   | 3.4   |   | 3.2                    |   | 3.3   |  
|Restructuring charges                        |  | 0.1   |   | 0.3   |   | 0.1                    |   | 0.1   |  
|Laidlaw fees and compensation(1)             |  |      |   |      |   | 0.8                    |   |      |  
|                                             |  |       |   |       |   |                        |   |       |  
|Income from operations                       |  | 6.3   | % | 5.3   | % | 3.9                    | % | 4.8   | %
|                                             |  |       |   |       |   |                        |   |       |  

---

70

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AMR

|                                             |  |   |           |  |       |   |   |           |  | Predecessor/
Successor |   |   |           |  |      
|-------------------------------------------- |  | - | --------- |  | ----- | - | - | --------- |  | ---------------------- | - | - | --------- |  | -----
|
|
|
|
|Net revenue                                  |  | $ | 1,219,212 |  | 100.0 | % | $ | 1,189,447 |  | 100.0                  | % | $ | 1,153,513 |  | 100.0
|Compensation and benefits                    |  |   | 772,677   |  | 63.4  |   |   | 759,517   |  | 63.9                   |   |   | 741,695   |  | 64.3 
|Operating expenses                           |  |   | 275,603   |  | 22.6  |   |   | 259,213   |  | 21.8                   |   |   | 223,624   |  | 19.4 
|Insurance expense                            |  |   | 36,513    |  | 3.0   |   |   | 36,192    |  | 3.0                    |   |   | 47,899    |  | 4.2  
|Selling, general and administrative expenses |  |   | 42,333    |  | 3.5   |   |   | 39,929    |  | 3.4                    |   |   | 40,047    |  | 3.5  
|Depreciation and amortization expense        |  |   | 56,560    |  | 4.6   |   |   | 53,024    |  | 4.5                    |   |   | 47,508    |  | 4.1  
|Restructuring charges                        |  |   | 2,242     |  | 0.2   |   |   | 6,369     |  | 0.5                    |   |   | 1,633     |  | 0.1  
|Laidlaw fees and compensation charges(1)     |  |   |          |  |      |   |   |          |  |                       |   |   | 5,858     |  | 0.5  
|                                             |  |   |           |  |       |   |   |           |  |                        |   |   |           |  |      
|Income from operations                       |  | $ | 33,284    |  | 2.7   | % | $ | 35,203    |  | 3.0                    | % | $ | 45,249    |  | 3.9  
|                                             |  |   |           |  |       |   |   |           |  |                        |   |   |           |  |      

---

EmCare

|                                             |  |   |         |  |       |   |   |         |  | Predecessor/
Successor |   |   |         |  |      
|-------------------------------------------- |  | - | ------- |  | ----- | - | - | ------- |  | ---------------------- | - | - | ------- |  | -----
|
|
|
|
|Net revenue                                  |  | $ | 887,781 |  | 100.0 | % | $ | 744,758 |  | 100.0                  | % | $ | 645,041 |  | 100.0
|Compensation and benefits                    |  |   | 683,293 |  | 77.0  |   |   | 574,131 |  | 77.1                   |   |   | 507,551 |  | 78.7 
|Operating expenses                           |  |   | 41,915  |  | 4.7   |   |   | 35,593  |  | 4.8                    |   |   | 27,932  |  | 4.3  
|Insurance expense                            |  |   | 29,795  |  | 3.4   |   |   | 38,066  |  | 5.1                    |   |   | 46,858  |  | 7.3  
|Selling, general and administrative expenses |  |   | 19,560  |  | 2.2   |   |   | 17,474  |  | 2.3                    |   |   | 18,498  |  | 2.9  
|Depreciation and amortization expense        |  |   | 13,923  |  | 1.6   |   |   | 12,981  |  | 1.7                    |   |   | 10,507  |  | 1.6  
|Restructuring charges                        |  |   |        |  |      |   |   |        |  |                       |   |   | 148     |  | 0.0  
|Laidlaw fees and compensation charges(1)     |  |   |        |  |      |   |   |        |  |                       |   |   | 8,582   |  | 1.3  
|                                             |  |   |         |  |       |   |   |         |  |                        |   |   |         |  |      
|Income from operations                       |  | $ | 99,295  |  | 11.2  | % | $ | 66,513  |  | 8.9                    | % | $ | 24,965  |  | 3.9  
|                                             |  |   |         |  |       |   |   |         |  |                        |   |   |         |  |      

---

Year ended December 31, 2007 compared to year ended December 31, 2006

Consolidated

Our results for the year ended December 31, 2007 reflect an increase in net revenue of $172.8 million and an increase in net income of
$20.7 million compared to the year ended December 31, 2006. The increase in net income is attributable primarily to an increase of $30.9 million in operating income, offset by
increases in income tax expense. Basic and diluted earnings per share were $1.44 and $1.39, respectively, for the year ended December 31, 2007. Basic and diluted earnings per share were $0.94
and $0.92, respectively, for the same period in 2006.

71

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Net revenue

For the year ended December 31, 2007, we generated net revenue of $2,107.0 million compared to net revenue of $1,934.2 million for the year
ended December 31, 2006, representing an increase of 8.9%. The increase is attributable primarily to increases in rates and volumes on existing contracts and increased volume from net new
contracts and acquisitions.

Adjusted EBITDA

Adjusted EBITDA was $210.2 million, or 10.0% of net revenue, for the year ended December 31, 2007 compared to $173.7 million, or 9.0% of net
revenue, for the same period in 2006. The increase is attributable primarily to the net impact of revenue growth during the period and continued improvement in insurance claims costs.

Depreciation and amortization expense

Depreciation and amortization expense for the year ended December 31, 2007 was $70.5 million, or 3.3% of net revenue, compared to
$66.0 million, or 3.4% of net revenue, for the year ended December 31, 2006. The increase is attributable to higher depreciation expense related to growth in capital expenditures during
2006 and amortization expense recorded on additional contract intangible assets for acquisitions made since December 31, 2006.

Interest income from restricted assets

Interest income from restricted assets for the year ended December 31, 2007 was $7.1 million compared to $6.0 million for the same period in
2006. The increase is attributable primarily to additional insurance collateral assets maintained during the year.

Interest expense

Interest expense for the year ended December 31, 2007 was $46.9 million compared to $45.6 million for the same period in 2006. The increase
is attributable primarily to borrowings on our revolving credit facility during the year ended December 31, 2007.

Income tax expense

Income tax expense increased by $11.1 million for the year ended December 31, 2007, compared to the same period in 2006, which resulted primarily
from increased operating income. Our effective tax rate for the year ended December 31, 2007 was 38.0% compared with 39.2% for the same period in 2006.

AMR

Net revenue

Net revenue for the year ended December 31, 2007 was $1,219.2 million, an increase of $29.8 million, or 2.5%, from $1,189.4 million
for the same period in 2006. The increase in net revenue was due primarily to an increase in our net revenue per weighted transport of approximately 2.7%, or $31.8 million and a decrease of
0.2%, or $2.0 million, in weighted transport volume. Revenue per weighted transport increased due primarily to revenue from our fixed wing air transportation services business acquired in July
2006, and from our Medicaid managed transportation business in Texas, a contract under which we began providing services in June 2006. Weighted transports decreased approximately 4,900 for the year
ended December 31, 2007 compared to 2006. The change was primarily the result of the restructuring of certain of our operations in Los Angeles and the exit of our operations located in eastern
Michigan, which accounted for a decrease of approximately 139,800

72

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weighted
transports. The decrease was partially offset by an increase in weighted transports of 72,295 from our acquisitions of Abbott Ambulance and MedicWest in 2007 and by an increase in transport
volume in other markets of 2.1%.

Compensation and benefits

Compensation and benefit costs for the year ended December 31, 2007 were $772.7 million, or 63.4% of net revenue, compared to $759.5 million,
or 63.9% of net revenue, for the year ended December 31, 2006. Ambulance crew wages per ambulance unit hour increased by approximately 2.2%, or $9.6 million, principally from annual wage
rate increases. Ambulance unit hours decreased period over period by 1.0% or $4.5 million, due to the restructuring of certain of our operations in Los Angeles and the exit of our operations
located in eastern Michigan, partially offset by increases from recent acquisitions and in our other markets. Non-crew wages increased $12.0 million, or 6.4% primarily from annual
salary increases and additional compensation costs incurred under our fixed wing transportation services business, Medicaid management transportation contract and newly acquired companies. Benefit
costs decreased by $1.8 million for the year ended December 31, 2007, compared to the same period in 2006, primarily due to reduced claims costs incurred under our
self-insured health plans.

Operating expenses

Operating expenses for the year ended December 31, 2007 were $275.6 million, or 22.6% of net revenue, compared to $259.2 million, or 21.8% of
net revenue, for the year ended December 31, 2006. Operating expenses per weighted transport increased 6.5% for the year ended December 31, 2007 compared to the same period in 2006. This
change is due primarily to an additional $14.7 million of operating expenses
incurred under our fixed wing transportation services business and our Texas Medicaid managed transportation contract and higher fuel costs.

Insurance expense

Insurance expense for the year ended December 31, 2007 was $36.5 million compared to $36.2 million in 2006, or 3.0% of net revenue in both
years. Due to continued improvement in estimates of current and prior year ultimate claims costs, a reduction of prior year insurance provisions of $11.3 million was recorded for the year ended
December 31, 2007 compared to a $13.0 million reduction for the same period in 2006.

Selling, general and administrative

Selling, general and administrative expense for the year ended December 31, 2007 was $42.3 million, or 3.5% of net revenue, compared to
$39.9 million, or 3.4% of net revenue, for the year ended December 31, 2006. The change is primarily due to an increase in software licensing and maintenance fees.

Restructuring charges

Restructuring charges of $2.2 million were recorded during the year ended December 31, 2007, relating to the closure of one of our billing offices
and restructuring of our operations in Los Angeles and Orange Counties in California. Restructuring charges of $6.4 million were recorded during the year ended December 31, 2006,
relating to the re-alignment of regional, billing, and certain west coast operations, as well as due to our exit from our operations located in eastern Michigan.

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Depreciation and amortization

Depreciation and amortization expense for the year ended December 31, 2007 was $56.6 million, or 4.6% of net revenue, compared to
$53.0 million, or 4.5% of net revenue, for the same period in 2006. The increase is attributable primarily to higher depreciation expense related to growth in capital expenditures during 2006
and higher amortization expense due to acquisitions since December 31, 2006.

EmCare

Net revenue

Net revenue for the year ended December 31, 2007 was $887.8 million, an increase of $143.0 million, or 19.2%, from $744.8 million for
the year ended December 31, 2006. Following December 31, 2005, we added 60 net new contracts which accounted for a net revenue increase of $72.5 million in 2007. Of the 60 net new
contracts added since December 31, 2005, 43 were added in 2006 resulting in an increase in 2007 net revenue of $49.0 million. For the year ended December 31, 2007, EmCare added a
net 17 new contracts, from starting 68 new contracts and terminating 51 contracts, resulting in an increase in net revenue of $23.4 million in 2007. Net revenue under our "same store" contracts
(contracts in existence for the entirety of both years) increased $70.6 million, or 12.0%, for the year ended December 31, 2007 due to an 8.2% increase in net revenue per patient visit
from rate increases from our third-party payors and from retroactive revenue adjustments of 1.8% recorded during 2007. For the year ended December 31, 2007, "same store" patient visits
increased 2.0% compared to the same period in 2006.

Compensation and benefits

Compensation and benefits costs for the year ended December 31, 2007 were $683.3 million, or 77.0% of net revenue, compared to
$574.1 million, or 77.1% of net revenue, for the same period in 2006. Provider compensation costs increased $57.3 million from net new contract additions. "Same store" provider
compensation costs increased $39.6 million due to an 8.7% increase in provider compensation per patient visit primarily due to increases in net revenue per patient visit. The remaining variance
is related primarily to higher expense for incentive compensation plans and increased variable salary costs due to growth in patient visits.

Operating expenses

Operating expenses for the year ended December 31, 2007 were $41.9 million, or 4.7% of net revenue, compared to $35.6 million, or 4.8% of net
revenue, for the same period in 2006. The variance is primarily due to growth in patient visits from net new contracts and from additional off-hours radiology coverage of
$3.2 million.

Insurance expense

Professional liability insurance expense for the year ended December 31, 2007 was $29.8 million, or 3.4% of net revenue, compared to
$38.1 million, or 5.1% of net revenue, for the same period in 2006. The decrease is due to the continued improvement in our estimates for current and prior year ultimate claims costs. As a
result, a reduction of prior year insurance provisions of $10.2 million was recorded during the year ended December 31, 2007. A reduction of $3.9 million was recorded for the year
ended December 31, 2006.

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Selling, general and administrative

Selling, general and administrative expense for the year ended December 31, 2007 was $19.6 million, or 2.2% of net revenue, compared to
$17.5 million, or 2.3% of net revenue, for the same period in 2006.

Depreciation and amortization

Depreciation and amortization expense for the year ended December 31, 2007 was $13.9 million, or 1.6% of net revenue, compared to
$13.0 million, or 1.7% of net revenue, for the same period in 2006.

Year ended December 31, 2006 compared to year ended December 31, 2005

Consolidated/Combined

Our results for the year ended December 31, 2006 reflect an increase in net revenue of $135.7 million and an increase in net income of
$25.1 million from the year ended December 31, 2005. The increase in net income is attributable primarily to an increase of $33.3 million in income from operations partially
offset by an increase in income tax expense. Basic and diluted earnings per share were $0.94 and $0.92, respectively, for the year ended December 31, 2006.

We
completed our initial offering of class A common stock on December 21, 2005; when issued, public trading of our shares commenced on December 16, 2005.

Net revenue

For the year ended December 31, 2006 we generated net revenue of $1,934.2 million, compared to net revenue of $1,798.6 million for year ended
December 31, 2005, representing an increase of 7.5%. The increase is attributable primarily to increases in rates and volumes on existing contracts and increased volume from net new contracts.

Depreciation and amortization expense

Depreciation and amortization expense for the year ended December 31, 2006 was $66.0 million, or 3.4% of net revenue, compared to
$58.0 million, or 3.2% of net revenue, for the year ended December 31, 2005. The change is attributable to amortization expense on the contract intangible assets recorded in connection
with the acquisition of AMR and EmCare, increasing capital expenditures and changes in the composition and timing of capital expenditures.

Income from operations

Income from operations was $101.7 million, or 5.3% of net revenue, for the year ended December 31, 2006 compared to $70.2 million, or 3.9% of
net revenue, for the year ended December 31, 2005. The increase is attributable primarily to the elimination of Laidlaw acquisition-related compensation charges, continued improvement in
insurance claims costs and the net impact of revenue growth during the period.

Interest income from restricted assets

Interest income from restricted assets for the year ended December 31, 2006 was $6.0 million compared to $4.2 million for the same period in
2005. The increase is attributable primarily to additional insurance collateral assets maintained during the year.

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Interest expense

Interest expense for the year ended December 31, 2006 was $45.6 million compared to $49.0 million for the year ended December 31,
2005. The decrease relates to the repayment of approximately $99.1 million of our senior secured credit facility in December 2005 following our initial public offering and unscheduled
repayments of $10.0 million and $9.4 million in May 2006 and July 2006, respectively, offset by rising interest rates.

Income tax expense

Income tax expense increased by $14.6 million for the year ended December 31, 2006, compared to the same period in 2005, resulting primarily from
increased operating income. The one month ended January 31, 2005 included one-time acquisition-related Laidlaw compensation charges which resulted in an operating loss for the month
and an associated income tax benefit. Our effective tax rate for 2006 was 39.2%.

AMR

Net revenue

Net revenue for the year ended December 31, 2006 was $1,189.4 million, an increase of $35.9 million, or 3.1%, from $1,153.5 million
for the same period in 2005. The increase in net revenue was due primarily to an increase in our net revenue per weighted transport of approximately 3.1% (4.1% excluding the net decrease in
hurricane-related revenue). Net revenue per weighted transport increased 1.7% due to revenue from our recently acquired fixed wing air transportation services business and from our Medicaid managed
transportation business in Texas. During 2006, AMR was awarded a contract with the Texas Department of Transportation to provide management of non-emergency transportation services for
Medicaid clients in four geographical areas. Net revenue per transport also increased due to rate increases in several markets partially offset by Medicare rate reductions and an increase in our
self-pay transport mix in certain markets. The loss of a portion of AMR's 9-1-1 contract with Los Angeles County resulted in a reduction of approximately 60,100
emergency transports and approximately $23.2 million in net revenue during the year ended December 31, 2006 compared with the same period last year. Excluding the impact of the Los
Angeles County reduction, ambulance transport volume increased 2.2%, offset by a 2.0% decrease in wheelchair transports for planned reductions in certain markets, resulting in an increase of
approximately 59,900 weighted transports compared with the same period last year.

Compensation and benefits

Compensation and benefits costs for the year ended December 31, 2006 were $759.5 million, or 63.9% of net revenue, compared to
$741.7 million, or 64.3% of net revenue, for the year ended December 31, 2005. Ambulance unit hours increased period over period by 0.5%, primarily due to contractual deployment changes,
partially offset by the reduction in Los Angeles County volumes and the associated decrease in ambulance unit hours, increasing compensation costs by $1.9 million. Ambulance crew wages per
ambulance unit hour increased by approximately 4.4%, or $18.1 million principally from annual salary increases and increased overtime due to staffing shortages in certain markets. Wheelchair
crew wages decreased by $1.0 million during the period due to reduced volumes and associated unit hours. Benefits costs increased by $0.2 million for the year ended December 31,
2006, but decreased 0.5% as a percentage of salaries compared to the same period last year primarily due to reduced claims costs incurred under our self-insured health plans.

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Operating expenses

Operating expenses for the year ended December 31, 2006 were $259.2 million, or 21.8% of net revenue, compared to $223.6 million, or 19.4% of
net revenue, for the year ended December 31, 2005. Operating expenses per weighted transport increased 15.9% in the year ended December 31, 2006 compared to the same period in 2005. This
change is due to additional operating expenses incurred under our Texas Medicaid managed transportation contract and our recently acquired fixed wing transportation services business, which amounted
to $19.8 million for the year ended December 31, 2006. In addition, external provider costs, such as dispatch and first responder fees and provider costs incurred under our Kaiser
contract, increased by $4.6 million or 9.2%, which were partially offset by additional revenue. Fuel costs increased by $3.8 million and other operating costs, including medical
supplies, occupancy and professional fees increased by $7.4 million.

Insurance expense

Insurance expense for the year ended December 31, 2006 was $36.2 million, or 3.0% of net revenue, compared to $47.9 million, or 4.2% of net
revenue, for the same period in 2005. The decrease is due to the continued improvement in our estimated current and prior year ultimate claims costs. As a result, a reduction of prior year insurance
provisions of $13.0 million was recorded during the year ended December 31, 2006, compared to a $7.3 million reduction recorded during the same period last year.

Selling, general and administrative

Selling, general and administrative expense for the year ended December 31, 2006 was $39.9 million, or 3.4% of net revenue, compared to
$40.0 million, or 3.5% of net revenue, for the year ended December 31, 2005. The decrease relates primarily to our ability to better leverage support costs across our operations.

Restructuring charges

Restructuring charges of $6.4 million were recorded during the year ended December 31, 2006, related to the re-alignment of regional,
billing and certain west coast operations, as well as due to the exit from our operations located in eastern Michigan. AMR incurred restructuring charges during the year ended December 31, 2005
of $1.6 million related to the consolidation of two operating regions and the combination of the AMR and EmCare corporate overhead departments.

Laidlaw fees and compensation charges

AMR did not incur Laidlaw compensation charges subsequent to the acquisition in February 2005. Results for the year ended December 31, 2005 include
$5.9 million, or 0.5% of net revenue, for Laidlaw acquisition-related compensation charges incurred in January 2005.

Depreciation and amortization

Depreciation and amortization expense for the year ended December 31, 2006 was $53.0 million, or 4.5% of net revenue, compared to
$47.5 million, or 4.1% of net revenue, for the same period in 2005. The increase is attributable to additional amortization expense related to the contract intangible asset we recorded in
connection with the acquisition of AMR and an increase in depreciation expense related to increased capital expenditures and changes in the composition and timing of capital expenditures.

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EmCare

Net revenue

Net revenue for the year ended December 31, 2006 was $744.8 million, an increase of $99.7 million, or 15.5%, from $645.0 million in
2005. The increase was due primarily to an increase in patient visits from net new hospital contracts and net revenue increases in existing contracts. During the two years ended December 31,
2006, we added 69 net new contracts, which accounted for a net revenue increase of $41.9 million for the year ended December 31, 2006. Of the 69 net new contracts added since
December 31, 2004, 26 were added in 2005 resulting in an increase in 2006 net revenue of $17.0 million. Net new contracts added in 2006 totaled 43 and increased 2006 net revenue by
$24.9 million. Of the 43 net new contracts added in 2006, 20 were from our acquisition of CSS in November 2006 with related net revenue totaling $1.6 million. Net revenue under our same
store contracts increased $57.8 million in the year ended December 31, 2006 due to a 4.5% increase in patient visits and a 6.9% increase in net revenue per patient visit.

Compensation and benefits

Compensation and benefits costs for the year ended December 31, 2006 were $574.1 million, or 77.1% of net revenue, compared to
$507.6 million, or 78.7% of net revenue, for the same period in 2005. Provider compensation and benefits costs increased $25.6 million from net new contract additions. Same store
provider compensation and benefits costs increased $30.7 million due to a 4.5% increase in patient visits and a 4.8% increase in provider compensation per patient visit. The remaining variance
is due to higher variable compensation costs for our billing function due to the increase in patient visits and higher payments on profitability-based incentive compensation plans for
non-clinical employees.

Operating expenses

Operating expenses for the year ended December 31, 2006 were $35.6 million, or 4.8% of net revenue, compared to $27.9 million, or 4.3% of net
revenue, for the same period in 2005. Operating expenses increased primarily due to the addition of net new contracts, increased patient visits at same store contracts, additional off hours radiology
coverage for new contracts and increased professional fees related to various Company initiatives.

Insurance expense

Professional liability insurance expense for the year ended December 31, 2006 was $38.1 million, or 5.1% of net revenue, compared to
$46.9 million, or 7.3% of net revenue, for the year ended December 31, 2005. The decrease is due to the continued improvement in our estimated current and prior year ultimate claims
costs. As a result, a reduction of prior year insurance provisions of $3.9 million was recorded during the year ended December 31, 2006.

Selling, general and administrative

Selling, general and administrative expense for the year ended December 31, 2006 was $17.5 million, or 2.3% of net revenue, compared to
$18.5 million, or 2.9% of net revenue, for the year ended December 31, 2005. The decrease relates primarily to our ability to better leverage support costs across our operations.

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Laidlaw fees and compensation charges

EmCare did not incur Laidlaw compensation charges subsequent to the acquisition in February 2005. Results for the year ended December 31, 2005 include
$8.6 million, or 1.3% of net revenue, for Laidlaw acquisition-related compensation charges incurred in January 2005.

Depreciation and amortization

Depreciation and amortization expense for the year ended December 31, 2006 was $13.0 million, or 1.7% of net revenue, compared to
$10.5 million, or 1.6% of net revenue, for the year ended December 31, 2005. The increase as a percentage of net revenue is attributable to additional amortization expense from the
contract intangible we recorded in connection with the acquisition of EmCare, as well as depreciation expense related to EmCare's participation in Company-wide shared services initiatives.

Liquidity and Capital Resources

Our primary source of liquidity is cash flow provided by our operating activities. We can also use our revolving senior secured credit facility, described below,
to supplement cash flows provided by our operating activities if we decide to do so for strategic or operating reasons. Our liquidity needs are primarily to service long-term debt and to
fund working capital requirements, capital expenditures related to the acquisition of vehicles and medical equipment, technology-related assets and insurance-related deposits. See the discussion in
Item 1A, "Risk Factors" for circumstances that could affect our sources of liquidity.

We
have available to us, upon compliance with customary conditions, $100.0 million under the revolving credit facility, less any letters of credit outstanding. Outstanding letters
of credit at December 31, 2007 were $29.6 million. Further, we have a conditional right under our senior secured credit facility to request new or existing lenders to provide up to an
additional $100.0 million of term debt (in $20.0 million increments).

Cash Flow

The table below summarizes cash flow information derived from our statements of cash flows for the periods indicated, amounts in thousands:

|                             |                      |  |   |          |   | Predecessor/
Successor |          |   |  
|---------------------------- | -------------------- |  | - | -------- | - | ---------------------- | -------- | - | -
|
|
|
|
|
|Net cash provided (used) by: |                      |  |   |          |   |                        |          |   |  
|                             | Operating activities |  | $ | 97,818   |   | $                      | 165,742  |   | $
|                             | Investing activities |  |   | (100,226 | ) |                        | (113,127 | ) |  
|                             | Financing activities |  | $ | (8,014   | ) | $                      | (31,327  | ) | $

Operating Activities

Net cash provided by operating activities was $97.8 million for the year ended December 31, 2007 compared to $165.7 million for the same
period in 2006. Operating cash flows were affected primarily by changes in net income, accounts receivable and accounts payable and accrued liabilities. Increases in accounts receivable decreased
operating cash flows by $75.0 million for the year ended December 31, 2007 compared to $4.7 million for the same period in 2006. The 2006 period was impacted positively by the
collection of hurricane-related and income tax receivables recorded in 2005. The 2007 period was

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impacted
by increases in accounts receivable at our EmCare segment primarily related to a significant increase in net revenue of $143.0 million. Our AMR segment was impacted negatively in the
2007 period primarily due to the implementation of a new billing system in several markets and by our acquisition of MedicWest, in which we did not purchase the existing accounts receivable balances.
We expect these to be temporary delays in our collection process and to have no material effect on our financial condition or results of operations. The changes in accounts payable and accrued
liabilities are primarily attributable to the timing of payroll related payments.

For
the years ended December 31, 2006 and 2005, we generated cash flows from operating activities of $165.7 million and $105.3 million, respectively. Operating cash
flows were positively affected by increased net income, utilization of deferred tax assets, and timing differences on insurance premium and employee compensation payments. For the year ended
December 31, 2006, we had net income of $39.1 million, compared to $14.0 million for the year ended December 31, 2005. Changes in working capital contributed
$24.9 million for the year ended December 31, 2006, which included a $4.7 million decrease in accounts receivable, and a $30.7 million increase in accounts payable and
accrued liabilities.
Working capital uses in operating cash flow were $20.3 million for the year ended December 31, 2005, including an increase in accounts receivable of $57.4 million, primarily
related to hurricane revenue and income tax refunds, offset in part by increases in accrued liabilities of $36.3 million.

Certain
government programs, including Medicare and Medicaid programs, require notice or re-enrollment when certain ownership changes occur. In certain jurisdictions such
changes require pre- or post-notification to governmental licensing and certification agencies, agencies with which we have contracts. If the payor requires us to complete the
re-enrollment process prior to submitting reimbursement requests, we may be delayed in payment, receive refund requests or be subject to recoupment for services we provide in the interim.

Investing Activities

Net cash used in investing activities was $100.2 million for the year ended December 31, 2007 compared to $113.1 million for the same period
in 2006. The decrease relates primarily to acquisitions of businesses of $75.6 million during the year ended December 31, 2007 compared with acquisitions of businesses of
$23.6 million during the same period in 2006. The increase in acquisitions was offset partially by a $39.2 million reduction in net insurance collateral funding and a
$21.5 million reduction in net capital expenditures.

Net
cash used in investing activities was $113.1 million for the year ended December 31, 2006, compared to $902.8 million for the year ended December 31,
2005. The $789.7 million decrease was attributable principally to our net cash outflow of $828.8 million to fund the acquisition of AMR and EmCare. We also had net cash outflows to fund
our insurance related programs of $28.4 million in fiscal 2006 and $27.4 million for the year ended December 31, 2005. Capital expenditures were $60.4 million in fiscal
2006 and $52.8 million for the year ended December 31, 2005. Cash outflows to fund acquisitions of businesses were $23.6 million in 2006.

Financing Activities

For the year ended December 31, 2007, net cash used in financing activities was $8.0 million compared to $31.3 million for the same period in
2006. The variance related primarily to unscheduled payments of approximately $19.4 million on our senior secured credit facility in 2006. Included in net cash used in financing activities for
the year ended December 31, 2007, are borrowings and repayments under our revolving credit facility. At December 31, 2007, there were no amounts outstanding under our revolving credit
facility.

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For
the year ended December 31, 2006, net cash used in financing activities was $31.3 million, compared to net cash provided by financing activities of
$811.7 million for the year ended December 31, 2006. The decrease in net cash provided by financing activities relates primarily to borrowings under our senior secured credit facility
and our issuance of senior subordinated notes in 2005. For the year ended December 31, 2005, net cash used in financing activities included financing costs of $18.3 million and
repayments of debt, including capital lease and senior secured credit facility obligations totaling $134.4 million. Repayments of debt in the year ended December 31, 2006 were
$27.1 million and included early repayments of $19.4 million.

Debt Facilities

The acquisition of AMR and EmCare resulted in a significant increase in the level of our outstanding debt. We have a $450.0 million senior secured credit
facility bearing interest at variable rates at specified margins above either the agent bank's alternate base rate or its LIBOR rate. The senior secured credit facility consists of a
$100.0 million, six-year revolving credit facility and a $350.0 million, seven-year term loan. We borrowed the full amount of the term loan, and
$20.2 million under the revolving credit facility, on February 10, 2005 to fund the acquisition of AMR and EmCare and pay related fees and expenses. On February 10, 2005, we also
issued $250.0 million principal amount of 10% senior subordinated notes due 2015. We used the net proceeds of this notes issuance to fund the acquisition.

In
December 2005, we used a significant portion of the proceeds from our initial public offering of common stock to prepay $99.1 million of the term loan. We did not incur a
prepayment penalty or any similar charges in connection with this prepayment. This amount is not available for future borrowings. We prepaid $19.4 million of the term loan in 2006.

Our
$350.0 million term loan initially carried interest at the alternate base rate, plus a margin of 1.75%, or the LIBOR rate, plus a margin of 2.75%. We refinanced this term loan
on March 29, 2005 for a term loan with identical terms except that the margins were reduced by 0.25%. The term loan is subject to quarterly amortization of principal (in quarterly
installments), with 1% of the aggregate principal payable in each of the first six years, with the remaining balance due in the final year. Our $100.0 million revolving credit facility
initially bears interest at the alternate base rate, plus a margin of 1.75%, or the LIBOR rate, plus a margin of 2.75%. We had no outstanding borrowings under the revolving credit facility at
December 31, 2007 and 2006. Under the terms of our senior secured credit facility, our letters of credit outstanding reduce our available borrowings under the revolving credit facility. At
December 31, 2007, our outstanding letters of credit totaled $29.6 million, including $16.8 million to support our self-insurance program and $12.8 million,
primarily related to
secure our performance under certain 911 emergency response contracts, and our availability under the revolving credit facility was $70.4 million.

All
amounts borrowed under our senior secured credit facility are collateralized by, among other things:



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The
agreements governing our senior secured credit facility contains customary affirmative and negative covenants, including, among other things, restrictions on indebtedness, liens,
mergers and consolidations, sales of assets, loans, acquisitions, joint ventures, restricted payments, transactions with affiliates, dividends and other payment restrictions affecting subsidiaries, a
change in control of the company and other matters customarily restricted in such agreements. The agreement governing our senior secured credit facility also contains financial covenants, including a
maximum total leverage ratio (4.50 to 1.00 as of December 31, 2007), maximum senior leverage ratio (2.50 to 1.00 as of December 31, 2007), a minimum fixed charge coverage ratio (1.10 to
1.00 as of December 31, 2007) and a maximum capital expenditure amount ($65 million as of December 31, 2007). The financial covenant ratios are based on adjusted EBITDA, which is
the amount of our income (loss) from operations before depreciation and amortization expenses and other specifically identified exclusions. These ratios are to be calculated each quarter based on the
financial data for the four fiscal quarters then ending. Each financial covenant ratio and capital expenditure amount adjusts over time as set forth in our senior secured credit facility. Our failure
to meet any of these financial covenants could be an event of default under our senior secured credit facility.

On
March 7, 2007, we entered into Waiver and Amendment No. 2, or the Second Amendment, to our senior secured credit facility. The Second Amendment increased the threshold
consideration requiring us to provide financial information to the lenders prior to an acquisition, eliminated the annual and aggregate maximum amounts we are permitted to spend on acquisitions, and
extended our deadlines to provide lenders with financial forecasts of EMS LP and its subsidiaries for the immediately following fiscal year. In addition, the Second Amendment waived any
potential technical non-compliance with the senior secured credit facility arising from a name change related to AMR HoldCo, Inc.

The
calculated ratios and amounts for the fiscal year ended December 31, 2007 were as follows (dollars in thousands):

Total Leverage Ratio:


2.27Consolidated Indebtedness/

$
482,883Adjusted LTM EBITDA(1)

$
213,176Senior Leverage Ratio:


1.09Senior Indebtedness/

$
232,883Adjusted LTM EBITDA(1)

$
213,176Fixed Charge Coverage Ratio:


3.11Fixed Charge Numerator(2)

$
174,841Fixed Charge Denominator(3)

$
56,216Capital Expenditures:

$
37,976


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The
indenture governing our senior subordinated notes contains a number of covenants that, among other things, restrict our ability and the ability of our subsidiaries, subject to
certain exceptions, to sell assets, incur additional debt or issue preferred stock, repay other debt, pay dividends and distributions or repurchase our capital stock, create liens on assets, make
investments, loans or advances, make certain acquisitions, engage in mergers or consolidations and engage in certain transactions with affiliates. We do not expect to be in violation of our debt
covenants in 2008.

Off-Balance Sheet Arrangements

We do not have any relationships with unconsolidated entities or financial partnerships, such as entities often referred to as structured finance or special
purpose entities, established for the purpose of facilitating off-balance sheet arrangements or other contractually narrow or limited purposes. Accordingly, we are not materially exposed
to any financing, liquidity, market or credit risk that could arise if we had engaged in such relationships.

Tabular Disclosure of Contractual Obligations and other Commitments

The following table reflects a summary of obligations and commitments outstanding as of December 31, 2007, including our borrowings under our senior
secured credit facility and our senior subordinated notes.

|                                                               |          | Less than
1 Year |        | 1-3 Years |   | 3-5 Years |         | More than
5 Years |         | Total  
|-------------------------------------------------------------- | -------- | ---------------- | ------ | --------- | - | --------- | ------- | ----------------- | ------- | -------
|
|Contractual obligations                                        |          |                  |        |           |   |           |         |                   |         |        
|(Payments Due by Period):                                      |          |                  |        |           |   |           |         |                   |         |        
|Long-term debt(1)                                              |          | $                | 260    |           | $ | 1,262     |         | $                 | 210     |        
|Senior secured credit facility(2)                              |          |                  | 2,305  |           |   | 4,610     |         |                   | 217,252 |        
|Capital lease obligations                                      |          |                  | 2,499  |           |   | 4,510     |         |                   |        |        
|Senior subordinated notes                                      |          |                  |       |           |   |          |         |                   |        |        
|Interest on debt(3)                                            |          |                  | 35,500 |           |   | 77,054    |         |                   | 68,145  |        
|Operating lease obligations                                    |          |                  | 28,307 |           |   | 40,734    |         |                   | 29,243  |        
|Other contractual obligations(4)                               |          |                  | 16,054 |           |   | 11,499    |         |                   | 4,815   |        
|                                                               |          |                  |        |           |   |           |         |                   |         |        
|                                                               | Subtotal |                  |        | 84,925    |   |           | 139,669 |                   |         | 319,665
|                                                               |          |                  |        |           |   |           |         |                   |         |        
|Other commitments(Amount of Commitment Expiration Per Period): |          |                  |        |           |   |           |         |                   |         |        
|Guarantees of surety bonds                                     |          |                  |       |           |   |          |         |                   |        |        
|Letters of credit(5)                                           |          |                  |       |           |   |          |         |                   |        |        
|                                                               |          |                  |        |           |   |           |         |                   |         |        
|                                                               | Subtotal |                  |        |          |   |           |        |                   |         |       
|                                                               |          |                  |        |           |   |           |         |                   |         |        
|Total obligations and commitments                              |          | $                | 84,925 |           | $ | 139,669   |         | $                 | 319,665 |        
|                                                               |          |                  |        |           |   |           |         |                   |         |        

---

83

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We
have one capital lease relating to approximately 450 ambulances. The term of the lease extends to March 2010.

ITEM 7A.    QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

As of December 31, 2007, we had $476.5 million of outstanding debt, excluding capital leases, of which $24.2 million was variable rate debt
under our senior secured credit facility and the balance was fixed rate debt, including the $250 million aggregate principal amount of our senior subordinated notes and $200 million
under our senior secured credit facility. An increase or decrease in interest rates will not materially affect our interest costs.

We
monitor the risk from changing interest rates and evaluate ways to mitigate possible exposures, as appropriate, using derivative and hedging instruments. Our use of derivative
instruments is limited to highly effective fixed interest rate swap agreements used to manage well-defined interest rate risk exposures. At December 31, 2007, we were party to one
interest rate swap agreement. The swap agreement is with major financial institutions and is for a notional amount of $200 million of our variable rate debt. This swap agreement effectively
converts $200 million of variable rate debt to fixed
rate debt with an effective rate of 4.3%. The Company continues to make interest payments based on the variable rate associated with the debt (based on LIBOR which had an average rate of 3.81% at
December 31, 2007) and periodically settles with its counterparties for the difference between the rate paid and the fixed rate. The remaining term of this swap agreement is two years from
December 2007.

We
reduced the outstanding balance of our variable rate debt in fiscal 2006 through two unscheduled prepayments of the outstanding balance totaling $19.4 million.

ITEM 8.    FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

See index to financial information on page F-1.

ITEM 9.    CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE

None.

ITEM 9A.    CONTROLS AND PROCEDURES

Evaluation of Disclosure Controls and Procedures

As required by Rule 13a-15(b) of the Securities Exchange Act of 1934, as amended, management carried out an evaluation under the supervision
and with the participation of the Chief Executive Officer and Chief Financial Officer, of the effectiveness of the design and operation of our disclosure controls and procedures that were in effect as
of the end of the period covered by this
report. Our Chief Executive Officer and Chief Financial Officer each concluded that our disclosure controls and procedures are effective at a reasonable assurance level as of December 31, 2007,
the end of the period covered by this report.

Changes in Internal Control over Financial Reporting

There have been no changes in our internal controls over financial reporting during our most recent fiscal quarter that have materially affected, or are
reasonably likely to materially affect, our internal controls over financial reporting.

84

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Management's Report on Internal Control over Financial Reporting

Our management is responsible for establishing and maintaining adequate internal controls over financial reporting, as such term is defined in Exchange Act
Rule 13a-15(f). The Company's internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and
the preparation of financial statements for external purposes in accordance with U.S. generally accepted accounting principles.

Because
of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future
periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

Under
the supervision and with the participation of our management, including our Chief Executive Officer and Chief Financial Officer, the Company conducted an assessment of the
effectiveness of its internal control over financial reporting as of December 31, 2007. The assessment was based on criteria established in the frameworkInternal
ControlIntegrated Framework, issued by the Committee of Sponsoring Organizations of the Treadway Commission. Based on this assessment, management concluded that
our internal control over financial reporting was effective as of December 31, 2007.

The
effectiveness of our internal control over financial reporting as of December 31, 2007, has been audited by Ernst & Young LLP, an independent registered public
accounting firm. Their report appears with the Consolidated Financial Statements included in Part II, Item 8 of this Form 10-K.

ITEM 9B.    OTHER INFORMATION

On February 26, 2008, EMSC, in its capacity as General Partner of EMS LP, entered into the Second Amended and Restated Agreement of Limited Partnership of
EMS LP, or the Amended LP Agreement. The Amended LP Agreement provides that EMSC will act with respect to EMS LP through a Board of Directors, or the Partnership Board, consisting of one to three
directors, who will be elected by EMSC to serve at EMSC's pleasure until the director or directors' resignation or removal. EMSC has elected William A. Sanger to serve as the sole director on the
Partnership Board, and EMSC has no plans to elect additional directors to serve on the Partnership Board at this time. EMSC adopted the Amended LP Agreement in order to meet structural requirements
under its 2007 Employee Stock Purchase Plan, and EMSC does not anticipate any practical changes to the governance structure of EMS LP.

Also
on February 26, 2008, Amendment No. 2 to the Equityholders' Agreement, or the Equityholders' Agreement, dated February 10, 2005, among EMS LP, Onex Partners,
LP, the equityholders signatory thereto and future signatories, became effective. The amendment provides that the restrictions in the Equityholders' Agreement on employees and affiliated physicians,
or the Affiliate Investors, against selling class A common stock of EMSC received by the Affiliate Investors in exchange for their EMS LP partnership units, or the EMS LP Units, apply solely to
EMS LP Units held prior to EMSC's initial public offering in December 2005, and not to EMS LP Units underlying options held by the Affiliate Investors prior to EMSC's initial public offering.

85

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PART III.

ITEM 10.    DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT

Incorporated by reference to the Company's Proxy Statement for its Annual Stockholders Meeting to be filed with the Securities and Exchange Commission within
120 days after December 31, 2007.

ITEM 11.    EXECUTIVE COMPENSATION

Incorporated by reference to the Company's Proxy Statement for its Annual Stockholders Meeting to be filed with the Securities and Exchange Commission within
120 days after December 31, 2007.

ITEM 12.    SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS

Incorporated by reference to the Company's Proxy Statement for its Annual Stockholders Meeting to be filed with the Securities and Exchange Commission within
120 days after December 31, 2007.

ITEM 13.    CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

Incorporated by reference to the Company's Proxy Statement for its Annual Stockholders Meeting to be filed with the Securities and Exchange Commission within
120 days after December 31, 2007.

ITEM 14.    PRINCIPAL ACCOUNTING FEES AND SERVICES

Incorporated by reference to the Company's Proxy Statement for its Annual Stockholders Meeting to be filed with the Securities and Exchange Commission within
120 days after December 31, 2007.

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PART IV.

ITEM 15.    EXHIBITS AND FINANCIAL STATEMENT SCHEDULES

Financial Statement Schedules

The Consolidated and Combined Financial Statements and Notes thereto filed as part of Form 10-K can be found in Item 8,"Financial
Statements and Supplementary Data", of this Annual Report.

Exhibits

The list of exhibits required by Item 601 of Regulation S-K and filed as part of this Annual Report on Form 10-K is
as follows:

|Exhibit No. |  | Description                                                                                                                                                                                                                                                                                                   
|----------- |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|2.1         |  | Stock Purchase Agreement, dated as of December 6, 2004, by and among Laidlaw International, Inc., Laidlaw Medical Holdings, Inc. and Emergency Medical Services Corporation (incorporated by reference to
Exhibit 2.1 of the Company's Registration Statement on Form S-1 filed August 2, 2005).              
|2.2         |  | Amendment to Stock Purchase Agreement, dated February 10, 2005, by and among Laidlaw International, Inc., Laidlaw Medical Holdings, Inc. and Emergency Medical Services Corporation (incorporated by reference to Exhibit 2.2 of the
Company's Registration Statement on Form S-1 filed August 2, 2005).      
|2.3         |  | Stock Purchase Agreement, dated as of December 6, 2004, by and among Laidlaw International, Inc., Laidlaw Medical Holdings, Inc. and Emergency Medical Services Corporation (incorporated by reference to Exhibit 2.3 of the Company's
Registration Statement on Form S-1 filed August 2, 2005).              
|2.4         |  | Amendment to Stock Purchase Agreement, dated as of February 10, 2005, by and among Laidlaw International, Inc., Laidlaw Medical Holdings, Inc. and Emergency Medical Services Corporation (incorporated by reference to Exhibit 2.4 of
the Company's Registration Statement on Form S-1 filed August 2, 2005).
|2.5         |  | Letter, dated March 25, 2005, to AMR HoldCo, Inc. from Laidlaw Medical Holdings, Inc. (incorporated by reference to Exhibit 2.5of the Company's Registration Statement on Form S-1 filed August 2, 2005).                                                                                                     
|3.1         |  | Amended and Restated Certificate of Incorporation of Emergency Medical Services Corporation (incorporated by reference to Exhibit 3.1 of the Company's Annual Report on Form 10-K for the eleven months ended December 31,
2005).                                                                             
|3.2         |  | Amended and Restated By-Laws of Emergency Medical Services Corporation (incorporated by reference to Exhibit 3.2 of the Company's Annual Report on Form 10-K for the eleven months ended December 31, 2005).                                                                                                  
|3.3         |  | Certificate of Formation of Emergency Medical Services L.P. (incorporated by reference to Exhibit 3.3 of the Company's Registration Statement on Form S-1 filed August 2, 2005).                                                                                                                              
|3.4         |  | Second Amended and Restated Agreement of Limited Partnership of Emergency Medical Services L.P., by and among Emergency Medical Services Corporation and the persons listed on Schedule A thereto.*                                                                                                           

87

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|4.1   |  | Form of Class A Common Stock Certificate (incorporated by reference to Exhibit 4.1 of the Company's Amendment No. 5 to Registration Statement on Form S-1 filed December 6, 2005).                                                                                                                                                                                                       
|----- |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|4.2   |  | Form of Class B Common Stock Certificate (incorporated by reference to Exhibit 4.2 of the Company's Amendment No. 5 to Registration Statement on Form S-1 filed December 6, 2005).                                                                                                                                                                                                       
|4.3   |  | Investor Equityholders Agreement, dated February 10, 2005, by and among Emergency Medical Services L.P., Onex Partners LP and the equityholders listed on the signature pages thereto (incorporated by reference to Exhibit 4.3 of the
Company's Registration Statement on Form S-1 filed August 2, 2005).                                                                               
|4.4   |  | Equityholders Agreement, dated as of February 10, 2005, by and among Emergency Medical Services L.P., Onex Partners LP and the equityholders listed on the signature pages thereto (incorporated by reference to Exhibit 4.4 of the
Company's Amendment No. 1 to Registration Statement on Form S-1 filed September 14, 2005).                                                           
|4.4.1 |  | Amendment No. 2 to the Equityholders Agreement, dated as of February 26, 2008, by and among Emergency Medical Services L.P., Onex Partners LP and the equityholders listed on the signature page thereto.*                                                                                                                                                                               
|4.5   |  | Registration Agreement, dated February 10, 2005, by and among Emergency Medical Services L.P. and the persons listed on Schedule A thereto and amendment thereto (incorporated by reference to Exhibit 4.5 of the Company's Amendment
No. 1 to Registration Statement on Form S-1 filed September 14, 2005).                                                                             
|4.6   |  | Indenture, dated February 10, 2005, by and among AMR HoldCo, Inc., EmCare HoldCo, Inc., the guarantors named therein and U.S. Bank Trust National Association, as trustee (incorporated by reference to Exhibit 4.6 of the Company's
Registration Statement on Form S-1 filed August 2, 2005).                                                                                           
|4.7   |  | Supplemental Indenture, dated April 15, 2005, by and among AMR Brockton L.L.C., AMR HoldCo, Inc., EmCare HoldCo, Inc., the guarantors named therein and U.S. Bank Trust National Association, as trustee (incorporated by reference to
Exhibit 4.7 of the Company's Registration Statement on Form S-1filed August 2, 2005).                                                             
|4.8   |  | Supplemental Indenture No. 2, effective as of September 30, 2005, by and among Global Medical Response, Inc., AMR HoldCo, Inc., EmCare HoldCo, Inc., the guarantors named therein and U.S. Bank Trust National Association, as
trustee (incorporated by reference to Exhibit 4.8 of the Company's Amendment No. 3 to Registration Statement on Form S-1 filed November 14, 2005).        
|4.9   |  | Supplemental Indenture No. 3, effective as of February 23, 2006, by and among Emergency Medical Services Corporation, AMR HoldCo, Inc., EmCare HoldCo, Inc., the guarantors named therein and U.S. Bank Trust National Association, as
trustee (incorporated by reference to Exhibit 4.8 of the Company's Amendment No. 3 to Registration Statement on Form S-1 filed November 14, 2005).
|4.10  |  | Supplemental Indenture No. 4, effective as of August 7, 2006, among the Issuers named therein, the Guarantors named therein and U.S. Bank Trust National Association, as trustee (incorporated by reference to Exhibit 4.10 of the
Company's Annual Report on Form 10-K filed on March 8, 2007).                                                                                         

88

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|4.11 |  | Supplemental Indenture No. 5, effective as of August 7, 2006, among Air Ambulance Specialists, Inc., a Colorado corporation and successor by merger to Eagle Acquisition Subsidiary, Inc., the Issuers named therein, the other
Guarantors named therein and U.S. Bank Trust National Association, as trustee (incorporated by reference to Exhibit 4.11 of the Company's Annual Report on Form 10-K filed on March 8, 2007).
|---- |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|4.12 |  | Supplemental Indenture No. 6, effective as of November 28, 2006, among Electrolyte Acquisition Subsidiary, Inc., the Issuers named therein, the other Guarantors named therein and U.S. Bank Trust National Association, as trustee
(incorporated by reference to Exhibit 4.12 of the Company's Annual Report on Form 10-K filed on March 8, 2007).                                                                          
|4.13 |  | Registration Rights Agreement, dated as of February 10, 2005, by and among AMR HoldCo, Inc., EmCare HoldCo, Inc., the guarantors named therein, Banc of America Securities LLC and J.P. Morgan Securities Inc.(incorporated by
reference to Exhibit 4.9 of the Company's Registration Statement on Form S-1 filed August 2, 2005).                                                                                           
|4.14 |  | Voting and Exchange Trust Agreement, dated as of December 20, 2005, among Emergency Medical Services Corporation, Emergency Medical Services L.P. and Onex Corporation(incorporated by reference to Exhibit 4.11 of the Company's Annual
Report on Form 10-K for the eleven months ended December 31, 2005).                                                                                                                 
|4.15 |  | Form of Indemnification Agreement (incorporated by reference to Exhibit 4.11 of the Company's Amendment No. 4 to Registration Statement on Form S-1 filed December 5, 2005).                                                                                                                                                                                                                                                 
|4.16 |  | Form of 10% Senior Subordinated Note due 2015 (included in Exhibit 4.6).                                                                                                                                                                                                                                                                                                                                                     
|4.17 |  | Notification of Guarantee, dated as of February 10, 2005, executed by the guarantors identified therein (incorporated by reference to Exhibit 4.12 of the Company's Registration Statement on Form S-4 filed October 11,
2005).                                                                                                                                                                                              
|9.1  |  | Voting and Exchange Trust Agreement, dated as of December 20, 2005, among Emergency Medical Services Corporation, Emergency Medical Services L.P. and Onex Corporation (included in Exhibit 4.11 and incorporated by reference to
Exhibit 9.1 of the Company's Annual Report on Form 10-K for the eleven months ended December 31, 2005).                                                                                    
|10.1 |  | Employment Agreement, dated December 6, 2004, between William A. Sanger and Emergency Medical Services Corporation (incorporated by reference to Exhibit 10.1 of the Company's Registration Statement on Form S-1 filed August 2,
2005).                                                                                                                                                                                     
|10.2 |  | Employment Agreement, dated as of February 10, 2005, between Don S. Harvey and Emergency Medical Services L.P., and assignment to Emergency Medical Services Corporation (incorporated by reference to Exhibit 10.2 of the Company's
Registration Statement on Form S-1 filed August 2, 2005).                                                                                                                               
|10.3 |  | Employment Agreement, dated as of February 10, 2005, between Randel G. Owen and Emergency Medical Services L.P., and assignment to Emergency Medical Services Corporation (incorporated by reference to Exhibit 10.3 of the Company's
Registration Statement on Form S-1 filed August 2, 2005).                                                                                                                              
|10.4 |  | Employment Agreement, dated as of February 10, 2005, between Todd Zimmerman and Emergency Medical Services L.P., and assignment to Emergency Medical Services Corporation (incorporated by reference to Exhibit 10.4 of the Company's
Registration Statement on Form S-1 filed August 2, 2005).                                                                                                                              

89

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|10.5    |  | Employment Agreement, dated as of April 19, 2005, by and between Emergency Medical Services L.P. and Dighton Packard, M.D., and assignment to Emergency Medical Services Corporation (incorporated by reference to Exhibit 10.5 of the
Company's Registration Statement on Form S-1 filed August 2, 2005).                                                                                                                                                                                                      
|------- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|10.6    |  | Emergency Medical Services L.P. Equity Option Plan (incorporated by reference to Exhibit 10.6 of the Company's Registration Statement on Form S-1 filed August 2,2005).**                                                                                                                                                                                                                                                                                                                                       
|10.7    |  | Emergency Medical Services L.P. Equity Purchase Plan (incorporated by reference to Exhibit 10.7 of the Company's Registration Statement on Form S-1 filed August 2,2005).**                                                                                                                                                                                                                                                                                                                                     
|10.8    |  | Management Agreement, dated February 10, 2005, by and among Onex Partners Manager LP, AMR HoldCo, Inc., and EmCare HoldCo, Inc. (incorporated by reference to Exhibit 10.8 of the Company's Registration Statement on
Form S-1 filed August 2, 2005).                                                                                                                                                                                                                                                           
|10.9    |  | Purchase Agreement, dated January 27, 2005, among AMR HoldCo, Inc.), EmCare HoldCo, Inc., the Registrant, the guarantors party thereto, Banc of America LLC Securities and J.P. Morgan Securities Inc. (incorporated by reference
to Exhibit 10.9 of the Company's Registration Statement on Form S-1 filed August 2, 2005).                                                                                                                                                                                    
|10.10   |  | Credit Agreement, dated as of February 10, 2005, among AMR HoldCo, Inc., EmCare HoldCo, Inc., Emergency Medical Services L.P., the guarantors party thereto, Bank of America, N.A. and the other lenders party thereto(incorporated by
reference to Exhibit 10.10 of the Company's Registration Statement on Form S-1 filed August 2, 2005).                                                                                                                                                                    
|10.11.1 |  | Amendment No. 1, dated March 29, 2005, among AMR HoldCo, Inc., EmCare HoldCo, Emergency Medical Services L.P., the guarantors and the lenders party thereto, to the Credit Agreement dated as of February 10, 2005, among AMR
HoldCo, Inc., EmCare HoldCo, Inc., Emergency Medical Services L.P., the guarantors party thereto, Bank of America, N.A. and the other lenders party thereto (incorporated by reference to Exhibit 10.11 of the Company's Registration
Statement on Form S-1 filed August 2, 2005).
|10.11.2 |  | Waiver and Amendment No. 2, dated March 7, 2007, among AMR HoldCo, Inc., EmCare HoldCo, Inc., Emergency Medical Services L.P., and the guarantors and lenders party thereto, to the Credit Agreement, dated as of
February 10, 2005 (incorporated by reference to Exhibit 10.11.2 of the Company's Annual Report on Form 10-K filed on March 8, 2007).                                                                                                                                                          
|10.12   |  | Security Agreement, dated as of February 10, 2005, made by AMR HoldCo, Inc., EmCare HoldCo., Inc., the guarantors party thereto, in favor of Bank of America, N.A. (incorporated by reference to Exhibit 10.12 of the Company's
Registration Statement on Form S-1 filed August 2, 2005).                                                                                                                                                                                                                       
|10.13   |  | Assignment, dated as of December 20, 2005, by and among Emergency Medical Services Corporation, AMR HoldCo, Inc. and ClaimCo L.P. (incorporated by reference to Exhibit 10.13 of the Company's Annual Report on Form 10-K for the
eleven months ended December 31, 2005).                                                                                                                                                                                                                                       
|10.14.1 |  | Form of Employee Equity Option Agreement (incorporated by reference to Exhibit 10.14.1of the Company's Annual Report on Form 10-K for the eleven months ended December 31, 2005).                                                                                                                                                                                                                                                                                                                               
|10.14.2 |  | Form of Director Equity Option Agreement (incorporated by reference to Exhibit 10.14.2 of the Company's Annual Report on Form 10-K for the eleven months ended December 31, 2005).                                                                                                                                                                                                                                                                                                                              

90

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|10.15 |  | EMSC Non-Employee Director Compensation Program (incorporated by reference to Annex A of the Company's Proxy Statement for its Annual Stockholders Meeting filed with the Securities and Exchange Commission on April 16, 2007).**                                                      
|----- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|10.16 |  | 2007 Long-Term Incentive Plan (incorporated by reference to Annex B to the Company's Proxy Statement for its Annual Stockholders Meeting filed with the Securities and Exchange Commission on April 16, 2007).                                                                          
|10.17 |  | 2007 Employee Stock Purchase Plan (incorporated by reference to Annex C to the Company's Proxy Statement for its Annual Stockholders Meeting filed with the Securities and Exchange Commission on April 16, 2007).                                                                      
|14.1  |  | Code of Ethics (incorporated by reference to Exhibit 14.1 of the Company's Annual Report on Form 10-K for the eleven months ended December 31, 2005).                                                                                                                                   
|21.1  |  | Subsidiaries of Emergency Medical Services L.P. and Emergency Medical Services Corporation.*                                                                                                                                                                                            
|23.1  |  | Consent of Independent Registered Public Accounting Firm.*                                                                                                                                                                                                                              
|31.1  |  | Certification of the Chief Executive Officer of Emergency Medical Services Corporation pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.*                                                                                                                                      
|31.2  |  | Certification of the Chief Executive Officer of Emergency Medical Services Corporation, as general partner of Emergency Medical Services L.P. pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.*                                                                               
|31.3  |  | Certification of the Chief Financial Officer of Emergency Medical Services Corporation pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.*                                                                                                                                      
|31.4  |  | Certification of the Chief Financial Officer of Emergency Medical Services Corporation, as general partner of Emergency Medical Services L.P. pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.*                                                                               
|32.1  |  | Certification of the Chief Executive Officer and the Chief Financial Officer of Emergency Medical Services Corporation pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.*                                                       
|32.2  |  | Certification of the Chief Executive Officer and the Chief Financial Officer of Emergency Medical Services Corporation, as general partner of Emergency Medical Services L.P. pursuant to 18 U.S.C. Section 1350, as adopted pursuant to
Section 906 of the Sarbanes-Oxley Act of 2002.*

---

91

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SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrants have duly caused this report to be signed on
their behalf by the undersigned, thereunto duly authorized, on the 26th day of February, 2008.

| |  | EMERGENCY MEDICAL SERVICES CORPORATION(registrant)
| |  | --------------------------------------------------
| |  | By:                                               
| |  | EMERGENCY MEDICAL SERVICES L.P.(registrant)       
| |  | By:                                               
| |  | By:                                               

Pursuant
to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrants and in the capacities and on
the dates indicated.

|Signature                                     |  | Title                                                                        |  | Date             
|--------------------------------------------- |  | ---------------------------------------------------------------------------- |  | -----------------
|/s/WILLIAM A. SANGERWilliam A. Sanger         |  | Chairman, Chief Executive Officer and Director (Principal Executive Officer) |  | February 26, 2008
|/s/RANDEL G. OWENRandel G. Owen               |  | Chief Financial Officer (Principal Financial and Accounting Officer)         |  | February 26, 2008
|/s/ROBERT M. LE BLANCRobert M. Le Blanc       |  | Director                                                                     |  | February 26, 2008
|/s/STEVEN B. EPSTEINSteven B. Epstein         |  | Director                                                                     |  | February 26, 2008
|/s/PAUL B. IANNINI, M.D.Paul B. Iannini, M.D. |  | Director                                                                     |  | February 26, 2008

92

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|/s/JAMES T. KELLYJames T. Kelly     |  | Director |  | February 26, 2008
|----------------------------------- |  | -------- |  | -----------------
|/s/MICHAEL L. SMITHMichael L. Smith |  | Director |  | February 26, 2008

93

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Exhibit Index

|Exhibit No. |  | Description                                                                                                                                                                                                                                                                                                   
|----------- |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|2.1         |  | Stock Purchase Agreement, dated as of December 6, 2004, by and among Laidlaw International, Inc., Laidlaw Medical Holdings, Inc. and Emergency Medical Services Corporation (incorporated by reference to
Exhibit 2.1 of the Company's Registration Statement on Form S-1 filed August 2, 2005).              
|2.2         |  | Amendment to Stock Purchase Agreement, dated February 10, 2005, by and among Laidlaw International, Inc., Laidlaw Medical Holdings, Inc. and Emergency Medical Services Corporation (incorporated by reference to Exhibit 2.2 of the
Company's Registration Statement on Form S-1 filed August 2, 2005).      
|2.3         |  | Stock Purchase Agreement, dated as of December 6, 2004, by and among Laidlaw International, Inc., Laidlaw Medical Holdings, Inc. and Emergency Medical Services Corporation (incorporated by reference to Exhibit 2.3 of the Company's
Registration Statement on Form S-1 filed August 2, 2005).              
|2.4         |  | Amendment to Stock Purchase Agreement, dated as of February 10, 2005, by and among Laidlaw International, Inc., Laidlaw Medical Holdings, Inc. and Emergency Medical Services Corporation (incorporated by reference to Exhibit 2.4 of
the Company's Registration Statement on Form S-1 filed August 2, 2005).
|2.5         |  | Letter, dated March 25, 2005, to AMR HoldCo, Inc. from Laidlaw Medical Holdings, Inc. (incorporated by reference to Exhibit 2.5 of the Company's Registration Statement on Form S-1 filed August 2, 2005).                                                                                                    
|3.1         |  | Amended and Restated Certificate of Incorporation of Emergency Medical Services Corporation (incorporated by reference to Exhibit 3.1 of the Company's Annual Report on Form 10-K for the eleven months ended December 31,
2005).                                                                             
|3.2         |  | Amended and Restated By-Laws of Emergency Medical Services Corporation (incorporated by reference to Exhibit 3.2 of the Company's Annual Report on Form 10-K for the eleven months ended December 31, 2005).                                                                                                  
|3.3         |  | Certificate of Formation of Emergency Medical Services L.P. (incorporated by reference to Exhibit 3.3 of the Company's Registration Statement on Form S-1 filed August 2, 2005).                                                                                                                              
|3.4         |  | Second Amended and Restated Agreement of Limited Partnership of Emergency Medical Services L.P., by and among Emergency Medical Services Corporation and the persons listed on Schedule A thereto.*                                                                                                           
|4.1         |  | Form of Class A Common Stock Certificate (incorporated by reference to Exhibit 4.1 of the Company's Amendment No. 5 to Registration Statement on Form S-1 filed December 6, 2005).                                                                                                                            
|4.2         |  | Form of Class B Common Stock Certificate (incorporated by reference to Exhibit 4.2 of the Company's Amendment No. 5 to Registration Statement on Form S-1 filed December 6, 2005).                                                                                                                            
|4.3         |  | Investor Equityholders Agreement, dated February 10, 2005, by and among Emergency Medical Services L.P., Onex Partners LP and the equityholders listed on the signature pages thereto (incorporated by reference to Exhibit 4.3 of the
Company's Registration Statement on Form S-1 filed August 2, 2005).    

94

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|4.4   |  | Equityholders Agreement, dated as of February 10, 2005, by and among Emergency Medical Services L.P., Onex Partners LP and the equityholders listed on the signature pages thereto (incorporated by reference to Exhibit 4.4 of the
Company's Amendment No. 1 to Registration Statement on Form S-1 filed September 14, 2005).                                                                                               
|----- |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|4.4.1 |  | Amendment No. 2 to the Equityholders Agreement, dated as of February 26, 2008, by and among Emergency Medical Services L.P., Onex Partners LP and the equityholders listed on the signature page thereto.*                                                                                                                                                                                                                   
|4.5   |  | Registration Agreement, dated February 10, 2005, by and among Emergency Medical Services L.P. and the persons listed on Schedule A thereto and amendment thereto (incorporated by reference to Exhibit 4.5 of the Company's Amendment
No. 1 to Registration Statement on Form S-1 filed September 14, 2005).                                                                                                                 
|4.6   |  | Indenture, dated February 10, 2005, by and among AMR HoldCo, Inc., EmCare HoldCo, Inc., the guarantors named therein and U.S. Bank Trust National Association, as trustee (incorporated by reference to Exhibit 4.6 of the Company's
Registration Statement on Form S-1filed August 2, 2005).                                                                                                                                
|4.7   |  | Supplemental Indenture, dated April 15, 2005, by and among AMR Brockton L.L.C., AMR HoldCo, Inc., EmCare HoldCo, Inc., the guarantors named therein and U.S. Bank Trust National Association, as trustee (incorporated by reference to
Exhibit 4.7 of the Company's Registration Statement on Form S-1 filed August 2, 2005).                                                                                                
|4.8   |  | Supplemental Indenture No. 2, effective as of September 30, 2005, by and among Global Medical Response, Inc., AMR HoldCo, Inc., EmCare HoldCo, Inc., the guarantors named therein and U.S. Bank Trust National Association, as
trustee (incorporated by reference to Exhibit 4.8 of the Company's Amendment No. 3 to Registration Statement on Form S-1 filed November 14, 2005).                                            
|4.9   |  | Supplemental Indenture No. 3, effective as of February 23, 2006, by and among Emergency Medical Services Corporation, AMR HoldCo, Inc., EmCare HoldCo, Inc., the guarantors named therein and U.S. Bank Trust National Association, as
trustee (incorporated by reference to Exhibit 4.8 of the Company's Amendment No. 3 to Registration Statement on Form S-1 filed November 14, 2005).                                    
|4.10  |  | Supplemental Indenture No. 4, effective as of August 7, 2006, among the Issuers named therein, the Guarantors named therein and U.S. Bank Trust National Association, as trustee (incorporated by reference to Exhibit 4.10 of the
Company's Annual Report on Form 10-K filed on March 8, 2007).                                                                                                                             
|4.11  |  | Supplemental Indenture No. 5, effective as of August 7, 2006, among Air Ambulance Specialists, Inc., a Colorado corporation and successor by merger to Eagle Acquisition Subsidiary, Inc., the Issuers named therein, the other
Guarantors named therein and U.S. Bank Trust National Association, as trustee (incorporated by reference to Exhibit 4.11 of the Company's Annual Report on Form 10-K filed on March 8, 2007).
|4.12  |  | Supplemental Indenture No. 6, effective as of November 28, 2006, among Electrolyte Acquisition Subsidiary, Inc., the Issuers named therein, the other Guarantors named therein and U.S. Bank Trust National Association, as trustee
(incorporated by reference to Exhibit 4.12 of the Company's Annual Report on Form 10-K filed on March 8, 2007).                                                                          

95

---



|4.13 |  | Registration Rights Agreement, dated as of February 10, 2005, by and among AMR HoldCo, Inc., EmCare HoldCo, Inc., the guarantors named therein, Banc of America Securities LLC and J.P. Morgan Securities Inc. (incorporated by
reference to Exhibit 4.9 of the Company's Registration Statement on Form S-1 filed August 2, 2005).      
|---- |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|4.14 |  | Voting and Exchange Trust Agreement, dated as of December 20, 2005, among Emergency Medical Services Corporation, Emergency Medical Services L.P. and Onex Corporation (incorporated by reference to Exhibit 4.11 of the Company's Annual
Report on Form 10-K for the eleven months ended December 31, 2005).                            
|4.15 |  | Form of Indemnification Agreement (incorporated by reference to Exhibit 4.11 of the Company's Amendment No. 4 to Registration Statement on Form S-1 filed December 5, 2005).                                                                                                                                                             
|4.16 |  | Form of 10% Senior Subordinated Note due 2015 (included in Exhibit 4.6).                                                                                                                                                                                                                                                                 
|4.17 |  | Notification of Guarantee, dated as of February 10, 2005, executed by the guarantors identified therein (incorporated by reference to Exhibit 4.12 of the Company's Registration Statement on Form S-4 filed October 11,
2005).                                                                                                          
|9.1  |  | Voting and Exchange Trust Agreement, dated as of December 20, 2005, among Emergency Medical Services Corporation, Emergency Medical Services L.P. and Onex Corporation (included in Exhibit 4.11 and incorporated by reference to
Exhibit 9.1 of the Company's Annual Report on Form 10-K for the eleven months ended December 31, 2005).
|10.1 |  | Employment Agreement, dated December 6, 2004, between William A. Sanger and Emergency Medical Services Corporation (incorporated by reference to Exhibit 10.1 of the Company's Registration Statement on Form S-1 filed August 2,
2005).                                                                                                 
|10.2 |  | Employment Agreement, dated as of February 10, 2005, between Don S. Harvey and Emergency Medical Services L.P., and assignment to Emergency Medical Services Corporation (incorporated by reference to Exhibit 10.2 of the Company's
Registration Statement on Form S-1 filed August 2, 2005).                                           
|10.3 |  | Employment Agreement, dated as of February 10, 2005, between Randel G. Owen and Emergency Medical Services L.P., and assignment to Emergency Medical Services Corporation (incorporated by reference to Exhibit 10.3 of the Company's
Registration Statement on Form S-1 filed August 2, 2005).                                          
|10.4 |  | Employment Agreement, dated as of February 10, 2005, between Todd Zimmerman and Emergency Medical Services L.P., and assignment to Emergency Medical Services Corporation (incorporated by reference to Exhibit 10.4 of the Company's
Registration Statement on Form S-1 filed August 2, 2005).                                          
|10.5 |  | Employment Agreement, dated as of April 19, 2005, by and between Emergency Medical Services L.P. and Dighton Packard, M.D., and assignment to Emergency Medical Services Corporation (incorporated by reference to Exhibit 10.5 of the
Company's Registration Statement on Form S-1 filed August 2, 2005).                               
|10.6 |  | Emergency Medical Services L.P. Equity Option Plan (incorporated by reference to Exhibit 10.6 of the Company's Registration Statement on Form S-1 filed August 2, 2005).**                                                                                                                                                               
|10.7 |  | Emergency Medical Services L.P. Equity Purchase Plan (incorporated by reference to Exhibit 10.7 of the Company's Registration Statement on Form S-1 filed August 2, 2005).**                                                                                                                                                             

96

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|10.8    |  | Management Agreement, dated February 10, 2005, by and among Onex Partners Manager LP, AMR HoldCo, Inc., Inc. and EmCare HoldCo, Inc. (incorporated by reference to Exhibit 10.8 of the Company's Registration Statement on
Form S-1 filed August 2, 2005).                                                                                                                                                                                                                                                      
|------- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|10.9    |  | Purchase Agreement, dated January 27, 2005, among AMR HoldCo, Inc., EmCare HoldCo, Inc., the Registrant, the guarantors party thereto, Banc of America LLC Securities and J.P. Morgan Securities Inc. (incorporated by reference
to Exhibit 10.9 of the Company's Registration Statement on Form S-1 filed August 2, 2005).                                                                                                                                                                                     
|10.10   |  | Credit Agreement, dated as of February 10, 2005, among AMR HoldCo, Inc., EmCare HoldCo, Inc., Emergency Medical Services L.P., the guarantors party thereto, Bank of America, N.A. and the other lenders party thereto (incorporated
by reference to Exhibit 10.10 of the Company's Registration Statement on Form S-1 filed August 2, 2005).                                                                                                                                                                   
|10.11.1 |  | Amendment No. 1, dated March 29, 2005, among AMR HoldCo, Inc., EmCare HoldCo, Emergency Medical Services L.P., the guarantors and the lenders party thereto, to the Credit Agreement dated as of February 10, 2005, among AMR
HoldCo, Inc., EmCare HoldCo, Inc., Emergency Medical Services L.P., the guarantors party thereto, Bank of America, N.A. and the other lenders party thereto (incorporated by reference to Exhibit 10.11 of the Company's Registration
Statement on Form S-1 filed August 2, 2005).
|10.11.2 |  | Waiver and Amendment No. 2, dated March 7, 2007, among AMR HoldCo, Inc., EmCare HoldCo, Inc., Emergency Medical Services L.P., and the guarantors and lenders party thereto, to the Credit Agreement, dated as of
February 10, 2005 (incorporated by reference to Exhibit 10.11.2 of the Company's Annual Report on Form 10-K filed on March 8, 2007).                                                                                                                                                          
|10.12   |  | Security Agreement, dated as of February 10, 2005, made by AMR HoldCo, Inc., EmCare HoldCo., Inc., the guarantors party thereto, in favor of Bank of America, N.A.(incorporated by reference to Exhibit 10.12 of the Company's
Registration Statement on Form S-1 filed August 2, 2005).                                                                                                                                                                                                                        
|10.13   |  | Assignment, dated as of December 20, 2005, by and among Emergency Medical Services Corporation, AMR HoldCo, Inc. and ClaimCo L.P.(incorporated by reference to Exhibit 10.13 of the Company's Annual Report on Form 10-K for the
eleven months ended December 31, 2005).                                                                                                                                                                                                                                        
|10.14.1 |  | Form of Employee Equity Option Agreement (incorporated by reference to Exhibit 10.14.1 of the Company's Annual Report on Form 10-K for the eleven months ended December 31, 2005).                                                                                                                                                                                                                                                                                                                              
|10.14.2 |  | Form of Director Equity Option Agreement (incorporated by reference to Exhibit 10.14.2 of the Company's Annual Report on Form 10-K for the eleven months ended December 31, 2005).                                                                                                                                                                                                                                                                                                                              
|10.15   |  | EMSC Non-Employee Director Compensation Program (incorporated by reference to Annex A of the Company's Proxy Statement for its Annual Stockholders Meeting filed with the Securities and Exchange Commission on April 16, 2007).**                                                                                                                                                                                                                                                                              
|10.16   |  | 2007 Long-Term Incentive Plan (incorporated by reference to Annex B to the Company's Proxy Statement for its Annual Stockholders Meeting filed with the Securities and Exchange Commission on April 16, 2007).                                                                                                                                                                                                                                                                                                  

97

---



|10.17 |  | 2007 Employee Stock Purchase Plan (incorporated by reference to Annex C to the Company's Proxy Statement for its Annual Stockholders Meeting filed with the Securities and Exchange Commission on April 16, 2007).                                                                      
|----- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|14.1  |  | Code of Ethics (incorporated by reference to Exhibit 14.1 of the Company's Annual Report on Form 10-K for the eleven months ended December 31, 2005).                                                                                                                                   
|21.1  |  | Subsidiaries of Emergency Medical Services L.P. and Emergency Medical Services Corporation.*                                                                                                                                                                                            
|23.1  |  | Consent of Independent Registered Public Accounting Firm.*                                                                                                                                                                                                                              
|31.1  |  | Certification of the Chief Executive Officer of Emergency Medical Services Corporation pursuant to Section 302of the Sarbanes-Oxley Act of 2002.*                                                                                                                                       
|31.2  |  | Certification of the Chief Executive Officer of Emergency Medical Services Corporation, as general partner of Emergency Medical Services L.P. pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.*                                                                               
|31.3  |  | Certification of the Chief Financial Officer of Emergency Medical Services Corporation pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.*                                                                                                                                      
|31.4  |  | Certification of the Chief Financial Officer of Emergency Medical Services Corporation, as general partner of Emergency Medical Services L.P. pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.*                                                                               
|32.1  |  | Certification of the Chief Executive Officer and the Chief Financial Officer of Emergency Medical Services Corporation pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.*                                                       
|32.2  |  | Certification of the Chief Executive Officer and the Chief Financial Officer of Emergency Medical Services Corporation, as general partner of Emergency Medical Services L.P. pursuant to 18 U.S.C. Section 1350, as adopted pursuant to
Section 906 of the Sarbanes-Oxley Act of 2002.*

---

98

---





Index to Financial Statements        Emergency Medical Services Corporation



|Report of Ernst & Young LLP, Independent Registered Public Accounting Firm                                                                                      |  | F-2 
|--------------------------------------------------------------------------------------------------------------------------------------------------------------- |  | ----
|Report of Ernst & Young LLP, Independent Registered Public Accounting Firm                                                                                      |  | F-3 
|Report of PricewaterhouseCoopers LLP, Independent Registered Public Accounting Firm                                                                             |  | F-4 
|Consolidated Balance Sheets as of December 31, 2007 and 2006                                                                                                    |  | F-5 
|Consolidated Statements of Operations and Comprehensive Income for the years ended December 31, 2007 and 2006 and for the eleven months ended December 31, 2005 |  | F-6 
|Consolidated Statements of Changes in Equity for the years ended December 31, 2007 and 2006 and for the eleven months ended December 31, 2005                   |  | F-7 
|Consolidated Statements of Cash Flows for the years ended December 31, 2007 and 2006 and for the eleven months ended December 31, 2005                          |  | F-9 
|Notes to Consolidated Financial Statements                                                                                                                      |  | F-10

F-1

---





Report of Ernst & Young LLP, Independent Registered Public Accounting Firm

The
Board of Directors and Stockholders of Emergency Medical Services Corporation

We
have audited the accompanying consolidated balance sheets of Emergency Medical Services Corporation as of December 31, 2007 and 2006, and the related consolidated statements of
operations and comprehensive income, changes in equity, and cash flows for the two years then ended. These financial statements are the responsibility of the Company's management. Our responsibility
is to express an opinion on these financial statements based on our audits.

We
conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in
the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement
presentation. We believe that our audits provide a reasonable basis for our opinion.

In
our opinion, the financial statements referred to above present fairly, in all material respects, the consolidated financial position of Emergency Medical Services Corporation at
December 31, 2007 and 2006, and the consolidated results of its operations and its cash flows for the two years then ended, in conformity with U.S. generally accepted accounting principles.

As
discussed in Notes 2 and 6, effective January 1, 2007, the Company has changed its method of accounting for uncertain income tax positions.

We
also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States), Emergency Medical Services Corporation's internal control over
financial
reporting as of December 31, 2007, based on criteria established in Internal Control-Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission and our
report dated February 15, 2008 expressed an unqualified opinion thereon.

| |  | /s/ERNST & YOUNG LLP
| |  | --------------------

Denver,
Colorado
February 15, 2008

F-2

---



Report of Ernst & Young LLP, Independent Registered Public Accounting Firm

The
Board of Directors and Shareholders of Emergency Medical Services Corporation

We
have audited Emergency Medical Services Corporation's internal control over financial reporting as of December 31, 2007 based on criteria established in Internal
ControlIntegrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (the COSO criteria). Emergency Medical Services Corporation's management is
responsible for maintaining effective internal control over financial reporting, and for its assessment of the effectiveness of internal control over financial reporting included in the accompanying
Management's Report on Internal Control over Financial Reporting. Our responsibility is to express an opinion on the Company's internal control over financial reporting based on our audit.

We
conducted our audit in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether effective internal control over financial reporting was maintained in all material respects. Our audit included obtaining an understanding of internal control
over financial reporting, assessing the risk that a material weakness exists, testing and evaluating the design and operating effectiveness of internal control based on the assessed risk, and
performing such other procedures as we considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinion.

A
company's internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of
financial statements for external purposes in accordance with U.S. generally accepted accounting principles. A company's internal control over financial reporting includes those policies and
procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company;
(2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with U.S. generally accepted accounting principles, and
that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding
prevention or timely detection of unauthorized acquisition, use, or disposition of the company's assets that could have a material effect on the financial statements.

Because
of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future
periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

In
our opinion, Emergency Medical Services Corporation maintained, in all material respects, effective internal control over financial reporting as of December 31, 2007, based on
the COSO criteria.

We
also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States), the consolidated balance sheets of Emergency Medical Services
Corporation as of December 31, 2007 and 2006, and the related consolidated statements of operations and comprehensive income (loss), changes in equity, and cash flows for the two years then
ended and our report dated February 15, 2008 expressed an unqualified opinion thereon.

| |  | /s/ERNST & YOUNG LLP
| |  | --------------------

Denver,
Colorado
February 15, 2008

F-3

---



Report of PricewaterhouseCoopers LLP, Independent Registered Public Accounting Firm

To
the Stockholders of
Emergency Medical Services Corporation:

In
our opinion, the accompanying consolidated statements of operations and comprehensive income, of changes in equity and of cash flows for the eleven-month period ended
December 31, 2005, present fairly, in all material respects, the results of operations and cash flows of Emergency Medical Services Corporation and its subsidiaries in conformity with
accounting principles generally accepted in the United States of America. These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on
these financial statements based on our audit. We conducted our audit of these statements in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those
standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test
basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, and evaluating the overall
financial statement presentation. We believe that our audit provides a reasonable basis for our opinion.

PricewaterhouseCoopers LLP
Denver, Colorado
February 23, 2006, except for Note 1 with respect to
the reclassification of interest income, as to
which the date is January 29, 2008.

F-4

---





Emergency Medical Services Corporation        Consolidated Balance Sheets(in thousands, except share and per share amounts)

|                                                   |                                                                                                                                                      | December 31,              |                             
|-------------------------------------------------- | ---------------------------------------------------------------------------------------------------------------------------------------------------- | ------------------------- | ----------------------------
|
|Assets                                             |                                                                                                                                                      |                           |                             
|Current assets:                                    |                                                                                                                                                      |                           |                             
|                                                   | Cash and cash equivalents                                                                                                                            |                           | $                           
|                                                   | Insurance collateral                                                                                                                                 |                           |                             
|                                                   | Trade and other accounts receivable, net                                                                                                             |                           |                             
|                                                   | Parts and supplies inventory                                                                                                                         |                           |                             
|                                                   | Prepaids and other current assets                                                                                                                    |                           |                             
|                                                   | Current deferred tax assets                                                                                                                          |                           |                             
|                                                   |                                                                                                                                                      |                           |                             
|                                                   |                                                                                                                                                      | Total current assets      |                             
|                                                   |                                                                                                                                                      |                           |                             
|Non-current assets:                                |                                                                                                                                                      |                           |                             
|                                                   | Property, plant and equipment, net                                                                                                                   |                           |                             
|                                                   | Intangible assets, net                                                                                                                               |                           |                             
|                                                   | Non-current deferred tax assets                                                                                                                      |                           |                             
|                                                   | Insurance collateral                                                                                                                                 |                           |                             
|                                                   | Goodwill                                                                                                                                             |                           |                             
|                                                   | Other long-term assets                                                                                                                               |                           |                             
|                                                   |                                                                                                                                                      |                           |                             
|                                                   |                                                                                                                                                      | Total assets              |                             
|                                                   |                                                                                                                                                      |                           |                             
|Liabilities and Equity                             |                                                                                                                                                      |                           |                             
|Current liabilities:                               |                                                                                                                                                      |                           |                             
|                                                   | Accounts payable                                                                                                                                     |                           | $                           
|                                                   | Accrued liabilities                                                                                                                                  |                           |                             
|                                                   | Current portion of long-term debt                                                                                                                    |                           |                             
|                                                   |                                                                                                                                                      |                           |                             
|                                                   |                                                                                                                                                      | Total current liabilities |                             
|Long-term debt                                     |                                                                                                                                                      |                           | 478,166                     
|Insurance reserves and other long-term liabilities |                                                                                                                                                      |                           | 245,010                     
|                                                   |                                                                                                                                                      |                           |                             
|                                                   |                                                                                                                                                      | Total liabilities         |                             
|                                                   |                                                                                                                                                      |                           |                             
|Equity:                                            |                                                                                                                                                      |                           |                             
|                                                   | Preferred stock ($0.01 par value; 20,000,000 shares authorized, 0 issued and outstanding)                                                            |                           |                             
|                                                   | Class A common stock ($0.01 par value; 100,000,000 shares authorized, 9,320,347 and 9,262,853 issued and outstanding in 2007 and 2006, respectively) |                           |                             
|                                                   | Class B common stock ($0.01 par value; 40,000,000 shares authorized, 142,545 issued and outstanding in 2007 and 2006)                                |                           |                             
|                                                   | Class B special voting stock ($0.01 par value; 1 share authorized, issued and outstanding in 2007 and 2006)                                          |                           |                             
|                                                   | LP exchangeable units (32,107,500 units issued and outstanding in 2007 and 2006)                                                                     |                           |                             
|                                                   | Additional paid-in capital                                                                                                                           |                           |                             
|                                                   | Retained earnings                                                                                                                                    |                           |                             
|                                                   | Accumulated other comprehensive income (loss)                                                                                                        |                           |                             
|                                                   |                                                                                                                                                      |                           |                             
|                                                   |                                                                                                                                                      | Total equity              |                             
|                                                   |                                                                                                                                                      |                           |                             
|                                                   |                                                                                                                                                      |                           | Total liabilities and equity
|                                                   |                                                                                                                                                      |                           |                             

The
accompanying notes are an integral part of these financial statements.

F-5

---





Emergency Medical Services Corporation        Consolidated Statements of Operations and Comprehensive Income(in thousands, except share and per share amounts)

|                                                |                                                                                | Year
ended
December 31,
2007 |            | Year
ended
December 31,
2006 |   | Eleven months
ended
December 31,
2005 |        
|----------------------------------------------- | ------------------------------------------------------------------------------ | ---------------------------- | ---------- | ---------------------------- | - | ------------------------------------- | -------
|Net revenue                                     |                                                                                | $                            | 2,106,993  |                              | $ | 1,934,205                             |        
|                                                |                                                                                |                              |            |                              |   |                                       |        
|Compensation and benefits                       |                                                                                |                              | 1,455,970  |                              |   | 1,333,648                             |        
|Operating expenses                              |                                                                                |                              | 317,518    |                              |   | 294,806                               |        
|Insurance expense                               |                                                                                |                              | 66,308     |                              |   | 74,258                                |        
|Selling, general and administrative expenses    |                                                                                |                              | 61,893     |                              |   | 57,403                                |        
|Depreciation and amortization expense           |                                                                                |                              | 70,483     |                              |   | 66,005                                |        
|Restructuring charges                           |                                                                                |                              | 2,242      |                              |   | 6,369                                 |        
|                                                |                                                                                |                              |            |                              |   |                                       |        
|                                                | Income from operations                                                         |                              |            | 132,579                      |   |                                       | 101,716
|Interest income from restricted assets          |                                                                                |                              | 7,143      |                              |   | 5,987                                 |        
|Interest expense                                |                                                                                |                              | (46,948    | )                            |   | (45,605                               | )      
|Realized gain (loss) on investments             |                                                                                |                              | 245        |                              |   | (467                                  | )      
|Interest and other income                       |                                                                                |                              | 2,055      |                              |   | 2,346                                 |        
|Loss on early debt extinguishment               |                                                                                |                              |           |                              |   | (377                                  | )      
|                                                |                                                                                |                              |            |                              |   |                                       |        
|                                                | Income before income taxes and equity in earnings of unconsolidated subsidiary |                              |            | 95,074                       |   |                                       | 63,600 
|Income tax expense                              |                                                                                |                              | (36,104    | )                            |   | (24,961                               | )      
|                                                |                                                                                |                              |            |                              |   |                                       |        
|                                                | Income before equity in earnings of unconsolidated subsidiary                  |                              |            | 58,970                       |   |                                       | 38,639 
|Equity in earnings of unconsolidated subsidiary |                                                                                |                              | 848        |                              |   | 432                                   |        
|                                                |                                                                                |                              |            |                              |   |                                       |        
|                                                | Net income                                                                     |                              |            | 59,818                       |   |                                       | 39,071 
|Other comprehensive income, net of tax:         |                                                                                |                              |            |                              |   |                                       |        
|                                                | Unrealized holding gains (losses) during the period                            |                              |            | 2,262                        |   |                                       | 450    
|                                                | Unrealized losses on derivative financial instruments                          |                              |            | (1,232                       | ) |                                       |       
|                                                |                                                                                |                              |            |                              |   |                                       |        
|Comprehensive income                            |                                                                                | $                            | 60,848     |                              | $ | 39,521                                |        
|                                                |                                                                                |                              |            |                              |   |                                       |        
|Basic net income per common share               |                                                                                | $                            | 1.44       |                              | $ | 0.94                                  |        
|Diluted net income per common share             |                                                                                | $                            | 1.39       |                              | $ | 0.92                                  |        
|Average common shares outstanding, basic        |                                                                                |                              | 41,551,207 |                              |   | 41,502,632                            |        
|Average common shares outstanding, diluted      |                                                                                |                              | 43,146,881 |                              |   | 42,528,885                            |        

The
accompanying notes are an integral part of these financial statements.

F-6

---





Emergency Medical Services Corporation        Consolidated Statements of Changes in Equity(in thousands, except share and per share amounts)

|                           |                                                                                               | Shares/Units |          
|-------------------------- | --------------------------------------------------------------------------------------------- | ------------ | ---------
|
|Balances February 1, 2005  |                                                                                               |             |          
|                           | Partnership units issued on transaction date, net of issuance costs of $1,726                 |              |         
|                           | Partnership units issued during the period, net of issuance costs of $193                     |              |         
|                           | Exchange of certain partnership units for common stock                                        |              | 1,147,200
|                           | Issuance of class A common stock in initial public offering, net of issuance costs of $11,525 |              | 8,100,000
|                           | Equity-based compensation                                                                     |              |         
|                           | Net income                                                                                    |              |         
|                           | Unrealized holding losses                                                                     |              |         
|                           |                                                                                               |              |          
|Balances December 31, 2005 |                                                                                               | 9,247,200    |          
|                           | Exercise of options                                                                           |              | 15,653   
|                           | Equity-based compensation                                                                     |              |         
|                           | Net income                                                                                    |              |         
|                           | Unrealized holding gains                                                                      |              |         
|                           |                                                                                               |              |          
|Balances December 31, 2006 |                                                                                               | 9,262,853    |          
|                           | Exercise of options                                                                           |              | 57,494   
|                           | Equity-based compensation                                                                     |              |         
|                           | Net income                                                                                    |              |         
|                           | Unrealized holding gains                                                                      |              |         
|                           |                                                                                               |              |          
|Balances December 31, 2007 |                                                                                               | 9,320,347    |          
|                           |                                                                                               |              |          

The
accompanying notes are an integral part of these financial statements.

F-7

---



Emergency Medical Services Corporation

Consolidated Statements of Changes in Equity (Continued)

(in thousands, except share and per share amounts)

|                           |                                                                                               | Class A
Common
Stock |    | Class B
Common
Stock |   | LP
Exchangeable
Units |   | Additional
Paid-in
Capital |         | Retained
Earnings |   | Accumulated
Other
Comprehensive
Income (Loss) |         | Total
Equity |        
|-------------------------- | --------------------------------------------------------------------------------------------- | -------------------- | -- | -------------------- | - | --------------------- | - | -------------------------- | ------- | ----------------- | - | --------------------------------------------- | ------- | ------------ | -------
|Balances February 1, 2005  |                                                                                               | $                    |   |                      | $ |                      |   | $                          |        |                   | $ |                                              |         | $            |       
|                           | Partnership units issued on transaction date, net of issuance costs of $1,726                 |                      |    |                     |   |                       |  |                            |         | 218,879           |   |                                               |        |              |        
|                           | Partnership units issued during the period, net of issuance costs of $193                     |                      |    |                     |   |                       |  |                            |         | 1,857             |   |                                               |        |              |        
|                           | Exchange of certain partnership units for common stock                                        |                      |    | 11                   |   |                       | 1 |                            |         | (8,375            | ) |                                               | 8,363   |              |        
|                           | Issuance of class A common stock in initial public offering, net of issuance costs of $11,525 |                      |    | 81                   |   |                       |  |                            |         |                  |   |                                               | 101,794 |              |        
|                           | Equity-based compensation                                                                     |                      |    |                     |   |                       |  |                            |         |                  |   |                                               | 2,780   |              |        
|                           | Net income                                                                                    |                      |    |                     |   |                       |  |                            |         |                  |   |                                               |        |              |        
|                           | Unrealized holding losses                                                                     |                      |    |                     |   |                       |  |                            |         |                  |   |                                               |        |              |        
|                           |                                                                                               |                      |    |                      |   |                       |   |                            |         |                   |   |                                               |         |              |        
|Balances December 31, 2005 |                                                                                               |                      | 92 |                      |   | 1                     |   |                            | 212,361 |                   |   | 112,937                                       |         |              | 20,067 
|                           | Exercise of options                                                                           |                      |    | 1                    |   |                       |  |                            |         |                  |   |                                               | 103     |              |        
|                           | Equity-based compensation                                                                     |                      |    |                     |   |                       |  |                            |         |                  |   |                                               | 1,431   |              |        
|                           | Net income                                                                                    |                      |    |                     |   |                       |  |                            |         |                  |   |                                               |        |              |        
|                           | Unrealized holding gains                                                                      |                      |    |                     |   |                       |  |                            |         |                  |   |                                               |        |              |        
|                           |                                                                                               |                      |    |                      |   |                       |   |                            |         |                   |   |                                               |         |              |        
|Balances December 31, 2006 |                                                                                               |                      | 93 |                      |   | 1                     |   |                            | 212,361 |                   |   | 114,471                                       |         |              | 59,138 
|                           | Exercise of options                                                                           |                      |    |                     |   |                       |  |                            |         |                  |   |                                               | 383     |              |        
|                           | Equity-based compensation                                                                     |                      |    |                     |   |                       |  |                            |         |                  |   |                                               | 2,225   |              |        
|                           | Net income                                                                                    |                      |    |                     |   |                       |  |                            |         |                  |   |                                               |        |              |        
|                           | Unrealized holding gains                                                                      |                      |    |                     |   |                       |  |                            |         |                  |   |                                               |        |              |        
|                           | Net change in fair value of interest rate swap agreement                                      |                      |    |                     |   |                       |  |                            |         |                  |   |                                               |        |              |        
|                           |                                                                                               |                      |    |                      |   |                       |   |                            |         |                   |   |                                               |         |              |        
|Balances December 31, 2007 |                                                                                               | $                    | 93 |                      | $ | 1                     |   | $                          | 212,361 |                   | $ | 117,079                                       |         | $            | 118,956
|                           |                                                                                               |                      |    |                      |   |                       |   |                            |         |                   |   |                                               |         |              |        

The accompanying notes are an integral part of these financial statements.

F-8

---





Emergency Medical Services Corporation        Consolidated Statements of Cash Flows(in thousands)

|                                                                                  |                                                               | Year
ended
December 31,
2007             |                                                     | Year
ended
December 31,
2006 |         | Eleven months
ended
December 31,
2005 |       
|--------------------------------------------------------------------------------- | ------------------------------------------------------------- | ---------------------------------------- | --------------------------------------------------- | ---------------------------- | ------- | ------------------------------------- | ------
|Cash Flows from Operating Activities                                              |                                                               |                                          |                                                     |                              |         |                                       |       
|Net income                                                                        |                                                               | $                                        | 59,818                                              |                              | $       | 39,071                                |       
|Adjustments to reconcile net income to net cash provided by operating activities: |                                                               |                                          |                                                     |                              |         |                                       |       
|                                                                                  | Depreciation and amortization                                 |                                          |                                                     | 72,556                       |         |                                       | 68,104
|                                                                                  | Gain on disposal of property, plant and equipment             |                                          |                                                     | (2                           | )       |                                       | (787  
|                                                                                  | Equity-based compensation expense                             |                                          |                                                     | 1,727                        |         |                                       | 1,431 
|                                                                                  | Loss on restricted investments                                |                                          |                                                     |                             |         |                                       |      
|                                                                                  | Loss on early debt extinguishment                             |                                          |                                                     |                             |         |                                       | 377   
|                                                                                  | Equity in earnings of unconsolidated subsidiary               |                                          |                                                     | (848                         | )       |                                       | (432  
|                                                                                  | Dividends received                                            |                                          |                                                     | 416                          |         |                                       |      
|                                                                                  | Deferred income taxes                                         |                                          |                                                     | 33,274                       |         |                                       | 24,646
|                                                                                  | Changes in operating assets/liabilities, net of acquisitions: |                                          |                                                     |                              |         |                                       |       
|                                                                                  |                                                               | Trade and other accounts receivable      |                                                     |                              | (74,991 | )                                     |       
|                                                                                  |                                                               | Parts and supplies inventory             |                                                     |                              | (1,285  | )                                     |       
|                                                                                  |                                                               | Prepaids and other current assets        |                                                     |                              | 4,975   |                                       |       
|                                                                                  |                                                               | Accounts payable and accrued liabilities |                                                     |                              | 5,184   |                                       |       
|                                                                                  |                                                               | Insurance accruals                       |                                                     |                              | (3,006  | )                                     |       
|                                                                                  |                                                               |                                          |                                                     |                              |         |                                       |       
|                                                                                  |                                                               |                                          | Net cash provided by operating activities           |                              |         | 97,818                                |       
|                                                                                  |                                                               |                                          |                                                     |                              |         |                                       |       
|Cash Flows from Investing Activities                                              |                                                               |                                          |                                                     |                              |         |                                       |       
|Purchases of property, plant and equipment                                        |                                                               |                                          | (38,335                                             | )                            |         | (60,415                               | )     
|Proceeds from sale of property, plant and equipment                               |                                                               |                                          | 359                                                 |                              |         | 902                                   |       
|Acquisitions of businesses, net of cash received                                  |                                                               |                                          | (75,648                                             | )                            |         | (23,555                               | )     
|Decrease (increase) in insurance collateral                                       |                                                               |                                          | 10,872                                              |                              |         | (28,363                               | )     
|Other investing activities                                                        |                                                               |                                          | 2,526                                               |                              |         | (1,696                                | )     
|EMS LP purchase of AMR and EmCare                                                 |                                                               |                                          |                                                    |                              |         |                                      |       
|                                                                                  |                                                               |                                          |                                                     |                              |         |                                       |       
|                                                                                  |                                                               |                                          | Net cash used in investing activities               |                              |         | (100,226                              | )     
|                                                                                  |                                                               |                                          |                                                     |                              |         |                                       |       
|Cash Flows from Financing Activities                                              |                                                               |                                          |                                                     |                              |         |                                       |       
|EMSC issuance of class A common stock                                             |                                                               |                                          | 383                                                 |                              |         | 104                                   |       
|EMSC equity issuance costs                                                        |                                                               |                                          |                                                    |                              |         | (2,408                                | )     
|Repayments of capital lease obligations and other debt                            |                                                               |                                          | (76,033                                             | )                            |         | (27,066                               | )     
|(Decrease) increase in bank overdrafts                                            |                                                               |                                          | (2,664                                              | )                            |         | (1,957                                | )     
|Borrowings under senior secured credit facility                                   |                                                               |                                          |                                                    |                              |         |                                      |       
|Proceeds from issuance of senior subordinated notes                               |                                                               |                                          |                                                    |                              |         |                                      |       
|Borrowings under revolving credit facility                                        |                                                               |                                          | 70,300                                              |                              |         |                                      |       
|Debt issue costs                                                                  |                                                               |                                          |                                                    |                              |         |                                      |       
|EMS LP issuance of partnership equity                                             |                                                               |                                          |                                                    |                              |         |                                      |       
|EMS LP partnership equity issuance costs                                          |                                                               |                                          |                                                    |                              |         |                                      |       
|                                                                                  |                                                               |                                          |                                                     |                              |         |                                       |       
|                                                                                  |                                                               |                                          | Net cash (used in) provided by financing activities |                              |         | (8,014                                | )     
|                                                                                  |                                                               |                                          |                                                     |                              |         |                                       |       
|Change in cash and cash equivalents                                               |                                                               |                                          | (10,422                                             | )                            |         | 21,288                                |       
|Cash and cash equivalents, beginning of period                                    |                                                               |                                          | 39,336                                              |                              |         | 18,048                                |       
|                                                                                  |                                                               |                                          |                                                     |                              |         |                                       |       
|Cash and cash equivalents, end of period                                          |                                                               | $                                        | 28,914                                              |                              | $       | 39,336                                |       
|                                                                                  |                                                               |                                          |                                                     |                              |         |                                       |       
|Cash paid for interest                                                            |                                                               | $                                        | 46,278                                              |                              | $       | 46,130                                |       
|                                                                                  |                                                               |                                          |                                                     |                              |         |                                       |       
|Cash paid (refunds received) for taxes                                            |                                                               | $                                        | 2,132                                               |                              | $       | (15,235                               | )     
|                                                                                  |                                                               |                                          |                                                     |                              |         |                                       |       
|Non-cash activities                                                               |                                                               |                                          |                                                     |                              |         |                                       |       
|Equipment purchased through existing capital lease                                |                                                               | $                                        | 8,038                                               |                              | $       |                                      |       
|                                                                                  |                                                               |                                          |                                                     |                              |         |                                       |       

The accompanying notes are an integral part of these financial statements.

F-9

---





Emergency Medical Services Corporation        Notes to Consolidated Financial Statements        (dollars in thousands, except for share and per share amounts)

1. General

Basis of Presentation of Financial Statements

These financial statements have been prepared in accordance with accounting principles generally accepted in the United States ("GAAP") to reflect the
consolidated financial position, results of operations and cash flows of Emergency Medical Services Corporation ("EMSC" or the "Company"). The consolidated financial statements of EMSC include those
of its direct subsidiary, Emergency Medical Services, L.P. ("EMS LP"), a Delaware limited partnership (see note 2 "Summary of Significant Accounting PoliciesEquity
Structure"). EMS LP acquired American Medical Response, Inc. and its subsidiaries ("AMR") and EmCare Holdings Inc. and its subsidiaries ("EmCare") on February 10, 2005 with
an effective transaction date after the close of business January 31, 2005. On December 21, 2005, the Company effected a reorganization and issued class A common stock in an
initial public offering (see note 13 "Equity").

The
Company operates in two segments, AMR in the healthcare transportation service business and EmCare in the emergency management service business. AMR operates in 37 states, providing
a full range of medical transportation services from basic patient transit to the most advanced emergency care and pre-hospital assistance. In addition, AMR operates emergency
(911) call and response services for large and small communities all across the United States, offers medical staff for large entertainment venues like stadiums and arenas, and provides
telephone triage, transportation dispatch and demand management services. EmCare provides outsourced business services to hospitals primarily for emergency departments, related urgent care centers and
for certain inpatient departments with 395 contracts in 40 states. EmCare recruits physicians, gathers their credentials, arranges contracts for their services, assists in monitoring their performance
and arranges their scheduling. In addition, EmCare assists clients in such operational areas as staff coordination, quality assurance, departmental accreditation, billing, record-keeping, third-party
payment programs, and other administrative services.

During
the year ended December 31, 2007, the Company reclassified income earned on insurance related assets as Interest Income from Restricted Assets in the accompanying
consolidated statements of operations and comprehensive income; such income was previously reported as a component of insurance expense. Previous amounts have been reclassified to conform to the
current year presentation.

2. Summary of Significant Accounting Policies

Consolidation

The consolidated financial statements include EMSC, its subsidiary EMS LP, and EMS LP's subsidiaries, AMR and EmCare. All significant intercompany
transactions and balances have been eliminated.

Use of Estimates

The preparation of financial statements requires management to make estimates and assumptions relating to the reporting of results of operations, financial
condition and related disclosure of contingent assets and liabilities at the date of the financial statements including, but not limited to, estimates and assumptions for accounts receivable and
insurance related reserves. Actual results may differ from those estimates under different assumptions or conditions.

F-10

---



Emergency Medical Services Corporation

Notes to Consolidated Financial Statements (Continued)

(dollars in thousands, except for share and per share amounts)

2. Summary of Significant Accounting Policies (Continued)

Cash and Cash Equivalents

Cash and cash equivalents are composed of highly liquid investments with a maturity of three months or less at acquisition, and are recorded at market value.

At
December 31, 2007 and 2006, bank overdrafts of $21.1 million and $23.8 million, respectively, were included in accounts payable in the accompanying balance
sheets.

Insurance Collateral

Insurance collateral is principally comprised of government and investment grade securities and cash deposits with third parties and supports the Company's
insurance program and reserves. Certain of these investments, if sold or otherwise liquidated, would have to be replaced by other suitable financial assurances and are, therefore, considered
restricted.

Trade and Other Accounts Receivable, net

The Company determines its allowances based on payor reimbursement schedules, historical collections and write-off experience and other economic data.
Account balances are charged off against the uncompensated care allowance when it is probable the receivable will not be recovered. Write-offs to the contractual allowance occur when
payment is received. The allowance for uncompensated care is related principally to receivables recorded for self-pay patients. The following table presents accounts receivable, net and
accounts receivable allowances by segment:

December 31,2007

2006Accounts receivable, netEMS

$
162

$
AMR


295,510


264,898EmCare


199,676


151,552Total

$
495,348

$
416,450Accounts receivable allowancesAMRAllowance for contractual discounts

$
216,397

$
159,367Allowance for uncompensated care


172,140


146,305Total

$
388,537

$
305,672EmCareAllowance for contractual discounts

$
616,341

$
540,033Allowance for uncompensated care


259,780


223,227Total

$
876,121

$
763,260


The
increase in the allowances and provisions for contractual discounts and uncompensated care is primarily a result of increases in the Company's gross
fee-for-service rate schedules. These gross fee schedules, including any changes to existing fee schedules, generally are negotiated with various

F-11

---



Emergency Medical Services Corporation

Notes to Consolidated Financial Statements (Continued)

(dollars in thousands, except for share and per share amounts)

2. Summary of Significant Accounting Policies (Continued)

contracting
entities, including municipalities and facilities. Fee schedule increases are billed for all revenue sources and to all payors under that specific contract; however, reimbursement in the
case of certain state and federal payors, including Medicare and Medicaid, will not change as a result of the change in gross fee schedules. In certain cases, this results in a higher level of
contractual and uncompensated care provisions and allowances, requiring a higher percentage of contractual discount and uncompensated care provisions compared to gross charges.

Parts and Supplies Inventory

Parts and supplies inventory is valued at cost, determined on a first-in, first-out basis. Durable medical supplies, including stretchers,
oximeters and other miscellaneous items, are capitalized as inventory and expensed as used.

Property, Plant and Equipment, net

Property, plant and equipment were reflected at their estimated fair value as of February 1, 2005. Additions to property, plant and equipment subsequent to
this date are recorded at cost. Maintenance and repairs that do not extend the useful life of the property are charged to expense as incurred. Gains and losses from dispositions of property, plant and
equipment are recorded in the period incurred. Depreciation of property, plant and equipment is provided substantially on a straight-line basis over their estimated useful lives, which are
as follows:

Buildings

35 to 40 yearsLeasehold improvements

Shorter of expected life or life of leaseVehicles

5 to 7 yearsComputer hardware and software

3 to 5 yearsOther

3 to 10 years


Goodwill

SFAS 142 requires the Company to compare the fair value of the reporting unit to its carrying amount on an annual basis to determine if there is potential
goodwill impairment. If the fair value of the
reporting unit is less than its carrying value, an impairment loss is recorded to the extent that the fair value of the goodwill within the reporting unit is less than its carrying value.

The
Company uses an independent valuation group to assist in the determination of the fair value of its operating units. The independent valuation group uses a present value technique,
corroborated by market multiples when available and as appropriate, for each of the reporting units. EMSC's annual goodwill impairment assessment is performed during the third quarter each year. No
impairment indicators were noted in completing the Company's annual impairment assessment.

Impairment of Long-lived Assets other than Goodwill and Other Definite Lived Intangibles

Long-lived assets other than goodwill and other definite lived intangibles are assessed for impairment whenever events or changes in circumstances
indicate that the carrying value may not be recoverable. Important factors which could trigger impairment review include significant

F-12

---



Emergency Medical Services Corporation

Notes to Consolidated Financial Statements (Continued)

(dollars in thousands, except for share and per share amounts)

2. Summary of Significant Accounting Policies (Continued)

underperformance
relative to historical or projected future operating results, significant changes in the use of the acquired assets or the strategy for the overall business, and significant negative
industry or economic trends. If indicators of impairment are present, management evaluates the carrying value of long-lived assets other than goodwill and other definite lived intangibles
in relation to the projection of future undiscounted cash flows of the underlying business. Projected cash flows are based on historical results adjusted to reflect management's best estimate of
future market and operating conditions, which may differ from actual cash flows. There were no indicators of impairment in 2007, 2006 or 2005.

Contract Value

The Company's contracts and customer relationships, recorded initially at their estimated fair value, represent the amortized value of such assets held by the
Company. These assets are amortized on a straight-line basis over the average length of the contracts and expected contract renewal period, and range from 3 to 10 years depending on
the type of contract and customer relationship.

Radio Frequencies

The radio frequency licenses total $0.6 million at December 31, 2007 and 2006. These assets are considered to be indefinite lived intangible assets
and as such are not amortized, but are reviewed for impairment on an annual basis.

Trade Names

The trade names value was $0.7 million at December 31, 2007. These assets are considered to be indefinite lived intangible assets and as such are
not amortized, but are reviewed for impairment on an annual basis.

Claims Liability and Professional Liability Reserves

EMSC is self-insured up to certain limits for costs associated with workers compensation claims, automobile, professional liability claims and general
business liabilities. Reserves are established for estimates of the loss that will ultimately be incurred on claims that have been reported but not paid and claims that have been incurred but not
reported. These reserves are based upon valuations that are prepared by independent actuaries. The actuarial valuations consider a number of factors, including historical claim payment patterns and
changes in case reserves, the assumed rate of increase in healthcare costs and property damage repairs. Historical experience and recent trends in the historical experience are the most significant
factors in the determination of these reserves. Management believes the use of actuarial methods to account for these reserves provides a consistent and effective way to measure these subjective
accruals. However, given the magnitude of the claims involved and the length of time until the ultimate cost is known, the use of any estimation technique in this area is inherently sensitive.
Accordingly, recorded reserves could differ from ultimate costs related to these claims due to changes in accident reporting, claims payment and settlement practices or claims reserve practices, as
well as differences between assumed and future cost increases. Accrued unpaid claims and expenses that are expected to be paid within the next twelve months are classified as current liabilities. All
other accrued unpaid claims and expenses are classified as non-current liabilities.

F-13

---



Emergency Medical Services Corporation

Notes to Consolidated Financial Statements (Continued)

(dollars in thousands, except for share and per share amounts)

2. Summary of Significant Accounting Policies (Continued)

Equity Structure

The Company is the general partner of EMS LP and holds 22.8% of the equity interests in EMS LP. LP exchangeable units, held by persons
affiliated with the Company's principal equity holder, represent the balance of the EMS LP equity. The LP exchangeable units are exchangeable at any time, at the option of the holder,
for shares of the Company's class B common stock on a one-for-one basis. The holders of the LP exchangeable units have the right to vote, through the trustee
holder of the Company's class B special voting stock, at all stockholder meetings at which holders of the Company's class B common stock or class B special voting stock are
entitled to vote.

In
the EMS LP partnership agreement, the Company has agreed to maintain the economic equivalency of the LP exchangeable units and the class B common stock, and the
holders of the LP exchangeable units have no general voting rights. The LP exchangeable units, when considered with the class B special voting stock, have the same rights,
privileges and characteristics of the Company's class B common stock. The LP exchangeable units are intended to be economically equivalent to the class B common stock of the
Company in that the LP exchangeable units carry the right to vote (by virtue of the class B special voting stock) with the holders of class B common stock as if one class, and
entitle holders to receive distributions only if the equivalent dividends are declared on the Company's class B common stock. Accordingly, the Company accounts for the LP exchangeable
units as if the LP exchangeable units were shares of its common stock, including reporting the LP exchangeable units in the equity section of the Company's balance sheet and including
the number of outstanding LP exchangeable units in both its basic and diluted earnings per share calculations.

Derivatives and Hedging Activities

All derivative instruments are recorded on the balance sheet at fair value. The Company currently uses interest rate swaps to manage risks associated with
interest rate volatility. All hedging instruments that qualify for hedge accounting are designated and effective as hedges, in accordance with GAAP. If the underlying hedged transaction ceases to
exist, all changes in fair value of the related derivatives that have not been settled are recognized in current earnings. Instruments that do not qualify for hedge accounting and the ineffective
portion of hedges are marked to market with changes recognized in current earnings. The Company does not hold or issue derivative financial instruments for trading purposes and is not a party to
leveraged derivatives.

EmCare Contractual Arrangements

EmCare structures its contractual arrangements for emergency department management services in various ways. In most states, a wholly-owned subsidiary of EmCare
("EmCare Subsidiary") contracts with hospitals to provide emergency department management services. The EmCare Subsidiary enters into an agreement ("PA Management Agreement") with a professional
association or professional corporation ("PA"), whereby the EmCare Subsidiary provides the PA with management services and the PA agrees to provide physician services for the hospital contract. The PA
employs physicians directly or subcontracts with another entity for the physician services. In certain states, the PA contracts directly with the hospital, but provides physician services and obtains
management services in the same manner as described above. In all arrangements, decisions regarding patient care are made exclusively by the physicians. In consideration for these services, the EmCare
Subsidiary receives a monthly fee that may

F-14

---



Emergency Medical Services Corporation

Notes to Consolidated Financial Statements (Continued)

(dollars in thousands, except for share and per share amounts)

2. Summary of Significant Accounting Policies (Continued)

be
adjusted from time to time to reflect industry practice, business conditions, and actual expenses for administrative costs and uncollectible accounts. In most states, these fees approximate the
excess of the PA's revenues over its expenses.

Each
PA is wholly-owned by a physician who enters into a Stock Transfer and Option Agreement with EmCare. This agreement gives EmCare the right to replace the physician owner with
another physician in accordance with the terms of the agreement.

EmCare
has determined that these management contracts met the requirements of Emerging Issues Task Force 97-2Application of FASB Statement
No. 94 and APB Opinion No. 16 to Physician Practice Entities, for consolidation. Upon adoption of FIN 46(R),Consolidation of
Variable Interest Entities,the Company also concluded that these management contracts resulted in a variable interest in the PAs and that the Company is the primary
beneficiary. Accordingly, the consolidated financial statements of EmCare and these financial statements include the accounts of EmCare and its subsidiaries and the PAs. The financial statements of
the PAs are consolidated with EmCare and its subsidiaries because EmCare has ultimate control over the assets and business operations of the PAs as described above. Notwithstanding the lack of
technical majority ownership, consolidation of the PAs is necessary to present fairly the financial position and results of operations of EmCare because of the existence of a control relationship by
means other than record ownership of the PAs' voting stock. Control of a PA by EmCare is perpetual and other than temporary because EmCare may replace the physician owner of the PA at any time and
thereby continue EmCare's relationship with the PA.

Financial Instruments and Concentration of Credit Risk

The Company's cash and cash equivalents, accounts receivable, accounts payable, accrued liabilities, other than current portion of self-insurance
estimates, long-term debt and long-term liabilities, other than self-insurance estimates, constitute financial instruments. Based on management's estimates, the
carrying value of these financial instruments approximates their fair value as of December 31, 2007 and 2006. Concentration of credit risks in accounts receivable is limited, due to the large
number of customers comprising EMSC's customer base throughout the United States. A significant component of the Company's revenue is derived from Medicare and Medicaid. Given that these are
government programs, the credit risk for these customers is considered low. The Company performs ongoing credit evaluations of its other customers, but does not require collateral to support customer
accounts receivable. The Company establishes an allowance for uncompensated care based on the credit risk applicable to particular customers, historical trends and other relevant information. For each
of the periods presented, the Company derived approximately 29% of its net revenue from Medicare and Medicaid, 66% from insurance providers and contracted payors, and 5% directly from patients.

The
Company estimates the fair value of its fixed rate, senior subordinated notes based on quoted market prices. The estimated fair value of the senior subordinated notes at
December 31, 2007 was approximately $265 million with a carrying value of $250 million.

F-15

---



Emergency Medical Services Corporation

Notes to Consolidated Financial Statements (Continued)

(dollars in thousands, except for share and per share amounts)

2. Summary of Significant Accounting Policies (Continued)

Revenue Recognition

Revenue is recognized at the time of service and is recorded net of provisions for contractual discounts and estimated uncompensated care. Provisions for
contractual discounts and estimated uncompensated care by segment, as a percentage of gross revenue and gross revenue less contractual discount provisions as indicated, are as follows:

Year
ended
December 31,
2007

Year
ended
December 31,
2006

Eleven months
ended
December 31,
2005AMRGross revenue

100.0
%
100.0
%
100.0
%Provision for contractual discounts

39.4
%
38.3
%
36.5
%Provision for uncompensated care

15.2
%
14.1
%
13.7
%After contractual discount provisions

25.0
%
22.8
%
21.6
%EmCareGross revenue

100.0
%
100.0
%
100.0
%Provision for contractual discounts

49.3
%
47.1
%
49.4
%Provision for uncompensated care

20.8
%
23.5
%
19.9
%After contractual discount provisions

41.1
%
44.5
%
39.4
%TotalGross revenue

100.0
%
100.0
%
100.0
%Provision for contractual discounts

44.6
%
42.8
%
42.7
%Provision for uncompensated care

18.2
%
18.8
%
16.7
%After contractual discount provisions

32.8
%
32.9
%
29.2
%


Healthcare
payment is complex and may involve lengthy delays. Third-party payors are continuing their efforts to control expenditures for healthcare, including proposals to revise
reimbursement policies. The Company has from time to time experienced delays in payment from third-party payors. In addition, third-party payors may disallow, in whole or in part, claims for payment
based on determinations that certain amounts are not reimbursable under plan coverage, determinations of medical necessity, or the need for additional information.

Laws
and regulations governing the Medicare and Medicaid programs are very complex and subject to interpretation. As a result, there is a reasonable possibility that recorded estimates
will change materially in the short-term. Retroactive adjustments may change the amounts realized from third-party payors and are considered in the recognition of revenue on an estimated
basis in the period the related services are rendered. Such amounts, including adjustments between contractual discount and uncompensated care provisions, are adjusted in future periods, as
adjustments become known. The retroactive adjustments, which increased revenue recorded in 2007 and 2006, was 1.6% and 1.3%, respectively, of consolidated net revenue.

Subsidies
and fees in connection with community contracts at AMR are recognized ratably over the service period the payment covers.

F-16

---



Emergency Medical Services Corporation

Notes to Consolidated Financial Statements (Continued)

(dollars in thousands, except for share and per share amounts)

2. Summary of Significant Accounting Policies (Continued)

The
Company also provides services to patients who have no insurance or other third-party payor coverage. In certain circumstances, federal law requires providers to render services to
any patient who requires emergency care regardless of their ability to pay.

Income Taxes

The Company accounts for income taxes under SFAS No. 109Accounting for Income Taxes("SFAS 109").
Deferred income taxes reflect the impact of temporary differences between the reported amounts of assets and liabilities for financial reporting purposes and such amounts as measured by tax laws and
regulations. The deferred tax assets and liabilities represent the future tax return consequences of those differences, which will either be taxable or deductible when the assets and liabilities are
recovered or settled. A valuation allowance is provided for deferred tax assets when management concludes it is more likely than not that some portion of the deferred tax assets will not be
recognized. 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 establish a reasonable
estimate of possible additional taxes owing, if any.

In
connection with the acquisition of AMR and EmCare, the Company made an Internal Revenue Code ("IRC") section 338(h)(10) election for EmCare which eliminated $67 million
of deferred tax assets and stepped-up the tax basis of EmCare's assets to fair value. Differences between book and tax depreciation and amortization for these assets will create future
deferred tax assets or liabilities.

In
July 2006, the FASB issued Interpretation No. 48Accounting for Uncertainty in Income Taxes,an interpretation of
SFAS 109 ("FIN 48"). FIN 48 was adopted by the Company on January 1, 2007. FIN 48 creates a single model to address uncertainty in tax positions, prescribes the
minimum recognition threshold, and provides guidance on derecognition, measurement, classification, interest and penalties, accounting in interim periods, disclosure and transition. FIN 48 also
has expanded disclosure requirements, which include a tabular rollforward of the beginning and ending aggregate unrecognized tax benefits, as well as specific detail related to tax uncertainties for
which it is reasonably possible the amount of unrecognized tax benefit will significantly increase or decrease within twelve months. Upon adoption of FIN 48, the Company reclassified
approximately $41 million to a long-term liability and increased current deferred tax assets (see note 6 "Income Taxes").

Net Income Per Common Share

The consolidated financial statements include "basic" and "diluted" per share information. Basic per share information is calculated by dividing net income
available to stockholders by the weighted average number of shares outstanding. Diluted per share information is calculated by also considering the impact of potential common stock on both net income
and the weighted average number of shares outstanding. The weighted average number of shares used in the basic earnings per share computation was 41.6 million and 41.5 million for the
years ended December 31, 2007 and 2006, respectively, and 33.6 million for the eleven months ended December 31, 2005. The only difference in the computation of basic and diluted
earnings per share is the inclusion of 1.6 million, 1.0 million and 0.7 million potential common shares for the periods ended December 31, 2007, 2006 and 2005,
respectively.

F-17

---



Emergency Medical Services Corporation

Notes to Consolidated Financial Statements (Continued)

(dollars in thousands, except for share and per share amounts)

2. Summary of Significant Accounting Policies (Continued)

Stock Options

The Company records the expense of stock option awards over the period in which the options vest, consistent with the provisions of SFAS No. 123(R) Accounting for Stock-Based Compensation("SFAS 123R"). The stock options are valued using the Black-Scholes valuation method on the date of
grant. Prior to January 1, 2006, the Company recorded equity-based compensation in accordance with the provisions of SFAS No. 123Accounting for Stock-Based
Compensation.

Recent Accounting Pronouncements

In September 2006, the FASB issued SFAS No. 157Fair Value Measurement("SFAS 157"), which defines
fair value, establishes a framework for measuring fair value and expands disclosures about assets and liabilities measured at fair value. The Company will be required to adopt SFAS 157 in the
first quarter of fiscal 2008. For certain nonfinancial assets and nonfinancial liabilities, the effective date has been deferred for one year. Management currently is evaluating the requirements of
SFAS 157 and has not yet determined the impact it will have on the Company's financial statements.

In
February 2007, the FASB issued SFAS No. 159The Fair Value Option for Financial Assets and Financial Liabilities("SFAS 159"), which permits entities to choose to measure many financial instruments and certain other items at fair value. The Company will have the option to adopt SFAS 159 in the
first quarter of fiscal 2008. Management currently is evaluating the requirements of SFAS 159 and has not yet determined the impact it will have on the Company's financial statements.

In
December 2007, the FASB issued SFAS No. 141 (revised 2007)Business Combinations("SFAS 141(R)"), which replaces FASB
Statement No. 141. SFAS 141(R) establishes requirements for how an acquirer in a business combination recognizes and measures the assets acquired, liabilities assumed and any
noncontrolling interests. The provisions of SFAS 141(R) are effective for business combinations for which the acquisition date is on or after the beginning of the first annual reporting period
beginning on or after December 15, 2008.

In
December 2007, the FASB issued SFAS No. 160Noncontrolling Interests in Consolidated Financial Statements, an amendment of ARB
No. 51("SFAS 160"). SFAS 160 will change the accounting and
reporting for minority interests, which will be recharacterized as noncontrolling interests and classified as a component of equity. SFAS 160 is effective for fiscal years beginning on or after
December 15, 2008.

3. Acquisitions

In July 2007, the Company acquired MedicWest Ambulance based in North Las Vegas, Nevada and Abbott Ambulance, Inc. based in St. Louis, Missouri,
together with certain of their respective affiliates. In September 2007, the Company acquired certain ground ambulance assets from subsidiaries of Lifeguard Transportation Service, Inc. in
Dallas, Texas and Atlanta, Georgia. The total cost for acquisitions completed during 2007 was $75.6 million and was paid primarily in cash. These acquisitions expanded AMR's presence in
existing markets and allowed it to enter a new market in the St. Louis area. The Company has substantially completed the purchase price allocation for these acquisitions and has preliminarily
recorded $42.1 million of goodwill as of December 31, 2007.

F-18

---



Emergency Medical Services Corporation

Notes to Consolidated Financial Statements (Continued)

(dollars in thousands, except for share and per share amounts)

3. Acquisitions (Continued)

During
the year ended December 31, 2006, the Company acquired four entities for a total cost of $24.7 million, which was paid primarily in cash. On July 8, 2006, the
Company acquired Air Ambulance Specialists, Inc., a privately held fixed wing air ambulance company, with an effective date of July 1, 2006. AASI is based in Centennial, Colorado. On
November 13, 2006, the Company acquired Clinical Staffing Solutions, a Philadelphia-based hospitalist business. The Company also purchased two local ambulance service providers. Silver Spring
Ambulance Service, Inc., providing services in the Washington D.C. market, was acquired in July 2006. Lifeline Medical Services, Inc., providing services in the south Florida market, was
acquired in June 2006.

4. Property, Plant and Equipment, net

Property, plant and equipment, net consisted of the following at December 31:

2007

2006Land

$
2,586

$
2,079Building and leasehold improvements


23,839


19,997Vehicles


120,673


105,788Computer hardware and software


69,077


48,792Communication and medical equipment and other


66,206


66,216282,381


242,872Less: accumulated depreciation and amortization


(139,039
)

(95,710
)Property, plant and equipment, net

$
143,342

$
147,162


Vehicles
include certain vehicles held under capital leases with a net book value of $6.8 million and $2.1 million at December 31, 2007 and 2006, respectively.
Accumulated depreciation and amortization at December 31, 2007 and 2006 includes $1.8 million and $9.7 million, respectively, relating to such vehicles. Depreciation expense,
which includes amortization of assets under capital leases, was $55.4 million and $53.1 million for the years ended December 31, 2007 and 2006, respectively, and
$42.5 million for the eleven months ended December 31, 2005.

F-19

---



Emergency Medical Services Corporation

Notes to Consolidated Financial Statements (Continued)

(dollars in thousands, except for share and per share amounts)

5. Intangible Assets, net

Intangible assets, net consisted of the following at December 31:

|                              |                         | 2007  |   | 2006    |        
|----------------------------- | ----------------------- | ----- | - | ------- | -------
|
|Amortized intangible assets   |                         |       |   |         |        
|                              | Contract value          |       | $ | 118,590 |        
|                              | Covenant not to compete |       |   | 1,363   |        
|                              |                         |       |   |         |        
|                              |                         | Total |   | $       | 119,953
|                              |                         |       |   |         |        
|Unamortized intangible assets |                         |       |   |         |        
|                              | Trade names             |       |   | 700     |        
|                              | Radio frequencies       |       |   | 601     |        
|                              |                         |       |   |         |        
|                              |                         | Total |   | $       | 121,254
|                              |                         |       |   |         |        

Amortization
expense of intangible assets was $15.1 million and $12.8 million for the years ended December 31, 2007 and 2006, respectively, and $11.7 million
for the eleven months ended December 31, 2005. Estimated annual amortization over each of the next five years is expected to be:

2008

$
16,7902009


14,8932010


14,2982011


14,0822012


9,832


F-20

---



Emergency Medical Services Corporation

Notes to Consolidated Financial Statements (Continued)

(dollars in thousands, except for share and per share amounts)

6. Income Taxes

Deferred income taxes reflect the net tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes
and the amounts used for income tax purposes. Significant components of the Company's deferred taxes were as follows at December 31:

2007

2006Current deferred tax assets (liabilities):Accounts receivable

$
55,057

$
(5,562
)Accrued liabilities


20,675


17,312Credit carryforwards


1,265


723Net current deferred tax assets


76,997


12,473Long-term deferred tax assets (liabilities):Intangible assets


(24,221
)

(7,005
)Insurance and other long-term liabilities


37,106


30,982Excess of tax over book depreciation


(4,275
)

(4,783
)Interest carryforwards


51,078


65,497Net operating loss carryforwards


35,273


18,679Net long-term deferred tax assets


94,961


103,370Net deferred tax assets

$
171,958

$
115,843


The
Company has significant net deferred tax assets resulting from net operating loss ("NOL") and interest deduction carryforwards and other deductible temporary
differences that will reduce taxable income in future periods. SFAS 109 requires that a valuation allowance be established when it is "more likely than not" that all, or a portion, of net
deferred tax assets will not be realized. A review of all available positive and negative evidence needs to be considered, including expected reversals of significant deductible temporary differences,
a company's recent financial performance, the market environment in which a company operates, tax planning strategies and the length of NOL carryforward periods. Furthermore, the weight given to the
potential effect of negative and positive evidence should be commensurate with the extent to which it can be objectively verified. The Company's evaluation of such evidence shows that no valuation
allowance is needed.

The
Company operates in multiple taxing jurisdictions and in the normal course of business is examined by federal and state tax authorities. In association with this the Company has
established reserves for income taxes in accordance with SFAS No. 5Accounting for Contingencies("SFAS 5"). Beginning in the first
quarter of 2007, this reserve was accounted for under FIN 48. The Company will periodically assess the amount of such reserves and adjust the reserve balances as necessary. EMSC does not expect
the final resolution of tax examinations to have a material impact on the Company's financial results.

The
Company has interest carryovers of $132.2 million at December 31, 2007 limited by IRC Section 163(j) without expiration, and federal net operating loss
carryforwards of $91.3 million which expire in the years 2017 to 2027. All NOL carryforwards are subject to AMR's annual IRC Section 382 limitation of $1.3 million. However, AMR
has a net unrealized built-in gain ("NUBIG") and future recognition of some of these built-in gains will enable AMR to utilize its NOLs in excess of the annual limitation. AMR
recognized additional NOLs of $53.9 million related to an issue that was settled in

F-21

---



Emergency Medical Services Corporation

Notes to Consolidated Financial Statements (Continued)

(dollars in thousands, except for share and per share amounts)

6. Income Taxes (Continued)

AMR's
August 31, 2002 and August 31, 2003 audits that closed in 2007. The closure of the audit along with refinement of AMR's net unrecognized built-in gain computation
allowed AMR to recognize this additional asset.

A
reconciliation of the beginning and ending amount of unrecognized tax benefits is as follows:

Balance at January 1, 2007

$
40,934Additions based on tax positions related to the current year


Additions for tax positions of prior years


51,637Reductions for tax positions of prior years


Reductions for tax positions due to lapse of statute of limitations


Settlements


Balance at December 31, 2007

$
92,571


In
accordance with the Company's accounting policy, EMSC recognized accrued interest and penalties related to unrecognized tax benefits as a component of tax expense, which is consistent
with the recognition of these items in prior reporting periods. The Company recognized $10.1 million and $8.3 million for the payment of interest and penalties for the years ended
December 31, 2007 and 2006, respectively.

It
is reasonably possible that a reduction of up to $93 million of unrecognized tax benefits may occur as a result of possible audit settlements and/or tax filings made by the
Company within the next twelve months.

The
amount of unrecognized tax benefits that, if recognized, would impact the effective tax rate was $0.2 million on December 31, 2007 and 2006.

The
components of income tax expense were as follows:

Year
ended
December 31,
2007

Year
ended
December 31,
2006

Eleven months
ended
December 31,
2005Current tax expenseState

$
625

$


$
Federal


27


479


102Total


652


479


102Deferred tax expenseState


3,830


1,970


1,134Federal


31,622


22,512


13,136Total


35,452


24,482


14,270Total tax expenseState


4,455


1,970


1,134Federal


31,649


22,991


13,238Total

$
36,104

$
24,961

$
14,372


F-22

---



Emergency Medical Services Corporation

Notes to Consolidated Financial Statements (Continued)

(dollars in thousands, except for share and per share amounts)

6. Income Taxes (Continued)

A
reconciliation of the provision for income taxes at the federal statutory rate compared to the Company's effective tax rate is as follows:

Year
ended
December 31,
2007

Year
ended
December 31,
2006

Eleven months
ended
December 31,
2005Income tax expense at the statutory rate

$
33,571

$
22,412

$
12,033Increase in income taxes resulting from:State taxes, net of federal


2,787


1,971


1,182Other


(254
)

578


1,157Provision for income taxes

$
36,104

$
24,961

$
14,372


7. Accrued Liabilities

Accrued liabilities were as follows at December 31:

2007

2006Accrued wages and benefits

$
79,781

$
71,578Accrued paid time-off


24,687


22,816Current portion of self-insurance reserve


59,821


57,596Accrued restructuring


600


5,738Current portion of compliance and legal


2,245


4,910Accrued billing and collection fees


5,046


5,085Accrued profit sharing


23,661


19,695Accrued interest


10,407


11,810Other


31,071


32,403Total accrued liabilities

$
237,319

$
231,631


8. Debt

On February 10, 2005, the Company issued $250.0 million of senior subordinated unsecured notes and entered into a $450.0 million Senior
Secured Credit Facility ("Credit Facility") agreement.

The
senior subordinated notes have a fixed interest rate of 10%, payable semi-annually and mature in February 2015. The senior subordinated notes are general unsecured
obligations of the issuers, AMR HoldCo, Inc. and EmCare HoldCo, Inc., and are guaranteed by EMSC, EMS LP and each of EMSC's domestic subsidiaries. AMR and its subsidiaries are
wholly-owned subsidiaries of AMR HoldCo, Inc. and EmCare and its subsidiaries are wholly-owned subsidiaries of EmCare HoldCo, Inc.

The
Credit Facility consists of a $350.0 million senior secured term loan and a $100.0 million Senior Secured Revolving Credit Facility commitment, ("Revolving Facility"),
each collateralized by a pledge of 100% of the capital stock of the Company and its direct and indirect domestic subsidiaries, 65% of the capital stock of any direct foreign subsidiaries and an
interest in substantially all tangible

F-23

---



Emergency Medical Services Corporation

Notes to Consolidated Financial Statements (Continued)

(dollars in thousands, except for share and per share amounts)

8. Debt (Continued)

and
intangible assets of EMS LP and its subsidiaries. The term loan matures in February 2012 and requires quarterly principal payments of $0.6 million. The Revolving Facility was
established to fund the Company's working capital and letter of credit needs and requires principal and interest to be paid at maturity in February 2011. The Revolving Facility is also subject to an
annual commitment fee of 0.5% on unutilized commitments. Under the terms of the agreement, the Company may select between various interest rate arrangements based on LIBOR or the Prime Rate plus
additional basis points ranging from 1% to 2%, determined by reference to a leverage ratio. At December 31, 2007, net of letters of credit outstanding of $29.6 million, the maximum
available under the Revolving Facility was $70.4 million. There were no borrowings under the Revolving Facility at December 31, 2007 and 2006.

The
Credit Facility agreement contains various customary operating and financial covenants. The more restrictive of these covenants limit the Company and its subsidiaries' ability to
create liens on assets; make certain investments, loans, guarantees or advances; incur additional indebtedness or issue capital stock; engage in mergers, acquisitions or consolidations; dispose of
assets; pay dividends, repurchase equity interest or make other restricted payments; change the business conducted by the Company; engage in transactions with affiliates; and repay certain
indebtedness, including the senior unsecured notes, or amend or otherwise modify agreements governing the subordinated indebtedness. The financial maintenance covenants establish a maximum leverage
ratio, a maximum senior leverage ratio, a minimum fixed charge coverage ratio and an annual capital expenditure limit. The Company is in compliance with its debt covenants as of December 31,
2007.

The
Company paid approximately $18.3 million in debt issuance costs that are being amortized using the effective interest method. In connection with the initial public offering
discussed in note 13 "Equity," the Company used net proceeds from the offering to pay down a portion of the Credit Facility and wrote off $2.0 million of unamortized debt issuance costs.
The Company made unscheduled payments on the Credit Facility totaling $19.4 million during the year ended December 31, 2006 and wrote off $0.4 million of unamortized debt issuance
costs.

Long-term
debt and capital lease obligations consisted of the following at December 31:

2007

2006Senior subordinated notes due 2015

$
250,000

$
250,000Senior secured term loan due 2012 (7.15% at December 31,2007)


224,167


226,472Notes due at various dates from 2008 to 2022 with interest rates from 6% to 10%


2,292


1,856Capital lease obligations due 2010


6,424


1,447482,883


479,775Less current portion


(4,717
)

(4,159
)Total long-term debt

$
478,166

$
475,616


F-24

---



Emergency Medical Services Corporation

Notes to Consolidated Financial Statements (Continued)

(dollars in thousands, except for share and per share amounts)

8. Debt (Continued)

The
aggregate amount of minimum payments required on long-term debt and capital lease obligations (see note 14 "Commitments and Contingencies") in each of the years
indicated is as follows:

Year ending December 31,2008

$
4,7172009


5,5802010


4,5632011


163,2572012


54,205Thereafter


250,561$
482,883


9. Derivative Instruments and Hedging Activities

The Company manages its exposure to changes in market interest rates. The Company's use of derivative instruments is limited to highly effective fixed interest
rate swap agreements used to manage well-defined interest rate risk exposures. The Company monitors its positions and the credit ratings of its counterparties and does not anticipate
non-performance by the counterparties. Interest rate swap agreements are not entered into for trading purposes.

At
December 31, 2007, the Company was party to one interest rate swap agreement. The swap agreement is with major financial institutions and amounts to $200 million of
notional principal amount. This swap agreement effectively converts $200 million of variable rate debt to fixed rate debt with an effective rate of 4.3%. The Company continues to make interest
payments based on the variable rate associated with the debt (based on LIBOR which had an average rate of 3.81% at December 31, 2007)
and periodically settles with its counterparties for the difference between the rate paid and the fixed rate. The remaining term of this swap agreement is two years. In fiscal 2007, the Company
recorded a net change in the fair value of the fixed interest rate swap agreement in the amount of $2.0 million as a component of other comprehensive income. The net additional interest
payments made or received under this swap agreement is recognized in interest expense. Over the next twelve months, the Company expects to reclassify $0.4 million of deferred gain from
accumulated other comprehensive loss to interest expense as related interest payments that are being hedged are recognized.

F-25

---



Emergency Medical Services Corporation

Notes to Consolidated Financial Statements (Continued)

(dollars in thousands, except for share and per share amounts)

10. Restructuring Charges

|                  |  |   |      |   |   | 2006 Plans |   | 2007 Plans |        |   |  
|----------------- |  | - | ---- | - | - | ---------- | - | ---------- | ------ | - | -
|
|
|February 1, 2005  |  | $ | 746  |   |   |            |   |            |        |   |  
|Adjustment        |  |   | 287  |   |   |            |   |            |        |   |  
|Incurred          |  |   |     |   | $ | 1,494      |   |            |        |   |  
|Paid              |  |   | (567 | ) |   | (228       | ) |            |        |   |  
|                  |  |   |      |   |   |            |   |            |        |   |  
|December 31, 2005 |  |   | 466  |   |   | 1,266      |   |            |        |   |  
|Incurred          |  |   |     |   |   |           |   | $          | 5,618  |   | $
|Paid              |  |   | (286 | ) |   | (1,266     | ) |            | (811   | ) |  
|                  |  |   |      |   |   |            |   |            |        |   |  
|December 31, 2006 |  |   | 180  |   |   |           |   |            | 4,807  |   |  
|Incurred          |  |   |     |   |   |           |   |            |       |   |  
|Paid              |  |   | (104 | ) |   |           |   |            | (4,807 | ) |  
|                  |  |   |      |   |   |            |   |            |        |   |  
|December 31, 2007 |  | $ | 76   |   | $ |           |   | $          |       |   | $
|                  |  |   |      |   |   |            |   |            |        |   |  

The
activity in the accrued restructuring balance is as follows:

During
fiscal year 2002, in an effort to eliminate the differences in size among regions, AMR was re-aligned into four geographic regions. The operating units within the five
original regions were shifted to create the new structure and the administrative offices of the former South region and one billing center were closed. A National Products and Services function was
also closed as part of this restructuring plan. The functions previously performed by these groups were distributed to the remaining regions and the corporate office. The lease commitment associated
with this plan is expected to be completed by December 2008.

As
part of a plan to merge the national support functions of AMR and EmCare, EMSC recorded a restructuring charge of $0.6 million for severance costs in the fourth quarter of
fiscal 2005. In addition to this EMSC restructuring, in 2005 AMR was re-aligned from three into two geographic regions and a resulting severance charge of $0.9 million was recorded.
The final severance payments under the restructuring plan were paid in 2006.

As
part of a plan to re-align the operations and billing function of AMR and to exit the East Michigan market, the Company recorded a restructuring charge of
$6.4 million during 2006. Lease termination costs accounted for $0.8 million and the remaining $5.6 million related to one-time termination benefits. Lease termination
costs are expected to be completed by December 2015.

The
Company restructured certain billing functions of AMR and operations in the Los Angeles, California market during the first quarter of 2007 and recorded a restructuring charge of
$2.2 million. This restructuring charge included $0.2 million in lease termination and exit costs and $2.0 million related to termination benefits. These costs are expected to be
paid by the end of December 2008.

11. Retirement Plans and Employee Benefits

The Company maintains three 401(k) plans (the "EMSC Plans") for its employees and employees of certain subsidiaries who meet the eligibility requirements set
forth in the EMSC Plans. Employees

F-26

---



Emergency Medical Services Corporation

Notes to Consolidated Financial Statements (Continued)

(dollars in thousands, except for share and per share amounts)

11. Retirement Plans and Employee Benefits (Continued)

may
contribute a maximum of 40% of their compensation up to a maximum of $15,500. Generally, 50% of the contribution is matched by the Company up to a maximum of 3% to 6% of the employee's salary per
year, depending on the plan. EMSC's contributions to the EMSC Plans were $11.3 million and $10.4 million for the years ended December 31, 2007 and 2006, respectively, and
$8.7 million for the eleven months ended December 31, 2005. Contributions are included in compensation and benefits on the accompanying statements of operations.

EmCare
established the EmCare Holdings Inc. 401(k) Savings Plan (the "EmCare Plan") in 1994 to provide retirement benefits to its physician employees. Employees may elect to
participate in the EmCare Plan at the beginning of each calendar quarter and may contribute 1% to 25% of their annual compensation on a tax-deferred basis subject to limits established by
the Internal Revenue Service. EmCare contributes 50% of the first 6% of base compensation that a participant contributes to the EmCare Plan during any calendar year. EmCare contributed
$0.8 million and $0.3 million during the years ended December 31, 2007 and 2006, respectively, and $0.3 million during the eleven months ended December 31, 2005.

12. Equity Based Compensation

Equity Option Plan

Under the Company's Equity Option Plan approved in February 2005, key employees were granted options to purchase partnership units of EMS LP. In accordance
with the terms of the Equity Option Plan, the terms of these options were adjusted to reflect the Company's initial public offering and reorganization (see note 13 "Equity") in the fourth
quarter of 2005. The options permit employees to purchase class A common shares at an exercise price of between $6.67 and $16.00 per share and vest ratably generally over a period of
4 years and have a maximum 10-year term. In addition, certain performance measures must be met for 50% of the options to become exercisable. The Company recorded a compensation
charge of $1.1 million and $1.2 million for the years ended December 31, 2007 and 2006, respectively, and $1.0 million for the eleven months ended December 31, 2005
associated with the grant of these options. No future grants of options will be made under this plan.

The
Black-Scholes option pricing model was used to estimate fair values as of the date of grant using 0% volatility (because the options were granted by EMS LP as a private
company), risk free rates ranging from 3.53% to 3.88%, 0% dividend yield and terms of 4 and 5 years. The weighted average fair value of options granted during the eleven months ended
December 31, 2005 was $1.40.

F-27

---



Emergency Medical Services Corporation

Notes to Consolidated Financial Statements (Continued)

(dollars in thousands, except for share and per share amounts)

12. Equity Based Compensation (Continued)

The
following table summarizes the status of options under the Equity Option Plan, as well as options granted to certain directors (with similar terms) as of December 31, 2007:

Class A
Shares

Weighted
Average
Exercise PriceOutstanding at beginning of year

3,357,907

$
6.77Granted at fair value




Exercised

(57,494
)

6.67Expired or forfeited

(47,817
)

6.67Outstanding at end of year

3,252,596

$
6.78Exercisable at end of year

874,378

$
6.77


The
range of exercise prices of the outstanding exercisable options are as follows at December 31, 2007:

Weighted Average
Exercise Price

Number of
Exercisable
Shares

Number of
Outstanding
Shares

Weighted Average
Remaining
Life in Years$
6.67

865,003

3,215,096

7.11$
16.00

9,375

37,500

7.95


The
Company recorded a charge totaling $1.8 million associated with partnership units sold and certain options to purchase equity issued to employees and officers of the Company.
This non-cash expense was recorded as a component of compensation and benefits on the accompanying statement of operations for the eleven months ended December 31, 2005.

Directors' Plan

The Directors' Plan, approved by stockholders in May 2007, is available to non-employee directors of the Company other than the Chair of the
Compliance Committee. Under this plan, eligible directors are granted Restricted Stock Units ("RSUs") immediately following each annual stockholder meeting with each RSU representing one share of the
Company's class A common stock. Each grant of RSUs has a fair market value of $0.1 million on the date of grant based on the closing price of the Company's class A common stock on
the business day immediately preceding the grant date. The Directors' Plan allows directors to defer income from the grant of RSUs, which vest immediately prior to the election of directors at the
next annual stockholder meeting. In connection with this plan, the Company granted 2,705 and 8,000 RSUs per director in 2007 and 2006, respectively, and expensed $0.4 million and
$0.2 million for the years ended December 31, 2007 and 2006, respectively.

Long-Term Incentive Plan

EMSC's Long-Term Incentive Plan (the "Plan") was approved by stockholders in May 2007 and provides for the grant of long-term incentives,
including various equity-based incentives, to those persons with responsibility for the success and growth of the Company and its subsidiaries.

F-28

---



Emergency Medical Services Corporation

Notes to Consolidated Financial Statements (Continued)

(dollars in thousands, except for share and per share amounts)

12. Equity Based Compensation (Continued)

During
2007, members of the Board of Directors of the Company granted, in the aggregate, 30,000 shares of restricted class A common stock pursuant to the Plan, which shares vest ratably
over a period of three to four years. In addition, certain performance measures must be met for 50% of these shares to become exercisable. In connection with these grants, the Company expensed
$0.1 million for the year ended December 31, 2007.

The
Company also granted options to key employees during 2007 under the Plan. The options permit employees to purchase shares of class A common stock at exercise prices ranging
from $30.37 to $39.89 per share and vest ratably over a period of 4 years and have a maximum term of ten years. In addition, certain performance measures must be met for 50% of the options to
become exercisable. In connection with these grants the Company recorded a compensation charge of $0.1 million for the year ended December 31, 2007.

The
Black-Scholes option pricing model was used to estimate fair values as of the date of grant using 43% to 46% volatility based on EMSC's historical stock price, risk free rates
ranging from 4.07% to 5.16%, 0% dividend yield and a term of 5 years. The weighted average fair value of options granted during 2007 was $15.30.

The
following table summarizes the status of restricted stock and options under the Plan as of December 31, 2007:

Options SummaryRestricted
Stock

Class A
Shares

Weighted
Average
Exercise PriceOutstanding at beginning of year





$
Granted

30,000

95,000


33.93Exercised






Expired or forfeited






Outstanding at end of year

30,000

95,000

$
33.93Exercisable at end of year





$



13. Equity

On December 21, 2005, the Company effected a reorganization and issued 8.1 million shares of class A common stock in an initial public
offering. Pursuant to the reorganization, EMS LP, the former top-tier holding company of AMR and EmCare, became the consolidated subsidiary of EMSC, a newly formed corporation. To
effect the reorganization, the holders of the capital stock of the sole general partner of EMS LP contributed that capital stock to the Company in exchange for class B common stock; the
general partner was merged into the Company and the Company became the sole general partner of EMS LP. Concurrently, the holders of class B units of EMS LP contributed their units
to the Company in exchange for shares of the Company's class A common stock, and the holders of certain class A units of EMS LP contributed their units to the Company in exchange
for shares of the Company's class B common stock.

F-29

---



Emergency Medical Services Corporation

Notes to Consolidated Financial Statements (Continued)

(dollars in thousands, except for share and per share amounts)

13. Equity (Continued)

Preferred Stock

The Company's board of directors may, without further action by stockholders, from time to time direct the issuance of up to 20 million shares of preferred
stock in series and may, at the time of issuance, determine the rights, preferences and limitations of each series.

Class A and Class B Common Stock and Class B Special Voting Stock

General

The Company's class A common stock and class B common stock is identical in all respects, except with respect to voting and except that each share
of class B common stock is convertible into one share of class A common stock at the option of the holder. The class B common stock will be converted automatically into
class A common stock upon a transfer thereof to any person other than certain currently affiliated persons and their affiliates. The class A and class B common stock are referred
to as "common stock".

Subject
to preferences that may apply to shares of preferred stock outstanding at the time, holders of the Company's outstanding common stock are entitled to any dividend declared by the
board of directors out of funds legally available for this purpose. Upon the Company's liquidation, dissolution or winding up, the holders of the class A and class B common stock are
entitled to receive pro rata the Company's assets available for distribution, after payment of all liabilities and subject to the rights of any outstanding preferred stock and of the holders of
the LP exchangeable units to receive distributions of assets equivalent to, on a per share/per unit basis, the distributions to the holders of the class A and class B common
stock.

The
Company's one share of class B special voting stock is not entitled to any rights or privileges except for the voting rights described below, and except that it is entitled to
a distribution equal to its $0.01 par value upon the Company's liquidation, dissolution or winding up.

The
class B units of EMS LP had no voting rights and transfer of the units was restricted. Prior to a qualified public offering, if the employment of a holder of
class B units was terminated because of death, disability or by the Company without cause, the holder had the right to either retain his class B units, or to "put" his class B
units to the Company and require the Company to purchase his class B units. The Company had the right to "call" the class B units and require the holder to sell his/her class B
units to the Company. The Company's "call" right was also exercisable upon a holder's termination for cause. At June 30, 2005 and September 30, 2005, the Company recorded the repurchase
price associated with the put right of $1.8 million and $1.2 million, respectively (see note 17 "Net Income per Common Share"). These put and call rights expired upon the
completion of the Company's public offering in the fourth quarter of 2005.

Voting Rights

Generally, on all matters on which the holders of common stock are entitled to vote, the holders of the class A common stock, the class B common
stock and the class B special voting stock vote together as a single class. On all matters with respect to which the holders of the Company's common stock are entitled to vote, each outstanding
share of class A common stock is entitled to one vote, each

F-30

---



Emergency Medical Services Corporation

Notes to Consolidated Financial Statements (Continued)

(dollars in thousands, except for share and per share amounts)

13. Equity (Continued)

outstanding
share of class B common stock is entitled to ten votes and the one share of class B special voting stock is entitled to a number of votes equal to the number of votes that
could be cast if all of the then outstanding LP exchangeable units were exchanged for class B common stock. If the Minimum Hold Condition is no longer satisfied, the number of votes per
share of class B common stock will be reduced automatically to one vote per share. The Minimum Hold Condition is satisfied so long as the aggregate of the numbers of outstanding shares of
class B common stock and LP exchangeable units is at least 10% of the total number of shares of common stock and LP exchangeable units outstanding.

In
addition, holders of class A common stock, on the one hand, and the class B common stock and class B special voting stock, on the other, are entitled to vote as a
separate class on approval of (i) any alteration, repeal or amendment of the Company's certificate of incorporation which would adversely affect the powers, preferences or rights of the holders
of class A common stock or the class B common stock and class B special voting stock, as the case may be, and (ii) any merger or consolidation of the Company with any other
entity if, as a result, (x) shares of class A common stock would be converted into or exchanged for, or receive, any consideration that differs from that applicable to the shares of
class B common stock as a result of such merger or consolidation, other than a difference limited to preserving the relative voting power of the holders of the class A common stock, the
class B common stock and the class B special voting stock or (y) in the case of the class B common stock and class B special voting stock only, the class B
special voting stock would not remain outstanding.

In
respect of any matter as to which the holders of the class A common stock are entitled to a class vote, holders have one vote per share, and the affirmative vote of the holders
of a majority of the shares of class A common stock outstanding is required for approval. In respect of any matter as to which the holders of the class B common stock and class B
special voting stock are entitled to a class vote, holders of class B common stock have one vote per share and the holder of the class B special voting stock will have one vote for
each LP exchangeable unit outstanding, and the affirmative vote of the holders of a majority of the votes entitled to be cast is required for approval.

LP Exchangeable Units

The LP exchangeable units are issued by EMS LP. Each LP exchangeable unit is exchangeable at any time into one share of class B common
stock at the option of the holder and is substantially equivalent
economically to a share of class B common stock. The holders of the LP exchangeable units have the right to receive distributions, on a per unit basis, in amounts (or property in the
case of non-cash dividends), which are the same as, or economically equivalent to, and which are payable at the same time as, dividends declared on the class B common stock (or
dividends that would be required to be declared if class B common stock were outstanding). These holders also have the right to vote, through the trustee holder of the class B special
voting stock, at all stockholder meetings at which holders of the class B common stock or class B special voting stock are entitled to vote, and the right to participate on a pro rata
basis with the class B common stock in the distribution of assets of the Company, upon specified events relating to the voluntary or involuntary liquidation, dissolution, winding up or other
distribution of the assets, through the mandatory exchange of LP exchangeable units for shares of class B common stock. The LP exchangeable units have been included as common
stock equivalents in the basic and diluted earnings per share calculations.

F-31

---



Emergency Medical Services Corporation

Notes to Consolidated Financial Statements (Continued)

(dollars in thousands, except for share and per share amounts)

14. Commitments and Contingencies

Lease Commitments

The Company leases various facilities and equipment under operating lease agreements. Rental expense incurred under these leases was $38.6 million,
$43.4 million and $31.1 million for the years ended December 31, 2007 and 2006 and for the eleven months ended December 31, 2005, respectively.

The
Company also leases certain vehicles under a capital lease and during the first quarter of 2007 extended the term of this capital lease for an additional three years. Assets under
capital leases are capitalized using inherent interest rates at the inception of each lease. Capital leases are collateralized by the leased vehicles.

Future
commitments under non-cancelable capital and operating leases for vehicle, premises, equipment and other recurring commitments are as follows:

Capital
Leases

Operating
Leases &
OtherYear ending December 31,2008

$
2,499

$
44,3612009


2,499


30,2662010


2,011


21,9682011





19,7332012





14,325Thereafter





33,1167,009

$
163,769Less imputed interest


(641
)Total capital lease obligations


6,368Less current portion


(2,499
)Long-term capital lease obligations

$
3,869


Services

The Company is 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 and regulations but there can
be no assurance the Company will not be found to have violated certain of these laws and regulations. From time to time, the Company receives requests for information from government agencies pursuant
to their regulatory or investigational authority. Such requests can include subpoenas or demand letters for documents to assist the government in audits or investigations. The Company is cooperating
with the government agencies conducting these investigations and is providing requested information to the government

F-32

---



Emergency Medical Services Corporation

Notes to Consolidated Financial Statements (Continued)

(dollars in thousands, except for share and per share amounts)

14. Commitments and Contingencies (Continued)

agencies.
Other than the investigations described below, management believes that the outcome of any of these investigations would not have a material adverse effect on the Company.

Like
other ambulance companies, AMR has provided discounts to its healthcare facility customers (nursing homes and hospitals) in certain circumstances. The Company has attempted to
comply with applicable law where such discounts are provided. During the first quarter of fiscal 2004, the Company 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 "medical necessity" 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 Statute were provided by AMR in exchange for referrals involving Medicare eligible patients. In connection with the third issue, the government alleged that certain
of AMR's hospital and nursing home contracts in effect in Texas in periods prior to 2002 contained discounts in violation of the federal Anti-Kickback Statute. The Company negotiated a
settlement with the government pursuant to which the Company paid $9 million and obtained a release of all claims related to such conduct alleged to have occurred in Texas in periods prior to
2002. In connection with the settlement, AMR entered into a Corporate Integrity Agreement ("CIA") which is effective for a period of five years beginning September 12, 2006. Pursuant to the
CIA, AMR is required to maintain a compliance program which includes, among other elements, the appointment of a compliance officer and committee; training of employees nationwide; contractual
safeguards nationwide, including tracking of contractual arrangements in Texas; review by an independent review organization and reporting of certain reportable events

On
December 13, 2005, a lawsuit purporting to be a class action was commenced against AMR in Spokane, Washington in Washington State Court, Spokane County. The complaint alleges
that AMR billed patients and third party payors for transports it conducted between 1998 and 2005 at higher rates than contractually permitted. The Court has certified a class in this case, but the
size and membership of the class has not yet been determined. At this time, AMR does not believe that any incorrect billings are material in amount.

On
April 17, 2006, the Office of Inspector General for the United States Department of Health and Human Services, or OIG, finalized its draft report requesting that the Company's
Massachusetts subsidiary reimburse the Medicare program for approximately $1.8 million in alleged overpayments from Medicare for services performed between July 1, 2002 and
December 31, 2002. The OIG claims that these payments were made for services that did not meet Medicare medical necessity and reimbursement requirements. On December 10, 2006, AMR paid
the $1.8 million in alleged overpayments. However, the Company disagrees with the OIG's finding and has filed an administrative appeal. If AMR is successful in the administrative appeal the
Company may be entitled to repayment of all or part of the $1.8 million.

Letters of Credit

At December 31, 2007 and 2006, the Company had $29.6 million and $29.9 million, respectively, in outstanding letters of credit.

F-33

---



Emergency Medical Services Corporation

Notes to Consolidated Financial Statements (Continued)

(dollars in thousands, except for share and per share amounts)

14. Commitments and Contingencies (Continued)

Other Legal Matters

EmCare entered into a settlement agreement with respect to June Belt, et. al. v. EmCare, Inc., et. al brought by a number of nurse practitioners and
physician assistants under the Fair Labor Standards Act. The suit was filed on February 25, 2003 in the Eastern District of Texas. Pursuant to the settlement agreement, EmCare paid
$1.7 million in satisfaction of all claims in the lawsuit during the first quarter of 2007.

AMR
and the City of Stockton, California are parties to litigation regarding the terms and enforceability of a memorandum of understanding and a related joint venture agreement between
the parties to present a joint bid in response to a request for proposals to provide emergency ambulance services in the County of San Joaquin, California. The parties were unable to agree on the
final terms of a joint bid. AMR was awarded the San Joaquin contract. While the Company is unable at this time to estimate the amount of potential damages, it believes that Stockton may claim as
damages a portion of the Company's profit on the contract or the profit Stockton might have realized had the joint venture proceeded. Management believes the outcome of this lawsuit will not have a
material adverse effect on the Company.

In
December 2006, AMR received a subpoena from the DOJ. The subpoena requested copies of documents for the period from January 2000 through the present. The subpoena required AMR to
produce a broad range of documents relating to the operations of certain AMR affiliates in New York. The Company is in the process of producing documents in response to the subpoena.

15. Transactions with Onex

The Company is party to a management agreement with a wholly-owned subsidiary of Onex Corporation, its principal equityholder. In exchange for an annual
management fee of $1.0 million, the Onex subsidiary provides the Company with corporate finance and strategic planning consulting services. This fee, which has been included as a component of
selling, general and administrative expenses on the accompanying statement of operations, amounted to $1.0 million for the years ended December 31, 2007 and 2006 and $0.9 million
for the eleven months ended December 31, 2005.

16. Insurance

Insurance reserves are established for automobile, workers compensation, general liability and professional liability claims utilizing policies with both
fully-insured and self-insured components. This includes the use of an off-shore captive insurance program through a wholly-owned subsidiary for certain professional liability
(medical malpractice) programs for EmCare. In those instances where the Company has obtained third-party insurance coverage, the Company normally retains liability for the first $1 to
$2 million of the loss. Insurance reserves cover known claims and incidents within the level of Company retention that may result in the assertion of additional claims, as well as claims from
unknown incidents that may be asserted arising from activities through December 31, 2007.

The
Company establishes reserves for claims based upon an assessment of actual claims and claims incurred but not reported. The reserves are established based on consultation with
third-party independent actuaries using actuarial principles and assumptions that consider a number of factors, including historical claim payment patterns (including legal costs) and changes in case
reserves and the

F-34

---



Emergency Medical Services Corporation

Notes to Consolidated Financial Statements (Continued)

(dollars in thousands, except for share and per share amounts)

16. Insurance (Continued)

assumed
rate of inflation in health care costs and property damage repairs. Claims, other than general liability claims, are discounted at a rate commensurate with the interest rate on monetary assets
that essentially are risk free and have a maturity comparable to the underlying liabilities, currently 4%. General liability claims are not discounted.

The
Company's most recent actuarial valuation was completed in December 2007. As a result of this and previous actuarial valuations, the Company recorded reductions in its provisions for
insurance liabilities of approximately $21.5 million in fiscal 2007 and $16.9 million in fiscal 2006 related to reserves for losses in prior years. During the eleven months ended
December 31, 2005, the Company recorded reductions in insurance liabilities of approximately $7.3 million related to reserves for losses in prior years.

Provisions
for insurance expense included in the statements of operations include annual provisions determined in consultation with third-party actuaries and premiums paid to third-party
insurers.

The
table below summarizes the non-health and welfare insurance reserves included in the accompanying balance sheets:

Accrued
Liabilities

Insurance Reserves
and Other
Long-term Liabilities

Total
LiabilitiesDecember 31, 2007Automobile

$
8,210

$
8,999

$
17,209Workers compensation


15,937


29,656


45,593General/Professional liability


35,674


106,089


141,763$
59,821

$
144,744

$
204,565December 31, 2006Automobile

$
7,671

$
9,642

$
17,313Workers compensation


14,751


29,728


44,479General/Professional liability


35,174


110,605


145,779$
57,596

$
149,975

$
207,571


Certain
insurance programs also require the Company to maintain deposits with third-party insurers or with trustees to cover future claims costs. These deposits are included as insurance
collateral in the accompanying balance sheets. Investments supporting insurance programs are comprised principally of government securities and investment grade securities. These investments are
designated as available-for-sale and reported at fair value. Investment income/loss earned on these

F-35

---



Emergency Medical Services Corporation

Notes to Consolidated Financial Statements (Continued)

(dollars in thousands, except for share and per share amounts)

16. Insurance (Continued)

investments
is reported as interest income from restricted assets in the statements of operations. The following table summarizes these deposits and restricted investments:

2007

2006Restricted cash and cash equivalents

$
2,298

$
3,321Restricted marketable securities


5,522


1,504Other short-term insurance collateral


29,956


24,899Insurance collateralshort-term

$
37,776

$
29,724Restricted long-term investments

$
99,846

$
95,307Other long-term insurance collateral


46,792


67,993Insurance collaterallong-term

$
146,638

$
163,300


17. Net Income Per Common Share

The calculation of basic net income per common share and diluted net income per common share is presented below for the years ended December 31, 2007 and
2006 and the eleven months ended December 31, 2005 (in thousands except for share and per share amounts):

|                                                                   |                                        | 2007 |            | 2006       |   | 2005       |           
|------------------------------------------------------------------ | -------------------------------------- | ---- | ---------- | ---------- | - | ---------- | ----------
|Basic earnings per common share computation                        |                                        |      |            |            |   |            |           
|Numerator:                                                         |                                        |      |            |            |   |            |           
|Net income                                                         |                                        | $    | 59,818     |            | $ | 39,071     |           
|Accretion of put right (see note 13 "Equity")                      |                                        |      |           |            |   |           |           
|                                                                   |                                        |      |            |            |   |            |           
|Net income available to stockholders                               |                                        |      | 59,818     |            |   | 39,071     |           
|                                                                   |                                        |      |            |            |   |            |           
|Denominator:                                                       |                                        |      |            |            |   |            |           
|Basic average shares outstanding                                   |                                        |      |            |            |   |            |           
|                                                                   | Common stock and LP exchangeable units |      |            | 41,551,207 |   |            | 41,502,632
|                                                                   |                                        |      |            |            |   |            |           
|Basic earnings per common share                                    |                                        | $    | 1.44       |            | $ | 0.94       |           
|                                                                   |                                        |      |            |            |   |            |           
|Diluted earnings per share computation                             |                                        |      |            |            |   |            |           
|Numerator:                                                         |                                        |      |            |            |   |            |           
|Net income                                                         |                                        | $    | 59,818     |            | $ | 39,071     |           
|Accretion of put right                                             |                                        |      |           |            |   |           |           
|                                                                   |                                        |      |            |            |   |            |           
|Net income available to stockholders                               |                                        |      | 59,818     |            |   | 39,071     |           
|                                                                   |                                        |      |            |            |   |            |           
|Denominator:                                                       |                                        |      |            |            |   |            |           
|Basic average shares outstanding                                   |                                        |      | 41,551,207 |            |   | 41,502,632 |           
|Incremental shares from assumed exercise of stock options and RSUs |                                        |      | 1,595,674  |            |   | 1,026,253  |           
|Diluted average common shares outstanding                          |                                        |      | 43,146,881 |            |   | 42,528,885 |           
|                                                                   |                                        |      |            |            |   |            |           
|Diluted earnings per common share                                  |                                        | $    | 1.39       |            | $ | 0.92       |           
|                                                                   |                                        |      |            |            |   |            |           

F-36

---



Emergency Medical Services Corporation

Notes to Consolidated Financial Statements (Continued)

(dollars in thousands, except for share and per share amounts)

17. Net Income Per Common Share (Continued)

The
2007 period excluded 35,500 potential common shares and the 2005 period excluded 37,500 potential common shares from the calculation of diluted earnings per share because they were
antidilutive.

18. Segment Information

The Company is organized around two separately managed business units: healthcare transportation services and emergency management services, which have been
identified as operating segments. The healthcare transportation services reportable segment focuses on providing a full range of medical transportation services from basic patient transit to the most
advanced emergency care and pre-hospital assistance. The emergency management services reportable segment provides outsourced business services to hospitals primarily for emergency
departments, urgent care centers and for certain inpatient departments. The Chief Executive Officer has been identified as the chief operating decision maker (CODM) for purposes of SFAS
No. 131,Disclosures about Segments of an Enterprise and Related Information,as he assesses the performance of the business units and decides
how to allocate resources to the business units.

Net
income before equity in earnings of unconsolidated subsidiary, income tax expense, loss on early debt extinguishment, interest and other income, realized gain (loss) on investments,
interest expense, and depreciation and amortization ("Adjusted EBITDA") is the measure of profit and loss that the CODM uses to assess performance, measure liquidity and make decisions.
Pre-tax income from continuing operations represents net revenue less direct operating expenses incurred within the

F-37

---



Emergency Medical Services Corporation

Notes to Consolidated Financial Statements (Continued)

(dollars in thousands, except for share and per share amounts)

18. Segment Information (Continued)

operating
segments. The accounting policies for reported segments are the same as for the Company as a whole (see note 2 "Summary of Significant Accounting Policies").

|                                   |  | Year
ended
December 31,
2007 |           | Year
ended
December 31,
2006 |   | Eleven months
ended
December 31,
2005
|---------------------------------- |  | ---------------------------- | --------- | ---------------------------- | - | -------------------------------------
|Healthcare Transportation Services |  |                              |           |                              |   |                                      
|Revenue                            |  | $                            | 1,219,212 |                              | $ | 1,189,447                            
|Income from operations             |  |                              | 33,284    |                              |   | 35,203                               
|Adjusted EBITDA                    |  |                              | 92,725    |                              |   | 90,671                               
|Goodwill                           |  |                              | 150,765   |                              |   | 130,268                              
|Intangible assets, net             |  |                              | 51,379    |                              |   | 31,066                               
|Total identifiable assets          |  |                              | 870,845   |                              |   | 817,715                              
|Capital expenditures               |  | $                            | 32,847    |                              | $ | 44,006                               
|Emergency Management Services      |  |                              |           |                              |   |                                      
|Revenue                            |  | $                            | 887,781   |                              | $ | 744,758                              
|Income from operations             |  |                              | 99,295    |                              |   | 66,513                               
|Adjusted EBITDA                    |  |                              | 117,480   |                              |   | 83,037                               
|Goodwill                           |  |                              | 162,359   |                              |   | 142,060                              
|Intangible assets, net             |  |                              | 30,338    |                              |   | 35,723                               
|Total identifiable assets          |  |                              | 558,272   |                              |   | 446,590                              
|Capital expenditures               |  | $                            | 751       |                              | $ | 4,933                                
|Segment Totals                     |  |                              |           |                              |   |                                      
|Revenue                            |  | $                            | 2,106,993 |                              | $ | 1,934,205                            
|Income from operations             |  |                              | 132,579   |                              |   | 101,716                              
|Adjusted EBITDA                    |  |                              | 210,205   |                              |   | 173,708                              
|Goodwill                           |  |                              | 313,124   |                              |   | 272,328                              
|Intangible assets, net             |  |                              | 81,717    |                              |   | 66,789                               
|Total identifiable assets          |  |                              | 1,429,117 |                              |   | 1,264,305                            
|Capital expenditures               |  | $                            | 33,598    |                              | $ | 48,939                               

F-38

---



Emergency Medical Services Corporation

Notes to Consolidated Financial Statements (Continued)

(dollars in thousands, except for share and per share amounts)

18. Segment Information (Continued)

A
reconciliation of Adjusted EBITDA to net income for each year is as follows:

Year
ended
December 31,
2007

Year
ended
December 31,
2006

Eleven months
ended
December 31,
2005Adjusted EBITDA

$
210,205

$
173,708

$
137,500Depreciation and amortization expense


(70,483
)

(66,005
)

(54,143
)Interest expense


(46,948
)

(45,605
)

(47,813
)Realized gain (loss) on investments


245


(467
)

(164
)Interest and other income


2,055


2,346


1,040Loss on early debt extinguishment





(377
)

(2,040
)Income tax expense


(36,104
)

(24,961
)

(14,372
)Equity in earnings of unconsolidated subsidiary


848


432


59Net income

$
59,818

$
39,071

$
20,067


A
reconciliation of Adjusted EBITDA to cash flows provided by operating activities for each year is as follows:

Year
ended
December 31,
2007

Year
ended
December 31,
2006

Eleven months
ended
December 31,
2005Adjusted EBITDA

$
210,205

$
173,708

$
137,500Interest paid


(44,874
)

(43,506
)

(45,642
)Change in accounts receivable


(74,991
)

(4,740
)

(36,617
)Change in other operating assets/liabilities


5,868


38,072


51,644Equity based compensation


1,727


1,431


2,780Other


(117
)

777


298Cash flows provided by operating activities

$
97,818

$
165,742

$
109,963


A
reconciliation of segment assets as of December 31, 2007 and 2006 to total assets and segment capital expenditures to total capital expenditures is as follows:

2007

2006Segment total identifiable assets

$
1,429,117

$
1,264,305Corporate cash


32,330


35,598Other corporate assets


18,116


18,314Total identifiable assets

$
1,479,563

$
1,318,217


F-39

---



Emergency Medical Services Corporation

Notes to Consolidated Financial Statements (Continued)

(dollars in thousands, except for share and per share amounts)

18. Segment Information (Continued)

Other
corporate assets principally consist of property, plant and equipment, and other assets.

|                                   |  | Year
ended
December 31,
2007 |        | Year
ended
December 31,
2006 |   | Eleven months
ended
December 31,
2005
|---------------------------------- |  | ---------------------------- | ------ | ---------------------------- | - | -------------------------------------
|Segment total capital expenditures |  | $                            | 33,598 |                              | $ | 48,939                               
|Corporate capital expenditures     |  |                              | 4,737  |                              |   | 11,476                               
|                                   |  |                              |        |                              |   |                                      
|Total capital expenditures         |  | $                            | 38,335 |                              | $ | 60,415                               
|                                   |  |                              |        |                              |   |                                      

19. Quarterly Financial Information (unaudited)

Selected unaudited quarterly financial data for the years ended December 31, 2007 and 2006 is as follows (in millions, except per share amounts):

2007

1st Qtr.

2nd Qtr.

3rd Qtr.

4th Qtr.Revenue

$
523.3

$
516.7

$
529.8

$
537.2Operating income


35.8


33.2


33.3


30.3Net income


16.6


15.1


14.7


13.4Basic earnings per share


0.40


0.36


0.35


0.32Diluted earnings per share

$
0.39

$
0.35

$
0.34

$
0.31


|
|

2006

1st Qtr.

2nd Qtr.

3rd Qtr.

4th Qtr.Revenue

$
469.1

$
478.5

$
485.7

$
500.9Operating income


21.7


27.3


26.3


26.4Net income


7.3


10.7


10.3


10.8Basic earnings per share


0.17


0.26


0.25


0.26Diluted earnings per share

$
0.17

$
0.25

$
0.24

$
0.25


F-40

---



Emergency Medical Services Corporation

Notes to Consolidated Financial Statements (Continued)

(dollars in thousands, except for share and per share amounts)

20. Valuation and Qualifying Accounts

|                             |            | Allowance for
Contractual
Discounts |         | Allowance for
Uncompensated
Care |   | Total
Accounts
Receivable
Allowances |           
|---------------------------- | ---------- | ----------------------------------- | ------- | -------------------------------- | - | ------------------------------------ | ----------
|Balance at February 1, 2005  |            | $                                   | 314,863 |                                  | $ | 681,304                              |           
|                             | Additions  |                                     |         | 1,752,254                        |   |                                      | 684,614   
|                             | Reductions |                                     |         | (1,596,915                       | ) |                                      | (1,029,144
|                             |            |                                     |         |                                  |   |                                      |           
|Balance at December 31, 2005 |            |                                     | 470,202 |                                  |   | 336,774                              |           
|                             | Additions  |                                     |         | 2,126,111                        |   |                                      | 950,639   
|                             | Reductions |                                     |         | (1,896,913                       | ) |                                      | (917,881  
|                             |            |                                     |         |                                  |   |                                      |           
|Balance at December 31, 2006 |            |                                     | 699,400 |                                  |   | 369,532                              |           
|                             | Additions  |                                     |         | 2,524,339                        |   |                                      | 1,027,732 
|                             | Reductions |                                     |         | (2,391,001                       | ) |                                      | (965,344  
|                             |            |                                     |         |                                  |   |                                      |           
|Balance at December 31, 2007 |            | $                                   | 832,738 |                                  | $ | 431,920                              |           
|                             |            |                                     |         |                                  |   |                                      |           

Additions
to the Company's valuation and qualifying accounts are primarily related to income statement provisions and balances added from acquisitions. Reductions to these accounts are
primarily related to write-off activity.

21. Guarantors of Debt

EMS LP financed the acquisition of AMR and EmCare, described in note 1 "GeneralBasis of Presentation", in part by issuing
$250.0 million principal amount of senior subordinated notes and borrowing $370.2 million under the Credit Facility. Its wholly-owned subsidiaries, AMR HoldCo, Inc. and EmCare
HoldCo, Inc., are the issuers of the senior subordinated notes and the borrowers under the Credit Facility. As part of the transaction, AMR and its subsidiaries became wholly-owned subsidiaries
of AMR HoldCo, Inc. and EmCare and its subsidiaries became wholly-owned subsidiaries of EmCare HoldCo, Inc. The senior subordinated notes and the Credit Facility include a full,
unconditional and joint and several guarantee by all of EMSC, EMS LP and EMSC's domestic subsidiaries. All of the operating income and cash flow of EMSC, EMS LP, AMR HoldCo, Inc.
and EmCare HoldCo, Inc. is generated by AMR, EmCare and their subsidiaries. As a result, funds necessary to meet the debt service obligations under the senior secured notes and Credit Facility
are provided by the distributions or advances from the subsidiary companies, AMR and EmCare. Investments in subsidiary operating companies are accounted for on the equity method. Accordingly, entries
necessary to consolidate EMSC, EMS LP, AMR HoldCo, Inc., EmCare HoldCo, Inc. and all of their subsidiaries are reflected in the Eliminations/Adjustments column. Separate complete
financial statements of the issuers, EMS LP and subsidiary guarantors would not provide additional material information that would be useful in assessing the financial composition of the
issuers, EMS LP or the subsidiary guarantors. The condensed consolidating financial statements for EMSC, EMS LP, the issuers, the guarantors and the non-guarantor are as
follows:

F-41

---



Emergency Medical Services Corporation

Notes to Consolidated Financial Statements (Continued)

(dollars in thousands, except for share and per share amounts)

21. Guarantors of Debt (Continued)

Consolidating Balance Sheet
As of December 31, 2007

|                            |                                          | EMSC                   |         | EMS LP  |         | Issuer
AMR
HoldCo, Inc. |         | Issuer
EmCare
HoldCo, Inc. |         | Subsidiary
Guarantors |         | Subsidiary
Non-Guarantor |         | Eliminations/
Adjustments |         | Total  
|--------------------------- | ---------------------------------------- | ---------------------- | ------- | ------- | ------- | ----------------------- | ------- | -------------------------- | ------- | --------------------- | ------- | ------------------------ | ------- | ------------------------- | ------- | -------
|Assets                      |                                          |                        |         |         |         |                         |         |                            |         |                       |         |                          |         |                           |         |        
|Current assets:             |                                          |                        |         |         |         |                         |         |                            |         |                       |         |                          |         |                           |         |        
|                            | Cash and cash equivalents                |                        | $       |        |         | $                       |        |                            | $       |                      |         | $                        |        |                           | $       | 24,987 
|                            | Insurance collateral                     |                        |         |        |         |                         |        |                            |         |                      |         |                          |        |                           |         | 24,498 
|                            | Trade and other accounts receivable, net |                        |         |        |         |                         |        |                            |         |                      |         |                          |        |                           |         | 494,376
|                            | Parts and supplies inventory             |                        |         |        |         |                         |        |                            |         |                      |         |                          |        |                           |         | 20,010 
|                            | Other current assets                     |                        |         |        |         |                         |        |                            |         |                      |         |                          |        |                           |         | 11,709 
|                            | Current deferred tax assets              |                        |         |        |         |                         |        |                            |         |                      |         |                          |        |                           |         | 73,834 
|                            |                                          |                        |         |         |         |                         |         |                            |         |                       |         |                          |         |                           |         |        
|                            |                                          | Current assets         |         |         |        |                         |         |                           |         |                       |        |                          |         |                          |         |        
|                            |                                          |                        |         |         |         |                         |         |                            |         |                       |         |                          |         |                           |         |        
|Non-current assets:         |                                          |                        |         |         |         |                         |         |                            |         |                       |         |                          |         |                           |         |        
|                            | Property, plant, and equipment, net      |                        |         |        |         |                         |        |                            |         |                      |         |                          |        |                           |         | 143,342
|                            | Intercompany receivable                  |                        |         | 3,773   |         |                         | 113,400 |                            |         | 281,598               |         |                          | 192,635 |                           |         |       
|                            | Intangible assets, net                   |                        |         |        |         |                         |        |                            |         |                      |         |                          |        |                           |         | 81,717 
|                            | Non-current deferred tax assets          |                        |         |        |         |                         |        |                            |         |                      |         |                          |        |                           |         | 94,092 
|                            | Insurance collateral                     |                        |         |        |         |                         |        |                            |         |                      |         |                          |        |                           |         | 49,200 
|                            | Goodwill                                 |                        |         |        |         |                         |        |                            |         |                      |         |                          |        |                           |         | 312,666
|                            | Other long-term assets                   |                        |         |        |         |                         |        |                            |         | 7,124                 |         |                          | 3,231   |                           |         | 18,666 
|                            | Investment and advances in subsidiaries  |                        |         | 445,723 |         |                         | 332,323 |                            |         | 212,555               |         |                          | 119,754 |                           |         | 3,458  
|                            |                                          |                        |         |         |         |                         |         |                            |         |                       |         |                          |         |                           |         |        
|                            |                                          |                        | Assets  |         | $       | 449,496                 |         | $                          | 445,723 |                       | $       | 501,277                  |         | $                         | 315,620 |        
|                            |                                          |                        |         |         |         |                         |         |                            |         |                       |         |                          |         |                           |         |        
|Liabilities and Equity      |                                          |                        |         |         |         |                         |         |                            |         |                       |         |                          |         |                           |         |        
|Current liabilities:        |                                          |                        |         |         |         |                         |         |                            |         |                       |         |                          |         |                           |         |        
|                            | Accounts payable                         |                        | $       |        |         | $                       |        |                            | $       |                      |         | $                        |        |                           | $       | 64,746 
|                            | Accrued liabilities                      |                        |         |        |         |                         |        |                            |         | 5,547                 |         |                          | 4,860   |                           |         | 196,565
|                            | Current portion of long-term debt        |                        |         |        |         |                         |        |                            |         | 1,656                 |         |                          | 744     |                           |         | 2,317  
|                            |                                          |                        |         |         |         |                         |         |                            |         |                       |         |                          |         |                           |         |        
|                            |                                          | Current liabilities    |         |         |        |                         |         |                           |         |                       | 7,203   |                          |         | 5,604                     |         |        
|Long-term debt              |                                          |                        |        |         |         |                        |         |                            | 281,519 |                       |         | 190,248                  |         |                           | 6,399   |        
|Other long-term liabilities |                                          |                        |        |         |         |                        |         |                            |        |                       |         |                         |         |                           | 158,813 |        
|Intercompany                |                                          |                        |        |         |         |                        |         |                            |        |                       |         |                         |         |                           | 591,406 |        
|                            |                                          |                        |         |         |         |                         |         |                            |         |                       |         |                          |         |                           |         |        
|                            |                                          | Liabilities            |         |         |        |                         |         |                           |         |                       | 288,722 |                          |         | 195,852                   |         |        
|                            |                                          |                        |         |         |         |                         |         |                            |         |                       |         |                          |         |                           |         |        
|Equity:                     |                                          |                        |         |         |         |                         |         |                            |         |                       |         |                          |         |                           |         |        
|Class A common stock        |                                          |                        | 93      |         |         |                        |         |                            |        |                       |         |                         |         |                           |        |        
|Class B common stock        |                                          |                        | 1       |         |         |                        |         |                            |        |                       |         |                         |         |                           |        |        
|Partnership equity          |                                          |                        | 212,361 |         |         | 325,761                 |         |                            | 189,394 |                       |         | 22,967                   |         |                           | 212,361 |        
|Additional paid-in capital  |                                          |                        | 117,079 |         |         |                        |         |                            |        |                       |         |                         |         |                           |        |        
|Retained earnings           |                                          |                        | 118,956 |         |         | 118,956                 |         |                            | 23,783  |                       |         | 95,173                   |         |                           | 118,942 |        
|Comprehensive income (loss) |                                          |                        | 1,006   |         |         | 1,006                   |         |                            | (622    | )                     |         | 1,628                    |         |                           | 1,006   |        
|                            |                                          |                        |         |         |         |                         |         |                            |         |                       |         |                          |         |                           |         |        
|                            | Equity                                   |                        |         | 449,496 |         |                         | 445,723 |                            |         | 212,555               |         |                          | 119,768 |                           |         | 332,309
|                            |                                          |                        |         |         |         |                         |         |                            |         |                       |         |                          |         |                           |         |        
|                            |                                          | Liabilities and Equity |         | $       | 449,496 |                         | $       | 445,723                    |         | $                     | 501,277 |                          | $       | 315,620                   |         | $      
|                            |                                          |                        |         |         |         |                         |         |                            |         |                       |         |                          |         |                           |         |        

F-42

---



Emergency Medical Services Corporation

Notes to Consolidated Financial Statements (Continued)

(dollars in thousands, except for share and per share amounts)

21. Guarantors of Debt (Continued)

Consolidating Balance Sheet
As of December 31, 2006

|                            |                                          | EMSC                   |         | EMS LP  |         | Issuer
AMR
HoldCo, Inc. |         | Issuer
EmCare
HoldCo, Inc. |         | Subsidiary
Guarantors |         | Subsidiary
Non-Guarantor |         | Eliminations/
Adjustments |         | Total   |          
|--------------------------- | ---------------------------------------- | ---------------------- | ------- | ------- | ------- | ----------------------- | ------- | -------------------------- | ------- | --------------------- | ------- | ------------------------ | ------- | ------------------------- | ------- | ------- | ---------
|Assets                      |                                          |                        |         |         |         |                         |         |                            |         |                       |         |                          |         |                           |         |         |          
|Current assets:             |                                          |                        |         |         |         |                         |         |                            |         |                       |         |                          |         |                           |         |         |          
|                            | Cash and cash equivalents                |                        | $       |        |         | $                       |        |                            | $       |                      |         | $                        |        |                           | $       | 39,329  |          
|                            | Insurance collateral                     |                        |         |        |         |                         |        |                            |         |                      |         |                          |        |                           |         | 24,912  |          
|                            | Trade and other accounts receivable, net |                        |         |        |         |                         |        |                            |         |                      |         |                          |        |                           |         | 415,290 |          
|                            | Parts and supplies inventory             |                        |         |        |         |                         |        |                            |         |                      |         |                          |        |                           |         | 18,089  |          
|                            | Other current assets                     |                        |         |        |         |                         |        |                            |         |                      |         |                          |        |                           |         | 16,972  |          
|                            | Current deferred tax assets              |                        |         |        |         |                         |        |                            |         |                      |         |                          |        |                           |         | 9,310   |          
|                            |                                          |                        |         |         |         |                         |         |                            |         |                       |         |                          |         |                           |         |         |          
|                            |                                          | Current assets         |         |         |        |                         |         |                           |         |                       |        |                          |         |                          |         |         | 523,902  
|                            |                                          |                        |         |         |         |                         |         |                            |         |                       |         |                          |         |                           |         |         |          
|Non-current assets:         |                                          |                        |         |         |         |                         |         |                            |         |                       |         |                          |         |                           |         |         |          
|                            | Property, plant, and equipment, net      |                        |         |        |         |                         |        |                            |         |                      |         |                          |        |                           |         | 147,162 |          
|                            | Intercompany receivable                  |                        |         | 400     |         |                         | 114,165 |                            |         | 282,691               |         |                          | 193,177 |                           |         |        |          
|                            | Intangible assets, net                   |                        |         |        |         |                         |        |                            |         |                      |         |                          |        |                           |         | 66,789  |          
|                            | Non-current deferred tax assets          |                        |         |        |         |                         |        |                            |         |                      |         |                          |        |                           |         | 104,501 |          
|                            | Insurance collateral                     |                        |         |        |         |                         |        |                            |         |                      |         |                          |        |                           |         | 59,599  |          
|                            | Goodwill                                 |                        |         |        |         |                         |        |                            |         |                      |         |                          |        |                           |         | 271,870 |          
|                            | Other long-term assets                   |                        |         |        |         |                         |        |                            |         | 8,590                 |         |                          | 3,838   |                           |         | 20,351  |          
|                            | Investment and advances in subsidiaries  |                        |         | 385,640 |         |                         | 271,475 |                            |         | 206,969               |         |                          | 64,492  |                           |         | 6,696   |          
|                            |                                          |                        |         |         |         |                         |         |                            |         |                       |         |                          |         |                           |         |         |          
|                            |                                          | Assets                 |         | $       | 386,040 |                         | $       | 385,640                    |         | $                     | 498,250 |                          | $       | 261,507                   |         | $       | 1,200,870
|                            |                                          |                        |         |         |         |                         |         |                            |         |                       |         |                          |         |                           |         |         |          
|Liabilities and Equity      |                                          |                        |         |         |         |                         |         |                            |         |                       |         |                          |         |                           |         |         |          
|Current liabilities:        |                                          |                        |         |         |         |                         |         |                            |         |                       |         |                          |         |                           |         |         |          
|                            | Accounts payable                         |                        | $       |        |         | $                       |        |                            | $       |                      |         | $                        |        |                           | $       | 65,172  |          
|                            | Accrued liabilities                      |                        |         |        |         |                         |        |                            |         | 6,515                 |         |                          | 5,295   |                           |         | 192,501 |          
|                            | Current portion of long-term debt        |                        |         |        |         |                         |        |                            |         | 1,656                 |         |                          | 744     |                           |         | 1,759   |          
|                            |                                          |                        |         |         |         |                         |         |                            |         |                       |         |                          |         |                           |         |         |          
|                            |                                          | Current liabilities    |         |         |        |                         |         |                           |         |                       | 8,171   |                          |         | 6,039                     |         |         | 259,432  
|Long-term debt              |                                          |                        |        |         |         |                        |         |                            | 283,110 |                       |         | 190,962                  |         |                           | 1,544   |         |          
|Other long-term liabilities |                                          |                        |        |         |         |                        |         |                            |        |                       |         |                         |         |                           | 78,000  |         |          
|Intercompany                |                                          |                        |        |         |         |                        |         |                            |        |                       |         |                         |         |                           | 590,433 |         |          
|                            |                                          |                        |         |         |         |                         |         |                            |         |                       |         |                          |         |                           |         |         |          
|                            |                                          | Liabilities            |         |         |        |                         |         |                           |         |                       | 291,281 |                          |         | 197,001                   |         |         | 929,409  
|                            |                                          |                        |         |         |         |                         |         |                            |         |                       |         |                          |         |                           |         |         |          
|Equity:                     |                                          |                        |         |         |         |                         |         |                            |         |                       |         |                          |         |                           |         |         |          
|Class A common stock        |                                          |                        | 93      |         |         |                        |         |                            |        |                       |         |                         |         |                           |        |         |          
|Class B common stock        |                                          |                        | 1       |         |         |                        |         |                            |        |                       |         |                         |         |                           |        |         |          
|Partnership equity          |                                          |                        | 212,361 |         |         | 326,526                 |         |                            | 189,394 |                       |         | 22,967                   |         |                           | 212,361 |         |          
|Additional paid-in capital  |                                          |                        | 114,471 |         |         |                        |         |                            |        |                       |         |                         |         |                           |        |         |          
|Retained earnings           |                                          |                        | 59,138  |         |         | 59,138                  |         |                            | 17,575  |                       |         | 41,563                   |         |                           | 59,124  |         |          
|Comprehensive income (loss) |                                          |                        | (24     | )       |         | (24                     | )       |                            |        |                       |         | (24                      | )       |                           | (24     | )       |          
|                            |                                          |                        |         |         |         |                         |         |                            |         |                       |         |                          |         |                           |         |         |          
|                            | Equity                                   |                        |         | 386,040 |         |                         | 385,640 |                            |         | 206,969               |         |                          | 64,506  |                           |         | 271,461 |          
|                            |                                          |                        |         |         |         |                         |         |                            |         |                       |         |                          |         |                           |         |         |          
|                            |                                          | Liabilities and Equity |         | $       | 386,040 |                         | $       | 385,640                    |         | $                     | 498,250 |                          | $       | 261,507                   |         | $       | 1,200,870
|                            |                                          |                        |         |         |         |                         |         |                            |         |                       |         |                          |         |                           |         |         |          

F-43

---



Emergency Medical Services Corporation

Notes to Consolidated Financial Statements (Continued)

(dollars in thousands, except for share and per share amounts)

21. Guarantors of Debt (Continued)

Consolidating Statement of Operations
For the year ended December 31, 2007

|                                                  |                                                                 | EMSC |        | EMS LP |   | Issuer
AMR
HoldCo, Inc. |   | Issuer
EmCare
HoldCo, Inc. |       | Subsidiary
Guarantors |   | Subsidiary
Non-Guarantor |   | Eliminations/
Adjustments |           | Total   |  
|------------------------------------------------- | --------------------------------------------------------------- | ---- | ------ | ------ | - | ----------------------- | - | -------------------------- | ----- | --------------------- | - | ------------------------ | - | ------------------------- | --------- | ------- | -
|Net revenue                                       |                                                                 | $    |       |        | $ |                        |   | $                          |      |                       | $ |                         |   | $                         | 2,106,993 |         | $
|                                                  |                                                                 |      |        |        |   |                         |   |                            |       |                       |   |                          |   |                           |           |         |  
|Compensation and benefits                         |                                                                 |      |       |        |   |                        |   |                            |      |                       |   |                         |   |                           | 1,455,970 |         |  
|Operating expenses                                |                                                                 |      |       |        |   |                        |   |                            |      |                       |   |                         |   |                           | 317,518   |         |  
|Insurance expense                                 |                                                                 |      |       |        |   |                        |   |                            |      |                       |   |                         |   |                           | 61,801    |         |  
|Selling, general and administrative expenses      |                                                                 |      |       |        |   |                        |   |                            |      |                       |   |                         |   |                           | 61,893    |         |  
|Depreciation and amortization expense             |                                                                 |      |       |        |   |                        |   |                            |      |                       |   |                         |   |                           | 70,483    |         |  
|Restructuring charge                              |                                                                 |      |       |        |   |                        |   |                            |      |                       |   |                         |   |                           | 2,242     |         |  
|                                                  |                                                                 |      |        |        |   |                         |   |                            |       |                       |   |                          |   |                           |           |         |  
|                                                  | Income from operations                                          |      |        |       |   |                         |  |                            |       |                      |   |                          |  |                           |           | 137,086 |  
|Interest income from restricted assets            |                                                                 |      |       |        |   |                        |   |                            |      |                       |   |                         |   |                           | 2,881     |         |  
|Interest expense                                  |                                                                 |      |       |        |   |                        |   |                            |      |                       |   |                         |   |                           | (46,948   | )       |  
|Realized gain on investments                      |                                                                 |      |       |        |   |                        |   |                            |      |                       |   |                         |   |                           |          |         |  
|Interest and other income                         |                                                                 |      |       |        |   |                        |   |                            |      |                       |   |                         |   |                           | 2,055     |         |  
|                                                  |                                                                 |      |        |        |   |                         |   |                            |       |                       |   |                          |   |                           |           |         |  
|                                                  | Income before income taxes                                      |      |        |       |   |                         |  |                            |       |                      |   |                          |  |                           |           | 95,074  |  
|Income tax expense                                |                                                                 |      |       |        |   |                        |   |                            |      |                       |   |                         |   |                           | (36,104   | )       |  
|                                                  |                                                                 |      |        |        |   |                         |   |                            |       |                       |   |                          |   |                           |           |         |  
|                                                  | Income before equity in earnings of unconsolidated subsidiaries |      |        |       |   |                         |  |                            |       |                      |   |                          |  |                           |           | 58,970  |  
|Equity in earnings of unconsolidated subsidiaries |                                                                 |      | 59,818 |        |   | 59,818                  |   |                            | 6,209 |                       |   | 53,609                   |   |                           | 848       |         |  
|                                                  |                                                                 |      |        |        |   |                         |   |                            |       |                       |   |                          |   |                           |           |         |  
|Net income                                        |                                                                 | $    | 59,818 |        | $ | 59,818                  |   | $                          | 6,209 |                       | $ | 53,609                   |   | $                         | 59,818    |         | $
|                                                  |                                                                 |      |        |        |   |                         |   |                            |       |                       |   |                          |   |                           |           |         |  

F-44

---



Emergency Medical Services Corporation

Notes to Consolidated Financial Statements (Continued)

(dollars in thousands, except for share and per share amounts)

21. Guarantors of Debt (Continued)

Consolidating Statement of Operations
For the year ended December 31, 2006

|                                                  |                                                                 | EMSC |        | EMS LP |   | Issuer
AMR
HoldCo, Inc. |   | Issuer
EmCare
HoldCo, Inc. |       | Subsidiary
Guarantors |   | Subsidiary
Non-Guarantor |   | Eliminations/
Adjustments |           | Total   |  
|------------------------------------------------- | --------------------------------------------------------------- | ---- | ------ | ------ | - | ----------------------- | - | -------------------------- | ----- | --------------------- | - | ------------------------ | - | ------------------------- | --------- | ------- | -
|Net revenue                                       |                                                                 | $    |       |        | $ |                        |   | $                          |      |                       | $ |                         |   | $                         | 1,934,205 |         | $
|                                                  |                                                                 |      |        |        |   |                         |   |                            |       |                       |   |                          |   |                           |           |         |  
|Compensation and benefits                         |                                                                 |      |       |        |   |                        |   |                            |      |                       |   |                         |   |                           | 1,333,648 |         |  
|Operating expenses                                |                                                                 |      |       |        |   |                        |   |                            |      |                       |   |                         |   |                           | 294,806   |         |  
|Insurance expense                                 |                                                                 |      |       |        |   |                        |   |                            |      |                       |   |                         |   |                           | 71,182    |         |  
|Selling, general and administrative expenses      |                                                                 |      |       |        |   |                        |   |                            |      |                       |   |                         |   |                           | 57,403    |         |  
|Depreciation and amortization expense             |                                                                 |      |       |        |   |                        |   |                            |      |                       |   |                         |   |                           | 66,005    |         |  
|Restructuring charge                              |                                                                 |      |       |        |   |                        |   |                            |      |                       |   |                         |   |                           | 6,369     |         |  
|                                                  |                                                                 |      |        |        |   |                         |   |                            |       |                       |   |                          |   |                           |           |         |  
|                                                  | Income from operations                                          |      |        |       |   |                         |  |                            |       |                      |   |                          |  |                           |           | 104,792 |  
|Interest income from restricted assets            |                                                                 |      |       |        |   |                        |   |                            |      |                       |   |                         |   |                           | 2,444     |         |  
|Interest expense                                  |                                                                 |      |       |        |   |                        |   |                            |      |                       |   |                         |   |                           | (45,605   | )       |  
|Realized loss on investments                      |                                                                 |      |       |        |   |                        |   |                            |      |                       |   |                         |   |                           |          |         |  
|Interest and other income                         |                                                                 |      |       |        |   |                        |   |                            |      |                       |   |                         |   |                           | 2,346     |         |  
|Loss on early debt extinguishment                 |                                                                 |      |       |        |   |                        |   |                            |      |                       |   |                         |   |                           | (377      | )       |  
|                                                  |                                                                 |      |        |        |   |                         |   |                            |       |                       |   |                          |   |                           |           |         |  
|Income before income taxes                        |                                                                 |      |       |        |   |                        |   |                            |      |                       |   |                         |   |                           | 63,600    |         |  
|Income tax expense                                |                                                                 |      |       |        |   |                        |   |                            |      |                       |   |                         |   |                           | (24,961   | )       |  
|                                                  |                                                                 |      |        |        |   |                         |   |                            |       |                       |   |                          |   |                           |           |         |  
|                                                  | Income before equity in earnings of unconsolidated subsidiaries |      |        |       |   |                         |  |                            |       |                      |   |                          |  |                           |           | 38,639  |  
|Equity in earnings of unconsolidated subsidiaries |                                                                 |      | 39,071 |        |   | 39,071                  |   |                            | 6,781 |                       |   | 32,290                   |   |                           | 432       |         |  
|                                                  |                                                                 |      |        |        |   |                         |   |                            |       |                       |   |                          |   |                           |           |         |  
|Net income                                        |                                                                 | $    | 39,071 |        | $ | 39,071                  |   | $                          | 6,781 |                       | $ | 32,290                   |   | $                         | 39,071    |         | $
|                                                  |                                                                 |      |        |        |   |                         |   |                            |       |                       |   |                          |   |                           |           |         |  

F-45

---



Emergency Medical Services Corporation

Notes to Consolidated Financial Statements (Continued)

(dollars in thousands, except for share and per share amounts)

21. Guarantors of Debt (Continued)

Consolidating Statement of Operations
For the eleven months ended December 31, 2005

|                                                                |  | EMSC |        | EMS LP |   | Issuer
AMR
HoldCo, Inc. |  | Issuer
EmCare
HoldCo, Inc. |        | Subsidiary
Guarantors |   | Subsidiary
Non-Guarantor |  | Eliminations/
Adjustments |           | Total |  
|--------------------------------------------------------------- |  | ---- | ------ | ------ | - | ----------------------- |  | -------------------------- | ------ | --------------------- | - | ------------------------ |  | ------------------------- | --------- | ----- | -
|Net revenue                                                     |  | $    |       |        | $ |                        |  | $                          |       |                       | $ |                         |  | $                         | 1,655,485 |       | $
|                                                                |  |      |        |        |   |                         |  |                            |        |                       |   |                          |  |                           |           |       |  
|Compensation and benefits                                       |  |      |       |        |   |                        |  |                            |       |                       |   |                         |  |                           | 1,146,055 |       |  
|Operating expenses                                              |  |      |       |        |   |                        |  |                            |       |                       |   |                         |  |                           | 233,087   |       |  
|Insurance expense                                               |  |      |       |        |   |                        |  |                            |       |                       |   |                         |  |                           | 84,685    |       |  
|Selling, general and administrative expenses                    |  |      |       |        |   |                        |  |                            |       |                       |   |                         |  |                           | 54,262    |       |  
|Depreciation and amortization expense                           |  |      |       |        |   |                        |  |                            |       |                       |   |                         |  |                           | 54,143    |       |  
|Restructuring charge                                            |  |      |       |        |   |                        |  |                            |       |                       |   |                         |  |                           | 1,781     |       |  
|                                                                |  |      |        |        |   |                         |  |                            |        |                       |   |                          |  |                           |           |       |  
|Income from operations                                          |  |      |       |        |   |                        |  |                            |       |                       |   |                         |  |                           | 81,472    |       |  
|Interest income from restricted assets                          |  |      |       |        |   |                        |  |                            |       |                       |   |                         |  |                           | 1,721     |       |  
|Interest expense                                                |  |      |       |        |   |                        |  |                            |       |                       |   |                         |  |                           | (47,813   | )     |  
|Realized loss on investments                                    |  |      |       |        |   |                        |  |                            |       |                       |   |                         |  |                           |          |       |  
|Interest and other income                                       |  |      |       |        |   |                        |  |                            |       |                       |   | 14                       |  |                           | 1,026     |       |  
|Loss on early debt extinguishment                               |  |      |       |        |   |                        |  |                            |       |                       |   |                         |  |                           | (2,040    | )     |  
|                                                                |  |      |        |        |   |                         |  |                            |        |                       |   |                          |  |                           |           |       |  
|Income before income taxes                                      |  |      |       |        |   |                        |  |                            |       |                       |   | 14                       |  |                           | 34,366    |       |  
|Income tax expense                                              |  |      |       |        |   |                        |  |                            |       |                       |   |                         |  |                           | (14,372   | )     |  
|                                                                |  |      |        |        |   |                         |  |                            |        |                       |   |                          |  |                           |           |       |  
|Income before equity in earnings of unconsolidated subsidiaries |  |      |       |        |   |                        |  |                            |       |                       |   | 14                       |  |                           | 19,994    |       |  
|Equity in earnings of unconsolidated subsidiary                 |  |      | 20,067 |        |   | 20,067                  |  |                            | 10,795 |                       |   | 9,258                    |  |                           | 59        |       |  
|                                                                |  |      |        |        |   |                         |  |                            |        |                       |   |                          |  |                           |           |       |  
|Net income                                                      |  | $    | 20,067 |        | $ | 20,067                  |  | $                          | 10,795 |                       | $ | 9,272                    |  | $                         | 20,053    |       | $
|                                                                |  |      |        |        |   |                         |  |                            |        |                       |   |                          |  |                           |           |       |  

F-46

---



Emergency Medical Services Corporation

Notes to Consolidated Financial Statements (Continued)

(dollars in thousands, except for share and per share amounts)

21. Guarantors of Debt (Continued)

Condensed Consolidating Statement of Cash Flows
For the year ended December 31, 2007

|                                                       |                                           | EMSC |      | EMS LP |   | Issuer
AMR
HoldCo, Inc. |   | Issuer
EmCare
HoldCo, Inc. |   | Subsidiary
Guarantors |   | Subsidiary
Non-Guarantor |   | Total |        
|------------------------------------------------------ | ----------------------------------------- | ---- | ---- | ------ | - | ----------------------- | - | -------------------------- | - | --------------------- | - | ------------------------ | - | ----- | -------
|Cash Flows from Operating Activities                   |                                           |      |      |        |   |                         |   |                            |   |                       |   |                          |   |       |        
|                                                       |                                           |      |      |        |   |                         |   |                            |   |                       |   |                          |   |       |        
|                                                       | Net cash provided by operating activities |      | $    |       |   | $                       |  |                            | $ |                      |   | $                        |  |       | $      
|                                                       |                                           |      |      |        |   |                         |   |                            |   |                       |   |                          |   |       |        
|Cash Flows from Investing Activities                   |                                           |      |      |        |   |                         |   |                            |   |                       |   |                          |   |       |        
|Purchase of property, plant and equipment              |                                           |      |     |        |   |                        |   |                            |  |                       |   |                         |   |       | (38,335
|Proceeds from sale of property, plant and equipment    |                                           |      |     |        |   |                        |   |                            |  |                       |   |                         |   |       | 359    
|Acquisition of businesses, net of cash received        |                                           |      |     |        |   |                        |   |                            |  |                       |   |                         |   |       | (75,648
|Insurance collateral                                   |                                           |      |     |        |   |                        |   |                            |  |                       |   |                         |   |       | 13,207 
|Net change in deposits and other assets                |                                           |      |     |        |   |                        |   |                            |  |                       |   |                         |   |       | 2,526  
|                                                       |                                           |      |      |        |   |                         |   |                            |   |                       |   |                          |   |       |        
|                                                       | Net cash used in investing activities     |      |      |       |   |                         |  |                            |   |                      |   |                          |  |       |        
|                                                       |                                           |      |      |        |   |                         |   |                            |   |                       |   |                          |   |       |        
|Cash Flows from Financing Activities                   |                                           |      |      |        |   |                         |   |                            |   |                       |   |                          |   |       |        
|Issuance of EMSC equity                                |                                           |      | 383  |        |   |                        |   |                            |  |                       |   |                         |   |       |       
|Borrowings                                             |                                           |      |     |        |   |                        |   |                            |  |                       |   |                         |   |       | 70,300 
|Repayments of capital lease obligations and other debt |                                           |      |     |        |   |                        |   |                            |  |                       |   |                         |   |       | (76,033
|Net intercompany borrowings (payments)                 |                                           |      | (383 | )      |   |                        |   |                            |  |                       |   |                         |   |       | 383    
|Increase in bank overdrafts                            |                                           |      |     |        |   |                        |   |                            |  |                       |   |                         |   |       | (2,664 
|                                                       |                                           |      |      |        |   |                         |   |                            |   |                       |   |                          |   |       |        
|                                                       | Net cash used in financing activities     |      |      |       |   |                         |  |                            |   |                      |   |                          |  |       |        
|                                                       |                                           |      |      |        |   |                         |   |                            |   |                       |   |                          |   |       |        
|Increase in cash and cash equivalents                  |                                           |      |     |        |   |                        |   |                            |  |                       |   |                         |   |       | (14,342
|Cash and cash equivalents, beginning of period         |                                           |      |     |        |   |                        |   |                            |  |                       |   |                         |   |       | 39,329 
|                                                       |                                           |      |      |        |   |                         |   |                            |   |                       |   |                          |   |       |        
|Cash and cash equivalents, end of period               |                                           | $    |     |        | $ |                        |   | $                          |  |                       | $ |                         |   | $     | 24,987 
|                                                       |                                           |      |      |        |   |                         |   |                            |   |                       |   |                          |   |       |        

F-47

---



Emergency Medical Services Corporation

Notes to Consolidated Financial Statements (Continued)

(dollars in thousands, except for share and per share amounts)

21. Guarantors of Debt (Continued)

Condensed Consolidating Statement of Cash Flows
For the year ended December 31, 2006

|                                                       |                                           | EMSC |        | EMS LP |   | Issuer
AMR
HoldCo, Inc. |   | Issuer
EmCare
HoldCo, Inc. |   | Subsidiary
Guarantors |   | Subsidiary
Non-Guarantor |   | Total |        
|------------------------------------------------------ | ----------------------------------------- | ---- | ------ | ------ | - | ----------------------- | - | -------------------------- | - | --------------------- | - | ------------------------ | - | ----- | -------
|Cash Flows from Operating Activities                   |                                           |      |        |        |   |                         |   |                            |   |                       |   |                          |   |       |        
|                                                       | Net cash provided by operating activities |      | $      |       |   | $                       |  |                            | $ |                      |   | $                        |  |       | $      
|                                                       |                                           |      |        |        |   |                         |   |                            |   |                       |   |                          |   |       |        
|Cash Flows from Investing Activities                   |                                           |      |        |        |   |                         |   |                            |   |                       |   |                          |   |       |        
|Purchase of property, plant and equipment              |                                           |      |       |        |   |                        |   |                            |  |                       |   |                         |   |       | (60,415
|Proceeds from sale of property, plant and equipment    |                                           |      |       |        |   |                        |   |                            |  |                       |   |                         |   |       | 902    
|Acquisitions of businesses, net of cash acquired       |                                           |      |       |        |   |                        |   |                            |  |                       |   |                         |   |       | (23,555
|Insurance collateral                                   |                                           |      |       |        |   |                        |   |                            |  |                       |   |                         |   |       | (7,836 
|Net change in deposits and other assets                |                                           |      |       |        |   |                        |   |                            |  |                       |   |                         |   |       | (1,696 
|                                                       |                                           |      |        |        |   |                         |   |                            |   |                       |   |                          |   |       |        
|                                                       | Net cash used in investing activities     |      |        |       |   |                         |  |                            |   |                      |   |                          |  |       |        
|                                                       |                                           |      |        |        |   |                         |   |                            |   |                       |   |                          |   |       |        
|Cash Flows from Financing Activities                   |                                           |      |        |        |   |                         |   |                            |   |                       |   |                          |   |       |        
|Issuance of EMSC equity                                |                                           |      | 104    |        |   |                        |   |                            |  |                       |   |                         |   |       |       
|EMSC equity issuance costs                             |                                           |      | (2,408 | )      |   |                        |   |                            |  |                       |   |                         |   |       |       
|Repayments of capital lease obligations and other debt |                                           |      |       |        |   |                        |   |                            |  |                       |   |                         |   |       | (27,066
|Net intercompany borrowings(payments)                  |                                           |      | 2,304  |        |   |                        |   |                            |  |                       |   |                         |   |       | (2,304 
|Decrease in bank overdrafts                            |                                           |      |       |        |   |                        |   |                            |  |                       |   |                         |   |       | (1,957 
|                                                       |                                           |      |        |        |   |                         |   |                            |   |                       |   |                          |   |       |        
|                                                       | Net cash used in financing activities     |      |        |       |   |                         |  |                            |   |                      |   |                          |  |       |        
|                                                       |                                           |      |        |        |   |                         |   |                            |   |                       |   |                          |   |       |        
|Increase in cash and cash equivalents                  |                                           |      |       |        |   |                        |   |                            |  |                       |   |                         |   |       | 21,328 
|Cash and cash equivalents, beginning of period         |                                           |      |       |        |   |                        |   |                            |  |                       |   |                         |   |       | 18,001 
|                                                       |                                           |      |        |        |   |                         |   |                            |   |                       |   |                          |   |       |        
|Cash and cash equivalents, end of period               |                                           | $    |       |        | $ |                        |   | $                          |  |                       | $ |                         |   | $     | 39,329 
|                                                       |                                           |      |        |        |   |                         |   |                            |   |                       |   |                          |   |       |        

F-48

---



Emergency Medical Services Corporation

Notes to Consolidated Financial Statements (Continued)

(dollars in thousands, except for share and per share amounts)

21. Guarantors of Debt (Continued)

Condensed Consolidating Statement of Cash Flows
For the eleven months ended December 31, 2005

|                                                          |                                                    | EMSC |          | EMS LP |   | Issuer
AMR
HoldCo, Inc. |          | Issuer
EmCare
HoldCo, Inc. |          | Subsidiary
Guarantors |   | Subsidiary
Non-Guarantor |     | Total |        
|--------------------------------------------------------- | -------------------------------------------------- | ---- | -------- | ------ | - | ----------------------- | -------- | -------------------------- | -------- | --------------------- | - | ------------------------ | --- | ----- | -------
|Cash Flows from Operating Activities                      |                                                    |      |          |        |   |                         |          |                            |          |                       |   |                          |     |       |        
|                                                          | Net cash provided by operating activities          |      | $        |       |   | $                       |         |                            | $        |                      |   | $                        | 14  |       | $      
|                                                          |                                                    |      |          |        |   |                         |          |                            |          |                       |   |                          |     |       |        
|Cash Flows from Investing Activities                      |                                                    |      |          |        |   |                         |          |                            |          |                       |   |                          |     |       |        
|EMS purchase of AMR and EmCare                            |                                                    |      |         |        |   | (828,775                | )        |                            |         |                       |   |                         |     |       |       
|Purchase of property, plant and equipment                 |                                                    |      |         |        |   |                        |          |                            |         |                       |   |                         |     |       | (48,933
|Proceeds from sale of property, plant and equipment       |                                                    |      |         |        |   |                        |          |                            |         |                       |   |                         |     |       | 708    
|Purchase of restricted cash and investments               |                                                    |      |         |        |   |                        |          |                            |         |                       |   |                         |     |       |       
|Proceeds from sale and maturity of restricted investments |                                                    |      |         |        |   |                        |          |                            |         |                       |   |                         |     |       |       
|Net change in deposits and other assets                   |                                                    |      |         |        |   |                        |          |                            |         |                       |   |                         |     |       | (4,473 
|                                                          |                                                    |      |          |        |   |                         |          |                            |          |                       |   |                          |     |       |        
|                                                          | Net cash used in investing activities              |      |          |       |   |                         | (828,775 | )                          |          |                      |   |                          |    |       |        
|                                                          |                                                    |      |          |        |   |                         |          |                            |          |                       |   |                          |     |       |        
|Cash Flows from Financing Activities                      |                                                    |      |          |        |   |                         |          |                            |          |                       |   |                          |     |       |        
|Borrowings under new senior secured credit facility       |                                                    |      |         |        |   |                        |          |                            | 241,500  |                       |   | 108,500                  |     |       |       
|Proceeds from issuance of senior subordinated notes       |                                                    |      |         |        |   |                        |          |                            | 172,500  |                       |   | 77,500                   |     |       |       
|Borrowings under new revolving credit facility            |                                                    |      |         |        |   |                        |          |                            | 17,388   |                       |   | 7,812                    |     |       |       
|Debt issue costs                                          |                                                    |      |         |        |   |                         |          |                            | (12,648  | )                     |   | (5,682                   | )   |       |        
|EMS LP issuance of partnership equity                     |                                                    |      |         |        |   | 222,655                 |          |                            |         |                       |   |                         |     |       |       
|EMS LP partnership equity issuance costs                  |                                                    |      |         |        |   | (1,919                  | )        |                            |         |                       |   |                         |     |       |       
|EMSC issuance of class A common stock                     |                                                    |      | 113,400  |        |   |                        |          |                            |         |                       |   |                         |     |       |       
|EMSC equity issuance costs                                |                                                    |      | (9,329   | )      |   |                        |          |                            |         |                       |   |                         |     |       |       
|Repayments of capital lease obligations and other debt    |                                                    |      |         |        |   |                        |          |                            | (87,596  | )                     |   | (39,354                  | )   |       | (5,395 
|Repayments of revolving credit facility                   |                                                    |      |         |        |   |                        |          |                            |          |                       |   |                          |     |       |       
|Net investment and advances (distributions)               |                                                    |      | (104,071 | )      |   | 608,039                 |          |                            | (331,144 | )                     |   | (148,790                 | )   |       | (24,034
|Increase (decrease) in bank overdrafts                    |                                                    |      |         |        |   |                        |          |                            |         |                       |   |                         |     |       | 3,751  
|Increase (decrease) in other on-current liabilities       |                                                    |      |         |        |   |                        |          |                            |         |                       |   |                         |     |       |       
|                                                          |                                                    |      |          |        |   |                         |          |                            |          |                       |   |                          |     |       |        
|                                                          | Net cash provided by(used in) financing activities |      |          |       |   |                         | 828,775  |                            |          |                      |   |                          | (14 | )     |        
|                                                          |                                                    |      |          |        |   |                         |          |                            |          |                       |   |                          |     |       |        
|Increase in cash and cash equivalents                     |                                                    |      |         |        |   |                        |          |                            |         |                       |   |                         |     |       | 13,223 
|Cash and cash equivalents, beginning of period            |                                                    |      |         |        |   |                        |          |                            |         |                       |   |                         |     |       | 4,778  
|                                                          |                                                    |      |          |        |   |                         |          |                            |          |                       |   |                          |     |       |        
|Cash and cash equivalents, end of period                  |                                                    | $    |         |        | $ |                        |          | $                          |         |                       | $ |                         |     | $     | 18,001 
|                                                          |                                                    |      |          |        |   |                         |          |                            |          |                       |   |                          |     |       |        

F-49

---