company listed on both the New York Stock Exchange (LDW) and
Montreal and Toronto exchanges (LDM).
L1 KEY LINES OF BUSINESS
management services. School bus and public transportation.
Ambulance services and hospital emergency room management. Retains
a substantial interest in Laidlaw Environmental Services, a
hazardous waste and trash disposal firm.
L2 OFFICERS AND DIRECTORS
Peter N. T. Widdrington* (Chairman), James R. Bullock* (President
and CEO), Leslie W. Haworth* (Vice-President and CFO), John R.
Grainger* (Executive Vice-President and COO of Laidlaw Transit),
Ivan R. Cairns* (Senior Vice-President and General Counsel),
George B. DeHuff (CEO of American Medical Response), Kenneth W.
Winger (CEO of Laidlaw Environmental Services), Jeffery Cassell
(Vice-President, Risk Management), Thomas A. G. Watson
(Vice-President, Communications), William R. Cottick (Associate
General Counsel), Debbie Block (Manager, Human Resources).
Asterisk indicates that individual is also on the firm's board of
William P. Cooper (President and CEO, Cooper Corporation), Jack P.
Edwards (President and CEO, Danzas Corporation), William A.
Farlinger (Chairman, Ontario Hydro), Donald M. Green (Chairman,
ACD Tridon Inc.), Martha O. Hesse (President, Hesse Gas Company),
Gordon R. Ritchie (CEO, Strategico Inc.), Stella M. Thompson
(President, Governance West Inc.).
C1 MULTI-YEAR STOCK AND EPS TRENDS
year ending in August)
C2/C3 DIRECTOR/MANAGEMENT OWNERSHIP AND FIVE
Own less than 1% of outstanding equity.
Shareholders: No individuals. Canadian Pacific owns 17% of the
C4 BUSINESS SEGMENT REVENUES
figures for year ending August 31)
T1 KEY OPERATING DATA
79,500 1-year employee growth: 20.6%
expenditures and other investing
margin (5-year ave)
profit margin (5-year ave)
on assets (TTM)
|Return of assets (5-year ave)
on investment (TTM)
of investment (5-year ave.)
on equity (TTM)
of equity (5-year ave)
= trailing twelve month)
T2 KEY CAPITAL STRUCTURE DATA
capitalization (millions of $): 3,008.37
debt and capital leases
debt to equity (%) :
a small, Ontario-based trucking firm, Laidlaw was acquired in 1959
by Belgian entrepreneur Michael DeGroote for $300,000. DeGroote
employed an aggressive acquisitions strategy over the next two
decades to transform the company into a multifaceted
transportation services firm. Though the firm remained based in
Canada, most of its business is now in the United States. DeGroote
took Laidlaw public in 1969, and in 1988 sold out his interests in
the firm to Canadian Pacific for $500 million. By this point,
Laidlaw had wide-ranging interests in solid waste disposal, the
school bus industry, public transit, and chemical and hazardous
waste management. In the 1990s, Laidlaw has been transformed yet
again by current CEO James Bullock, who has continued to use
aggressive acquisitions and major divestitures to refocus the
company less on waste management, which failed to provide
consistent earnings growth, and more on bus transportation (school
and municipal), ambulance services, and emergency room management.
The continuing sale of businesses in the stagnant waste services
industry has generated significant cash reserves. In 1997, that
allowed Laidlaw to acquire 10 separate businesses for $1.9
billion, including American Medical Response, the largest private
U.S. ambulance service, and EmCare, the largest private operator
of U.S. hospital emergency rooms. By October 1988, when it
proposed acquisition of Greyhound Lines Inc. for $470 million,
Laidlaw was already the largest North American provider of
ambulances, municipal transportation fleets, and school bus
In many of
its U.S. and Canadian acquisitions, Laidlaw has employed a
low-cost financing scheme which involves the use of a Laidlaw
subsidiary based in a European tax haven. (Perhaps half of the
Canadian companies that have U.S. subsidiaries have employed the
same device; many European firms have as well, though to a lesser
extent.) The IRS argues that this arrangement exceeded acceptable
norms for deductible lending, and that Laidlaw took unjustifiable
tax breaks. Laidlaw contests the claim. CEO Bullock estimates that
if the IRS's view prevails in Tax Court, the company might easily
owe as much as $500 million in additional U.S. taxes. Investor
uncertainty over this issue has driven Laidlaw's stock price down
by nearly 40% in the past year.
KEY FACTS ABOUT THE COMPANY
Provides school bus transportation for 1,940,000 students per
day. Has more than 25% of the market for privately-run school
buses. Nearly 80% of the firm's school bus revenues are
generated in the U.S.
bus services to 205 municipal transit systems in 45 states
(including Los Angeles, Chicago and Seattle).
operations include fixed-rate transit, daily scheduled services,
parcel express, and private tour packages. Also the largest
operator of "paratransit" services to elderly and
physically and mentally-handicapped passengers in the U.S.
second largest provider of health care transportation services
in the U.S., operating from 71 locations in 23 states. Provides
service to more than 5 million people annually. Healthcare
transportation services include emergency ambulance operations,
emergency response services, and nonemergency medical transport.
About half of U.S. ambulance operations are privately-run. In
1997, Laidlaw had about 15% of that market. Of the approximately
5200 emergency hospital rooms in the U.S., only about 20% are
privately managed. Laidlaw is already the leading private
operator in this market.
Privatization of public services (school bus and ambulance
operations) has been a principal source of Laidlaw's revenue
growth over the past five years, though it has often come
through the acquisition of firms that had existing public
contracts -- such as Mayflower Contract Services, which operated
more than 7500 school buses in the Midwest.
Continuing interests in solid waste include operations in 26
states and 7 Canadian provinces. Owns 35% of Safety-Kleen, a
hazardous and industrial waste management firm. Laidlaw has been
attempting to abandon simple trash hauling, a low margin
business, in favor of integrated waste operations in which the
firm additionally controls the dump or recycling process.
of $5 billion in annual revenues by 2000. Operating earnings
growth continues in excess of 20% per annum.
Relatively poor financial performance and depressed equity
values are attributable in part to the debt overload that has
resulted from the company's policy of continuing acquisitions,
restructuring charges, currency exchange losses, and the
uncertainty over the ultimate disposition of the company's
dispute with the IRS over interest deductions, which has led the
company to build up a cash reserve in excess of $200 million.
early growth in the school bus market was achieved primarily
through acquisitions of existing companies. More recently, it has
shifted its focus to the conversion of existing public systems to
private ownership. Much of Laidlaw's recent growth is the result
of the determination of local school boards to save money by
privatizing bus operations. The company argues that it can reduce
bus transportation costs by 10-20% through a combination of lower
wages and efficiencies gained through size (lower costs for
replacement parts, say, or cheaper insurance rates). Laidlaw's
size permits it to maintain relatively newer buses than many
public systems can afford, and the company claims that it enjoys a
better safety record (measured in the form of accidents per
100,000 miles) than a typical public school system.
Profile was prepared by the Center for Economic Organizing,
Washington, DC, for the National Education Association Educational
Support Personnel Information System (ESPIS). ESPIS is a
collaborative project of NEA Affiliate Capacity Building and NEA