<i>SBF</i>'s 2006 Contractor Showcase

Implementing ideas for growth and efficiency

Durham School Services
Downers Grove, Ill.

What’s your company’s outlook for the 2005-06 school year?
Our company is looking forward to continued growth and pursuit of efficiencies in 2005-06.

What’s been the most positive aspect of this school year thus far?
Our continued safe performance and retention of qualified professionals at all levels within our organization, as well as the addition of personnel from outside our organization who are giving us a different perspective.

Are school district budgets returning to normal?
If normal means “stretched,” then yes. There’s no question financial resources available to school districts are being reduced while demands are being increased.

How have you managed costs this year? Have you been able to reduce overhead?
We have developed strategic initiatives targeting those areas of cost that are most controllable by us. Additionally, we have worked with our customers to take cost out of their operations, which enables us to reduce our cost as well. Overheads are being controlled but not necessarily reduced.

Have you seen any changes, positive or negative, in the employee labor pool? How are you dealing with driver shortage, if you have any?
The available pool of individuals qualified and willing to work in the school bus industry appears to be dwindling. Stringent qualifications and challenges with people and machines in our industry make it easy for people to look elsewhere for employment. Where driver shortages do exist, we rely upon all available resources, internal and external, to make sure our customers’ needs are met.

How are you being affected by rising fuel costs?
Adversely!

What’s your company’s greatest strength?
The ability and willingness of all our personnel to demonstrate expertise, creativity and flexibility in meeting the needs of our customers and employees.

What’s the greatest single skill you have that makes you qualified for your job?
I am able to identify and surround myself with talented individuals.

Who has had the greatest influence on you with your career?
The superintendent of schools for whom I worked when I was in education and the chief executive for whom I worked during my first year in business.

What’s the last thing you do before leaving the office?
Turn off my computer, walk through the office and say good night to those who are still working.

— Questions answered by John A. Elliott

Fleet Facts
Fleet composition: 9,000+ vehicles
States operating in: 21
Canadian provinces operating in: N/a
Students transported: 800,000
School district contracts: 300+
Company head: John A. Elliott, president and CEO
Website: www.durhamschoolservices.com
Phone number: (800) 950-0485

[PAGEBREAK]

Prioritizing safety and service

Laidlaw Education Services
Naperville, Ill.

What’s your company’s outlook for the 2005-06 school year?
The current school year continues to be very competitive and full of more than the usual challenges. Throughout the industry, most of us are wrestling with the pending 2007 vehicle emission standards and its implications for changes to technology in the vehicles. Additionally, we are facing a tightening labor market, as a result of a stronger economy, and an unpredictable fuel environment.

What’s been the most positive aspect of this school year thus far?
We are pleased with the smooth start-ups we had this year across our business, even the new contracts. We are also realizing benefits from our intense focus on safety.

Are school district budgets returning to normal?
It is impossible to state what is “normal” when we serve a huge range of school districts — large and small, urban, suburban and rural — that face a variety of issues. Like our customers, we face similar challenges, especially with wages and benefits. Under the current financial constraints we acknowledge the difficulty school districts face in being able to properly reward the efforts of their teachers.

How have you managed costs this year? Have you been able to reduce overhead?
We are aggressively working to optimize our scale and control costs by collapsing what were five regional operations into three, consolidating functional responsibilities when appropriate and increasing our use of technology.

Have you seen any changes, positive or negative, in the employee labor pool? How are you dealing with driver shortage, if you have any?
With the strengthening economy and shrinking unemployment levels, we are seeing the impact of a tightening labor pool. In each market, especially those with significant driver shortages, we are focusing on recruitment, driver training and the benefits of working for an organization like Laidlaw.

How are you being affected by rising fuel costs?
Because most contracts have terms of three to five years, rising fuel prices can be problematic. We are offsetting the increasing costs by actively engaging in hedging and advance purchase strategies, minimizing off-route fuel usage and increasing maintenance to ensure the buses are running at optimum performance levels.

What’s your company’s greatest strength?
As the largest school bus contractor in the industry, we have the opportunity to lower operating and support costs through the use of our scale. While price is key to our customers, we are mindful that safety and service remain the priority of the more than 2 million students we transport each day.

What’s the greatest single skill you have that makes you qualified for your job?
I am ever mindful that it takes a strong team to win.

— Questions answered by Kevin Benson

Fleet Facts
Fleet composition: 41,000 school buses
States operating in: 36
Canadian provinces operating in: 6
Students transported: Approximately 2 million
School district contracts: 1,000
Company head: Kevin Benson, president and CEO
Website: www.laidlawschoolbus.com
Phone number: (630) 848-3000 

[PAGEBREAK]

Pursuing opportunity and safety excellence

Student Transportation of America
Wall, N.J.

What’s your company’s outlook for the 2005-06 school year?
Student Transportation of America (STA) expects 2005-06 to be another year of opportunity for us. Our growth during the 2005-06 school year has already met our expectations, and we see many more exciting opportunities ahead.

What’s been the most positive aspect of this school year thus far?
Unparalleled focus on safety. At the heart of our business is the safety of our passengers and our employees.

Are school district budgets returning to normal?
Yes, specific to school transportation needs. Budgets and priorities for school transportation have been a major presence for districts this school year.

How have you managed costs this year? Have you been able to reduce overhead?
Yes, even though fuel continues to be higher as a percentage of revenue compared to last year. We anticipate that will continue for the balance of this school year. However, we have been able to contain other costs to reduce the impact of fuel on our results. Recently we renewed our annual general liability insurance and workers’ compensation programs and have reduced annualized costs due to our positive safety performance.

Have you seen any changes, positive or negative, in the employee labor pool? How are you dealing with driver shortage, if you have any?
STA historically has a low staff turnover for drivers and monitors. This ensures consistent dependability and experience on the road. It does vary geographically, and it is always a full-time job recruiting and training drivers.

How are you being affected by rising fuel costs?
As stated above, fuel continues to be higher compared to last year, and STA has begun to review all current and future contracts with close scrutiny with regards to fuel escalators, caps and creative fuel-purchasing programs. In addition, the rising fuel costs have brought to the forefront the exploration of alternative fuels and the changing circumstances with engine innovations.

What’s your company’s greatest strength?
No question — our drivers and staff along with our top-flight management team with over 200 years of experience in the school transportation industry.

What’s the greatest single skill you have that makes you qualified for your job?
This is the business my family has been in ever since my great grandfather, a school janitor, reconfigured his truck to take the kids home from school one afternoon. I have been in this industry my entire life and have had every job there is to do. It is a public trust that I take most seriously every day.

Who has had the greatest influence on you with your career?
Without a doubt my father, Thomas Gallagher, from whom I learned the first three letters of the word b-u-s-iness.

What’s the last thing you do before leaving the office?
Give thanks for a safe day traveled by all of our drivers and children.

— Questions answered by Denis J. Gallagher

Fleet Facts
Fleet composition: 3,500 buses
States operating in: 10
Canadian provinces operating in: 1
Students transported: 300,000
School district contracts: N/a
Company head: Denis J. Gallagher, CEO
Website: www.ridesta.com
Phone number: (888) 942-2250