Documents filed as part of the report:
|
1.
|
Financial Statements included in Item 8 of this report:
|
Reports of Independent Registered Public Accounting Firm
Consolidated Balance Sheets, December 31, 2012 and 2011
Consolidated Statements of Income for the years ended December 31, 2012, 2011, and 2010
Consolidated Statements of Stockholders' Equity for the years ended December 31, 2012, 2011, and 2010
Consolidated Statements of Cash Flows for the years ended December 31, 2012, 2011, and 2010
Notes to Consolidated Financial Statements
|
2.
|
Financial Statement Schedules included in Item 8 of this report:
|
Schedule II – Valuation and Qualifying Accounts for the years ended December 31, 2012, 2011, and 2010
All other supporting schedules have been omitted because the information required is included in the financial statements or notes thereto or have been omitted as not applicable or not required.
|
Number
|
Description of Exhibits
|
|
3.1
|
Certificate of Incorporation
1
|
|
3.2
|
Amendments to Certificate of Incorporation
2
|
|
3.3
|
Amendment to Certificate of Incorporation, effective June 18, 2010
3
|
|
3.4
|
Amendment to Certificate of Incorporation, effective December 14, 2012
4
|
|
3.6
|
First Amended and Restated Bylaws of Air Methods Corporation
6
|
|
4.1
|
Specimen Stock Certificate
7
|
|
10.1
|
Second Amended and Restated 2006 Equity Compensation Plan
8
|
|
10.2
|
Form of Restricted Stock Grant Agreement
9
|
|
10.3
|
Form of Non-Qualified Stock Option Agreement
10
|
|
10.4
|
Form of Incentive Stock Option Agreement
10
|
|
10.5
|
Amended and Restated Employment Agreement between the Company and Aaron D. Todd, dated September 24, 2012
11
|
|
10.6
|
Amended and Restated Employment Agreement between the Company and Michael D. Allen, dated September 24, 2012
11
|
|
10.7
|
Amended and Restated Employment Agreement between the Company and Trent J. Carman, dated September 24, 2012
11
|
|
10.8
|
Amended and Restated Employment Agreement between the Company and Sharon J. Keck, dated September 24, 2012
11
|
|
10.9
|
Amended and Restated Employment Agreement between the Company and Edward T. Rupert, dated September 24, 2012
11
|
|
10.10
|
Amended and Restated
Revolving Credit, Term Loan and Security Agreement, dated as of July 5, 2011, among Air Methods Corporation and certain of its subsidiaries
,
certain lender parties named therein, KeyBank National Association, as Administrative Agent for the lenders, Lead Arranger and Sole Book Runner, PNC Bank, National Association, as Joint Lead Arranger and Documentation Agent, BBVA Compass Bank, as Joint Lead Arranger and Co-Syndication Agent, and Bank of America, N.A., as Joint Lead Arranger and Co-Syndication Agent.
12
|
|
10.11
|
Joinder and Amendment No. 1 to Amended and Restated Revolving Credit, Term Loan and Security Agreement, dated August 1, 2011, among
Air Methods Corporation and certain of its subsidiaries
, certain lender parties named therein, KeyBank National Association, as Administrative Agent for the lenders, Lead Arranger and Sole Book Runner, PNC Bank, National Association, as Joint Lead Arranger and Documentation Agent, BBVA Compass Bank, as Joint Lead Arranger and Co-Syndication Agent, and Bank of America, N.A., as Joint Lead Arranger and Co-Syndication Agent.
13
|
|
10.12
|
Amendment No. 2 to Amended and Restated Revolving Credit, Term Loan and Security Agreement, dated December 14, 2012, among Air Methods Corporation, certain of its subsidiaries, certain lender parties named therein, KeyBank National Association, as Administrative Agent for the lenders, Lead Arranger and Sole Book Runner, PNC Bank, National Association, as Joint Lead Arranger and Documentation Agent, BBVA Compass Bank, as Joint Lead Arranger and Co-Syndication Agent, and Bank of America, N.A., as Joint Lead Arranger and Co-Syndication Agent.
4
|
|
10.13
|
Joinder to Amended and Restated Revolving Credit, Term Loan and Security Agreement, and Second Amendment to Pledge Agreement, dated December 31, 2012, among Air Methods Corporation, certain of its subsidiaries, certain lender parties named therein, KeyBank National Association, as Administrative Agent for the lenders, Lead Arranger and Sole Book Runner, PNC Bank, National Association, as Joint Lead Arranger and Documentation Agent, BBVA Compass Bank, as Joint Lead Arranger and Co-Syndication Agent, and Bank of America, N.A., as Joint Lead Arranger and Co-Syndication Agent.
14
|
|
10.14
|
Air Methods Corporation Economic Value Added Plan, adopted February 5, 2009
15
|
|
10.15
|
Air Methods Corporation Performance Pay Plan, adopted by the Company’s Board of Directors on September 30, 2011, as approved by the Company’s stockholders at the 2012 Annual Meeting
16
|
|
10.16
|
2011-2014 Bonus Program adopted by the Company’s Board of Directors on September 30, 2011, as approved by the Company’s stockholders at Company’s 2012 Annual Meeting
16
|
|
10.17
|
Air Methods Corporation 2012-2014 Bonus Program, adopted September 25, 2012
11
|
|
10.18
|
Agreement and Plan of Merger by and among Air Methods Corporation; Air Methods Acquisition Sub, Inc.; OF Air Holdings Corporation; and Wind Point Partners V, L.P., dated June 1, 2011
17
|
|
|
Stock Purchase Agreement by and among Air Methods Corporation, Sundance Helicopters, Inc., the sellers listed on Exhibit A thereto and for purposes of Article IX, the guarantors party thereto, dated December 20, 2012.
|
|
10.20
|
Collective Bargaining Agreement by and between the Office and Professional Employees International Union, Local 109, and Air Methods Corporation, effective December 15, 2011
18
|
|
|
Subsidiaries of Registrant
|
|
|
Chief Executive Officer Certification adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
|
|
|
Chief Financial Officer Certification adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
|
|
|
Certification adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
|
|
101.INS
|
XBRL Instance Document
|
|
101.SCH
|
XBRL Taxonomy Extension Schema Document
|
|
101.CAL
|
XBRL Taxonomy Extension Calculation Linkbase Document
|
|
101.DEF
|
XBRL Taxonomy Extension Definition Linkbase Document
|
|
101.LAB
|
XBRL Taxonomy Extension Label Linkbase Document
|
|
101.PRE
|
XBRL Taxonomy Extension Presentation Linkbase Document
|
1
|
Filed as an exhibit to the Company’s Registration Statement on Form S-1 (Registration No. 33-15007), as declared effective on August 27, 1987, and incorporated herein by reference.
|
2
|
Filed as an exhibit to the Company's Annual Report on Form 10-K for the fiscal year ended June 30, 1992, and incorporated herein by reference.
|
3
|
Filed as an exhibit to the Company's Current Report on Form 8-K dated June 14, 2010, and incorporated herein by reference.
|
4
|
Filed as an exhibit to the Company's Current Report on Form 8-K dated December 17, 2012, and incorporated herein by reference.
|
5
|
Filed as an exhibit to the Company’s Current Report on Form 8-K dated June 20, 2006, and incorporated herein by reference.
|
6
|
Filed as an exhibit to the Company’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2012, and incorporated herein by reference.
|
7
|
Filed as an exhibit to the Company's Annual Report on Form 10-K for the fiscal year ended June 30, 1992, and incorporated herein by reference.
|
8
|
Filed as an exhibit to the Company’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2006, and incorporated herein by reference.
|
9
|
Filed as an exhibit to the Company's Annual Report on Form 10-K for the year ended December 31, 2008, and incorporated herein by reference.
|
10
|
Filed as an exhibit to the Company's Annual Report on Form 10-K for the fiscal year ended December 31, 2011, and incorporated herein by reference.
|
11
|
Filed as an exhibit to the Company's Current Report on Form 8-K dated September 28, 2012, and incorporated herein by reference.
|
12
|
Filed as an exhibit to the Company’s Current Report on Form 8-K dated July 6, 2011, and incorporated herein by reference.
|
13
|
Filed as an exhibit to the Company's Current Report on Form 8-K dated August 4, 2011, and incorporated herein by reference.
|
14
|
Filed as an exhibit to the Company's Current Report on Form 8-K dated December 31, 2012, and incorporated herein by reference.
|
15
|
Filed as an exhibit to the Company's Current Report on Form 8-K dated February 5, 2009, and incorporated herein by reference.
|
16
|
Filed as an exhibit to the Company's Current Report on Form 8-K dated September 28, 2012, and incorporated herein by reference.
|
17
|
Filed as an exhibit to the Company’s Current Report on Form 8-K dated June 2, 2011, and incorporated herein by reference.
|
18
|
Filed as an exhibit to the Company’s Current Report on Form 8-K dated December 21, 2011, and incorporated herein by reference.
|
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
|
|
|
|
AIR METHODS CORPORATION
|
|
|
|
|
|
|
|
|
|
|
Date:
|
March 1, 2013
|
|
By:
|
/s/ Aaron D. Todd
|
|
|
|
|
Aaron D. Todd
|
|
|
|
|
Chief Executive Officer
|
Pursuant to the requirements of the Securities Act of 1934, this report has been signed below by the following persons on behalf of the registrant in the capacities and on the date indicated.
/s/ Aaron D. Todd
|
|
Chief Executive Officer and Director
|
March 1, 2013
|
Aaron D. Todd
|
|
|
|
|
|
|
|
/s/ Trent J. Carman
|
|
Chief Financial Officer
|
March 1, 2013
|
Trent J. Carman
|
|
Secretary and Treasurer
|
|
|
|
|
|
/s/ Sharon J. Keck
|
|
Chief Accounting Officer
|
March 1, 2013
|
Sharon J. Keck
|
|
|
|
|
|
|
|
/s/ C. David Kikumoto
|
|
Chairman of the Board
|
March 1, 2013
|
C. David Kikumoto
|
|
|
|
|
|
|
|
/s/ George W. Belsey
|
|
Director
|
March 1, 2013
|
George W. Belsey
|
|
|
|
|
|
|
|
/s/ Ralph J. Bernstein
|
|
Director
|
March 1, 2013
|
Ralph J. Bernstein
|
|
|
|
|
|
|
|
/s/ Mark D. Carleton
|
|
Director
|
March 1, 2013
|
Mark D. Carleton
|
|
|
|
|
|
|
|
/s/ John J. Connolly
|
|
Director
|
March 1, 2013
|
John J. Connolly
|
|
|
|
|
|
|
|
/s/ Jeffrey A. Dorsey
|
|
Director
|
March 1, 2013
|
Jeffrey A. Dorsey
|
|
|
|
|
|
|
|
/s/ Carl H. McNair, Jr.
|
|
Director
|
March 1, 2013
|
Carl H. McNair, Jr.
|
|
|
|
|
|
|
|
/s/ Lowell D. Miller, Ph.D.
|
|
Director
|
March 1, 2013
|
Lowell D. Miller, Ph.D.
|
|
|
|
|
|
|
|
/s/ Morad Tahbaz
|
|
Director
|
March 1, 2013
|
Morad Tahbaz
|
|
|
|
AIR METHODS CORPORATION
AND SUBSIDIARIES
Table of Contents
Independent Registered Public Accounting Firm’s Reports
|
F-1
|
|
|
Consolidated Financial Statements
|
|
|
|
Consolidated Balance Sheets
,
|
|
December 31, 2012 and 2011
|
F-3
|
|
|
Consolidated Statements of Income
,
|
|
Years Ended December 31, 2012, 2011, and 2010
|
F-5
|
|
|
Consolidated Statements of Stockholders' Equity
,
|
|
Years Ended December 31, 2012, 2011, and 2010
|
F-6
|
|
|
Consolidated Statements of Cash Flows
,
|
|
Years Ended December 31, 2012, 2011, and 2010
|
F-7
|
|
|
Notes to Consolidated Financial Statements
,
|
|
December 31, 2012 and 2011
|
F-9
|
|
|
Schedules
|
|
|
|
II – Valuation and Qualifying Accounts
|
|
Years Ended December 31, 2012, 2011, and 2010
|
F-32
|
All other supporting schedules are omitted because they are inapplicable, not required, or the information is presented in the consolidated financial statements or notes thereto.
Report of Independent Registered Public Accounting Firm
The Board of Directors and Stockholders
Air Methods Corporation:
We have audited the accompanying consolidated balance sheets of Air Methods Corporation and subsidiaries (the Company) as of December 31, 2012 and 2011, and the related consolidated statements of income, stockholders’ equity, and cash flows for each of the years in the three-year period ended December 31, 2012. In connection with our audits of the consolidated financial statements, we also have audited financial statement Schedule II – Valuation and Qualifying Accounts. These consolidated financial statements and financial statement schedule are the responsibility of the Company’s management. Our responsibility is to express an opinion on these consolidated financial statements and financial statement schedule based on our audits.
We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of Air Methods Corporation and subsidiaries as of December 31, 2012 and 2011, and the results of their operations and their cash flows for each of the years in the three-year period ended December 31, 2012, in conformity with U.S. generally accepted accounting principles. Also in our opinion, the related financial statement schedule, when considered in relation to the basic consolidated financial statements taken as a whole, presents fairly, in all material respects, the information set forth therein.
We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States), Air Methods Corporation’s internal control over financial reporting as of December 31, 2012, based on criteria established in
Internal Control – Integrated Framework
issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO), and our report dated March 1, 2013 expressed an unqualified opinion on the effectiveness of the Company’s internal control over financial reporting.
/s/ KPMG LLP
Denver, Colorado
March 1, 2013
Report of Independent Registered Public Accounting Firm
The Board of Directors and Stockholders
Air Methods Corporation:
We have audited Air Methods Corporation and subsidiaries’ (the Company) internal control over financial reporting as of December 31, 2012, based on criteria established in
Internal Control – Integrated Framework
issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). The Company’s management is responsible for maintaining effective internal control over financial reporting and for its assessment of the effectiveness of internal control over financial reporting, included in the accompanying
Management’s Report on Internal Control Over Financial Reporting.
Our responsibility is to express an opinion on the Company’s internal control over financial reporting based on our audit.
We conducted our audit in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether effective internal control over financial reporting was maintained in all material respects. Our audit included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. Our audit also included performing such other procedures as we considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinion.
A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company’s internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.
Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.
In our opinion, Air Methods Corporation and subsidiaries maintained, in all material respects, effective internal control over financial reporting as of December 31, 2012, based on criteria established in
Internal Control – Integrated Framework
issued by the Committee of Sponsoring Organizations of the Treadway Commission.
The Company acquired all of the outstanding common stock of Sundance Helicopters, Inc. and all of the aircraft owned by two affiliated entities of Sundance Helicopters, Inc. (collectively referred to as Sundance), during 2012, and management excluded from its assessment of the effectiveness of the Company’s internal control over financial reporting as of December 31, 2012, Sundance’s internal control over financial reporting associated with total assets of $53.5 million included in the consolidated financial statements of the Company as of and for the year ended December 31, 2012. Our audit of internal control over financial reporting of the Company also excluded an evaluation of the internal control over financial reporting of Sundance.
We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States), the consolidated balance sheets of Air Methods Corporation and subsidiaries as of December 31, 2012 and 2011, and the related consolidated statements of income, stockholders’ equity, and cash flows for each of the years in the three-year period ended December 31, 2012, and our report dated March 1, 2013 expressed an unqualified opinion on those consolidated financial statements.
/s/ KPMG LLP
Denver, Colorado
March 1, 2013
AIR METHODS CORPORATION
AND SUBSIDIARIES
Consolidated Balance Sheets
December 31, 2012 and 2011
(Amounts in thousands, except share and per share amounts)
|
|
2012
|
|
|
2011
|
|
Assets
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Current assets:
|
|
|
|
|
|
|
Cash and cash equivalents
|
|
$
|
3,818
|
|
|
|
3,562
|
|
Current installments of notes receivable
|
|
|
4
|
|
|
|
687
|
|
Receivables:
|
|
|
|
|
|
|
|
|
Trade, net (note 4 and 7)
|
|
|
232,929
|
|
|
|
187,056
|
|
Refundable income taxes
|
|
|
3,944
|
|
|
|
1,808
|
|
Other
|
|
|
2,838
|
|
|
|
1,924
|
|
|
|
|
239,711
|
|
|
|
190,788
|
|
|
|
|
|
|
|
|
|
|
Inventories (note 7)
|
|
|
40,789
|
|
|
|
33,089
|
|
Work-in-process on medical interiors and products contracts
|
|
|
2,335
|
|
|
|
1,369
|
|
Assets held for sale
|
|
|
9,290
|
|
|
|
2,807
|
|
Costs and estimated earnings in excess of billings on uncompleted contracts (note 5)
|
|
|
585
|
|
|
|
1,854
|
|
Refundable deposits
|
|
|
2,149
|
|
|
|
14,146
|
|
Prepaid expenses and other current assets (note 6)
|
|
|
8,124
|
|
|
|
7,417
|
|
|
|
|
|
|
|
|
|
|
Total current assets
|
|
|
306,805
|
|
|
|
255,719
|
|
|
|
|
|
|
|
|
|
|
Property and equipment (notes 7 and 8):
|
|
|
|
|
|
|
|
|
Land
|
|
|
251
|
|
|
|
251
|
|
Flight and ground support equipment
|
|
|
417,303
|
|
|
|
343,069
|
|
Aircraft under capital leases
|
|
|
343,079
|
|
|
|
408,985
|
|
Aircraft rotable spare parts
|
|
|
54,176
|
|
|
|
44,020
|
|
Buildings and office equipment
|
|
|
44,785
|
|
|
|
41,824
|
|
|
|
|
859,594
|
|
|
|
838,149
|
|
Less accumulated depreciation and amortization
|
|
|
(262,356
|
)
|
|
|
(268,571
|
)
|
|
|
|
|
|
|
|
|
|
Net property and equipment
|
|
|
597,238
|
|
|
|
569,578
|
|
|
|
|
|
|
|
|
|
|
Goodwill (notes 2 and 3)
|
|
|
120,029
|
|
|
|
115,117
|
|
Notes and other receivables, less current installments
|
|
|
113
|
|
|
|
117
|
|
Intangible assets, net of accumulated amortization of $8,019 and $4,374 at December 31, 2012 and 2011, respectively (note 2)
|
|
|
66,817
|
|
|
|
64,752
|
|
Other assets
|
|
|
27,861
|
|
|
|
23,188
|
|
|
|
|
|
|
|
|
|
|
Total assets
|
|
$
|
1,118,863
|
|
|
|
1,028,471
|
|
(Continued)
AIR METHODS CORPORATION
AND SUBSIDIARIES
Consolidated Balance Sheets, Continued
December 31, 2012 and 2011
(Amounts in thousands, except share and per share amounts)
|
|
2012
|
|
|
2011
|
|
Liabilities and Stockholders' Equity
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Current liabilities:
|
|
|
|
|
|
|
Notes payable
|
|
$
|
3,570
|
|
|
|
27,940
|
|
Current installments of long-term debt (note 6 and 7)
|
|
|
23,796
|
|
|
|
18,889
|
|
Current installments of obligations under capital leases (note 8)
|
|
|
39,343
|
|
|
|
49,100
|
|
Accounts payable
|
|
|
15,847
|
|
|
|
15,890
|
|
Deferred revenue
|
|
|
4,506
|
|
|
|
4,493
|
|
Billings in excess of costs and estimated earnings on uncompleted contracts (note 5)
|
|
|
392
|
|
|
|
2,726
|
|
Accrued wages and compensated absences
|
|
|
21,614
|
|
|
|
20,267
|
|
Due to third party payers
|
|
|
6,426
|
|
|
|
5,604
|
|
Deferred income taxes (note 13)
|
|
|
11,797
|
|
|
|
7,654
|
|
Other accrued liabilities
|
|
|
16,161
|
|
|
|
18,145
|
|
|
|
|
|
|
|
|
|
|
Total current liabilities
|
|
|
143,452
|
|
|
|
170,708
|
|
|
|
|
|
|
|
|
|
|
Long-term debt, less current installments (note 6 and 7)
|
|
|
380,682
|
|
|
|
243,678
|
|
Obligations under capital leases, less current installments (note 8)
|
|
|
200,337
|
|
|
|
240,208
|
|
Deferred income taxes (note 13)
|
|
|
61,684
|
|
|
|
49,966
|
|
Other liabilities (note 8)
|
|
|
33,098
|
|
|
|
36,009
|
|
|
|
|
|
|
|
|
|
|
Total liabilities
|
|
|
819,253
|
|
|
|
740,569
|
|
|
|
|
|
|
|
|
|
|
Stockholders’ equity (notes 9 and 10):
|
|
|
|
|
|
|
|
|
Preferred stock, $1 par value. Authorized 15,000,000 shares,
|
|
|
|
|
|
|
|
|
none issued
|
|
|
--
|
|
|
|
--
|
|
Common stock, $.06 par value. Authorized 70,500,000 shares; issued 38,967,105 and 38,398,680 shares at December 31, 2012 and 2011, respectively; outstanding 38,761,462 and 38,218,680 shares at December 31, 2012 and 2011, respectively
|
|
|
2,324
|
|
|
|
764
|
|
Additional paid-in capital
|
|
|
104,585
|
|
|
|
95,960
|
|
Retained earnings
|
|
|
192,701
|
|
|
|
191,178
|
|
|
|
|
|
|
|
|
|
|
Total stockholders' equity
|
|
|
299,610
|
|
|
|
287,902
|
|
Commitments and contingencies (notes 7, 8, 14, and 15)
|
|
|
|
|
|
|
|
|
Total liabilities and stockholders' equity
|
|
$
|
1,118,863
|
|
|
|
1,028,471
|
|
See accompanying notes to consolidated financial statements
.
Consolidated Statements of Income
Years Ended December 31, 2012, 2011, and 2010
(Amounts in thousands, except share and per share amounts)
|
|
Year Ended December 31
|
|
|
|
2012
|
|
|
2011
|
|
|
2010
|
|
Revenue:
|
|
|
|
|
|
|
|
|
|
Patient transport revenue, net of provision for contractual discounts (note 4)
|
|
$
|
910,939
|
|
|
|
625,182
|
|
|
|
484,022
|
|
Provision for uncompensated care (note 4)
|
|
|
(320,221
|
)
|
|
|
(208,888
|
)
|
|
|
(154,171
|
)
|
Patient transport revenue, net
|
|
|
590,718
|
|
|
|
416,294
|
|
|
|
329,851
|
|
Air medical services contract revenue (note 12)
|
|
|
224,956
|
|
|
|
206,935
|
|
|
|
204,001
|
|
Medical interiors and products revenue
|
|
|
28,832
|
|
|
|
30,462
|
|
|
|
22,447
|
|
Other
|
|
|
6,306
|
|
|
|
6,858
|
|
|
|
5,703
|
|
|
|
|
850,812
|
|
|
|
660,549
|
|
|
|
562,002
|
|
Operating expenses:
|
|
|
|
|
|
|
|
|
|
|
|
|
Flight centers
|
|
|
322,168
|
|
|
|
260,363
|
|
|
|
216,092
|
|
Aircraft operations (note 6)
|
|
|
151,200
|
|
|
|
125,892
|
|
|
|
114,109
|
|
Cost of medical interiors and products sold
|
|
|
21,236
|
|
|
|
21,800
|
|
|
|
15,776
|
|
Depreciation and amortization
|
|
|
82,524
|
|
|
|
72,877
|
|
|
|
63,636
|
|
Loss (gain) on disposition of assets, net
|
|
|
1,329
|
|
|
|
644
|
|
|
|
(35
|
)
|
General and administrative
|
|
|
102,023
|
|
|
|
85,500
|
|
|
|
69,226
|
|
|
|
|
680,480
|
|
|
|
567,076
|
|
|
|
478,804
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating income
|
|
|
170,332
|
|
|
|
93,473
|
|
|
|
83,198
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other income (expense):
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest expense
|
|
|
(20,651
|
)
|
|
|
(20,072
|
)
|
|
|
(19,176
|
)
|
Other, net
|
|
|
3,263
|
|
|
|
3,901
|
|
|
|
3,934
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income before income taxes
|
|
|
152,944
|
|
|
|
77,302
|
|
|
|
67,956
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income tax expense (note 13)
|
|
|
(59,792
|
)
|
|
|
(30,728
|
)
|
|
|
(25,199
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income
|
|
$
|
93,152
|
|
|
|
46,574
|
|
|
|
42,757
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income per common share (note 9):
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
|
$
|
2.41
|
|
|
|
1.23
|
|
|
|
1.14
|
|
Diluted
|
|
$
|
2.39
|
|
|
|
1.21
|
|
|
|
1.13
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average number of common shares outstanding:
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
|
|
38,594,286
|
|
|
|
37,999,422
|
|
|
|
37,489,539
|
|
Diluted
|
|
|
39,044,468
|
|
|
|
38,482,785
|
|
|
|
37,789,242
|
|
See accompanying notes to consolidated financial statements.
AIR METHODS CORPORATION
AND SUBSIDIARIES
Consolidated Statements of Stockholders' Equity
Years Ended December 31, 2012, 2011, and 2010
(Amounts in thousands, except share amounts)
|
|
Common Stock
|
|
|
Additional Paid-in
|
|
|
Retained
|
|
|
Total Stock-
holders’
|
|
|
|
Shares
|
|
|
Amount
|
|
|
Capital
|
|
|
Earnings
|
|
|
Equity
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balances at January 1, 2010
|
|
|
37,402,161
|
|
|
$
|
748
|
|
|
|
82,978
|
|
|
|
101,847
|
|
|
|
185,573
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Issuance of common shares for options
|
|
|
407,331
|
|
|
|
8
|
|
|
|
3,018
|
|
|
|
--
|
|
|
|
3,026
|
|
Tax benefit from exercise of stock options
|
|
|
--
|
|
|
|
--
|
|
|
|
561
|
|
|
|
--
|
|
|
|
561
|
|
Stock-based compensation (note 10)
|
|
|
--
|
|
|
|
--
|
|
|
|
1,512
|
|
|
|
--
|
|
|
|
1,512
|
|
Forfeiture of unvested restricted shares
|
|
|
(3,000
|
)
|
|
|
--
|
|
|
|
--
|
|
|
|
--
|
|
|
|
--
|
|
Net income
|
|
|
--
|
|
|
|
--
|
|
|
|
--
|
|
|
|
42,757
|
|
|
|
42,757
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balances at December 31, 2010
|
|
|
37,806,492
|
|
|
|
756
|
|
|
|
88,069
|
|
|
|
144,604
|
|
|
|
233,429
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Issuance of common shares for options
|
|
|
406,188
|
|
|
|
8
|
|
|
|
3,678
|
|
|
|
--
|
|
|
|
3,686
|
|
Tax benefit from exercise of stock options
|
|
|
--
|
|
|
|
--
|
|
|
|
1,324
|
|
|
|
--
|
|
|
|
1,324
|
|
Stock-based compensation (note 10)
|
|
|
6,000
|
|
|
|
--
|
|
|
|
2,889
|
|
|
|
--
|
|
|
|
2,889
|
|
Unvested restricted stock grants
|
|
|
180,000
|
|
|
|
--
|
|
|
|
--
|
|
|
|
--
|
|
|
|
--
|
|
Net income
|
|
|
--
|
|
|
|
--
|
|
|
|
--
|
|
|
|
46,574
|
|
|
|
46,574
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balances at December 31, 2011
|
|
|
38,398,680
|
|
|
|
764
|
|
|
|
95,960
|
|
|
|
191,178
|
|
|
|
287,902
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Issuance of common shares for options
|
|
|
451,770
|
|
|
|
9
|
|
|
|
4,685
|
|
|
|
--
|
|
|
|
4,694
|
|
Tax benefit from exercise of stock options
|
|
|
--
|
|
|
|
--
|
|
|
|
3,447
|
|
|
|
--
|
|
|
|
3,447
|
|
Stock-based compensation (note 10)
|
|
|
3,001
|
|
|
|
--
|
|
|
|
2,044
|
|
|
|
--
|
|
|
|
2,044
|
|
Forfeiture of unvested restricted shares
|
|
|
(15,996
|
)
|
|
|
--
|
|
|
|
--
|
|
|
|
--
|
|
|
|
--
|
|
Unvested restricted stock grants
|
|
|
129,650
|
|
|
|
--
|
|
|
|
--
|
|
|
|
--
|
|
|
|
--
|
|
Stock split
(note 9)
|
|
|
--
|
|
|
|
1,551
|
|
|
|
(1,551
|
)
|
|
|
--
|
|
|
|
--
|
|
Cash dividend
(note 9)
|
|
|
--
|
|
|
|
--
|
|
|
|
--
|
|
|
|
(91,629
|
)
|
|
|
(91,629
|
)
|
Net income
|
|
|
--
|
|
|
|
--
|
|
|
|
--
|
|
|
|
93,152
|
|
|
|
93,152
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balances at December 31, 2012
|
|
|
38,967,105
|
|
|
$
|
2,324
|
|
|
|
104,585
|
|
|
|
192,701
|
|
|
|
299,610
|
|
See accompanying notes to consolidated financial statements
.
Consolidated Statements of Cash Flows
Years Ended December 31, 2012, 2011, and 2010
|
|
Year Ended December 31
|
|
|
|
2012
|
|
|
2011
|
|
|
2010
|
|
Cash flows from operating activities:
|
|
|
|
|
|
|
|
|
|
Net income
|
|
$
|
93,152
|
|
|
|
46,574
|
|
|
|
42,757
|
|
Adjustments to reconcile net income to net cash provided by operating activities:
|
|
|
|
|
|
|
|
|
|
|
|
|
Depreciation and amortization expense
|
|
|
82,524
|
|
|
|
72,877
|
|
|
|
63,636
|
|
Deferred income tax expense
|
|
|
15,258
|
|
|
|
13,107
|
|
|
|
5,308
|
|
Stock-based compensation
|
|
|
2,044
|
|
|
|
2,889
|
|
|
|
1,512
|
|
Tax benefit from exercise of stock options
|
|
|
(3,447
|
)
|
|
|
(1,324
|
)
|
|
|
(561
|
)
|
Loss (gain) on disposition of assets
|
|
|
1,329
|
|
|
|
644
|
|
|
|
(35
|
)
|
Unrealized loss on derivative instrument
|
|
|
257
|
|
|
|
800
|
|
|
|
181
|
|
Changes in operating assets and liabilities, net of effects of acquisitions:
|
|
|
|
|
|
|
|
|
|
|
|
|
Increase in receivables
|
|
|
(46,692
|
)
|
|
|
(23,725
|
)
|
|
|
(21,420
|
)
|
Decrease (increase) in inventories and work-in-process on medical interiors and products contracts
|
|
|
(6,614
|
)
|
|
|
(2,578
|
)
|
|
|
850
|
|
Decrease (increase) in prepaid expenses and other current assets
|
|
|
12,803
|
|
|
|
(12,093
|
)
|
|
|
(691
|
)
|
Decrease (increase) in costs in excess of billings
|
|
|
1,269
|
|
|
|
(1,694
|
)
|
|
|
6,454
|
|
Increase (decrease) in accounts payable, other accrued liabilities, and other liabilities
|
|
|
1,809
|
|
|
|
(1,193
|
)
|
|
|
12,559
|
|
Increase (decrease) in deferred revenue and billings in excess of costs
|
|
|
(2,397
|
)
|
|
|
487
|
|
|
|
(514
|
)
|
Net cash provided by operating activities
|
|
|
151,295
|
|
|
|
94,771
|
|
|
|
110,036
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash flows from investing activities:
|
|
|
|
|
|
|
|
|
|
|
|
|
Acquisition of Sundance Helicopters, Inc. (note 2)
|
|
|
(44,736
|
)
|
|
|
--
|
|
|
|
--
|
|
Acquisition of OF Air Holdings Corporation (note 3)
|
|
|
(3,176
|
)
|
|
|
(201,180
|
)
|
|
|
--
|
|
Acquisition of membership interest of United Rotorcraft Solutions, LLC
|
|
|
--
|
|
|
|
(1,554
|
)
|
|
|
--
|
|
Buy-out of previously leased aircraft
|
|
|
(65,661
|
)
|
|
|
(35,237
|
)
|
|
|
(21,445
|
)
|
Acquisition of property and equipment
|
|
|
(27,024
|
)
|
|
|
(21,541
|
)
|
|
|
(13,689
|
)
|
Proceeds from disposition and sale of equipment and assets held for sale
|
|
|
33,423
|
|
|
|
8,754
|
|
|
|
7,983
|
|
Decrease (increase) in notes and other receivables and other assets, net
|
|
|
(2,825
|
)
|
|
|
(170
|
)
|
|
|
209
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net cash used in investing activities
|
|
|
(109,999
|
)
|
|
|
(250,928
|
)
|
|
|
(26,942
|
)
|
(Continued)
Consolidated Statements of Cash Flows, continued
|
|
Year Ended December 31
|
|
|
|
2012
|
|
|
2011
|
|
|
2010
|
|
Cash flows from financing activities:
|
|
|
|
|
|
|
|
|
|
Proceeds from issuance of common stock
|
|
$
|
4,694
|
|
|
|
3,686
|
|
|
|
3,026
|
|
Payment of cash dividend
|
|
|
(91,629
|
)
|
|
|
--
|
|
|
|
--
|
|
Tax benefit from exercise of stock options
|
|
|
3,447
|
|
|
|
1,324
|
|
|
|
561
|
|
Borrowings under line of credit
|
|
|
135,738
|
|
|
|
31,271
|
|
|
|
--
|
|
Payments under line of credit
|
|
|
(80,008
|
)
|
|
|
(20,000
|
)
|
|
|
--
|
|
Proceeds from long-term debt
|
|
|
111,888
|
|
|
|
204,750
|
|
|
|
6,188
|
|
Payments for financing costs
|
|
|
(888
|
)
|
|
|
(1,807
|
)
|
|
|
(178
|
)
|
Payments of long-term debt
|
|
|
(25,707
|
)
|
|
|
(49,161
|
)
|
|
|
(15,468
|
)
|
Payments of capital lease obligations
|
|
|
(98,575
|
)
|
|
|
(71,054
|
)
|
|
|
(54,586
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net cash provided (used) by financing activities
|
|
|
(41,040
|
)
|
|
|
99,009
|
|
|
|
(60,457
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Increase (decrease) in cash and cash equivalents
|
|
|
256
|
|
|
|
(57,148
|
)
|
|
|
22,637
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash and cash equivalents at beginning of year
|
|
|
3,562
|
|
|
|
60,710
|
|
|
|
38,073
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash and cash equivalents at end of year
|
|
$
|
3,818
|
|
|
|
3,562
|
|
|
|
60,710
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest paid in cash during the year
|
|
$
|
20,083
|
|
|
|
19,407
|
|
|
|
18,842
|
|
Income taxes paid in cash during the year
|
|
$
|
43,041
|
|
|
|
15,351
|
|
|
|
19,627
|
|
Non-cash investing and financing activities:
In the year ended December 31, 2012, the Company entered into capital leases of $48,947 to finance the purchase of aircraft. The Company also settled notes payable of $27,940 in exchange for the aircraft securing the debt.
In the year ended December 31, 2011, the Company entered into notes payable of $27,940 to finance the purchase of aircraft which were held in property and equipment pending permanent lease financing as of December 31, 2011, and entered into capital leases of $47,537 to finance the purchase of aircraft and other equipment. The Company also entered into a note receivable of $700 related to the sale of an aircraft.
In the year ended December 31, 2010, the Company settled notes payable of $4,510 in exchange for the aircraft securing the debt and entered into capital leases of $34,913 to finance the purchase of aircraft and other equipment. The Company also traded a used aircraft for a $2,000 deposit toward the purchase of fifteen new aircraft.
See accompanying notes to consolidated financial statements.
AIR METHODS CORPORATION
AND SUBSIDIARIES
Notes to Consolidated Financial Statements
(1)
|
Summary of Significant Accounting Policies
|
Basis of Financial Statement Presentation and Business
|
Air Methods Corporation, a Delaware corporation, and its subsidiaries (Air Methods or the Company) serves as a provider of air medical emergency transport services and systems throughout the United States of America. The Company also designs, manufactures, and installs medical aircraft interiors and other aerospace and medical transport products for domestic and international customers. All significant intercompany balances and transactions have been eliminated in consolidation.
|
On December 31, 2012, we acquired 100% of the outstanding common stock of Sundance Helicopters, Inc., and all of the aircraft owned by two affiliated entities (collectively, Sundance). Sundance is a provider of helicopter tour operations, focusing primarily on Grand Canyon helicopter tours, as well as helicopter services to support firefighting, natural resource agency operations, vertical lifts, aerial photography and motion pictures, news gathering, and aerial surveying. Sundance operations will comprise a new Tourism operating segment beginning in 2013.
|
The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the reporting period. The Company considers its critical accounting policies involving more significant judgments and estimates to be those related to revenue recognition, deferred income taxes, and valuation of long-lived assets and goodwill. Actual results could differ from those estimates.
|
|
Cash and Cash Equivalents
|
|
For purposes of the consolidated statements of cash flows, the Company considers all highly liquid instruments with original maturities of three months or less to be cash equivalents. Cash equivalents of $625,000 and $624,000 at December 31, 2012 and 2011, consist of short-term money market funds.
|
|
Trade receivables are presented net of allowances for contractual discounts and uncompensated care. The Company determines its allowances for contractual discounts and uncompensated care based on payer mix, payer reimbursement schedules, and historical collection experience. The allowances are reviewed monthly and adjusted periodically based on actual collections. Billings are charged off against the uncompensated care allowance when it is probable that the receivable will not be recovered. Billings in excess of actual payment are charged off against the contractual allowance when payment is received. The allowance for contractual discounts is related primarily to Medicare and Medicaid patients. The allowance for uncompensated care is related primarily to receivables recorded for self-pay patients.
|
|
Inventories are comprised primarily of expendable aircraft parts and manufactured parts for medical aircraft interiors and are recorded at the lower of cost (average cost) or market.
|
AIR METHODS CORPORATION
AND SUBSIDIARIES
Notes to Consolidated Financial Statements, Continued
(1)
|
Summary of Significant Accounting Policies, continued
|
Property and Equipment
|
Hangars, equipment, and leasehold improvements are recorded at cost. All maintenance and repairs, including scheduled aircraft component overhauls and replacements, are expensed when incurred. Major modifications and costs incurred to place aircraft in service are capitalized. Improvements to leased helicopters and airplanes are included in flight and ground support equipment in the accompanying financial statements. Leasehold improvements to hangar and office space are included in buildings and office equipment in the accompanying financial statements. Depreciation is computed using the straight-line method over the shorter of the useful lives of the equipment or the lease term, as follows:
|
Description
|
Lives
|
|
Estimated
Residual value
|
|
Buildings, including hangars
|
40 years
|
|
|
10
|
%
|
Helicopters, including medical equipment
|
8 – 25 years
|
|
|
10 - 25
|
%
|
Ground support equipment and rotables
|
5 – 10 years
|
|
|
0 - 10
|
%
|
Furniture and office equipment
|
3 – 10 years
|
|
|
0
|
%
|
|
Amortizable Intangible Assets
|
|
The Company recognized intangible assets related to trade names, customer lists, and other customer or contractual relationships as a result of its acquisitions in 2012 and 2011. Useful lives are determined based on the estimated period of economic benefit, measured by the present value of associated cash flows, derived from each of these assets and range from five to sixteen years. Amortization expense, computed using the straight-line method, is estimated to be $4,624,000 per year for each of the next three years, $4,376,000 in 2016, and $4,326,000 in 2017.
|
|
The Company capitalizes incremental direct costs related to the application for multiple Supplemental Type Certificates (STC’s). STC’s are issued by the Federal Aviation Administration (FAA) and represent the FAA’s approval and certification of the airworthiness of an aircraft modification, such as a medical interior. A multiple STC allows the modification to be made to more than one aircraft without additional certification. STC costs are amortized using the straight-line method over the estimated useful economic life of the STC, typically five years.
|
|
The Company accounts for goodwill under FASB ASC 350,
Intangibles – Goodwill and Other
. Under ASC 350, goodwill and certain identifiable intangible assets are not amortized, but instead are reviewed for impairment at least annually in accordance with the provisions of the statement. The Company did not recognize any losses related to impairment of goodwill in 2012, 2011, and 2010. Goodwill has been allocated to the Company’s segments as follows: $116,025,000 to the Air Medical Services Division, $495,000 to the United Rotorcraft Division, and $3,509,000 to the Tourism Division.
|
AIR METHODS CORPORATION
AND SUBSIDIARIES
Notes to Consolidated Financial Statements, Continued
(1)
|
Summary of Significant Accounting Policies, continued
|
The Company accounts for derivative financial instruments under FASB ASC 815,
Derivatives and Hedging.
ASC 815 requires the Company to measure all derivatives at fair value and to recognize them in the balance sheet as an asset or liability. Changes in fair value of derivative instruments not designated as hedging instruments are recognized in earnings in the current period. The Company’s derivative instruments are not designated as hedging instruments. Changes in the fair value of the fuel derivative instruments are reflected in fuel expense, included in aircraft operations expense, in the statements of income.
|
The Company periodically reviews long-lived assets, including amortizable intangible assets, for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. Recoverability of long-lived assets is measured by a comparison of the carrying amount of an asset to future net cash flows expected to be generated by the asset. No impairment related to long-lived assets has been recognized in the accompanying consolidated financial statements.
|
|
Assets to be disposed of are reported at the lower of the carrying amount or fair value less estimated selling costs. As of December 31, 2012, assets held for sale consisted primarily of eight aircraft, which the Company intends to sell within one year. Periodically the Company identifies aircraft to be sold or used for spare parts as part of its long-term plan to phase out certain older models of aircraft and replace them with newer models.
|
Revenue Recognition
|
Fixed fee revenue under the Company's operating agreements with hospitals and other institutions is recognized monthly over the terms of the agreements.
|
|
Revenue relating to emergency flights is recognized upon completion of the services and is recorded net of provisions for contractual discounts and estimated uncompensated care. The Company has from time to time experienced delays in reimbursement from third-party payers. In addition, third-party payers may disallow, in whole or in part, claims for reimbursement based on determinations that certain amounts are not reimbursable under plan coverage, determinations of medical necessity, or the need for additional information. Laws and regulations governing the Medicare and Medicaid programs are very complex and subject to interpretation. The Company also provides services to patients who have no insurance or other third-party payer coverage. As a result, there is a reasonable possibility that recorded estimates will change materially in the short-term. Retroactive adjustments may change the amounts realized from third-party payers.
|
The Company has contracts to manufacture and install medical equipment and modify aircraft for third parties. When the total cost to complete a project can be reasonably estimated, revenue is recorded as costs are incurred using the percentage of completion method of accounting. Losses on contracts in process are recognized when determined.
AIR METHODS CORPORATION
AND SUBSIDIARIES
Notes to Consolidated Financial Statements, Continued
(1)
|
Summary of Significant Accounting Policies, continued
|
|
The Company accounts for its stock-based compensation under FASB ASC 718,
Compensation – Stock Compensation
. ASC 718 requires recognition over the vesting period in the income statement of the grant-date fair value of stock options and other equity-based compensation issued to employees.
|
Income Taxes
|
Deferred tax assets and liabilities are recognized for future income tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases and operating loss and tax credit carryforwards. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred income tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date.
|
|
The Company evaluates its tax positions in accordance with FASB ASC 740-10-25,
Accounting for Uncertainty in Income Taxes
. ASC 740-10-25 prescribes a recognition threshold and measurement attribute for recognition and measurement of a tax position taken or expected to be taken in a tax return.
|
|
Basic earnings per share is computed by dividing net income by the weighted average number of common shares outstanding during the period. Diluted earnings per share is computed by dividing net income by all outstanding and potentially dilutive common shares during the period.
|
New Accounting Standards
In July 2012, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) No. 2012-02,
Testing Indefinite-Lived Intangible Assets for Impairment
, which allows an entity to first assess qualitative factors to determine whether the existence of events and circumstances indicates that it is more likely than not that an indefinite-lived intangible asset is impaired. If, after this assessment, an entity concludes that it is not more likely than not that an indefinite-lived intangible asset is impaired, the entity is not required to take further action. If an entity concludes otherwise, it is required to determine whether impairment exists by comparing the fair value with the carrying amount of the asset. The ASU is effective for periods beginning after September 15, 2012. Implementation of ASU No. 2012-02 did not have a material effect on the Company’s financial position or results of operations.
AIR METHODS CORPORATION
AND SUBSIDIARIES
Notes to Consolidated Financial Statements, Continued
(2)
|
Acquisition of Sundance Helicopters, Inc.
|
On December 31, 2012, the Company acquired all of the outstanding common stock of Sundance and all of the aircraft owned by two affiliated entities of Sundance for a purchase price of approximately $46.3 million, subject to final determination of certain working capital adjustments, as defined in the agreement, as of the acquisition date. In addition, the purchase agreement also provides for an additional amount to be paid to the sellers if certain aircraft maintenance expense targets are achieved. The Company has estimated the increase to the purchase price for both of these adjustments to be approximately $906,000 and has recorded the related liability as of December 31, 2012. The final calculation of amounts due under these provisions is subject to review by the sellers, and payment of any additional amounts due is expected to be made in the second quarter of 2013. The purchase price was financed primarily through borrowings under the Company’s Amended and Restated Revolving Credit, Term Loan and Security Agreement.
Sundance is a helicopter tour operator, primarily focusing on Grand Canyon tours, but also provides helicopter services to support firefighting, news gathering, and other missions. The acquisition is expected to provide a platform for the Company to expand into adjacent aviation industries. Sundance’s operations will comprise a new tourism operating segment for the Company. No results of operations for Sundance have been included in the Company’s consolidated income statement because the acquisition was effective following the close of business on December 31, 2012.
Assets acquired consisted primarily of $34.4 million in aircraft, $5.7 million in amortizable intangible assets, and $3.5 million in goodwill, with the remaining value allocated to working capital accounts and other equipment. None of the goodwill is expected to be deductible for income tax purposes. No debt was assumed in the acquisition. The Company is still evaluating the aircraft spare parts inventory, verifying open repair orders with aircraft parts vendors and other liabilities relating to pre-acquisition events, refining its calculation of identifiable intangible assets, and reviewing accounts receivable for collectibility. Therefore, the allocation of the purchase price is still subject to adjustment.
(3)
|
Acquisition of OF Air Holdings Corporation
|
On August 1, 2011, the Company acquired 100% of the outstanding common stock of OF Air Holdings Corporation and its subsidiaries, including Omniflight Helicopters, Inc. (together, Omniflight), for a cash purchase price of $201.9 million, subject to final determination of working capital, as defined in the merger agreement, as of the closing date. As of December 31, 2011, the Company had recorded a liability of $3,119,000 for the estimated increase to the purchase price for the change in working capital. Based upon final agreed upon adjustments to the working capital measurement, the Company paid the sellers $3,176,000 during the first quarter of 2012, and no further amounts are due the sellers. The purchase price was financed primarily through a term loan under the Company’s Amended and Restated Revolving Credit, Term Loan and Security Agreement.
AIR METHODS CORPORATION
AND SUBSIDIARIES
Notes to Consolidated Financial Statements, Continued
(3)
|
Acquisition of OF Air Holdings Corporation, continued
|
The allocation of the purchase price was as follows (amounts in thousands):
|
|
Allocation at
December 31, 2011
|
|
|
Adjustments
|
|
|
Revised
Allocation
|
|
Assets purchased:
|
|
|
|
|
|
|
|
|
|
Receivables
|
|
$
|
28,622
|
|
|
|
--
|
|
|
|
28,622
|
|
Aircraft
|
|
|
33,500
|
|
|
|
--
|
|
|
|
33,500
|
|
Goodwill
|
|
|
89,116
|
|
|
|
1,403
|
|
|
|
90,519
|
|
Amortizable intangible assets
|
|
|
63,100
|
|
|
|
--
|
|
|
|
63,100
|
|
Aircraft under capital leases
|
|
|
29,405
|
|
|
|
--
|
|
|
|
29,405
|
|
Equipment and other property
|
|
|
5,986
|
|
|
|
--
|
|
|
|
5,986
|
|
Spare parts inventories
|
|
|
4,525
|
|
|
|
--
|
|
|
|
4,525
|
|
Other
|
|
|
14,521
|
|
|
|
(42
|
)
|
|
|
14,479
|
|
Total assets
|
|
|
268,775
|
|
|
|
1,361
|
|
|
|
270,136
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Capital lease obligations assumed
|
|
|
(38,034
|
)
|
|
|
--
|
|
|
|
(38,034
|
)
|
Net deferred tax liabilities
|
|
|
(5,961
|
)
|
|
|
(1,888
|
)
|
|
|
(7,849
|
)
|
Other liabilities assumed
|
|
|
(19,765
|
)
|
|
|
584
|
|
|
|
(19,181
|
)
|
Total liabilities assumed
|
|
|
(63,760
|
)
|
|
|
(1,304
|
)
|
|
|
(65,064
|
)
|
Purchase price
|
|
$
|
205,015
|
|
|
|
57
|
|
|
|
205,072
|
|
Adjustments to the purchase price allocation during 2012 included the working capital adjustment to the purchase price, as described above, and revised estimates of liabilities related to aircraft repair costs based upon verification of open repair orders with aircraft parts vendors. Following the end of the measurement period, which extends for a maximum of one year following the acquisition date, no further adjustments are made to the purchase price allocation except to correct an error.
In the fourth quarter of 2012, the Company identified an error in the calculation of certain net operating loss carryforwards for state income tax purposes relating to pre-acquisition periods. The adjustments in the above table include an increase of $1,663,000 to goodwill and deferred tax liabilities to correct this error. The Company does not expect further adjustments to the purchase price allocation.
Revenue of $61,494,000 and income of $13,368,000 before income taxes, interest expense on acquisition financing, and allocation of corporate office expenses generated by Omniflight’s operations from August 1 through December 31, 2011, have been included with those of the Company in the consolidated statements of income. The unaudited pro forma revenue, net income, and income per common share for the years ended December 31, 2011 and 2010, assuming the acquisition occurred as of January 1, 2010, are as follows (amounts in thousands, except per share amounts):
|
|
2011
|
|
|
2010
|
|
|
|
(unaudited)
|
|
|
(unaudited)
|
|
Revenue
|
|
$
|
766,422
|
|
|
|
729,468
|
|
Net income
|
|
$
|
54,284
|
|
|
|
47,055
|
|
Basic income per common share
|
|
$
|
4.29
|
|
|
|
3.77
|
|
Diluted income per common share
|
|
$
|
4.23
|
|
|
|
3.74
|
|
AIR METHODS CORPORATION
AND SUBSIDIARIES
Notes to Consolidated Financial Statements, Continued
(4)
|
Patient Transport Revenue Recognition
|
In 2012, the Company adopted ASU No. 2011-07,
Presentation and Disclosure of Patient Service Revenue, Provision for Bad Debts, and the Allowance for Doubtful Accounts for Certain Health Care Entities
. Trade receivables are presented net of allowances for contractual discounts and uncompensated care. The allowance for contractual discounts is related primarily to Medicare and Medicaid patients. The allowance for uncompensated care is related primarily to receivables recorded for self-pay patients.
The Company has not changed its discount policies related to self-pay patients or deductible and copayment balances for insured patients during 2012, 2011, or 2010. The allowance for uncompensated care was 40.1% of receivables from non-governmental payers as of December 31, 2012, compared to 38.8% at December 31, 2011. The increase at December 31, 2012, compared to December 31, 2011, is due primarily to the impact of the acquisition of Omniflight in August 2011 and to regularly scheduled price increases. Omniflight had a higher gross charge structure and, therefore, a higher percentage of uncollectible accounts, than the Company’s historical operations prior to the acquisition.
|
The allowances for contractual discounts and uncompensated care are as follows at December 31 (amounts in thousands):
|
|
|
2012
|
|
|
2011
|
|
|
|
|
|
|
|
|
Allowance for contractual discounts
|
|
$
|
134,257
|
|
|
|
101,016
|
|
Allowance for uncompensated care
|
|
|
121,623
|
|
|
|
92,995
|
|
Total
|
|
$
|
255,880
|
|
|
|
194,011
|
|
The Company recognizes patient transport revenue at its standard rates for services provided, regardless of expected payer. In the period that services are provided and based upon historical experience, the Company records a significant provision for uncompensated care related to uninsured patients who will be unable or unwilling to pay for the services provided. Patient transport revenue, net of provision for contractual discounts but before provision for uncompensated care, by major payer class, was as follows (amounts in thousands):
|
|
For years ended December 31,
|
|
|
|
2012
|
|
|
2011
|
|
|
2010
|
|
|
|
|
|
|
|
|
|
|
|
Third-party payers
|
|
$
|
693,395
|
|
|
|
481,589
|
|
|
|
380,743
|
|
Self-pay
|
|
|
217,544
|
|
|
|
143,593
|
|
|
|
103,279
|
|
Total
|
|
$
|
910,939
|
|
|
|
625,182
|
|
|
|
484,022
|
|
The provision for uncompensated care was 98.5% of revenue attributed to self-pay patients and 18.5% of revenue attributed to all other non-governmental payers for the year ended December 31, 2012, compared to 98.1% of revenue attributed to self-pay patients and 17.4% of revenue attributed to all other non-governmental payers for the year ended December 31, 2011. The provision for uncompensated care was 97.9% of revenue attributed to self-pay patients and 18.2% of revenue attributed to all other non-governmental payers for the year ended December 31, 2010.
AIR METHODS CORPORATION
AND SUBSIDIARIES
Notes to Consolidated Financial Statements, Continued
(5)
|
Costs in Excess of Billings and Billings in Excess of Costs
|
As of December 31, 2012, the estimated period to complete medical interior and products contracts in process ranges from one to twelve months, and the Company expects to collect all related accounts receivable and costs and estimated earnings in excess of billings on uncompleted contracts within one year. The following summarizes contracts in process at December 31 (amounts in thousands):
|
|
2012
|
|
|
2011
|
|
|
|
|
|
|
|
|
Costs incurred on uncompleted contracts
|
|
$
|
9,181
|
|
|
|
9,525
|
|
Estimated contribution to earnings
|
|
|
2,088
|
|
|
|
2,784
|
|
|
|
|
11,269
|
|
|
|
12,309
|
|
Less billings to date
|
|
|
(11,076
|
)
|
|
|
(13,181
|
)
|
Costs and estimated earnings in excess of billings (billings in excess of costs), net
|
|
$
|
193
|
|
|
|
(872
|
)
|
(6)
|
Fair Value of Financial Instruments
|
ASC Topic 820, “
Fair Value Measurements and Disclosures,”
requires disclosures about how fair value is determined for assets and liabilities and establishes a hierarchy by which these assets and liabilities must be grouped based on the type of inputs used in measuring fair value as follows:
|
Level 1:
|
quoted prices in active markets for identical assets or liabilities;
|
|
Level 2:
|
quoted prices in active markets for similar assets and liabilities and inputs that are observable for the asset or liability; or
|
|
Level 3:
|
unobservable inputs, such as discounted cash flow models or valuations.
|
In the first quarter of 2012, the Company adopted Accounting Standards Update (ASU) No. 2011-04,
Amendments to Achieve Common Fair Value Measurement and Disclosure Requirements in U.S. GAAP and IFRSs
. The following methods and assumptions were used to estimate the fair value of each class of financial instruments:
|
Cash and cash equivalents, accounts receivable, notes receivable, notes payable, accounts payable, and accrued liabilities:
|
The carrying amounts approximate fair value because of the short maturity of these instruments.
Derivatives:
The Company’s cost of operations is affected by changes in the price and availability of aircraft fuel, which has historically fluctuated widely in price.
Fuel costs represented approximately 3.8%, 3.4%, and 2.7% of the Company’s operating expenses for the years ended December 31, 2012, 2011, and 2010, respectively. The Company endeavors to acquire jet fuel at the lowest possible cost and to reduce volatility in operating expenses through the use of short-term purchased call options. With the use of purchased call options, the Company cannot be in a liability position at settlement. For 2012 the Company had fuel derivatives in place to cover approximately 86% of its fuel consumption.
AIR METHODS CORPORATION
AND SUBSIDIARIES
Notes to Consolidated Financial Statements, Continued
(6)
|
Fair Value of Financial Instruments
|
The Company’s financial derivatives do not qualify for hedge accounting, and, therefore, realized and non-cash mark to market adjustments are included in aircraft operations expense in the Company’s statements of income. Premiums paid under all agreements are included in prepaid expenses and other current assets on the Company’s balance sheet, and all cash flows associated with purchasing and selling derivatives are classified as operating cash flows in the Company’s statement of cash flows. The Company does not purchase or hold any derivative financial instruments for trading purposes.
|
The Company’s financial derivative agreements protected against increases in the cost of Gulf Coast jet fuel above $2.35 per gallon for wholesale purchases from January 1, 2010, through June 30, 2010; above $2.71 per gallon from July 1, 2010, through December 31, 2010; above $2.68 per gallon from January 1, 2011, through December 31, 2011; and above $3.50 per gallon from January 1, 2012, through December 31, 2012.
|
|
The fair value of all fuel derivative contracts included in prepaid expenses and other current assets was $0 and $256,000 at December 31, 2012 and 2011, respectively, and is classified as Level 2 in the fair value hierarchy. Aircraft operations expense for the years ended December 31, 2012, 2011, and 2010, included non-cash mark to market derivative losses of $257,000, $800,000, and $181,000, respectively. Cash settlements under the terms of the agreements were $1,131,000 in 2011. There were no cash settlements under the agreements in 2012 or 2010.
|
Long-term debt:
The fair value of long-term debt is classified as Level 3 in the fair value hierarchy because it is determined based on the present value of future contractual cash flows discounted at an interest rate that reflects the risks inherent in those cash flows. Based on the borrowing rates currently available to the Company for loans with similar terms and average maturities and on recent transactions, the fair value of long-term debt as of December 31, 2012, is estimated to be $406,856,000, compared to carrying value of $404,478,000. The fair value of long-term debt as of December 31, 2011, was estimated to be $266,213,000, compared to carrying value of $262,567,000.
AIR METHODS CORPORATION
AND SUBSIDIARIES
Notes to Consolidated Financial Statements, Continued
Long-term debt consists of the following at December 31 (amounts in thousands):
|
|
2012
|
|
|
2011
|
|
Term loan with quarterly installments of principal and interest, with all remaining principal due in 2017. Interest rate at December 31, 2012, was 1.75%.
|
|
$
|
287,500
|
|
|
|
195,000
|
|
Borrowings under revolving credit facility with interest due not less than quarterly and all principal due in 2017. Interest rate at December 31, 2012, was 3.75%.
|
|
|
67,000
|
|
|
|
11,271
|
|
Notes payable with interest rates from 2.31% to 6.57%, due in monthly installments of principal and interest with balloon payments due at various dates in 2013 through 2018, collateralized by aircraft
|
|
|
36,934
|
|
|
|
41,125
|
|
Notes payable with variable interest rates due in monthly installments of principal and interest with all remaining principal due in 2015, collateralized by aircraft. Interest rate at December 31, 2012, was 4.00%.
|
|
|
2,211
|
|
|
|
2,673
|
|
Note payable with interest rate at 4.92%, due in monthly installments of principal and interest with all remaining principal due in 2018, collateralized by real estate
|
|
|
4,720
|
|
|
|
5,015
|
|
Note payable with interest at 3.94%, due in monthly installments of principal and interest at various dates through 2015, collateralized by aircraft
|
|
|
3,206
|
|
|
|
4,223
|
|
Note payable with interest at 4.04%, due in semi-annual installments of principal and interest through 2019, collateralized by aircraft
|
|
|
2,907
|
|
|
|
3,260
|
|
|
|
|
404,478
|
|
|
|
262,567
|
|
Less current installments
|
|
|
(23,796
|
)
|
|
|
(18,889
|
)
|
|
|
$
|
380,682
|
|
|
|
243,678
|
|
The Company’s senior credit facility consists of term loans with a balance of $287,500,000 as of December 31, 2012, and a revolving credit facility. As of December 31, 2012, the Company had $67,000,000 outstanding against the $100 million revolving credit facility and available capacity on the facility of $29,975,000. The capacity available on the revolving credit facility is reduced by four outstanding letters of credit totaling $3,025,000.
Borrowings under the credit facility are secured by substantially all of the Company’s accounts receivable, inventory, equipment, and general intangibles. Indebtedness under the credit facility has a first priority claim to the assets pledged to secure it. Quarterly principal payments are due beginning in 2013 as follows: 1.25% of total principal balance per quarter for quarters 1 – 8; 1.875% of total principal balance per quarter for quarters 9 – 16; and 2.5% of total principal balance per quarter for quarters 17 – 19. All remaining principal is due at the maturity date in December 2017 but can be prepaid at any time without penalty. Base Rate Loans (as defined in the Amended and Restated Revolving Credit, Term Loan and Security Agreement) bear interest at the greater of (i) prime or (ii) the federal funds rate plus 0.25% to 1.25%. The interest rate for LIBOR Rate Loans (as defined in the Amended and Restated Revolving Credit, Term Loan and Security Agreement) is generally the LIBOR rate plus 1.25% to 2.25%. As of December 31, 2012, the interest rate on the term loans was 1.75% and on the revolving credit facility was 3.75%.
AIR METHODS CORPORATION
AND SUBSIDIARIES
Notes to Consolidated Financial Statements, Continued
(7)
|
Long-term Debt, continued
|
Subject to certain conditions, the Company may borrow an additional $100 million under the senior credit facility. These additional borrowings may be in the form of term or revolving loans. The maturity date and the interest rate on the additional borrowings would be the same as all other outstanding borrowings under the senior credit facility.
Payment obligations under the credit facility accelerate upon the occurrence of defined events of default, including the following: failure to pay principal or interest or to perform covenants under the credit facility or other indebtedness with outstanding obligations exceeding $3 million; events of insolvency or bankruptcy; failure to timely discharge judgments of $750,000 or more; failure to maintain the first priority status of liens under the credit facility; suspension of material governmental permits; a material adverse effect with respect to the Company; and a change of control in the Company.
The credit facility contains various covenants that limit, among other things, the Company’s ability to create liens, declare future dividends, make loans and investments, make any material change to the nature of its business, enter into any transaction with affiliates other than on arms' length terms, enter into a merger or consolidation, or sell assets. The Company is required to maintain certain financial ratios as defined in the credit facility and other notes.
|
Aggregate maturities of long-term debt are as follows (amounts in thousands):
|
Year ending December 31:
|
|
|
|
2013
|
|
$
|
23,796
|
|
2014
|
|
|
29,671
|
|
2015
|
|
|
29,343
|
|
2016
|
|
|
24,508
|
|
2017
|
|
|
291,048
|
|
Thereafter
|
|
|
6,112
|
|
|
|
$
|
404,478
|
|
The Company leases hangar and office space and certain equipment under noncancelable operating leases and leases certain aircraft under noncancelable capital and operating leases. The majority of aircraft leases contain purchase options, either at the end of the lease term or at a stipulated early buyout date. The Company measures
capital lease
assets and the related obligations initially at an amount equal to the present value at the beginning of the
lease term
of minimum lease payments during the lease term, excluding executory costs. The Company has made an accounting policy election to exclude the maximum consideration it could be required to pay the lessor in the event of default from the calculation of the present value of the minimum lease payments in measuring the capital lease asset and related obligation, since there is no likely scenario whereby an aircraft lessor would require the Company to pay the full stipulated loss value in the event of a non-performance-related default, and, therefore, this maximum consideration has a remote probability of payment.
AIR METHODS CORPORATION
AND SUBSIDIARIES
Notes to Consolidated Financial Statements, Continued
|
As of December 31, 2012, future minimum lease payments under capital and operating leases are as follows (amounts in thousands):
|
|
|
Capital
|
|
|
Operating
|
|
|
|
leases
|
|
|
leases
|
|
Year ending December 31:
|
|
|
|
|
|
|
2013
|
|
$
|
48,206
|
|
|
|
10,118
|
|
2014
|
|
|
47,167
|
|
|
|
7,513
|
|
2015
|
|
|
43,423
|
|
|
|
4,214
|
|
2016
|
|
|
38,590
|
|
|
|
2,883
|
|
2017
|
|
|
33,272
|
|
|
|
1,740
|
|
Thereafter
|
|
|
60,420
|
|
|
|
18,366
|
|
|
|
|
|
|
|
|
|
|
Total minimum lease payments
|
|
|
271,078
|
|
|
$
|
44,834
|
|
Less amounts representing interest
|
|
|
(31,398
|
)
|
|
|
|
|
Present value of minimum capital lease payments
|
|
|
239,680
|
|
|
|
|
|
Less current installments
|
|
|
(39,343
|
)
|
|
|
|
|
|
|
$
|
200,337
|
|
|
|
|
|
Rent expense relating to operating leases totaled $13,732,000, $9,177,000, and $5,919,000, for the years ended December 31, 2012, 2011, and 2010, respectively.
The Company receives certain allowances for the completion of medical interiors for its leased aircraft. Gains associated with these completion allowances are deferred and amortized over the terms of the leases and are included in other liabilities in the consolidated balance sheets. As of December 31, 2012 and 2011, unamortized completion allowances included in other liabilities totaled $19,110,000 and $21,798,000, respectively.
At December 31, 2012 and 2011, leased property held under capital leases included in equipment, net of accumulated depreciation, totaled approximately $217,213,000 and $258,472,000, respectively. Amortization of leased property held under capital leases is included in depreciation expense.
Stock Split
On December 3, 2012, the Company’s stockholders approved a three-for-one stock split of the Company’s common stock to be accomplished by means of a stock distribution. The additional shares were distributed on December 28, 2012, to stockholders of record as of December 14, 2012. The stockholders also approved an increase from 23,500,000 to 70,500,000 in the number of authorized shares of the Company’s common stock and an increase from 5,000,000 to 15,000,000 in the number of authorized shares of the Company’s preferred stock. Historical outstanding shares, stock options, and restricted shares were recast upon the distribution of additional shares.
AIR METHODS CORPORATION
AND SUBSIDIARIES
Notes to Consolidated Financial Statements, Continued
(9)
|
Stockholders’ Equity, continued
|
The effect of the stock split on income per share and weighted average common shares outstanding for the years ended December 31 was as follows:
|
|
2011
(As Reported)
|
|
|
2011
(As Adjusted)
|
|
|
2010
(As Reported)
|
|
|
2010
(As Adjusted)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic income per common share
|
|
$
|
3.68
|
|
|
|
1.23
|
|
|
|
3.42
|
|
|
|
1.14
|
|
Diluted income per common share
|
|
$
|
3.63
|
|
|
|
1.21
|
|
|
|
3.39
|
|
|
|
1.13
|
|
Weighted average number of common shares outstanding:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
|
|
12,666,474
|
|
|
|
37,999,422
|
|
|
|
12,496,513
|
|
|
|
37,489,539
|
|
Diluted
|
|
|
12,827,595
|
|
|
|
38,482,785
|
|
|
|
12,596,414
|
|
|
|
37,789,242
|
|
The effect of the stock split on income per share for the quarters of 2012 and 2011 was as follows:
|
|
Basic income
per common
share
(As Reported)
|
|
|
Basic income
per common
share
(As Adjusted)
|
|
|
Diluted income
per common
share
(As Reported)
|
|
|
Diluted income
per common
share
(As Adjusted)
|
|
2012:
|
|
|
|
|
|
|
|
|
|
|
|
|
For quarter ended March 31
|
|
$
|
.98
|
|
|
|
.33
|
|
|
|
.97
|
|
|
|
.32
|
|
For quarter ended June 30
|
|
|
2.44
|
|
|
|
.81
|
|
|
|
2.43
|
|
|
|
.81
|
|
For quarter ended September 30
|
|
|
2.16
|
|
|
|
.72
|
|
|
|
2.14
|
|
|
|
.71
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2011:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
For quarter ended March 31
|
|
$
|
.45
|
|
|
|
.15
|
|
|
|
.45
|
|
|
|
.15
|
|
For quarter ended June 30
|
|
|
.78
|
|
|
|
.26
|
|
|
|
.77
|
|
|
|
.26
|
|
For quarter ended September 30
|
|
|
1.46
|
|
|
|
.49
|
|
|
|
1.44
|
|
|
|
.48
|
|
For quarter ended December 31
|
|
|
.98
|
|
|
|
.33
|
|
|
|
.96
|
|
|
|
.32
|
|
AIR METHODS CORPORATION
AND SUBSIDIARIES
Notes to Consolidated Financial Statements, Continued
(9)
|
Stockholders’ Equity, continued
|
Income per Share
The reconciliation of basic to diluted weighted average common shares outstanding is as follows for the years ended December 31:
|
|
2012
|
|
|
2011
|
|
|
2010
|
|
Weighted average number of common shares outstanding – basic
|
|
|
38,594,286
|
|
|
|
37,999,422
|
|
|
|
37,489,539
|
|
Dilutive effect of:
|
|
|
|
|
|
|
|
|
|
|
|
|
Common stock options
|
|
|
398,452
|
|
|
|
453,054
|
|
|
|
292,467
|
|
Unvested restricted stock
|
|
|
51,730
|
|
|
|
30,309
|
|
|
|
7,236
|
|
Weighted average number of common shares outstanding – diluted
|
|
|
39,044,468
|
|
|
|
38,482,785
|
|
|
|
37,789,242
|
|
Common stock options totaling 372,999 were not included in the diluted income per share calculation for the year ended December 31, 2010, because their effect would have been anti-dilutive.
Cash Dividend
On December 10, 2012, the Company’s board of directors declared a special cash dividend of $7.00 per share (on a pre-split basis) on the Company’s common stock. The dividend of $91,629,000 was paid on December 28, 2012, to stockholders of record as of the close of business on December 20, 2012, and was funded with available cash and additional borrowings under the Company’s senior credit facility. Covenants under the senior credit facility limit the Company’s ability to declare future dividends.
(10)
|
Stock-based Compensation
|
The Company’s 2006 Equity Compensation Plan (2006 Plan) provides for the granting of incentive stock options, non-statutory stock options (NSO’s), shares of restricted stock, stock appreciation rights and supplemental bonuses consisting of shares of common stock, cash or a combination thereof to employees, directors, and consultants. On December 3, 2012, the Company’s stockholders approved an increase in the number of shares of common stock available under the plan from 3,000,000 to 5,400,000. The 2006 Plan is administered by a committee of the Company’s board of directors which has discretion to set the exercise price and term of any option granted, provided that the term may not exceed ten years.
Shares of restricted stock granted under the 2006 Plan are valued at the closing market price of the Company’s common stock on the date of grant and have typically vested over a one- to five-year period. All share and per share amounts in this footnote have been adjusted to reflect the impact of the three-for-one stock split described in note 9.
AIR METHODS CORPORATION
AND SUBSIDIARIES
Notes to Consolidated Financial Statements, Continued
(10)
|
Stock-based Compensation, continued
|
The fair value of each option grant is estimated on the date of grant using the Black-Scholes option-pricing model. The Company uses historical option exercise data for similar employee groups, as well as the vesting period and contractual term, to estimate the expected term of options granted; the expected term represents the period of time that options granted are expected to be outstanding. Expected volatility is based on historical volatility of the Company’s stock. The risk-free rate for periods within the contractual life of the option is based on the U.S. Treasury yield curve in effect at the time of the grant. During the year ended December 31, 2012, options to purchase 13,800 shares of stock, with a weighted average exercise price of $29.47, were granted at a weighted average fair value of $9.13. The weighted average fair value of options granted during the years ended December 31, 2011 and 2010, was $6.58 and $3.67, respectively. The following weighted average assumptions were used in valuing the grants for the years ended December 31:
|
|
2012
|
|
|
2011
|
|
|
2010
|
|
Expected term (in years)
|
|
|
3.0
|
|
|
|
3.0
|
|
|
|
3.4
|
|
Expected volatility
|
|
|
46
|
%
|
|
|
54
|
%
|
|
|
51
|
%
|
Risk-free interest rate
|
|
|
0.3
|
%
|
|
|
1.4
|
%
|
|
|
1.6
|
%
|
Expected dividend yield
|
|
|
0
|
%
|
|
|
0
|
%
|
|
|
0
|
%
|
The following is a summary of option activity under all stock option plans during the year ended December 31, 2012:
|
|
Shares
|
|
|
Weighted
Average
Exercise Price
|
|
|
Weighted-Average
Remaining
Contractual
Life (Years)
|
|
|
Aggregate Intrinsic
Value (amounts in
thousands)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Outstanding at January 1, 2012
|
|
|
891,666
|
|
|
$
|
10.24
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Granted
|
|
|
13,800
|
|
|
|
29.47
|
|
|
|
|
|
|
|
Exercised
|
|
|
(451,770
|
)
|
|
|
10.39
|
|
|
|
|
|
|
|
Canceled
|
|
|
(15,003
|
)
|
|
|
9.21
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Outstanding at December 31, 2012
|
|
|
438,693
|
|
|
|
10.72
|
|
|
|
2.0
|
|
|
$
|
11,491
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Exercisable at December 31, 2012
|
|
|
379,182
|
|
|
|
10.88
|
|
|
|
2.0
|
|
|
|
9,869
|
|
The aggregate intrinsic value of options exercised during the years ended December 31, 2012, 2011, and 2010 was $9,614,000, $5,768,000, and $2,631,000, respectively.
AIR METHODS CORPORATION
AND SUBSIDIARIES
Notes to Consolidated Financial Statements, Continued
(10)
|
Stock-based Compensation, continued
|
The following is a summary of restricted stock activity during the year ended December 31, 2012:
|
|
Shares
|
|
|
Weighted
Average
Grant-Date
Fair Value
|
|
|
|
|
|
|
|
|
Non-vested at January 1, 2012
|
|
|
180,000
|
|
|
$
|
18.69
|
|
|
|
|
|
|
|
|
|
|
Granted
|
|
|
137,400
|
|
|
|
33.34
|
|
Vested
|
|
|
(91,000
|
)
|
|
|
18.81
|
|
Forfeited
|
|
|
(20,750
|
)
|
|
|
21.57
|
|
|
|
|
|
|
|
|
|
|
Non-vested at December 31, 2012
|
|
|
205,650
|
|
|
|
27.94
|
|
The total fair value of shares vested during 2012, 2011, and 2010, was $2,644,000, $255,000, and $293,000, respectively.
|
During the years ended December 31, 2012, 2011, and 2010, the Company recognized $2,044,000, $2,889,000, and $1,512,000, respectively, in stock-based compensation expense. No income tax benefit was recognized related to stock compensation expense recorded for Incentive Stock Options. Total unrecognized compensation cost related to unvested stock-based awards as of December 31, 2012, was $4,424,000 and is expected to be recognized over the remaining weighted average vesting term of approximately one and a half years.
|
(11)
|
Related Party Transactions
|
|
During the year ended December 31, 2010, the Company paid one of its directors $105,000 to provide consulting services. In addition, the director was issued 15,000 stock options with an exercise price of $13.68 per share and a grant-date fair value totaling $65,000. The options vested immediately and were exercised during 2012.
|
AIR METHODS CORPORATION
AND SUBSIDIARIES
Notes to Consolidated Financial Statements, Continued
(12)
|
Air Medical Services Contract Revenue
|
|
The Company has operating agreements with various hospitals and other institutions to provide services and aircraft for initial terms ranging from one to ten years. The agreements typically provide for revenue from monthly fixed fees and flight fees based upon the utilization of aircraft in providing emergency medical services. The fixed-fee portions of the agreements effective as of December 31, 2012, provide for the following revenue for years ending December 31 (amounts in thousands):
|
2013
|
|
$
|
146,198
|
|
2014
|
|
|
85,555
|
|
2015
|
|
|
46,136
|
|
2016
|
|
|
25,311
|
|
2017
|
|
|
10,451
|
|
Thereafter
|
|
|
464
|
|
|
|
$
|
314,115
|
|
Income tax expense consists of the following for the years ended December 31 (amounts in thousands):
|
|
2012
|
|
|
2011
|
|
|
2010
|
|
Current income tax expense:
|
|
|
|
|
|
|
|
|
|
Federal
|
|
$
|
(37,323
|
)
|
|
|
(14,922
|
)
|
|
|
(17,231
|
)
|
State
|
|
|
(7,211
|
)
|
|
|
(2,699
|
)
|
|
|
(2,660
|
)
|
|
|
|
(44,534
|
)
|
|
|
(17,621
|
)
|
|
|
(19,891
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Deferred income tax expense:
|
|
|
|
|
|
|
|
|
|
|
|
|
Federal
|
|
|
(12,956
|
)
|
|
|
(11,182
|
)
|
|
|
(4,528
|
)
|
State
|
|
|
(2,302
|
)
|
|
|
(1,925
|
)
|
|
|
(780
|
)
|
|
|
|
(15,258
|
)
|
|
|
(13,107
|
)
|
|
|
(5,308
|
)
|
Total income tax expense
|
|
$
|
(59,792
|
)
|
|
|
(30,728
|
)
|
|
|
(25,199
|
)
|
|
The Company’s effective tax rate is affected by the apportionment of revenue and income before taxes to the various jurisdictions in which it operates and by changing tax laws and regulations in those jurisdictions.
|
AIR METHODS CORPORATION
AND SUBSIDIARIES
Notes to Consolidated Financial Statements, Continued
(13)
|
Income Taxes, continued
|
|
Reconciliation of income taxes on income before income taxes computed at the federal statutory rate of 35% for the years ended December 31 to income taxes as recorded is as follows (amounts in thousands):
|
|
|
2012
|
|
|
2011
|
|
|
2010
|
|
Tax at the federal statutory rate
|
|
$
|
(53,530
|
)
|
|
|
(27,056
|
)
|
|
|
(23,784
|
)
|
State income taxes, net of federal benefit, including adjustments based on filed state income tax returns
|
|
|
(5,812
|
)
|
|
|
(2,926
|
)
|
|
|
(1,882
|
)
|
Nontaxable (nondeductible) items
|
|
|
2
|
|
|
|
(624
|
)
|
|
|
72
|
|
Adjustment to filed returns
|
|
|
(45
|
)
|
|
|
1
|
|
|
|
73
|
|
Tax credits
|
|
|
174
|
|
|
|
(1
|
)
|
|
|
90
|
|
Changes in estimated state tax rates
|
|
|
(667
|
)
|
|
|
--
|
|
|
|
221
|
|
Other
|
|
|
86
|
|
|
|
(122
|
)
|
|
|
11
|
|
Net income tax expense
|
|
$
|
(59,792
|
)
|
|
|
(30,728
|
)
|
|
|
(25,199
|
)
|
|
For state income tax purposes, at December 31, 2012, the Company has net operating loss carryforwards of approximately $7.8 million, expiring at various dates through 2031. In addition, as of December 31, 2012, the Company has approximately $0.4 million of net operating loss carryforwards for state income tax purposes relating to pre-acquisition periods for FSS and approximately $73.6 million relating to pre-acquisition periods for Omniflight. As of December 31, 2012, the Company also has approximately $29 million of net operating loss carryforwards for federal income tax purposes related to the Omniflight acquisition. Utilization of all of the FSS and Omniflight net operating loss carryforwards, which expire at various dates through 2026 and 2028 for state income tax purposes, respectively, is subject to an annual limitation under the provisions of Section 382 of the Internal Revenue Code. Based on the Company’s current projections of taxable income, the Omniflight net operating loss carryforwards for federal income tax purposes, as limited by Section 382, are expected to be utilized within the next two years.
|
For the years ended December 31, 2012, 2011, and 2010, the Company recognized excess tax benefits related to stock option plans in the amount of $3,447,000, $1,324,000, and $561,000, respectively. Such benefits were recorded as a reduction of income taxes payable and an increase in additional paid-in capital.
AIR METHODS CORPORATION
AND SUBSIDIARIES
Notes to Consolidated Financial Statements, Continued
(13)
|
Income Taxes, continued
|
The tax effects of temporary differences that give rise to significant portions of the deferred tax assets and liabilities at December 31 are as follows (amounts in thousands):
|
|
2012
|
|
|
2011
|
|
Deferred tax assets:
|
|
|
|
|
|
|
Net operating loss carryforwards
|
|
$
|
13,257
|
|
|
|
22,463
|
|
Accruals and other, principally due to differences in employee compensation and benefits
|
|
|
11,262
|
|
|
|
11,209
|
|
Other liabilities, principally due to differences in revenue recognition
|
|
|
9,064
|
|
|
|
7,193
|
|
Total deferred tax assets
|
|
|
33,583
|
|
|
|
40,865
|
|
|
|
|
|
|
|
|
|
|
Deferred tax liabilities:
|
|
|
|
|
|
|
|
|
Equipment and leasehold improvements, principally due to differences in bases and depreciation methods
|
|
|
(60,488
|
)
|
|
|
(58,592
|
)
|
Intangible assets, principally due to differences in bases and amortization methods
|
|
|
(24,928
|
)
|
|
|
(23,334
|
)
|
Allowance for uncollectible accounts
|
|
|
(17,769
|
)
|
|
|
(14,362
|
)
|
Goodwill
|
|
|
(2,547
|
)
|
|
|
(1,481
|
)
|
Other
|
|
|
(1,332
|
)
|
|
|
(716
|
)
|
Total deferred tax liabilities
|
|
|
(107,064
|
)
|
|
|
(98,485
|
)
|
Net deferred tax liability
|
|
$
|
(73,481
|
)
|
|
|
(57,620
|
)
|
Based on management’s assessment of future taxable earnings and tax-planning strategies, realization of net deferred tax assets through future taxable earnings is considered more likely than not.
At December 31, 2012, the Company had no gross unrecognized tax benefits. It is the Company’s practice to recognize interest and penalties related to income tax matters in income tax expense. The Company does not believe that it is reasonably possible that its estimates of unrecognized tax benefits will change significantly in the next twelve months.
At December 31, 2012, the Company had recorded a liability of $1.6 million for uncertain tax positions, including estimated penalties and interest, related to acquisitions. Since the Company has been fully indemnified against the tax liability, including penalties and interest, a corresponding asset of $1.6 million has also been recorded as of December 31, 2012.
The Company and its subsidiaries are subject to U.S. federal income tax as well as income tax of multiple state jurisdictions and are open to federal and state tax audits until the applicable statutes of limitations expire. The Company is no longer subject to U.S. federal tax examinations by tax authorities for tax years before 2009. The Company is currently not under examination by any federal or state taxing authority.
AIR METHODS CORPORATION
AND SUBSIDIARIES
Notes to Consolidated Financial Statements, Continued
(14)
|
Employee Benefit Plans
|
The Company has a defined contribution retirement plan whereby eligible employees may contribute up to 60% of their gross pay subject to the IRS maximum ($17,000 for 2012). Employees age 50 or older may make additional contributions up to the IRS maximum ($22,500 for 2012). Under the plan, the Company’s current discretionary match is equal to 70% of eligible contributions made by each participant during the year, up to the first 8% of the participant’s current gross eligible earnings. In addition, upon acquiring Omniflight, the Company acquired a defined contribution retirement plan, which allowed employees to contribute up to 50% of their gross pay, subject to the same IRS maximums, and provided for discretionary matching Company benefits. The discretionary match in effect for Omniflight as of the acquisition date and continued by the Company through December 31, 2011, was 25% of eligible contributions up to 2% of the participant’s gross pay. Effective January 1, 2012, Omniflight employees became eligible to participate in the Company’s defined contribution retirement plan. Company contributions to all plans totaled approximately $9,372,000, $7,033,000, and $6,575,000, for the years ended December 31, 2012, 2011, and 2010, respectively.
(15)
|
Commitments, Contingencies, and Concentrations
|
Commitments
As of December 31, 2012, the Company had open purchase commitments totaling $158.0 million for 47 aircraft scheduled to be delivered from 2013 through 2015. Typically the Company has financed aircraft acquired under similar commitments through capital lease or debt agreements
.
If financing arrangements cannot be arranged or the Company is prevented from taking or declines to take delivery of the aircraft under the commitments described above for any other reason, the Company may forfeit nonrefundable deposits of approximately $9.5 million. The amount of deposit to be forfeited may be mitigated if the aircraft manufacturer is able to remarket the commitment positions. As of December 31, 2012, the Company has received financing commitments, subject to routine credit approval and aircraft inspection processes, to cover the cost of all aircraft scheduled to be delivered in 2013. The Company intends to use the new aircraft for base expansion opportunities as well as to replace older models of aircraft in the fleet. The Company plans to either sell the aircraft which are replaced, use them for spare parts, or redeploy them into the backup fleet.
|
As of December 31, 2012, the Company had four letters of credit totaling $3,025,000 in lieu of cash deposits on workers compensation insurance policies and other obligations and as performance security under an operating agreement. All letters of credit may be renewed annually and reduce the available borrowing capacity under the Company’s revolving credit facility.
|
Contingencies
On January 30, 2013, the Company was served with a purported class action lawsuit, filed in the Superior Court of Alameda County, California, alleging failure to pay certain compensation and benefits to employees in that jurisdiction. The Company is currently evaluating the merits of the lawsuit, plans to vigorously defend against this suit, and expects to file an Answer and Affirmative Defenses on March 4, 2013. A range of potential outcomes cannot be determined at this stage; however, there is a reasonable possibility (more than remote, but less than likely) of an unfavorable outcome, which may or may not be material.
The Company is involved in various claims and legal actions arising in the ordinary course of business. In the opinion of management, the ultimate disposition of these matters will not have a material adverse effect on the Company’s consolidated financial position, results of operations, or liquidity.
AIR METHODS CORPORATION
AND SUBSIDIARIES
Notes to Consolidated Financial Statements, Continued
(15)
|
Commitments, Contingencies, and Concentrations, continued
|
Concentrations
|
As of December 31, 2012, American Eurocopter Corporation (AEC) aircraft comprise 83% of the Company’s helicopter fleet while aircraft made by Bell Helicopter, Inc. (Bell) constitute 15%. The Company obtains a substantial portion of its helicopter spare parts and components from AEC and Bell and maintains supply arrangements with other parties for engine and related dynamic components.
|
|
The Company’s pilots, comprising 31% of the total workforce, are represented by a collective bargaining unit. The current collective bargaining agreement (CBA) between the Company and the pilots’ union is effective through December 2013.
|
|
Payer mix related to the Company’s patient transport revenue, based on number of transports, was as follows for the years ended December 31:
|
|
|
2012
|
|
|
2011
|
|
Private insurance carriers
|
|
|
35
|
%
|
|
|
35
|
%
|
Medicare
|
|
|
31
|
%
|
|
|
31
|
%
|
Medicaid
|
|
|
21
|
%
|
|
|
20
|
%
|
Self-pay patients
|
|
|
13
|
%
|
|
|
14
|
%
|
(16)
|
Business Segment Information
|
The Company identifies operating segments based on management responsibility and the type of services or products offered. Effective September 1, 2012, the Company combined two of its operating segments, Community-Based Services (CBS) and Hospital-Based Services (HBS), into a single operating segment reporting to the President of Air Medical Services. The decision to combine CBS and HBS delivery models for air medical transportation services was made in order to improve efficiency and communication between regional management. In addition, with increasing conversion of HBS contracts into CBS operations and the development of alternative delivery models in partnering with hospitals to provide air medical transportation services, the lines between the two delivery models have become less distinct. CBS and HBS segment results for prior periods have been combined in the following table to reflect the new segment definition.
Operating segments and their principal services or products are as follows:
|
·
|
Air Medical Services (AMS) - provides air medical transportation services to the general population as an independent service and to hospitals or other institutions under exclusive operating agreements. Services include aircraft operation and maintenance, medical care, dispatch and communications, and medical billing and collection.
|
|
·
|
United Rotorcraft (UR) Division - designs, manufactures, and installs aircraft medical interiors and other aerospace and medical transport products for domestic and international customers.
|
|
·
|
Tourism – provides helicopter tours and charter flights. Segment originated with the acquisition of Sundance on December 31, 2012, as described more fully in Note 2. No results of operations for the Tourism segment have been included in the Company’s consolidated income statement because the acquisition was effective following the close of business on December 31, 2012.
|
The accounting policies of the operating segments are as described in Note 1. The Company evaluates the performance of its segments based on pretax income. Intersegment sales are reflected at market prices.
AIR METHODS CORPORATION
AND SUBSIDIARIES
Notes to Consolidated Financial Statements, Continued
(16)
|
Business Segment Information, continued
|
Summarized financial information for the Company’s operating segments is shown in the following table (amounts in thousands). Amounts in the “Corporate Activities” column represent corporate headquarters expenses and results of insignificant operations. The Company does not allocate assets between operating segments for internal reporting and performance evaluation purposes.
|
|
AMS
|
|
|
UR
|
|
|
Corporate
Activities
|
|
|
Intersegment
Eliminations
|
|
|
Consolidated
|
|
2012
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
External revenue
|
|
$
|
822,023
|
|
|
|
28,365
|
|
|
|
424
|
|
|
|
--
|
|
|
|
850,812
|
|
Intersegment revenue
|
|
|
--
|
|
|
|
20,971
|
|
|
|
--
|
|
|
|
(20,971
|
)
|
|
|
--
|
|
Total revenue
|
|
|
822,023
|
|
|
|
49,336
|
|
|
|
424
|
|
|
|
(20,971
|
)
|
|
|
850,812
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating expenses
|
|
|
(543,410
|
)
|
|
|
(38,272
|
)
|
|
|
(32,462
|
)
|
|
|
16,188
|
|
|
|
(597,956
|
)
|
Depreciation & amortization
|
|
|
(79,683
|
)
|
|
|
(1,385
|
)
|
|
|
(1,456
|
)
|
|
|
--
|
|
|
|
(82,524
|
)
|
Interest expense
|
|
|
(20,138
|
)
|
|
|
(1
|
)
|
|
|
(512
|
)
|
|
|
--
|
|
|
|
(20,651
|
)
|
Other, net
|
|
|
3,122
|
|
|
|
--
|
|
|
|
141
|
|
|
|
--
|
|
|
|
3,263
|
|
Income tax expense
|
|
|
--
|
|
|
|
--
|
|
|
|
(59,792
|
)
|
|
|
--
|
|
|
|
(59,792
|
)
|
Net income (loss)
|
|
$
|
181,914
|
|
|
|
9,678
|
|
|
|
(93,657
|
)
|
|
|
(4,783
|
)
|
|
|
93,152
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2011
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
External revenue
|
|
$
|
630,143
|
|
|
|
30,384
|
|
|
|
22
|
|
|
|
--
|
|
|
|
660,549
|
|
Intersegment revenue
|
|
|
--
|
|
|
|
27,047
|
|
|
|
--
|
|
|
|
(27,047
|
)
|
|
|
--
|
|
Total revenue
|
|
|
630,143
|
|
|
|
57,431
|
|
|
|
22
|
|
|
|
(27,047
|
)
|
|
|
660,549
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating expenses
|
|
|
(443,352
|
)
|
|
|
(42,954
|
)
|
|
|
(27,830
|
)
|
|
|
19,937
|
|
|
|
(494,199
|
)
|
Depreciation & amortization
|
|
|
(70,518
|
)
|
|
|
(1,248
|
)
|
|
|
(1,111
|
)
|
|
|
--
|
|
|
|
(72,877
|
)
|
Interest expense
|
|
|
(19,362
|
)
|
|
|
(15
|
)
|
|
|
(695
|
)
|
|
|
--
|
|
|
|
(20,072
|
)
|
Other, net
|
|
|
3,568
|
|
|
|
--
|
|
|
|
333
|
|
|
|
--
|
|
|
|
3,901
|
|
Income tax expense
|
|
|
--
|
|
|
|
--
|
|
|
|
(30,728
|
)
|
|
|
--
|
|
|
|
(30,728
|
)
|
Net income (loss)
|
|
$
|
100,479
|
|
|
|
13,214
|
|
|
|
(60,009
|
)
|
|
|
(7,110
|
)
|
|
|
46,574
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2010
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
External revenue
|
|
$
|
539,593
|
|
|
|
22,409
|
|
|
|
--
|
|
|
|
--
|
|
|
|
562,002
|
|
Intersegment revenue
|
|
|
--
|
|
|
|
15,545
|
|
|
|
--
|
|
|
|
(15,545
|
)
|
|
|
--
|
|
Total revenue
|
|
|
539,593
|
|
|
|
37,954
|
|
|
|
--
|
|
|
|
(15,545
|
)
|
|
|
562,002
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating expenses
|
|
|
(377,800
|
)
|
|
|
(29,195
|
)
|
|
|
(20,988
|
)
|
|
|
12,815
|
|
|
|
(415,168
|
)
|
Depreciation & amortization
|
|
|
(61,933
|
)
|
|
|
(721
|
)
|
|
|
(982
|
)
|
|
|
--
|
|
|
|
(63,636
|
)
|
Interest expense
|
|
|
(18,438
|
)
|
|
|
(26
|
)
|
|
|
(712
|
)
|
|
|
--
|
|
|
|
(19,176
|
)
|
Other, net
|
|
|
3,387
|
|
|
|
--
|
|
|
|
547
|
|
|
|
--
|
|
|
|
3,934
|
|
Income tax expense
|
|
|
--
|
|
|
|
--
|
|
|
|
(25,199
|
)
|
|
|
--
|
|
|
|
(25,199
|
)
|
Net income (loss)
|
|
$
|
84,809
|
|
|
|
8,012
|
|
|
|
(47,334
|
)
|
|
|
(2,730
|
)
|
|
|
42,757
|
|
AIR METHODS CORPORATION
AND SUBSIDIARIES
Notes to Consolidated Financial Statements, Continued
(17)
|
Unaudited Quarterly Financial Data
|
Summarized unaudited quarterly financial data for 2012 and 2011 is as follows (amounts in thousands except per share data):
|
|
Quarter
|
|
|
|
First
|
|
|
Second
|
|
|
Third
|
|
|
Fourth
|
|
2012
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenue
|
|
$
|
190,814
|
|
|
|
222,480
|
|
|
|
221,290
|
|
|
|
216,228
|
|
Operating income
|
|
|
25,038
|
|
|
|
55,264
|
|
|
|
51,228
|
|
|
|
38,802
|
|
Income before income taxes
|
|
|
20,375
|
|
|
|
50,990
|
|
|
|
46,917
|
|
|
|
34,662
|
|
Net income
|
|
|
12,474
|
|
|
|
31,413
|
|
|
|
27,844
|
|
|
|
21,421
|
|
Basic income per common share
|
|
|
.33
|
|
|
|
.81
|
|
|
|
.72
|
|
|
|
.55
|
|
Diluted income per common share
|
|
|
.32
|
|
|
|
.81
|
|
|
|
.71
|
|
|
|
.55
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2011
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenue
|
|
$
|
131,905
|
|
|
|
150,162
|
|
|
|
185,172
|
|
|
|
193,310
|
|
Operating income
|
|
|
12,722
|
|
|
|
19,785
|
|
|
|
35,667
|
|
|
|
25,299
|
|
Income before income taxes
|
|
|
9,429
|
|
|
|
16,370
|
|
|
|
31,156
|
|
|
|
20,347
|
|
Net income
|
|
|
5,712
|
|
|
|
9,920
|
|
|
|
18,540
|
|
|
|
12,402
|
|
Basic income per common share
|
|
|
.15
|
|
|
|
.26
|
|
|
|
.49
|
|
|
|
.33
|
|
Diluted income per common share
|
|
|
.15
|
|
|
|
.26
|
|
|
|
.48
|
|
|
|
.32
|
|
Income per common share is computed independently for each of the quarters presented. Therefore, the sum of the quarterly income per share does not necessarily equal the total computed for the year.
AIR METHODS CORPORATION
AND SUBSIDIARIES
Schedule II – Valuation and Qualifying Accounts
(Amounts in thousands)
Description
|
|
Balance at
Beginning
of Period
|
|
|
Additions (a)
|
|
|
Deductions (b)
|
|
|
Balance at End of
Period
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Allowance for contractual discounts
|
|
|
|
|
|
|
|
|
|
|
|
|
Year ended December 31, 2012
|
|
$
|
101,016
|
|
|
|
744,212
|
|
|
|
(710,971
|
)
|
|
|
134,257
|
|
Year ended December 31, 2011
|
|
|
54,915
|
|
|
|
491,991
|
|
|
|
(445,890
|
)
|
|
|
101,016
|
|
Year ended December 31, 2010
|
|
|
45,273
|
|
|
|
319,279
|
|
|
|
(309,637
|
)
|
|
|
54,915
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Allowance for uncompensated care
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Year ended December 31, 2012
|
|
$
|
92,995
|
|
|
|
320,221
|
|
|
|
(291,593
|
)
|
|
|
121,623
|
|
Year ended December 31, 2011
|
|
|
56,749
|
|
|
|
208,888
|
|
|
|
(172,642
|
)
|
|
|
92,995
|
|
Year ended December 31, 2010
|
|
|
39,043
|
|
|
|
154,171
|
|
|
|
(136,465
|
)
|
|
|
56,749
|
|
Notes:
(a)
|
Amounts excluded from revenue.
|
(b)
|
Actual write-offs and charges to allowances.
|
See accompanying Report of Independent Registered Public Accounting Firm.
F-32
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