DENVER, Feb. 28, 2017 (GLOBE NEWSWIRE) -- Air Methods Corporation (Nasdaq:AIRM), the global leader in air medical transportation, today reported financial results for the quarter ended December 31, 2016.

Fourth Quarter 2016 Results:
  • Revenue of $297.5 million, compared to $272.4 million for the fourth quarter of 2015, an increase of 9.2%.
  • Diluted earnings per share from continuing operations of $0.54, compared to $0.57 for the fourth quarter of 2015, a decrease of 5.3%.
  • Depreciation and amortization expense of $23.5 million and interest expense of $8.1 million, compared to $21.3 million and $7.0 million for the fourth quarter of 2015, respectively, due primarily to the Tri-State Care Flight (TSCF) acquisition. This represents increases of 10.3% and 17.0%, respectively.
  • Adjusted EBITDA from continuing operations* (a non-GAAP measure) of $66.4 million, compared to $65.6 million for the fourth quarter of 2015, an increase of 1.2%.

Aaron Todd, CEO of Air Methods, stated, "Patient transports rebounded in the fourth quarter, increasing 11.1% in total and 1.5% on a same-base basis as the Company benefited from changes implemented towards the end of the third quarter and early in the fourth quarter and from more normal weather. We remain focused on driving shareholder value by improving the utilization of the Company's assets, increasing its net revenue per transport through improvements in the Company's revenue cycle operations and increasing the percent of commercial claims that are in network, growing the Company's air medical footprint, and increasing the revenue and profitability of the Tourism operations."

Peter Csapo, CFO of Air Methods, added, "In the fourth quarter, we continued to make significant progress on one of our highest priorities, achieving a year-over-year reduction in DSOs of 6 days to 124 days. When coupled with the 38% reduction in capital expenditures in 2016, the Company's free cash flow* (a non-GAAP measure) for 2016 improved by $111.7 million over the prior year."

* Adjusted EBITDA and free cash flow are non-GAAP measures. Reconciliations of Adjusted EBITDA to net income (loss) and free cash flow to net cash provided by continuing operating activities, the most directly comparable financial measures presented in accordance with GAAP, are set forth in the schedules accompanying this release. See "Non-GAAP Financial Measures."

Fourth Quarter Performance by Segment

For the fourth quarter, Air Medical Services (AMS) revenue increased 11.4% to $262.9 million compared to $236.0 million in the prior-year quarter. Excluding the acquisition of TSCF, revenues increased 7.1%. Key operating statistics include:
      4Q16         4Q15       YOY Change (%)
  Transports       17,571           15,817       11.1 %
  Transports + Weather Cancellations       23,924           22,945       4.3 %
  Same-Base Transports (SBTs)       15,107           14,891       1.5 %
  SBT + Weather Cancellations       20,837           21,664       (3.8 %)
  Net Revenue per Transport     $ 12,875         $ 12,508       2.9 %

Flight center and aircraft operations expenses increased 12.3% to $156.6 million in the current quarter compared to $139.4 million in the prior year quarter. AMS maintenance expense increased 13.0% per flight hour during the fourth quarter compared to the prior-year quarter. This was offset partially by a 13.0% decline in the cost per hour for fuel during the fourth quarter compared to the fourth quarter of 2015. AMS segment adjusted EBITDA (a non-GAAP measure) increased 5.8% to $77.0 million compared to $72.7 million for the fourth quarter of 2015. 

Tourism revenues increased 2.5% to $29.6 million in the fourth quarter compared to $28.9 million in the prior-year quarter.  Total passengers decreased 1.6% to 101,623 during the fourth quarter compared to 103,261 in the prior-year quarter. Total revenue per passenger increased 4.3% to $292 in the fourth quarter compared to $280 in the prior-year quarter. Tourism operating expenses increased 1.5% to $20.7 million in the fourth quarter compared to $20.4 million in the prior-year quarter. Results benefitted from an 18.1% reduction in the maintenance cost per flight hour and a 4.1% reduction in the fuel cost per flight hour in the fourth quarter of 2016 compared to the fourth quarter of 2015. Tourism segment adjusted EBITDA (a non-GAAP measure) increased 18.9% to $4.9 million in the fourth quarter compared to $4.1 million in the prior-year quarter. 

United Rotorcraft's external revenue declined by 34.2% to $4.9 million in the fourth quarter compared to $7.4 million in the prior-year quarter. Its segment adjusted EBITDA (a non-GAAP measure) declined in the fourth quarter to a loss of $1.1 million from a gain of $1.5 million in the prior year period.

Share Repurchase Program

The Company did not repurchase shares during the fourth quarter. To date, it has repurchased 3.1 million shares for $109.9 million and has $90.1 million remaining on its authorized program.

Fourth Quarter 2016 Conference Call

The Company will discuss these results in a conference call scheduled today at 4:30 p.m. Eastern. Interested parties can access the call by dialing (855) 601-0049 (domestic) or (720) 398-0100 (international) or by accessing the web cast at www.airmethods.com. A replay of the call will be available at (855) 859-2056 (domestic) or (404) 537-3406 (international), access number 10184903, for 3 days following the call and the web cast can be accessed at www.airmethods.com for 30 days. Concurrently, the Company will post a financial supplement that contains final operating statistics on its website, www.airmethods.com.

Air Methods Corporation ( www.airmethods.com) is the global leader in air medical transportation. The Air Medical Services Division is the largest provider of air medical transport services in the United States. The United Rotorcraft Division specializes in the design and manufacture of aeromedical and aerospace technology. The Tourism Division is comprised of Sundance Helicopters, Inc. and Blue Hawaiian Helicopters, which provide helicopter tours and charter flights in the Las Vegas/Grand Canyon region and Hawaii, respectively. Air Methods' fleet of owned, leased or maintained aircraft features approximately 500 helicopters and fixed wing aircraft. 

Forward Looking Statements: Forward-looking statements in this news release are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Statements in this press release that are "forward-looking statements", including statements we make with regard to the Company's focus on driving shareholder value by (i) improving utilization of the Company's assets (ii) increasing its net revenue per transport through, among other things, (x) improvements in the Company's revenue cycle operations; and (y) increases in the number of commercial claims that are in-network; (iii) expanding the Company's air medical footprint; and (iv) increasing the revenue and profitability of the Company's Tourism operations; are based on current expectations and assumptions that are subject to risks and uncertainties. Actual results could differ materially from those currently anticipated due to a number of factors, including but not limited to, the Company's completion of its final quarter-end closing and review procedures, the size, structure and growth of the Company's air medical services, United Rotorcraft Division and Tourism Division; the collection rates for patient transports; collection of future price increases for patient transports; requests for air medical services; shifts in payer mix resulting in a decrease of the number of privately insured transports, execution of the integration plan for Tri-State Care Flight; the continuation and/or renewal of air medical service contracts; general trends in the health care industry; weather conditions across the U.S.; development and changes in laws and regulations, including, without limitation, increased regulation of the health care and aviation industry through legislative action and revised rules and standards; and other matters set forth in the Company's filings with the SEC. The Company is under no obligation (and expressly disclaims any obligation) to update or alter its forward-looking statements, whether as a result of new information, future events or otherwise. 

IMPORTANT ADDITONAL INFORMATION AND WHERE TO FIND ITAir Methods intends to file a proxy statement with the U.S. Securities and Exchange Commission (the "SEC") with respect to its 2017 Annual Meeting (the "2017 Proxy Statement"). AIR METHODS STOCKHOLDERS ARE STRONGLY ENCOURAGED TO READ THE 2017 PROXY STATEMENT (INCLUDING ANY AMENDMENTS OR SUPPLEMENTS THERETO), THE ACCOMPANYING WHITE PROXY CARD AND OTHER RELEVANT DOCUMENTS FILED WITH THE SEC CAREFULLY IN THEIR ENTIRETY WHEN THEY BECOME AVAILABLE BECAUSE THEY WILL CONTAIN IMPORTANT INFORMATION.

Air Methods, its directors, executive officers and other employees may be deemed to be participants in the solicitation of proxies from Air Methods stockholders in connection with the matters to be considered at Air Methods' 2017 Annual Meeting. Information about Air Methods' directors and executive officers is available in Air Methods' proxy statement, dated April 29, 2016, for its 2016 Annual Meeting. To the extent holdings of Air Methods' securities by such directors or executive officers have changed since the amounts printed in the 2016 proxy statement, such changes have been or will be reflected on Statements of Change in Ownership on Form 4 filed with the SEC. More detailed information regarding the identity of potential participants, and their direct or indirect interests, by security holdings or otherwise, will be set forth in the 2017 Proxy Statement and other materials to be filed with the SEC in connection with Air Methods' 2017 Annual Meeting. Stockholders will be able to obtain the 2017 Proxy Statement, any amendments or supplements thereto and other documents filed by Air Methods with the SEC free of charge at the SEC's website at  www.sec.gov. Copies also will be available free of charge at Air Methods' website ( www.airmethods.com) or by writing to Air Methods' Corporate Secretary at Air Methods, 7211 South Peoria Street, Englewood, Colorado 80112, or by calling Air Methods' Corporate Secretary at (303) 792-7400.

CONTACTS: Peter P. Csapo, Chief Financial Officer, ( peter.csapo@airmethods.com). Please contact Christina Brodsly at ( christina.brodsly@airmethods.com) to be included on the Company's e-mail distribution list.

- FINANCIAL STATEMENTS ATTACHED -
 
AIR METHODS CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(Amounts in thousands)
(unaudited)
                 
                 
        December 31, 2016       December 31, 2015
                 
ASSETS                
                 
Current assets:                
Cash and cash equivalents     $ 5,903     $ 5,808
Trade receivables, net       380,249       360,542
Other current assets       100,228       91,251
                 
Total current assets       486,380       457,601
                 
Net property and equipment       878,009       799,656
Other assets, net       424,876       278,693
                 
Total assets     $ 1,789,265     $ 1,535,950
                 
                 
LIABILITIES AND STOCKHOLDERS' EQUITY                
                 
Current liabilities:                
Notes payable related to aircraft pending long-term financing     $ 15,179     $ 2,955
Current portion of indebtedness       80,584       58,304
Accounts payable, accrued expenses and other       90,133       87,211
                 
Total current liabilities       185,896       148,470
                 
Long-term indebtedness       810,944       635,615
Other non-current liabilities       219,883       179,129
                 
Total liabilities       1,216,723       963,214
                 
Redeemable non-controlling interests       -       8,550
                 
Total stockholders' equity       572,542       564,186
                 
Total liabilities and stockholders' equity     $ 1,789,265     $ 1,535,950
                 

 
AIR METHODS CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
(Amounts in thousands, except share and per share amounts)
(unaudited)
 
      Quarter Ended     Year Ended
      December 31,     December 31,
                         
      2016       2015       2016       2015  
                                 
Revenue:                        
Patient transport revenue, net   $ 226,219       198,207       869,267       759,877  
Air medical services contract revenue     33,360       34,158       135,742       153,901  
Tourism revenue     29,644       28,918       127,886       127,795  
Product operations     4,895       7,513       23,794       24,479  
Transfer center, dispatch and billing service revenue     3,355       3,647       13,766       14,386  
Total revenue     297,473       272,443       1,170,455       1,080,438  
                         
Expenses:                        
Operating expenses     189,496       170,422       722,355       656,085  
General and administrative     43,553       37,693       164,016       146,391  
Depreciation and amortization     23,455       21,272       93,107       83,354  
      256,504       229,387       979,478       885,830  
                         
Operating income     40,969       43,056       190,977       194,608  
                         
Interest expense     (8,136 )     (6,954 )     (31,990 )     (21,995 )
Other, net     360       786       1,719       2,056  
                         
Income from continuing operations before income taxes     33,193       36,888       160,706       174,669  
                         
Income tax expense     (13,337 )     (14,370 )     (62,831 )     (68,213 )
                         
Income from continuing operations     19,856       22,518       97,875       106,456  
                         
Loss on discontinued operations, net of income taxes     -       (20 )     -       (398 )
                         
Net income     19,856       22,498       97,875       106,058  
                         
Income (loss) attributable to redeemable non-controlling interests     -       (44 )     (30 )     640  
                         
Net income attributable to Air Methods Corporation and subsidiaries   $ 19,856       22,542       97,905       105,418  
                         
Income per common share:                  
Basic                        
Continuing operations   $ 0.55       0.57       2.58       2.67  
Discontinued operations     -       -       -       (0.01 )
Diluted                        
Continuing operations   $ 0.54       0.57       2.57       2.66  
Discontinued operations     -       -       -       (0.01 )
     
Weighted average common shares outstanding:    
Basic     36,396,593       39,262,268       37,732,644       39,272,585  
Diluted     36,444,558       39,418,254       37,798,690       39,420,963  
 

 
AIR METHODS CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Amounts in thousands)
(unaudited)
     
    Year Ended
    December 31,
           
    2016       2015  
               
Cash flows from operating activities:          
Net income $ 97,875       106,058  
Loss from discontinued operations, net of income taxes   -       398  
Adjustments to reconcile net income to net cash provided by operating activities:          
Depreciation and amortization   93,107       83,354  
Deferred income tax expense   43,984       27,245  
Stock-based compensation   6,907       7,458  
Amortization of debt issuance costs   1,249       1,004  
Loss on disposition of assets   2,132       3,291  
Unrealized loss (gain) on derivative instrument   (511 )     369  
Loss from equity method investee   419       1,082  
Changes in assets and liabilities, net of effects of acquisitions   (18,074 )     (57,853 )
           
Net cash provided by continuing operating activities   227,088       172,406  
Net cash used by discontinued operating activities   -       (92 )
Net cash provided by operating activities   227,088       172,314  
           
Cash flows from investing activities:          
Acquisition of subsidiaries   (225,577 )     -  
Acquisition of property and equipment   (91,946 )     (148,999 )
Acquisition of hospital programs   -       (64,654 )
Buy-out of previously leased aircraft   (17,176 )     (17,747 )
Proceeds from disposition of equipment   10,272       9,664  
Decrease (increase) in other assets   (3,232 )     (6,475 )
           
Net cash used by continuing investing activities   (327,659 )     (228,211 )
Net cash provided (used) by discontinued investing activities   -       25  
Net cash used by investing activities   (327,659 )     (228,186 )
           
Cash flows from financing activities:          
Proceeds from issuance of common stock, net   803       610  
Payments for purchases of common stock   (96,497 )     (13,457 )
Payments for financing costs   (81 )     (4,622 )
Proceeds from long-term debt   293,454       151,701  
Payment of long-term debt, notes payable, and capital lease obligations   (97,013 )     (85,717 )
           
Net cash provided (used) by continuing financing activities   100,666       48,515  
Net cash provided (used) by discontinued financing activities   -       -  
Net cash provided (used) by financing activities   100,666       48,515  
           
Increase (decrease) in cash and cash equivalents   95       (7,357 )
           
Cash and cash equivalents at beginning of period   5,808       13,165  
         
Cash and cash equivalents at end of period $ 5,903     5,808  
               

 
AIR METHODS CORPORATION AND SUBSIDIARIES
RECONCILIATION OF CASH FLOW FROM OPERATIONS TO FREE CASH FLOW
(Amounts in thousands)
(unaudited)
 
        Year Ended
        December 31,
             
        2016     2015  
 
Net cash provided by continuing operating activities     $ 227,088     172,406  
 
Acquisition of property and equipment       (91,946 )   (148,999 )
                 
Free cash flow       135,142     23,407  

 
Non-GAAP Measures: This release may discuss Adjusted EBITDA from continuing operations and free cash flow, which are not calculated in conformity with U.S. Generally Accepted Accounting Principles (GAAP). The Company defines Adjusted EBITDA from continuing operations as earnings attributable to Air Methods Corp. and its subsidiaries (AMC) before interest, income taxes, depreciation, amortization, gain or loss on disposition of assets, and discontinued operations. The Company defines free cash flow as cash flow from continuing operations less capital expenditures. Buyouts of previously leased aircraft, payments for hospital contract conversions, and proceeds from the disposition of assets are excluded from the calculation. To supplement the Company's consolidated financial statements presented on a GAAP basis, management believes that these non-GAAP measures provide useful information about the Company's core operating results and thus are appropriate to enhance the overall understanding of the Company's past financial performance and its prospects for the future.  Management believes the additions and subtractions from net income used to calculate Adjusted EBITDA from continuing operations reflect the measurements that its bank creditors and third party stock analysts use in evaluating the Company. These adjustments to the Company's GAAP results are made with the intent of providing both management and investors a more complete understanding of the Company's underlying operational results and trends and performance. Management uses these non-GAAP measures to evaluate the Company's financial results. The presentation of non-GAAP measures is not meant to be considered in isolation or as a substitute for or superior to financial results determined in accordance with GAAP.

AIR METHODS CORPORATION AND SUBSIDIARIES
RECONCILIATION OF NET INCOME TO ADJUSTED EBITDA
(Amounts in thousands)
(unaudited)
 
      Quarter Ended   Year Ended
      December 31,   December 31,
        2016   2015     2016   2015  
                         
Net income attributable to Air Methods Corporation and subsidiaries     $ 19,856   22,542     97,905   105,418  
Loss on discontinued operations, net of income taxes       -   (20 )   -   (398 )
Net income from continuing operations attributable to Air Methods Corporation and subsidiaries       19,856   22,562     97,905   105,816  
             
Interest expense *       8,136   6,954     31,990   21,874  
Income tax expense *       13,337   14,370     62,831   68,213  
Depreciation and amortization *       23,455   21,272     93,107   83,072  
Loss (gain) on disposition of assets, net *       1,568   415     2,132   3,292  
                         
Adjusted EBITDA from continuing operations     $ 66,352   65,573     287,965   282,267  
 
 
 
* Excludes amounts attributable to redeemable non-controlling interests  

Non-GAAP Measures: This release may discuss Adjusted EBITDA from continuing operations and free cash flow, which are not calculated in conformity with U.S. Generally Accepted Accounting Principles (GAAP). The Company defines Adjusted EBITDA from continuing operations as earnings attributable to Air Methods Corp. and its subsidiaries (AMC) before interest, income taxes, depreciation, amortization, gain or loss on disposition of assets, and discontinued operations. The Company defines free cash flow as cash flow from continuing operations less capital expenditures. Buyouts of previously leased aircraft, payments for hospital contract conversions, and proceeds from the disposition of assets are excluded from the calculation. To supplement the Company's consolidated financial statements presented on a GAAP basis, management believes that these non-GAAP measures provide useful information about the Company's core operating results and thus are appropriate to enhance the overall understanding of the Company's past financial performance and its prospects for the future.  Management believes the additions and subtractions from net income used to calculate Adjusted EBITDA from continuing operations reflect the measurements that its bank creditors and third party stock analysts use in evaluating the Company. These adjustments to the Company's GAAP results are made with the intent of providing both management and investors a more complete understanding of the Company's underlying operational results and trends and performance. Management uses these non-GAAP measures to evaluate the Company's financial results. The presentation of non-GAAP measures is not meant to be considered in isolation or as a substitute for or superior to financial results determined in accordance with GAAP.

AIR METHODS CORPORATION AND SUBSIDIARIES
RECONCILIATION OF AIR MEDICAL SERVICES DIVISION NET INCOME TO ADJUSTED EBITDA
(Amounts in thousands)
(unaudited)
             
             
 
      Quarter Ended   Year Ended
      December 31,   December 31,
        2016   2015       2016   2015  
                           
Net income attributable to Air Methods Corporation and subsidiaries     $ 50,486   49,938     $ 210,257   214,445  
Loss on discontinued operations, net of income taxes       -   (20 )     -   (398 )
Net income from continuing operations attributable to Air Methods Corporation and subsidiaries       50,486   49,958       210,257   214,843  
                   
Interest expense       6,448   5,406       25,538   16,575  
Income tax expense       -   -       -   -  
Depreciation and amortization       19,705   17,661       78,078   69,687  
Loss (gain) on disposition of assets, net       332   (276 )     226   1,084  
                           
Adjusted EBITDA from continuing operations     $ 76,971   72,749     $ 314,099   302,189  

Non-GAAP Measures: This release may discuss Adjusted EBITDA from continuing operations and free cash flow, which are not calculated in conformity with U.S. Generally Accepted Accounting Principles (GAAP). The Company defines Adjusted EBITDA from continuing operations as earnings attributable to Air Methods Corp. and its subsidiaries (AMC) before interest, income taxes, depreciation, amortization, gain or loss on disposition of assets, and discontinued operations. The Company defines free cash flow as cash flow from continuing operations less capital expenditures. Buyouts of previously leased aircraft, payments for hospital contract conversions, and proceeds from the disposition of assets are excluded from the calculation. To supplement the Company's consolidated financial statements presented on a GAAP basis, management believes that these non-GAAP measures provide useful information about the Company's core operating results and thus are appropriate to enhance the overall understanding of the Company's past financial performance and its prospects for the future.  Management believes the additions and subtractions from net income used to calculate Adjusted EBITDA from continuing operations reflect the measurements that its bank creditors and third party stock analysts use in evaluating the Company. These adjustments to the Company's GAAP results are made with the intent of providing both management and investors a more complete understanding of the Company's underlying operational results and trends and performance. Management uses these non-GAAP measures to evaluate the Company's financial results. The presentation of non-GAAP measures is not meant to be considered in isolation or as a substitute for or superior to financial results determined in accordance with GAAP.

AIR METHODS CORPORATION AND SUBSIDIARIES
RECONCILIATION OF TOURISM DIVISION NET INCOME TO ADJUSTED EBITDA
(Amounts in thousands)
(unaudited)
 
      Quarter Ended   Year Ended
      December 31,   December 31,
       2016     2015    2016   2015
                         
Net income from continuing operations attributable to Air Methods Corporation and subsidiaries     $ 1,593     340   $ 10,332   9,985
                   
Interest expense *       1,155     978     4,340   3,296
Income tax expense *       -     -     -   -
Depreciation and amortization *       2,286     2,139     9,184   7,648
Loss on disposition of assets, net *       (113 )   681     571   2,197
                         
Adjusted EBITDA from continuing operations     $ 4,921     4,138   $ 24,427   23,126
                         
         
* Excludes amounts attributable to redeemable non-controlling interests      

Non-GAAP Measures: This release may discuss Adjusted EBITDA from continuing operations and free cash flow, which are not calculated in conformity with U.S. Generally Accepted Accounting Principles (GAAP). The Company defines Adjusted EBITDA from continuing operations as earnings attributable to Air Methods Corp. and its subsidiaries (AMC) before interest, income taxes, depreciation, amortization, gain or loss on disposition of assets, and discontinued operations. The Company defines free cash flow as cash flow from continuing operations less capital expenditures. Buyouts of previously leased aircraft, payments for hospital contract conversions, and proceeds from the disposition of assets are excluded from the calculation. To supplement the Company's consolidated financial statements presented on a GAAP basis, management believes that these non-GAAP measures provide useful information about the Company's core operating results and thus are appropriate to enhance the overall understanding of the Company's past financial performance and its prospects for the future.  Management believes the additions and subtractions from net income used to calculate Adjusted EBITDA from continuing operations reflect the measurements that its bank creditors and third party stock analysts use in evaluating the Company. These adjustments to the Company's GAAP results are made with the intent of providing both management and investors a more complete understanding of the Company's underlying operational results and trends and performance. Management uses these non-GAAP measures to evaluate the Company's financial results. The presentation of non-GAAP measures is not meant to be considered in isolation or as a substitute for or superior to financial results determined in accordance with GAAP.

AIR METHODS CORPORATION AND SUBSIDIARIES
RECONCILIATION OF UNITED ROTORCRAFT DIVISION NET INCOME TO ADJUSTED EBITDA
(Amounts in thousands)
(unaudited)
 
      Quarter Ended   Year Ended
      December 31,   December 31,
       2016     2015    2016     2015
                           
Net income (loss) from continuing operations attributable to Air Methods Corporation and subsidiaries     $ (1,983 )   597   $ (1,702 )   2,692
                   
Interest expense       -     -     -     -
Income tax expense       -     -     -     -
Depreciation and amortization       843     878     3,441     3,407
Loss on disposition of assets, net       -     -     -     -
                           
Adjusted EBITDA from continuing operations     $ (1,140 )   1,475   $ 1,739     6,099

Non-GAAP Measures: This release may discuss Adjusted EBITDA from continuing operations and free cash flow, which are not calculated in conformity with U.S. Generally Accepted Accounting Principles (GAAP). The Company defines Adjusted EBITDA from continuing operations as earnings attributable to Air Methods Corp. and its subsidiaries (AMC) before interest, income taxes, depreciation, amortization, gain or loss on disposition of assets, and discontinued operations. The Company defines free cash flow as cash flow from continuing operations less capital expenditures. Buyouts of previously leased aircraft, payments for hospital contract conversions, and proceeds from the disposition of assets are excluded from the calculation. To supplement the Company's consolidated financial statements presented on a GAAP basis, management believes that these non-GAAP measures provide useful information about the Company's core operating results and thus are appropriate to enhance the overall understanding of the Company's past financial performance and its prospects for the future.  Management believes the additions and subtractions from net income used to calculate Adjusted EBITDA from continuing operations reflect the measurements that its bank creditors and third party stock analysts use in evaluating the Company. These adjustments to the Company's GAAP results are made with the intent of providing both management and investors a more complete understanding of the Company's underlying operational results and trends and performance. Management uses these non-GAAP measures to evaluate the Company's financial results. The presentation of non-GAAP measures is not meant to be considered in isolation or as a substitute for or superior to financial results determined in accordance with GAAP.

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