For the transition period from                                                           to ________________________

                                                               Commission file number 0-16079

Not Applicable

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

NASDAQ Stock Market
(Name of each exchange on which registered)

     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____

     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.      [   ]

     The aggregate market value of the common stock held by non-affiliates of the Registrant as of February 15, 2000 was approximately $25,656,000.⁽¹⁾ The number of outstanding shares of Common Stock as of February 15, 2000 was 8,271,178.

 ____________________

Air Methods Corporation, a Delaware corporation ("Air Methods" or "the Company"), was originally incorporated in Colorado in 1982 and now serves as one of the largest providers of air medical emergency transport services and systems throughout North America. As of December 31, 1999, the Company's Air Medical Services Division provided air medical transportation services to hospitals located in 17 states under 23 operating agreements with terms ranging from one to ten years and had transported approximately 160,000 patients. Mercy Air Service, Inc. ("Mercy Air"), the Company's wholly owned subsidiary, is an independent provider of air medical transportation services in southern California. The Company's Products Division designs, manufactures, and installs aircraft medical interiors and other aerospace products. Financial information for each of the Company's operating segments is included in the notes to the Company's consolidated financial statements in Item 8 of this report.

The Company's Air Medical Services Division provides its hospital clients with helicopters and airplanes equipped with medical interiors approved by the Federal Aviation Administration ("FAA") to 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. The Air Medical Services Division conducts its operations using predominantly Instrument Flight Rules ("IFR") certified aircraft and IFR-rated pilots. Maintenance and operation of the aircraft in accordance with Federal Aviation Regulations (FAR) Part 135 standards is the division's responsibility. The hospital clients are responsible for providing medical personnel and all medical care. Under the typical operating agreement with a hospital, the division earns approximately 70% of its revenue from a fixed monthly fee and 30% from an hourly flight fee from the hospital, regardless of when, or if, the hospital 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 and in hull and liability insurance premiums. Because the majority of the division's flight revenue is generated from fixed monthly fees, seasonal fluctuations in flight hours do not significantly impact monthly revenue in total. In 1999 the Air Medical Services Division began operations under new operating agreements in Salt Lake City, Utah; Scottsbluff, Nebraska; and Mason City, Iowa.

The Company performs non-destructive component testing, engine repair, and component overhaul at its headquarters in the Denver metropolitan area. The Company is a Customer Service Facility for Bell Helicopter, Inc. ("Bell") and an FAA Certified Repair Station authorized to perform airframe, avionics, and limited engine repair. In-house repair, maintenance, and testing capabilities provide cost savings and decrease aircraft down time by avoiding the expense and delay of having this work performed by nonaffiliated vendors.

The Company operates some of its domestic Air Medical Services Division contracts under the service mark AIR LIFE® and has successfully defended the service mark against infringement actions in Colorado, California, and Kansas. The air medical transportation industry identifies the service mark with the Company's high quality of customer support and standard of service.

In July 1997 the Company acquired all of the common stock of Mercy Air Service, Inc., a California corporation, and substantially all of the net assets of Helicopter Services, Inc., a California corporation (together "Mercy Air"). Mercy Air has operated as an independent provider of air medical transportation services throughout southern California since 1988. Independent provider operations include medical care, aircraft operation and maintenance, 24-hour communications and dispatch, and medical billing and collections. Mercy Air operates nine helicopters under both Instrument Flight Rules and Visual Flight Rules in southern California and Las Vegas and is a leading provider of air medical transportation services in Orange, Riverside, San Diego, Kern, San Bernardino, and Los Angeles counties. Although Mercy Air does not contract directly with specific hospitals, it has long-standing relationships with several leading healthcare institutions. Mercy Air provides air medical services in the Santa Barbara region under a joint venture agreement which calls for Mercy Air to provide medical staffing, dispatch, and medical billing and collection and to share equally in the net operating results of the venture with its partner. Revenue from Mercy Air's flight operations 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 revenue generated from Mercy Air's operations to fluctuate accordingly. In March 1999, the Company purchased the business operations of another air ambulance service provider in San Diego to expand Mercy Air's flight volume in the region.

The Company's Products Division manufactures modular, multi-functional medical interiors; multi-mission interiors; and other aerospace products. The key features of the multi-functional and multi-mission interiors are flexibility of configuration, which can be easily converted for other transport needs, and simplicity of installation and maintenance. Although medical interiors ranging from basic life support systems to intensive care units have comprised the majority of the Products Division's business, the combination of its engineering, manufacturing, and certification capabilities has also allowed the division to design and integrate other aerospace products, such as aircraft navigation systems, environmental control systems, and structural and electrical systems. Manufacturing capabilities include composites, machining and welding, sheetmetal, and upholstery. To optimize the efficiency of the design phase, the engineering department uses computer-aided design work stations and finite element analysis software. The division also offers quality assurance and certification services pursuant to Parts Manufacturer Approvals ("PMA's"). The division is currently pursuing registration under the International Standards Organization ("ISO") quality standards.

The Products Division markets its services and products both domestically and internationally to a variety of customers through an extensive network of marketing representatives. Development of the modular, multi-functional interior has enabled the division to move from its prior concentration in custom-designed projects to produce components individually for a variety of airframes. The Company maintains patents covering several products, including the Multi-Functional Floor, Articulating Patient Loading System, and Modular Equipment Frame, all of which were developed as part of the modular interior. Raw materials and components used in the manufacture of interiors and other products are generally widely available from several different vendors.

In 1999 the Products Division received a contract to begin low-rate, initial production ("LRIP") of Multi-Mission Medevac Systems for the UH-60Q helicopter from the prime contractor for the UH-60Q program with the Department of Defense. The contract calls for the division to manufacture six UH-60Q units, with an option for five additional systems. The division continued design work on a Spinal Cord Injury Transport System ("SCITS") for the U.S. Air Force and manufactured four test units for developmental testing and evaluation and is under contract to produce an additional ten SCITS units for operational testing and evaluation. During 1999 the division installed components of its multi-functional interior for eight commercial customers, in addition to completing five medical interiors and various other projects for the Air Medical Services Division.

Competition in the air medical transportation industry comes primarily from four national operators: Corporate Jets, Inc.; OmniFlight, Inc.; Petroleum Helicopters, Inc.; and Rocky Mountain Helicopters, Inc. Mercy Air also faces competition from smaller regional carriers and alternative air ambulance providers such as sheriff departments. Operators generally compete on the basis of price, safety record, accident prevention and training, and the medical capability of the aircraft offered. Price is a significant element of competition as many healthcare organizations continue to move toward consolidation and strict cost containment, reflecting uncertainty concerning the future structure of healthcare providers.

The Company's competition in the medical interior design and manufacturing industry comes primarily from two companies based in the United States and one European company. Competition is based mainly on product features, performance, price, and weight.

The Company believes that demand for comprehensive medical transportation will continue to increase with the closing and consolidation of hospitals. The Company will pursue growth as an air medical transportation operator through responses to selected Requests for Proposal (RFP's) received from healthcare centers; through growing independent programs based on the Mercy Air model of operations; and through business combinations such as joint ventures, mergers and acquisitions. RFP's will be evaluated based upon the program's expected contribution to the Company's profitability objectives as well as potential increase in market share.

In several of Mercy Air's service areas, local government agencies determine the distribution of call volume among competitors. Mercy Air plans to maximize its market share by developing strategic alliances with other operators in local markets and repositioning its aircraft. In addition, several governmental entities have competed against Mercy Air contrary to the provisions of their charters. Mercy Air will continue to lobby for change in these entities' practices.

The Company also intends to aggressively market its three aircraft interior product lines through domestic and foreign marketing representatives to original equipment manufacturers as well as air medical operators. The government air medical industry continues to be a market of primary importance, both domestically and internationally. The Company believes that demand for medical aircraft interiors will focus on products which are easy to install, maintain, and operate and which can be rapidly converted to other uses. The Company has also retained a mergers and acquisitions specialist to assist in developing its acquisition strategy and identify targets to expand the Products Division's aerospace technology products business.

Contracts in Process

As of December 31, 1999, the Company was continuing the production of six UH-60Q Multi-Mission Medevac Systems and four SCITS test units. These projects are scheduled for delivery in the first and second quarters of 2000, with remaining revenue estimated at $2.9 million. As of December 31, 1998, the portion of medical interiors and other products in process to be completed was $2.4 million.

As of December 31, 1999, the Company retained 389 full time and 71 part time employees, comprised of 149 pilots; 134 aviation machinists, airframe and powerplant ("A&P") engineers and other manufacturing/maintenance positions; 77 flight nurses and paramedics; and 100 business and administrative personnel. All of the Company's pilots are IFR-rated and have completed an extensive ground school and flight training program at the commencement of their employment with the Company, as well as local area orientation and annual training provided by the Company. All of the Company's 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 Pediatric Advanced Life Support certifications.

The Company's employees are not covered by any collective bargaining agreements and management believes that its relations with employees are satisfactory. The Company provides salary and benefits packages competitive with those offered by other providers of air medical services based on the individual qualifications of employees.

The Company is subject to the Federal Aviation Act of 1958, as amended. All flight and maintenance operations of the Company are regulated and actively supervised by the U.S. Department of Transportation through the FAA. Medical interiors and other aerospace products developed by the Company are subject to FAA certification. The Company and Mercy Air each hold a Part 135 Air Carrier Certificate and a Part 145 Repair Station Certificate from the FAA. In addition, the SCITS unit developed by the Products Division is subject to U.S. Food and Drug Administration regulation.

The Company leases its headquarters, consisting of approximately 70,000 square feet of office and hangar space, in metropolitan Denver, Colorado at Centennial Airport. The lease expires in March 2003 and the approximate annual rent is $568,000.

Mercy Air's headquarters consist of approximately 19,000 square feet of office and hangar space owned by the Company in Rialto, California. The Company pays minimal rent for the land at the airport where the facilities are located. The Company believes that these facilities are in good condition and suitable for the Company's present requirements.

As of December 31, 1999, the Company managed and operated a fleet of 49 aircraft, consisting of 43 helicopters and 6 airplanes. Of these aircraft, the Company owns 25 helicopters and one airplane and leases 11 helicopters and one airplane. The Company operates 7 helicopters and 4 airplanes owned by client hospitals and other third parties in connection with existing air medical contracts. The composition of the Company's owned and leased helicopter and airplane fleet as of December 31, 1999, is as follows:

(1) Includes aircraft acquired under capital leases.

The Company generally pays all insurance, taxes, and maintenance expense for each aircraft in its fleet. Because helicopters are insured at replacement cost which usually exceeds book value, the Company believes that helicopter accidents covered by hull and liability insurance will generally result in full reimbursement of any damages sustained. In the ordinary course of business, the Company may from time to time purchase and sell helicopters in order to best meet the specific needs of its contracts.

The Company has experienced no significant difficulties in obtaining required parts for its helicopters. Repair and replacement components are purchased primarily through Bell, since Bell aircraft make up the majority of the Company's fleet. Bell is a major helicopter manufacturer with extensive links to the defense industry, and the Company does not anticipate any interruption in Bell's manufacturing of replacement parts and components in the near future. Any termination of production by Bell would require the Company to obtain spare parts from other suppliers, which are not currently in place.

Not applicable.

No matters were submitted to a vote of security holders during the quarter ended December 31, 1999.

The Company's common stock is traded on the NASDAQ Stock Market under the trading symbol "AIRM." The following table shows, for the periods indicated, the high and low closing prices for the Company's 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.

As of February 15, 2000, there were approximately 356 holders of record of the Company's common stock. The Company estimates that it has approximately 3,200 beneficial owners of common stock.

The Company has not paid any cash dividends since its inception and intends to retain any future earnings to finance the growth of the Company's business rather than to pay dividends. Payment of cash dividends is restricted by the Company's line of credit agreement.

The following tables present selected consolidated financial information of the Company and its subsidiary which has been derived from the Company's audited consolidated financial statements. This selected financial data should be read in conjunction with the consolidated financial statements of the Company and notes thereto appearing in Item 8 of this report. Revenue for the years ended 1999, 1998, and 1997 increased in part as a result of the Company's acquisition of Mercy Air. See "Business - General" in Item 1 and "Management's Discussion and Analysis" in Item 7 of this report.

The Company reported net income of $3,445,000 for the year ended December 31, 1999, compared to $257,000 for the year ended December 31, 1998. The change in operating results in 1999 is attributable to improved profitability for all three divisions of the Company, driven by increased flight volume for the Company's Air Medical Services Division and subsidiary Mercy Air, higher volume of contracts for Products Division, and cost containment of operating expenses.

Flight revenue increased $7,581,000, or 17.6%, from $42,996,000 for the year ended December 31, 1998, to $50,577,000 for the year ended December 31, 1999. Flight revenue for the Air Medical Services Division increased 11.2% for the year ended December 31, 1999, primarily due to revenue of $2.6 million from new or expanded contracts and to annual price increases in contracts with hospital clients. Flight volume for continuing contracts also increased approximately 8% in 1999. Flight revenue for Mercy Air increased 29.9% for the year ended December 31, 1999, compared to 1998, due to a full year of operations at new bases in San Diego and Las Vegas and to the purchase of the business operations of another air ambulance service provider in San Diego in March 1999. Transport volume also increased 12.9%, excluding the effect of the new bases, for the year ended December 31, 1999, as Mercy Air achieved all-time record high patient transports during the third quarter of 1999. Flight revenue is recorded net of contractual allowances under agreements with third-party payers.

Sales of medical interiors and products increased $1,691,000, or 51.4%, from $3,290,000 for the year ended December 31, 1998, to $4,981,000 for the year ended December 31, 1999. Significant projects in 1999 included design and manufacture of SCITS units for the U.S. Air Force and manufacture of multi-functional interiors for six Bell helicopters and one MD902 helicopter. The Company also began production of six UH-60Q Multi-Mission Medevac Systems in the third quarter of 1999. Revenue by product line for the year ended December 31, 1999, was as follows:

• $2,480,000 - manufacture and installation of modular, multi-functional interiors
• $985,000 - manufacture of multi-mission interiors
• $1,516,000 - design and manufacture of other aerospace products

Significant projects in 1998 included production of electrical system components for the U. S. Air Force HH-60G helicopter, manufacture of multi-functional interiors for three Bell helicopters, and SCITS design work. Revenue recognized in the year ended December 31, 1998, consisted of the following:

• $1,594,000 - manufacture and installation of modular, multi-functional interiors
• $90,000 - design and manufacture of multi-mission interiors
• $1,606,000 - design and manufacture of other aerospace products

Cost of medical interiors and products increased by 33.0% for the year ended December 31, 1999, as compared to the previous year. The increase is consistent with the increase in related product revenue over the same period. In addition, the average net margin earned on projects during 1999 was 24% compared to 15% in 1998, partly due to the commencement of production on UH-60Q Multi-Mission Medevac Systems.

Parts and maintenance sales and services increased 21.0% for the year ended December 31, 1999, compared to the year ended December 31, 1998, due to an increase in sales volume. Cost of parts and maintenance sales and services for the year also increased accordingly.

The Company recognized $79,000 in international franchise revenue in the year ended December 31, 1999, compared to $275,000 in the year ended December 31, 1998. In 1999 the Company renegotiated the franchise agreement with Unimed Air S/A ("Unimed Air"), the Company's Brazilian franchisee, to reduce fees to $13,000 per month. In September 1999 Unimed Air ceased making payments under the agreement. The Company recognizes international franchise revenue as payments are received.

The Company holds a 50% interest in a joint venture to provide air ambulance services in the Santa Barbara region of California. Under the agreement, Mercy Air provides medical staffing, dispatch, marketing, and medical billing and collection functions. The Company also holds a 50% interest in a joint venture to provide management services for a ground ambulance operation in New York. Other income for the year ended December 31, 1999, consists of $90,000 recognized from operations of the joint ventures, compared to a loss of $101,000 in the year ended December 31, 1998.

Flight center costs (consisting primarily of pilot, mechanic, and medical staff salaries and benefits) increased 16.6% for the year ended December 31, 1999, compared to 1998. Flight center costs for the Air Medical Services Division increased 10.0% in 1999, primarily due to $557,000 in costs for new hospital contracts and increases in salaries for merit pay raises. Flight center costs related to Mercy Air's operations increased 31.8% in the year ended December 31, 1999, primarily due to costs of approximately $850,000 for new bases of operation established during 1998 and to merit pay raises.

Aircraft operating expenses decreased 1.8% for the year ended December 31, 1999, in comparison to the year ended December 31, 1998. Aircraft operating expenses consist of fuel, insurance, and maintenance costs and generally are a function of the size of the fleet, type of aircraft flown, and number of hours flown. The impact of adding four helicopters and two airplanes to the fleet was offset by lower aircraft maintenance costs for both the Air Medical Services Division and Mercy Air during 1999. The Company's hull insurance rates also decreased approximately 30% effective July 1, 1999.

Aircraft rental expense increased 7.3% for the year ended December 31, 1999, compared to the previous year. Lease expense related to three new aircraft for the Air Medical Services Division totaled $510,000 in 1999. The impact of adding these aircraft was offset in part during the year by refinance or expiration of three lease agreements.

Depreciation and amortization expense increased 21.2% for the year ended December 31, 1999, reflecting the addition of a Bell 222 helicopter, as well as two new medical interiors, to the Air Medical Services Division's fleet of owned aircraft. The Company completed the renovation of its corporate headquarters facility in Colorado and Mercy Air's headquarters in California in early 1999, increasing depreciable leasehold improvements by approximately $635,000. Expenses in 1999 also includes approximately $225,000 for amortization of a non-compete agreement related to the buyout of another air ambulance service provider in San Diego.

Bad debt expense is estimated during the period the related services are performed based on historical experience for Mercy Air's operations and adjusted as required based on actual collections in subsequent periods. The increase of 39.4% for the year ended December 31, 1999, compared to 1998 reflects the increase in flight revenue for Mercy Air. Bad debt expense for the year ended December 31, 1999, was approximately 20% of Mercy Air's net flight revenue, compared to 19% in 1998. Mercy Air invoices patients and their insurers directly for services rendered rather than invoicing hospital customers. Bad debt expense related to the Air Medical Services Division was not significant in either 1999 or 1998.

General and administrative expenses remained relatively constant for the year ended December 31, 1999, compared to 1998, despite the revenue growth over the same period. Most of the general and administrative costs are fixed in nature and do not vary with revenue volume.

In the year ended December 31, 1999, the Company recorded an income tax benefit of $255,000 from the recognition of a portion of its deferred tax asset as a result of current period taxable losses. A deferred tax liability was generated by a change in tax accounting method for Mercy Air's trade receivables from cash to accrual basis when the Company acquired Mercy Air in 1997. The taxable income created by this change was unable to be offset by the Company's net operating loss carryforwards but could be offset by current period taxable losses.

The Company reported net income of $257,000 for the year ended December 31, 1998, compared to $1,696,000 for the year ended December 31, 1997. The change in operating results was primarily attributable to costs invested in the start-up of new operations for the Air Medical Services Division and Mercy Air and other factors discussed below. Start-up costs include flight and medical crew salaries and training and aircraft ownership expenses, such as interest and lease expense.

Flight revenue increased $9,027,000 or 26.6% from $33,969,000 for the year ended December 31, 1997, to $42,996,000 for the year ended December 31, 1998. The increase was primarily due to flight revenue of $14.8 million from Mercy Air's operations in 1998 compared to $6.4 million generated by Mercy Air from the acquisition date through December 31, 1997. Revenue for Mercy Air in 1998 also included $1.4 million from operations at two new locations in Las Vegas and San Diego. Flight revenue from the Company's Air Medical Services Division increased 2.1% for the year ended December 31, 1998, due to annual price increases in contracts and the addition of two new contracts, offset in part by the expiration of a contract in May 1998. Revenue flight hours on continuing contracts remained basically unchanged in 1998 as compared to 1997.

Sales of medical interiors and products decreased $60,000 or 1.8% from $3,350,000 for the year ended December 31, 1997, to $3,290,000 for the year ended December 31, 1998. Significant projects in 1998 included SCITS design work and the manufacture of electrical system components for the HH-60G helicopter. Revenue by product line was as follows:

• $1,594,000 - manufacture and installation of modular, multi-functional medical interiors
• $90,000 - design and manufacture of multi-mission interiors
• $1,606,000 - design and manufacture of other aerospace products

Significant projects in 1997 included the design and manufacture of UH-60Q Multi-Mission Medevac Systems and the manufacture of electrical system components for the HH-60G helicopter. Revenue recognized in 1997 consisted of the following:

• $778,000 - manufacture and installation of modular, multi-functional medical interiors
• $1,489,000 - design and manufacture of multi-mission interiors
• $1,083,000 - manufacture of other aerospace products

Cost of medical interiors decreased by 7.1% for the year ended December 31, 1998, as compared to the previous year, reflecting the decrease in sales volume and completion of the developmental phase of the UH-60Q Multi-Mission Medevac System in 1997. The Company did not invest in any similar developmental costs in 1998; the only developmental project in process during the year, the SCITS program, was a cost reimbursable contract. All other significant projects in process or completed during the year, with the exception of the electrical system components, represented adaptations of the multi-mission or modular medical interiors.

The increase in parts and maintenance sales and services in 1998, as compared with 1997, was due to the acquisition of Mercy Air in July 1997. Mercy Air provides helicopter maintenance services and parts to customers primarily in southern California. Cost of parts and maintenance sales and services also increased correspondingly in 1998.

 The Company recognized revenue of $275,000 from its Brazilian franchise during 1998, compared to $428,000 in 1997. The decrease was due to a decline in the number of subscribers as Unimed Air eliminated services to two cities and one state since 1997. In 1998 the franchise reduced its subscription rates to remain competitive and membership levels stabilized.

In 1998 the Company recognized net gains totaling $873,000 on the disposition of assets, including $870,000 from an insurance settlement for one of the Company's helicopters destroyed in an accident in January 1998. In 1997 net gains totaled $277,000, including $61,000 on the sale of an aircraft to the Company's Brazilian franchisee and $255,000 from the insurance settlement for one of the Company's helicopters destroyed in an accident in December 1997.

Flight center costs increased 40.3% in 1998 compared to 1997. Mercy Air's flight center costs increased $2,734,000 in 1998, reflecting a full year of operations compared to five months in 1997 and the expansion of operations into three new locations. Without the effect of the Mercy Air acquisition, flight center costs increased 14.8% in 1998 as a result of the addition of two new hospital contracts and merit pay increases in salaries. The change in flight center costs for 1998 also included an increase in workers compensation expense due to the impact of the helicopter accidents on the Company's workers compensation insurance rates through June 30, 1998.

Aircraft operating expenses increased 28.6% for the year ended December 31, 1998, compared to 1997. Expenses for Mercy Air's operations totaled $4,242,000 for the twelve months ended December 31, 1998, compared to $1,092,000 for five months in 1997. Expenses for Mercy Air in 1998 included $388,000 for two aircraft added to the fleet to expand operations into new locations. Absent the impact of the Mercy Air transaction, aircraft operating expenses decreased 1.4% in 1998. Costs of approximately $313,000 attributable to four aircraft added to the Company's fleet since last year were offset by a reduction in the Company's hull insurance rates effective July 1, 1997.

Aircraft rental expense increased 28.1% for the year ended December 31, 1998, compared to 1997. Lease expense for three aircraft added to the Company's fleet since 1997 totaled approximately $190,000 in 1998. The increase in rental expense also reflected a full year of expense for four aircraft, including two in Mercy Air's fleet, which were added during 1997.

Depreciation and amortization expense increased 14.6% for the year ended December 31, 1998. The addition of Mercy Air's aircraft and equipment increased depreciation by $494,000 in 1998. Excluding the impact of the Mercy Air acquisition, depreciation and amortization expense remained relatively unchanged during 1998.

Bad debt expense increased 73.2% for 1998 compared to 1997, reflecting the impact of twelve months of activity for Mercy Air compared to five months in 1997. Bad debt expense related to the Air Medical Services Division was not significant in either 1998 or 1997.

For the year ended December 31, 1998, other operating expenses reflected a loss of $101,000 recognized from the operations of the Company's joint venture in California.

The 34.3% increase in general and administrative expenses for the year ended December 31, 1998, compared to the year ended December 31, 1997, reflected the impact of the Mercy Air transaction. Excluding Mercy Air's expenses, general and administrative expenses increased 11.1% in 1998. This increase was primarily due to changes in administrative and human resources staffing to manage the expanded employee base with the acquisition of Mercy Air and addition of new hospital contracts. General and administrative expenses for 1998 also included approximately $100,000 for the Company's additional safety training and review programs implemented during the year in response to the helicopter accidents.

Interest expense increased 22.5% in 1998 compared to 1997. Interest expense for new debt incurred in the acquisition of Mercy Air totaled approximately $1,051,000 in 1998, compared to $444,000 in 1997. The impact of debt related to the Mercy Air transaction was offset in part during 1998 by refinancing notes totaling approximately $5.2 million at reduced interest rates and by pay-down of long-term debt and capital lease obligations.

The Company had working capital of $4,621,000 as of December 31, 1999, compared to $962,000 at December 31, 1998. The change in working capital position is primarily attributable to increases in receivables and costs in excess of billings in 1999. The increase in receivables is consistent with the increase in revenue for all three operating segments. The increase in costs in excess of billings is due to costs on the UH-60Q project which were invoiced in January 2000 after billing terms for the contract were finalized.

The Company had cash and cash equivalents of $2,242,000 as of December 31, 1999, compared to $2,407,000 at December 31, 1998. Cash generated by operations increased to $6.1 million in 1999 from $3.4 million in 1998. The increase is primarily due to the Company's improved profitability as discussed above in "Results of Operations."

Cash used for investing activities totaled $3.6 million in 1999, down from $4.4 million in 1998. Significant equipment acquisitions in 1999 included two medical aircraft interiors. Most of the aircraft added to the Company's fleet in 1999 were under operating lease agreements and, therefore, did not require capital investment. Significant equipment acquisitions in 1998 included a Bell 407 helicopter and four medical aircraft interiors.

Financing activities used $2.7 million in cash in 1999, compared to generating $41,000 in 1998. Uses of cash consisted of regular payments for long-term debt and capital lease obligations, pay down of balance on lines of credit, and purchases of common stock into treasury during 1999. In 1998, debt and capital lease payments were offset by proceeds from new note agreements.

Repayment of debt and capital lease obligations as well as operating lease agreements constitute the Company's long-term commitments to use cash. Balloon payments on long-term debt are due as follows: $1.1 million in 2003, $700,000 in 2004, and $3.1 million in 2007.

In August 1999 the Company entered into an agreement with a financial institution for a $2,700,000 line of credit with a two-year term and a variable interest rate equal to the bank's index. In the third quarter of 1999 the amount of the line was decreased to $2 million in exchange for eliminating the bank's lien against one of the Company's aircraft. The line has various covenants which limit the Company's ability to merge or consolidate with another entity, pay dividends, and change the nature of business operations. The Company is also required to maintain certain financial ratios as defined in the agreement. At December 31, 1999, the Company was in compliance with the financial covenants and had drawn $700,000 against the line.

In March 1999 the Company entered into a $1.1 million note payable with a company with interest at 8.16% to finance the acquisition of business operations of another air ambulance service provider in San Diego, finance the buyout of an aircraft under capital lease, and provide additional working capital. The note is collateralized by a Bell 222 helicopter.

As of December 31, 1999, the Company held unencumbered aircraft with a net book value of $5.9 million and has additional equity in other encumbered aircraft which could be utilized as collateral for borrowing funds as an additional source of working capital if necessary. The Company believes that these borrowing resources coupled with continued favorable results of operations will allow the Company to meet its obligations in the coming year.

The statements contained in this Outlook are based on current expectations. These statements are forward-looking, and actual results may differ materially. The Company undertakes no obligation to update any forward-looking statements.

Four hospital contracts are due for renewal in 2000. One of the contracts was renewed during the first quarter of 2000 for an additional two-year term; renewals on the other three contracts are still pending. The Company expects 2000 flight activity of current hospital customers to remain consistent with historical levels with increases for a full year of operations under the contracts begun in 1999.

The Company expects flight volume for Mercy Air's operations to be consistent with levels achieved in 1999 after the expansion of operations in San Diego. Mercy Air also added a ninth helicopter to its fleet in southern California late in 1999 primarily to provide organ procurement team and physician transport services.

In November 1999, the Company signed a non-binding letter of intent under which Mercy Air will acquire Area Rescue Consortium of Hospitals ("ARCH"), an independent provider of air medical transport services in the St. Louis region. The definitive purchase agreement and closing of the asset purchase are expected to be completed in the first quarter of 2000. Closing of the acquisition is contingent upon successful negotiation of the definitive agreement and obtaining various consents and approvals of the transaction.

The Company expects to complete production of six UH-60Q Multi-Mission Medevac Systems during the first and second quarters of 2000. The current contract for the UH-60Q program includes an option for five additional units which has not yet been exercised. The Army Program Objective Memorandum ("POM") includes funding for 357 units in total over the next 10 to 20 years. There can be no assurance that the current contract option will be exercised or orders for additional units will be received in 2000 or in future periods.

The testing phase of the SCITS program for the U.S. Air Force will continue in the first and second quarters of 2000. The long-range Air Force plan includes between 75 and 250 SCITS units over the next 5 years. The production contract for SCITS has not yet been awarded and there is no assurance that the contract will be awarded in 2000 or in future periods.

There can be no assurance that the Company will continue to renew operating agreements for the Air Medical Services Division, generate new profitable contracts for the Products Division, expand flight volume for Mercy Air, or close the acquisition of ARCH. However, based on the anticipated level of flight activity for its hospital customers and Mercy Air and the backlog of projects for the Products Division, the Company expects to generate sufficient cash flow to meet its operational needs throughout 2000.

Actual results achieved by the Company may differ materially from those described in forward-looking statements as a result of various factors, including but not limited to, those discussed above in "Outlook for 2000" and those described below.

• Flight volume - All of Mercy Air's revenue and approximately 30% of the Air Medical Services Division's revenue is dependent upon flight volume. Approximately 22% of the Company's operating expenses also vary with number of hours flown. Poor visibility, high winds, and heavy precipitation can affect the safe operation of helicopters and therefore result in a reduced number of flight hours. Prolonged periods of adverse weather conditions, especially in southern California where Mercy Air's operations are concentrated, could have an adverse impact on the Company's operating results. In southern California, the months from November through February tend to have lower flight volume due to weather conditions and other factors, resulting in lower operating revenue for Mercy Air during these months. Flight volume for Mercy Air's operations can also be affected by the distribution of calls among competitors by local government agencies and the entrance of competitors into a market.
• Collection rates - Mercy Air invoices patients and their insurers directly for services rendered, and the level of bad debt expense is driven by collection rates on these accounts. Collectibility is primarily dependent upon the health of the U.S. economy, especially in southern California. A significant or sustained downturn in the U.S. economy could have an adverse impact on the Company's bad debt expense.
• Dependence on third party suppliers - The Company currently obtains a substantial portion of its helicopter spare parts and components from Bell, because its fleet is composed primarily of Bell aircraft, and maintains supply arrangements with other parties for its engine and related dynamic components. Based upon the manufacturing capabilities and industry contacts of Bell and other suppliers, the Company believes it will not be subject to material interruptions or delays in obtaining aircraft parts and components but does not have an alternative source of supply for 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 the Company. Because of its dependence upon Bell for helicopter parts, the Company could also be subject to adverse impacts from unusually high price increases which are greater than overall inflationary trends. Increases in the Company's flight fees billed to its customers are generally limited to changes in the consumer price index.
• Department of Defense funding - The two major projects in process for the Products Division, UH-60Q and SCITS, are both dependent upon Department of Defense funding. Failure of the U.S. Congress to approve funding for the production of additional UH-60Q or SCITS units could have a material adverse impact on Products Division revenue.
• Governmental regulation - The air medical transportation services and products industry is subject to extensive regulation by governmental agencies, including the FAA, which impose significant compliance costs on the Company. In addition, reimbursement rates for air ambulance services established by governmental programs such as Medicare directly affect Mercy Air's revenue and indirectly affect Air Medical Services Division's revenue from its hospital customers. Changes in laws or regulations or reimbursement rates could have a material adverse impact on the Company's cost of operations or revenue from flight operations.
• Competition - The Air Medical Services Division faces significant competition from several national and regional air medical transportation providers for contracts with hospitals and other healthcare institutions. Operators generally compete on the basis of price, safety record, accident prevention and training, and the medical capability of the aircraft offered. There can be no assurance that the Company will be able to continue to compete successfully for new or renewing contracts in the future.

See Consolidated Financial Statements attached hereto.

None.

The information required by this item is incorporated by reference from the Company's Proxy Statement to be filed on or prior to April 29, 2000, for the Annual Meeting of Stockholders to be held June 13, 2000.

The information required by this item is incorporated by reference from the Company's Proxy Statement to be filed on or prior to April 29, 2000, for the Annual Meeting of Stockholders to be held June 13, 2000.

The information required by this item is incorporated by reference from the Company's Proxy Statement to be filed on or prior to April 29, 2000, for the Annual Meeting of Stockholders to be held June 13, 2000.

The information required by this item is incorporated by reference from the Company's Proxy Statement to be filed on or prior to April 29, 2000, for the Annual Meeting of Stockholders to be held June 13, 2000.

____________________

     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.

  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.

We have audited the accompanying consolidated balance sheets of Air Methods Corporation and subsidiary as of December 31, 1999 and 1998, and the related consolidated statements of operations, stockholders' equity, and cash flows for each of the years in the three-year period ended December 31, 1999. These consolidated financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on these consolidated 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 consolidated financial statements referred to above present fairly, in all material respects, the financial position of Air Methods Corporation and subsidiary as of December 31, 1999 and 1998, and the results of their operations and their cash flows for each of the years in the three-year period ended December 31, 1999, in conformity with generally accepted accounting principles.

Denver, Colorado
February 24, 2000

(Continued)

______________________________________________________________________________

See accompanying notes to consolidated financial statements.

See accompanying notes to consolidated financial statements.

(Continued)

Capital lease obligations of $90 were assumed to acquire equipment during the year ended December 31, 1998.

In connection with the acquisition of Mercy, the Company issued notes payable of $1,398 to the sellers as partial consideration for the acquisition during the year ended December 31, 1997.

See accompanying notes to consolidated financial statements.

As of December 31, 1999, the estimated period to complete contracts in process ranges from two to eighteen 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):

Long-term debt consists of the following at December 31 (amounts in thousands):

Rent expense relating to operating leases totaled $2,850,000, $2,719,000, and $2,255,000, for the years ended December 31, 1999, 1998, and 1997.

At December 31, 1999 and 1998, leased property held under capital leases included in equipment, net of accumulated depreciation, totaled $3,043,000 and $5,699,000, respectively.