SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
------------------------------------
FORM 11-K
|X| Annual Report Pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934 for the fiscal year ended December 31, 1997
|_| Transition Report Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Commission file number 000-16079
A. Air Methods Corporation 401(k) and Retirement Savings Plan
B. Air Methods Corporation
7301 South Peoria
Englewood, Colorado 80112
(303) 792-7400
<PAGE>
AIR METHODS CORPORATION
401(k) AND RETIREMENT SAVINGS PLAN
ACCOUNTANTS' REPORT AND
FINANCIAL STATEMENTS
DECEMBER 31, 1997 AND 1996
<PAGE>
AIR METHODS CORPORATION
401(k) AND RETIREMENT
SAVINGS PLAN
FINANCIAL STATEMENTS
AND SUPPLEMENTAL SCHEDULES
DECEMBER 31, 1997 AND 1996
(WITH INDEPENDENT AUDITORS' REPORT THEREON)
<PAGE>
AIR METHODS CORPORATION
401(k) AND RETIREMENT SAVINGS PLAN
TABLE OF CONTENTS
- -------------------------------------------------------------------------------
INDEPENDENT AUDITORS' REPORT ........................................... 1
STATEMENTS OF NET ASSETS AVAILABLE FOR PARTICIPANT BENEFITS -
December 31, 1997 and 1996.......................................... 2
STATEMENTS OF CHANGES IN NET ASSETS AVAILABLE FOR PARTICIPANT
BENEFITS - Years Ended December 31, 1997 and 1996.................... 3
NOTES TO FINANCIAL STATEMENTS........................................... 4
SUPPLEMENTAL SCHEDULES
1 ITEM 27a - SCHEDULE OF ASSETS HELD FOR INVESTMENT PURPOSES -
December 31, 1997........................................... 10
2 ITEM 27d - SCHEDULE OF REPORTABLE TRANSACTIONS -
Year Ended December 31, 1997................................ 11
<PAGE>
[PEAT MARWICK LLP LETTERHEAD]
INDEPENDENT AUDITORS' REPORT
THE BOARD OF DIRECTORS
AIR METHODS CORPORATION:
We have audited the accompanying statements of net assets available for
participant benefits of the Air Methods Corporation 401(k) and Retirement
Savings Plan as of December 31, 1997 and 1996, and the related statements of
changes in net assets available for participant benefits for the years then
ended. These financial statements are the responsibility of the Plan's
management. Our responsibility is to express an opinion on these financial
statements based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. 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 financial statements referred to above present fairly, in
all material respects, the net assets available for participant benefits of the
Air Methods Corporation 401(k) and Retirement Savings Plan as of December 31,
1997 and 1996, and the changes in those net assets for the years then ended in
conformity with generally accepted accounting principles.
Our audits were performed for the purpose of forming an opinion on the basic
financial statements taken as a whole. The supplemental schedules of assets held
for investment purposes and reportable transactions are presented for the
purpose of additional analysis and are not a required part of the basic
financial statements but are supplementary information required by the
Department of Labor's Rules and Regulations for Reporting and Disclosure under
the Employee Retirement Income Security Act of 1974. These supplemental
schedules are the responsibility of the Plan's management. The supplemental
schedules have been subjected to the auditing procedures applied in the audits
of the basic financial statements and, in our opinion, are fairly stated in all
material respects in relation to the basic financial statements taken as a
whole.
/S/KPMG PEAT MARWICK LLP
Denver, Colorado
June 2, 1998
1
<PAGE>
AIR METHODS CORPORATION
401(k) AND RETIREMENT SAVINGS PLAN
STATEMENTS OF NET ASSETS AVAILABLE FOR PARTICIPANT BENEFITS
DECEMBER 31, 1997 AND 1996
- -------------------------------------------------------------------------------
1997 1996
---- ----
Assets:
Investments, at fair value (note 3):
Pooled funds $ 5,891,618 4,643,875
Air Methods Corporation common stock 3,940 -
Loans to participants 333,984 228,899
--------- ---------
6,229,542 4,872,774
Receivables:
Loan payments 11,188 6,311
--------- ---------
Net assets available for participant $ 6,240,730 4,879,085
benefits ========= =========
See accompanying notes to financial statements.
2
<PAGE>
AIR METHODS CORPORATION
401(k) AND RETIREMENT SAVINGS PLAN
STATEMENTS OF CHANGES IN NET ASSETS AVAILABLE FOR PARTICIPANT BENEFITS
YEARS ENDED DECEMBER 31, 1997 AND 1996
- -------------------------------------------------------------------------------
1997 1996
---- ----
Contributions:
Employer $ 180,011 154,432
Participants 772,898 585,815
--------- ---------
952,909 740,247
Investment income:
Net realized and unrealized appreciation of
investments (note 3) 863,733 481,436
Interest 27,323 32,014
--------- ---------
Net investment income 891,056 513,450
--------- ---------
Total additions 1,843,965 1,253,697
Deductions from net assets attributed to:
Distributions to participants (482,259) (116,330)
Administrative expenses (61) (784)
--------- ---------
Total deductions (482,320) (117,114)
--------- ---------
Net increase in net assets available
for participant benefits 1,361,645 1,136,583
Net assets available for participant benefits:
Beginning of year 4,879,085 3,742,502
--------- ---------
End of year $ 6,240,730 4,879,085
========= =========
See accompanying notes to financial statements.
3
<PAGE>
AIR METHODS CORPORATION
401(k) AND RETIREMENT SAVINGS PLAN
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1997 AND 1996
- -------------------------------------------------------------------------------
(1) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
(a) BASIS OF FINANCIAL STATEMENT PRESENTATION
The Air Methods Corporation 401(k) and Retirement Savings Plan (the
Plan) is a defined contribution plan sponsored by Air Methods
Corporation (the Employer).
The accompanying financial statements have been prepared on the accrual
basis of accounting and present the net assets available for participant
benefits and the changes in those net assets.
The preparation of financial statements in conformity with generally
accepted accounting principles requires the plan administrator 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 increases
and decreases to plan assets during the reporting period. Actual results
could differ from those estimates.
(b) INVESTMENTS
The Plan's investments are managed by Great-West Life & Annuity
Insurance Company, the trustee of the Plan. Investments in equity and
fixed income pooled funds are stated at fair values based upon quoted
market prices of securities underlying the pooled funds. The common
stock of the Employer, which was added as an investment option on
February 1, 1997, is stated at fair value based upon the quoted market
price. Short Term and Guaranteed Certificate Funds are stated at cost
which approximates market. Changes in market values after the plan
year-end are not reflected in the accompanying financial statements.
Investment transactions are recorded on the date of purchase or sale
(trade date). Gains and losses on sales of investments are computed
using the average cost method.
(c) LOANS TO PARTICIPANTS
Loans to plan participants are recorded at cost less principal balances
repaid. The loans bear interest at the prime rate plus 2% and have
maximum terms of five years, except for loans for principal residences,
which may have a term of up to fifteen years. The interest rates on
loans outstanding range from 8% to 11% at December 31, 1997.
(2) PLAN DESCRIPTION
The following summary of the Plan provides general information only.
Participants should refer to the Plan agreement for a more complete
description of the Plan's provisions.
4
<PAGE>
AIR METHODS CORPORATION
401(k) AND RETIREMENT SAVINGS PLAN
NOTES TO FINANCIAL STATEMENTS, CONTINUED
- -------------------------------------------------------------------------------
(2) PLAN DESCRIPTION (CONTINUED)
(a) GENERAL
The Plan was established effective January 1, 1989 by the Employer for
the benefit of its employees and to qualify under Section 401(k) of the
Internal Revenue Code. The Employer contracts with the trustee and
custodian for the investing, safekeeping and accounting for the Plan's
assets and valuation of the individual participant's accounts.
Employees who have completed six months of service and are over the age
of 18 are eligible to participate in the Plan.
Although the Employer has not expressed any intent to terminate the
Plan, it may do so at any time. Each participant is assessed an annual
administrative fee, which varies based upon the number of participants
and rates negotiated by the Employer.
(b) CONTRIBUTIONS
Employer contributions were made to the Plan at a rate of 1% of the
participant's gross salary plus 20% of the participant's contribution,
limited to the first 6% of the participant's gross salary through
January 1997. Effective February 1, 1997, the employer match percentage
was increased to 50% of the first 5% of the employee's salary
contributed, and the 1% employer contribution per employee was
discontinued.
Participants are allowed to contribute up to 15% of their total biweekly
compensation and the contributions are invested at the direction of the
participant in a variety of investment options, as described in note 3.
Maximum contributions by participants are limited as a result of the
provisions of the Tax Reform Act of 1986 ($9,500 in 1997 and 1996).
Included in participants' contributions are rollovers from other
qualified plans of $114,446 and $26,359 in 1997 and 1996, respectively.
(c) DISTRIBUTIONS
Withdrawals from the Plan may be made by a participant or beneficiary
upon death, disability, retirement, financial hardship or termination of
employment. Distributions are either in a lump sum cash payment or
through a ten-year certain life annuity.
Benefits are recorded when paid. For financial statement reporting
purposes, benefits payable are not accrued and are considered as part of
net assets available for participant benefits. There were no benefits
payable to participants who had withdrawn from participation in the Plan
as of December 31, 1997 or 1996.
5
<PAGE>
AIR METHODS CORPORATION
401(k) AND RETIREMENT SAVINGS PLAN
NOTES TO FINANCIAL STATEMENTS, CONTINUED
- -------------------------------------------------------------------------------
(d) VESTING
Participant contributions and the earnings thereon are fully vested at
all times. Prior to 1997, company contributions and the earnings thereon
were fully vested at all times. Effective February 1, 1997, vesting of
Company contributions and the earnings thereon is based on years of
continuous services, as follows:
Nonforfeitable
Years of vested
service percentage
------- ----------
1 33.33%
2 66.67%
3 100.00%
Forfeitures are used to reduce future employer contributions; there were
no forfeitures in 1997.
(3) INVESTMENTS
The Plan's various investments consist of pooled funds managed by the
trustee and are described as follows:
AGGRESSIVE GROWTH FUNDS - mutual funds consisting primarily of common
stocks.
GROWTH FUNDS - mutual funds consisting primarily of common stocks with a
record of paying dividends, and which are widely recognized Standard &
Poor's 500 and Standard & Poor's Mid-Cap issues or are of firms that have
had significant earnings growth over the past 10 years.
GROWTH & INCOME FUNDS - mutual funds consisting primarily of common stocks
of well known companies with histories of stable and improving revenue and
earnings, and fixed income and money market securities.
BOND FUNDS - mutual funds consisting of government agency mortgage-related
securities and investment grade corporate debt securities and debt
securities of the U.S. government or its agencies.
INTERNATIONAL FUNDS - mutual funds consisting primarily of common stocks
from around the world.
SHORT TERM FUND - mutual fund consisting of short term money market
securities.
GUARANTEED CERTIFICATE FUND - fund similar to a certificate of deposit
where funds deposited earn a guaranteed rate of return paid by the
trustee.
EMPLOYER STOCK - common stock of Air Methods Corporation.
6
<PAGE>
AIR METHODS CORPORATION
401(k) AND RETIREMENT SAVINGS PLAN
NOTES TO FINANCIAL STATEMENTS, CONTINUED
- -------------------------------------------------------------------------------
The Plan's investments were as follows at December 31:
Fair value
---------------------
1997 1996
---- ----
Aggressive Growth Funds $ 2,392,321 * 1,972,459 *
Growth Funds 1,299,598 * 997,992 *
Growth & Income Funds 1,015,526 * 710,531 *
Bond Funds 404,835 * 363,993 *
International Funds 227,524 203,401
Short Term Fund 299,936 145,241
Guaranteed Certificate Fund 251,878 250,258 *
Air Methods Corporation Stock 3,940 -
--------- -------
$ 5,895,558 4,643,875
========= =======
* Represents investments that are 5% or more of the Plan's net assets.
Net appreciation (depreciation) in fair value for the years ended December
31, including realized gains and losses, was as follows:
1997 1996
---- ----
Aggressive Growth Funds $ 392,256 214,607
Growth Funds 254,795 131,968
Growth & Income Funds 169,109 96,031
Bond Funds 25,154 11,671
International Funds 18,227 22,020
Short Term Fund 7,691 5,139
Employer Stock (3,499) -
--------- -------
$ 863,733 481,436
========= =======
(4) FEDERAL INCOME TAXES
The Plan has received a determination letter from the Internal Revenue
Service stating that the Plan constitutes a qualified plan under Section
401(k) of the Internal Revenue Code (IRC) and is, therefore, exempt from
Federal income taxes under provisions of Section 501(a) of the IRC. Once
qualified, the Plan is required to operate in conformity with the IRC to
maintain its qualification. The Plan administrator is not aware of any
course of action or series of events that have occurred that might adversely
affect the Plan's qualified status.
Except for participant after-tax contributions, participants are not subject
to income taxes on contributions or other accumulations in their account
until a distribution is made from the Plan.
7
<PAGE>
AIR METHODS CORPORATION
401(K) AND RETIREMENT SAVINGS PLAN
NOTES TO FINANCIAL STATEMENTS, CONTINUED
- -------------------------------------------------------------------------------
(5) SUMMARY OF NET ASSETS AND CHANGES IN NET ASSETS BY INVESTMENT OPTION
The net assets available for participant benefits as of
December 31, 1997 and the changes in those net assets for the year
then ended by investment option are summarized as follows:
<TABLE>
<CAPTION>
Guaran-
Loans Aggres- -teed
to sive Growth & Inter- Short Certif-
partic- Growth Growth Income Bond national Term icate Employer
Totals ipants Funds Funds Funds Funds Funds Fund Fund Stock
------ ------ ----- ----- ----- ----- ----- ---- ---- -----
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Net assets available for
participant benefits,
beginning of year $ 4,879,085 235,210 1,972,459 997,992 710,531 363,993 203,401 145,241 250,258 -
Contributions:
Employer 180,011 - 69,998 37,414 31,367 13,802 9,346 12,365 5,719 -
Participants 772,898 - 313,526 159,128 121,639 70,499 45,695 39,840 22,571 -
--------- ------- --------- --------- --------- ------- ------- ------- ------- -----
952,909 - 383,524 196,542 153,006 84,301 55,041 52,205 28,290 -
--------- ------- --------- --------- --------- ------- ------- ------- ------- -----
Investment income:
Net realized and
unrealized
appreciation
(depreciation)
of investments 863,733 - 392,256 254,795 169,109 25,154 18,227 7,691 - (3,499)
Interest 27,323 14,515 - - - - - - 12,808 -
--------- ------- --------- --------- --------- ------- ------- ------- ------- -----
891,056 14,515 392,256 254,795 169,109 25,154 18,227 7,691 12,808 (3,499)
--------- ------- --------- --------- --------- ------- ------- ------- ------- -----
Total additions 1,843,965 14,515 775,780 451,337 322,115 109,455 73,268 59,896 41,098 (3,499)
Distributions
to participants (482,259) - (146,953) (134,245) (64,528) (32,521) (49,584) (26,170) (28,258) -
Administrative expenses (61) - (12) (13) (2) (1) (1) (26) (6) -
Loans to participants,
net of repayments - 95,447 (58,633) (14,247) (11,437) (13,235) 44 (721) 2,782 -
Net transfers - - (150,320) (1,226) 58,847 (22,856) 396 121,716 (13,996) 7,439
--------- ------- --------- --------- --------- ------- ------- ------- ------- -----
Net increase in net
assets available
for participant
benefits 1,361,645 109,962 419,862 301,606 304,995 40,842 24,123 154,695 1,620 3,940
--------- ------- --------- --------- --------- ------- ------- ------- ------- -----
Net assets available
for participant bene-
fits end of year $ 6,240,730 345,172 2,392,321 1,299,598 1,015,526 404,835 227,524 299,936 251,878 3,940
========= ======= ========= ========= ========= ======= ======= ======= ======= =====
</TABLE>
8
<PAGE>
AIR METHODS CORPORATION
401(k) AND RETIREMENT SAVINGS PLAN
Notes to Financial Statements, Continued
- -------------------------------------------------------------------------------
(5) SUMMARY OF NET ASSETS AND CHANGES IN NET ASSETS BY INVESTMENT OPTION
(CONTINUED)
The net assets available for participant benefits as of December 31, 1996
and the changes in those net assets for the year then ended by
investment option are summarized as follows:
<TABLE>
<CAPTION>
Guaran-
teed
Loans to Aggressive Growth & Inter- Short Certif-
partic- Growth Growth Income Bond national Term icate
Totals pants Funds Funds Funds Funds Funds Fund Fund
--------- ------- --------- ------- ------- ------- ------- ------- -------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Net assets available for
participant benefits,
beginning of year $ 3,742,502 172,301 1,498,203 712,231 519,331 315,205 155,775 133,828 235,628
Contributions:
Employer 154,432 - 58,976 31,009 21,799 11,388 7,453 18,422 5,385
Participants 585,815 - 255,333 131,714 82,393 36,867 28,952 29,506 21,050
--------- ------- --------- ------- ------- ------- ------- ------- -------
740,247 - 314,309 162,723 104,192 48,255 36,405 47,928 26,435
--------- ------- --------- ------- ------- ------- ------- ------- -------
Investment income:
Net realized and
unrealized
appreciation of
investments 481,436 214,607 131,968 96,031 11,671 22,020 5,139 -
Interest 32,014 19,410 - - - - - - 12,604
--------- ------- --------- ------- ------- ------- ------- ------- -------
513,450 19,410 214,607 131,968 96,031 11,671 22,020 5,139 12,604
--------- ------- --------- ------- ------- ------- ------- ------- -------
Total additions 1,253,697 19,410 528,916 294,691 200,223 59,926 58,425 53,067 39,039
Distributions
to participants (116,330) (5,267) (37,078) (12,165) (9,294) (6,958) (6,282) (14,795) (24,491)
Administrative expenses (784) (73) (19) (174) (39) (29) (26) (310) (114)
Loans to participants, net
of repayments - 48,839 (24,684) (24,256) (7,028) 5,364 (1,584) 1,145 2,204
Net transfers - - 7,121 27,665 7,338 (9,515) (2,907) (27,694) (2,008)
--------- ------- --------- ------- ------- ------- ------- ------- -------
Net increase in net
assets available for
participant
benefits 1,136,583 62,909 474,256 285,761 191,200 48,788 47,626 11,413 14,630
--------- ------- --------- ------- ------- ------- ------- ------- -------
Net assets available for
participant benefits,
end of year $ 4,879,085 235,210 1,972,459 997,992 710,531 363,993 203,401 145,241 250,258
========= ======= ========= ======= ======= ======= ======= ======= =======
</TABLE>
9
<PAGE>
<TABLE>
<CAPTION>
SCHEDULE 1
AIR METHODS CORPORATION
401(k) AND RETIREMENT SAVINGS PLAN
ITEM 27a - SCHEDULE OF ASSETS HELD FOR INVESTMENT PURPOSES
DECEMBER 31, 1997
- ------------------------------------------------------------------------------------------
Identity of Issuer, Borrower, Lessor or Similar Party Cost Fair value
- ----------------------------------------------------- ---- ----------
GREAT WEST LIFE & ANNUITY INSURANCE COMPANY POOLED FUNDS:
AGGRESSIVE GROWTH FUNDS:
<S> <C> <C>
Aggressive Growth Fund I $ 1,254,070 1,502,962
Aggressive Growth Fund II 580,248 640,331
Aggressive Growth Fund III 27,716 32,712
Aggressive Growth Fund IV 38,756 47,211
Aggressive Growth Fund V 56,258 64,710
Profile Series I 88,199 104,395
--------- ---------
2,045,247 2,392,321
--------- ---------
GROWTH FUNDS:
Growth Fund I 205,526 272,577
Growth Fund II 165,989 223,672
Growth Fund III 453,973 580,997
Growth Fund IV 20,835 28,068
Growth Fund V 191 199
Profile Series II 161,690 194,085
--------- ---------
1,008,204 1,299,598
--------- ---------
GROWTH & INCOME FUNDS:
Growth & Income Fund I 85,812 100,896
Growth & Income Fund II 443,824 573,462
Growth & Income Fund III 86,783 109,245
Growth & Income Fund IV 93,992 114,319
Growth & Income Fund V 15,922 17,415
Profile Series III 87,153 98,307
Profile Series IV 1,672 1,882
--------- ---------
815,158 1,015,526
--------- ---------
BOND FUNDS:
Bond Fund I 225,212 249,549
Bond Fund II 81,400 87,544
Bond Fund III 45,993 51,584
Bond Fund IV 15,566 16,158
--------- ---------
368,171 404,835
--------- ---------
GUARANTEED CERTIFICATE FUNDS 251,878 251,878
--------- ---------
INTERNATIONAL FUNDS:
International Fund I 172,521 197,046
International Fund II 10,830 10,266
International Fund III 6,126 6,483
International Fund IV 7,556 6,220
International Fund V 7,557 7,509
--------- ---------
204,590 227,524
--------- ---------
SHORT TERM FUND II 292,291 299,936
--------- ---------
Total pooled funds 4,985,539 5,891,618
--------- ---------
EMPLOYER STOCK:
Air Methods Corporation 3,272 3,940
--------- ---------
LOANS TO PARTICIPANTS: 333,984 333,984
Interest rates ranging from 8% to 11% --------- ---------
$ 5,322,795 6,229,542
========= =========
</TABLE>
See accompanying independent auditors' report.
10
<PAGE>
<TABLE>
<CAPTION>
SCHEDULE 2
AIR METHODS CORPORATION
401(k) AND RETIREMENT SAVINGS PLAN
ITEM 27d - SCHEDULE OF REPORTABLE TRANSACTIONS
YEAR ENDED DECEMBER 31, 1997
- -------------------------------------------------------------------------------------------------------------------------------
Selling
price and
current value of Net
Identity of Description Purchase asset at Cost of realized
issuer of asset price transaction date asset gain
------ -------- ----- ---------------- ----- ----
<S> <C> <C> <C> <C> <C>
Great-West Life & Annuity Aggressive Growth Fund I $ - 340,086 298,597 41,489
Insurance Company
Great-West Life & Annuity Short Term Fund II 312,253 - 312,253 -
Insurance Company
</TABLE>
See accompanying independent auditors' report.
11
<PAGE>
Pursuant to the requirements of the Securities Exchange Act of 1934, the
trustees (or other persons who administer the employee benefit plan) have
duly caused this annual report to be signed on its behalf by the undersigned
thereunto duly authorized.
AIR METHODS CORPORATION
401(k) AND RETIREMENT SAVINGS PLAN
/s/Kathleen Ann Joyce
Date 7/15/98 ----------------------------------
------------------------- (Signature)
