10-K

UNITED STATES SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-K

 (Mark One)

x ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the fiscal year ended December 31, 2012

OR

o TRANSITION REPORT PURSUANT TO SECTION 13 or 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from ______________________________ to ______________________________ 

AIR METHODS CORPORATION

(Exact name of registrant as specified in its charter)

Commission file number   0-16079

Delaware	84-0915893
(State or other jurisdiction of incorporation or organization)	(I.R.S. employer identification no.)

7301 South Peoria, Englewood, Colorado 80112

(Address of principal executive offices and zip code)

303-792-7400

(Registrant’s telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act:

COMMON STOCK, $.06 PAR VALUE PER SHARE (the "Common Stock")

(Title of Class)

The NASDAQ Stock Market

(Name of exchange on which registered)

Securities registered pursuant to Section 12(g) of the Act:

Not Applicable

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act.

Yes x  No  o

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act.

Yes o  No  x

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes x   No  o

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes x No o

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of registrant's knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. o

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See definition of “accelerated filer,” “large accelerated filer,” and “smaller reporting company” in Rule 12b-2 of the Exchange Act. (Check one):

Large accelerated Filer x Accelerated Filer o Non-accelerated Filer o  (Do not check if a smaller reporting company)   Smaller reporting company o

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act.) Yes o  No  x

State the aggregate market value of the voting and non-voting common equity held by non-affiliates computed by reference to the price at which the common equity was last sold, or the average bid and asked price of such common equity, as of the last business day of the registrant’s most recently completed second fiscal quarter: $1,144,780,000

The number of outstanding shares of Common Stock as of February 22, 2013, was 38,815,936.

DOCUMENTS INCORPORATED BY REFERENCE

Certain information required for Part III of this Annual Report on Form 10-K is incorporated by reference to the registrant’s definitive proxy statement for the 2013 annual meeting of stockholders.

TABLE OF CONTENTS

To Form 10-K

		Page
PART I
ITEM 1.	BUSINESS	1
	General	1
	Employees	3
	Government Regulation	3
	Available Information	5
ITEM 1A.	RISK FACTORS	5
ITEM 1B.	UNRESOLVED STAFF COMMENTS	10
ITEM 2.	PROPERTIES	10
	Facilities	10
	Equipment and Parts	11
ITEM 3.	LEGAL PROCEEDINGS	12
ITEM 4.	MINE SAFETY DISCLOSURES	12
PART II
ITEM 5.	MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS, AND ISSUER PURCHASES OF EQUITY SECURITIES	13
ITEM 6.	SELECTED FINANCIAL DATA	15
ITEM 7.	MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS	17
	Overview	17
	Results of Operations	19
	Liquidity and Capital Resources	24
	Critical Accounting Policies	26
	New Accounting Standards	28
ITEM 7A.	QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK	28
ITEM 8.	FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA	29
ITEM 9.	CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE	29
ITEM 9A.	CONTROLS AND PROCEDURES	29
ITEM 9B.	OTHER INFORMATION	30

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PART III

ITEM 10.	DIRECTORS, EXECUTIVE OFFICERS, AND CORPORATE GOVERNANCE	31
ITEM 11.	EXECUTIVE COMPENSATION	31
ITEM 12.	SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT	31
ITEM 13.	CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS AND DIRECTOR INDEPENDENCE	31
ITEM 14.	PRINCIPAL ACCOUNTANT FEES AND SERVICES	31
PART IV
ITEM 15.	EXHIBITS AND FINANCIAL STATEMENT SCHEDULES	IV-1
SIGNATURES		IV-5

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PART I

ITEM 1. BUSINESS

General

Air Methods Corporation, a Delaware corporation, (Air Methods or the Company) was established in Colorado in 1982 and now serves as the largest provider of air medical emergency transport services and systems throughout the United States of America. Rocky Mountain Holdings, LLC (RMH); FSS Airholdings, LLC (FSS); Mercy Air Service, Inc. (Mercy Air); LifeNet, Inc. (LifeNet); United Rotorcraft Solutions, LLC (URS); OF Air Holdings Corporation; and Sundance Helicopters, Inc., all operate as wholly-owned subsidiaries of Air Methods. FSS is the parent company of CJ Systems Aviation Group, Inc. (CJ). OF Air Holdings Corporation is the parent company of Omniflight Helicopters, Inc. (Omniflight).

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). The purchase price was financed primarily through borrowings under our Amended and Restated Revolving Credit, Term Loan and Security Agreement with a commercial bank group. Sundance provides 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/motion pictures, news gathering, and aerial surveying. Sundance operates a fleet of 24 helicopters consisting of Eurocopter AS350s and EC130s. Because the acquisition was effective after the close of business on December 31, 2012, no operations for Sundance are reflected in our consolidated statements of income and cash flows for the year ended December 31, 2012. Sundance operations will comprise a new Tourism operating segment beginning in 2013.

As of December 31, 2012, our Air Medical Services (AMS) Division provided air medical transportation services in 42 states to the general population as an independent service (also called community-based services) and to hospitals or other institutions under exclusive operating agreements (also called hospital-based services). We transport persons requiring intensive medical care from either the scene of an accident or general care hospitals to highly skilled trauma centers or tertiary care centers. Our United Rotorcraft Division designs, manufactures, and installs aircraft medical interiors and other aerospace or medical transport products. Financial information for each of our operating segments is included in the notes to our consolidated financial statements included in Item 8 of this annual report.

Air Medical Services Division

Effective September 1, 2012, we combined two of our 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.

Services provided by our AMS Division include medical care, aircraft operation and maintenance in accordance with Federal Aviation Regulations (FAR) Part 135 standards, 24-hour communications and dispatch, and medical billing and collections. Aircraft are typically based at fire stations, airports, or hospital locations. Patient transport revenue consists of flight fees billed directly to patients, their insurers, or governmental agencies. Due to weather conditions and other factors, the number of flights is generally higher during the summer months than during the remainder of the year, causing patient transport revenue to fluctuate accordingly. AMS contract revenue consists of approximately 80% fixed monthly fees and 20% hourly flight fees under exclusive operating agreements with hospitals or other institutions. These fees are earned regardless of when, or if, the customer is reimbursed for these services by its patients, their insurers, or the federal government. Both monthly and hourly fees are generally subject to annual increases based on changes in the consumer price index, hull and liability insurance premiums, or spare parts prices from aircraft manufacturers. Because the majority of AMS contract revenue is generated from fixed monthly fees, seasonal fluctuations in flight hours do not significantly impact monthly revenue in total. We operate some of our contracts under the service mark AIR LIFE®, which is generally associated within the industry with our standard of service.

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The division operates 394 helicopters and 21 fixed wing aircraft under both Instrument Flight Rules (IFR) and Visual Flight Rules (VFR). Our aircraft are dispatched in response to requests for transport received by our communications centers from sending or receiving hospitals or local emergency personnel, such as firemen or police officers, at the scene of an accident. Communications and dispatch operations for substantially all of our community-based locations and some of our hospital-based locations are conducted from our national center in Omaha, Nebraska. Medical billing and collections are processed primarily from our offices in San Bernardino, California. We also have contracts to provide dispatch, medical billing, and transfer center services to outside third parties.

In 2012 we opened eight new community-based locations and closed four due to insufficient flight volume. Three of the four locations closed in 2012 had been acquired as part of the Omniflight Helicopters, Inc., acquisition in August 2011. We began operations under a new three-year contract with a hospital in New Jersey in the second quarter of 2012 and under a new agreement with a military base in New York during  the third quarter. In the fourth quarter of 2012, we began operations under a new five-year agreement with a hospital in Colorado. Four of our hospital customers expanded their service areas, resulting in six new bases of operation. Twenty-two AMS contracts were due for renewal in 2012, ten of which were renewed for terms ranging from one to four years. Eight other contracts were extended into 2013 to allow additional time for contract discussions, and one contract converted to independent operations upon expiration in 2012. Two customers, representing four base locations, gave notice of intent to terminate during the first quarter of 2013 and another is in the process of converting operations to community-based services also during the first quarter of 2013.

During the third quarter of 2011, we entered into a preferred provider agreement (PPA) with Community Health Systems Professional Services Corporation (CHS) to provide air medical transport services to CHS-affiliated hospitals. As of December 31, 2012, approximately 70% of all CHS-affiliated hospitals had been transitioned onto the PPA air medical transport request protocols. Patient transports originating at CHS-affiliated hospitals increased by approximately 900 in 2012 compared to 2011.

Competition comes primarily from national operators, smaller regional carriers, and alternative air ambulance providers such as local governmental entities. Some of our competitors utilize aircraft with lower ownership and operating costs and do not require a similar level of experience for aviation and medical personnel, allowing them to operate within markets that generate lower flight volume than our typical base of operation. Operators generally compete for AMS contracts on the basis of price, safety record, accident prevention and training, and the medical capability of the aircraft. The ready availability of new and used aircraft has contributed to increased price competition on contract renewals. Price is a significant element of competition because of the continued pressure on many healthcare organizations to contain costs passed on to their consumers.We believe that our competitive strengths center on the quality of our patient care, training, maintenance and customer service; the medical capability of the aircraft we deploy; and our investment in safety equipment and programs for our operations, as well as our ability to tailor the service delivery model to a hospital’s or community’s specific needs. Unlike many operators, we maintain in-house core competencies in hiring, training, and managing medical staff; billing and collection services; dispatch and communication functions; and aviation and field maintenance operations. We believe that choosing not to outsource these services allows us to better ensure the quality of patient care and enhances control over the associated costs.

United Rotorcraft Division

Our United Rotorcraft (UR) Division designs, manufactures, and certifies modular medical interiors, multi-mission interiors, and other aerospace and medical transport products. These interiors and other products range from basic life support to intensive care suites to advanced search and rescue systems. With a full range of engineering, manufacturing and certification capabilities, the division has also designed and integrated aircraft communication, navigation, environmental control, structural, and electrical systems. Manufacturing capabilities include avionics, electrical, composites, machining, welding, sheet metal, and upholstery. The division also offers quality assurance and certification services pursuant to its FAA Organization Designation (ODA) authorization, Parts Manufacturer Approvals (PMA's), and ISO9001:2000 (Quality Systems) certification.

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We maintain patents covering several products, including the Litter Lift System used in the U.S. Army’s HH-60M helicopter and Medical Evacuation Vehicle (MEV), and the Articulating Patient Loading System and Modular Equipment Frame developed as part of the modular interior concept. Raw materials and components used in the manufacture of interiors and other products are widely available from several different vendors.

As of December 31, 2012, projects in process included 25 HH-60M units and two aircraft medical interior kits for a commercial customer. We also had received contracts for three aircraft medical interiors for commercial customers. Deliveries under all contracts in process or received as of December 31, 2012, are expected to be completed by the fourth quarter of 2013, and remaining revenue is estimated at $2.8 million. In January 2013, we received an agreement for 114 additional HH-60M units totaling $44.8 million with deliveries through 2017.

Our competition in the aircraft interior design and manufacturing industry comes primarily from several companies based in the United States and three in Europe. Competition is based mainly on product availability, price, and product features, such as configuration and weight. With our established line of interiors for Bell and Eurocopter aircraft, we believe that we have demonstrated the ability to compete on the basis of each of these factors.

Employees

As of December 31, 2012, excluding Sundance, we had 3,710 full time and 251 part time employees, comprised of 1,226 pilots; 674 aviation machinists, airframe and power plant (A&P) engineers, and other manufacturing/maintenance positions; 1,176 flight nurses and paramedics; 163 dispatch and transfer center personnel; and 722 business development, billing, and administrative personnel. Our pilots are IFR-rated where required by contract, and all have completed an extensive ground school and flight training program at the commencement of their employment with us, as well as local area orientation and annual training provided by us. All of our aircraft mechanics must possess FAA A&P licenses. All flight nurses and paramedics hold the appropriate state and county licenses, as well as Cardiopulmonary Resuscitation, Advanced Cardiac Life Support, and/or Pediatric Advanced Life Support certifications.

Our pilots are represented by a collective bargaining unit and the current collective bargaining agreement (CBA) is effective through December 2013.

Government Regulation

The healthcare and aviation industries in general are subject to significant federal, state, and local regulation that affects our business activities. We are unable to predict what federal or state legislation or regulatory initiatives may be enacted in the future relating to our business or the health care or aviation industries in general, or what effect any such legislation or regulations may have on our business. Any failure or alleged failure to comply with applicable laws, or any adverse applications of or changes in the laws and regulations affecting our business, could have a material adverse effect on our operating results and financial condition.

Federal Aviation Administration and U.S. Department of Transportation

We are subject to the Federal Aviation Act of 1958, as amended. All of our flight and maintenance operations—including equipment, ground facilities, dispatch, communications, flight training personnel and other matters affecting air safety—are regulated and actively supervised by the U.S. Department of Transportation through the FAA. Medical interiors and other aerospace products developed by us are subject to FAA certification and certain other regulatory approvals. In addition, the National Transportation Safety Board (NTSB) is authorized to investigate aircraft accidents and to recommend improved safety standards.

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The FAA requires us to obtain operating, airworthiness, and other certificates which are subject to suspension or revocation for cause. Air Methods and a subsidiary of Omniflight both hold Part 135 Air Carrier Certificates. Air Methods also holds a Part 145 Repair Station Certificate, which covers two master locations, from the FAA. Pursuant to FAA regulations, we have established, and the FAA has approved or accepted, as applicable, our operations specifications and maintenance programs for our respective aircraft. The FAA, acting through its own powers or through the appropriate U.S. Attorney, has the power to bring proceedings for the imposition and collection of fines for violation of the Federal Aviation Regulations. In addition, a Part 135 certificate requires that the voting interests of the holder of the certificate cannot be more than 25% owned by foreign persons. As of December 31, 2012, we are not aware of any foreign person who holds more than 5% of our outstanding Common Stock.

In the second quarter of 2011, the FAA commenced special inspections of helicopters equipped with Night Vision Imaging Systems (NVIS). For a cost of approximately $515,000 during 2012, we completed our remediation of certification issues surrounding a particular supplier of Supplemental Type Certificate (STC) modifications of helicopter cockpits for NVIS use and returned all impacted helicopters back to NVIS service. In 2012, as a result of the ongoing inspections, certification issues were identified in the United Rotorcraft Division’s NVIS STC documentation covering 145 of our aircraft. We anticipate that correcting the certification issues on these aircraft will extend into the fourth quarter of 2013 at a total cost of up to $2.5 million.

Health Care Regulation

Under extensive healthcare regulations, we must meet requirements to participate in government programs, including Medicare and Medicaid. Such extensive regulations include, among others:

· Medicare and Medicaid anti-kickback and anti-fraud and abuse amendments codified under Section 1128B(b) of the Social Security Act (Anti-kickback Statute), which prohibits certain business practices and relationships that might affect the provision and cost of health care services payable under the Medicare and Medicaid programs and other government programs, including the payment or receipt of remuneration for the referral of patients whose care will be paid for by such programs. Many states have statutes similar to the federal Anti-kickback Statute, except that the state statutes usually apply to referrals for services reimbursed by all third-party payers, not just federal programs.

· Section 1877 of the Social Security Act (also known as the Stark law) generally restricts referrals by physicians of Medicare or Medicaid patients to entities with which the physician or an immediate family member has a financial relationship, unless one of several exceptions applies. A violation of the Stark law may result in a denial of payment, required refunds to patients and the Medicare program, civil penalties of various monetary amounts depending on the violation, and exclusion from participation in the Medicare and Medicaid programs and other federal programs.

· Health Insurance Portability and Accountability Act (HIPAA) mandates the adoption of specific standards for electronic transactions and code sets that are used to transmit certain types of health information. HIPAA also sets forth federal rules addressing the use and disclosure of individually identifiable health information and the rights of patients to understand and control how their information is used and disclosed. The law provides both criminal and civil fines and penalties for covered entities that fail to comply. The Health Information Technology for Economic and Clinical Health (HITECH) Act, which was enacted as part of the American Recovery and Reinvestment Act of 2009, modified and expanded the privacy and security requirements of HIPAA. The HITECH Act applies certain of the HIPAA privacy and security requirements directly to business associates of covered entities and establishes new mandatory federal requirements for notification of breaches of security involving protected health information. The U.S. Department of Health and Human Services is responsible for enforcing the requirement that covered entities notify any individual whose protected health information has been improperly acquired, accessed, used, or disclosed. On January 17, 2013, the Office for Civil Rights issued a final rule, with a compliance date of September 23, 2013, to implement the HITECH Act and make other modifications to the HIPAA and HITECH regulations. This rule expanded the potential liability for a breach involving protected health information to cover some instances where a subcontractor is responsible for the breaches and that individual or entity was acting within the scope of delegated authority under the related contract or engagement.

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· Patient Protection and Affordable Care Act, as amended by the Health Care and Education Reconciliation Act of 2010, (PPACA) is designed to increase access to health benefits for the uninsured or underinsured populations. PPACA also includes, among other things, Medicare payment and delivery reforms aimed at containing costs, rewarding quality, and improving outcomes through coordinated care arrangements. Most of the provisions designed to increase access to health benefits for the uninsured or underinsured populations are not scheduled to take effect until 2014.

Both federal and state government agencies continue heightened and coordinated civil and criminal enforcement efforts against the health care industry by conducting audits, evaluations, and investigations and, when appropriate, imposing civil monetary penalties, assessments, and administrative sanctions. From time to time, we, like others in the health care industry, may receive notices from federal and state regulatory agencies alleging that we failed to comply with applicable standards. These notices may require us to take corrective action and may impose civil monetary penalties and/or other operating restrictions. Although we have policies and procedures in place to facilitate compliance in all material respects with the regulations affecting the health care industry, if a determination is made that we were in material violation of such regulations, our financial condition, results of operations, or cash flows could be materially adversely affected.

Other Regulations

We are also subject to laws, regulations, and standards relating to corporate governance and public disclosure, including the Sarbanes-Oxley Act of 2002, Dodd-Frank Wall Street Reform and Consumer Protection Act, Securities and Exchange Commission (SEC) regulations, NASDAQ Market rules, and other federal and state securities laws. Certain of our operations are also subject to regulation under the Foreign Corrupt Practices Act and various laws related to the export of emergency medical interiors manufactured by United Rotorcraft, including among others, the U.S. Export Administration Regulations and the International Traffic in Arms Regulations administered by the U.S. Department of State, Directorate of Defense Trade Controls.  In addition, our operations are subject to various other federal, state, and local laws and regulations relating to occupational safety and health, including the Occupational Safety and Health Administration regulations.

Available Information

Our internet site is www.airmethods.com. We make available free of charge, on or through the website, all annual, quarterly, and current reports, as well as any amendments to these reports, as soon as reasonably practicable after electronically filing these reports with the SEC. Such reports are also available at www.sec.gov. This reference to the website does not incorporate by reference the information contained in the website and such information should not be considered a part of this report.

ITEM 1A. RISK FACTORS

Our actual operating results may differ materially from those described in forward-looking statements as a result of various factors, including but not limited to, those described below. You should carefully consider the following risk factors in addition to the other information included in this Annual Report on Form 10-K.

· Flight volume – Almost all patient transport revenue and approximately 20% of AMS contract revenue is dependent upon flight volume. Approximately 20% of our costs primarily associated with flight operations incurred during the year ended December 31, 2012, also vary with the number of hours flown. Poor visibility, high winds, and heavy precipitation can affect the safe operation of aircraft and therefore result in a reduced number of flight hours due to the inability to fly during these conditions. Prolonged periods of adverse weather conditions could have an adverse impact on our operating results due to missed flights or reduced demand for service. Typically, the months from November through February have lower flight volume due to weather conditions and other factors, resulting in lower patient transport revenue during these months. Flight volume related to patient transports can also be affected by the distribution of calls among competitors by local government agencies and the entrance of new competitors into a market. Over the past several years, the increase in the number of air medical helicopters operating within the United States has outpaced trends in the demand for service. Demand for air medical transportation may also be unfavorably impacted by an overall slow-down in economic activity; a decrease in road traffic volume because of unusually high spikes in fuel prices or other factors; cost of the service; loss of confidence in certain markets because of recent, high-profile accidents within the air medical industry; or questions regarding the medical necessity for certain transports. In addition, if hospitals within our service areas expand operations to include trauma centers, cardiac catheterization labs, and similar capabilities, the demand for our services may decrease. Conversely, a trend toward hospital consolidation may increase demand for air medical transportation. Finally, a number of our bases are located in rural areas throughout the United States and are difficult to staff with appropriate personnel, resulting in lower in-service rates and, therefore, lower flight volume.

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· Collection rates – We respond to calls for air medical transport without pre-screening the creditworthiness of the patient. For our independent service operations, we invoice patients and their insurers directly for services rendered and recognize revenue net of provisions for contractual discounts and estimated uncompensated care. Both provisions are estimated during the period the related services are performed based on historical collection experience and any known trends or changes in reimbursement rate schedules and payer mix. The provisions are adjusted as required based on actual collections in subsequent periods. Net reimbursement per patient transport is primarily a function of price, payer mix, and timely and effective collection efforts. To the extent that the complexity associated with billing for our services causes delays in our cash collections, we assume the financial risk of increased carrying costs associated with the aging of our accounts receivable as well as the increased potential for unrecoverable accounts. Both the pace of collections and the ultimate collection rate are affected by the overall health of the U.S. economy and the unemployment rate, which impact the number of indigent patients and funding for state-run programs, such as Medicaid. Medicaid reimbursement rates in many jurisdictions have remained well below the cost of providing air medical transportation. Some states have reduced or are planning to reduce Medicaid benefits or the number of citizens eligible for benefits. However, Medicaid represents a small percentage of the revenue we realize from patient transports. The collection rate is also impacted by changes in the cost of healthcare and health insurance, as well as economic pressures on employers. As the cost of healthcare increases and businesses explore ways to contain or reduce operating costs, health insurance coverage provided by employers may be reduced, resulting in an increase in the uninsured population. A shift of 1% of our payer mix from insured accounts to either Medicaid or uninsured accounts would result in a decrease of $10.7 million to $11.7 million in pre-tax operating results. Similar to Medicaid reimbursement rates, Medicare rates are less than the cost of providing air medical transportation, and, therefore, our collection rates may decline as more of the U.S. population becomes eligible for Medicare coverage. To the extent that healthcare reform or other forces result in a reversal of the trend away from insurance coverage, reimbursement rates may increase. Our ability to collect price increases in our standard charge structure has generally been limited to accounts covered by insurance providers. Although we have not yet experienced significant increased limitations in the amount reimbursed by insurance companies, continued price increases may cause insurance companies to limit coverage for air medical transport to amounts less than our standard rates. There is no assurance that we will be able to maintain historical collection rates after the implementation of price increases for patient transports.

· Billing investigations and audits – State and federal statutes impose substantial penalties—including civil and criminal fines, exclusion from participation in government programs, and imprisonment—on entities or individuals (including any individual corporate officers or physicians deemed responsible) that fraudulently or wrongfully bill governmental or other third-party payers for services. We believe that audits, inquiries, and investigations from government agencies will continue to occur from time to time in the ordinary course of our business, including as a result of our arrangements with hospitals and healthcare providers and of our UR Division contracts. In addition, we may be subject to increased audits from private payers to the extent they encounter pricing pressures related to healthcare reform. This could result in substantial defense costs to us and a diversion of management’s time and attention. Such pending or future audits, inquiries, or investigations, or the public disclosure of such matters, may have a material adverse effect on our financial condition and results of operations.

· Healthcare reform – One of the key goals of PPACA is to increase access to health benefits for the uninsured or underinsured populations, partially through new federal rules related to private health insurance offerings. PPACA also includes, among other things, Medicare payment and delivery reforms aimed at containing costs, rewarding quality, and improving outcomes through coordinated care arrangements. The new federal rules in PPACA may create pricing pressure on private health insurance premiums and, as a result, pricing pressure on providers. PPACA also includes provisions that expand the government’s ability to combat healthcare program fraud, abuse, and waste. Because most of the provisions designed to increase access to health benefits for the uninsured or underinsured populations are not scheduled to take effect until 2014, a high degree of uncertainty exists regarding the impact of the PPACA on our collection rates. To the extent uninsured patients obtain any type of insurance coverage, our collection rates may increase. To the extent patients currently covered by private insurance move to government-run programs or to proposed public or private insurance exchanges, collection rates may decrease. Government-run programs, such as Medicare and Medicaid, may also impose additional discounts in determining their reimbursement rates to offset the cost of expanding coverage to a greater number of participants. In addition, states are allowed to opt out of the Medicaid expansion, which may limit the number of uninsured patients which receive coverage.

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· Completion and integration of acquisitions – On December 31, 2012, we acquired Sundance. We expect to continue to seek opportunities to grow through attractive acquisitions. However, acquisitions present a number of challenges, including significant effort to assimilate the operations, financial and accounting practices, and information systems, and to integrate key personnel from the acquired business. To manage our growth effectively, we must expand and improve our operational, financial, and management controls, information systems, and procedures. Acquisitions may cause disruptions in our operations and divert management's attention from day-to-day operations. We may not realize the anticipated benefits of the Sundance acquisition or any future acquisitions, profitability may suffer due to acquisition-related costs or unanticipated liabilities, and our stock price may decrease if the financial markets consider any acquisition to be inappropriately priced.

· Dependence on third party suppliers – We currently obtain a substantial portion of our helicopter spare parts and components from American Eurocopter Corporation (AEC) and Bell Helicopter, Inc. (Bell) and maintain supply arrangements with other parties for our engine and related dynamic components. As of December 31, 2012, AEC aircraft comprise 83% of our helicopter fleet while Bell aircraft constitute 15%. Increases in spare parts prices tend to be higher for aircraft which are no longer in production. The ability to pass on price increases may be limited by reimbursement rates established by Medicare, Medicaid, and insurance providers and by other market considerations. Based upon the manufacturing capabilities and industry contacts of AEC, Bell, and other suppliers, we believe we will not be subject to material interruptions or delays in obtaining aircraft parts and components but do not have an alternative source of supply for AEC, Bell, and certain other aircraft parts. Failure or significant delay by these vendors in providing necessary parts could, in the absence of alternative sources of supply, have a material adverse effect on us.

· Disposition of aircraft – We are dependent upon the secondary used aircraft market to dispose of older models of aircraft as part of our ongoing fleet rejuvenation efforts. In the past several years, the demand for used aircraft has diminished. If we are unable to dispose of our older aircraft, our aircraft carrying costs may increase above requirements for our current operations, or we may accept lower selling prices, resulting in losses on disposition or reduced gains. The types of aircraft targeted for disposition as part of our fleet rejuvenation usually have lower carrying costs than new aircraft. We have also been able to utilize some aircraft for spare parts to support the operation of our existing fleet, rather than seeking to sell the aircraft to a third party.

· Employee unionization – Our pilots have been represented by a collective bargaining unit since September 2003, and the current CBA is effective through December 2013. The CBA establishes procedures for training, addressing grievances, discipline and discharge, among other matters, and defines vacation, holiday, sick, health insurance, and other employee benefits. Wage increases stipulated in the CBA are consistent with our expectations of increases for other work groups during the next year. Union personnel have also actively attempted to organize other employee groups in the past, and these groups may elect to be represented by unions in the future.

· Competition – We face significant competition from several national and regional air medical transportation providers for contracts with hospitals and other healthcare institutions. A number of hospitals and healthcare institutions have also elected to operate their own Part 135 Certificate, thereby eliminating the need for a third party to provide air medical transportation services. In addition, we face competition from smaller regional carriers and alternative air ambulance providers such as sheriff departments for patient transports. In some cases advanced life support and critical care transport ground ambulance providers may also be competing for the same transports. Air medical operators generally compete on the basis of price, safety record, accident prevention and training, and the medical capability of the aircraft. There can be no assurance that we will be able to continue to compete successfully for new or renewing AMS contracts or market share in the future.

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· Aviation industry hazards and insurance limitations – Hazards are inherent in the aviation industry and may result in loss of life and property, thereby exposing us to potentially substantial liability claims arising from the operation of aircraft. We may also be sued in connection with medical malpractice claims arising from events occurring during or relating to medical flights. Under most AMS operating agreements, our customers have agreed to indemnify us against liability arising from medical malpractice claims and to maintain insurance covering such liability, but there can be no assurance that a hospital will not challenge the indemnification rights or will have sufficient assets or insurance coverage to fulfill its indemnity obligations. In independent model operations, our personnel perform medical procedures on transported patients, which may expose us to significant direct legal exposure to medical malpractice claims. We maintain general liability aviation insurance, aviation product liability coverage, and medical malpractice insurance, and believe our level of coverage is customary in the industry and adequate to protect against claims. However, there can be no assurance that it will be sufficient to cover potential claims or that present levels of coverage will be available in the future at reasonable cost. A limited number of hull and liability insurance underwriters provide coverage for air medical operators. Insurance underwriters are required by various federal and state regulations to maintain minimum levels of reserves for known and expected claims. However, there can be no assurance that underwriters have established adequate reserves to fund existing and future claims. The number of air medical accidents, as well as the number of insured losses within other helicopter operations and the commercial airline industry, and the impact of general economic conditions on underwriters may result in increases in premiums above the rate of inflation. In addition, loss of any aircraft as a result of accidents could cause adverse publicity and interruption of services to client hospitals, which could adversely affect our operating results and relationships with such hospitals. Approximately 46% of any increases in hull and liability insurance may be passed through to our AMS contract customers according to contract terms.

· Fuel costs – Fuel accounted for 3.8% of total operating expenses for the year ended December 31, 2012. Both the cost and availability of fuel are influenced by many economic and political factors and events occurring in oil-producing countries throughout the world. The price per barrel of oil has fluctuated significantly over the past several years. We cannot predict the future cost and availability of fuel or the impact of disruptions in oil supplies or refinery production from natural disasters. The unavailability of adequate fuel supplies or higher fuel prices could have an adverse effect on our cost of operations and profitability. Generally, our AMS hospital contract customers pay for all fuel consumed in medical flights. However, our ability to pass on increased fuel costs for independent operations may be limited by economic and competitive conditions and by reimbursement rates established by Medicare, Medicaid, and insurance providers. Since 2009, we have carried financial derivative agreements to protect against increases in the cost of Gulf Coast jet fuel. During 2012, fuel derivatives covered approximately 86% of our fuel consumption, and in the first quarter of 2013, we entered into fuel derivatives to cover approximately 75% of our anticipated fuel consumption for 2013.

· Employee recruitment and retention - An important aspect of our operations is the ability to hire and retain employees who have advanced aviation, nursing, and other technical skills. In addition, hospital contracts typically contain minimum certification requirements for pilots and mechanics. Employees who meet these standards are in great demand and are likely to remain a limited resource in the foreseeable future. If we are unable to recruit and retain a sufficient number of these employees, the ability to maintain and grow the business could be negatively impacted. A limited supply of qualified applicants may also contribute to wage increases which outpace the rate of inflation.

8

· Loss of key personnel – Our success depends to a significant extent on the continued services of our core senior management team, including our Chief Executive Officer. If one or more of these individuals were unable or unwilling to continue in his or her present position, our business may be disrupted and we may not be able to find replacements on a timely basis or with the same level of skill and experience. Finding and hiring any such replacements could be costly and may require us to grant significant incentive compensation.

· Restrictive debt covenants – Our senior credit facility contains restrictive financial and operating covenants, including restrictions on our ability to incur additional indebtedness and to engage in various corporate transactions such as mergers, acquisitions, asset sales and the payment of future cash dividends. These covenants may restrict future growth through the limitation on acquisitions and may adversely impact our ability to implement our business plan. Failure to comply with the covenants defined in the agreement or to maintain the required financial ratios could result in an event of default and accelerate payment of the principal balances due under the senior credit facility. Given factors beyond our control, such as interruptions in operations from unusual weather patterns or decreases in flight volume due to overall economic conditions not included in current projections, there can be no assurance that we will be able to remain in compliance with financial covenants in the future, or that, in the event of non-compliance, we will be able to obtain waivers from the lenders, or that to obtain such waivers, we will not be required to pay lenders significant cash or equity compensation.

· Technology and information systems – We are dependent on the proper function, availability and security of our information systems, including without limitation those systems utilized in our flight, dispatch and collection operations. We have undertaken substantial measures to protect the safety and security of our information systems and the data maintained within those systems, and on an annual basis, we test the adequacy of our security and disaster recovery measures. As part of our efforts, we may be required to expend significant capital to protect against the threat of security breaches or to alleviate problems caused by breaches, including unauthorized access to patient data and personally identifiable information stored in our information systems and the introduction of computer malware to our systems. However, there can no assurance our safety and security measures or our disaster recovery plan will detect and prevent security breaches in a timely manner or otherwise prevent damage or interruption of our systems and operations. We may be vulnerable to losses associated with the improper functioning, security breach or unavailability of our information systems. We may be held liable to our patients and regulators, which could result in fines, litigation, or negative publicity.

· Governmental regulation – The air medical transportation services and products industry is subject to extensive regulation by governmental agencies, including the FAA and Centers for Medicare and Medicaid Services (CMS), which imposes significant compliance costs on us. Changes in laws or regulations could have a material adverse impact on our cost of operations or revenue from flight operations. Further, failure to comply with these extensive laws and regulations or the terms or conditions may result in the assessment of administrative, civil and/or criminal penalties, the imposition of remedial obligations or corrective actions, and the issuance of injunctions limiting or prohibiting some of or all of our operations. NTSB hearings into accidents may result in the promulgation of additional regulations for our industry.

· Government contracting – Approximately 3.4% of our revenue for the year ended December 31, 2012, was derived from contracts with the U.S. government, including United Rotorcraft contracts for the manufacture of interiors for the U.S. Army’s HH-60M helicopter. U.S. government contracts are subject to termination by the government, either for the convenience of the government or for default as a result of our failure to perform under the applicable contract. If terminated by the government as a result of our default, we could be liable for additional costs the government incurs in acquiring undelivered goods or services from another source and any other damages it suffers. United Rotorcraft is also sensitive to U.S. military budgets, which may be impacted by numerous economic and political factors and which may fluctuate based on the policies of the current administration or Congress. In addition, the specific government programs in which we participate, or in which we may seek to participate in the future, compete with other programs for consideration during the budget formulation and appropriation processes. One or more of the programs that we currently support could be phased out or terminated. Reductions in these existing programs, unless offset by other programs and opportunities, could have a material adverse effect on the competitive position, results of operations, cash flows or financial condition of the United Rotorcraft Division.

9

· Debt and lease obligations – We are obligated under debt facilities and capital lease arrangements providing for up to approximately $677.2 million of indebtedness, of which approximately $644.2 million was outstanding at December 31, 2012, and operating lease obligations which total $44.8 million over the remaining terms of the leases. If we fail to meet our payment obligations or otherwise default under the agreements governing indebtedness or lease obligations, the lenders under those agreements will have the right to accelerate the indebtedness and exercise other rights and remedies against us. These rights and remedies include the rights to repossess and foreclose upon the assets that serve as collateral, initiate judicial foreclosure against us, petition a court to appoint a receiver for us, and initiate involuntary bankruptcy proceedings against us. If lenders exercise their rights and remedies, our assets may not be sufficient to repay outstanding indebtedness and lease obligations, and there may be no assets remaining after payment of indebtedness and lease obligations to provide a return on common stock.

· Foreign ownership – Federal law requires that United States air carriers be citizens of the United States. For a corporation to qualify as a United States citizen, the president and at least two-thirds of the directors and other managing officers of the corporation must be United States citizens and at least 75% of the voting interest of the corporation must be owned or controlled by United States citizens. If we are unable to satisfy these requirements, operating authority from the Department of Transportation may be revoked. As of December 31, 2012, we are not aware of any foreign person who holds more than 5% of our outstanding Common Stock. Because we are unable to control the transfer of our stock, we are unable to assure that we can remain in compliance with these requirements in the future.

ITEM 1B. UNRESOLVED STAFF COMMENTS

None.

ITEM  2. PROPERTIES

Facilities

Our headquarters, which serves all segments of our operation, consists of approximately 113,000 square feet of office and hangar space in metropolitan Denver, Colorado, at Centennial Airport. We own the buildings subject to an existing ground lease with the airport authority which expires in October 2044. The headquarters buildings are also collateral for a ten-year mortgage which matures in 2018. We hold a lease through January 2015 for approximately 22,000 square feet of office space in San Bernardino, California, for our medical billing department and through February 2021 for approximately 12,000 square feet of office space in Omaha, Nebraska, for our communications and dispatch center. Both leases contain options to extend the terms past the stated expiration dates. We also own and lease various properties for depot level maintenance, warehouse, and administration purposes. We believe that these facilities are in good condition and suitable for our present requirements.

10

Equipment and Parts

As of December 31, 2012, our aircraft fleet consisted of 178 Company-owned aircraft and 195 leased aircraft, including aircraft acquired in the Sundance transaction. The table below also includes 67 aircraft owned by AMS customers and operated by us under contracts with them.

Type	AMS Division		AMS Customer- Owned		Sundance		Total
Single-Engine Helicopters:
Bell 206		3		--		--		3
Bell 407		33		9		--		42
Eurocopter AS 350		106		4		20		130
Eurocopter EC 130		39		--		4		43
Total Single-Engine		181		13		24		218
Twin-Engine Helicopters:
Bell 222		10		--		--		10
Bell 412		3		--		--		3
Bell 429		1		1		--		2
Bell 430		--		4		--		4
Eurocopter AS 365		2		5		--		7
Eurocopter BK 117		47		7		--		54
Eurocopter EC 135		77		9		--		86
Eurocopter EC 145		7		20		--		27
Boeing MD 902		1		1		--		2
Agusta 109		1		3		--		4
Agusta 119		1		--		--		1
Total Twin-Engine		150		50		--		200
Total Helicopters		331		63		24		418
Airplanes:
Piper Saratoga		--		--		1		1
King Air B 100		1		--		--		1
King Air B 200		2		1		--		3
Pilatus PC 12		14		3		--		17
Total Airplanes		17		4		1		22
TOTALS		348		67		25		440

We generally pay all insurance, taxes, and maintenance expense for each aircraft in our fleet. Because helicopters are insured at replacement cost which usually exceeds book value, we believe that helicopter accidents covered by hull and liability insurance will generally result in full reimbursement of any damages sustained. We may from time to time purchase and sell helicopters in order to best meet the specific needs of our operations.

We have experienced no significant difficulties in obtaining required parts for our helicopters. Repair and replacement components are purchased primarily through AEC and Bell, whose aircraft make up the majority of our fleet. Based upon the manufacturing capabilities and industry contacts of AEC and Bell, we believe we will not be subject to material interruptions or delays in obtaining aircraft parts and components. Any termination of production by AEC or Bell would require us to obtain spare parts from other suppliers, which are not currently in place.

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ITEM 3. LEGAL PROCEEDINGS

On January 30, 2013, we were served with a purported class action lawsuit, Helmick and Williams v. Air Methods Corporation, filed in Superior Court in Alameda County, California. We will file our Answer and Affirmative Defenses on March 4, 2013. The lawsuit alleges failure to pay wages and overtime, failure to provide rest and meal breaks or to pay compensation in lieu of such breaks, failure to pay timely wages on termination, failure to provide accurate wage statements, and unlawful business practices and unfair competition within the jurisdiction of the state of California. Plaintiff is seeking compensatory damages and other applicable statutory damages, penalties and wages under the Labor Code, and attorneys' fees, interest and costs.

We are currently evaluating the merits of the lawsuit and plan to vigorously defend against this suit. However, we cannot predict the outcome of this lawsuit or whether we may be required to pay damages, settlement costs, or legal costs.

In the normal course of business, there are various other claims in process, matters in litigation and other contingencies. These include claims resulting from helicopter accidents, employment-related claims and claims from patients transported by our company alleging negligent medical care or transport. To date, no claims of these types of litigation, certain of which are covered by insurance policies, have had a material effect on us. While it is not possible to predict the outcome of these other suits, legal proceedings and claims with certainty, management is of the opinion that adequate provision for potential losses associated with these other matters has been made in the financial statements and that the ultimate resolution of these other matters will not have a material adverse effect on our financial position and results of operations.

ITEM 4.  MINE SAFETY DISCLOSURES

None.

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PART II

ITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY, RELATED STOCKHOLDER MATTERS, AND ISSUER PURCHASES OF EQUITY SECURITIES

Our common stock is traded on the NASDAQ Global Select Market® under the trading symbol "AIRM." The following table shows, for the periods indicated, the high and low closing prices for our common stock. The quotations for the common stock represent prices between dealers and do not reflect adjustments for retail mark-ups, mark-downs or commissions, and may not represent actual transactions. All prices presented have been retroactively adjusted for a 3-for-1 stock split which was effective on December 28, 2012, and is described in further detail in Note 9 to the consolidated financial statements.

Year Ended December 31, 2012
Common Stock	High		Low
First Quarter	$	30.61	$	26.47
Second Quarter		32.75		27.06
Third Quarter		40.35		31.84
Fourth Quarter		40.26		34.49

Year Ended December 31, 2011
Common Stock	High		Low
First Quarter	$	22.42	$	16.80
Second Quarter		25.26		19.75
Third Quarter		25.38		18.91
Fourth Quarter		29.43		20.83

As of February 22, 2013, there were approximately 192 holders of record of our common stock. We estimate that we have approximately 2,900 beneficial owners of common stock.

On December 28, 2012, we paid a special cash dividend of $7.00 per share (on a pre-split basis) on our common stock to stockholders of record at the close of business on December 20, 2012. Although our current intention is to retain any future earnings to finance the growth of our business rather than to pay dividends, we may consider the payment of dividends in the future. Our senior credit facility contains a covenant which restricts, but does not prohibit, the payment of dividends.

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Stock Performance Graph

The following graph compares our cumulative total stockholder return for the period from December 31, 2007 through December 31, 2012, against the Standard & Poor’s 500 Index (S&P 500) and peer group companies in industries similar to those of the Company. The S&P 500 is a widely used composite index reflecting the returns of 500 publicly traded companies in a variety of industries. The Peer Group consists of all publicly traded companies in SIC Group 4522: “Non-scheduled Air Transport,” including Alpine Air Express, Inc.; Atlas Air Worldwide Holdings, Inc.; Avantair, Inc.; Bristow Group, Inc.; and PHI, Inc. We believe that this Peer Group is our most appropriate peer group for stock comparison purposes due to the limited number of publicly traded companies engaged in air or ground medical transport and because this Peer Group contains a number of companies with capital costs and operating constraints similar to ours. The graph shows the value at the end of each of the last five fiscal years of $100 invested in our common stock or the indices on December 31, 2007, and assumes reinvestment of dividends. Historical stock price performance is not necessarily indicative of future stock price performance.

INDEXED RETURNS

	Base Period		Years Ending
	Dec-07		Dec-08		Dec-09		Dec-10		Dec-11		Dec-12
AIR METHODS CORPORATION		100.00		32.19		67.69		113.29		170.02		237.42
S & P 500		100.00		63.00		79.67		91.67		93.61		108.59
PEER GROUP		100.00		39.51		65.89		88.57		87.60		107.32

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ITEM  6. SELECTED FINANCIAL DATA

The following tables present selected consolidated financial information of the Company and our subsidiaries which has been derived from our audited consolidated financial statements. This selected financial data should be read in conjunction with our consolidated financial statements and notes thereto appearing in Item 8 of this report. Revenue, expenses, and total assets as of and for the years ended December 31, 2012 and 2011, increased in part as a result of the acquisition of Omniflight in August 2011. Total assets as of December 31, 2012, also increased in part as a result of the acquisition of Sundance in December 2012. All share and per share amounts presented below have been retroactively adjusted to reflect the 3-for-1 stock split effected in December 2012.

SELECTED FINANCIAL DATA OF THE COMPANY

(Amounts in thousands except share and per share amounts)

	Year Ended December 31,
	2012			2011			2010			2009			2008
Statement of Operations Data:
Revenue	$	850,812			660,549			562,002			514,298			501,447
Operating expenses		(578,457	)		(481,576	)		(409,578	)		(389,132	)		(391,819	)
General and administrative expenses		(102,023	)		(85,500	)		(69,226	)		(64,963	)		(67,480	)
Other expense, net		(17,388	)		(16,171	)		(15,242	)		(16,337	)		(15,958	)
Income before income taxes		152,944			77,302			67,956			43,866			26,190
Income tax expense		(59,792	)		(30,728	)		(25,199	)		(16,954	)		(9,725	)
Net income	$	93,152			46,574			42,757			26,912			16,465
Basic income per common share	$	2.41			1.23			1.14			.73			.45
Diluted income per common share	$	2.39			1.21			1.13			.72			.44
Weighted average number of shares of Common Stock outstanding - basic		38,594,286			37,999,422			37,489,539			36,803,181			36,465,432
Weighted average number of shares of Common Stock outstanding - diluted		39,044,468			38,482,785			37,789,242			37,303,758			37,591,143

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SELECTED FINANCIAL DATA OF THE COMPANY

(Amounts in thousands)

	As of December 31,
	2012		2011		2010		2009		2008
Balance Sheet Data:
Total assets	$	1,118,863		1,028,471		723,110		694,338		689,287
Long-term liabilities		675,801		569,861		374,288		391,344		403,695
Stockholders' equity		299,610		287,902		233,429		185,573		151,536

SELECTED OPERATING DATA

	2012		2011			2010		2009		2008
For year ended December 31:
Patient transports		55,976		45,480	(1)		40,046		39,613		42,394
As of December 31:
Community-based locations		169		165			110		102		98
AMS contract locations		141		136			126		132		147

(1) Includes transports and missions for Omniflight locations from August 1 through December 31, 2011, only.

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ITEM  7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

The following discussion of the results of operations and financial condition should be read in conjunction with our consolidated financial statements and notes thereto included in Item 8 of this report. This report, including the information incorporated by reference, contains forward-looking statements as defined in the Private Securities Litigation Reform Act of 1995. The use of any of the words “believe,” “expect,” “anticipate,” “plan,” “estimate,” and similar expressions are intended to identify such statements. Forward-looking statements include statements concerning the integration of Sundance; our possible or assumed future results; flight volume and collection rates for patient transports; size, structure and growth of our air medical services and products markets; continuation and/or renewal of hospital contracts; acquisition of new and profitable UR Division contracts; and other matters. The actual results that we achieve may differ materially from those discussed in such forward-looking statements due to the risks and uncertainties described in the Risk Factors contained in Part I, Item 1A of this report, in Management’s Discussion and Analysis of Financial Condition and Results of Operations, and in other sections of this report,as well as in our quarterly reports on Form 10-Q. We undertake no obligation to update any forward-looking statements.

Overview

We provide air medical transportation services throughout the United States and design, manufacture, and install medical aircraft interiors and other aerospace and medical transport products. Our divisions, or business segments, are organized according to the type of service or product provided and consist of the following:

· Air Medical Services (AMS) - provides air medical transportation services to the general population as an independent service (also called community-based services) and to hospitals or other institutions under exclusive operating agreements (also called hospital-based services). Patient transport revenue consists of flight fees billed directly to patients, their insurers, or governmental agencies, and cash flow is dependent upon collection from these individuals or entities.Air medical services contract revenue consists of fixed monthly fees (approximately 80% of total contract revenue) and hourly flight fees (approximately 20% of total contract revenue) billed to hospitals or other institutions. In 2012 the AMS Division generated 97% of our total revenue, compared to 95% in 2011 and 96% in 2010.

· United Rotorcraft (UR) Division - designs, manufactures, and installs aircraft medical interiors and other aerospace and medical transport products for domestic and international customers. In 2012 the UR Division generated 3% of our total revenue, compared to 5% in 2011 and 4% in 2010.

See Note 16 to the consolidated financial statements included in Item 8 of this report for operating results by segment.

We believe that the following factors have the greatest impact on our results of operations and financial condition:

· Flight volume. Almost all of patient transport revenue is derived from flight fees, as compared to approximately 20% of AMS contract revenue. By contrast, 80% of our costs primarily associated with flight operations (including salaries, aircraft ownership costs, hull insurance, and general and administrative expenses) incurred during the year ended December 31, 2012, are mainly fixed in nature. While flight volume is affected by many factors, including competition and the effectiveness of marketing and business development initiatives, the greatest single variable has historically been weather conditions. Adverse weather conditions—such as fog, high winds, or heavy precipitation—hamper our ability to operate our aircraft safely and, therefore, result in reduced flight volume. Total patient transports for community-based locations were approximately 56,000 for 2012 compared to approximately 45,500 for 2011. Patient transports for community-based locations open longer than one year (Same-Base Transports) were approximately 44,900 in 2012 compared to 44,400 in 2011. Cancellations due to unfavorable weather conditions for community-based locations open longer than one year were 1,698 lower in 2012 compared to 2011. Requests for service decreased by 1.2% for the year ended December 31, 2012, for bases open greater than one year.

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· Reimbursement per transport. We respond to calls for air medical transports without pre-screening the creditworthiness of the patient and are subject to collection risk for services provided to insured and uninsured patients. Medicare and Medicaid also receive contractual discounts from our standard charges for flight services. Patient transport revenue is recorded net of provisions for contractual discounts and estimated uncompensated care. Both provisions are estimated during the period the related services are performed based on historical collection experience and any known trends or changes in reimbursement rate schedules and payer mix. The provisions are adjusted as required based on actual collections in subsequent periods. Net reimbursement per patient transport is primarily a function of price, payer mix, and timely and effective collection efforts. Both the pace of collections and the ultimate collection rate are affected by the overall health of the U.S. economy, which impacts the number of indigent patients and funding for state-run programs, such as Medicaid. Medicaid reimbursement rates in many jurisdictions have remained well below the cost of providing air medical transportation. In addition, the collection rate is impacted by changes in the cost of healthcare and health insurance; as the cost of healthcare increases, health insurance coverage provided by employers may be reduced, resulting in an increase in the uninsured population. Most of the significant provisions of the PPACA are not scheduled to take effect until 2014, and the impact on our reimbursement rates is, therefore, unknown. Net reimbursement per transport increased 15.1% in the year ended December 31, 2012, compared to 2011, attributed to recent price increases. Provisions for contractual discounts and estimated uncompensated care as a percentage of related gross billings for patient transports were as follows:

	For years ended December 31,
	2012			2011			2010
Gross billings		100	%		100	%		100	%
Provision for contractual discounts		45	%		44	%		40	%
Provision for uncompensated care		19	%		19	%		19	%

Although price increases generally increase the net reimbursement per transport from insurance payers, the amount per transport collectible from private patient payers, Medicare, and Medicaid does not increase proportionately with price increases. Therefore, depending upon overall payer mix, price increases will usually result in an increase in the percentage of uncollectible accounts. Although we have not yet experienced significant increased limitations in the amount reimbursed by insurance companies, continued price increases may cause insurance companies to limit coverage for air medical transport to amounts less than our standard rates. The increase in the percentage of uncollectible accounts in 2012 and 2011 also reflects the addition of Omniflight which had a higher gross charge structure and, therefore, a higher percentage of uncollectible accounts. In addition, the percentage of transports covered by insurance for Omniflight’s operations has historically been approximately three to four percentage points lower than the percentage of insured transports for the Company’s historical operations. The number of transports covered by insurance decreased from 35.4% of total transports for the year ended December 31, 2011, to 34.5% of total transports for the year ended December 31, 2012, with the decrease moving almost equally to Medicare and private patient payers.

· Aircraft maintenance. AMS operations are directly affected by fluctuations in aircraft maintenance costs. Proper operation of the aircraft by flight crews and standardized maintenance practices can help to contain maintenance costs. Increases in spare parts prices from original equipment manufacturers tend to be higher for aircraft which are no longer in production. Two models of aircraft within our fleet, representing 15% of the rotor wing fleet, are no longer in production and are, therefore, susceptible to price increases which outpace general inflationary trends. In addition, on-condition components are more likely to require replacement with age. Since January 1, 2011, we have taken delivery of 37 new aircraft and have commitments to take delivery of 47 additional aircraft over the next three years. We have replaced discontinued models and other older aircraft with the new aircraft, as well as provided capacity for base expansion. Replacement models of aircraft typically have higher ownership costs than the models targeted for replacement but lower maintenance costs. Total maintenance expense increased 18.1% from the year ended December 31, 2011, to the year ended December 31, 2012, while total flight volume increased 14.5% over the same period. The change in maintenance expense reflects normal fluctuations in the timing of overhaul and replacement cycles for aircraft parts, as well as the acquisition of Omniflight in August 2011.

18

· Competitive pressures from low-cost providers. We are recognized within the industry for our standard of service and our use of cabin-class aircraft. Many of our competitors utilize aircraft with lower ownership and operating costs and do not require a similar level of experience for aviation and medical personnel. Reimbursement rates established by Medicare, Medicaid, and most insurance providers are not contingent upon the type of aircraft used or the experience of personnel. However, we believe that higher quality standards help to differentiate our service from competitors and, therefore, lead to higher utilization.

· Employee recruitment and relations. The ability to deliver quality services is partially dependent upon our ability to hire and retain employees who have advanced aviation, nursing, and other technical skills. In addition, hospital contracts typically contain minimum certification requirements for pilots and mechanics. Employees who meet these standards are in great demand and are likely to remain a limited resource in the foreseeable future.Our pilots are represented by a collective bargaining unit and are covered under a CBA which is effective through December 31, 2013. Other employee groups may also elect to be represented by unions in the future.

Results of Operations

Year ended December 31, 2012 compared to 2011

We reported net income of $93,152,000 for the year ended December 31, 2012, compared to $46,574,000 for the year ended December 31, 2011.The results for 2012 and for five months of 2011 include the impact of the Omniflight acquisition which closed in August 2011.Net reimbursement per patient transport increased 15.1% in 2012 compared to 2011, while Same-Base Transports were 1.0% higher over the same period.

Air Medical Services

Patient transport revenue is recorded net of provisions for contractual discounts and uncompensated care and increased $174,424,000, or 41.9%, for the year ended December 31, 2012, compared to the year ended December 31, 2011, for the following reasons:

· Net revenue of $74,560,000 from Omniflight’s patient transports from January 1, 2012, through July 31, 2012.

· Increase of 15.1% in net reimbursement per transport for the year ended December 31, 2012, compared to 2011, due to the benefit of recent price increases net of the deterioration in payer mix described above.

· Increase of 434, or 1.0%, in Same-Base Transports for the year ended December 31, 2012, compared to 2011. Cancellations due to unfavorable weather conditions for bases open longer than one year were 1,698 lower in 2012 compared to 2011. Requests for service decreased by 1.2% in 2012 for bases open greater than one year.

· Incremental net revenue of $25,991,000 for the year ended December 31, 2012, generated from the addition of nineteen new bases, including seven bases resulting from the conversion of hospital contracts, during either 2012 or 2011.

· Closure of five bases due to insufficient flight volume and the conversion of one base back to hospital-based operations during either 2012 or 2011, resulting in a decrease in net revenue of approximately $7,461,000 during the year ended December 31, 2012.

Air medical services contract revenue increased $18,021,000, or 8.7%, for the year ended December 31, 2012, compared to the year ended December 31, 2011, for the following reasons:

· Net revenue of $13,694,000 from Omniflight’s air medical services contracts from January 1, 2012, through July 31, 2012.

· Cessation of service under six contracts and the conversion of three contracts to community-based operations, as well as the closure of certain satellite locations at the option of three current customers, during either 2012 or 2011, resulting in a decrease in net revenue of approximately $18,660,000 for the year ended December 31, 2012.

· Incremental net revenue of $14,792,000 for the year ended December 31, 2012, generated from the addition of three new air medical services contracts, the expansion of eight contracts to additional bases of operation, and the conversion of one community-based location back to hospital-based operations during either 2012 or 2011.

· Decrease of approximately 1.3% in flight volume for the year ended December 31, 2012, for all contracts excluding Omniflight operations from January 1 through July 31, 2012; new contracts; contract expansions; and closed contracts.

· Annual price increases in the majority of contracts based on stipulated contractual increases, changes in the Consumer Price Index or spare parts prices from aircraft manufacturers.

19

Flight center costs (consisting primarily of pilot, mechanic, and medical staff salaries and benefits) increased $61,805,000, or 23.7%, for the year ended December 31, 2012, compared to 2011, for the following reasons:

· Flight center costs of approximately $41,613,000 related to Omniflight’s operations from January 1, 2012, through July 31, 2012.

· Increase of approximately $16,503,000 for the year ended December 31, 2012, for the addition of personnel to staff new base locations described above.

· Decrease of approximately $10,086,000 for the year ended December 31, 2012, due to the closure of base locations described above.

· Increases in salaries for merit pay raises.

Aircraft operating expenses increased $25,308,000, or 20.1%, for the year ended December 31, 2012, in comparison to 2011. Aircraft operating expenses consist of fuel, insurance, and maintenance costs and generally are a function of the size of the fleet, the type of aircraft flown, and the number of hours flown. The increase in costs is due to the following:

· Increase in aircraft maintenance expense of $16,102,000, or 18.1%, to $105,142,000. Total flight volume increased 14.5% for 2012 compared to 2011. The change in maintenance expense reflects normal fluctuations in the timing of overhaul and replacement cycles for aircraft parts.

· Increase of approximately 8.2% in the cost of aircraft fuel per hour flown. Total fuel costs increased $6,075,000 to $25,623,000 for 2012 compared to 2011. During both 2012 and 2011 we had commodity call options to protect against aircraft fuel price increases greater than 20%, covering approximately 86% of our fuel consumption for 2012 and essentially all of our consumption in 2011.Fuel expense included non-cash mark to market derivative losses of $257,000 for 2012 compared to $800,000 for 2011. Cash settlements under the terms of the agreements totaled $1,131,000 in 2011. We received no cash settlements under the agreements in 2012.

· Decreases in hull insurance rates effective July 2012 and 2011.

· Incremental aircraft operating expenses related to the Omniflight fleet were approximately $18,410,000 from January 1, 2012 through July 31, 2012.

United Rotorcraft Division

Medical interiors and products revenue decreased $1,630,000, or 5.4%, for the year ended December 31, 2012, compared to 2011. Significant projects in process during 2012 included fifty multi-mission interiors for the U.S. Army’s HH-60M helicopter and ten aircraft medical interiors for commercial customers. Revenue by product line for the year ended December 31, 2012, was as follows:

· $14,460,000 – governmental entities

· $14,372,000 – commercial customers

Significant projects in process during 2011 included work under two contracts to produce a total of fifty multi-mission interiors for the U.S. Army’s HH-60M helicopter, 53 interiors for an older generation of the U.S. Army’s Blackhawk helicopter, approximately 187 MEV litter systems, and seven aircraft medical interior kits for commercial customers. Revenue by product line for the year ended December 31, 2011, was as follows:

· $21,160,000 – governmental entities

· $9,302,000 – commercial customers

Cost of medical interiors and products decreased $564,000, or 2.6%, for the year ended December 31, 2012, as compared to the previous year, due primarily to changes in sales volume and product mix. Costs in 2012 also included development and design work on aircraft interior configurations for commercial customers, leading to higher engineering and certification costs and to lower profit margins.

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General Expenses

Depreciation and amortization expense increased $9,647,000, or 13.2%, for the year ended December 31, 2012. Incremental depreciation related to Omniflight’s fixed assets, including aircraft under capital leases, was approximately $5,547,000, and amortization of Omniflight’s intangible assets totaled $2,301,000 from January 1, 2012, through July 31, 2012. In addition, from the fourth quarter of 2011 through the end of 2012, we added 30 aircraft subject to capital leases, totaling approximately $60.3 million, to our depreciable assets.

General and administrative (G&A) expenses increased $16,523,000, or 19.3%, for the year ended December 31, 2012, compared to 2011. G&A expenses include executive management, accounting and finance, billing and collections, information services, human resources, aviation management, pilot training, dispatch and communications, and AMS program administration. G&A expenses were 12.0% of revenue for 2012, compared to 12.9% of revenue for 2011. During the first quarter of 2012, we completed the consolidation of the Part 135 Air Carrier Certificate for Omniflight into the Air Methods certificate and completed the process of integrating other Omniflight overhead functions into existing departments. G&A expenses for 2012 also included $9,451,000 for severance related to the elimination of the chief operating officer position and incentive compensation accruals related to our financial performance. Expense related to incentive compensation totaled approximately $4,567,000 in 2011. Expenses for 2011 also included approximately $2,283,000 in transaction costs and employee severance related to the acquisition of Omniflight. We also incurred approximately $1,678,000 in expenses during the fourth quarter of 2011 related to transitioning Omniflight’s G&A functions into existing Air Methods departments.

Interest expense increased $579,000, or 2.9%, for the year ended December 31, 2012, compared to 2011. The increase is primarily due to interest recorded on capital lease obligations, totaling approximately $17.0 million as of December 31, 2012, assumed in the Omniflight acquisition and to interest incurred on the $200 million term loan originated in July 2011 to fund the acquisition of Omniflight. The term loan bears interest at a variable rate which averaged 2.2% for the year ended December 31, 2012, compared to 2.4% for the year ended December 31, 2011. In addition, we carried an average balance of $24.4 million against our line of credit during 2012, compared to $1.6 million in 2011. The line of credit bears interest at a variable rate which averaged 3.1% for 2012. These increases were offset in part by the effect of reduction in principal balances for long-term debt and capital lease obligations as a result of regularly scheduled payments; lease buyouts relating to obligations totaling $51.2 million; and the payoff of our previous $50 million term loan in July 2011.

Income tax expense was $59,792,000, or 39.1% of income before taxes in 2012 and $30,728,000, or 39.8% of income before taxes in 2011. The rate in 2012 was affected by apportionmentfactor adjustmentswhich increased our expected blended state rate; applying the new rate to deferred tax assets and liabilities resulted in income tax expense of $667,000 for the year ended December 31, 2012. Excluding the effect of this change, the effective tax rate was 38.7% in 2012. The decrease in this adjusted rate compared to 2011 is primarily the result of a decrease in certain permanent book-tax differences. Changes in our effective tax rate areaffected by the apportionment of revenue and income before taxesto the various jurisdictions in which we operate and by changing tax laws and regulations in those jurisdictions.

Year ended December 31, 2011 compared to 2010

We reported net income of $46,574,000 for the year ended December 31, 2011, compared to $42,757,000 for the year ended December 31, 2010. The results for 2011 include the impact of the Omniflight acquisition effective August 1, 2011. Net reimbursement per patient transport increased 10.6% in 2011 compared to 2010, while Same-Base Transports were 6.9% lower over the same period.

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Air Medical Services

Patient transport revenue increased $86,443,000, or 26.2%, for the year ended December 31, 2011, compared to 2010, for the following reasons:

· Net revenue of $49,474,000 from Omniflight’s patient transports from the acquisition date through December 31, 2011.

· Increase of 10.6% in net reimbursement per transport for year ended December 31, 2011, compared to 2010, due to the benefit of recent price increases net of the change in payer mix resulting from the Omniflight acquisition described above.

· Decrease of 2,718, or 6.9%, in Same-Base Transports for the year ended December 31, 2011, compared to 2010. Cancellations due to unfavorable weather conditions for locations open longer than one year were 508 higher in 2011 compared to 2010. Requests for service decreased by 4.5% in 2011 for bases open greater than one year.

· Incremental net revenue of $26,135,000 for the year ended December 31, 2011, generated from the addition of nineteen new bases, including eleven bases resulting from the conversion of hospital contracts, during either 2011 or 2010.

· Closure of three bases during 2010 and one during 2011 due to insufficient flight volume, resulting in a decrease in net revenue of approximately $4,431,000 during the year ended December 31, 2011.

Air medical services contract revenue increased $2,934,000, or 1.4%, for the year ended December 31, 2011, compared to 2010, for the following reasons:

· Net revenue of $11,987,000 from Omniflight’s air medical services contracts from the acquisition date through December 31, 2011.

· Cessation of service under three contracts and the conversion of five contracts to community-based services during either 2011 or 2010, resulting in a decrease in net revenue of approximately $16,903,000 for the year ended December 31, 2011.

· Incremental net revenue of $5,771,000 for the year ended December 31, 2011, generated from the expansion of six contracts to additional bases of operation during either 2011 or 2010 and from the conversion of one community-based location back to hospital-based operations in 2011.

· Decrease of 2.2% in flight volume for the year ended December 31, 2011, for all contracts excluding contract expansions and closed contracts discussed above, as well as Omniflight’s air medical services contracts from the acquisition date through December 31, 2011.

· Annual price increases in the majority of contracts based on stipulated contractual increases, changes in the Consumer Price Index or spare parts prices from aircraft manufacturers.

Flight center costs increased $44,271,000, or 20.5%, to $260,363,000 for the year ended December 31, 2011, compared to 2010. During the fourth quarter of 2011, we recorded $2,179,000 for retroactive adjustments in pay resulting from the new CBA negotiated with our pilots and $600,000 in additional workers compensation expense related to a fatal accident experienced in 2011.Increase is due to the following:

· Flight center costs of approximately $28,817,000 related to Omniflight’s operations from the acquisition date through December 31, 2011.

· Increase of approximately $12,633,000 for the year ended December 31, 2011, for the addition of personnel to staff new base locations described above.

· Decrease of approximately $8,008,000 for the year ended December 31, 2011, due to the closure of base locations described above.

· Increases in salaries for merit pay raises and in the cost of employee medical benefits.

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Aircraft operating expenses increased $11,783,000, or 10.3%, for the year ended December 31, 2011, in comparison to 2010, for the following reasons:

· Increase in aircraft maintenance expense of $4,328,000, or 5.1%, to $89,040,000. Total flight volume increased 13.1% for 2011 compared to 2010. Excluding the impact of the Omniflight fleet, aircraft maintenance expense decreased 7.2% for 2011 compared to 2010, and total flight volume, excluding the Omniflight fleet, increased 1.4%. The decrease in maintenance expense reflects normal fluctuations in the timing of overhaul and replacement cycles for aircraft parts. In addition, during 2011 we became qualified to bring repairs and overhauls of certain aircraft engines in-house, resulting in a decrease of approximately 20% in the repair costs associated with this engine type.

· Increase of approximately 28.1% in the cost of aircraft fuel per hour flown. Total fuel costs increased $6,247,000 to $19,548,000 for 2011 compared to 2010. During both 2011 and 2010 we had commodity call options to protect against aircraft fuel price increases greater than 20%, covering essentially all of our fuel consumption for 2011, excluding the impact of the Omniflight fleet, and approximately 97% of our consumption in 2010.Fuel expense included non-cash mark to market derivative losses of $800,000 for 2011 compared to $181,000 for 2010. Cash settlements under the terms of the agreements totaled $1,131,000 in 2011. We received no cash settlements under the agreements in 2010.

· Decreases in hull insurance rates effective July 2011 and 2010.

· Total aircraft operating expenses related to the Omniflight fleet were approximately $15,480,000 from the acquisition date through December 31, 2011.

United Rotorcraft Division

Medical interiors and products revenue increased $8,015,000, or 35.7%, from $22,447,000 for the year ended December 31, 2010, to $30,462,000 for the year ended December 31, 2011. Significant projects in process during 2011 included work under two contracts to produce a total of fifty multi-mission interiors for the U.S. Army’s HH-60M helicopter, 53 interiors for an older generation of the U.S. Army’s Blackhawk helicopter, approximately 187 litter systems for the U.S. Army’s Medical Evacuation Vehicle (MEV), and seven aircraft medical interior kits for commercial customers. Revenue by product line for the year ended December 31, 2011, was as follows:

· $21,160,000 – governmental entities

· $9,302,000 – commercial customers

Significant projects in process during 2010 included 32 HH-60M units, 36 interiors for an older generation of the U.S. Army’s Blackhawk helicopter, approximately 187 MEV litter systems, and five medical interior kits for commercial customers. Revenue by product line for the year ended December 31, 2010, was as follows:

· $16,785,000 – governmental entities

· $5,662,000 – commercial customers

Cost of medical interiors and products increased $6,024,000, or 38.2%, for the year ended December 31, 2011, as compared to the previous year, due primarily to changes in sales volume.

Other Revenue and General Expenses

Other revenue—consisting of fees earned for dispatch, transfer center, and patient billing services provided to third parties—increased $1,155,000, or 20.3% for the year ended December 31, 2011, compared to 2010, primarily due to eleven new contracts entered into during either 2011 or 2010.

Depreciation and amortization expense increased $9,241,000, or 14.5%, for the year ended December 31, 2011. Depreciation related to Omniflight’s fixed assets, including aircraft under capital leases, was approximately $4,040,000 from the acquisition date through December 31, 2011. Amortization of Omniflight’s intangible assets totaled $1,643,000 for 2011 and was allocated entirely to the AMS division. In addition, during 2011 we added 24 aircraft subject to capital leases, totaling approximately $46.7 million, to our depreciable assets.

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General and administrative (G&A) expenses increased $16,274,000, or 23.5%, for the year ended December 31, 2011, compared to 2010. G&A expenses were 12.9% of revenue for 2011, compared to 12.3% of revenue for 2010. Expenses for 2011 included approximately $2,283,000 in transaction costs and employee severance related to the acquisition of Omniflight. We also incurred approximately $1,678,000 in expenses related to transitioning Omniflight’s G&A functions into existing Air Methods departments. The increase in expense also reflects additional headcount in our safety department to support the ongoing implementation of our Safety Management System (SMS) and in our billing, dispatch, and transfer center departments to support the increase in third party contracts.

Interest expense increased $896,000, or 4.7%, for the year ended December 31, 2011, compared to 2010. The increase is primarily due to interest of $641,000 recorded on capital lease obligations assumed in the Omniflight acquisition and to interest incurred on the $200 million term loan originated to fund the acquisition of Omniflight. The term loan bears interest at a variable rate which averaged 2.4% from inception through December 31, 2011. In addition, we carried an average balance of $5.3 million against our line of credit during the fourth quarter of 2011, compared to no borrowings against our line in 2010. These increases were partially offset by the effect of the reduction in principal balances for long-term debt and capital lease obligations as a result of regularly scheduled payments.

Income tax expense was $30,728,000, or 39.8% of income before taxes in 2011 and $25,199,000, or 37.1% of income before taxes in 2010. The rate in 2010 was affected by apportionmentfactor adjustmentswhich reduced our expected blended state rate by approximately $300,000 and adjustments to previously filed state income tax returns which also reduced state income tax expense by approximately $625,000. These adjustments represented 1.3% of income before taxes in 2010. Changes in our effective tax rate areaffected by the apportionment of revenue and income before taxesfor the various jurisdictions in which we operate and by changing tax laws and regulations in those jurisdictions.

Liquidity and Capital Resources

Cash Requirements

Debt and Other Long-term Obligations

The following table outlines our contractual obligations as of December 31, 2012 (amounts in thousands):

	Total		Less than 1 year		1-3 years		4-5 years		After 5 years
Long-term debt principal	$	404,478		23,796		59,014		315,556		6,112
Interest payments (1)		36,072		8,976		15,036		11,800		260
Total long-term debt obligations		440,550		32,772		74,050		327,356		6,372
Capital leases		239,680		39,343		77,951		65,304		57,082
Interest payments		31,398		8,863		12,639		6,558		3,338
Total capital lease obligations		271,078		48,206		90,590		71,862		60,420
Operating leases		44,834		10,118		11,727		4,623		18,366
Aircraft purchase commitments		158,010		24,590		133,420		--		--
Total	$	914,472		115,686		309,787		403,841		85,158

(1) Interest payments include an estimate of variable-rate interest on our revolving credit facility and notes with principal balances of $289,711,000 as of December 31, 2012. Variable interest was estimated using the weighted average rate in effect during 2012 for each note and the average balance outstanding against the revolving credit facility during 2012.

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Balloon payments on long-term debt are due as follows:

· $4,710,000 in 2013

· $9,289,000 in 2014

· $3,513,000 in 2015

· $2,504,000 in 2016

· $264,503,000 in 2017

· $4,375,000 in 2018

Off-Balance Sheet Arrangements

Aircraft Purchase Commitments

As of December 31, 2012, we had open purchase commitments totaling $158.0 million for 47 aircraft scheduled to be delivered from 2013 through 2015. Typically we have financed aircraft acquired under similar commitments through capital lease or debt agreements. If financing arrangements cannot be arranged or we are prevented from taking or decline to take delivery of the aircraft under the commitments described above for any other reason, we 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, we have 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. We intend to use the new aircraft for base expansion opportunities as well as to replace older models of aircraft in the fleet. We plan to either sell the aircraft which are replaced, use them for spare parts, or redeploy them into the backup fleet.

Letters of Credit

As of December 31, 2012, we 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 our revolving credit facility.

Sources and Uses of Cash

We had cash and cash equivalents of $3,818,000 and working capital of $163,353,000 at December 31, 2012, compared to cash and cash equivalents of $3,562,000 and working capital of $85,011,000 at December 31, 2011. Cash generated by operations totaled $151,295,000 in 2012 compared to $94,771,000 in 2011. In 2012, we received refunds of $14.7 million for aircraft purchase deposits when permanent financing was arranged. Days’ sales outstanding (DSO’s) for patient transports, measured by comparing net patient transport revenue for the annualized previous 3-month period to outstanding open net accounts receivable, increased from 94 days at December 31, 2011, to 106 days at December 31, 2012. During the first quarter of 2013, we increased staffing in the billing office for the purpose of decreasing DSO’s.

Cash used for investing activities totaled $109,999,000 in 2012, compared to $250,928,000 in 2011. In addition to the working capital adjustment of $3.2 million to the purchase price for Omniflight, equipment acquisitions in 2012 included the buy-out of 49 previously leased aircraft for approximately $65.7 million. Five of these aircraft were subsequently sold for approximately $21.1 million and leased back under capital leases. We also sold fourteen other aircraft for $11.6 million during 2012. In addition to the purchases of Omniflight and URS, equipment acquisitions in 2011 included the purchase of one aircraft and the buy-out of 29 previously leased aircraft for approximately $35.2 million. We sold five aircraft for $5.9 million during 2011.

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Financing activities used $41,040,000 in 2012 compared to providing $99,009,000 in 2011. The primary uses of cash in both 2012 and 2011 were regularly scheduled payments of long-term debt and capital lease obligations and capital lease buy-outs. In 2012 the payment of a special cash dividend of $91.6 million was funded by an additional $100 million term loan under our senior credit facility. Although our current intention is to retain any future earnings to finance the growth of our business rather than to pay dividends, we may consider the payment of dividends in the future. Our senior credit facility contains a covenant which restricts, but does not prohibit, the payment of dividends. Lease buy-outs of $51.2 million in 2012 were funded primarily through borrowings under our line of credit and cash from current operations. We also used additional draws against our line of credit to fund the purchase of Sundance on December 31, 2012. In 2011 we used cash reserves to retire our previous term loan and proceeds from the $200 million term loan under our Restated Revolving Credit, Term Loan and Security Agreement to fund the acquisition of Omniflight. We began making scheduled quarterly principal payments on the term loan beginning with the quarter ended September 30, 2011. We also drew against our line of credit in 2011 to fund the buy-out of leased aircraft.

Senior Credit Facility

Our 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, we 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 our 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%.

Subject to certain conditions, the Company may borrow an additional $100 million under the senior credit facility 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, our 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. We are required to maintain certain financial ratios as defined in the credit facility and other notes. As of December 31, 2012, we were in compliance with the covenants of the credit facility.

Critical Accounting Policies

Our consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States. The preparation of these financial statements requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period.

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On an on-going basis, management evaluates our estimates and judgments, including those related to revenue recognition, deferred income taxes, and valuation of long-lived assets and goodwill. Management bases its estimates and judgments on historical experience and on various other factors that are believed to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates under different assumptions or conditions. Management believes the following critical accounting policies affect its more significant judgments and estimates used in the preparation of our consolidated financial statements.

Revenue Recognition

Fixed contract revenue under our operating agreements with hospitals is recognized monthly over the terms of the agreements. Revenue relating to patient transports is recognized upon completion of the services and is recorded net of provisions for contractual discounts and estimated uncompensated care. Both provisions are estimated during the period related services are performed based on historical collection experience and any known trends or changes in reimbursement rate schedules and payer mix. The provisions are adjusted as required based on actual collections in subsequent periods. We have 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 Medicare and Medicaid programs are very complex and subject to interpretation. We also provide services to patients who have no insurance or other third-party payer coverage. There can be no guarantee that we will continue to experience the same collection rates that we have in the past. If actual future collections are more or less than those projected by management, adjustments to allowances for contractual discounts and uncompensated care may be required. Based on related patient transport revenue for the year ended December 31, 2012, a change of 100 basis points in the percentage of estimated contractual discounts and uncompensated care would have resulted in a change of approximately $16,552,000 in patient transport revenue.

Revenue related to fixed fee medical interior and products contracts is recorded as costs are incurred using the percentage of completion method of accounting. We estimate the percentage of completion based on costs incurred to date as a percentage of an estimate of the total costs to complete the project. Losses on contracts in process are recognized when determined. If total costs to complete a project are greater or less than estimated, the gross margin on the project may be greater or less than originally recorded under the percentage of completion method.

Deferred Income Taxes

In preparation of the consolidated financial statements, we are required to estimate income taxes in each of the jurisdictions in which we operate. This process involves estimating actual current tax exposure together with assessing temporary differences resulting from differing treatment of items, such as depreciable assets, for tax and accounting purposes. These differences result in deferred tax assets and liabilities, which are included in the consolidated balance sheets. We then assess the likelihood that deferred tax assets will be recoverable from future taxable income in the respective federal or state jurisdiction as appropriate and record a valuation allowance for those amounts we believe are not likely to be realized. We consider estimated future taxable income, tax planning strategies, and the expected timing of reversals of existing temporary differences in assessing the need for a valuation allowance against deferred tax assets. Establishing or increasing a valuation allowance in a period increases income tax expense. In the event we were to determine that we would not be able to realize all or part of our net deferred tax assets in the future, an adjustment to the valuation allowance would be charged to income in the period such determination was made. Likewise, should we determine that we would be able to realize our deferred tax assets in the future in excess of our net recorded amount, an adjustment to the valuation allowance would increase income in the period such determination was made. The effect on deferred income tax assets and liabilities of a change in statutory tax rates applicable to the Company is also recognized in income in the period of the change. We evaluate the recognition and measurement of uncertain tax positions based on the facts and circumstances surrounding the tax position and applicable tax law and other tax pronouncements. Changes in our estimates of uncertain tax positions would be recognized as an adjustment to income tax expense in the period of the change.

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Long-lived Assets Valuation

In accounting for long-lived assets, we make estimates about the expected useful lives, projected residual values and the potential for impairment. Estimates of useful lives and residual values of aircraft are based upon actual industry experience with the same or similar aircraft types and anticipated utilization of the aircraft. Changing market prices of new and used aircraft, government regulations and changes in our maintenance program or operations could result in changes to these estimates. Long-lived assets are evaluated 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. Our cash flow estimates are based on historical results adjusted for estimated current industry trends, the economy, and operating conditions.

Goodwill Valuation

The Company’s goodwill relates to seven acquisitions and has been allocated to our reporting units. During the first quarter of 2012, we adopted ASU No. 2011-08, Testing for Goodwill Impairment, which allows an entity to first assess qualitative factors to determine whether it is necessary to perform the two-step quantitative goodwill impairment test. Factors considered include overall economic conditions within our markets, access to capital, changes in the cost of operations, the financial performance of the Company, and the change in our stock price during the year. Based upon our qualitative assessment of factors impacting the value of goodwill as of December 31, 2012, we determined that it is not likely that the fair value of any reporting unit is less than its carrying amount and that a quantitative assessment of goodwill was not necessary. Changes in these factors or a continued decline in general economic conditions could change our conclusion regarding an impairment of goodwill and potentially result in a non-cash impairment loss in a future 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 our financial position or results of operations.

ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Market risk is the potential loss arising from adverse changes in market rates and prices, such as foreign currency exchange and interest rates. All of our sales and related receivables are payable in U.S. dollars. We are subject to interest rate risk on our debt obligations and notes receivable, all of which have fixed interest rates except our line of credit, which had a balance of $67,000,000 at December 31, 2012, and $289,711,000 in notes payable. Based on the amounts outstanding at December 31, 2012, the annual impact of a change of 100 basis points in interest rates would be approximately $3,567,000. Interest rates on these instruments approximate current market rates as of December 31, 2012.

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Our cost of operations is also affected by changes in the price and availability of aircraft fuel. Generally, our AMS contract hospital customers pay for all fuel consumed in medical flights. Based on actual fuel usage for our patient transports for the year ended December 31, 2012, the impact on operating costs of an increase of 10% in the cost of aircraft fuel per hour flown would be approximately $2,562,000 for the year, exclusive of the impact of fuel derivative agreements. Flight volume for patient transports can vary due to weather conditions and other factors. Therefore, the impact of a change in fuel cost based on 2012 volume is not necessarily indicative of the impact on subsequent years or quarters. We had financial derivative agreements to protect against increases in the cost of Gulf Coast jet fuel above $3.50 per gallon for wholesale purchases in 2012, covering approximately 86% of our fuel consumption for the year. In the first quarter of 2013, we entered into fuel derivatives to protect against increases in the cost of Gulf Coast jet fuel above $3.55 per gallon covering approximately 75% of our anticipated fuel consumption for 2013.

ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

See Consolidated Financial Statements attached hereto.

ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE

None.

ITEM 9A. CONTROLS AND PROCEDURES

Disclosure Controls and Procedures

We maintain disclosure controls and procedures that are designed to ensure that information required to be disclosed in our reports filed or submitted to the SEC under the Securities Exchange Act of 1934, as amended, is recorded, processed, summarized and reported within the time periods specified by the Commission’s rules and forms, and that information is accumulated and communicated to management, including the principal executive and financial officers (referred to in this report as the Certifying Officers), as appropriate to allow timely decisions regarding required disclosure. Management, under the supervision and with the participation of the Certifying Officers, evaluated the effectiveness of disclosure controls and procedures as of December 31, 2012, pursuant to Rule 13a-15(b) under the Exchange Act. Based on that evaluation, the Certifying Officers have concluded that, as of December 31, 2012, the Company’s disclosure controls and procedures were effective.

Changes in Internal Control over Financial Reporting

There were no significant changes in our internal control over financial reporting that occurred during the most recently completed fiscal quarter that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

Management’s Report on Internal Control over Financial Reporting

Management is responsible for establishing and maintaining adequate internal control over financial reporting (as defined in Rule 13a-15(f) under the Securities Exchange Act of 1934, as amended). Management assessed the effectiveness of our internal control over financial reporting as of December 31, 2012, using criteria established in Internal Control-Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). As permitted by SEC guidance, management’s assessment of the effectiveness of the Company’s internal control over financial reporting excludes the evaluation of internal controls over financial reporting of Sundance Helicopters, Inc. (Sundance), which was acquired on December 31, 2012. Sundance represents approximately $53.5 million of net assets as of December 31, 2012.

29

Based on this assessment, management concluded that we maintained effective internal control over financial reporting as of December 31, 2012.

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 and procedures may deteriorate.

KPMG LLP, an independent registered public accounting firm, has audited the effectiveness of our internal control over financial reporting as of December 31, 2012, and their report is included herein.

ITEM 9B. OTHER INFORMATION

None.

30

 PART III

ITEM 10. DIRECTORS, EXECUTIVE OFFICERS, AND CORPORATE GOVERNANCE

The information required by this item is incorporated by reference from the Company's Proxy Statement to be filed on or prior to April 30, 2013, for the Annual Meeting of Stockholders to be held in May 2013.

ITEM 11. EXECUTIVE COMPENSATION

The information required by this item is incorporated by reference from the Company's Proxy Statement to be filed on or prior to April 30, 2013, for the Annual Meeting of Stockholders to be held in May 2013.

ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

The information required by this item is incorporated by reference from the Company's Proxy Statement to be filed on or prior to April 30, 2013, for the Annual Meeting of Stockholders to be held in May 2013.

ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS AND DIRECTOR INDEPENDENCE

The information required by this item is incorporated by reference from the Company's Proxy Statement to be filed on or prior to April 30, 2013, for the Annual Meeting of Stockholders to be held in May 2013.

ITEM 14. PRINCIPAL ACCOUNTANT FEES AND SERVICES

The information required by this item is incorporated by reference from the Company's Proxy Statement to be filed on or prior to April 30, 2013, for the Annual Meeting of Stockholders to be held in May 2013.

31

PART IV

ITEM 15. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES

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.

3.  Exhibits:

Exhibit

Number Description of Exhibits

3.1 Certificate of Incorporation1

3.2 Amendments to Certificate of Incorporation2

3.3 Amendment to Certificate of Incorporation, effective June 18, 20103

3.4 Amendment to Certificate of Incorporation, effective December 14, 20124

3.5 By-Laws as Amended5

3.6 First Amended and Restated Bylaws of Air Methods Corporation6

4.1 Specimen Stock Certificate7

10.1 Second Amended and Restated 2006 Equity Compensation Plan8

10.2 Form of Restricted Stock Grant Agreement9

10.3 Form of Non-Qualified Stock Option Agreement10

10.4 Form of Incentive Stock Option Agreement10

10.5 Amended and Restated Employment Agreement between the Company and Aaron D. Todd, dated September 24, 201211

IV-1

10.6 Amended and Restated Employment Agreement between the Company and Michael D. Allen, dated September 24, 201211

10.7 Amended and Restated Employment Agreement between the Company and Trent J. Carman, dated September 24, 201211

10.8 Amended and Restated Employment Agreement between the Company and Sharon J. Keck, dated September 24, 201211

10.9 Amended and Restated Employment Agreement between the Company and Edward T. Rupert, dated September 24, 201211

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, 200915

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 Meeting16

IV-2

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 Meeting16

10.17 Air Methods Corporation 2012-2014 Bonus Program, adopted September 25, 201211

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, 201117

10.19 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, 201118

21 Subsidiaries of Registrant

23  Consent of KPMG LLP

31.1 Chief Executive Officer Certification adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

31.2 Chief Financial Officer Certification adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

32 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.

IV-3

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.

IV-4

SIGNATURES

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

IV-5

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.

IV-6

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

F-1

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

F-2

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)

F-3

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.

F-4

AIR METHODS CORPORATION

AND SUBSIDIARIES

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.

F-5

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.

F-6

AIR METHODS CORPORATION

AND SUBSIDIARIES

Consolidated Statements of Cash Flows

Years Ended December 31, 2012, 2011, and 2010

(Amounts in thousands)

	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)

F-7

AIR METHODS CORPORATION

AND SUBSIDIARIES

Consolidated Statements of Cash Flows, continued

(Amounts in thousands)

	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.

F-8

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, net

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

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.

F-9

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.

Goodwill

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.

F-10

AIR METHODS CORPORATION

AND SUBSIDIARIES

Notes to Consolidated Financial Statements, Continued

(1)  Summary of Significant Accounting Policies, continued

Derivative Instruments

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.

Long-lived Assets

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.

F-11

AIR METHODS CORPORATION

AND SUBSIDIARIES

Notes to Consolidated Financial Statements, Continued

(1)  Summary of Significant Accounting Policies, continued

Stock-based Compensation

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.

Income Per Share

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.

F-12

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.

F-13

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

F-14

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.

F-15

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.

F-16

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.

F-17

AIR METHODS CORPORATION

AND SUBSIDIARIES

Notes to Consolidated Financial Statements, Continued

(7)  Long-term Debt

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%.

F-18

 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

(8)  Leases

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.

F-19

AIR METHODS CORPORATION

AND SUBSIDIARIES

Notes to Consolidated Financial Statements, Continued

(8)  Leases, 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.

(9)  Stockholders’ Equity

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.

F-20

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

F-21

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.

F-22

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.

F-23

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.

F-24

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

(13)  Income Taxes

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.

F-25

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.

F-26

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.

F-27

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.

F-28

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.

F-29

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

F-30

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.

F-31

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

EX-10.19

Execution Copy

EXHIBIT 10.19

STOCK PURCHASE AGREEMENT

dated

December 20, 2012

by and among

AIR METHODS CORPORATION,

(the “Buyer”),

SUNDANCE HELICOPTERS, INC.

(the “Company”),

THE SELLERS

LISTED ON EXHIBIT A HERETO

AND

FOR PURPOSES OF ARTICLE IX ONLY,

THE GUARANTORS PARTY HERETO

TABLE OF CONTENTS

		Page
ARTICLE I SALE AND PURCHASE OF THE SHARES		1
1.1	Defined Terms	1
1.2	Sale and Purchase of the Shares	9
1.3	Consideration for the Shares	9
1.4	Payment of the Purchase Price	9
1.5	Closing Working Capital and Closing A/R and A/P Adjustment.	10
1.6	Indemnity Escrow	12
1.7	Tax Escrow	12
1.8	Maintenance Holdback Amount	13
ARTICLE II REPRESENTATIONS AND WARRANTIES OF THE COMPANY AND THE SELLERS		13
2.1	Due Organization and Qualification	13
2.2	Subsidiaries	13
2.3	Due Authorization	13
2.4	Capitalization	14
2.5	Non-Contravention	14
2.6	Absence of Changes or Events	14
2.7	Personal Property.	16
2.8	Compliance with Licenses, Permits, Laws and Other Instruments	17
2.9	Contracts and Agreements	18
2.1	Employment Contracts and Employee Plans.	18
2.11	Employee Benefits. Employee Benefits	19
2.12	Labor Disputes; Compliance.	22
2.13	OSHA	22
2.14	Claims and Proceedings	22
2.15	Taxes	23
2.16	Real Properties; Leases	24
2.17	Insurance; Product Liability	25
2.18	Books and Records	25
2.19	Financial Statements	25
2.2	Accounts Receivable	26
2.21	Accounts Payable	26
2.22	Bank Accounts	26
2.23	Environmental Matters.	26
2.24	Intellectual Property	27
2.25	Brokers	28
2.26	Illegal Payments; FCPA	28
2.27	Related Party	28
2.28	Information Furnished	29

ii

ARTICLE III BUYER’S REPRESENTATIONS AND WARRANTIES		29
3.1	Due Organization	29
3.2	Due Authorization	29
3.3	No Brokers	29
3.4	Investment	29
ARTICLE IV COVENANTS		29
4.1	Conduct of Business Pending Closing	29
4.2	Consents of Others	32
4.3	Notification of Certain Matters	32
4.4	Further Assurances	32
4.5	Access to Records Before Closing	32
4.6	Disclosure Schedules	32
4.7	Assignment of New Aircraft	32
ARTICLE V CONDITIONS TO OBLIGATION OF PARTIES TO CONSUMMATE CLOSING		33
5.1	Conditions to Buyer’s Obligations	33
5.2	Conditions to the Company’s and Sellers’ Obligations	35
ARTICLE VI CLOSING		35
6.1	Closing	35
6.2	Documents to be Delivered by the Company and Sellers	35
6.3	Obligations of Buyer	37
ARTICLE VII TAXES		37
7.1	Transfer Taxes	37
7.2	Tax Matters	37
ARTICLE VIII INDEMNIFICATION		40
8.1	Survival	40
8.2	Indemnification	41
8.3	Limitations on Indemnification Obligations of Sellers	41
8.4	Non-Exclusive Remedy	43
ARTICLE IX Post-Closing matters		43
9.1	Confidential Information	43
9.2	Noncompetition	44
9.3	Authority Filings and Notifications	45
ARTICLE X TERMINATION		45
10.1	Termination of Agreement	45
10.2	Effect of Termination	46

iii

ARTICLE XI MISCELLANEOUS		47
11.1	Modifications; Waiver	47
11.2	Notices	47
11.3	Counterparts	48
11.4	Binding Effect; Assignment; No Third Party Rights	48
11.5	Seller Representative	48
11.6	No Strict Construction	49
11.7	Entire and Sole Agreement	49
11.8	Governing Law; Jurisdiction and Venue	49
11.9	Invalid Provisions	50
11.1	Headings	50

iv

List of Exhibits and Schedules

Exhibits
Exhibit A	Ownership / Allocation of Purchase Price
Exhibit B	Opinion of Counsel
Exhibit C	Aircraft Purchase Agreement
Exhibit D	Reserved
Exhibit E	Indemnity Escrow Agreement
Exhibit F	Tax Escrow Agreements
Exhibit G	Officer’s Certificate
Exhibit H	Form of Guarantee»
Schedules
Schedule 1.1	Aircraft
Schedule 1.4(b)	Excise and Use Tax Matters
Schedule 1.4(e)	Transaction Expenses
Schedule 2.5	Non-Contravention
Schedule 2.6	Changes or Events Since March 31, 2012
Schedule 2.7(a)	Personal Property Liens
Schedule 2.7(c)	Inventories
Schedule 2.8(a)	Licenses and Permits
Schedule 2.9	Contracts and Agreements
Schedule 2.10(a)	List of Employees
Schedule 2.10(c)	Terminated Employees
Schedule 2.10(d)	Employee Agreements
Schedule 2.11(a)	Employee Benefit Plans
Schedule 2.11(g)	Post-Retirement Welfare Plans
Schedule 2.11(k)	Benefits Triggered by the Transactions
Schedule 2.13(b)	OSHA Notices
Schedule 2.14	Claims and Proceedings
Schedule 2.15	Tax Returns and Withholdings
Schedule 2.15(c)	Tax Assessments
Schedule 2.16(a)	Leases
Schedule 2.17	Insurance
Schedule 2.19	Financial Statements
Schedule 2.20	Accounts Receivable
Schedule 2.21	Accounts Payable
Schedule 2.22	Bank Accounts
Schedule 2.23(e)	Storage Tanks
Schedule 2.24(a)	Intellectual Property
Schedule 2.24(b)	License Agreements
Schedule 2.25	Brokers
Schedule 2.27	Related Party Transactions
Schedule 5.1(b)	Consents
Schedule 5.1(f)	Indebtedness
Schedule 8.2(a)	Transfer Pricing Matter

v

STOCK PURCHASE AGREEMENT

This STOCK PURCHASE AGREEMENT (this “Agreement”) is entered into as of December 20, 2012 by and among Air Methods Corporation, a Delaware corporation, (the “Buyer”), Sundance Helicopters, Inc., a Nevada corporation (the “Company”), The Eisenreich Family Trust u/a/d 7/9/90, The John A. Sullivan Trust u/a/d 4/12/2002 and The Granquist 2004 Trust u/a/d 3/26/2004 (each, a “Seller,” and collectively, the “Sellers”), and, for purposes of Article IX only, Richard Eisenreich, John A. Sullivan and James A. Granquist (each a “Guarantor,” and collectively, the “Guarantors”).

RECITALS

WHEREAS, the Company is engaged in the business of providing helicopter tours between Las Vegas, Nevada and the Grand Canyon, which is located in the state of Arizona,  (the “Business”), and the LLCs own certain aircraft used in the Company’s operation of the Business;

WHEREAS, the Sellers own all of the issued and outstanding shares of capital stock of the Company, consisting of an aggregate 30,000 shares of common stock (the “Shares”), in the specific amounts set forth on Exhibit A hereto;

WHEREAS, the Guarantors have a significant involvement in the Business and are the settlors of the Sellers that hold all of the Shares of the Company, however, Judith Eisenreich and Cheryl Granquist, the beneficiaries of certain of the Sellers, have not been involved in the Business, have no knowledge of the operations of the Business and are not personal guarantors under this Agreement;

WHEREAS, the Sellers desire to sell to Buyer, and Buyer desires to purchase from the Sellers, the Shares upon the terms and conditions hereinafter set forth, and the LLCs desire to sell to Buyer, and Buyer desires to purchase from the LLCs, the Aircraft and certain assets related thereto upon the terms and conditions set forth in the Aircraft Purchase Agreement (defined below) (collectively, the “Transactions”) which Transactions are anticipated to close on or before December 31, 2012;

WHEREAS, certain terms used in this Agreement are defined in Article I hereof.

NOW, THEREFORE, in consideration of the foregoing and of the mutual representations, warranties, covenants, agreements, terms and conditions set forth below, the receipt and adequacy of which are hereby acknowledged, the parties hereto agree as follows:

ARTICLE I

SALE AND PURCHASE OF THE SHARES

1.1Defined Terms. As used in this Agreement, the following terms have the meanings set forth below:

“Accountant” means McGladrey LLP or such other mutually agreeable national or regionally recognized accounting firm that has no material relationship with any of the parties to this Agreement.

“Adjustment Amount” has the meaning set forth in Section 1.5(a) hereof.

“Actual Maintenance Expenses” has the mean set forth in Section 1.8 hereof.

“Agreement” has the meaning set forth in the Preamble hereof.

“Aircraft” means all aircraft, including all engines, rotors, appliances, parts, instruments, appurtenances, accessories and other equipment installed on, attached to or related to the airframes and engines, owned, used or operated by the Company or an LLC for the Business, wherever located, including as described on Schedule 1.1.

“Aircraft Documents” means all airframe and engine logbooks, flight and operations manuals, all diagrams, maintenance records, certification documents, warranty documentation, and related maintenance records that are customarily considered a part of an Aircraft and required to be maintained in connection with the ownership, operation, and maintenance of an Aircraft.

“Aircraft Purchase Agreement” has the meaning set forth in Section 5.2(d) hereof.

“Aircraft Transfers” has the meanint set forth in Section 4.7 hereof.

“Arizona Tax Issue” has the meaning set forth in Section 7.2(f) hereof.

“Arizona Tax Losses” has the meaning set forth in Section 7.2(f) hereof.

 “Aviation Authority” means any Governmental Authority or other official authority in the United States or other jurisdiction which is or shall from time to time be vested with the control and supervision of, or have jurisdiction over, the registration, airworthiness, design, production, operation, or maintenance of any helicopter or other aircraft, or other matters relating to civil or military aviation within such jurisdiction, including without limitation the FAA and the U.S. Department of Transportation.

“Aviation Authorizations” has the meaning set forth in Section 2.8(a) hereof.

“Affiliate” means, with respect to any Person, (a) a manager, director, officer or shareholder of such Person, (b) a spouse, parent, sibling or descendant of such Person (or a spouse, parent, sibling or descendant of any director or officer of such Person) and (c) any other Person that, directly or indirectly through one or more intermediaries, controls, or is controlled by, or is under common control with, such Person.

“Business” has the meaning set forth in the Recitals hereof.

“Buyer” has the meaning set forth in the Recitals hereof.

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“Buyer Indemnified Parties” has the meaning set forth in Section 8.2(a) hereof.

“Buyer Indemnifiable Costs” has the meaning set forth in Section 8.2(a) hereof.

“Buyer Returns” has the meaning set forth in Section 7.2(c) hereof.

“Buyer Statement of Accounts” has the meaning set forth in Section 1.5(b) hereof.

 “Buyer Statement of Working Capital” has the meaning set forth in Section 1.5(b) hereof.

“Buyer Statements” has the meaning set forth in Section 1.5(b) hereof.

“Claims or Proceedings” has the meaning set forth in Section 2.14 hereof.

“Claim Certificate” has the meaning set forth in Section 9.3(d)(i) hereof.

“Closing” has the meaning set forth in Section 6.1 hereof.

“Closing Date” has the meaning set forth in Section 6.1 hereof.

“Closing Payment” has the meaning set forth in Section 1.4(f) hereof.

“Closing Accounts Payable” has the meaning set forth in Section 1.5(a) hereof.

“Closing Accounts Receivable” has the meaning set forth in Section 1.5(a) hereof.

“Closing Working Capital” has the meaning set forth in Section 1.5(a) hereof.

“Code” means the Internal Revenue Code of 1986, as amended.

“Company” has the meaning set forth in the introductory paragraph hereof.

“Confidential Information” has the meaning set forth in Section 9.1 hereof.

“Deductible” has the meaning set forth in Section 8.3(a) hereof.

“Effective Time” has the meaning set forth in Section 6.1 hereof.

“Employee Plans” has the meaning set forth in Section 2.11(a) hereof.

 “Environmental Laws”means any and all applicable federal, state, local, municipal or foreign laws, rules, orders, regulations, statutes, ordinances, codes or requirements of any Governmental Authority concerning air, water, solid waste, Hazardous Substance, chemical or release reporting worker and community right-to-know, hazard communication, noise, natural resources, species protection, resource protection, zoning, wetlands and watercourses, health protection or other environmental, health, safety, building and land use concerns as may now or at any time hereafter be in effect.

3

“Entity” shall mean any Person other than an individual or a Governmental Authority.

“ERISA” has the meaning set forth in Section 2.11(a) hereof.

“ERISA Affiliate” has the meaning set forth in Section 2.11(a) hereof.

“Escrow Agent” shall mean Nevada Title Company or another institute acceptable to Buyer and the Sellers.

“Estimated Statement of Accounts” has the meaning set forth in Section 1.5(a) hereof.

“Estimated Statement of Working Capital” has the meaning set forth in Section 1.5(a) hereof.

“Estimated Statements” has the meaning set forth in Section 1.5(a) hereof.

“Excise Tax Escrow Amount” has the meaning set forth in Section 1.4(b) hereof.

“Excise Tax Obligations” has the meaning set forth in Section 1.4(b) hereof.

“FAA”means the United States Federal Aviation Administration.

“Final Adjustment Amount” has the meaning set forth in Section 1.5(f) hereof.

“Final Statement” has the meaning set forth in Section 1.5(e) hereof.

“Financial Statements” has the meaning set forth in Section 2.19 hereof.

“Form 5500 Expenses” has the meaning set forth in Section 5.1(m) hereof.

“Fundamental Representations” has the meaning set forth in Section 8.3(a) hereof.

“GAAP” means United States generally accepted accounting principles consistently applied.

“Governing Documents” of an Entity shall mean the (i) certificate of formation, certificate of incorporation or articles of incorporation, as applicable, under which an Entity is formed; and (ii) the other documents or agreements, including bylaws of a corporation or operating agreements of limited liability companies, or similar documents, adopted by the Entity to govern the formation and internal affairs of the Entity.

“Governmental Authority” means any government, any governmental or regulatory entity or body, department, commission, board, agency or instrumentality, and any court, tribunal or judicial body, in each case whether federal, state, county, provincial, and whether local or foreign.

“Guarantee” means the guarantee of each of the Guarantors in the form attached to this Agreement as Exhibit H.

4

“Guarantor(s)” has the meaning set forth in the introductory paragraph hereof.

“Hazardous Substance”means any substance, material or waste that is regulated by or forms the basis of liability now or hereafter under any Environmental Laws, including without limitation any material or substance that is (a) defined as a “solid waste,” “hazardous waste,” “hazardous material,” “hazardous substance,” “extremely hazardous waste,” “restricted hazardous waste,” “pollutant,” “contaminant,” “hazardous constituent,” “special waste,” “toxic substance” or other similar term or phrase under any Environmental Law, and (b) petroleum or any fraction or by-product thereof, asbestos-containing material, mold, radioactive material, biomedical waste, infectious material, polychlorinated biphenyls (PCB’s), or any radioactive substance.

“Indebtedness” means and include all Liabilities and obligations, including any applicable fees, penalties (including with respect to any prepayment thereof), interest and premiums: (i) for borrowed money; (ii) evidenced by notes, bonds, debentures or similar instruments; (iii) for the deferred purchase price of goods or services (other than trade payables or accruals incurred in the ordinary course of business); (iv) under capital leases; (v) all accounts payable and all accrued expenses or liabilities (excluding accounts payable and other accrued liabilities from time to time incurred in the ordinary course of business that are within their stated terms and are not delinquent); and (vi) in the nature of guarantees of the obligations described in clauses (i) through (v) above of any other Person.

“Indemnified Party” has the meaning set forth in Section 8.3(d)(i) hereof.

“Indemnifying Party” has the meaning set forth in Section 8.3(d)(i) hereof.

“Indemnity Escrow Agreement” has the meaning set forth in Section 6.2(f) hereof.

“Indemnity Escrow Amount” has the meaning set forth in Section 1.4(a) hereof.

“Indemnity Escrow Fund” means the Indemnity Escrow Amount plus any interest paid on such Indemnity Escrow Amount in accordance with the terms of the Indemnity Escrow Agreement.

“Intellectual Property” has the meaning set forth in Section 2.24(a) hereof.

“Interim Financial Statements” has the meaning set forth in Section 2.19 hereof.

“Inventories” has the meaning set forth in Section 2.7(c) hereof.

“IRS” means the United States Internal Revenue Service.

“Knowledge” means actual knowledge and such knowledge which should have been acquired by such Person after making such due inquiry and exercising such due diligence as a prudent businessperson would have made or exercised in the management of his or her business affairs.  Statements as to the Knowledge of the Company shall include the Knowledge of each Guarantor, Art McTigue and Robert Englebracht.

5

“Laws” means any non-U.S. law applicable to the Business, U.S. federal, state or local law, statute, rule, regulation, administrative ruling, order or process (including any rule, regulation, law, airworthiness directive, mandatory service bulletin, or equivalent of any Aviation Authority, zoning or land use law, building code, environmental law, securities, stock exchange, blue sky, civil rights, employment, labor or occupational health and safety law or regulation or any law, order, rule or regulation applicable to federal contractors or subcontractors at any tier).

“Leases” has the meaning set forth in Section 2.16(a) hereof.

“Leased Real Property” has the meaning set forth in Section 2.16(b) hereof.

“Liability” or “Liabilities” means, with respect to any Person, all liabilities of any kind (whether contingent, accrued, due or to become due, secured or unsecured, matured or otherwise), including but not limited to accounts payable, royalties payable, and other reserves, Taxes, accrued bonuses, accrued vacation, employee expense obligations and all other liabilities of such Person, regardless of whether such liabilities are required to be reflected on a balance sheet in accordance with GAAP.  Liabilities shall not include third-party accounts payable, except such accounts payable that have not been paid in accordance with vendor terms.

“Lien” has the meaning set forth in Section 2.7(a) hereof.

“LLC(s)” means SDH and Saguaro.

“Maintenance Budget Target” has the meaning set forth in Section 1.8 hereof.

“Maintenance Budget Total” means the sum of the Maintenance Budget Target plus the Maintenance Holdback Amount.

“Maintenance Holdback Amount” has the meaning set forth in Section 1.4(c) hereof.

“Material Adverse Change” and“Material Adverse Effect” means, with respect to any Person, (i) any material adverse change in the business, operations, assets, condition (financial or otherwise), operating results, liabilities or prospects of such Person, (ii) any material casualty loss or damage to the assets of such Person, whether or not covered by insurance, or (iii) any material adverse change in relations with employees, customers, suppliers, or any Aviation Authority.

“Material Contracts” has the meaning set forth in Section 2.9 hereof.

“Net Proceeds” means $44,000,000 less the aggregate amount of any Indebtedness of the Company and the LLCs repaid by Buyer out of the aggregate purchase price payable by Buyer under this Agreement and the Aircraft Purchase Agreement.

“Notice of Objection” has the meaning set forth in Section 1.5(c) hereof.

6

“Order” means temporary restraining order, preliminary or permanent injunction or other order of a court of competent jurisdiction or any Aviation Authority or other Governmental Authority.

“OSHA” means the Occupational Safety and Health Administration and any State that administers its own OSHA-approved State Implementation Plan.

“Permit” means all licenses, permits, certificates, approvals, consents and other authorizations that the Company owns, holds or possesses from any source.

“Person” means an individual or entity, including a partnership, limited liability company, a corporation, an association, a joint stock company, a trust, a joint venture, an unincorporated organization, or a Governmental Entity.

“Personal Property Leases” has the meaning set forth in Section 2.16(a) hereof.

“Pre-Closing Tax Period” means any Tax period ending on or before the Closing Date and, for purposes of Section 7.2(e), with respect to any taxable years or periods beginning before and ending after the Closing Date, the portion of such taxable years or period ending on and including the Closing Date.

“Projected EBITDA Target” means $8,019,500.

“Purchase Price” has the meaning set forth in Section 1.3 hereof.

“Real Property Leases” has the meaning set forth in Section 2.16(a) hereof.

“Related Agreements” means this Agreement, the Guarantees, the Aircraft Purchase Agreement, the Indemnity Escrow Agreement and the Tax Escrow Agreement.

“Related Party” has the meaning set forth in Section 2.27 hereof.

“Saguaro” means Saguaro Rentals LLC, an Arizona limited liability company.

“SDH” means SDH Capital Holdings LLC, a Nevada limited liability company.

“Securities Act” the Securities Act of 1933, as amended.

“Seller Indemnifiable Costs” has the meaning set forth in Section 8.2(b) hereof.

“Seller Indemnified Parties” has the meaning set forth in Section 8.2(b) hereof.

“Seller Representative” has the meaning set forth in Section 11.5(a) hereof.

“Seller Returns” has the meaning set forth in Section 7.2(c) hereof.

“Sellers” has the meaning set forth in the introductory paragraph hereof.

“Shares” has the meaning set forth in the Recitals hereof.

7

“Specified Tax Costs” has the meaning set forth in Section 9.2(a) hereof.

“Target Working Capital” shall mean $1,340,947.

“Tax” or “Taxes” means (i) any and all federal, state, local and foreign taxes, assessments and other governmental charges, duties, impositions and liabilities, including taxes based upon or measured by gross receipts, gross margin, income, profits, sales, use and occupation, and value added, ad valorem, escheat, transfer, franchise, withholding, payroll, recapture, employment, excise and property taxes as well as public imposts, fees and social security charges (including but not limited to health, unemployment, workers’ compensation and pension insurance), together with all interest, penalties and additions imposed with respect to such amounts, (ii) any liability for the payment of any amounts of the type described in clause (i) as a result of being a member of an affiliated, consolidated, combined or unitary group (including any arrangement for group or consortium relief or similar arrangement) for any period, and (iii) any liability for the payment of any amounts of the type described in clauses (i) or (ii) as a result of any express or implied obligation to indemnify any other person or as a result of any obligation under any agreement or arrangement with any other person with respect to such amounts.

“Tax Controversy” has the meaning set forth in Section 7.2(e) hereof.

“Tax Escrow Agreement” has the meaning set forth in Section 6.2(g) hereof.

“Tax Escrow Amount” has the meaning set forth in Section 1.4(b) hereof.

“Tax Escrow Fund” means the Tax Escrow Amount plus any interest paid on such Tax Escrow Amount in accordance with the terms of the Tax Escrow Agreement.

“Tax Opinion” has the meaning set forth in Section 7.2(f) hereof.

“Tax Returns” means all returns, reports, forms, declarations, claims for refund, information returns or statements or information related to any Tax, including any schedule or attachment thereto, and including any amendment thereof.

“Transaction” has the meaning set forth in the Recitals hereof.

“UCC” has the meaning set forth in Section 5.1(g) hereof.

“Use Tax Escrow Amount” has the meaning set forth in Section 1.4(b) hereof.

“Use Tax Obligations” has the meaning set forth in Section 1.4(b) hereof.

“WARN Act” has the meaning set forth in Section 2.10(e) hereof.

“Working Capital” shall mean the amount equal to the sum of the Company’s inventory and prepaid expenses as of the Closing Date minus the Company’s accrued expenses as of the Closing Date, in each case determined on a consolidated basis and in accordance with GAAP applied using the same accounting methods, practices, principles, policies and procedures that were used in preparation of the Financial Statements.  Accrued expenses shall not be taken into account in calculating Working Capital to the extent it is (i) repaid or terminated without further obligation before Closing, or (ii) to the extent it is repaid at Closing without further obligation through the use of funds that are both not provided by Buyer on behalf of the Company or any Seller.

8

1.2Sale and Purchase of the Shares. Upon the terms and subject to the conditions contained herein, on the Closing Date, each Seller agrees to sell to Buyer, and Buyer agrees to purchase from each Seller, the Shares owned by such Seller set forth opposite such Seller’s name on Exhibit A hereto.

1.3Consideration for the Shares.  Subject to further adjustment pursuant to Section 1.5 below, the total consideration for the Shares shall be $21,320,000 plus the amount of deposits on new aircraft made by the Company following the date of this Agreement and prior to the Closing Date, in an amount equal to $1,262,494 to the extent the Company delivers to Buyer evidence of such deposits in form and substance satisfactory to Buyer in its sole discretion (as adjusted, the “Purchase Price”).

1.4Payment of the Purchase Price.  The Purchase Price, as adjusted pursuant to Section 1.5, shall be payable by wire transfer or other immediately available funds as follows:

(a)           Indemnity Escrow Fund. At the Closing, Buyer shall deliver to the Escrow Agent, on behalf of the Sellers, by wire transfer of immediately available funds, $2,550,000 (the “Indemnity Escrow Amount”), to be held in escrow by the Escrow Agent in accordance with the terms of the Indemnity Escrow Agreement;

(b)           Tax Escrow Fund. At the Closing, Buyer shall deliver to the Escrow Agent, on behalf of the Sellers, by wire transfer of immediately available funds, (i) $500,000 (the “Excise Tax Escrow Amount”) for potential federal excise tax liabilities described on Schedule 1.4(b) (the “Excise Tax Obligations”) and (ii) $1,100,000 (the “Use Tax Escrow Amount” and together with the Excise Tax Escrow Amount, the “Tax Escrow Amount”) for potential Nevada sales and use tax liabilities described on Schedule 1.4(b) (the “Use Tax Obligations”), to be held in escrow by the Escrow Agent in accordance with the terms of the Tax Escrow Agreement;

(c)           Maintenance Holdback. At the Closing, Buyer shall hold back $500,000 of the Purchase Price (the “Maintenance Holdback Amount”), which shall be held by Buyer and paid to the Sellers in accordance with Section 1.8;

(d)           Indebtedness. At the Closing, the amount required to discharge in full any outstanding Indebtednessof the Company as of the Closing Date, including accrued interest and prepayment penalties relating to such Indebtedness, shall be disbursed by Buyer in accordance with the payoff letters that have been provided by the respective creditors in forms satisfactory to Buyer;

(e)           Transaction Expenses. At the Closing, Buyer shall pay from the Purchase Price, by wire transfer of immediately available funds, the amounts required at Closing to discharge the Company’s and the Sellers’ costs and expenses payable to the Sellers’ advisors in respect of brokers, accounting, tax, legal, financial and other matters relating to the negotiation of this Agreement and the other Related Agreements and the consummation of the Transactions, as set forth on Schedule 1.4(e); and

9

(f)            Cash Payment. At the Closing, Buyer shall deliver to the Sellers, to be allocated among the Sellers as set forth on Exhibit A, by wire transfer of immediately available funds to the account designated by each Seller, the Purchase Price less the amounts set forth in Sections 1.4(a)-(e) above and, as adjusted pursuant to Section 1.5 below (the “Closing Payment”).

1.5Closing Working Capital and Closing A/R and A/P Adjustment.

(a)           No later than two (2) Business Days before the Closing Date, the Company will deliver to Buyer (i) a statement (the “Estimated Statement of Working Capital”) setting forth the Working Capital as of the Closing (the “Closing Working Capital”) and (ii) a statement (the “Estimated Statement of Accounts,” together with the Estimated Statement of Working Capital, the “Estimated Statements”) setting forth the Company’s net accounts receivable as of the Closing (the “Closing Accounts Receivable”) and the Company’s accounts payable as of the Closing that do not constitute Indebtedness (the “Closing Accounts Payable”). Upon Buyer’s receipt of the Estimated Statements, the Company will, upon Buyer’s reasonable request, make available during reasonable business hours to Buyer and its independent accountants (A) a copy of all workpapers and other books and records utilized by the Company in the preparation of the Estimated Statements and (B) any employee of the Company that participated in the preparation of the Estimated Statements.  If Buyer disputes either the Estimated Statement of Working Capital or the Estimated Statement of Accounts (or any portion thereof) prior to the Closing, then Buyer and the Company will negotiate in good faith to resolve any such dispute at or prior to Closing, but the resolution of any such dispute is not a condition to Closing. If the Closing Accounts Receivable is greater than the Closing Accounts Payable, then the Purchase Price payable at Closing shall be increased by an amount equal to such difference less an amount, if any, by which the Target Working Capital exceeds the Closing Working Capital (with such adjustment amount being the “Adjustment Amount”).  If the Closing Accounts Receivable is less than or equal to the Closing Accounts Payable, no adjustment shall be made to the Purchase Price at Closing.

(b)           Promptly, but in any event within ninety (90) days after the Closing Date, Buyer will prepare or cause the Company to prepare and deliver to the Sellers (i) a statement (the “Buyer Statement of Working Capital”) setting forth Buyer’s calculation of the Working Capital as of the Closing and (ii) a statement (the “Buyer Statement of Accounts,” together with the Buyer Statement of Working Capital, the “Buyer Statements”) setting forth Buyer’s calculation of the Closing Accounts Receivable and the Closing Accounts Payable.  The Buyer Statements will be prepared in accordance with this Agreement and GAAP, applied using the same accounting methods, practices, principles, policies and procedures, with consistent classifications that were used in the preparation of the Estimated Statements.

(c)           The Seller Representative shall have a period of up to thirty (30) days from the receipt of the Buyer Statements from Buyer to dispute the Buyer Statements. Upon the Sellers receipt of the Buyer Statements, Buyer will, upon the Seller Representative’s reasonable request, make available during reasonable business hours to the Seller Representative and the Sellers’ accountants (i) a copy of all books and records utilized by Buyer in the preparation of the Buyer Statements and (ii) any employee of Buyer or the Company that participated in the preparation of the Buyer Statements. If, as a result of such review, the Seller Representative disagrees with the Buyer Statements, the Seller Representative shall deliver a notice (a “Notice of Objection”) in writing to Buyer prior to the expiration of such 30-day review period. The Notice of Objection shall set forth in reasonable detail the adjustments the Seller Representative proposes to make to the Buyer Statements and the basis therefor and shall be consistent with the provisions of this Section 1.5. If (i) the Seller Representative agrees with the Buyer Statements or (ii) the Seller Representative fails to deliver a Notice of Objection to Buyer prior to the expiration of such 30-day review period, then, in either case, the Buyer Statements as prepared by Buyer on behalf of the Company shall be final and binding on the parties.

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(d)           If the Seller Representative delivers a Notice of Objection to Buyer in a timely manner pursuant to Section 1.5(c) above, then Buyer and the Seller Representative shall attempt in good faith to resolve and finally determine the amount of the Working Capital as of the Closing, the Closing Accounts Receivable or the Closing Accounts Payable, as applicable, within fifteen (15) days from the date of receipt of the Notice of Objection. If Buyer and the Seller Representative cannot reach agreement within such 15-day period (or such longer period as Buyer and the Seller Representative may mutually agree in writing), the parties shall refer the matter to an Accountant for binding resolution within ten (10) days thereafter. Promptly upon referral of the dispute to the Accountant, (i) Buyer shall submit the applicable Buyer Statement and the Seller Representative shall submit the applicable Estimated Statement and the Notice of Objection, in both cases together with all supporting documentation and work papers, (ii) each party shall reasonably cooperate with the Accountant and promptly respond to any requests for additional information or documents, (iii) each party shall execute the Accountant’s standard form of engagement letter, (iv) each party will be afforded the opportunity to present to the Accountant any material relating to the determination of the matters in dispute and to discuss such determination with the Accountant, and (v) to the extent that a value has been assigned to any component of Working Capital, Closing Accounts Receivable or Closing Accounts Payable, as applicable, that remains in dispute, the Accountant shall not assign a value to such component of Working Capital, Closing Accounts Receivable or Closing Accounts Payable, as applicable, that is greater than the greatest value for such component of Working Capital, Closing Accounts Receivable or Closing Accounts Payable, as applicable, claimed by either party or less than the smallest value for such component of Working Capital, Closing Accounts Receivable or Closing Accounts Payable, as applicable, claimed by either party. The fees, costs and expenses of the Accountant’s review and report shall be allocated to and borne by Buyer, on one hand, and the Sellers, on the other hand, based on the inverse of the percentage that the Independent Accountant’s determination (before such allocation) bears to the total amount of the total items in dispute as originally submitted to the Accountant. For example, should the items in dispute total in amount to One Thousand Dollars ($1,000) and the Accountant awards Six Hundred Dollars ($600) in favor of the Sellers’ position, sixty percent (60%) of the costs of its review would be borne by Buyer and forty percent (40%) of the costs would be borne by Sellers.

(e)           The Accountant shall calculate the components of Working Capital, Closing Accounts Receivable or Closing Accounts Payable, as applicable, that are the subject of the Notice of Objection in a manner consistent with this Agreement, as promptly as may be reasonably practicable. The Accountant shall deliver to Buyer and the Seller Representative concurrently a written opinion setting forth a final determination of the Working Capital, Closing Accounts Receivable or Closing Accounts Payable, as applicable, as of the Closing which shall be made up of (i) the line items set forth in the applicable Buyer Statement delivered by Buyer, to the extent that such line items are not the subject of the Notice of Objection and (ii) the line items determined by the Accountant with respect to line items that are the subject of the Notice of Objection (the “Final Statement”). The determination of the Accountant shall be final and binding on the parties, effective as of the date the Accountant’s written opinion is received by Buyer and the Seller Representative, and shall constitute an arbitral award that is final and binding on each of the parties, and no party shall seek further recourse to courts, other tribunals or otherwise, other than to enforce the Accountant’s written opinion.

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(f)           As used herein, the “Final Adjustment Amount” means the amount, if any, by which the amount of the Closing Accounts Receivable set forth on the Final Statement exceeds the amount of the Closing Accounts Payable set forth on the Final Statement, less an amount, if any, by which the Target Working Capital exceeds the Working Capital as set forth on the Final Statement.  To the extent that the Final Adjustment Amount exceeds the Adjustment Amount, Buyer will pay to the Sellers such excess within five (5) Business Days of final determination of the Final Adjustment Amount. To the extent that the Final Adjustment Amount is less than the Adjustment Amount, within five (5) Business Days of final determination of the Final Adjustment Amount the Sellers and Buyer shall provide joint written instruction to the Escrow Agent to release a portion of the Indemnity Escrow Amount equal to such excess to Buyer.

1.6Indemnity Escrow. The Indemnity Escrow Amount shall be held by the Escrow Agent, and the Indemnity Escrow Fund shall be released to the Sellers such that one hundred percent (100%) of the Indemnity Escrow Amount shall be released on date that is eighteen (18) months following the Closing Date, unless any indemnification claim made by any Buyer Indemnified Party is then pending, in which case an amount equal to the dollar amount of all such claims, as reasonably estimated by Buyer in good faith, shall be retained by the Escrow Agent until such time as such pending claims are resolved in accordance with Article VIII and the Indemnity Escrow Agreement. The Indemnity Escrow Amount shall not be subject to any Lien, attachment, trustee process or any other judicial process of any creditor of any party, and shall be held and disbursed solely for the purposes stated in, and in accordance with the terms of, the Indemnity Escrow Agreement.

1.7Tax Escrow. The Tax Escrow Amount shall be held by the Escrow Agent, and the Tax Escrow Fund shall be released to the Sellers such that one hundred percent (100%) of the Tax Escrow Amount shall be released on the earlier of (i) the issuance of a final non-appealable binding decision with respect to such tax issue, or (ii) execution of a settlement agreement or other binding resolution for the respective tax issue. The Tax Escrow Amount shall not be subject to any Lien, attachment, trustee process or any other judicial process of any creditor of any party, and shall be held and disbursed solely for the purposes stated in, and in accordance with the terms of, the Tax Escrow Agreement.

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1.8Maintenance Holdback Amount.  The full amount of the Maintenance Holdback Amount will be payable to the Sellers if the Company’s actual maintenance expenses for the fiscal year ended March 31, 2013 (including required maintenance related to events or incidents that occur prior to March 31, 2013 but may not be expensed prior to March 31, 2013 and excluding any maintenance expenses incurred after Closing that result from the negligence of the Company’s pilots or mechanics, i.e., “hot starts”) (“Actual Maintenance Expenses”) are equal to or less than $9,091,749 (as adjusted, the “Maintenance Budget Target”).  In the event that the Actual Maintenance Expenses exceed the Maintenance Budget Target but are less than the Maintenance Budget Total, then Buyer shall pay to the Sellers that portion of the Maintenance Holdback Amount equal to the Maintenance Budget Total less the Actual Maintenance Expenses.  If the Actual Maintenance Expenses exceed the Maintenance Budget Total, Buyer shall retain the Maintenance Holdback Amount and shall have no obligation to pay any portion of the Maintenance Holdback Amount to the Sellers.  In calculating Actual Maintenance Expenses, the parties shall add the following line items set forth in the Company’s income statement: (i) “Scheduled Maintenance”; (ii) “Unscheduled Maintenance”; (iii) “Engine Maintenance” (iv) “Air Frame Rental”; (v) “Engine Rental”; and (vi) “Miscellaneous Aircraft Expense”.  The parties intend for the Maintenance Holdback Amount to serve as protection for Buyer in the event the Company has not correctly forecasted the hours to be flown or the 2012-2013 maintenance.  After Closing, to the extent Buyer increases the scheduled 2012-13 maintenance and/or the Company’s aircraft are flown during the period commencing on the Closing Date and ending March 31, 2013 more than the amounts used in setting the Maintenance Budget Target, Buyer and the Seller Representative shall adjust the  Maintenance Budget Target accordingly.  Notwithstanding the foregoing, if the Company meets the Projected EBITDA Target for the fiscal year ending March 31, 2013, then the Maintenance Holdback shall be paid to the Sellers even if the Actual Maintenance Expenses exceed the Maintenance Budget Target.  Any amounts payable to the Sellers under this Section 1.8 shall be paid by Buyer to the Sellers on or prior to May 15, 2013.

ARTICLE II

REPRESENTATIONS AND WARRANTIES OF THE COMPANY AND THE SELLERS

The Company and the Sellers represent and warrant to Buyer that:

2.1Due Organization and Qualification. The Company is a corporation duly organized, validly existing, and in good standing under the laws of the State of Nevada and has full corporate power and authority to own its properties and to carry on the Business as presently conducted. The Company is qualified to do business in each jurisdiction in which the nature of the Business or the ownership of its properties requires such qualification.

2.2Subsidiaries. The Company has no subsidiaries and does not conduct any operations, business, or activities other than operation of the Business at the Leased Real Property.

23Due Authorization. The Company has all necessary corporate power and has taken all necessary corporate action to authorize, execute, deliver and perform this Agreement and the Related Agreements, to consummate the transactions contemplated by this Agreement and the Related Agreements and for the assignment and delivery of the Shares, in each case, as applicable. The assignment of the Shares does not require any further corporate action by the Company. This Agreement and the Related Agreements have been duly executed and delivered by the Company and each of Sellers, and constitutes the valid and legally binding obligation of each, enforceable against each in accordance with its terms and conditions, subject, as to enforcement, to bankruptcy, insolvency, fraudulent conveyance, reorganization and other laws of general applicability relating to or affecting creditors’ rights and to general equitable principles.

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1.2

2.4Capitalization. The capitalization and ownership of the Company is set forth on Exhibit A.  The Shares have been duly authorized and were issued in compliance with all applicable Laws.  To the Sellers’ Knowledge, the Shares were not issued in violation of any preemptive or preferential right and there are no outstanding conversion or exchange rights, subscriptions, options, warrants or other arrangements or commitments obligating any Seller to issue any shares or other securities or otherwise entitling any Person to receive any ownership or equity interest in any Seller. There are no agreements, written or oral, relating to the acquisition, redemption, disposition, voting or registration under applicable securities laws of any security of the Sellers.  The Shares are not subject to preemptive rights created by statute, the Governing Documents, or any agreement to which the Company or any Seller is a party or by which it is bound.  The Shares are vested in all respects and are not otherwise subject to any repurchase or redemption right.  There are no declared or accrued but unpaid dividends or distributions with respect to the Shares.

2.5Non-Contravention. The execution, delivery, and performance of this Agreement (as well as the Related Agreements and all other instruments, agreements, certificates, or other documents contemplated hereby) by the Company and the Sellers and the consummation of the transactions contemplated by this Agreement and the Related Agreements do not and will not (a) violate or conflict with any Laws, any Permit, any Order applicable to the Company, or its assets or properties, (b) violate or conflict with any of the Governing Documents of the Company, (c) violate or conflict with, or permit the cancellation of, trigger or create any right or constitute a default under any agreement to which the Company is a party, which is material to the Business, or by which it or any of its properties are bound, (d) result in the imposition of any Lien upon any of the assets of the Company, or (e) violate, conflict with, impair, result in the cancellation, suspension, or restriction of, or otherwise have any Material Adverse Effect upon, any Aviation Authorization, or alter the Company’s or Buyer’s ability to operate the Business from and after the Closing Date in a way that is materially different from the way the Company and Sellers operated the Business just before the Closing Date. Except as set forth on Schedule 2.5, the Company is not required to give any notice to, make any filing with, or obtain any authorization, consent, or approval from any Governmental Authority or give any notice to, or obtain any consent or approval from, any other Person, in order for the Company and Sellers’ to consummate the transactions contemplated by this Agreement or any Related Agreement, or for the Company and Buyer’s to operate the Business in the ordinary course following the Closing Date, or to operate the Business from and after the Closing Date in the same way as the Company and the Sellers operated the Business just before the Closing Date.

2.6Absence of Changes or Events. Since March 31, 2012, the Sellers have operated the Business in the ordinary course consistent with past practices, and the Company, taken as a whole, has suffered no Material Adverse Change. Except as set forth on Schedule 2.6, since March 31, 2012, the Company has not:

(a)           acquired (including, without limitation, by merger, consolidation, or acquisition of stock or assets or any other business combination) any corporation, partnership, other business organization or any division of any such organization or any significant amount of assets;

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(b)           issued, delivered, sold or authorized, or proposed the issuance, delivery or sale of, any capital stock of the Company or securities convertible into, or subscriptions, rights, warrants or options to acquire, or other agreements or commitments of any character obligating the Company to issue any such capital stock or other convertible securities;

(c)            incurred any Indebtedness or issued any debt securities or assumed, guaranteed or endorsed, or otherwise become responsible for, the obligations of any person, or made any loans or advances, or granted any security interest in any of its assets, except in the ordinary course of business and consistent with past practice;

(d)           entered into any material contract or agreement other than in the ordinary course of business and consistent with past practice;

(e)           authorized or made any commitment that is not shown on the balance sheet contained in the Interim Financial Statements with respect to any single capital expenditure which is in excess of $25,000 or capital expenditures which are, in the aggregate, in excess of $50,000, except for aircraft and aircraft parts purchased in the ordinary course of business;

(f)            increased the compensation payable or to become payable or the benefits provided to its managers, officers or employees, except for increases in the ordinary course of business and consistent with past practice in salaries, wages, bonuses, incentives or benefits of employees of the Company, or granted any severance or termination pay to, or entered into any employment or severance agreement with, any manager/director, officer or other employee of the Company, or established, adopted, entered into or amended any collective bargaining, bonus, profit-sharing, thrift, compensation, stock option, restricted stock, pension, retirement, deferred compensation, employment, termination, severance or other plan, agreement, trust, fund, policy or arrangement for the benefit of any manager/director, officer or employee;

(g)           taken any action, other than reasonable and usual actions in the ordinary course of business and consistent with past practice, with respect to accounting policies or procedures;

(h)           made any Tax election or settled or compromised any United States federal, state, local or non-United States income Tax Liability or changed any method of accounting for Tax purposes; filed any Tax Return other than on a basis consistent with past practice; filed any amended Tax Return; consented to any extension or waiver of the limitation period applicable to any claim or assessment in respect of Taxes; filed any material claim for refund of Taxes previously paid or surrender of any claim for refund;

(i)             paid, discharged or satisfied any material claim, Liability or obligation (absolute, accrued, asserted or unasserted, contingent or otherwise), other than the payment, discharge or satisfaction, in the ordinary course of business and consistent with past practice;

(j)             amended, modified or consented to the termination of any Material Contract, or amended, waived, modified or consented to the termination of any material rights of any party to such Material Contract, other than in the ordinary course of business and consistent with past practice;

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(k)            commenced, became the subject of, or settled any material litigation, suit, claim, action, investigation or proceeding;

(l)             permitted any material item of Intellectual Property to lapse or to be abandoned, dedicated, or disclaimed, failed to perform or make any material filings, recordings or other similar actions or filings applicable to the Intellectual Property, or failed to pay any and all fees and Taxes required to maintain and protect its interest in each and every item of Intellectual Property;

(m)           permitted any of the Aviation Authorizations to lapse or to be abandoned, dedicated, or disclaimed, failed to perform or make any material filings, recordings, or similar actions or filings applicable to any of the Aviation Authorizations, or failed to pay any and all fees, fines and Taxes required to maintain and protect its interest in each and every of the Aviation Authorizations; or

(n)           announced an intention, entered into any formal or informal agreement or otherwise made a commitment, to do any of the foregoing.

2.7Personal Property.

(a)           Marketable Title. The Company has good title to (or valid leasehold or contractual interests in) all personal property of the Company, including all Aircraft, free and clear of all liens, claims, charges, set-offs, encumbrances or restrictions of every kind (“Lien”), except for the Liens set forth in Schedule 2.7(a). There are no contractual or legal restrictions that preclude or restrict the ability to use any Aviation Authorization or other personal property owned, held, or leased by the Company for the purposes for which it is currently being used. The assets held by the Company include all of the properties, assets, rights, contracts, leases, easements, licenses and personal property sufficient to conduct the Business after Closing as it is presently conducted by the Company or as it is contemplated to be conducted.

(b)           Aircraft, Machinery and Equipment. All Aircraft and other material machinery, equipment and tangible assets of the Company being used in the operation of the Business are in good operating condition, working order and maintained and serviced, all as necessary and as required by the Aviation Authorizations, all applicable Laws, and manufacturers’ manuals, specifications, and recommendations (subject to routine maintenance and repair for similar assets of like age), fit for their particular purpose, and are usable in the conduct of the Business. The maintenance and other records kept for each Aircraft and each piece of material machinery, equipment, and tangible asset are true, correct, accurate, complete, and current in all material respects as required by the Aviation Authorizations, all applicable Laws, and manufacturers’ manuals, specifications, and recommendations.  Each Aircraft is duly registered at the FAA Aircraft Registry and is certified by the FAA as being airworthy.

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(c)           Inventories. All inventories of the Company, wherever located, including all spare parts and supplies, work in process, and all other materials to be used or consumed by the Company in the Business (collectively “Inventories”) consist of a quality and quantity saleable and usable in the ordinary course of business of the Company, except for obsolete items and items of below-standard quality, each as described on Schedule 2.7(c). Inventories now on hand that were purchased after the date of the Financial Statements or the Interim Financial Statements were purchased in the ordinary course of business of the Company at a cost not exceeding market prices prevailing at the time of purchase. The quantities of each item of Inventories are not excessive but are reasonable in the present circumstances of the Company. Work-in-process Inventories are now valued, and will be valued on the Closing Date, according to GAAP.

(d)           Maintenance Records. The maintenance records kept for each Aircraft are true, correct, accurate, complete, and current in all material respects.  All such maintenance records accurately reflect the maintenance, each repair, each overhaul, each modification, and each alteration (as applicable) performed on each Aircraft, and no maintenance, repair, overhaul, modification, or alteration has occurred on any Aircraft that is not reflected in such maintenance records for such Aircraft.  No damage, loss, or incident has occurred on any Aircraft that is not reflected in such maintenance records for such Aircraft. No required or recommended maintenance, repair, overhaul, modification, alteration, airworthiness directive, service bulletin, or other aviation requirement or aviation recommendation has been deferred past the required or recommended deadline for the completion of same.

2.8Compliance with Licenses, Permits, Laws and Other Instruments.

(a)           Licenses and Permits. Attached hereto as Schedule 2.8(a) is a list of all Permits held or applied for by the Company which relate to the conduct of the Business and which have a material effect on the Business, including, but not limited to, all Permits issued by or pending before any Aviation Authority (collectively, the “Aviation Authorizations”). The Company has complied in all material respects with the terms and conditions of all such Aviation Authorizations, and no violation or failure to comply with any such Aviation Authorizations or the Laws governing the issuance or continued validity or effect thereof has occurred. No additional Aviation Authorizations are required from any Aviation Authority or other Governmental Authority in connection with the operation of the Business, the failure to obtain or maintain which could reasonably be expected to have a Material Adverse Effect on the Business. Since December 31, 2011 or except as may otherwise still be pending, the Company has not been issued any citations, notices or orders of non-compliance under any Laws, and no Aviation Authority or other Governmental Authority has given notice to the Company of, or otherwise indicated, any violation of, or failure to comply with, any Aviation Authorization or applicable Laws concerning the Company or the Business, except as disclosed on Schedule 2.8(a). All of the Aviation Authorizations used in connection with the Business prior to the Closing will be available for use by the Company on substantially the same terms and conditions immediately after the Closing.

(b)           Conflicts. The conduct of the Business does not conflict with the rights of any other Person, violate or, with or without the giving of notice or the passage of time, or both, will violate, conflict with or result in a default, right to accelerate or loss of rights under, any terms or provisions of the Governing Documents of the Company, as presently in effect, or any Lien, lease, license, agreement, understanding, or Law to which the Company is a party or by which the Company may be bound or affected.

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(c)            Government Consent. The Company is not aware of any proposed law, governmental taking, condemnation or other proceeding which would be applicable to the Business and which might have a Material Adverse Effect on the Business either before or after the Closing. No consent, qualification, order, approval, or authorization of, or filing with, any Aviation Authority or other Governmental Authority is required in connection with the Company’s execution, delivery and performance of this Agreement, and the Related Agreements and the consummation of any transaction contemplated hereby and thereby.

2.9Contracts and Agreements. Schedule 2.9 contains a list of all written or oral contracts, commitments, leases, and other agreements (including, without limitation, promissory notes, loan agreements, and other evidences of Indebtedness, guarantees, agreements with employees, contractors, consultants, distributors, suppliers, customers, and service agreements): (i) by which the Company or its properties are bound or are contemplated to amount to $10,000 or more in any fiscal year; (ii) that are terminable by the Company only upon more than thirty (30) calendar days prior written notice, (iii) that are otherwise material to the Business; or (iv) the absence of which would, individually or in the aggregate, have a Material Adverse Effect on the Company or the Business (together, the “Material Contracts”).Each of the Material Contracts is legal, valid and binding and in full force and effect, and neither the Company, nor, to the Knowledge of the Company, or any Seller, any other party to such Material Contract is in violation of or in default in the performance, observance or fulfillment of any material obligation, agreement, covenant or condition contained in such Material Contract. The Company has not received any notice, oral or written, from any party to any Material Contract (i) stating that such party intends not to perform, observe or fulfill any of its obligations, agreements, covenants or conditions under such Material Contract, or (ii) claiming that the Company is in violation or breach of, or default under, any Material Contract. The Company is not in default under or in breach of any of the Material Contracts. Neither the execution of this Agreement or the Related Agreements nor the consummation of any transaction contemplated by this Agreement or the Related Agreements shall constitute a default under, give rise to cancellation rights under, or otherwise adversely affect any of the rights of the Company under any Material Contract. The Company has furnished or made available to Buyer true and complete copies of all Material Contracts, including any and all amendments to such Material Contracts.

2..10       Employment Contracts and Employee Plans.

(a)           List of Employees. Schedule 2.10(a) contains a complete and accurate list of the following information for each employee, independent contractor, consultant and agent of the Company, including each employee on leave of absence or layoff status: name; job title; date of hiring or engagement; date of commencement of employment or engagement; current compensation paid or payable and any change in compensation since March 31, 2012; sick and vacation leave that is accrued but unused; and service credited for purposes of vesting and eligibility to participate under any Employee Plan, or any other employee benefit plan.

(b)           Employee Information. All of the Company’s workers are either United States citizens, lawful permanent residents of the United States, or are otherwise authorized to work in the United States. All of the Company’s (a) employment practices, including, but not limited to, those relating to the hiring and retention of workers, and (b) employment records, including, but not limited to, its Employment Eligibility Verification Forms (Form I-9) and all record keeping and retention practices in support thereof, are in compliance with all applicable Laws, including without limitation all applicable drug and alcohol testing requirements of each Aviation Authority. The Company has not received any written notices of violation or potential violation of any such Laws, and to the Company’s Knowledge, there are no conditions or circumstances which might lead to the Company receiving any such notice of violation or potential violation.

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(c)           Terminated Employees. Schedule 2.10(c) states the number of employees terminated by the Company since March 31, 2012, and contains a complete and accurate list of the following information for each employee of the Company who has been terminated or laid off, or whose hours of work have been reduced by more than fifty percent (50%) by the Company, since March 31, 2012: (i) the date of such termination, layoff or reduction in hours; and (ii) the reason for such termination, layoff or reduction in hours. Except as disclosed on Schedule 2.10(c), the Company has no obligations of any kind to any of such employees or former employees.

(d)           Employee Agreements. Schedule 2.10(d) contains a list of all of the Company’s (i) agreements with any employees, written or oral, concerning term of employment, compensation, benefits, or severance and (ii)  written employee policies, whether set forth in an employee manual, employee statement of policy, work rules for any employee or group of employees, or otherwise.

(e)           WARN Act. The Company has not violated the Worker Adjustment and Retraining Notification Act (the “WARN Act”) or any similar state or local legal requirement. During the ninety (90) day period prior to the date of this Agreement, the Company has terminated two (2) employees.

(f)            Employee Contracts Affecting Services. No employee, consultant, agent or contractor of the Company is bound by any contract that purports to limit his ability (i) to engage in or continue or perform any conduct, activity, duties or practice relating to the Business, or (ii) to assign to the Company or to any other Person any rights to any invention, improvement, or discovery. No former or current employee of the Company is a party to, or is otherwise bound by, any contract that in any way adversely affected, affects, or will affect the ability of Buyer to conduct the Business as heretofore carried on by the Company.

2.11        Employee Benefits. Employee Benefits.

(a)           Employee Benefit Plans. Set forth in Schedule 2.11(a) is a complete and correct list of all “employee benefit plans” as defined by Section 3(3) of the Employment Retirement Income Security Act of 1974, as amended (“ERISA”), all specified fringe benefit plans as defined in Section 6039D of the Code, and all other bonus, incentive-compensation, deferred-compensation, profit-sharing, stock-option, stock-appreciation-right, stock-bonus, stock-purchase, employee-stock-ownership, savings, severance, change-in-control, supplemental-unemployment, layoff, salary-continuation, retirement, pension, health, dental, vision, life-insurance, disability, accident, group-insurance, vacation, holiday, sick-leave, fringe-benefit or welfare plan, and any other compensation or benefit plan, agreement, policy, practice, commitment, contract or understanding (whether qualified or nonqualified, currently effective or previously terminated, written or unwritten) that (i) is or was maintained or contributed to by the Company or any other corporation or trade or business that, together with the Company, is treated as a single employer pursuant to Section 414 of the Code or Section 4001(a)(14) or 4001(b) of ERISA (“ERISA Affiliate”) for the benefit of any current or former director, officer, employee or service provider of, the Company or any ERISA Affiliate, or the dependents of any thereof, or (ii) with respect to which the Company or any ERISA Affiliate has or may have any liability (collectively the “Employee Plans”).

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(b)           Plan Documents. The Company has delivered to Buyer true, accurate and complete copies of (i) the documents comprising each Employee Plan (or, with respect to any Employee Plan which is unwritten, a detailed written description of eligibility, participation, benefits, funding arrangements, assets and any other matters which relate to the obligations of the Company or any ERISA Affiliate); (ii) all trust agreements, insurance contracts or any other funding instruments related to the Employee Plans; (iii) all rulings, determination letters, no-action letters or advisory opinions from the IRS, the U.S. Department of Labor, or any other Governmental Authority that pertain to each Employee Plan and any open requests therefor; (iv) the most recent actuarial and financial reports (audited and/or unaudited) and the annual reports filed with any Governmental Authority with respect to the Employee Plans during the current year and each of the two preceding years; (v) all contracts with third-party administrators, actuaries, investment managers, consultants and other independent contractors that relate to any Employee Plan, and (vi) all summary plan descriptions, summaries of material modifications and memoranda, employee handbooks and other written communications regarding the Employee Plans.

(c)           Compliance with Law.  Each Employee Plan complies in all material respects in form and in operation with its terms, with all applicable collective bargaining agreements, and all applicable Laws.  Each return, report statement, notice, declaration and other document required by any law or governmental agency, federal, state and local (including, without limitation, the IRS and the U.S. Department of Labor) with respect to each such Employee Plan has been filed, and each of such filings has been complete and accurate in all material respects, and no liability in connection with such filings has been incurred.

(d)           Tax-Qualified Retirement Plans.  Each Employee Plan that is intended to be tax-qualified under Section 401(a) of the Code is either (i) the recipient of a favorable determination letter from the IRS, or (ii) a volume submitter or master and prototype plan as to which the adopter is entitled to rely on the advisory or opinion letter issued by the IRS with respect to the qualified status of such plan under Section 401 of the Code to the extent provided in Revenue Procedure 2005-16, and no event has occurred that could reasonably be expected to result in the loss of tax-qualified status of such Employee Plan.

(e)            No Prohibited Transactions.  Neither the Company nor any ERISA Affiliate or their employees, owners or directors has engaged in any material nonexempt “prohibited transaction” under Section 406 of ERISA or Section 4975 of the Code.   Neither the Company nor any ERISA Affiliate has any Liability for breach of fiduciary duty with respect to any Employee Plan subject to Title I of ERISA or any other failure to act in accordance with Title I of ERISA or comply with Title I of ERISA in connection with the administration of, or investment or valuation of the assets of, any such Employee Plan.

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(f)            No Title IV or Other Liability.  Neither the Company nor any ERISA Affiliate (A) has within the preceding six years maintained, contributed to, or had or has any obligation to contribute to or had or has any Liability (contingent or otherwise) to any “multiemployer plan,” as that term is defined in Section 4001(a)(3) of ERISA, or any plan that is subject to Title IV of ERISA or Section 412 of the Code, or (B) sponsors or contributes to, is required to contribute to or has any Liability with respect to any “voluntary employees’ beneficiary association” within the meaning of Section 501(c)(9) of the Code, “welfare benefit fund” within the meaning of Section 419 of the Code, “qualified asset account” within the meaning of Section 419A of the Code, or “multiple employer welfare arrangement” within the meaning of Section 3(40) of ERISA.

(g)           No Post-Retirement Welfare Benefits.  Except as set forth in Schedule 2.11(g), neither the Company nor any ERISA Affiliate maintains or contributes to any Employee Plan which provides for continuing welfare benefits or coverage (including, without limitation, life insurance or medical benefits) for any participant or beneficiary of a participant after such participant's termination of employment, except as may be required by Section 4980B of the Code, Section 601 et seq. of ERISA or any similarly applicable state Law.

(h)           No Claims.  There are no pending or, to the Knowledge of the Company, threatened audits, claims (other than claims for benefits in the ordinary course) or Claims or Proceedings with respect to any Employee Plans.

(i)            Contributions and Premiums.  All contributions or insurance premiums required to have been made by the Company or any ERISA Affiliate to any Employee Plan pursuant to Law (including ERISA and the Code) or the terms of such Employee Plan have been made within the time prescribed by Law and the terms of such Employee Plan.

(j)            Amendment and Termination of Plans.  Each Employee Plan permits the plan sponsor to amend or terminate the plan at any time and without any liability (other than routine claims for benefits and reasonable administrative expenses), subject to the applicable requirements of ERISA and the Code for plan termination.

(k)           Benefits not Triggered.  Except as set forth in Schedule 2.11(k), the consummation of the Transactions will not constitute a triggering event under any Employee Plan which will result in any accelerated vesting or increase in benefits or the payment of benefits or compensation to any employee or former employee (or other current or former service provider) of the Company or any of its ERISA Affiliates.

(l)            409A Compliance.  Each Employee Plan that is a “nonqualified deferred compensation plan” (within the meaning of Code Section 409A(d)(1)) has at all times complied in form and in operation with the requirements of Section 409A of the Code and the guidance issued thereunder.  Neither the Company nor any of its ERISA Affiliates has any obligation to pay, gross up, or otherwise indemnify any employee or other service provider for Taxes or any other costs incurred as a result of a violation of Section 409A of the Code or Section 4999 of the Code.

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2.12        Labor Disputes; Compliance.

(a)           Compliance. The Company has complied in all material respects with all Laws relating to employment practices, terms and conditions of employment, equal employment opportunity, nondiscrimination, immigration, wages, hours, benefits, collective bargaining, occupational safety and health, and other requirements under applicable Laws, including without limitation all applicable drug and alcohol testing requirements of each Aviation Authority. The Company is not liable for the payment of any Taxes, fines, penalties, or other amounts, however designated, for failure to comply with any of the foregoing legal requirements.

(b)           Labor Relations. The Company has not been, and is not now, a party to any collective bargaining agreement or other labor contract; (ii) since March 31, 2012, there has not been, there is not presently pending or existing, and to the Company’s Knowledge there is not threatened, any strike, slowdown, picketing, work stoppage or employee grievance process involving the Company; (iii) to the Company’s Knowledge no event has occurred or circumstance exists that could provide the basis for any work stoppage or other labor dispute; (iv) there is not pending or, to the Company’s Knowledge, threatened against or affecting the Company any Proceeding relating to the alleged violation of any Laws pertaining to employment matters, including any charge or complaint filed with any Governmental Authority, and there is no organizational activity or other labor dispute against or affecting the Company or the facilities; (v) no application or petition for an election of or for certification of a collective bargaining agent is pending; (vi) no grievance or arbitration Proceeding exists that might have an Material Adverse Effect upon the Company or the conduct of its business; (vii) there is no lockout of any employees by the Company, and no such action is contemplated by the Company; and (viii) to the Company’s Knowledge there has been no charge of discrimination filed against or threatened against the Company with the Equal Employment Opportunity Commission or similar Governmental Authority.

2.13        OSHA.

(a)           Compliance. The operations of the Company have been and are in compliance with OSHA and all OSHA-required Permits. The Company has all Permits required under OSHA necessary to operate the Business. The Company has not received any written communication alleging that the Company might be in violation of OSHA or any Permit issued or required pursuant to OSHA, or has or might have any Liability under OSHA, as a result of the conduct of the Business. There are no Claims or Proceedings that could lead to the imposition of any Liability on the Company pursuant to OSHA as a result of the conduct of the Business.

(b)           OSHA Notices. Schedule 2.13(b) sets forth all reports related to any OSHA audit with respect to the Company performed since December 31, 2008 of the Company by any Person (including the Company or any Affiliate thereof) or any Governmental Authority.

2.14        Claims and Proceedings. There are no enforcement actions, claims, actions, demands, notices of violation, consent agreements, suits, legal or administrative proceedings or investigations pending or threatened, against the Company or any Seller or relating to the Business or the transactions contemplated by this Agreement or the Related Agreements (“Claims or Proceedings”), and neither the Company nor any Seller has any Knowledge of, nor has any reason to be aware of, any basis for the same other than those set out in Schedule 2.14. In particular, and without limiting the generality of the preceding sentence, there are no Claims or Proceedings, and no basis for any Claim or Proceeding, arising out of the Business prior to the Closing, and there are no Claims or Proceedings involving any Aviation Authority. There is no agreement, judgment, injunction, order, or decree served upon the Company or upon any Seller which has or could reasonably be expected to have the effect of prohibiting or impairing any current business practice of the Company, any acquisition of property by the Company, or the overall conduct of business of the Company as currently conducted, such that the result thereof could have a Material Adverse Effect on the Company or the Business.

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1.3

2.15        Taxes.

(a)           Returns.  Except as disclosed in Schedule 2.15, as of the Closing Date, the Company has filed all Tax Returns that it was required to file and all such Tax Returns are correct and complete in all material respects. All Taxes owed by the Company (whether or not shown on any Tax Return) have been paid in a timely fashion. Except as disclosed in Schedule 2.15, the Company has not received written notice from a Governmental Authority in a jurisdiction where the Company does not file Tax Returns that it is or may be subject to taxation by that jurisdiction. There are no Liens (and immediately following the Closing Date, there will not be) on any of the assets of the Company that arose in connection with any failure (or alleged failure) to pay any Tax when due. Neither the Company, nor any Seller, has Knowledge of any basis for the assertion of any claim relating or attributable to Taxes which, if adversely determined, would result in any Lien on the assets of the Company.

(b)           Withholdings. Except as disclosed in Schedule 2.15, the Company has timely withheld and paid all Taxes required to have been withheld and paid in connection with amounts paid or owed to any employee, creditor, member, or other third party.

(c)           Assessments. Except as disclosed in Schedule 2.15(c), the Company does not expect any Governmental Authority to assess any additional Taxes for any period for which Tax Returns have been filed. Except as disclosed in Schedule 2.15(c), there is no dispute or claim concerning any Liability of the Company either (i) claimed or raised by any Governmental Authority in a writing received by the Company or (ii) otherwise as to the Knowledge of the Sellers. Schedule 2.15(c) lists all Tax Returns filed since December 31, 2005 that have been audited, those Tax Returns that currently are the subject of audit and those Tax Returns showing Taxes that have not been paid in a timely fashion. The Company has made available to Buyer correct and complete copies of all Tax Returns, examination reports, and statements of deficiencies filed by, assessed against or agreed to by the Company since December 31, 2005. The Company has not waived any statute of limitations in respect of Taxes or agreed to any extension of time with respect to a Tax assessment or deficiency.

(d)           Affiliated Group». The Company (i) has not been a member of an affiliated group filing a consolidated federal income Tax Return or group filing combined Tax Returns or similar group for state, local or foreign Tax purposes (in each case, other than a group the common parent of which was Company) and (ii) does not have any Liability for the Taxes of any Person (other than Company) under Treas. Reg. Section 1.1502-6 (or any similar provision of state, local, or foreign law), as a transferee or successor, by contract, or otherwise.

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(e)           Tax Status. The Company is taxable as a corporation for federal income tax purposes.

(f)            Prior Transactions. The Company will not be required to include any income or gain or exclude any deduction or loss from taxable income for any taxable period or portion thereof on or after the Closing as a result of any (1) change in method of accounting made prior to or in connection with the Closing, (2) closing agreement under Section 7121 of the Code executed prior to the Closing, (or in the case of each of (1) and (2), under any similar provision of applicable Law) (3) installment sale or open transaction disposition consummated prior to the Closing, or (4) prepaid amount received prior to the Closing.

(g)           Payments Prior to Closing. All Tax Returns and reports of the Company required by Law to be filed on or before the Closing have been duly filed or duly extended to a date in the future, and all federal, state, local, foreign and any other taxes (including interest and penalties), assessments, fees and other governmental charges with respect to the properties, assets, income, sales, or use of the Company relating to the Business and due on or prior to the Closing have been paid.

(h)           Reportable Transactions. Neither the Company, nor any Seller has participated in a reportable transaction as those terms are defined in Treasury Regulations § 1.6011-4.

(i)            Tax Sharing Agreements.  The Company is not a party to any Tax sharing, Tax indemnity or similar agreement.

(j)             Spin Offs.  The Company has not distributed stock of another Person in a transaction that was intended to be governed by Section 355 of the Code

2.16        Real Properties; Leases.

(a)           Leases. The Company does not own any real property.  Schedule 2.16(a) is a list setting forth all leases under which the Company possesses or uses real property (the “Real Property Leases”) and all leases under which the Company possesses or uses items of tangible personal property that are material to conduct of the Business (the “Personal Property Leases”). True, correct and complete copies of the Real Property Leases and Personal Property Leases (collectively, the “Leases”) have been delivered to Buyer, together with the names and addresses of the lessors thereunder. The Leases are in full force and effect and the Company is not in default. To the Knowledge of the Company and of each Seller, (i) the other parties to the Leases are not in default thereunder and (ii) no facts or circumstances have occurred which, with the passage of time or the giving of notice, or both, would constitute a default by the Company or the other parties, under any of the Leases.

(b)           Condition of the Leased Real Property. (i) All structures and facilities on the real properties listed on Schedule 2.16(a) (the “Leased Real Property”) are equipped in substantial conformity with Laws applicable to the Company, (ii) the zoning of each parcel of real property permits the presently existing improvements and continuation of the Business presently conducted thereon by the Company, and (iii) no zoning changes, and no condemnation or similar proceedings, are pending or threatened against any of the real properties listed on Schedule 2.16(a). The plumbing, mechanical, heating, ventilation, air conditioning, electric wiring and water and sewage systems are in good working order, normal wear and tear excepted.

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2.17        Insurance; Product Liability.

(a)           Insurance.  Schedule 2.17 contains a listing of all policies of fire, general liability, worker’s compensation, errors and omissions, aviation-related, liability, malpractice and other types of insurance maintained by or on behalf of the Company, to provide insurance protection for the assets or the Business. All of such policies are now in full force and effect and those policies or other policies covering the same risks and in substantially the same amounts have been in full force and effect continuously for the past three (3) years, and provide coverage for the properties, assets, and activities and operations of the Company in the amounts and against the risks required (i) to comply with all Laws, (ii) to conform to the standard levels of insurance maintained in the industry in which the Company operates and (iii) to comply with the requirements of each Material Contract. The Company has not received any notice of cancellation or material amendment of any such policies; and, all material claims thereunder have been filed in a timely fashion. The activities and operations of the Company have been conducted in a manner so as to conform in all material respects to all applicable provisions of such insurance policies. The Company shall maintain all such insurance policies in effect from the date hereof until the Closing.

(b)           Product Liability. As of the Closing Date, no claim relating to product deficiencies, product liability or professional liability has been made against the Company or an LLC. In particular, there are no pending or, to the best of each Sellers’ knowledge threatened claims in connection with any crash or incident of any of the Aircraft. To the best of each Seller’s knowledge, there are no facts or circumstances which are reasonably likely to give rise to such product liability or professional liability claim.

2.18        Books and Records. The books of account, other financial records, and all aviation-related records, including all Aircraft Documents and all records maintained or required to be maintained in connection with any Aviation Authorization, of the Company as they relate to Business are complete and correct in all material respects, and there have been no transactions involving the Business which properly should have been set forth therein and which have not been accurately so set forth in all material respects.  All Aircraft Documents accurately and completely reflect the number of flight hours, cycles, and other particulars required by any Aviation Authorization, the FAA or any other Aviation Authority or any applicable Law.

2.19        Financial Statements. Attached as Schedule 2.19 are true, correct and complete copies of the (“Financial Statements”): (a) audited financial statements (a balance sheet, income statement and statement of cash flows) of the Company for the fiscal years ended March 31, 2010, 2011 and 2012, and (b) unaudited financial statements (a balance sheet, income statement and statement of cash flows) for the seven(7) months ended October 31, 2012 (the “Interim Financial Statements”). The Financial Statements are true, correct and complete in all material respects, and fairly present and describe the financial condition and operating results of the Company as of the dates, and for the periods, indicated therein. The Financial Statements have been prepared consistent with the Company’s past practices, and there has been no change in the Company’s keeping of its books of account or accounting practices relating to the Business for the three-year period ended on the Closing Date.

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1.4

2.20        Accounts Receivable. All of the accounts, notes, and loans receivable that have been recorded on the books of the Company are bona fide and represent amounts validly due for services rendered. Except as disclosed on Schedule 2.20 hereto (a) all of such accounts, notes, and loans receivable are owned by the Company free and clear of any Liens or other charge; (b) none of such accounts, notes, or loans receivable is subject to any offsets or claims of offset; and (c) none of the obligors of such accounts, notes, or loans receivable has given notice that it will or may refuse to pay the full amount or any portion thereof.

2.21        Accounts Payable. Schedule 2.21 is an aged list of the accounts payable of the Company and in respect of the Business as of the close of business on the Closing Date. All such accounts payable arose from the purchase of goods and services in the ordinary course of business. The Company is current in the payment of all such accounts payable, all in accordance with their terms.

2.22        Bank Accounts. Schedule 2.22 is a list of all banks or other financial institutions with which the Company has an account or maintains a safe deposit box, showing the type and account number of each such account and safe deposit box and the names of the persons authorized as signatories thereon or to act or deal in connection therewith.

2.23         Environmental Matters.

(a)           Environmental Proceedings. There are no Claims or Proceedings, existing or pending, or to the Knowledge of the Company or of any Seller threatened, relating to the Company, the properties subject to the Real Property Leases or any other property or facility operated or leased, or previously owned, operated or leased by the Company relating in any way to the Environmental Laws or any regulations, code, plan, Order, decree, judgment or injunction.

(b)           Release. Neither the Company nor any other person has released, placed, stored, buried, dumped, disposed or arranged for disposal of any Hazardous Substances or any other substances produced by, or resulting from, any business, commercial or industrial activities, operations or processes, on or beneath the Leased Real Property except for inventories of such substances to be used, and wastes generated therefrom, in the ordinary course of business of the Company provided that such excepted inventories and wastes, if any, were and are stored, handled and disposed of in accordance with applicable Laws and in a manner such that there has been no release of any such substances into the environment in violation of the Environmental Laws or in a manner that would give rise to costs or liability under any Environmental Law.

(c)           Liens. No releases have occurred at the properties subject to the Real Property Leases, which could result in the assertion or creation of a Lien on such properties by any Governmental Authority or agency with respect thereto, nor has any such assertion of a Lien been made by any Governmental Authority or agency with respect thereto.

(d)           Environmental Conditions. None of the following exists at the properties subject to the Real Property Leases: asbestos-containing material in any form or condition; materials or equipment containing polychlorinated biphenyl; or landfills, surface impoundments or disposal areas.

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(e)           Storage Tanks. Any underground and above-ground storage tanks currently or formerly owned or operated by the Company or located on or beneath the properties subject to the Real Property Leases are described on Schedule 2.23(e) and have been properly registered, constructed (or upgraded), operated and (if now out of service) closed and removed in compliance with all applicable laws and requirements.

2.24        Intellectual Property.

(a)           Attached hereto as Schedule 2.24(a) is a list and brief description of all patents, patent rights, trademarks, trade names, copyrights, service marks, trade secrets or applications therefor and other items of intellectual property or industrial property and computer programs, software and data, information, or knowledge owned or used by or registered in the name of the Company or any Seller or in which the Company has any rights, licenses, immunities, or rights (collectively, the “Intellectual Property”).

(b)           Attached hereto as Schedule 2.24(b) is a list of all license agreements to which the Company is a party, either as licensor or licensee, with respect to any Intellectual Property.

(c)           The Company has good and marketable title to or the right to use all the Intellectual Property for the conduct of the Business as presently conducted or operated without the payment of any royalty or similar payment, and the consummation of the transactions contemplated by this Agreement and the Related Agreements do not and will not violate, impair, or otherwise interfere with the Company’s right to use all of the Intellectual Property after the Closing Date in substantially the same way as the Intellectual Property was used just before the Closing.

(d)           Neither the Company nor any Seller has received any notice of any infringement, misappropriation, or wrongful use of any of the Intellectual Property. There has been no claim presented whether for infringement or otherwise by any third party which relates to the use of any Intellectual Property in connection with the Business. The Company is not infringing any patent right, trade name, copyright, trademark, or other Intellectual Property right of others, and neither the Company nor any Seller has any Knowledge or is aware of any infringement, misappropriation, or wrongful use by others of any such rights owned, licensed, or held by the Company. The Company has not granted any licenses, releases, security interests or other rights in or relating to any Intellectual Property.

(e)           No claim by any third party contesting the validity, enforceability, use or ownership of any Intellectual Property owned, held under license, or used by the Company has been made, or to the Knowledge of the Company or any Seller, is threatened or contemplated.

(f)           All acts required in connection with the preservation and protection of the Intellectual Property owned, licensed, or used by the Company have been timely and duly made and all fees in connection therewith have been fully and timely paid.

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(g)           No former or current employee, consultant, contractor, agent, or advisor of the Company has any right to, or any claims in connection with, any Intellectual Property owned, licensed, or used by the Company.

(h)           All of the Intellectual Property owned, held under license, or used in connection with the Business prior to the Closing will be owned or licensed by, or available for use by, the Company on substantially the same terms and conditions from and after the Closing.

2.25        Brokers. Except as set forth on Schedule 2.25, neither the Company nor Sellers has engaged, or caused to be incurred any liability for any brokerage or finders’ fees or agents’ commissions or like payment to, any finder, broker, or sales agent in connection with the origin, negotiation, execution, delivery, or performance of this Agreement or the transactions contemplated hereby, and all compensation payable to any such party shall be the sole responsibility of Sellers, and Buyer shall have no responsibility therefor.

2.26        Illegal Payments; FCPA. Neither the Company nor any of its officers, directors, employees, agents or representatives has at any time made or committed to make, or has been alleged to have made or committed to make, any payments for illegal political contributions or made any bribes, kickback payments or other illegal payments. Neither the Company nor any of its officers, directors, employees, agents or representatives has made, offered or agreed to offer anything of value to any governmental official, political party or candidate for governmental office (or any person that the Company knows, or has reason to know, will offer anything of value to any governmental official, political party or candidate for political office), such that the Company or any of its officers, directors, agents or representatives has violated the United States’ Foreign Corrupt Practices Act of 1977, as amended from time to time, and all applicable rules and regulations promulgated thereunder or any other applicable laws governing corrupt or illicit business practices. There is not now nor has there ever been any employment (or retention as a consultant or advisor) by the Company or any of its officers, directors, agents or representatives, of any governmental or political official in any country while such official was in office. The internal accounting controls of the Company are believed by the management of the Company to be adequate to detect any of the foregoing under current circumstances.

2.27       Related Party. Except as set forth in Schedule 2.27, no employee, officer, or director of the Company (a “Related Party”) or member of such Related Party’s immediate family, or any corporation, partnership or other entity in which such Related Party is an officer, director, member or partner, or in which such Related Party has significant ownership interests or otherwise controls, is indebted to the Company, nor is the Company indebted (or committed to make loans or extend or guarantee credit) to any of them. Further, none of such Persons has any direct or indirect ownership interest in any person or entity with which the Company is affiliated or with which the Company has a business relationship, or any Person that competes with the Company, except that employees, officers, or directors of the Company and members of such Related Party’s immediate families may own stock in publicly traded companies that may compete with the Company. No Related Party or member of their immediate family is directly or indirectly interested in any contract set forth in Schedule 2.9, except as disclosed on Schedule 2.27.

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2.28        Information Furnished. Any information furnished to Buyer by the Company or the Sellers is true, correct and complete in all material respects.  Such information states, or when furnished will state, all material facts necessary to make the statements therein, in light of the circumstances under which the statements are made, not misleading.  Neither the Company nor the Sellers have Knowledge of any matter which has not been disclosed to Buyer which materially and adversely affects or, so far as the Company or the Sellers can now reasonably foresee, will materially and adversely affect the Company or the Business.

ARTICLE III

BUYER’S REPRESENTATIONS AND WARRANTIES

Buyer represents and warrants to the Sellers as follows:

3.1           Due Organization. Buyer is a corporation duly organized, validly existing, and in good standing under the laws of the State of Delaware and has all requisite corporate power and authority to enter into and perform this Agreement and the Related Agreements.

3.2          Due Authorization. The execution and delivery of this Agreement, the Related Agreements and the performance of the transactions contemplated hereby and thereby have been duly authorized by all necessary action on the part of Buyer, and the Agreement has been duly and validly executed and delivered by Buyer and constitutes the valid and binding obligation of Buyer, enforceable in accordance with its terms. The execution, delivery, and performance of this Agreement and the Related Agreements (as well as all other instruments, agreements, certificates or other documents contemplated hereby) by Buyer will not (a) violate any Laws applicable to Buyer or its respective properties, or (b) violate or conflict with any provision of the Governing Documents of Buyer, except in each such case as would not have a Material Adverse Effect on Buyer.

3.3           No Brokers. Buyer has not engaged, or caused to be incurred any Liability to any finder, broker or sales agent in connection with the origin, negotiation, execution, delivery, or performance of this Agreement or the transactions contemplated hereby.

3.4          Investment. Buyer hereby represents that it is acquiring the Shares purchased or acquired under this Agreement for its own account with the present intention of holding such securities for purposes of investment, that it is an “accredited investor” as that term is defined in Rule 501 promulgated under the Securities Act and that it has no intention of selling such Shares in a public distribution in violation of the federal securities laws or any applicable state securities laws.

ARTICLE IV

COVENANTS

4.1          Conduct of Business Pending Closing. From the date of this Agreement to the Closing Date, the Company shall preserve the Company’s business organization and present relationships with its customers, suppliers, employees, and each Aviation Authority. The Company will not, and the Sellers will not cause or permit the Company to, take any action that could reasonably be expected to have a Material Adverse Effect on the Company, the Business, or the transactions contemplated by this Agreement and without the prior written consent of Buyer, the Company will not engage in any practice, take any action, or enter into any transaction outside the ordinary course of the Business as conducted prior to the date of this Agreement. Without limiting the generality of the foregoing, without such consent:

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(a)           The Company will not sell, lease, transfer, or assign any assets, tangible or intangible, other than for a fair consideration in the ordinary course of business, it being understood and agreed that no transfer of an Aviation Authorization shall be considered in the ordinary course of business.

(b)           The Company will not enter into any agreement, contract, lease, (or license or series of related agreements, contracts, leases and licenses) outside the ordinary course of business.

(c)           The Company will not accelerate, terminate or cancel any agreement, contract, lease, or license (or series of related agreements, contracts, leases and licenses) involving more than $10,000 to which the Company is a party or by which it is bound.

(d)           The Company will not impose any Lien upon any of its assets, tangible or intangible.

(e)           The Company will not make any capital investment in, any loan to, or any acquisition of the securities or assets of, any other person outside the ordinary course of business.

(f)            The Company will not issue any note, bond, or other debt security or create, incur, assume, or guarantee any Indebtedness or capitalized lease obligation involving more than $10,000 in the aggregate.

(g)           The Company will not merge with any other company, consolidate or sell or consent to the sale of any of the material assets of the Company or acquire any material assets outside the ordinary course of business.

(h)           The Company will not increase the compensation or benefits payable to its employees other than scheduled increases in the ordinary course of business.

(i)            The Company will not make any change in its accounting, collection or payment practices.

(j)            The Company will maintain insurance consistent with past practices and, unless comparable insurance is substituted therefor or is not generally available to businesses of the type conducted by the Company, not take any action to terminate or modify, or permit the lapse or termination of, the present insurance policies and coverages of the Company as set forth in Schedule 2.17.

(k)           The Company will promptly notify Buyer of any Claims or Proceedings that is commenced, or that is threatened, in writing, against the Company and that relates to or arises out of the Business and, if adversely determined against the Company, would be expected to have a Material Adverse Effect on the Company or the Business.

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(l)            The Company will not settle any action or proceeding on terms that are expected to have a Material Adverse Effect on the Company or the Business, nor release, settle, compromise or relinquish any claims, causes of action or rights involving more than $10,000, individually, or $25,000in the aggregate which the Company may have against any other persons including, without limitation, claims or rights to reimbursement or payment for services rendered by the Company.

(m)          The Company will maintain in good working order and condition, ordinary wear and tear excepted, all of the assets of the Company, including performing any maintenance or repair in accordance with past practice, as well as carrying out of any activity covered by an Aviation Authorization.

(n)           The Company will maintain its inventories of parts, supplies and other assets at substantially the same level as existed on the date hereof.

(o)           The Company will use commercially reasonable efforts to obtain and maintain all consents, assignments or approvals of, and licenses, permits and franchises and rights to operate granted by, each Aviation Authority or other Governmental Authority, the absence or loss of which is may have a Material Adverse Effect on the Company or the Business.

(p)           The Company will not take any action which may result in a violation by the Company of, or in the noncompliance by the Company with, any Aviation Authorization, applicable Laws, manufacturer’s requirements or recommendations, or any Material Contract, which in any case may have a Material Adverse Effect on the Company or on the Business.

(q)           The Company will cooperate with Buyer and render to Buyer such assistance as Buyer may reasonably request, in obtaining any Permit as Buyer considers necessary or appropriate.

(r)            The Company will (i) pay, when due, and prior to the imposition or assessment of any interest, penalties or Liens by reason of the nonpayment of, all Taxes due or assessed against it, except for any Taxes being contested in good faith and for which reserves have been established by the Company, and (ii) file all Tax Returns when due.

(s)           The Company will maintain, renew, and not alter any Aviation Authorization, or any right, privilege, or immunity, held by the Company on the date of this Agreement, and will continue to pursue any applications for any pending or new Aviation Authorizations, and will not take any action which may result in a violation, cancellation, suspension, or impairment of, or any change in, any existing Aviation Authorization, or the rejection or cancellation of any pending application or new application for any Aviation Authorization, or for any other right, privilege, or immunity existing or being sought on the date of this Agreement.

(t)           The Company shall give prompt notice to Buyer of any notice of material default received by the Company subsequent to the date of this Agreement under any Material Contract or any Material Adverse Change occurring prior to the Closing.

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4.2          Consents of Others. Prior to the Closing, the Company shall obtain all Permits required of the Business and the Company to permit consummation of the transactions contemplated by this Agreement. In addition, the Company shall, at the request of Buyers, give reasonable assistance to Buyer, and cause its personnel to provide reasonable assistance to and cooperation with Buyer as it contacts customers, suppliers, lenders, each Aviation Authority, and others with which the Company has business relationships and seeks consent to the transaction and agreement to continue such relationships with the Company and Buyer after consummation of the transaction.

4.3           Notification of Certain Matters. The Company shall give prompt notice to Buyer of the occurrence, or non-occurrence, of any event the occurrence, or non-occurrence, of which is reasonably likely (a) to cause any representation or warranty of the Company contained in this Agreement to be untrue or inaccurate if made as of any time at or prior to the Closing Date; or (b) to result in any failure of the Company to comply with or satisfy any covenant, condition or agreement to be complied with or satisfied hereunder; provided, however, that the delivery of any notice pursuant to this Section 4.3 shall not limit or otherwise affect the remedies available hereunder to any of the parties receiving such notice

4.4          Further Assurances. In case at any time after Closing any further action is necessary to complete the transfer of the Shares to Buyer, or otherwise to carry out the purposes of this Agreement, the Sellers shall take all such action without any further consideration therefor.

4.5          Access to Records Before Closing. Prior to the Closing, the Company shall give, or cause to be given, to Buyer and its representatives full and unrestricted access, upon reasonable notice, to the Company’s assets, properties, titles, operations, contracts, corporate minute and other books, records, Permits, files and documents of the Company to review and to make copies of all such materials. The Company will provide Buyer opportunities to meet with key employees of the Business, to visit facilities of the Business and to otherwise conduct due diligence in respect of the Company.

4.6           Disclosure Schedules.  The Sellers agree and acknowledge that the disclosure schedules delivered by Sellers in connection with the execution and delivery of this Agreement are the sole responsibility of the Sellers notwithstanding any assistance or input of Buyer in the preparation and review of such disclosure schedules.

4.7          Assignment of New Aircraft.  On or prior to the Closing Date, the Company will deliver evidence that the purchase documents associated with Saguaro’s purchase of two new aircraft for which a deposit of $1,262,494 has previously been paid, have been transferred to the Company (the “Aircraft Transfers”).  Any sales tax owing by the LLCs or the Company with respect to the post-Closing purchase of such aircraft and the Aircraft Transfers shall be the responsibility of Buyer.

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ARTICLE V

CONDITIONS TO OBLIGATION OF PARTIES TO CONSUMMATE CLOSING

5.1          Conditions to Buyer’s Obligations. The obligation of Buyer to consummate the transactions contemplated by this Agreement is subject to satisfaction on or prior to the Closing of the following conditions (any of which may be waived by Buyer in writing):

(a)            Covenants, Representations and Warranties. The Company and the Sellers shall have performed all obligations and agreements and complied with all covenants contained in this Agreement to be performed and complied with by each of them prior to or at the Closing. Each of the representations and warranties of the Company and the Sellers set forth in Article II hereof shall be true and correct as of the date hereof and as of the Closing Date (as though made then and as though the Closing Date were substituted for the date of this Agreement throughout Article II).

(b)            Consents. All requirements for the valid consummation by the Company and Sellers of the transactions contemplated by this Agreement shall have been fulfilled, all applicable waiting periods as respects any of the Aviation Authorizations mandated by any Aviation Authority, if any, shall have lapsed, and all authorizations, consents, waivers and approvals, and including those of any Aviation Authority or other Governmental Authority required or recommended to be obtained (as reasonably determined by Buyer) in order to permit Buyer to acquire the Shares, and for the Company to operate the Business after the Closing in substantially the same way as the Business was operated just before the Closing, shall have been obtained in form and substance satisfactory to Buyer in its sole discretion. All approvals of the Company and Sellers necessary for the consummation of this Agreement and the transactions contemplated hereby shall have been obtained. Notwithstanding the generality of the foregoing, (i) Buyer shall on or before the Closing Date have received evidence satisfactory to Buyer in its sole discretion from each Aviation Authority listed on Schedule 5.1(b) that each Aviation Authorization listed opposite such Aviation Authority will continue in full force and effect after the Closing on the same basis as such Aviation Authorization was in force just prior to the Closing, and (ii) Buyer shall on or before the Closing Date have received evidence satisfactory to Buyer in its sole discretion from each Person listed on Schedule 5.1(b) that each Material Contract listed opposite such Person will continue in full force and effect after the Closing on the same basis as such Material Contract was in force just prior to the Closing, in each case irrespective of the transactions contemplated by this Agreement and the Related Agreements.

(c)           Litigation. No Claims or Proceedings shall have been instituted before, or by, any Aviation Authority or other Governmental Authority, to restrain, modify or prevent the consummation of the transaction contemplated hereby, or to seek damages in connection with such transaction, or that has or may be expected to have, a Material Adverse Effect on Buyer’s right to own, operate, or control the Business.

(d)           Material Adverse Change. The Company shall not have experienced any Material Adverse Change.

(e)           Due Diligence. Buyer shall be satisfied, in its sole discretion, with the results of the due diligence investigation concerning the Company.

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(f)            Payoff of Indebtedness.  The Company shall have delivered to Buyer (i) payoff letters satisfactory to Buyer evidencing the outstanding amount of any Indebtedness of the Company, other than Indebtedness listed on Schedule 5.1(f), and such Indebtedness shall have been paid in full by the Company or shall be paid from the amount of the Closing Payment.

(g)           Release of Third Party Interests. Except as otherwise consented to in writing by Buyer, any Liens and/or security interests evidenced by financing statements currently of record to perfect a security interest in the assets of the Company in accordance with the Uniform Commercial Code (“UCC”), or duly recorded on title certificates of the Company’s assets pursuant to regulations of the FAA, or any interests recorded in favor any third-party at the International Registry of the Cape Town Convention, shall be released.

(h)           Reserved.

(i)            Tax Payment. Prior to the Closing Date, the Company shall provide evidence of payment to the IRS of $2,000,000, which shall be in addition to the $600,000 paid to the IRS prior to the date of this Agreement, in connection with the Excise Tax Obligations.

(j)            Resignations and Releases of Directors and Officers.  Buyer shall have received the resignations of and releases from each Person serving as a director or officer of the Company, effective as of the Closing.

(k)            Non-Foreign Status.  Each Seller shall have delivered to Buyer a certificate of non-foreign status dated as of the Closing Date, made under penalty of perjury and in form and substance required under the Treasury Regulations issued pursuant to Section 1445 of the Code.

(l)             Closing Deliveries.  The Company and the Sellers shall have delivered to Buyer each of the documents listed in Section 6.2.

(m)           Forms 5500.  The Sellers shall cause the Company to prepare and file completed applications and related Forms 5500 (including all required schedules and attachments) under the United States Department of Labor’s “Delinquent Filer Voluntary Compliance Program” for each Employee Plan (and covering each plan year) for which a Form 5500 was required, but failed, to be filed.  The Sellers shall pay and be solely responsible for any applicable filing fees or penalties due with respect to such applications (the “Form 5500 Expenses”).

(n)           Non-Qualified Stock Option Plan and Agreement.  The Sellers shall cause the Non-Qualified Stock Option Plan and Agreement between the Company and Robert Engelbrecht to have been terminated and paid in full.

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5.2          Conditions to the Company’s and Sellers’ Obligations. The obligation of the Company and the Sellers to consummate the transactions contemplated hereby is subject to satisfaction on or prior to the Closing of the following conditions (any of which may be waived by the Company and the Sellers in writing):

(a)            Covenants, Representations and Warranties. Buyer shall have performed all obligations and agreements and complied with all covenants contained in this Agreement to be performed and complied with by Buyer prior to or at the Closing. Each of the representations and warranties of Buyer set forth in Article III shall be true and correct in all material respects as of the date hereof and as of the Closing Date (as though made then and as though the Closing Date were substituted for the date of this Agreement throughout Article III).

(b)           Consents. All statutory requirements for the valid consummation by Buyer of the transactions contemplated by this Agreement shall have been fulfilled and all authorizations, consents and approvals, including those of any Governmental Authority required to be obtained in order to permit the consummation by Buyer of the transactions contemplated hereby shall have been obtained.

(c)           Litigation. No Claims or Proceedings shall have been instituted before, or by, any Aviation Authority or other Governmental Authority, to restrain, modify or prevent the consummation of the transaction contemplated hereby, or to seek damages in connection with such transaction, or that has or may be expected to have, a Material Adverse Effect on Buyer’s right to own, operate, or control the Business.

(d)           Closing Deliveries.  Buyer shall have delivered to the Sellers each of the documents listed in Section 6.3.

ARTICLE VI

CLOSING

6.1          Closing. The closing of the transactions contemplated hereby (the “Closing,”) shall occur on a date which follows or is simultaneous with the satisfaction of all applicable conditions and covenants contained herein (the “Closing Date”).  The Closing shall take place remotely via the exchange of documents and signatures or at such location as shall mutually agreed upon by Buyer and the Company.

6.2          Documents to be Delivered by the Company and Sellers. The following documents shall be delivered to Buyer at the Closing by the Company and the Sellers:

(a)           Secretary’s Certificate. Copies of each of the following for the Company certified to its satisfaction by the Secretary of the Company:  (i) the current articles of incorporation of the Company, certified by the Nevada Secretary of State as of a recent date; (ii) certificates of the Secretary of State of the State of Arizona as of a recent date as to the legal existence and good standing of the Company; (iii) the bylaws of the Company; and (iv) resolutions adopted by the Company’s Board of Directors and stockholders authorizing the execution, delivery and performance of this Agreement and the other transaction documents contemplated hereby and the consummation of the Transactions.

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(b)           Opinion. Opinion of Law Offices of Mary J. Drury & Associates, counsel to the Company and each Seller, dated as of the Closing Date, substantially in the form attached hereto as Exhibit B.

(c)           Aircraft Purchase Agreement». The LLCs shall have executed and delivered, or caused to be delivered, to Buyer an aircraft purchase agreement in substantially the form attached hereto as Exhibit C (the “Aircraft Purchase Agreement”).

(d)           Reserved.

(e)           Indemnity Escrow Agreement». The Sellers shall have executed and delivered, or caused to be delivered, to Buyer an indemnity escrow agreement in substantially the form attached hereto as Exhibit E (“Indemnity Escrow Agreement”).

(f)           Tax Escrow Agreement». The Sellers shall have executed and delivered, or caused to be delivered, to Buyer a tax escrow agreement in substantially the form attached hereto as Exhibit F (“Tax Escrow Agreement”).

(g)           Certificate. A certificate executed by an executive officer of the Company and each Seller dated as of the Closing Date, in substantially the form attached hereto as Exhibit G.

(h)           Termination of Security Interests. UCC termination statements, payoff letters and other applicable documentation necessary to release any interest of any third party in the Company’s assets duly executed by the appropriate parties.

(i)            Transfer of Records. All contracts, files, documents, data, records and information of the Company relating to the Business.

(j)            Consents. Evidence of (i) the fulfillment all requirements for the valid consummation by the Company of the transactions contemplated by this Agreement and (ii) all third party authorizations, consents and approvals, including those of any Aviation Authority or other Governmental Authority, required or recommended to be obtained in order to permit the consummation by the Company of the transactions contemplated by this Agreement and the Related Agreement, and for the Company to operate the Business after the Closing in substantially the same way as the Business was operated just before the Closing, in all cases in such form as may be reasonably acceptable to Buyer.

(k)           Non-Foreign Certificates.  A properly completed and executed certificate of non-foreign status under Section 1445 of the Code from each Seller.

(l)           Tax Opinion.  The Tax Opinion in such form and substance reasonably satisfactory to Buyer.

(m)           FIN 48 Disclosure.  Disclosure required by FIN 48 relating to certain tax positions taken by the Company in such form and substance reasonably satisfactory to Buyer.

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(n)           Guarantees.  A Guarantee in the form attached hereto as Exhibit H executed by each Guarantor.

(o)           Aircraft Transfers.  Evidence that the purchase documents associated with the Aircraft Transfers have been transferred to the Company.

6.3           Obligations of Buyer. The following shall be delivered to the Company and the Sellers at the Closing by Buyer:

(a)           Wire Transfer. The Closing Payment shall be paid by Buyer to the Sellers by wire transfer to the accounts specified by Sellers as set forth on Exhibit A.

(b)           Aircraft Purchase Agreement. The Aircraft Purchase Agreement, duly executed by Buyer.

(c)           Reserved.

(d)           Indemnity Escrow Agreement Agreements. The Indemnity Escrow Agreement, duly executed by Buyer.

(e)           Tax Escrow Agreement. The Tax Escrow Agreement, duly executed by Buyer.

(f)            Certificate. A certificate executed by an executive officer of Buyer, dated the Closing Date, in substantially the form attached as Exhibit G hereto.

(g)           Consents. Evidence of (i) the fulfillment all requirements for the valid consummation by Buyer of the transactions contemplated by this Agreement and (ii) all third party authorizations, consents and approvals, including those of any Governmental Authority, required to be obtained in order to permit the consummation by Buyer of the transactions contemplated by this Agreement, in all cases in such form as may be reasonably acceptable to Company and the Sellers.

ARTICLE VII

TAXES

7.1          Transfer Taxes. The Sellers shall be responsible for, and shall pay when due, all transfer, documentary, excise, stamp, sales, use, recording, registration or similar Taxes or fees arising out of the sale, transfer, conveyance or assignment of the Shares by the Sellers and the Transactions.  The Sellers shall make any filing under applicable Law with respect to such Taxes.

7.2          Tax Matters.

(a)           The Sellers shall be severally liable for and shall indemnify Buyer for Taxes of the Company for any Pre-Closing Tax Period on a pro rata basis based upon the percentage of the Purchase Price payable to such Seller as set forth on Exhibit A hereto and, with respect to any taxable years or periods beginning before and ending after the Closing Date, the portion of such taxable years or periods ending on and including the Closing Date.  To the extent permitted by applicable Law, the Sellers, the Company and Buyer shall cause any tax period to end on (but include) the Closing Date.

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(b)           For purposes of clause (a) above, whenever it is necessary to determine the liability of the Sellers for Taxes of the Company for a portion of a taxable year or period that begins before and ends after the Closing Date, the determination of such Taxes for the portion of the year or period ending on, and the portion of the year or period beginning after, the Closing Date, shall be determined (x) for any income Taxes or any transactional Taxes, including Taxes based on sales or revenue, using a closing-of-the-books method assuming that the applicable taxable year or period consists of two taxable periods, one ending on the Closing Date and one beginning at the opening of the day after the Closing Date, and (y) for any Taxes based on net worth, capital, intangibles, or similar items, and for any real estate Taxes or other property or tangible asset-based Taxes, on a per-diem basis taking into account the number of days in such entire taxable year or period and the number of those days Buyer and the Sellers, respectively, owned the Shares.  Any penalty or interest with respect to a Tax shall be a liability of the party or parties liable for the Tax to which such penalty or interest relates, regardless of when such penalty or interest is assessed.

(c)           The Seller Representative shall, at the Company’s expense, timely prepare and file (or cause to be timely prepared and filed) all income Tax Returns of the Company for Pre-Closing Tax Periods and all other Tax Returns of the Company required to be filed on or before the Closing Date (“Seller Returns”).  The final federal and state income Tax Returns of the Company shall be prepared by the Company’s existing accounting firm at the expense of the Sellers in accordance with past practice of the Company except as otherwise required by applicable Law.  To the extent that the Company recognizes net income for a Pre-Closing Tax Period, the Company’s accumulated net operating losses may be used by the Sellers to offset such net income to the extent allowable under applicable Laws and in accordance with the principles of Section 7.2(b).   The Company shall timely pay all Taxes shown as due and payable by the Company on the Seller Returns to the extent that such Taxes are a liability of the Company.  The Company shall timely prepare and file (or cause to be timely prepared and filed) all Tax Returns of the Company for Pre-Closing Tax Periods, other than Seller Returns, and all Tax Returns of the Company for any taxable years or periods beginning before and ending after the Closing Date (“Buyer Returns”).  Buyer shall timely pay (or cause to be paid) all Taxes shown as due and payable on Buyer Returns  and Sellers shall reimburse Buyer for the amount of Taxes associated with such Buyer Returns for which such Sellers are responsible pursuant to Section 7.2(a).  The Sellers shall reimburse Buyer within ten (10) days of any request from Buyer for such reimbursement.  If the Sellers fail to reimburse Buyer within such ten (10) day period, Buyer shall have an express right to issue written instruction to the Escrow Agent instructing a release from the Indemnity Escrow Amount to Buyer of amounts owing by the Sellers pursuant to this Section 7.2. Buyer shall provide the Sellers, and the Seller Representative shall provide Buyer, with copies of any Tax Returns to be filed by Buyer or the Seller Representative, as applicable, pursuant to this Section 7.2(c) at least twenty days prior to the due date thereof (giving effect to any extensions thereto).  The Seller Representative or Buyer, as applicable, shall have the right to review such Tax Returns prior to the filing of such Tax Returns.  If the Seller Representative or Buyer, as applicable, disputes any amounts shown to be due on such Tax Returns, the Seller Representative and Buyer shall consult and resolve in good faith any issues arising as a result of the review of such Tax Returns.  If the parties are unable to resolve any dispute within ten (10) days after the Seller Representative’s or Buyer’s, as applicable, receipt of such Tax Returns, such dispute shall be resolved by the Accountant, which shall resolve any issue in dispute as promptly as practicable and will not take any position that is not more likely than not to be correct.  All costs and expenses of the Accountant shall be borne by the non-prevailing party (or shall be shared equally if both parties prevail on material issues).

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(d)           After the Closing Date, the Sellers, the Seller Representative and Buyer shall:

(i)             assist in all reasonable respects the other party in preparing any Tax Returns which such other party is responsible for preparing and filing in accordance with this Section 7.2;

(ii)            cooperate in all reasonable respects in preparing for any audits of, or disputes with, taxing Authorities regarding Tax Returns of the Company;

(iii)           make available to the other as reasonably requested all information, records and documents relating to Taxes of the Company; and

(iv)           furnish the other party with copies of all correspondence received from any taxing Governmental Authority in connection with any Tax audit or information request with respect to any Tax for which such other party could be liable or required to indemnify the first party.

(e)           Buyer or the Company, on the one hand, and the Sellers or the Seller Representative, on the other hand, shall promptly notify each other in writing as soon as it becomes aware of any audit, administrative or judicial proceeding involving any Tax or Tax Return of the Company for a Pre-Closing Tax Period (a “Tax Controversy”).  Any expense incurred by Buyer or the Company in defending the Company with respect to a Tax Controversy shall be a liability of the Sellers.  Except as provided in Section 7.2(f) and Section 7.2(g), Buyer shall have the exclusive authority to control any Tax Controversy, provided that the Seller Representative shall be entitled to participate, at its own expense, in any Tax Controversy that could increase the Sellers’ liability for Taxes under applicable Law or under this Agreement, and Buyer shall not settle or otherwise resolve any Tax Controversy it controls if such settlement or resolution relates to Taxes for which Sellers are liable under this Agreement or under applicable Law without the prior written consent of the Seller Representative (which will not be unreasonably withheld, delayed, or conditioned).

(f)            Notwithstanding the foregoing, Buyer agrees that that upon the receipt of a legal opinion concluding that the Company’s operations are not subject to any form of Arizona income taxation or transactional privilege tax (the “Tax Opinion”), in form and substance reasonably satisfactory to the Buyer, Buyer shall not cause the Company to file any income or payroll Tax Returns in Arizona or otherwise seek a Tax ruling regarding whether the Company’s pre-Closing operations are subject to any form of Arizona taxation covered by the Tax Opinion (the “Arizona Tax Issue”) unless required by a change in applicable law; provided however, should any Governmental Authority audit the Company after Closing and disagree with the opinion articulated in the Tax Opinion, the Sellers’ shall be liable for any losses up to $1,000,000 incurred as a result of such audit (the “Arizona Tax Losses”).  The Sellers’ obligations to pay any Arizona Tax Losses shall survive for a period of four (4) years after the Closing Date and shall not be subject to the Deductible.

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(g)           Notwithstanding Section 7.2(e), the Sellers shall have the authority to control any audit, administrative or judicial proceeding involving any Arizona Tax Issue, Excise Tax Obligations or liability for Taxes in connection with the matter listed on Schedule 8.2(a) under which the Company or the Sellers might be liable for Taxes under applicable Law, provided that the Buyer shall have the right to approve any legal counsel retained and will be entitled to participate in any proceeding relating to any Arizona Tax Issue, Excise Tax Obligation or liability for Taxes in connection with the matter listed on Schedule 8.2(a), and Sellers shall not settle or otherwise resolve any Arizona Tax Issue, Excise Tax Obligation or liability for Taxes in connection with the matter listed on Schedule 8.2(a) it controls without the prior written consent of the Buyer (which will not be unreasonably withheld, delayed, or conditioned), and provided further that if any proceeding involving the Arizona Tax Issue involves potential liabilities of the Company in excess of $1,000,000, any proceeding involving any Excise Tax Obligation involves potential liabilities of the Company in excess of $500,000, or  any proceeding involving potential liabilities  of the Company for Taxes in connection with the matter listed on Schedule 8.2(a) in excess of $358,000, the Buyer shall have the authority to control such proceeding.

ARTICLE VIII

INDEMNIFICATION

8.1          Survival. The representations and warranties of the Company, the LLCs and the Sellers set forth in Article II hereof or in the Schedules or Closing Certificates delivered pursuant to this Agreement or any Related Agreement shall terminate on the eighteen (18) month anniversary of the Closing Date, except as follows: (i) the representations and warranties contained in Section 2.1 (Due Organization and Qualification), Section 2.2 (Subsidiaries), Section 2.3 (Due Authorization) and Section 2.4 (Capitalization); and (ii) the representations and warranties contained in Section 2.8 (Compliance with Licenses, Permits, Laws and Other Instruments), Section 2.11 (Employee Benefits) and Section 2.23 (Environmental) shall terminate on the three (3) year anniversary of the Closing Date. The representations and warranties of Buyer in Article III of this Agreement shall survive for a period of eighteen (18) months.

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8.2           Indemnification.

(a)           Indemnification of Buyer. Each Seller agrees that notwithstanding the Closing and regardless of any investigation made at any time by or on behalf of Buyer or of any information Buyer may have in respect of such investigation, Sellers, severally on a pro rata basis based upon the percentage of the Purchase Price payable to such Seller as set forth on Exhibit A hereto, will indemnify and hold harmless Buyer and each officer, director and affiliate of Buyer (collectively, the “Buyer Indemnified Parties”) from and against any and all damages, losses, claims, liabilities, demands, charges, suits, penalties, costs and expenses (including court costs and reasonable attorneys’ fees and expenses incurred in investigating and preparing for any litigation or proceeding) (collectively, the “Buyer Indemnifiable Costs”), which any of the Buyer Indemnified Parties may sustain, or to which any of the Buyer Indemnified Parties may be subjected, arising out of (A) any misrepresentation or breach of any of the representations and warranties made by the Company, any LLC or any Seller contained in this Agreement or any Related Agreement, including without limitation the Aircraft Purchase Agreement; (B) any failure by the Company, any LLC or any Seller to duly perform or observe any term, provision, covenant, agreement or condition in this Agreement or any Related Agreement on the part of the Company, any LLC or any Seller to be performed or observed; (C) Taxes for which the Sellers are responsible pursuant to Article VII, including any Arizona Tax Losses for which the Sellers are responsible pursuant to Section 7.2(f) and any liability for Taxes in connection with the matter listed on Schedule 8.2(a); (D) any Use Tax Obligations or related liabilities or any Excise Tax Obligations or related liabilities, in either case for any Pre-Closing Tax Period and for the portion of any period ending on and including the Closing Date (the “Specified Tax Costs”); (E) the Form 5500 Expenses; and (F) any matter listed or required to be listed on Schedule 2.14.

(b)           Indemnification of Sellers. Buyer will indemnify and hold harmless the Sellers and each trustee, beneficiary and affiliate of the Sellers (collectively, the “Seller Indemnified Parties”) from and against any and all damages, losses, claims, liabilities, demands, charges, suits, penalties, costs and expenses (including court costs and reasonable attorneys’ fees and expenses incurred in investigating and preparing for any litigation or proceeding) (collectively, the “Seller Indemnifiable Costs”), which any of the Seller Indemnified Parties may sustain, or to which any of the Seller Indemnified Parties may be subjected, arising out of (A) any misrepresentation or breach of any of the representations and warranties made by Buyer contained in this Agreement or any Related Agreement, including without limitation the Aircraft Purchase Agreement; or (B) any failure by Buyer to duly perform or observe any term, provision, covenant, agreement or condition in this Agreement or any Related Agreement on the part of Buyer to be performed or observed.

8.3          Limitations on Indemnification Obligations of Sellers. The liability of the Sellers to Buyer under Section 8.2(a) shall be subject to the following limitations:

(a)           Deductible. The Sellers shall not be liable for indemnity under Section 8.2(a)(A) unless the aggregate amount of Buyer Indemnifiable Costs incurred by Buyer Indemnified Parties exceeds the sum $75,000 (the “Deductible”), in which case the Sellers shall be liable to Buyer for the full amount of such Buyer Indemnifiable Costs without regard to such Deductible. Notwithstanding the foregoing, the parties hereto agree and acknowledge that any indemnity relating to (i) any fraud, willful breach or intentional misrepresentation by the Company, or (ii) any representation or warranty contained in Section 2.1 (Due Organization and Qualification), Section 2.2 (Subsidiaries), Section 2.3 (Due Authorization), Section 2.4 (Capitalization), Section 2.8 (Compliance with Licenses, Permits, Laws and Other Instruments), Section 2.11 (Employee Benefits) and Section 2.23 (Environmental) (collectively, the “Fundamental Representations”), shall not be subject to the Deductible.

(b)           Cap. The maximum amount of Buyer Indemnifiable Costs for which the Sellers shall be liable for indemnity under Section 8.2(a)(A) shall not exceed 50% of the Net Proceeds; provided, that such cap shall not apply to any Buyer Indemnifiable Costs resulting from (i) any fraud, willful breach or intentional misrepresentation by the Company or the Sellers or (ii) the breach of any Fundamental Representation.

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(c)           Materiality. Notwithstanding anything to the contrary contained in this Agreement, for purposes of the parties’ indemnification obligations under this Article VIII, all of the representations and warranties set forth in this Agreement, or any certificate or schedule that are qualified as to “material,” “materiality,” “material respects,” “Material Adverse Effect” or words of similar import or effect shall be deemed to have been made without any such qualification for the purposes of determining: (i) whether or not a breach of any representation or warranty has occurred, and (ii) the amount of any losses resulting from, arising out of, or relating to any such breach or misrepresentation.

(d)           Procedures for Indemnification.

(i)            Promptly after the discovery by any Buyer Indemnified Parties or Seller Indemnified Parties (each, an “Indemnified Party”) of any Buyer Indemnifiable Costs or Seller Indemnifiable Costs, as applicable, or claim or breach, that might give rise to indemnification hereunder, the Indemnified Party shall deliver to the party obligated to provide indemnification under this Agreement (the “Indemnifying Party”) a certificate (a “Claim Certificate”) that:

(A)          states that the Indemnified Party has paid or properly accrued Buyer Indemnifiable Costs or Seller Indemnifiable Costs, as applicable, or reasonably anticipates that it may or will incur liability for costs, for which such Indemnified Party is entitled to indemnification pursuant to this Agreement; and

(B)           specifies in reasonable detail, to the extent practicable and available, each individual item of loss included in the amount so stated, the basis for any anticipated liability and the nature of the misrepresentation, default, breach of warranty or breach of covenant or claim to which each such item is related and, to the extent computable, the computation of the amount to which such Indemnified Party claims to be entitled hereunder

provided, however that failure to give a Claim Certificate shall not affect any Indemnified Party’s ability to seek reimbursement unless, and only to the extent that, such failure has materially and adversely affected the Indemnifying Party’s liability.

If the Indemnifying Party objects to the indemnification of an Indemnified Party in respect of any claim or claims specified in any Claim Certificate, the Indemnifying Party shall deliver a written notice to such effect to the Indemnified Party within thirty (30) days after receipt by the Indemnifying Party of such Claim Certificate. Thereafter, the Indemnifying Party and the Indemnified Party shall attempt in good faith to agree upon the rights of the respective parties within thirty (30) days of receipt of such Claim Certificate with respect to each of such claims to which the Indemnifying Party has objected. If the Indemnified Party and the Indemnifying Party agree with respect to any of such claims, the Indemnified Party and the Indemnifying Party shall promptly prepare and sign a memorandum setting forth such agreement and. Should the Indemnified Party and the Indemnifying Party fail to agree as to any particular item or items or amount or amounts, then the parties shall resolve such dispute in accordance with Section 8.4 hereof.

42

(e)            Buyer Indemnifiable Costs. With respect to any Buyer Indemnifiable Costs incurred by Buyer other than any Specified Tax Costs, Buyer shall have an express right to claim against the Indemnity Escrow Amount. The Indemnity Escrow Fund shall not be the exclusive remedy with respect to such amounts.

(f)            Specified Tax Costs. With respect to Buyer Indemnifiable Costs incurred by Buyer consisting of Specified Tax Costs equal to or less than the Use Tax Escrow Amount with respect to Use Tax Obligations or equal to or less than the Excise Tax Amount with respect to Excise Tax Obligations, Buyer shall have an express right to claim against the Tax Escrow Amount. The Tax Escrow Fund shall not be the exclusive remedy with respect to such amounts.

(g)           Third-Party Claims. With respect to any third-party claim that Buyer believes, in good faith, may result in a demand by it for indemnification hereunder, the Sellers shall be entitled to approve any legal counsel retained by the Buyer (provided such approval shall be unreasonably withheld, delayed or conditioned) and entitled to participate, at his or her sole cost and expense, in any defense of such claim. Notwithstanding the immediately preceding sentence, Buyer shall conduct and control such defense, and may settle any such claim with or without the consent of the Sellers.

8.4           Non-Exclusive Remedy. The rights set forth in this Article VIII are distinct, separate and cumulative remedies, are non-exclusive rights and remedies of the parties and are in addition to all other rights and remedies that may be available hereunder, at law or in equity.  Notwithstanding the foregoing, Buyer Indemnifiable Costs first shall be paid from the Indemnity Escrow Fund or the Tax Escrow Amount, as applicable, until the Indemnity Escrow Fund or the Tax Escrow Amount, as applicable, is exhausted (other than claims arising from fraud, willful breach or intentional misrepresentation by the Company, the LLCs or the Sellers).

ARTICLE IX

POST-CLOSING MATTERS

9.1           Confidential Information.  Each Guarantor and each Seller acknowledges that, through his or its longstanding relationship with and involvement in the operation of the Company, he or she has gained or has had the opportunity to gain confidential and proprietary information concerning the business of the Company (the “Confidential Information”).  Confidential Information is information that derives independent economic value, actual or potential, from not being generally known to and not being readily ascertainable by proper means by other Persons who can obtain economic value from its disclosure or use, and is the subject of efforts that are reasonable under the circumstances to maintain its secrecy, and includes, but is not limited to, proprietary technology, operating procedures and methods of operation, financial statements and other financial information, trade secrets, market studies and forecasts, competitive analyses, pricing policies, the substance of agreements with customers and others, marketing and similar arrangements, servicing and training programs and arrangements, customer lists, other trade secrets and any other documents embodying confidential and proprietary information.  Each Seller and each Guarantor acknowledges that sharing this Confidential Information with third parties would be detrimental to Buyer and the Company and could place Buyer and the Company at a competitive disadvantage.  Each Seller and each Guarantor agrees that he or it shall not at any time following the Closing Date, directly or indirectly, disclose to any Person any Confidential Information.  The foregoing restrictions and obligations under this Section 9.1 shall not apply to: (a) any Confidential Information that is or becomes generally available to the public other than as a result of a disclosure, directly or indirectly, by the Seller, (b) any information obtained by the Sellers or the Guarantors from a third party which the Sellers or the Guarantors have no reason to be believe is violating any obligation of confidentiality to Buyer, or (c) any information the Sellers or the Guarantors are required by Law to disclose.

43

9.2          Noncompetition.

(a)           Each Seller and each Guarantor acknowledges that as a result of its or his affiliation with and involvement in the operation of the Company, it or he possesses Confidential Information and has significantly and uniquely contributed to the development and maintenance of the goodwill of the Company.

(b)           Each Seller and each Guarantor acknowledges that the Company has customers and clients located throughout, and conducts the Business throughout, the States of Nevada and Arizona.  Each Seller and each Guarantor covenants and agrees that during the period of five (5) years from the Closing Date, he or she shall not, anywhere within the States of Nevada and Arizona, engage directly or indirectly, as an agent, principal, manager, director, officer, employee, partner, member, or stockholder of any Person, in any or all of the following activities:

(i)             Enter into or engage in the Business or any other business competitive with the Business;

(ii)            Request, solicit or induce, or attempt to request, solicit or induce, any employee of the Company, Buyer or any other subsidiary of Buyer to leave the employment of such Person for any reason whatsoever or hire any former employee of the Company, Buyer or any other subsidiary of Buyer for a period of five (5) years following termination of his or her employment with such Person, as applicable, or

(iii)           Interfere with, disrupt or attempt to disrupt the relationship, contractual or otherwise, between the Company, Buyer or any other subsidiary of Buyer and any patient, supplier, lessor, lessee, employee or independent contractor of such Person or in any way encourage them to terminate or otherwise alter their relationship with the Company, Buyer or any other subsidiary of Buyer.

Notwithstanding the foregoing, nothing in this Section 9.2(b) shall restrict John Sullivan, a Guarantor, to engage in the business of providing helicopter tours to locations in the Navajo Indian Reservation located near Page, Arizona, which for the avoidance of doubt, shall not involve tour operations in or near the Grand Canyon or Las Vegas, Nevada.

44

(c)           Each Seller and each Guarantor recognizes that its or his breach of any of the provisions of Section 9.1 or this Section 9.2 would result in serious harm to Buyer for which monetary damages might not be an adequate remedy and that the amount of such damages would be difficult to determine.  Therefore, if any Seller or Guarantor breaches any provision of Section 9.1 or this Section 9.2, then Buyer shall be entitled to injunctive relief and specific performance in addition to any other available legal or equitable remedies.  Buyer may recover by appropriate action the amount, if ascertainable, of the actual damage caused to Buyer by any failure, refusal or neglect of any Seller or Guarantor to perform the agreements contained in Section 9.1 or this Section 9.2, together with any and all costs incurred by Buyer, including reasonable attorneys’ fees, in seeking such relief.  The remedies provided in this Section shall be deemed cumulative and the exercise of one shall not preclude the exercise of any other remedy at law or in equity for the same event or any other event.

(d)           It is the express intention of the parties hereto to comply with all Laws that may be applicable to Section 9.1 and this Section 9.2.  It is the express intention of Buyer to restrict the Sellers’ and the Guarantors’ activities only to the extent necessary to protect the legitimate business interests of Buyer.  Each Seller and each Guarantor acknowledges and agrees that the time, geographic, and other restrictions in Section 9.1 and this Section 9.2 are only as broad as reasonably necessary to protect the Confidential Information and goodwill being acquired by Buyer.  Nevertheless, should any restriction contained in Section 9.1 or this Section 9.2 be found to exceed in time, scope or space the restriction permitted by Law, it is expressly agreed that the covenants contained in Section 9.1 or this Section 9.2 shall be reformed or modified by the final judgment of a court of competent jurisdiction to reflect a lawful and enforceable duration, scope and space.

9.3          Authority Filings and Notifications.  The Sellers and the Guarantors shall cooperate with Buyer and the Company in filing all notices, applications, and any other documentation required to effect the change of ownership and/or update ownership in the Company’s Permits.

ARTICLE X

TERMINATION

10.1       Termination of Agreement. This Agreement may be terminated at any time prior to the Closing only as follows:

(a)           by mutual consent of Buyer, on the one hand, and the Sellers, on the other hand;

(b)           by Buyer, if the Sellers or the Company shall have breached any of their respective representations, warranties, covenants or other agreements contained in this Agreement or the Aircraft Purchase Agreement, which breach (i) would give rise to the failure of a condition set forth in Section 5.1(a) and (ii) is either incapable of being cured by the Sellers or the Company or, if curable, is not cured within Buyer’s reasonable discretion within ten (10) days of receipt from Buyer of written notice thereof;

45

(c)           by the Sellers and the Company, if Buyer shall have breached any of its representations, warranties, covenants or other agreements contained in this Agreement or the Aircraft Purchase Agreement, which breach (i) would give rise to the failure of a condition set forth in Section 5.2(a) and (ii) is either incapable of being cured by Buyer or, if curable, is not cured within the Sellers’ and Company’s reasonable discretion within ten (10) days of receipt from the Company and Sellers of written notice thereof;

(d)           by either Buyer, on the one hand, or the Company and the Sellers, on the other hand, if the transactions contemplated hereby have not been consummated by December 31, 2012; provided that neither Buyer nor the Company and the Sellers shall have a right to terminate this Agreement under this Section 10.1(d) if such terminating party is then in breach of this Agreement (unless such breach has been caused by the non-terminating party); and

(e)            by either Buyer, on the one hand, or the Company and the Sellers, on the other hand, if any court, Aviation Authority, or other Governmental Authority shall have issued, enforced or entered any final and non-appealable Order that is in effect and makes the consummation of the transactions contemplated hereby illegal, so long as the existence of any such Order is not due to a breach of this Agreement by the terminating party.

10.2        Effect of Termination. Upon the termination of this Agreement pursuant to Section 10.1:

(a)           Each party shall pay its own expenses in connection with the Agreement and the Transactions, whether or not the Transactions are consummated, including without limitation attorneys’ fees, accountants’ fees, brokers’ fees, other professional fees and costs related to expenses of officers, partners and managers.  Each party agrees to and shall indemnify the other parties hereto against any liability arising from any such fee or payment incurred by such party.

(b)           This Agreement shall be void and of no further effect, without any liability on the part of any party or its directors, managers, shareholders, members or officers, other than as set forth in this Section 10.2, and there shall be no liability by reason of this Agreement or the termination thereof on the part of Buyer, the Sellers or the Company, or their respective directors, managers, shareholders, members, officers, employees or agents, and all such parties shall be released from all such liability, provided that nothing herein will relieve any party from liability of its breach of this Agreement resulting in such termination or occurring prior to the termination.

(c)           The provisions of this Section 10.2 shall survive the termination of this Agreement (in addition to other provisions of this Agreement which are specifically and expressly intended to survive such termination).

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ARTICLE XI

MISCELLANEOUS

11.1        Modifications; Waiver. Any amendment, change or modification of this Agreement shall be void unless in writing and signed by all parties hereto. No failure or delay by any party hereto in exercising any right, power or privilege hereunder, and no course of dealing between or among any of the parties, shall operate as a waiver of any such right, power or privilege. No waiver of any default on any one occasion shall constitute a waiver of any subsequent or other default. No single or partial exercise of any such right, power or privilege shall preclude the further or full exercise thereof.

11.2        Notices. All notices and other communications hereunder shall be in writing and shall be deemed to have been duly given when personally delivered, mailed by certified mail, return receipt requested, or via Federal Express or similar overnight courier service, or by facsimile. Such notices or other communications shall be sent to the following addresses, unless other addresses are subsequently specified in writing:

Buyer:

Air Methods Corporation

7301 S. Peoria

Englewood, CO 80112

Attention: Crystal Gordon, General Counsel

Fax No.: (303) 792-7400

Tel. No.: (303) 792-7412

with a copy to:

Davis Graham & Stubbs LLP

1550 Seventeenth Street, Suite 500

Denver, Colorado 80202

Attention: Kristin L. Lentz, Esq.

Fax No.: (303) 893-1379

Tel. No.: (303) 892-9400

Sellers:

Law Offices of Mary J. Drury & Associates

5130 South Fort Apache Road #215-290

Las Vegas, Nevada 89148

Attention: Mary J. Drury, Esq.

Fax No.: (702) 920-8369

Tel. No.: (702) 600-3554

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with a copy to:

Richard Eisenreich

2928 Bridge Creek Street

Las Vegas, Nevada 89117

John A. Sullivan

12835 West Windmill Lane

Las Vegas, Nevada 89161

James A. Granquist

571 Sundown Lane

Evergreen, Colorado

11.3        Counterparts. This Agreement may be executed in multiple counterparts, each of which shall be deemed an original but all of which counterparts collectively shall constitute one instrument. Signatures may be exchanged by facsimile or e-mail, with original signatures to follow. Each party hereto agrees that it will be bound by its own signature and that it accepts the facsimile or e-mail signatures of the other parties hereto.

11.4        Binding Effect; Assignment; No Third Party Rights. This Agreement shall be binding upon and inure to the benefit of Buyer, the Company and Sellers, their respective representatives, successors, and permitted assigns; provided, however, that no party may assign his, her, or its rights or obligations under this Agreement without the prior written consent of the other parties. Nothing expressed or referred to in this Agreement shall be construed to give any person other than the parties to this Agreement any legal or equitable right, remedy, or claim under or with respect to this Agreement or any provision of this Agreement, except such rights as shall inure to a successor or permitted assignee pursuant to this Section 11.4.

11.5        Seller Representative.

(a)           Richard Eisenreich (the “Seller Representative”) is hereby designated by each of the Sellers, by the execution of this Agreement, to serve as the representative of the Sellers with respect to the matters expressly set forth in this Agreement to be performed by the Seller Representative.

(b)           Each of the Sellers, by the execution of this Agreement, hereby irrevocably appoints the Seller Representative as the agent, proxy and attorney-in-fact for such  Seller for the following purposes and for the purpose of additional explicit purposes set forth in this Agreement: (a) to consummate the Transactions contemplated herein; (b) to disburse any funds received hereunder and not delivered to a respective Seller, to such Seller; (c) to deliver any certificates or instruments representing the Shares, or any Shares of the Company; (d) to execute and deliver on behalf of such Seller any waiver hereto; (e) to engage special counsel, accountants and other advisors and incur such other expenses in connection with any of the Transactions; (f) to withhold funds to pay Seller-related expenses and obligations; and (g) to resolve claims under this Agreement regarding Working Capital and indemnification matters; provided, however, that, notwithstanding the foregoing, the Seller Representative shall not have the authority to increase the liability or obligations of the Sellers or to reduce the Purchase Price without the prior written consent of each of the Sellers.  Each of the Sellers agrees that such agency and proxy are coupled with an interest, are therefore irrevocable without the consent of the Seller Representative and shall survive the death, incapacity, bankruptcy, dissolution or liquidation of any Seller.  All decisions and actions by the Seller Representative (to the extent authorized by this Agreement) shall be binding upon all of the Sellers, and no Seller shall have the right to object, dissent, protest or otherwise contest the same. Notwithstanding the above, the Seller Representative may be removed or replaced only upon delivery of written notice to Buyer by the Sellers holding (immediately prior to the Closing) at least a majority of the Shares.  Buyer and any other Person may conclusively and absolutely rely, without inquiry, upon any action of the Seller Representative in all matters referred to herein.   The Sellers will be responsible for and shall, severally on a pro rata basis based upon the percentage of the Purchase Price payable to such Seller as set forth on Exhibit A hereto, refund the Seller Representative any expense incurred by him.

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(c)            Each Seller hereby releases the Seller Representative from any losses incurred, as such losses are incurred, for, arising out of or in connection with the acceptance or administration of the Seller Representative’s duties hereunder or any action taken or not taken by him in his capacity as such  (including the legal costs and expenses of defending the Seller Representative against any claim or liability (and all actions, claims, proceedings and investigations in respect thereof) in connection with, caused by or arising out of, directly or indirectly, the performance of the Seller Representative’ duties hereunder), except for a liability of the Seller Representative to any Seller for losses suffered by such Seller a result of the willful misconduct of the Seller Representative in carrying out his duties hereunder.

11.6        No Strict Construction. The language used in this Agreement shall be deemed to be the language chosen by the parties to express their mutual intent, and no rule of strict construction shall be applied against any party hereto.

11.7        Entire and Sole Agreement. This Agreement and the other schedules and agreements referred to herein, including the Aircraft Purchase Agreement, constitute the entire agreement between the parties hereto and supersede all prior agreements, negotiations, representations, warranties, statements, promises, information, arrangements and understandings, whether oral or written, express or implied, with respect to the subject matter hereof, including any prior confidentiality agreement and confidentiality provisions of prior agreements.

11.8        Governing Law; Jurisdiction and Venue.

(a)           This Agreement shall be governed by and construed in accordance with the domestic Laws of the State of Nevada, without giving effect to any choice of Law or conflict of Law provision or rule (whether of the State of Nevada or any other jurisdiction) that would cause the application of the Laws of any jurisdiction other than the State of Nevada. To the extent permitted by Law, each of the parties hereto hereby irrevocably submits to the exclusive jurisdiction of any state court or United States federal court, in either case sitting in Clark County in the State of Nevada, over any action brought by any party arising out of or relating to this Agreement, and each of the parties hereto hereby irrevocably agrees that all claims with respect to any such suit, action or other proceeding shall be heard and determined in such courts.

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(b)           THE PARTIES HEREBY WAIVE ANY RIGHT TO TRIAL BY JURY IN ANY PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT OR ANY OF THE CONTEMPLATED TRANSACTIONS, WHETHER NOW EXISTING OR HEREAFTER ARISING, AND WHETHER SOUNDING IN CONTRACT, TORT OR OTHERWISE. THE PARTIES AGREE THAT ANY OF THEM MAY FILE A COPY OF THIS PARAGRAPH WITH ANY COURT AS WRITTEN EVIDENCE OF THE KNOWING, VOLUNTARY AND BARGAINED-FOR AGREEMENT AMONG THE PARTIES IRREVOCABLY TO WAIVE TRIAL BY JURY AND THAT ANY PROCEEDING WHATSOEVER BETWEEN THEM RELATING TO THIS AGREEMENT OR ANY OF THE CONTEMPLATED TRANSACTIONS SHALL INSTEAD BY TRIED IN A COURT OF COMPETENT JURISDICTION BY A JUDGE SITTING WITHOUT A JURY.

11.9        Invalid Provisions. If any provision of this Agreement is deemed or held to be illegal, invalid or unenforceable, this Agreement shall be considered divisible and inoperative as to such provision to the extent it is deemed to be illegal, invalid or unenforceable, and in all other respects this Agreement shall remain in full force and effect; provided, however, that if any provision of this Agreement is deemed or held to be illegal, invalid or unenforceable there shall be added hereto automatically a provision as similar as possible to such illegal, invalid or unenforceable provision and be legal, valid and enforceable. Further, should any provision contained in this Agreement ever be reformed or rewritten by any judicial body of competent jurisdiction, such provision as so reformed or rewritten shall be binding upon all parties hereto.

11.10      Headings. The descriptive section headings are for convenience of reference only and shall not control or affect the meaning or construction of any provision of this Agreement.

* * * *

Remainder of page intentionally left blank

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IN WITNESS WHEREOF, each of the parties hereto has caused this Agreement to be duly executed as of the date and year first above written.

BUYER:
AIR METHODS CORPORATION
By:
	Name: Aaron D. Todd
	Title: Chief Executive Officer
COMPANY:
SUNDANCE HELICOPTERS, INC.
By:
	Name: Richard Eisenreich
	Title:
SELLERS:
The Eisenreich Family Trust u/a/d 7/9/1990
By:
Name:
Its:
By:
Name:
Its:
The John A. Sullivan Trust u/a/d 4/12/2002
By:
Name:
Its:

[Signature Page – Stock Purchase Agreement]

The Granquist 2004 Trust u/a/d 3/26/2004

By:

Name:

Its:

GUARANTORS (for purposes of Article IX only):

Richard Eisenreich

John A. Sullivan

James A. Granquist

[Signature Page – Stock Purchase Agreement]

EX-21

EXHIBIT 21

SIGNIFICANT SUBSIDIARIES OF REGISTRANT

Mercy Air Service, Inc., a California corporation (Mercy Air)

LifeNet, Inc., a Missouri corporation (LifeNet)

Rocky Mountain Holdings, LLC, a Delaware limited liability company (RMH)

United Rotorcraft Solutions, LLC, a Texas limited liability company (URS)

Omniflight Helicopters, Inc., a Delaware corporation (Omniflight)

Sundance Helicopters, Inc., a Nevada corporation (Sundance)

EX-23

EXHIBIT 23

Consent of Independent Registered Public Accounting Firm

The Board of Directors

Air Methods Corporation:

We consent to the incorporation by reference in the registration statements Form S-3 (No. 333-163467) and Form S-8 (Nos. 333-60825, 333-186688, 33-24980, 333-138771, and 333-168633) of Air Methods Corporation of our reports dated March 1, 2013 with respect to the 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, and the related consolidated financial statement schedule and the effectiveness of internal control over financial reporting as of December 31, 2012, which reports appear in the December 31, 2012 annual report on Form 10-K of Air Methods Corporation.

Our report dated March 1, 2013, on the effectiveness of internal control over financial reporting as of December 31, 2012, contains an explanatory paragraph that states 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 as of December 31, 2012 also excluded an evaluation of the internal control over financial reporting of Sundance.

/s/ KPMG LLP

Denver, Colorado

March 1, 2013

EX-31.1

EXHIBIT 31.1

CERTIFICATION

I, Aaron D. Todd, certify that:

1. I have reviewed this annual report on Form 10-K of Air Methods Corporation;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal controls over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, 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;

c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: March 1, 2013

/s/ Aaron D. Todd                                

Aaron D. Todd

Chief Executive Officer

EX-31.2

EXHIBIT 31.2

CERTIFICATION

I, Trent J. Carman, certify that:

1. I have reviewed this annual report on Form 10-K of Air Methods Corporation;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal controls over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, 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;

c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: March 1, 2013

/s/ Trent J. Carman

Trent J. Carman

Chief Financial Officer

EX-32

 EXHIBIT 32

CERTIFICATION PURSUANT TO

18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Annual Report of Air Methods Corporation (the “Company”) on Form 10-K for the year ended December 31, 2012, as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I certify, pursuant to 18 U.S.C. § 1350, as adopted pursuant to § 906 of the Sarbanes-Oxley Act of 2002, that, to my knowledge:

            (1) The Report fully complies with the requirements of section 13(a) of the Securities Exchange Act of 1934; and

            (2) The information contained in the Report fairly presents, in all material respects, the financial condition and result of operations of the Company.

/s/ Aaron D. Todd

Aaron D. Todd

Chief Executive Officer

March 1, 2013

/s/ Trent J. Carman

Trent J. Carman

Chief Financial Officer

March 1, 2013

XML

Unaudited Quarterly Financial Data (Tables)

12 Months Ended

Dec. 31, 2012

Unaudited Quarterly Financial Data [Abstract]

Summarized 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

XML

Commitments, Contingencies, and Concentrations (Details) (USD $)	12 Months Ended
	Dec. 31, 2012	Dec. 31, 2012 Number of Helicopters [Member] Supplier Concentration Risk, Helicopter Fleet [Member] American Eurocopter Corporation [Member]	Dec. 31, 2012 Number of Helicopters [Member] Supplier Concentration Risk, Helicopter Fleet [Member] Bell Helicopter, Inc. [Member]	Dec. 31, 2012 Number of Employees [Member] Labor Force Concentration Risk [Member] Pilots Under Collective Bargaining Agreement [Member]	Dec. 31, 2012 Number of Transports [Member] Customer Concentration Risk, Transports [Member] Private Insurance Carriers [Member]	Dec. 31, 2011 Number of Transports [Member] Customer Concentration Risk, Transports [Member] Private Insurance Carriers [Member]	Dec. 31, 2012 Number of Transports [Member] Customer Concentration Risk, Transports [Member] Medicare [Member]	Dec. 31, 2011 Number of Transports [Member] Customer Concentration Risk, Transports [Member] Medicare [Member]	Dec. 31, 2012 Number of Transports [Member] Customer Concentration Risk, Transports [Member] Medicaid [Member]	Dec. 31, 2011 Number of Transports [Member] Customer Concentration Risk, Transports [Member] Medicaid [Member]	Dec. 31, 2012 Number of Transports [Member] Customer Concentration Risk, Transports [Member] Self-pay Patients [Member]	Dec. 31, 2011 Number of Transports [Member] Customer Concentration Risk, Transports [Member] Self-pay Patients [Member]	Dec. 31, 2012 Revolving Credit Facility Due 2017 [Member]
Open purchase commitments [Abstract]
Open purchase commitments	$ 158,000,000
Total number of aircraft to be purchased under purchase commitment	47
Nonrefundable deposits	9,500,000
Letters of Credit [Line Items]
Number of letters of credit reducing available borrowing capacity under revolving credit facility													4
Amount of letters of credit reducing available borrowing capacity under revolving credit facility													$ 3,025,000
Concentration Risk [Line Items]
Concentration risk, percentage (in hundredths)		83.00%	15.00%	31.00%	35.00%	35.00%	31.00%	31.00%	21.00%	20.00%	13.00%	14.00%

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Stockholders' Equity (Details) (USD $) In Thousands, except Share data, unless otherwise specified	3 Months Ended								12 Months Ended
	Dec. 31, 2012	Sep. 30, 2012	Jun. 30, 2012	Mar. 31, 2012	Dec. 31, 2011	Sep. 30, 2011	Jun. 30, 2011	Mar. 31, 2011	Dec. 31, 2012	Dec. 31, 2011	Dec. 31, 2010	Dec. 03, 2012
Stockholders' Equity [Abstract]
Stock Split									Three-for-one
Common stock, authorized (in shares)	70,500,000				70,500,000				70,500,000	70,500,000		23,500,000
Preferred stock, authorized (in shares)	15,000,000				15,000,000				15,000,000	15,000,000		5,000,000
Effect of Stock Split [Line Items]
Basic income per common share (in dollars per share)	$ 0.55	$ 0.72	$ 0.81	$ 0.33	$ 0.33	$ 0.49	$ 0.26	$ 0.15	$ 2.41	$ 1.23	$ 1.14
Diluted income per common share (in dollars per share)	$ 0.55	$ 0.71	$ 0.81	$ 0.32	$ 0.32	$ 0.48	$ 0.26	$ 0.15	$ 2.39	$ 1.21	$ 1.13
Weighted average number of common shares outstanding [Abstract]
Basic (in shares)									38,594,286	37,999,422	37,489,539
Diluted (in shares)									39,044,468	38,482,785	37,789,242
Dilutive effect of [Abstract]
Common stock options (in shares)									398,452	453,054	292,467
Unvested restricted stock (in shares)									51,730	30,309	7,236
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Cash dividend declared (in dollars per share)									$ 7
Cash dividend declared									$ 91,629
Common Stock Options [Member]
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Antidilutive securities excluded from computation of diluted income per share (in shares)											372,999
As Reported [Member]
Effect of Stock Split [Line Items]
Basic income per common share (in dollars per share)		$ 2.16	$ 2.44	$ 0.98	$ 0.98	$ 1.46	$ 0.78	$ 0.45		$ 3.68	$ 3.42
Diluted income per common share (in dollars per share)		$ 2.14	$ 2.43	$ 0.97	$ 0.96	$ 1.44	$ 0.77	$ 0.45		$ 3.63	$ 3.39
Weighted average number of common shares outstanding [Abstract]
Basic (in shares)										12,666,474	12,496,513
Diluted (in shares)										12,827,595	12,596,414
As Adjusted [Member]
Effect of Stock Split [Line Items]
Basic income per common share (in dollars per share)		$ 0.72	$ 0.81	$ 0.33	$ 0.33	$ 0.49	$ 0.26	$ 0.15		$ 1.23	$ 1.14
Diluted income per common share (in dollars per share)		$ 0.71	$ 0.81	$ 0.32	$ 0.32	$ 0.48	$ 0.26	$ 0.15		$ 1.21	$ 1.13
Weighted average number of common shares outstanding [Abstract]
Basic (in shares)										37,999,422	37,489,539
Diluted (in shares)										38,482,785	37,789,242

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Business Segment Information (Details) (USD $)	3 Months Ended								12 Months Ended
	Dec. 31, 2012	Sep. 30, 2012	Jun. 30, 2012	Mar. 31, 2012	Dec. 31, 2011	Sep. 30, 2011	Jun. 30, 2011	Mar. 31, 2011	Dec. 31, 2012	Dec. 31, 2011	Dec. 31, 2010
Segment Reporting Information [Line Items]
External revenue	$ 216,228,000	$ 221,290,000	$ 222,480,000	$ 190,814,000	$ 193,310,000	$ 185,172,000	$ 150,162,000	$ 131,905,000	$ 850,812,000	$ 660,549,000	$ 562,002,000
Intersegment revenue									0	0	0
Total revenue									850,812,000	660,549,000	562,002,000
Operating expenses									(597,956,000)	(494,199,000)	(415,168,000)
Depreciation and amortization									(82,524,000)	(72,877,000)	(63,636,000)
Interest expense									(20,651,000)	(20,072,000)	(19,176,000)
Other, net									3,263,000	3,901,000	3,934,000
Income tax expense									(59,792,000)	(30,728,000)	(25,199,000)
Net income	21,421,000	27,844,000	31,413,000	12,474,000	12,402,000	18,540,000	9,920,000	5,712,000	93,152,000	46,574,000	42,757,000
Air Medical Services [Member]
Segment Reporting Information [Line Items]
External revenue									822,023,000	630,143,000	539,593,000
Intersegment revenue									0	0	0
Total revenue									822,023,000	630,143,000	539,593,000
Operating expenses									(543,410,000)	(443,352,000)	(377,800,000)
Depreciation and amortization									(79,683,000)	(70,518,000)	(61,933,000)
Interest expense									(20,138,000)	(19,362,000)	(18,438,000)
Other, net									3,122,000	3,568,000	3,387,000
Income tax expense									0	0	0
Net income									181,914,000	100,479,000	84,809,000
United Rotorcraft Division [Member]
Segment Reporting Information [Line Items]
External revenue									28,365,000	30,384,000	22,409,000
Intersegment revenue									20,971,000	27,047,000	15,545,000
Total revenue									49,336,000	57,431,000	37,954,000
Operating expenses									(38,272,000)	(42,954,000)	(29,195,000)
Depreciation and amortization									(1,385,000)	(1,248,000)	(721,000)
Interest expense									(1,000)	(15,000)	(26,000)
Other, net									0	0	0
Income tax expense									0	0	0
Net income									9,678,000	13,214,000	8,012,000
Corporate Activities [Member]
Segment Reporting Information [Line Items]
External revenue									424,000	22,000	0
Intersegment revenue									0	0	0
Total revenue									424,000	22,000	0
Operating expenses									(32,462,000)	(27,830,000)	(20,988,000)
Depreciation and amortization									(1,456,000)	(1,111,000)	(982,000)
Interest expense									(512,000)	(695,000)	(712,000)
Other, net									141,000	333,000	547,000
Income tax expense									(59,792,000)	(30,728,000)	(25,199,000)
Net income									(93,657,000)	(60,009,000)	(47,334,000)
Intersegment Eliminations [Member]
Segment Reporting Information [Line Items]
External revenue									0	0	0
Intersegment revenue									(20,971,000)	(27,047,000)	(15,545,000)
Total revenue									(20,971,000)	(27,047,000)	(15,545,000)
Operating expenses									16,188,000	19,937,000	12,815,000
Depreciation and amortization									0	0	0
Interest expense									0	0	0
Other, net									0	0	0
Income tax expense									0	0	0
Net income									$ (4,783,000)	$ (7,110,000)	$ (2,730,000)

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Long-term Debt (Details) (USD $)	12 Months Ended
	Dec. 31, 2012	Dec. 31, 2011
Debt Instrument [Line Items]
Long-term debt	$ 404,478,000	$ 262,567,000
Less current installments	(23,796,000)	(18,889,000)
Long-term debt, less current installments	380,682,000	243,678,000
Defined events of default [Abstract]
Threshold for outstanding obligations	3,000,000
Threshold for judgments	750,000
Aggregate maturities of long-term debt [Abstract]
2013	23,796,000
2014	29,671,000
2015	29,343,000
2016	24,508,000
2017	291,048,000
Thereafter	6,112,000
Term loan due 2017 [Member]
Debt Instrument [Line Items]
Long-term debt	287,500,000	195,000,000
Interest rate (in hundredths)	1.75%
Revolving credit facility due 2017 [Member]
Debt Instrument [Line Items]
Long-term debt	67,000,000	11,271,000
Interest rate (in hundredths)	3.75%
Maximum borrowing capacity	100,000,000
Available borrowing capacity	29,975,000
Number of letters of credit reducing available borrowing capacity under revolving credit facility	4
Amount of letters of credit reducing available borrowing capacity under revolving credit facility	3,025,000
Notes payable (2.31% to 6.57%) due 2013 through 2018 [Member]
Debt Instrument [Line Items]
Long-term debt	36,934,000	41,125,000
Interest rate, minimum (in hundredths)	2.31%
Interest rate, maximum (in hundredths)	6.57%
Notes payable (variable) due 2015 [Member]
Debt Instrument [Line Items]
Long-term debt	2,211,000	2,673,000
Interest rate (in hundredths)	4.00%
Note payable (4.92%) due 2018 [Member]
Debt Instrument [Line Items]
Long-term debt	4,720,000	5,015,000
Interest rate (in hundredths)	4.92%
Notes payable (3.94%) due 2015 [Member]
Debt Instrument [Line Items]
Long-term debt	3,206,000	4,223,000
Interest rate (in hundredths)	3.94%
Note payable (4.04%) due 2019 [Member]
Debt Instrument [Line Items]
Long-term debt	2,907,000	3,260,000
Interest rate (in hundredths)	4.04%
Senior credit facility [Member]
Debt Instrument [Line Items]
Maximum additional draws on senior credit facility	$ 100,000,000
Payment terms, description	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
Interest rate, description	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%
Percentage of principal balance payments per quarter for quarters 1 - 8 (in hundredths)	1.25%
Percentage of principal balance payments per quarter for quarters 9 - 16 (in hundredths)	1.875%
Percentage of principal balance payments per quarter for quarters 17 - 19 (in hundredths)	2.50%
Senior credit facility [Member] | Minimum [Member] | Federal Funds Rate [Member]
Debt Instrument [Line Items]
Basis spread on variable rate (in hundredths)	0.25%
Senior credit facility [Member] | Minimum [Member] | LIBOR Rate [Member]
Debt Instrument [Line Items]
Basis spread on variable rate (in hundredths)	1.25%
Senior credit facility [Member] | Maximum [Member] | Federal Funds Rate [Member]
Debt Instrument [Line Items]
Basis spread on variable rate (in hundredths)	1.25%
Senior credit facility [Member] | Maximum [Member] | LIBOR Rate [Member]
Debt Instrument [Line Items]
Basis spread on variable rate (in hundredths)	2.25%

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Stockholders' Equity (Tables)

12 Months Ended

Dec. 31, 2012

Stockholders' Equity [Abstract]

Effect of stock split on income per share and weighted average common shares outstanding

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

Effect of stock split on income per share

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

Reconciliation of basic to diluted weighted average common shares outstanding

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

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Schedule II Valuation and Qualifying Accounts (Details) (USD $) In Thousands, unless otherwise specified	12 Months Ended
	Dec. 31, 2012		Dec. 31, 2011		Dec. 31, 2010
Allowance for Contractual Discounts [Member]
Movement in Valuation Allowances and Reserves [Roll Forward]
Balance at beginning of period	$ 101,016		$ 54,915		$ 45,273
Additions	744,212	[1]	491,991	[1]	319,279	[1]
Deductions	(710,971)	[2]	(445,890)	[2]	(309,637)	[2]
Balance at end of period	134,257		101,016		54,915
Allowance for Uncompensated Care [Member]
Movement in Valuation Allowances and Reserves [Roll Forward]
Balance at beginning of period	92,995		56,749		39,043
Additions	320,221	[1]	208,888	[1]	154,171	[1]
Deductions	(291,593)	[2]	(172,642)	[2]	(136,465)	[2]
Balance at end of period	$ 121,623		$ 92,995		$ 56,749

[1] Amounts excluded from revenue.

[2] Actual write-offs and charges to allowances.

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Schedule II Valuation and Qualifying Accounts

12 Months Ended

Dec. 31, 2012

Schedule II - Valuation and Qualifying Accounts [Abstract]

Schedule II - Valuation and Qualifying Accounts

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.

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Related Party Transactions (Details) (Director [Member], USD $)	12 Months Ended
	Dec. 31, 2010
Director [Member]
Related Party Transaction [Line Items]
Payment to related party for consulting services	$ 105,000
Stock options granted to related party (in shares)	15,000
Exercise price of options granted (in dollars per share)	$ 13.68
Total grant-date fair value of options granted	$ 65,000

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Acquisition of OF Air Holdings Corporation (Details) (USD $)	3 Months Ended								12 Months Ended			5 Months Ended	12 Months Ended
	Dec. 31, 2012	Sep. 30, 2012	Jun. 30, 2012	Mar. 31, 2012	Dec. 31, 2011	Sep. 30, 2011	Jun. 30, 2011	Mar. 31, 2011	Dec. 31, 2012	Dec. 31, 2011	Dec. 31, 2010	Dec. 31, 2011 OF Air Holdings Corporation [Member]	Dec. 31, 2012 OF Air Holdings Corporation [Member]	Dec. 31, 2011 OF Air Holdings Corporation [Member]	Dec. 31, 2010 OF Air Holdings Corporation [Member]	Dec. 31, 2011 OF Air Holdings Corporation [Member] Allocation at December 31, 2011 [Member]	Dec. 31, 2012 OF Air Holdings Corporation [Member] Adjustments [Member]
Business Acquisition [Line Items]
Ownership interest acquired (in hundredths)	100.00%								100.00%			100.00%		100.00%
Cash purchase price												$ 201,900,000		$ 201,900,000
Liability recorded related to estimated increase to purchase price for change in working capital												3,119,000		3,119,000
Increase to purchase price for change in working capital													3,176,000
Allocation of the purchase price [Abstract]
Receivables													28,622,000			28,622,000	0
Aircraft													33,500,000			33,500,000	0
Goodwill													90,519,000			89,116,000	1,403,000
Amortizable intangible assets													63,100,000			63,100,000	0
Aircraft under capital leases													29,405,000			29,405,000	0
Equipment and other property													5,986,000			5,986,000	0
Spare parts inventories													4,525,000			4,525,000	0
Other													14,479,000			14,521,000	(42,000)
Total assets													270,136,000			268,775,000	1,361,000
Capital lease obligations assumed													(38,034,000)			(38,034,000)	0
Net deferred tax liabilities													(7,849,000)			(5,961,000)	(1,888,000)
Other liabilities assumed													(19,181,000)			(19,765,000)	584,000
Total liabilities assumed													(65,064,000)			(63,760,000)	(1,304,000)
Purchase price													205,072,000			205,015,000	57,000
Business Acquisition, Pro Forma Information [Abstract]
Revenue included in consolidated statements of income	216,228,000	221,290,000	222,480,000	190,814,000	193,310,000	185,172,000	150,162,000	131,905,000	850,812,000	660,549,000	562,002,000	61,494,000
Income before income taxes, interest expense on acquisition financing and allocation of corporate office expenses												13,368,000
Revenue														766,422,000	729,468,000
Net income														54,284,000	47,055,000
Basic income per common share (in dollars per share)														$ 4.29	$ 3.77
Diluted income per share (in dollars per share)														$ 4.23	$ 3.74
Maximum measurement period of purchase price allocation													1 year
Error Adjustment to goodwill and deferred tax liability													$ 1,663,000

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Commitments, Contingencies, and Concentrations (Tables)

12 Months Ended

Dec. 31, 2012

Commitments, Contingencies, and Concentrations [Abstract]

Payer mix for patient transport revenue

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	%

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Income Taxes (Details) (USD $)	12 Months Ended
	Dec. 31, 2012	Dec. 31, 2011	Dec. 31, 2010
Current income tax expense [Abstract]
Federal	$ (37,323,000)	$ (14,922,000)	$ (17,231,000)
State	(7,211,000)	(2,699,000)	(2,660,000)
Total current	(44,534,000)	(17,621,000)	(19,891,000)
Deferred income tax expense [Abstract]
Federal	(12,956,000)	(11,182,000)	(4,528,000)
State	(2,302,000)	(1,925,000)	(780,000)
Total deferred	(15,258,000)	(13,107,000)	(5,308,000)
Total income tax expense	(59,792,000)	(30,728,000)	(25,199,000)
Reconciliation of income taxes [Abstract]
Federal statutory income tax rate (in hundredths)	35.00%
Tax at the federal statutory rate	(53,530,000)	(27,056,000)	(23,784,000)
State income taxes, net of federal benefit, including adjustments based on filed state income tax returns	(5,812,000)	(2,926,000)	(1,882,000)
Nontaxable (nondeductible) items	2,000	(624,000)	72,000
Adjustment to filed returns	(45,000)	1,000	73,000
Tax credits	174,000	(1,000)	90,000
Changes in estimated state tax rates	(667,000)	0	221,000
Other	86,000	(122,000)	11,000
Total income tax expense	(59,792,000)	(30,728,000)	(25,199,000)
Excess tax benefits related to stock option plans [Abstract]
Excess tax benefits related to stock option plans	3,447,000	1,324,000	561,000
Deferred tax assets [Abstract]
Net operating loss carryforwards	13,257,000	22,463,000
Accruals and other, principally due to differences in employee compensation and benefits	11,262,000	11,209,000
Other liabilities, principally due to differences in revenue recognition	9,064,000	7,193,000
Total deferred tax assets	33,583,000	40,865,000
Deferred tax liabilities [Abstract]
Equipment and leasehold improvements, principally due to differences in bases and depreciation methods	(60,488,000)	(58,592,000)
Intangible assets, principally due to differences in bases and amortization methods	(24,928,000)	(23,334,000)
Allowance for uncollectible accounts	(17,769,000)	(14,362,000)
Goodwill	(2,547,000)	(1,481,000)
Other	(1,332,000)	(716,000)
Total deferred tax liabilities	(107,064,000)	(98,485,000)
Net deferred tax liability	(73,481,000)	(57,620,000)
Liability for uncertain tax positions	1,600,000
Corresponding asset recorded against the tax liability	1,600,000
OF Air Holdings Corporation [Member]
Operating Loss Carryforwards [Line Items]
Expected utilization period (in years)	within two years
State [Member]
Operating Loss Carryforwards [Line Items]
Net operating loss carryforwards	7,800,000
State [Member] | FSS Airholdings, LLC [Member]
Operating Loss Carryforwards [Line Items]
Net operating loss carryforwards relating to pre-acquisition periods	400,000
State [Member] | OF Air Holdings Corporation [Member]
Operating Loss Carryforwards [Line Items]
Net operating loss carryforwards relating to pre-acquisition periods	73,600,000
Federal [Member] | OF Air Holdings Corporation [Member]
Operating Loss Carryforwards [Line Items]
Net operating loss carryforwards relating to pre-acquisition periods	$ 29,000,000

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Leases (Details) (USD $)	12 Months Ended
	Dec. 31, 2012	Dec. 31, 2011	Dec. 31, 2010
Future minimum lease payments under capital leases [Abstract]
2013	$ 48,206,000
2014	47,167,000
2015	43,423,000
2016	38,590,000
2017	33,272,000
Thereafter	60,420,000
Total minimum lease payments	271,078,000
Less amounts representing interest	(31,398,000)
Present value of minimum capital lease payments	239,680,000
Less current installments	(39,343,000)	(49,100,000)
Noncurrent obligations under capital leases	200,337,000	240,208,000
Future minimum lease payments under operating leases [Abstract]
2013	10,118,000
2014	7,513,000
2015	4,214,000
2016	2,883,000
2017	1,740,000
Thereafter	18,366,000
Total minimum lease payments	44,834,000
Rent expense relating to operating leases [Abstract]
Rent expense relating to operating leases	13,732,000	9,177,000	5,919,000
Unamortized completion allowances	19,110,000	21,798,000
Property held under capital leases [Abstract]
Property held under capital leases, net of accumulated depreciation	$ 217,213,000	$ 258,472,000

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Acquisition of Sundance Helicopters, Inc

12 Months Ended

Dec. 31, 2012

Acquisition of Sundance Helicopters, Inc [Abstract]

Acquisition of Sundance Helicopters, Inc

(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.

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Patient Transport Revenue Recognition (Details) (USD $) In Thousands, unless otherwise specified	12 Months Ended
	Dec. 31, 2012	Dec. 31, 2011	Dec. 31, 2010
Patient Transport Revenue Recognition [Abstract]
Allowance for uncompensated care as a percentage of receivables from non-governmental payers (in hundredths)	40.10%	38.80%
Allowances for contractual discounts and uncompensated care [Abstract]
Allowance for contractual discounts	$ 134,257	$ 101,016
Allowance for uncompensated care	121,623	92,995
Total	255,880	194,011
Revenue from External Customer [Line Items]
Patient transport revenue, net of provision for contractual discounts	910,939	625,182	484,022
Provision for uncompensated care as a percentage of revenue from self-pay patients (in hundredths)	98.50%	98.10%	97.90%
Provision for uncompensated care as a percentage of revenue from other non-governmental payers (in hundredths)	18.50%	17.40%	18.20%
Third-Party Payers [Member]
Revenue from External Customer [Line Items]
Patient transport revenue, net of provision for contractual discounts	693,395	481,589	380,743
Self-Pay [Member]
Revenue from External Customer [Line Items]
Patient transport revenue, net of provision for contractual discounts	$ 217,544	$ 143,593	$ 103,279

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Patient Transport Revenue Recognition (Tables)

12 Months Ended

Dec. 31, 2012

Patient Transport Revenue Recognition [Abstract]

Allowances for contractual discounts and uncompensated care

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

Flight revenue, net of provision for contractual discounts but before the provision for uncompensated care, by major payer class

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

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Acquisition of OF Air Holdings Corporation (Tables)

12 Months Ended

Dec. 31, 2012

Acquisition of OF Air Holdings Corporation [Abstract]

Allocation of Purchase Price of OF Air Holdings Corporation

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

Unaudited Proforma Revenue, Net Income and Income per Share

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

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Unaudited Quarterly Financial Data (Details) (USD $) In Thousands, except Per Share data, unless otherwise specified	3 Months Ended								12 Months Ended
	Dec. 31, 2012	Sep. 30, 2012	Jun. 30, 2012	Mar. 31, 2012	Dec. 31, 2011	Sep. 30, 2011	Jun. 30, 2011	Mar. 31, 2011	Dec. 31, 2012	Dec. 31, 2011	Dec. 31, 2010
Unaudited Quarterly Financial Data [Abstract]
Revenue included in consolidated statements of income	$ 216,228	$ 221,290	$ 222,480	$ 190,814	$ 193,310	$ 185,172	$ 150,162	$ 131,905	$ 850,812	$ 660,549	$ 562,002
Operating income	38,802	51,228	55,264	25,038	25,299	35,667	19,785	12,722	170,332	93,473	83,198
Income before income taxes	34,662	46,917	50,990	20,375	20,347	31,156	16,370	9,429	152,944	77,302	67,956
Net income	$ 21,421	$ 27,844	$ 31,413	$ 12,474	$ 12,402	$ 18,540	$ 9,920	$ 5,712	$ 93,152	$ 46,574	$ 42,757
Basic income per common share (in dollars per share)	$ 0.55	$ 0.72	$ 0.81	$ 0.33	$ 0.33	$ 0.49	$ 0.26	$ 0.15	$ 2.41	$ 1.23	$ 1.14
Diluted income per common share (in dollars per share)	$ 0.55	$ 0.71	$ 0.81	$ 0.32	$ 0.32	$ 0.48	$ 0.26	$ 0.15	$ 2.39	$ 1.21	$ 1.13

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Costs in Excess of Billings and Billings in Excess of Costs (Details) (USD $) In Thousands, unless otherwise specified	Dec. 31, 2012	Dec. 31, 2011
Costs in Excess of Billings and Billings in Excess of Costs [Abstract]
Estimated period to complete contracts in process, minimum	1 month
Estimated period to complete contracts in process, maximum	12 months
Expected period for collection	1 year
Contracts in process [Abstract]
Costs incurred on uncompleted contracts	$ 9,181	$ 9,525
Estimated contribution to earnings	2,088	2,784
Total costs incurred and estimated earnings	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)

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Costs in Excess of Billings and Billings in Excess of Costs (Tables)

12 Months Ended

Dec. 31, 2012

Costs in Excess of Billings and Billings in Excess of Costs [Abstract]

Summary of contracts in process

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	)

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Long-term Debt (Tables)

12 Months Ended

Dec. 31, 2012

Long-term Debt [Abstract]

Long-term debt

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

Aggregate maturities of long-term debt

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

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Summary of Significant Accounting Policies

12 Months Ended

Dec. 31, 2012

Summary of Significant Accounting Policies [Abstract]

Summary of Significant Accounting Policies

(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, net

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

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.

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.

Goodwill

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.

Derivative Instruments

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.

Long-lived Assets

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.

Stock-based Compensation

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.

Income Per Share

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.

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Leases (Tables)

12 Months Ended

Dec. 31, 2012

Leases [Abstract]

Future minimum lease payments under capital and operating leases

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

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Summary of Significant Accounting Policies (Details) (USD $)	12 Months Ended
	Dec. 31, 2012	Dec. 31, 2011
Summary of Significant Accounting Policies [Abstract]
Percentage of voting interests acquired (in hundredths)	100.00%
Number of affiliated entities owning aircraft	2
Short-term money market funds	$ 625,000	$ 624,000
Amortizable intangible assets [Abstract]
Estimated useful life of customer lists and other customer relationships, minimum (in years)	5
Estimated useful life of customer lists and other customer relationships, maximum (in years)	16
Future amortization expense for customer lists and other customer relationships [Abstract]
2013	4,624,000
2014	4,624,000
2015	4,624,000
2016	4,376,000
2017	4,326,000
Estimated useful economic life of the STC (in years)	5
Goodwill [Line Items]
Goodwill	120,029,000	115,117,000
Long-lived assets held for sale [Abstract]
Number of aircraft classified as current assets held for sale	8
Air Medical Services [Member]
Goodwill [Line Items]
Goodwill	116,025,000
United Rotorcraft Division [Member]
Goodwill [Line Items]
Goodwill	495,000
Tourism Member]
Goodwill [Line Items]
Goodwill	$ 3,509,000
Buildings, Including Hangars [Member]
Property, Plant and Equipment [Line Items]
Useful life (in years)	40
Estimated residual value (in hundredths)	10.00%
Helicopters, Including Medical Equipment [Member]
Property, Plant and Equipment [Line Items]
Useful life, minimum (in years)	8
Useful life, maximum (in years)	25
Estimated residual value, minimum (in hundredths)	10.00%
Estimated residual value, maximum (in hundredths)	25.00%
Ground Support Equipment and Rotables [Member]
Property, Plant and Equipment [Line Items]
Useful life, minimum (in years)	5
Useful life, maximum (in years)	10
Estimated residual value, minimum (in hundredths)	0.00%
Estimated residual value, maximum (in hundredths)	10.00%
Furniture and Office Equipment [Member]
Property, Plant and Equipment [Line Items]
Useful life, minimum (in years)	3
Useful life, maximum (in years)	10
Estimated residual value (in hundredths)	0.00%

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Employee Benefit Plans (Details) (USD $)	12 Months Ended
	Dec. 31, 2012	Dec. 31, 2011	Dec. 31, 2010
Defined Contribution Plans [Line Items]
Employee contribution rate, maximum (in hundredths)	60.00%
Employee contribution, IRS maximum	$ 17,000
Employee contribution, IRS maximum, age 50 or older	22,500
Employer discretionary match based on employee contributions (in hundredths)	70.00%
Employer discretionary match based on gross pay (in hundredths)	8.00%
Employer contributions	$ 9,372,000	$ 7,033,000	$ 6,575,000
OF Air Holdings Corporation [Member]
Defined Contribution Plans [Line Items]
Employee contribution rate, maximum (in hundredths)	50.00%
Employer discretionary match based on employee contributions (in hundredths)	25.00%
Employer discretionary match based on gross pay (in hundredths)	2.00%

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Consolidated Balance Sheets (USD $) In Thousands, unless otherwise specified	Dec. 31, 2012	Dec. 31, 2011
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
Total receivables	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
Property and equipment, gross	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
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:
Preferred stock, $1 par value. Authorized 15,000,000 shares, none issued	0	0
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

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Fair Value of Financial Instruments (Details) (USD $)	12 Months Ended
	Dec. 31, 2012	Dec. 31, 2011	Dec. 31, 2010	Jun. 30, 2010
Derivatives, Fair Value [Line Items]
Percentage of fuel cost of operating expenses (in hundredths)	3.80%	3.40%	2.70%
Percentage of fuel consumption cover fuel derivatives contract (in hundredths)	86.00%
Derivative agreements (in dollars per gallon)	3.50	2.68	2.71	2.35
Derivative Instruments, Gain (Loss) [Line Items]
Unrealized loss on derivative instrument	$ 257,000	$ 800,000	$ 181,000
Cash settlements under derivative contracts	0	1,131,000	0
Estimate of Fair Value [Member]
Fair value of financial instruments [Abstract]
Long-term debt, fair value disclosure	406,856,000	266,213,000
Carrying (Reported) Amount [Member]
Fair value of financial instruments [Abstract]
Long-term debt, fair value disclosure	404,478,000	262,567,000
Aircraft operations expense [Member]
Derivative Instruments, Gain (Loss) [Line Items]
Unrealized loss on derivative instrument	257,000	800,000	181,000
Fuel derivative contracts [Member] | Prepaid expenses and other current assets [Member]
Derivatives, Fair Value [Line Items]
Fair value of fuel derivative contracts	$ 0	$ 256,000

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Consolidated Statements of Cash Flows (USD $) In Thousands, unless otherwise specified	12 Months Ended
	Dec. 31, 2012	Dec. 31, 2011	Dec. 31, 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)	0	0
Acquisition of OF Air Holdings Corporation (note 3)	(3,176)	(201,180)	0
Acquisition of membership interest of United Rotorcraft Solutions, LLC	0	(1,554)	0
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)
Cash flows from financing activities:
Proceeds from issuance of common stock	4,694	3,686	3,026
Payment of cash dividend	(91,629)	0	0
Tax benefit from exercise of stock options	3,447	1,324	561
Borrowings under line of credit	135,738	31,271	0
Payments under line of credit	(80,008)	(20,000)	0
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	$ 43,491	$ 15,351	$ 19,627

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Air Medical Services Contract Revenue (Tables)

12 Months Ended

Dec. 31, 2012

Air Medical Services Contract Revenue [Abstract]

Future revenue from fixed-fee portion of operating agreements

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

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Commitments, Contingencies, and Concentrations

12 Months Ended

Dec. 31, 2012

Commitments, Contingencies, and Concentrations [Abstract]

Commitments, Contingencies, and Concentrations

(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.

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	%

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Income Taxes (Tables)

12 Months Ended

Dec. 31, 2012

Income Taxes [Abstract]

Income tax expense

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	)

Reconciliation of income taxes

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	)

Deferred tax assets and liabilities

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	)

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Unaudited Quarterly Financial Data

12 Months Ended

Dec. 31, 2012

Unaudited Quarterly Financial Data [Abstract]

Unaudited Quarterly Financial Data

(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.

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Consolidated Statements of Cash Flows (Parenthetical) (USD $) In Thousands, unless otherwise specified	12 Months Ended
	Dec. 31, 2012	Dec. 31, 2011	Dec. 31, 2010
Non-cash investing and financing activities:
Entered into capital leases to finance the purchase of aircraft and equipment	$ 48,947	$ 47,537	$ 34,913
Settled notes payable in exchange for the aircraft securing the debt	27,940		4,510
Entered into notes payable to finance the purchase of aircraft		27,940
Entered into note receivable related to sale of aircraft		700
Like-kind exchange, aircrafts			$ 2,000
Number of new aircraft purchased			15

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Consolidated Balance Sheets (Parenthetical) (USD $) In Thousands, except Share data, unless otherwise specified	Dec. 31, 2012	Dec. 31, 2011
Assets
Intangible assets, accumulated amortization	$ 8,019	$ 4,374
Stockholders' equity:
Preferred stock, par value (in dollars per share)	$ 1	$ 1
Preferred stock, authorized (in shares)	15,000,000	15,000,000
Common stock, par value (in dollars per share)	$ 0.06	$ 0.06
Common stock, authorized (in shares)	70,500,000	70,500,000
Common stock, issued (in shares)	38,967,105	38,398,680
Common stock, outstanding (in shares)	38,761,462	38,218,680

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Stock-based Compensation

12 Months Ended

Dec. 31, 2012

Stock-based Compensation [Abstract]

Stock-based Compensation

(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.

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.

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.

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Document and Entity Information (USD $)	12 Months Ended
	Dec. 31, 2012	Feb. 22, 2013	Jun. 30, 2012
Document and Entity Information [Abstract]
Entity Registrant Name	AIR METHODS CORP
Entity Central Index Key	0000816159
Current Fiscal Year End Date	--12-31
Entity Well-known Seasoned Issuer	No
Entity Voluntary Filers	No
Entity Current Reporting Status	Yes
Entity Filer Category	Large Accelerated Filer
Entity Public Float			$ 1,144,780,000
Entity Common Stock, Shares Outstanding		38,815,936
Document Fiscal Year Focus	2012
Document Fiscal Period Focus	FY
Document Type	10-K
Amendment Flag	false
Document Period End Date	Dec. 31, 2012

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Related Party Transactions

12 Months Ended

Dec. 31, 2012

Related Party Transactions [Abstract]

Related Party Transactions

(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.

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Consolidated Statements of Income (USD $) In Thousands, except Share data, unless otherwise specified	12 Months Ended
	Dec. 31, 2012	Dec. 31, 2011	Dec. 31, 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
Total revenue	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
Operating expense	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 (in dollars per share)	$ 2.41	$ 1.23	$ 1.14
Diluted (in dollars per share)	$ 2.39	$ 1.21	$ 1.13
Weighted average number of common shares outstanding:
Basic (in shares)	38,594,286	37,999,422	37,489,539
Diluted (in shares)	39,044,468	38,482,785	37,789,242

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Costs in Excess of Billings and Billings in Excess of Costs

12 Months Ended

Dec. 31, 2012

Costs in Excess of Billings and Billings in Excess of Costs [Abstract]

Costs in Excess of Billings and Billings in Excess of Costs

 (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	)

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Patient Transport Revenue Recognition

12 Months Ended

Dec. 31, 2012

Patient Transport Revenue Recognition [Abstract]

Patient Transport Revenue Recognition

(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.

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Business Segment Information

12 Months Ended

Dec. 31, 2012

Business Segment Information [Abstract]

Business Segment Information

(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.

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

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Air Medical Services Contract Revenue

12 Months Ended

Dec. 31, 2012

Air Medical Services Contract Revenue [Abstract]

Air Medical Services Contract Revenue

(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

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Leases

12 Months Ended

Dec. 31, 2012

Leases [Abstract]

Leases

(8)        Leases

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.

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.

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Fair Value of Financial Instruments

12 Months Ended

Dec. 31, 2012

Fair Value of Financial Instruments [Abstract]

Fair Value of Financial Instruments

(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.

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.

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Long-term Debt

12 Months Ended

Dec. 31, 2012

Long-term Debt [Abstract]

Long-term Debt

(7)        Long-term Debt

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%.

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

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Stockholders' Equity

12 Months Ended

Dec. 31, 2012

Stockholders' Equity [Abstract]

Stockholders' Equity

(9)         Stockholders' Equity

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.

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

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.

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Stock-based Compensation (Tables)

12 Months Ended

Dec. 31, 2012

Stock-based Compensation [Abstract]

Weighted average assumptions

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	%

Summary of option activity

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

Summary of restricted stock activity

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

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Air Medical Services Contract Revenue (Details) (USD $) In Thousands, unless otherwise specified	Dec. 31, 2012
Air Medical Services Contract Revenue [Abstract]
Initial term of operating agreements, lower range limit	1 year
Initial term of operating agreements, upper range limit	10 years
Future revenue from fixed-fee portion of operating agreements [Abstract]
2013	$ 146,198
2014	85,555
2015	46,136
2016	25,311
2017	10,451
Thereafter	464
Total	$ 314,115

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Employee Benefit Plans

12 Months Ended

Dec. 31, 2012

Employee Benefit Plans [Abstract]

Employee Benefit Plans

(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.

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Summary of Significant Accounting Policies (Policies)

12 Months Ended

Dec. 31, 2012

Summary of Significant Accounting Policies [Abstract]

Consolidation

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.

Use of Estimates

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

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, net

Trade Receivables, net

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

Inventories

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.

Property and Equipment

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

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.

Goodwill

Goodwill

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.

Derivative Instruments

Derivative Instruments

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.

Long-lived Assets

Long-lived Assets

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

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.

Stock-based Compensation

Stock-based Compensation

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

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.

Income Per Share

Income Per Share

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.

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Stock-based Compensation (Details) (USD $)	12 Months Ended					12 Months Ended
	Dec. 31, 2012	Dec. 31, 2011	Dec. 31, 2010	Dec. 31, 2012 2006 Equity Compensation Plan [Member]	Dec. 03, 2012 2006 Equity Compensation Plan [Member]	Dec. 31, 2012 Stock Options [Member]	Dec. 31, 2011 Stock Options [Member]	Dec. 31, 2010 Stock Options [Member]	Dec. 31, 2012 Restricted Stock [Member]	Dec. 31, 2011 Restricted Stock [Member]	Dec. 31, 2010 Restricted Stock [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Common stock available under the plan (in shares)				5,400,000	3,000,000
Maximum term of award granted (in years)				P10Y
Vesting period of restricted stock, minimum (in years)				P1Y
Vesting period of restricted stock, maximum (in years)				P5Y
Stock split	Three-for-one			Three-for-one
Weighted average fair value of options granted (in dollars per share)						$ 9.13	$ 6.58	$ 3.67
Weighted average assumptions [Abstract]
Expected term (in years)						3.0	3.0	3.4
Expected volatility (in hundredths)						46.00%	54.00%	51.00%
Risk-free interest rate (in hundredths)						0.30%	1.40%	1.60%
Expected dividend yield (in hundredths)						0.00%	0.00%	0.00%
Summary of option activity [Roll Forward]
Outstanding at beginning of period (in shares)						891,666
Granted (in shares)						13,800
Exercised (in shares)						(451,770)
Canceled (in shares)						(15,003)
Outstanding at end of period (in shares)						438,693	891,666
Exercisable at end of period (in shares)						379,182
Weighted average exercise price [Abstract]
Weighted average exercise price of options outstanding at beginning of period (in dollars per share)						$ 10.24
Weighted average exercise price of options granted (in dollars per share)						$ 29.47
Weighted average exercise price of options exercised (in dollars per share)						$ 10.39
Weighted average exercise price of options canceled (in dollars per share)						$ 9.21
Weighted average exercise price of options outstanding at end of period (in dollars per share)						$ 10.72	$ 10.24
Weighted average exercise price of options exercisable at end of period (in dollars per share)						$ 10.88
Weighted-average remaining contractual life [Abstract]
Weighted-average remaining contractual life of options outstanding at end of period (in years)						2.0
Weighted-average remaining contractual life of options exercisable at end of period (in years)						2.0
Aggregate intrinsic value [Abstract]
Aggregate intrinsic value of options outstanding at end of period						$ 11,491,000
Aggregate intrinsic value of options exercisable at end of period						9,869,000
Aggregate intrinsic value of options exercised during the period						9,614,000	5,768,000	2,631,000
Summary of restricted stock activity [Roll Forward]
Nonvested at beginning of period (in shares)									180,000
Granted (in shares)									137,400
Vested (in shares)									(91,000)
Forfeited (in shares)									(20,750)
Nonvested at end of period (in shares)									205,650	180,000
Weighted average grant-date fair value [Abstract]
Weighted average grant-date fair value of nonvested shares at beginning of period (in dollars per share)									$ 18.69
Weighted average grant-date fair value of shares granted (in dollars per share)									$ 33.34
Weighted average grant-date fair value of shares vested (in dollars per share)									$ 18.81
Weighted average grant-date fair value of shares forfeited (in dollars per share)									$ 21.57
Weighted average grant-date fair value of nonvested shares at end of period (in dollars per share)									$ 27.94	$ 18.69
Total fair value of shares vested during the period									2,644,000	255,000	293,000
Stock-based compensation costs [Abstract]
Stock-based compensation expense	2,044,000	2,889,000	1,512,000
Total unrecognized compensation cost	$ 4,424,000
Period over which unrecognized compensation cost is expected to be recognized (in years)	1.5

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Acquisition of Sundance Helicopters, Inc (Details) (Sundance Helicopters, Inc [Member], USD $)	Dec. 31, 2012
Sundance Helicopters, Inc [Member]
Business Acquisition [Line Items]
Cash purchase price	$ 46,300,000
Increase to purchase price for change in working capital	906,000
Aircraft	34,400,000
Amortizable intangible assets	5,700,000
Goodwill	$ 3,500,000

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Consolidated Statements of Stockholders' Equity (USD $) In Thousands, except Share data	Common Stock [Member]	Additional Paid-In Capital [Member]	Retained Earnings [Member]	Total
Balances at Dec. 31, 2009	$ 748	$ 82,978	$ 101,847	$ 185,573
Balances (in shares) at Dec. 31, 2009	37,402,161
Issuance of common shares for options	8	3,018	0	3,026
Issuance of common shares for options (in shares)	407,331
Tax benefit from exercise of stock options	0	561	0	561
Stock-based compensation (note 10)	0	1,512	0	1,512
Stock-based compensation (note 10) (in shares)	0
Forfeiture of unvested restricted shares	0	0	0	0
Forfeiture of unvested restricted shares (in shares)	(3,000)
Net income	0	0	42,757	42,757
Balances at Dec. 31, 2010	756	88,069	144,604	233,429
Balances (in shares) at Dec. 31, 2010	37,806,492
Issuance of common shares for options	8	3,678	0	3,686
Issuance of common shares for options (in shares)	406,188
Tax benefit from exercise of stock options	0	1,324	0	1,324
Stock-based compensation (note 10)	0	2,889	0	2,889
Stock-based compensation (note 10) (in shares)	6,000
Unvested restricted stock (in shares)	180,000
Net income	0	0	46,574	46,574
Balances at Dec. 31, 2011	764	95,960	191,178	287,902
Balances (in shares) at Dec. 31, 2011	38,398,680
Issuance of common shares for options	9	4,685	0	4,694
Issuance of common shares for options (in shares)	451,770
Tax benefit from exercise of stock options	0	3,447	0	3,447
Stock-based compensation (note 10)	0	2,044	0	2,044
Stock-based compensation (note 10) (in shares)	3,001
Forfeiture of unvested restricted shares	0	0	0	0
Forfeiture of unvested restricted shares (in shares)	(15,996)
Unvested restricted stock (in shares)	129,650
Stock split (note 9)	1,551	(1,551)	0	0
Cash dividend (note 9)	0	0	(91,629)	(91,629)
Net income	0	0	93,152	93,152
Balances at Dec. 31, 2012	$ 2,324	$ 104,585	$ 192,701	$ 299,610
Balances (in shares) at Dec. 31, 2012	38,967,105

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Acquisition of OF Air Holdings Corporation

12 Months Ended

Dec. 31, 2012

Acquisition of OF Air Holdings Corporation [Abstract]

Acquisition of OF Air Holdings Corporation

(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.

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

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Summary of Significant Accounting Policies (Tables)

12 Months Ended

Dec. 31, 2012

Summary of Significant Accounting Policies [Abstract]

Estimated useful lives and salvage values of 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	%

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Business Segment Information (Tables)

12 Months Ended

Dec. 31, 2012

Business Segment Information [Abstract]

Summarized financial information for the Company's operating segments

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

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Income Taxes

12 Months Ended

Dec. 31, 2012

Income Taxes [Abstract]

Income Taxes

(13)        Income Taxes

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.

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.

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.