William A. Sanger, Chairman and Chief Executive Officer, said, "EMSC had an excellent third quarter. We produced diluted EPS of $0.66 and improved operating margins. This improvement is a result of the signing of new contracts, increased volumes at our emergency departments, expansion of our new service lines and improved resource utilization. I am particularly pleased that we were able to produce comparable results to the same quarter last year despite the more than $100 million of FEMA hurricane revenues in the third quarter of 2008. Finally, we continue to supplement our balance sheet by generating strong free cash flow, enhancing our ability to capitalize on market opportunities."

Results of Operations for the Third Quarter 2009

For the quarter ended September 30, 2009, EMSC generated net revenue of $665.1million, a decrease of 2.1% compared to the same period last year, or a 15.0% increase excluding third quarter 2008 FEMA hurricane deployment revenue of $101.1 million. There was no FEMA hurricane deployment revenue in 2009.

EMSC generated net income of $28.9 million, or $0.66 per diluted share, for the third quarter of 2009, compared to net income of $28.6 million, or $0.66 per diluted share, in the third quarter of 2008. Adjusted EBITDA was $72.3 million, a decrease of 1.6% compared to the same quarter last year. Adjusted EBITDA in 2008 was favorably impacted by the FEMA hurricane deployment. Adjusted EBITDA was positively impacted in 2009 by the net impact of increased volume from net new contracts, higher rates and volumes from existing contracts, improvement in compensation and benefits expenses as a percentage of net revenue and lower fuel costs. A description of the non-GAAP measures, Adjusted EBITDA and Free Cash Flow, and a reconciliation of non-GAAP to GAAP financial measures are included in this news release.

Cash provided by operating activities was $68.9 million in the third quarter of 2009, compared to $75.0 million for the same quarter last year. Working capital changes in the third quarter 2008 were significantly impacted by the FEMA hurricane deployment. During the third quarter of 2009, accounts receivable decreased $7.6 million, and Days Sales Outstanding (DSO) decreased 3 days sequentially. Free cash flow was $61.2 million in the third quarter of 2009 compared to $65.5 million in the same quarter last year.

Net cash used in investing activities was $8.9 million for the quarter ended September 30, 2009, compared to $17.9 million for the same period in 2008. Third quarter 2009 was positively impacted by a decrease in insurance collateral of $6.0 million. Acquisition related funding was $1.2 million in the third quarter 2009 compared to $8.4 million in the same period last year.

For the quarter ended September 30, 2009, net cash provided by financing activities was $4.0 million compared to $5.5 million for the same quarter last year. At September 30, 2009, there were no amounts outstanding under our revolving credit facility.

Results of Operations for the Nine Months Ended September 30, 2009

EMSC's net revenue was $1.92 billion for the nine months ended September 30, 2009, an increase of 5.5% compared to the same period last year, or an 11.7% increase excluding the third quarter 2008 impact of the FEMA hurricane deployment.

EMSC's net income for the nine months ended September 30, 2009 was $82.0 million, or $1.89 per diluted share, compared to net income of $64.0 million, or $1.49 per diluted share, an increase of 27.1% over the same period last year. Adjusted EBITDA was $210.8 million, an increase of 14.9% compared to the same period last year. The increase in earnings is attributable primarily to the net impact of increased volume from net new contracts, higher rates and volumes on existing contracts, improvement in compensation and benefits expenses as a percentage of net revenue and lower fuel costs, partially offset by higher insurance expense and the favorable impact of the FEMA hurricane deployment in 2008.

Cash provided by operating activities for the nine months ended September 30, 2009 was $209.8 million compared to $130.4 million for the same period in 2008. The increase in operating cash flow relates primarily to an increase in net income, further reductions in DSO, and changes in accounts payable and accrued liabilities. Working capital changes for the nine months ended September 30, 2008 were significantly impacted by the FEMA hurricane deployment. Changes in accounts payable and accrued liabilities increased $10.6 million during the nine months ended September 30, 2009. Accounts receivable decreased $8.4 million for the nine months ended September 30, 2009, primarily due to a decrease in DSO of 10 days during the same period. Free cash flow was $179.5 million for the nine months ended September 30, 2009, an increase of $51.1 million over the nine months ended September 30, 2008.

Net cash used in investing activities was $31.7 million for the nine months ended September 30, 2009 compared to $30.4 million for the same period in 2008. Reductions in net insurance collateral were $4.1 million during 2009 compared to $16.0 million during 2008. Net capital expenditures were $33.6 million during the nine months ended September 30, 2009 compared to $21.4 million during the same period in 2008 due primarily to the timing of capital purchases. The quarter ended September 30, 2009 included $1.4 million used in the acquisition of businesses compared to $28.3 million in the same period in 2008.

For the nine months ended September 30, 2009 net cash provided by financing activities was $6.8 million compared to $6.7 million for the nine months ended September 30, 2008.

Segment Results

EMSC operates two business segments: American Medical Response, Inc. (AMR), the Company's healthcare transportation services segment, and EmCare Holdings Inc. (EmCare), the Company's outsourced hospital-based physician services segment.

American Medical Response (AMR)

Comparisons of AMR's results for the quarter and nine months ended September 30, 2009 to the same periods last year are significantly impacted by our FEMA hurricane deployment during the third quarter of last year. Notwithstanding the difficulty in comparing the 2009 to the 2008 periods, performance in our core business has improved in 2009.

For the quarter ended September 30, 2009, AMR generated net revenue of $338.8 million, a decrease of 20.4% compared to the third quarter last year, or a 4.5% increase excluding third quarter 2008 FEMA hurricane deployment revenue of $101.1 million. The 4.5% increase in net revenue was from an improvement in revenue per transport and growth in our managed transportation business, offset by lower transports from our exit of underperforming markets.

Adjusted EBITDA was $31.8 million, a decrease of 32.5% compared to the same quarter last year. The decrease in Adjusted EBITDA is attributable primarily to the favorable impact of the FEMA hurricane deployment in 2008. Adjusted EBITDA in 2009 was positively impacted by revenue growth coupled with improvements in our resource utilization and lower fuel costs. Insurance expense for the quarter ended September 30, 2009 included a favorable prior period insurance adjustment of $2.1 million compared to a favorable prior period adjustment of $1.7 million in the same period last year. Income from operations was $19.1 million, a decrease of 42.0% compared to the same quarter in 2008. Income from operations in 2008 was favorably impacted by the FEMA hurricane deployment.

For the nine months ended September 30, 2009, AMR's net revenue was $1.01 billion, a decrease of 6.0% compared to the same period last year, or a 3.7% increase excluding the third quarter 2008 FEMA hurricane deployment revenue. Adjusted EBITDA was $98.2 million, a decrease of 3.4% compared to the same period last year. Insurance expense in the nine months ended September 30, 2009 included a favorable prior period adjustment of $0.2 million compared to a favorable prior period adjustment of $5.3 million in the same period last year. Income from operations was $59.5 million, an increase of 3.4% compared to the same period in 2008.

EmCare

For the quarter ended September 30, 2009, EmCare generated net revenue of $326.3 million, an increase of 28.5% compared to the same quarter last year. The increase in revenue is attributable primarily to the addition of 87 net new contracts since June 30, 2008 (of which 45 were a part of our acquisition of Clinical Partners in August 2008 with related management fee revenue of $2.3 million during the quarter) and revenue increases at existing contracts. Adjusted EBITDA was $40.4 million for the quarter compared to $26.3 million last year, an increase of 53.8%. The increase in Adjusted EBITDA was driven primarily by revenue increases and a reduction of compensation and benefits expenses as a percentage of net revenue. Insurance expense in the third quarter 2009 included an unfavorable prior period insurance adjustment of $1.3 million compared to an unfavorable prior period adjustment of $3.9 million in the same period last year. Income from operations was $36.3 million, an increase of 66.3% over the same period in 2008.

For the nine months ended September 30, 2009, EmCare's net revenue was $904.7 million, an increase of 22.1% compared to the same period last year. Adjusted EBITDA was $112.7 million compared to $81.9 million, an increase of 37.6% compared to the same period last year. Insurance expense in the nine months ended September 30, 2009 included unfavorable prior period adjustments of $4.5 million compared to unfavorable prior period adjustments of $1.3 million in the same period last year. Income from operations was $99.2 million, an increase of 44.5% over the same period in 2008.

Guidance

The Company expects full year 2009 EPS and Adjusted EBITDA to be at the high end of its existing guidance ranges. Our existing guidance range for EPS is an expected $2.38 - $2.48, and $268 million to $275 million for Adjusted EBITDA.

Conference Call

EMSC management will host a conference call and live audio webcast on Tuesday, November 3, 2009, at 11:00 a.m. EST, to discuss the Company's financial results. A 30-day online replay will be available approximately one hour following the conclusion of the live broadcast. A link to the live broadcast and online replay is available on the Investor Relations section of the Company's website at www.emsc.net.

About Emergency Medical Services Corporation

Emergency Medical Services Corporation (EMSC) is a leading provider of emergency medical services in the United States. EMSC operates two business segments: American Medical Response, Inc. (AMR), the Company's healthcare transportation services segment, and EmCare Holdings Inc. (EmCare), the Company's outsourced hospital-based physician services segment. AMR is the leading provider of ambulance services in the United States. EmCare is a leading provider of outsourced emergency department and hospital-based physician services. In 2008, EMSC provided services to 11.4 million patients in nearly 2,100 communities nationwide. EMSC is headquartered in Greenwood Village, Colorado. For additional information visit www.emsc.net.

Forward-Looking Statements

Certain statements and information herein may be deemed to be "forward-looking statements" within the meaning of the Federal Private Securities Litigation Reform Act of 1995. Forward-looking statements may include, but are not limited to, statements relating to our objectives, plans and strategies, and all statements (other than statements of historical facts) that address activities, events or developments that we intend, expect, project, believe or anticipate will or may occur in the future. Any forward-looking statements herein are made as of the date of this press release, and EMSC undertakes no duty to update or revise any such statements. Forward-looking statements are not guarantees of future performance and are subject to risks and uncertainties. Important factors that could cause actual results, developments and business decisions to differ materially from forward-looking statements are described in EMSC's filings with the SEC from time to time, including in the section entitled "Risk Factors" in the Company's most recent Annual Report on Form 10-K and subsequent periodic reports.