Laidlaw Reports Continued Revenue Growth

Insurance and energy costs temper operating earnings



Apr 10, 2001, 01:00 ET from Laidlaw Inc.

    BURLINGTON, ON, April 10 /PRNewswire/ - Laidlaw Inc. (TSE:LDM; OTC:LDWIF)
 has reported consolidated revenue from its continuing school, inter-city,
 travel services and public transit bus operations increased 3.1% during its
 second fiscal quarter ended February 28, 2001. Consolidated revenue for the
 quarter - the most difficult for bus operations due to winter weather - was
 $751.9 million compared with $729.3 million for the same period in 2000.
 Revenue gains of 6.5% were generated in the inter-city, travel services and
 public transit segment. Improvements resulted principally from higher ticket
 prices and increased passenger loads in Greyhound Lines' operations in both
 the United States and Canada. Education Services' revenue was essentially
 flat. Gains made as a result of increased pricing and route additions were
 offset by operating-day reductions due to a year-over-year change in the
 school calendar, inclement weather and the exit from under-performing
 contracts. The decline in the value of the Canadian dollar had a slight
 dampening effect on revenue in both segments.
     Commenting on the quarter's results, John R. Grainger, president & CEO of
 Laidlaw Inc. said, "We have been able to increase consolidated revenue but
 have been unsuccessful in increasing operating income as a result of sharply
 increased insurance claims cost and jumps in the cost of energy. Last year the
 company benefited from fuel hedges and lower-than-normal insurance claims cost
 experience. Management, at all levels, is working to further conserve energy
 and placing an even greater emphasis on the company's safe operating
 standards.
     "The process of restructuring Laidlaw Inc.'s debt is progressing with the
 co-operation of its lenders and bondholders. Our employees have continued to
 deliver service with their usual enthusiasm and customers have demonstrated
 their support with both renewals and awards of new contracts. I am confident
 that with our unrestricted cash on hand of approximately $184 million, an
 increase of $57 million in the quarter, our continuing cash generation, and
 credit facilities in-place, we have more than adequate funds to meet all
 foreseeable requirements." Mr. Grainger concluded.
     Income before interest, taxes and amortization (IBITA) for the quarter
 was $21.6 million compared with $49.1 million for the same period in fiscal
 2000. Approximately 70% of the decline in IBITA is a result of increased
 insurance claims cost. Other components of the decline are primarily accounted
 for by increases in the cost of energy-diesel fuel and utilities and by
 additional driver wages and benefits.
     Income before interest, taxes, depreciation and amortization (IBITDA)
 from continuing operations was $82.6 million compared with $107.5 million for
 the same quarter in fiscal 2000. Capital spending for replacement and
 expansion was reduced to $22.1 million compared with $40.1 million.
     A loss, from continuing operations, for the period of $74.3 million or
 $0.23 per share is principally attributable to increased interest costs of
 $71.3 million compared with $43.3 million for the same fiscal 2000 period and
 to $16.3 million of restructuring expenses incurred as the company continues
 its efforts to negotiate a consensual restructuring of its bank and public
 debt. No such restructuring-related costs were incurred in the comparable
 fiscal 2000 period. The loss from continuing operations for the same quarter,
 last year, was $625.9 million or $1.92 per share occasioned principally by
 losses and provisions related to the company's write-down of its 44% equity
 interest in Safety-Kleen Corp.
 
     EDUCATION SERVICES
 
     Quarterly IBITA from the company's school bus operations was $25.8
 million compared with $45.4 million for the same period in fiscal 2000.
 Increased insurance claims cost, fuel, wages, and lost contribution margin due
 to operating-day reductions, were all factors in the decline.
 
     INTER-CITY, TRAVEL SERVICES AND PUBLIC TRANSIT
 
     IBITA for the quarter was a $4.2 million loss compared with $3.7 million
 of income in last year's fiscal period. The difference results from increased
 insurance claims cost, higher fuel costs and additional drivers' wage and
 benefit costs. Increased fuel costs were mitigated by Greyhound Lines' ability
 to vary ticket pricing in response to market conditions.
 
     SIX-MONTH RESULTS
 
     For the six months ended February 28, 2001, revenue from continuing
 operations, increased 5% to $1.570 billion from the $1.497 billion reported
 for the same period in fiscal 2000. IBITA has declined to $101.2 million from
 $146.1 million, a result of the increased operating costs associated with
 insurance claims, fuel, driver wages and benefits and inclement winter
 weather.
     IBITDA, from continuing operations, was $223.5 million compared with
 $262.8 million for the prior-year period.
     The loss, from continuing operations, for the period was $90.0 million or
 $0.28 per share compared with a loss of $573.0 million or $1.75 per share for
 the same fiscal 2000 period, principally related to the write-down and
 provisions taken in regard to Safety-Kleen in February of 2000.
 
     HEALTHCARE OPERATIONS
 
     For the six months ended February 28, 2001, IBITDA from the company's
 healthcare operations (classified as "discontinued" for accounting purposes)
 was $65.1 million compared with the $63.6 million achieved in last year's
 first half, indicating a new stability in the segment's performance. Both
 EmCare and American Medical Response have significantly improved their cash
 collection rates; patient volumes have been strong and business development
 programs are producing new contracts. Capital expenditures were decreased to
 $7.0 million from the $9.5 million in the prior year's six-month period.
     Laidlaw Inc. is a holding company for North America's largest providers
 of school and intercity bus transportation, municipal transit, patient
 transportation and emergency department management services. All dollar
 amounts are in U.S. dollars.
     This news release contains forward-looking statements relating to the
 company's liquidity requirements and business prospects that involve a number
 of risks and uncertainties. Among the important factors that could cause
 actual results to differ materially from those indicated by such forward-
 looking statements are the availability of additional liquidity, if needed,
 competitive pressures, changes in pricing policies, business conditions in the
 marketplace, general economic conditions, the result of negotiations with
 lenders and other debt holders and the other risk factors detailed from time-
 to-time in the company's periodic reports and registration statements filed
 with the Securities and Exchange Commission.
 
 
 
                                 LAIDLAW INC.
                          CONSOLIDATED BALANCE SHEETS
                               (U.S. $millions)
 
                                                      February 28    August 31
                                                          2001         2000
                                                      -----------  -----------
                                                      (unaudited)
     ASSETS
 
     Current assets
     Cash and cash equivalents                           $216.9        $141.7
     Short-term investments and marketable securities
      - at cost which approximates market value             5.0          64.9
     Trade accounts receivable
      (net of allowance for doubtful accounts
      of $4.0; August 31, 2000 - $3.7)                    284.6         164.5
     Other receivables                                     33.6          37.5
     Income taxes recoverable                               0.9          14.5
     Parts and supplies                                    37.8          36.7
     Other current assets                                  35.1          54.4
                                                      -----------  -----------
     Total current assets                                 613.9         514.2
                                                      -----------  -----------
 
     Net assets of discontinued operations                433.2         400.0
                                                      -----------  -----------
 
     Long-term investments                                350.2         272.5
                                                      -----------  -----------
 
 
     Property and equipment
     Land                                                 156.3         160.7
     Buildings                                            233.8         233.3
     Vehicles                                           1,756.4       1,742.6
     Other                                                190.3         181.3
                                                      -----------  -----------
                                                        2,336.8       2,317.9
     Less: Accumulated depreciation
      and amortization                                    858.3         774.4
                                                      -----------  -----------
                                                        1,478.5       1,543.5
                                                      -----------  -----------
     Other assets
     Goodwill (net of accumulated amortization
      of $155.2; August 31, 2000 - $137.6)              1,189.3       1,215.1
     Pension asset                                         45.1          41.9
     Deferred charges                                      14.7          12.9
                                                      -----------  -----------
                                                        1,249.1       1,269.9
                                                      -----------  -----------
 
     Total assets                                      $4,124.9      $4,000.1
                                                      -----------  -----------
                                                      -----------  -----------
 
 
 
                                 LAIDLAW INC.
                          CONSOLIDATED BALANCE SHEETS
                               (U.S. $millions)
 
                                                      February 28    August 31
                                                          2001         2000
                                                      -----------  -----------
                                                      (unaudited)
     LIABILITIES
 
     Current liabilities
     Accounts payable                                     $90.9         $98.6
     Accrued interest payable                             276.8         131.6
     Other accrued liabilities                            327.2         323.1
     Current portion of long-term debt                  3,381.0       3,391.3
                                                      -----------  -----------
     Total current liabilities                          4,075.9       3,944.6
 
     Future income tax liability                           13.3             -
 
     Other long-term liabilities                          226.9         223.6
 
     Long-term debt                                       274.2         208.9
                                                      -----------  -----------
 
     Total liabilities                                  4,509.3       4,377.1
                                                      -----------  -----------
 
     SHAREHOLDERS' DEFICIENCY
     Preference Shares                                      7.9           7.9
     Common Shares; issued and outstanding
      325,927,870 (August 31, 2000 - 325,927,870)       2,222.6       2,222.6
     Cumulative foreign currency translation
      adjustments                                        (163.2)       (165.0)
     Deficit                                           (2,532.7)     (2,442.5)
                                                      -----------  -----------
     Total shareholders' deficiency                      (465.4)       (377.0)
                                                      -----------  -----------
 
     Total liabilities and shareholders'
      deficiency                                       $4,124.9      $4,000.1
                                                      -----------  -----------
                                                      -----------  -----------
 
 
 
                                 LAIDLAW INC.
                     CONSOLIDATED STATEMENTS OF OPERATIONS
                   (U.S. $millions except per share amounts)
                                  (unaudited)
 
                                    Three Months Ended     Six Months Ended
                                   --------------------- ---------------------
                                    February   February   February   February
                                       28         29         28         29
                                      2001       2000       2001       2000
                                   ---------- ---------- ---------- ----------
     Revenue
     Education services            $   387.9  $   387.6  $   834.3  $   814.1
     Inter-city, Transit & Tour
      services                         364.0      341.7      735.6      683.0
                                   ---------- ---------- ---------- ----------
     Total revenue                     751.9      729.3    1,569.9    1,497.1
 
     Operating expenses                576.0      530.8    1,154.3    1,055.4
     Selling, general and
      administrative expenses           93.3       91.0      192.1      178.9
     Depreciation expense               61.0       58.4      122.3      116.7
                                   ---------- ---------- ---------- ----------
                                        21.6       49.1      101.2      146.1
 
     Amortization expense               10.5        8.5       20.9       19.2
                                   ---------- ---------- ---------- ----------
 
     Income from operating
      segments                          11.1       40.6       80.3      126.9
     Interest expense                  (71.3)     (43.3)    (141.4)     (77.7)
     Other financing related
      expenses                         (16.3)         -      (31.9)         -
     Other income                        3.7        3.6        6.0        7.8
     Equity in earnings of
      Safety-Kleen Corp.                   -          -          -       10.8
     Impairment loss                       -     (605.0)         -     (605.0)
                                   ---------- ---------- ---------- ----------
     Loss from continuing
      operations before income
      taxes                            (72.8)    (604.1)     (87.0)    (537.2)
     Income tax expense                 (1.5)     (21.8)      (3.0)     (35.8)
                                   ---------- ---------- ---------- ----------
     Loss from continuing
      operations                       (74.3)    (625.9)     (90.0)    (573.0)
     Loss from discontinued
      operations                           -     (834.5)         -     (834.5)
                                   ---------- ---------- ---------- ----------
     Net loss for the period       $   (74.3) $(1,460.4) $   (90.0) $(1,407.5)
                                   ---------- ---------- ---------- ----------
                                   ---------- ---------- ---------- ----------
 
     Loss per share
     Continuing operations         $   (0.23) $   (1.92) $   (0.28) $   (1.75)
     Discontinued operations               -      (2.56)         -      (2.54)
                                   ---------- ---------- ---------- ----------
     Net loss                      $   (0.23) $   (4.48) $   (0.28) $   (4.29)
                                   ---------- ---------- ---------- ----------
                                   ---------- ---------- ---------- ----------
 
                      CONSOLIDATED STATEMENTS OF DEFICIT
                               (U.S. $millions)
                                  (unaudited)
 
                                                           Six Months Ended
                                                         ---------------------
                                                          February   February
                                                             28         29
                                                            2001       2000
                                                         ---------- ----------
 
     Deficit - beginning of period                       $(2,442.5) $  (173.3)
     Net loss for the period                                 (90.0)  (1,407.5)
     Dividends    - Preference shares                         (0.2)      (0.2)
                  - Common shares                                -      (31.4)
                                                         ---------- ----------
 
     Deficit - end of period                             $(2,532.7) $(1,612.4)
                                                         ---------- ----------
                                                         ---------- ----------
 
 
 
                                 LAIDLAW INC.
                     CONSOLIDATED STATEMENTS OF CASH FLOWS
                               (U.S. $millions)
                                  (unaudited)
 
                                                           Six Months Ended
                                                         ---------------------
                                                          February   February
                                                             28         29
                                                            2001       2000
                                                         ---------- ----------
     Operating activities
       Net loss from continuing operations for the
        period                                           $   (90.0)   $(573.0)
       Items not affecting cash                              196.5      751.9
                                                         ---------- ----------
 
     Cash provided by continuing operating activities
      before financing working capital, the change in
      accrued interest payable, the cash portion of
      other financing related expenses and the change
      in restricted cash and cash and cash equivalents       106.5      178.9
       Cash used for financing working capital other
        than the change in accrued interest payable         (117.3)    (170.7)
       Change in accrued interest payable                    145.2       (3.8)
       Cash portion of other financing related expenses      (30.0)         -
       Decrease in restricted cash and cash equivalents       12.5          -
                                                         ---------- ----------
     Net cash provided by continuing
      operating activities                                   116.9        4.4
     Net cash used in discontinued
      operating activities                                    (3.7)     (41.5)
                                                         ---------- ----------
 
     Net cash provided by (used in)
      operating activities                               $   113.2    $ (37.1)
                                                         ---------- ----------
 
     Investing activities
       Purchase of property, equipment and
        other assets, net of proceeds from sale          $   (64.0)   $ (60.7)
       Expended on acquisitions                                  -      (38.6)
       Net decrease (increase) in investments                 (5.5)      19.7
                                                         ---------- ----------
 
     Net cash used in continuing investing activities        (69.5)     (79.6)
     Net cash used in investing activities of
      discontinued operations                                (24.2)     (22.1)
                                                         ---------- ----------
     Net cash used in investing activities               $   (93.7)   $(101.7)
                                                         ---------- ----------
 
     Financing activities
       Net increase in long-term debt and other long-
        term liabilities                                 $    73.5    $ 216.9
       Repurchase of shares for redemption                       -      (26.2)
       Proceeds from share issues                                -        1.9
       Dividends                                                 -      (31.6)
                                                         ---------- ----------
 
     Net cash provided by continuing financing
      activities                                              73.5      161.0
     Net cash used in financing activities of
      discontinued operations                                 (5.3)     (20.7)
                                                         ---------- ----------
 
     Net cash provided by financing activities           $    68.2    $ 140.3
                                                         ---------- ----------
 
     Net increase in cash and cash equivalents           $    87.7    $   1.5
 
     Cash and cash equivalents - beginning of period          96.3(x)    58.2
                                                         ---------- ----------
 
     Cash and cash equivalents - end of period           $   184.0(x) $  59.7
                                                         ---------- ----------
                                                         ---------- ----------
 
          (x) These amounts represent the unrestricted cash and cash
                          equivalents of the Company
 
 
 
     Additional Information
 
     Details of revenue growth     Three months ended February 28, 2001
     ------------------------- -----------------------------------------------
                               Price &                   Foreign
                               Volume     Acquisitions   Exchange      Total
                               --------   ------------   --------     --------
     Education services         (0.8)   %    1.2   %       (0.4)  %     -   %
     Inter-city Transit &
      Tour services              5.9    %    1.1   %       (0.5)  %     6.5 %
     Consolidated                2.4    %    1.1   %       (0.4)  %     3.1 %
 
 
                                   Six months ended February 28, 2001
                               -----------------------------------------------
                               Price &                   Foreign
                               Volume     Acquisitions   Exchange      Total
                               --------   ------------   --------     --------
     Education services          1.5    %    1.3   %       (0.3)  %     2.5 %
     Inter-city Transit &
      Tour services              6.3    %    1.8   %       (0.4)  %     7.7 %
     Consolidated                3.7    %    1.5   %       (0.3)  %     4.9 %
 
 
                               Three Months Ended        Six Months Ended
                           February 28   February 29  February 28  February 29
                           -----------   -----------  -----------  -----------
                                2001        2000         2001         2000
                           -----------   -----------  -----------  -----------
     EBITDA ($ millions)
     Education services        $71.5       $89.0       $184.4        $214.2
     Inter-city, Transit
      & Tour services           11.1        18.5         39.1          48.6
                           -----------   -----------  -----------  -----------
     Consolidated              $82.6      $107.5       $223.5        $262.8
                           -----------   -----------  -----------  -----------
                           -----------   -----------  -----------  -----------
 
     EBITDA Margins
     Education services         18.4%       23.0%        22.1%         26.3%
     Inter-city, Transit
      & Tour services            3.0%        5.4%         5.3%          7.1%
     Consolidated               11.0%       14.7%        14.2%         17.6%
 
 
     Income from operations
      before amortization
      expense ($ millions)
     Education services        $25.8       $45.4        $93.2        $126.9
     Inter-city, Transit
      & Tour services           (4.2)        3.7          8.0          19.2
                           -----------   -----------  -----------  -----------
     Consolidated              $21.6       $49.1       $101.2        $146.1
                           -----------   -----------  -----------  -----------
                           -----------   -----------  -----------  -----------
 
     Operating margins
      before amortization
      expense
     Education services          6.7%       11.7%        11.2%         15.6%
     Inter-city, Transit
      & Tour services           (1.2)%       1.1%        1.1%           2.8%
     Consolidated                2.9%        6.7%        6.4%           9.8%
 
 
     Income from operating
      segments ($ millions)
     Education services        $19.8       $38.5       $81.3         $113.0
     Inter-city, Transit
      & Tour services           (8.7)        2.1        (1.0)          13.9
                           -----------   -----------  -----------  -----------
     Consolidated              $11.1       $40.6       $80.3         $126.9
                           -----------   -----------  -----------  -----------
                           -----------   -----------  -----------  -----------
 
 
     Operating margins
     Education services          5.1%        9.9%        9.7%          13.9%
     Inter-city, Transit
      & Tour services           (2.4)%       0.6%      (0.1)%           2.0%
     Consolidated                1.5%        5.6%       5.1%            8.5%
 
 
 
 

SOURCE Laidlaw Inc.
    BURLINGTON, ON, April 10 /PRNewswire/ - Laidlaw Inc. (TSE:LDM; OTC:LDWIF)
 has reported consolidated revenue from its continuing school, inter-city,
 travel services and public transit bus operations increased 3.1% during its
 second fiscal quarter ended February 28, 2001. Consolidated revenue for the
 quarter - the most difficult for bus operations due to winter weather - was
 $751.9 million compared with $729.3 million for the same period in 2000.
 Revenue gains of 6.5% were generated in the inter-city, travel services and
 public transit segment. Improvements resulted principally from higher ticket
 prices and increased passenger loads in Greyhound Lines' operations in both
 the United States and Canada. Education Services' revenue was essentially
 flat. Gains made as a result of increased pricing and route additions were
 offset by operating-day reductions due to a year-over-year change in the
 school calendar, inclement weather and the exit from under-performing
 contracts. The decline in the value of the Canadian dollar had a slight
 dampening effect on revenue in both segments.
     Commenting on the quarter's results, John R. Grainger, president & CEO of
 Laidlaw Inc. said, "We have been able to increase consolidated revenue but
 have been unsuccessful in increasing operating income as a result of sharply
 increased insurance claims cost and jumps in the cost of energy. Last year the
 company benefited from fuel hedges and lower-than-normal insurance claims cost
 experience. Management, at all levels, is working to further conserve energy
 and placing an even greater emphasis on the company's safe operating
 standards.
     "The process of restructuring Laidlaw Inc.'s debt is progressing with the
 co-operation of its lenders and bondholders. Our employees have continued to
 deliver service with their usual enthusiasm and customers have demonstrated
 their support with both renewals and awards of new contracts. I am confident
 that with our unrestricted cash on hand of approximately $184 million, an
 increase of $57 million in the quarter, our continuing cash generation, and
 credit facilities in-place, we have more than adequate funds to meet all
 foreseeable requirements." Mr. Grainger concluded.
     Income before interest, taxes and amortization (IBITA) for the quarter
 was $21.6 million compared with $49.1 million for the same period in fiscal
 2000. Approximately 70% of the decline in IBITA is a result of increased
 insurance claims cost. Other components of the decline are primarily accounted
 for by increases in the cost of energy-diesel fuel and utilities and by
 additional driver wages and benefits.
     Income before interest, taxes, depreciation and amortization (IBITDA)
 from continuing operations was $82.6 million compared with $107.5 million for
 the same quarter in fiscal 2000. Capital spending for replacement and
 expansion was reduced to $22.1 million compared with $40.1 million.
     A loss, from continuing operations, for the period of $74.3 million or
 $0.23 per share is principally attributable to increased interest costs of
 $71.3 million compared with $43.3 million for the same fiscal 2000 period and
 to $16.3 million of restructuring expenses incurred as the company continues
 its efforts to negotiate a consensual restructuring of its bank and public
 debt. No such restructuring-related costs were incurred in the comparable
 fiscal 2000 period. The loss from continuing operations for the same quarter,
 last year, was $625.9 million or $1.92 per share occasioned principally by
 losses and provisions related to the company's write-down of its 44% equity
 interest in Safety-Kleen Corp.
 
     EDUCATION SERVICES
 
     Quarterly IBITA from the company's school bus operations was $25.8
 million compared with $45.4 million for the same period in fiscal 2000.
 Increased insurance claims cost, fuel, wages, and lost contribution margin due
 to operating-day reductions, were all factors in the decline.
 
     INTER-CITY, TRAVEL SERVICES AND PUBLIC TRANSIT
 
     IBITA for the quarter was a $4.2 million loss compared with $3.7 million
 of income in last year's fiscal period. The difference results from increased
 insurance claims cost, higher fuel costs and additional drivers' wage and
 benefit costs. Increased fuel costs were mitigated by Greyhound Lines' ability
 to vary ticket pricing in response to market conditions.
 
     SIX-MONTH RESULTS
 
     For the six months ended February 28, 2001, revenue from continuing
 operations, increased 5% to $1.570 billion from the $1.497 billion reported
 for the same period in fiscal 2000. IBITA has declined to $101.2 million from
 $146.1 million, a result of the increased operating costs associated with
 insurance claims, fuel, driver wages and benefits and inclement winter
 weather.
     IBITDA, from continuing operations, was $223.5 million compared with
 $262.8 million for the prior-year period.
     The loss, from continuing operations, for the period was $90.0 million or
 $0.28 per share compared with a loss of $573.0 million or $1.75 per share for
 the same fiscal 2000 period, principally related to the write-down and
 provisions taken in regard to Safety-Kleen in February of 2000.
 
     HEALTHCARE OPERATIONS
 
     For the six months ended February 28, 2001, IBITDA from the company's
 healthcare operations (classified as "discontinued" for accounting purposes)
 was $65.1 million compared with the $63.6 million achieved in last year's
 first half, indicating a new stability in the segment's performance. Both
 EmCare and American Medical Response have significantly improved their cash
 collection rates; patient volumes have been strong and business development
 programs are producing new contracts. Capital expenditures were decreased to
 $7.0 million from the $9.5 million in the prior year's six-month period.
     Laidlaw Inc. is a holding company for North America's largest providers
 of school and intercity bus transportation, municipal transit, patient
 transportation and emergency department management services. All dollar
 amounts are in U.S. dollars.
     This news release contains forward-looking statements relating to the
 company's liquidity requirements and business prospects that involve a number
 of risks and uncertainties. Among the important factors that could cause
 actual results to differ materially from those indicated by such forward-
 looking statements are the availability of additional liquidity, if needed,
 competitive pressures, changes in pricing policies, business conditions in the
 marketplace, general economic conditions, the result of negotiations with
 lenders and other debt holders and the other risk factors detailed from time-
 to-time in the company's periodic reports and registration statements filed
 with the Securities and Exchange Commission.
 
 
 
                                 LAIDLAW INC.
                          CONSOLIDATED BALANCE SHEETS
                               (U.S. $millions)
 
                                                      February 28    August 31
                                                          2001         2000
                                                      -----------  -----------
                                                      (unaudited)
     ASSETS
 
     Current assets
     Cash and cash equivalents                           $216.9        $141.7
     Short-term investments and marketable securities
      - at cost which approximates market value             5.0          64.9
     Trade accounts receivable
      (net of allowance for doubtful accounts
      of $4.0; August 31, 2000 - $3.7)                    284.6         164.5
     Other receivables                                     33.6          37.5
     Income taxes recoverable                               0.9          14.5
     Parts and supplies                                    37.8          36.7
     Other current assets                                  35.1          54.4
                                                      -----------  -----------
     Total current assets                                 613.9         514.2
                                                      -----------  -----------
 
     Net assets of discontinued operations                433.2         400.0
                                                      -----------  -----------
 
     Long-term investments                                350.2         272.5
                                                      -----------  -----------
 
 
     Property and equipment
     Land                                                 156.3         160.7
     Buildings                                            233.8         233.3
     Vehicles                                           1,756.4       1,742.6
     Other                                                190.3         181.3
                                                      -----------  -----------
                                                        2,336.8       2,317.9
     Less: Accumulated depreciation
      and amortization                                    858.3         774.4
                                                      -----------  -----------
                                                        1,478.5       1,543.5
                                                      -----------  -----------
     Other assets
     Goodwill (net of accumulated amortization
      of $155.2; August 31, 2000 - $137.6)              1,189.3       1,215.1
     Pension asset                                         45.1          41.9
     Deferred charges                                      14.7          12.9
                                                      -----------  -----------
                                                        1,249.1       1,269.9
                                                      -----------  -----------
 
     Total assets                                      $4,124.9      $4,000.1
                                                      -----------  -----------
                                                      -----------  -----------
 
 
 
                                 LAIDLAW INC.
                          CONSOLIDATED BALANCE SHEETS
                               (U.S. $millions)
 
                                                      February 28    August 31
                                                          2001         2000
                                                      -----------  -----------
                                                      (unaudited)
     LIABILITIES
 
     Current liabilities
     Accounts payable                                     $90.9         $98.6
     Accrued interest payable                             276.8         131.6
     Other accrued liabilities                            327.2         323.1
     Current portion of long-term debt                  3,381.0       3,391.3
                                                      -----------  -----------
     Total current liabilities                          4,075.9       3,944.6
 
     Future income tax liability                           13.3             -
 
     Other long-term liabilities                          226.9         223.6
 
     Long-term debt                                       274.2         208.9
                                                      -----------  -----------
 
     Total liabilities                                  4,509.3       4,377.1
                                                      -----------  -----------
 
     SHAREHOLDERS' DEFICIENCY
     Preference Shares                                      7.9           7.9
     Common Shares; issued and outstanding
      325,927,870 (August 31, 2000 - 325,927,870)       2,222.6       2,222.6
     Cumulative foreign currency translation
      adjustments                                        (163.2)       (165.0)
     Deficit                                           (2,532.7)     (2,442.5)
                                                      -----------  -----------
     Total shareholders' deficiency                      (465.4)       (377.0)
                                                      -----------  -----------
 
     Total liabilities and shareholders'
      deficiency                                       $4,124.9      $4,000.1
                                                      -----------  -----------
                                                      -----------  -----------
 
 
 
                                 LAIDLAW INC.
                     CONSOLIDATED STATEMENTS OF OPERATIONS
                   (U.S. $millions except per share amounts)
                                  (unaudited)
 
                                    Three Months Ended     Six Months Ended
                                   --------------------- ---------------------
                                    February   February   February   February
                                       28         29         28         29
                                      2001       2000       2001       2000
                                   ---------- ---------- ---------- ----------
     Revenue
     Education services            $   387.9  $   387.6  $   834.3  $   814.1
     Inter-city, Transit & Tour
      services                         364.0      341.7      735.6      683.0
                                   ---------- ---------- ---------- ----------
     Total revenue                     751.9      729.3    1,569.9    1,497.1
 
     Operating expenses                576.0      530.8    1,154.3    1,055.4
     Selling, general and
      administrative expenses           93.3       91.0      192.1      178.9
     Depreciation expense               61.0       58.4      122.3      116.7
                                   ---------- ---------- ---------- ----------
                                        21.6       49.1      101.2      146.1
 
     Amortization expense               10.5        8.5       20.9       19.2
                                   ---------- ---------- ---------- ----------
 
     Income from operating
      segments                          11.1       40.6       80.3      126.9
     Interest expense                  (71.3)     (43.3)    (141.4)     (77.7)
     Other financing related
      expenses                         (16.3)         -      (31.9)         -
     Other income                        3.7        3.6        6.0        7.8
     Equity in earnings of
      Safety-Kleen Corp.                   -          -          -       10.8
     Impairment loss                       -     (605.0)         -     (605.0)
                                   ---------- ---------- ---------- ----------
     Loss from continuing
      operations before income
      taxes                            (72.8)    (604.1)     (87.0)    (537.2)
     Income tax expense                 (1.5)     (21.8)      (3.0)     (35.8)
                                   ---------- ---------- ---------- ----------
     Loss from continuing
      operations                       (74.3)    (625.9)     (90.0)    (573.0)
     Loss from discontinued
      operations                           -     (834.5)         -     (834.5)
                                   ---------- ---------- ---------- ----------
     Net loss for the period       $   (74.3) $(1,460.4) $   (90.0) $(1,407.5)
                                   ---------- ---------- ---------- ----------
                                   ---------- ---------- ---------- ----------
 
     Loss per share
     Continuing operations         $   (0.23) $   (1.92) $   (0.28) $   (1.75)
     Discontinued operations               -      (2.56)         -      (2.54)
                                   ---------- ---------- ---------- ----------
     Net loss                      $   (0.23) $   (4.48) $   (0.28) $   (4.29)
                                   ---------- ---------- ---------- ----------
                                   ---------- ---------- ---------- ----------
 
                      CONSOLIDATED STATEMENTS OF DEFICIT
                               (U.S. $millions)
                                  (unaudited)
 
                                                           Six Months Ended
                                                         ---------------------
                                                          February   February
                                                             28         29
                                                            2001       2000
                                                         ---------- ----------
 
     Deficit - beginning of period                       $(2,442.5) $  (173.3)
     Net loss for the period                                 (90.0)  (1,407.5)
     Dividends    - Preference shares                         (0.2)      (0.2)
                  - Common shares                                -      (31.4)
                                                         ---------- ----------
 
     Deficit - end of period                             $(2,532.7) $(1,612.4)
                                                         ---------- ----------
                                                         ---------- ----------
 
 
 
                                 LAIDLAW INC.
                     CONSOLIDATED STATEMENTS OF CASH FLOWS
                               (U.S. $millions)
                                  (unaudited)
 
                                                           Six Months Ended
                                                         ---------------------
                                                          February   February
                                                             28         29
                                                            2001       2000
                                                         ---------- ----------
     Operating activities
       Net loss from continuing operations for the
        period                                           $   (90.0)   $(573.0)
       Items not affecting cash                              196.5      751.9
                                                         ---------- ----------
 
     Cash provided by continuing operating activities
      before financing working capital, the change in
      accrued interest payable, the cash portion of
      other financing related expenses and the change
      in restricted cash and cash and cash equivalents       106.5      178.9
       Cash used for financing working capital other
        than the change in accrued interest payable         (117.3)    (170.7)
       Change in accrued interest payable                    145.2       (3.8)
       Cash portion of other financing related expenses      (30.0)         -
       Decrease in restricted cash and cash equivalents       12.5          -
                                                         ---------- ----------
     Net cash provided by continuing
      operating activities                                   116.9        4.4
     Net cash used in discontinued
      operating activities                                    (3.7)     (41.5)
                                                         ---------- ----------
 
     Net cash provided by (used in)
      operating activities                               $   113.2    $ (37.1)
                                                         ---------- ----------
 
     Investing activities
       Purchase of property, equipment and
        other assets, net of proceeds from sale          $   (64.0)   $ (60.7)
       Expended on acquisitions                                  -      (38.6)
       Net decrease (increase) in investments                 (5.5)      19.7
                                                         ---------- ----------
 
     Net cash used in continuing investing activities        (69.5)     (79.6)
     Net cash used in investing activities of
      discontinued operations                                (24.2)     (22.1)
                                                         ---------- ----------
     Net cash used in investing activities               $   (93.7)   $(101.7)
                                                         ---------- ----------
 
     Financing activities
       Net increase in long-term debt and other long-
        term liabilities                                 $    73.5    $ 216.9
       Repurchase of shares for redemption                       -      (26.2)
       Proceeds from share issues                                -        1.9
       Dividends                                                 -      (31.6)
                                                         ---------- ----------
 
     Net cash provided by continuing financing
      activities                                              73.5      161.0
     Net cash used in financing activities of
      discontinued operations                                 (5.3)     (20.7)
                                                         ---------- ----------
 
     Net cash provided by financing activities           $    68.2    $ 140.3
                                                         ---------- ----------
 
     Net increase in cash and cash equivalents           $    87.7    $   1.5
 
     Cash and cash equivalents - beginning of period          96.3(x)    58.2
                                                         ---------- ----------
 
     Cash and cash equivalents - end of period           $   184.0(x) $  59.7
                                                         ---------- ----------
                                                         ---------- ----------
 
          (x) These amounts represent the unrestricted cash and cash
                          equivalents of the Company
 
 
 
     Additional Information
 
     Details of revenue growth     Three months ended February 28, 2001
     ------------------------- -----------------------------------------------
                               Price &                   Foreign
                               Volume     Acquisitions   Exchange      Total
                               --------   ------------   --------     --------
     Education services         (0.8)   %    1.2   %       (0.4)  %     -   %
     Inter-city Transit &
      Tour services              5.9    %    1.1   %       (0.5)  %     6.5 %
     Consolidated                2.4    %    1.1   %       (0.4)  %     3.1 %
 
 
                                   Six months ended February 28, 2001
                               -----------------------------------------------
                               Price &                   Foreign
                               Volume     Acquisitions   Exchange      Total
                               --------   ------------   --------     --------
     Education services          1.5    %    1.3   %       (0.3)  %     2.5 %
     Inter-city Transit &
      Tour services              6.3    %    1.8   %       (0.4)  %     7.7 %
     Consolidated                3.7    %    1.5   %       (0.3)  %     4.9 %
 
 
                               Three Months Ended        Six Months Ended
                           February 28   February 29  February 28  February 29
                           -----------   -----------  -----------  -----------
                                2001        2000         2001         2000
                           -----------   -----------  -----------  -----------
     EBITDA ($ millions)
     Education services        $71.5       $89.0       $184.4        $214.2
     Inter-city, Transit
      & Tour services           11.1        18.5         39.1          48.6
                           -----------   -----------  -----------  -----------
     Consolidated              $82.6      $107.5       $223.5        $262.8
                           -----------   -----------  -----------  -----------
                           -----------   -----------  -----------  -----------
 
     EBITDA Margins
     Education services         18.4%       23.0%        22.1%         26.3%
     Inter-city, Transit
      & Tour services            3.0%        5.4%         5.3%          7.1%
     Consolidated               11.0%       14.7%        14.2%         17.6%
 
 
     Income from operations
      before amortization
      expense ($ millions)
     Education services        $25.8       $45.4        $93.2        $126.9
     Inter-city, Transit
      & Tour services           (4.2)        3.7          8.0          19.2
                           -----------   -----------  -----------  -----------
     Consolidated              $21.6       $49.1       $101.2        $146.1
                           -----------   -----------  -----------  -----------
                           -----------   -----------  -----------  -----------
 
     Operating margins
      before amortization
      expense
     Education services          6.7%       11.7%        11.2%         15.6%
     Inter-city, Transit
      & Tour services           (1.2)%       1.1%        1.1%           2.8%
     Consolidated                2.9%        6.7%        6.4%           9.8%
 
 
     Income from operating
      segments ($ millions)
     Education services        $19.8       $38.5       $81.3         $113.0
     Inter-city, Transit
      & Tour services           (8.7)        2.1        (1.0)          13.9
                           -----------   -----------  -----------  -----------
     Consolidated              $11.1       $40.6       $80.3         $126.9
                           -----------   -----------  -----------  -----------
                           -----------   -----------  -----------  -----------
 
 
     Operating margins
     Education services          5.1%        9.9%        9.7%          13.9%
     Inter-city, Transit
      & Tour services           (2.4)%       0.6%      (0.1)%           2.0%
     Consolidated                1.5%        5.6%       5.1%            8.5%
 
 
 
 SOURCE Laidlaw Inc.