Emergency Medical Services Reports 3rd Quarter Diluted EPS Improvement of 24.7%

Emergency Medical Services Corporation (NYSE: EMS) (EMSC or the Company) today announces results for the third quarter ended September 30, 2010.

William A. Sanger, Chairman and Chief Executive Officer, said, "EMSC continued to generate strong revenue and earnings during the quarter. Revenue at both segments benefited from organic and acquisition growth, and diluted EPS increased by 24.7% in spite of unusual employee medical claims in the quarter. We also strengthened our balance sheet during the quarter and now have $346 million in cash to capitalize on market opportunities.”

Results of Operations for the Third Quarter 2010

For the quarter ended September 30, 2010, EMSC generated net revenue of $737.2 million, an increase of 10.8% compared to the same period last year.

EMSC generated net income of $36.8 million, or $0.82 per diluted share for the third quarter of 2010, compared to net income of $28.9 million, or $0.66 per diluted share, in the third quarter of 2009, an increase of $7.9 million and 24.7%, respectively. Adjusted EBITDA was $80.1 million, an increase of 10.8% compared to the same quarter last year. This increase is attributable primarily to the impact of increased volume from net new contracts and acquisitions, increased revenue from existing contracts, continued compensation management and a decrease in operating expenses as a percentage of revenue. Partially offsetting these items, the Company incurred $3.0 million ($0.04 impact to diluted EPS) of increased employee medical claim charges related to four large claims in our self-insured health plans. These charges were recorded primarily at AMR, and are included as a component of compensation and benefit expense. We have historically not seen this severity of large claims. We do not believe this represents a long-term trend, and we have seen a return to normal claim levels since the end of the quarter. Net income was also positively impacted by a reduction in interest expense due to entering into our new credit facility in April 2010.

Cash provided by operating activities was $54.6 million in the third quarter of 2010, compared to $68.9 million for the same quarter last year. Cash paid for income taxes increased $23.5 million as the Company utilized most of its net operating loss carry-forwards in 2009. Days Sales Outstanding (DSO) decreased by one day from the prior quarter. Changes in insurance accruals and other assets and liabilities increased cash $11.2 million and were related to the timing of insurance and interest payments.

Net cash used in investing activities was $20.4 million for the quarter ended September 30, 2010, compared to $8.9 million for the same period in 2009. Insurance collateral funding increased by $10.1 million compared to the third quarter 2009 due to timing differences in insurance funding. Net capital expenditures were $16.2 million in the third quarter of 2010 compared to $13.5 million in the same period last year.

For the quarter ended September 30, 2010, net cash used in financing activities was $1.5 million compared to net cash provided by financing activities of $4.0 million for the third quarter of 2009. At September 30, 2010, there were no amounts outstanding under our revolving credit facility.

Free cash flow was $34.4 million in the third quarter of 2010 compared to $61.2 million in the third quarter of 2009. The difference is attributable primarily to the increase in cash paid for income taxes of $23.5 million and other aforementioned changes in operating and non-acquisition related investing activities.

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.

Results of Operations for the Nine Months Ended September 30, 2010

EMSC net revenue was $2.13 billion for the nine months ended September 30, 2010, an increase of 11.0% compared to the same period last year.

During the second quarter, EMSC incurred charges related to two non-recurring events. In April the Company recorded a $19 million expense for early debt extinguishment in connection with our debt refinancing. The Company also accrued $3.1 million for a tentative settlement regarding a previously disclosed investigation into billing matters during 2001-2005 for certain AMR affiliates in the state of New York ("NY Accrual”). Excluding these items, EMSC generated $2.36 per diluted share for the nine months ended September 30, 2010 compared to $1.89 per diluted share for the same period last year, an increase of 25.0%. Including these items, the Company generated net income of $91.8 million, or $2.06 per diluted share, for the nine months ended September 30, 2010.

Adjusted EBITDA was $236.0 million ($232.9 million including the NY Accrual), an increase of 12.0% compared to the same period last year. This increase is attributable primarily to the impact of increased volume from net new contracts and acquisitions, increased revenue from existing contracts, and a decrease in operating expenses as a percentage of revenue, offset in part by higher compensation and benefit costs.

Cash provided by operating activities was $139.4 million for the nine months ended September 30, 2010, compared to $209.8 million for the same period last year. The decrease in operating cash flows was primarily from an increase of $45.7 million of cash paid for income taxes in 2010, increases in accounts receivable in 2010 and the cash flow benefit related to tax deductions in 2010 from stock-based compensation.

Net cash used in investing activities was $80.8 million for the nine months ended September 30, 2010, compared to $31.7 million for the same period in 2009. The increase in cash flows used in investing activities is related primarily to an increase in acquisition funding in 2010.

For the nine months ended September 30, 2010, net cash used in financing activities was $45.8 million compared to net cash provided by financing activities of $6.8 million for the same period in 2009. The increase in cash used in financing activities is related primarily to our debt refinancing in the second quarter of 2010 including a principal reduction of $25 million.

Free cash flow was $109.7 million in the nine months ended September 30, 2010 compared to $179.5 million for the same period in 2009. The difference is attributable primarily to the aforementioned changes in operating and non-acquisition related investing activities.

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 facility-based physician services segment.

American Medical Response (AMR)

For the quarter ended September 30, 2010, AMR generated net revenue of $352.2 million, an increase of 4.0% compared to the same quarter last year. The increase in net revenue was from an increase in emergency transports and increases in other revenue, offset by a decrease in interfacility transports.

AMR’s Adjusted EBITDA was $31.4 million, a decrease of 1.2% compared to the same quarter last year. The decrease in Adjusted EBITDA is attributable to the negative impact of $2.5 million in increased benefit costs related to higher employee medical claims for the Company’s self-insured health plans and increased fuel costs. Insurance expense for the quarter ended September 30, 2010 included a favorable prior period insurance adjustment of $3.0 million compared to a favorable prior period adjustment of $2.1 million in the same period last year. Income from operations was $19.9 million, an increase of 3.9% compared to the same quarter in 2009.

For the nine months ended September 30, 2010, AMR’s net revenue was $1.03 billion, an increase of 2.2% compared to the same period last year. Adjusted EBITDA was $98.7 million ($95.6 million including the NY Accrual recorded in the second quarter), an increase of 0.6% compared to the same period last year. Income from operations, including the NY Accrual, was $61.1 million, an increase of 2.6% compared to the same period in 2009.

EmCare

For the quarter ended September 30, 2010, EmCare generated net revenue of $385.0 million, an increase of 18.0% compared to the same quarter last year. The increase in revenue is attributable primarily to the addition of 39 net new contracts since June 30, 2009, and revenue increases at existing contracts. Revenue at existing contracts grew 1.4% notwithstanding a 0.9% decline in same store patient encounters. 2009 patient encounters were positively impacted by increased visits related to the H1N1 virus.

Adjusted EBITDA was $48.6 million for the quarter compared to $40.4 million last year, an increase of 20.2%. The increase in Adjusted EBITDA was driven primarily by the net impact of revenue and volume increases from net new contracts in addition to a decrease in operating, insurance and general and administrative expense as a percentage of net revenue. Insurance expense for the quarter ended September 30, 2010 included an unfavorable prior period insurance adjustment of $3.2 million compared to an unfavorable prior period adjustment of $1.3 million in the same period last year. Income from operations was $42.9 million, an increase of 18.2% over the same period in 2009.

For the nine months ended September 30, 2010, EmCare’s net revenue was $1.09 billion, an increase of 20.7% compared to the same period last year. Adjusted EBITDA was $137.3 million, an increase of 21.9% compared to the same period last year. Income from operations was $121.0 million, an increase of 22.0% compared to the same period in 2009.

Guidance

Adjusted EBITDA guidance is being revised to an expected range of $317 million to $322 million from our previously announced range of $321 million to $328 million (excluding the NY Accrual). Diluted 2010 EPS guidance is being revised to an expected range of $3.20 - $3.26 from an expected range of $3.20 - $3.30 (excluding $0.30 of non-recurring charges related to our loss on early debt extinguishment and the NY Accrual). Adjusted EBITDA and Diluted EPS, including the loss on early debt extinguishment and the NY Accrual, are expected to be between $314 million to $319 million and $2.90 - $2.96, respectively. The change in guidance is driven primarily by the increased cost of employee medical claims in Q3 2010.

Conference Call

EMSC management will host a conference call and live audio webcast on Tuesday, November 2, 2010, at 11:00 a.m. EDT, 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 facility-based physician services segment. AMR is the leading provider of ambulance services in the United States. EmCare is a leading provider of physician services to healthcare facilities. In 2009, EMSC provided services in 13.0 million patient encounters in more than 2,200 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. Among the factors that could cause future results to differ materially from those provided in this press release are: the impact on our revenue of changes in transport volume, mix of insured and uninsured patients, and third party reimbursement rates and methods; the adequacy of our insurance coverage and insurance reserves; potential penalties or changes to our operations if we fail to comply with extensive and complex government regulation of our industry; the impact of changes in the healthcare industry; our ability to recruit and retain qualified physicians and other healthcare professionals, and enforce our non-compete agreements with our physicians; our ability to generate cash flow to service our debt obligations; the cost of capital expenditures to maintain and upgrade our vehicle fleet and medical equipment; the loss of one or more members of our senior management team; the outcome of government investigations of certain of our business practices; our ability to successfully restructure our operations to comply with future changes in government regulation; the loss of existing contracts and the accuracy of our assessment of costs under new contracts; the high level of competition in our industry; our ability to maintain or implement complex information systems; our ability to implement our business strategy; our ability to successfully integrate strategic acquisitions; and our ability to comply with the terms of our settlement agreements with the government.

Non-GAAP Financial Measures Description and Reconciliation

This press release includes presentations of Adjusted EBITDA, which 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 on investments, interest expense, and depreciation and amortization. It also includes presentations of free cash flow, which is defined as cash flow from operations adjusted for cash used in non-acquisition related investing activities. Adjusted EBITDA and free cash flow are commonly used by management and investors as performance measures and liquidity indicators. Adjusted EBITDA and free cash flow are not considered measures of financial performance under U.S. generally accepted accounting principles (GAAP), and the items excluded therefrom are significant components in understanding and assessing our financial performance. Adjusted EBITDA and free cash flow should not be considered in isolation or as an alternative to GAAP measures such as net income, cash flows provided by or used in operating, investing or financing activities or other financial statement data presented in our consolidated financial statements as an indicator of financial performance or liquidity. Reconciliations of non-GAAP financial measures are provided in this news release. Reconciliation for the forward-looking Adjusted EBITDA projections presented herein is not being provided due to the number of variables in the projected Adjusted EBITDA range. Since Adjusted EBITDA and free cash flow are not measures determined in accordance with GAAP and are susceptible to varying calculations, these measures, as presented, may not be comparable to other similarly titled measures of other companies.