Air Methods (Air Methods) Operating Income : $191 Mil (TTM As of Dec. 2016)

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What is Air Methods Operating Income?

Air Methods's Operating Income for the three months ended in Dec. 2016 was $41 Mil. Its Operating Income for the trailing twelve months (TTM) ended in Dec. 2016 was $191 Mil.

Operating Margin % is calculated as Operating Income divided by its Revenue. Air Methods's Operating Income for the three months ended in Dec. 2016 was $41 Mil. Air Methods's Revenue for the three months ended in Dec. 2016 was $297 Mil. Therefore, Air Methods's Operating Margin % for the quarter that ended in Dec. 2016 was 13.77%.

Air Methods's 5-Year average Growth Rate for Operating Margin % was 0.00% per year.

Operating Income or EBIT is linked to Return on Capital for both regular definition and Joel Greenblatt's definition. Air Methods's annualized ROC % for the quarter that ended in Dec. 2016 was 5.78%. Air Methods's annualized ROC (Joel Greenblatt) % for the quarter that ended in Dec. 2016 was 13.36%.

Air Methods Operating Income Historical Data

The historical data trend for Air Methods's Operating Income can be seen below:

* For Operating Data section: All numbers are indicated by the unit behind each term and all currency related amount are in USD.
* For other sections: All numbers are in millions except for per share data, ratio, and percentage. All currency related amount are indicated in the company's associated stock exchange currency.

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Air Methods Operating Income Chart

Air Methods Annual Data

Trend

Dec07

Dec08

Dec09

Dec10

Dec11

Dec12

Dec13

Dec14

Dec15

Dec16

Operating Income

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170.33

120.68

183.48

199.86

190.98

Air Methods Quarterly Data
	Mar12	Jun12	Sep12	Dec12	Mar13	Jun13	Sep13	Dec13	Mar14	Jun14	Sep14	Dec14	Mar15	Jun15	Sep15	Dec15	Mar16	Jun16	Sep16	Dec16
Operating Income	Get a 7-Day Free Trial															43.06	41.02	51.74	57.25	40.97

Air Methods Operating Income Calculation

Operating Income, is the profit a company earned through operations. All expenses, including cash expenses such as cost of goods sold (COGS), research & development, wages, and non-cash expenses, such as depreciation, depletion and amortization, have been deducted from the sales.

Operating Income for the trailing twelve months (TTM) ended in Dec. 2016 adds up the quarterly data reported by the company within the most recent 12 months, which was $191 Mil.

Air Methods (NAS:AIRM) Operating Income Explanation

1. Operating Income or EBIT is linked to Return on Capital for both regular definition and Joel Greenblatt's definition.

Air Methods's annualized ROC % for the quarter that ended in Dec. 2016 is calculated as:

	ROC % (Q: Dec. 2016 )
=	NOPAT	/	Average Invested Capital
=	Operating Income * ( 1 - Tax Rate % )	/	( (Invested Capital (Q: Sep. 2016 )	+	Invested Capital (Q: Dec. 2016 ))	/ count )
=	163.876 * ( 1 - 40.18% )	/	( (1697.809	+	1695.603)	/ 2 )
=	98.0306232	/	1696.706
=	5.78 %

where

	Invested Capital		(Q: Sep. 2016 )
=	Total Assets	-	Accounts Payable & Accrued Expense	-	Excess Cash
=	Total Assets	-	Accounts Payable & Accrued Expense	-	( Cash, Cash Equivalents, Marketable Securities	-	max(0, Total Current Liabilities	-	Total Current Assets	+	Cash, Cash Equivalents, Marketable Securities	))
=	1802.921	-	97.695	-	( 7.417	-	max(0, 182.311	-	501.14	+	7.417	))
=	1697.809

	Invested Capital		(Q: Dec. 2016 )
=	Total Assets	-	Accounts Payable & Accrued Expense	-	Excess Cash
=	Total Assets	-	Accounts Payable & Accrued Expense	-	( Cash, Cash Equivalents, Marketable Securities	-	max(0, Total Current Liabilities	-	Total Current Assets	+	Cash, Cash Equivalents, Marketable Securities	))
=	1789.265	-	87.759	-	( 5.903	-	max(0, 185.896	-	486.38	+	5.903	))
=	1695.603

Note: The Operating Income data used here is four times the quarterly (Dec. 2016) data.

2. Joel Greenblatt's definition of Return on Capital:

Air Methods's annualized ROC (Joel Greenblatt) % for the quarter that ended in Dec. 2016 is calculated as:

	ROC (Joel Greenblatt) %		(Q: Dec. 2016 )
=	EBIT	/	Average of (Net fixed Assets	+	Net Working Capital)
=	EBIT	/	Average of (Property, Plant and Equipment	+	Net Working Capital)
			Q: Sep. 2016		Q: Dec. 2016
=	EBIT	/	( ( (Property, Plant and Equipment + Net Working Capital)	+	(Property, Plant and Equipment + Net Working Capital) )	/	count )
=	165.316	/	( ( (872.792 + max(361.684, 0))	+	(878.009 + max(362.89, 0)) )	/	2 )
=	165.316	/	( ( 1234.476	+	1240.899 )	/	2 )
=	165.316	/	1237.6875
=	13.36 %

where Working Capital is:

	Working Capital		(Q: Sep. 2016 )
=	(Accounts Receivable	+	Total Inventories	+	Other Current Assets)	-	(Accounts Payable & Accrued Expense	+	Defer. Rev.	+	Other Current Liabilities)
=	(385.747	+	53.939	+	24.117)	-	(97.695	+	2.345	+	2.079)
=	361.684

	Working Capital		(Q: Dec. 2016 )
=	(Accounts Receivable	+	Total Inventories	+	Other Current Assets)	-	(Accounts Payable & Accrued Expense	+	Defer. Rev.	+	Other Current Liabilities)
=	(380.249	+	53.298	+	19.476)	-	(87.759	+	1.607	+	0.767)
=	362.89

When net working capital is negative, 0 is used.

Note: The EBIT data used here is four times the quarterly (Dec. 2016) EBIT data.

3. Operating Income is also linked to Operating Margin %:

Air Methods's Operating Margin % for the quarter that ended in Dec. 2016 is calculated as:

Operating Margin %	=	Operating Income (Q: Dec. 2016 )	/	Revenue (Q: Dec. 2016 )
	=	40.969	/	297.473
	=	13.77 %

4. Please click Growth Rate Calculation Example (GuruFocus) to see how GuruFocus calculates Wal-Mart Stores Inc (WMT)'s revenue growth rate. You can apply the same method to get the Operating Income growth rate using Operating Income per share data.

Be Aware

Compared with a company's EBITDA margin, Operating Margin can be manipulated by adjusting the rate of depreciation, depletion and amortization (DDA).

If a company is facing competition, its Operating Margin may decline. Often the Operating Margin declines well before the company's revenue or even profit decline. Therefore, Operating Margin is a very important indicator of whether the company is facing problems.

For instance, by 2012, Nokia (NOK)'s problems were well known and its stock had lost more than 90% of its market value since 2007. But Nokia's Operating Margin had already been in decline since 2002, although its earnings per share were still rising. Investors who paid attention to Operating Margin would have avoided this huge loss. The same can be said for Research-in-Motion (RIMM).

Therefore, Operating Margin is a very important screening filter for GuruFocus. GuruFocus's Buffett-Munger screener requires that the profit margin is either consistent or expanding. The Model Portfolio of the Buffett-Munger screener has outperformed the market every year since inception in 2009.

Air Methods Operating Income Related Terms

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Air Methods (Air Methods) Business Description

Industry

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Address

Website

http://www.airmethods.com

Air Methods Corp is a Delaware corporation, was established in Colorado in 1982. The Company provides air medical emergency transport services and systems throughout the United States of America. It designs, manufactures, and installs medical aircraft interiors and other aerospace and medical transport products. The Company also provides tourism operations in and around the Grand Canyon and Hawaiian Islands. The Company's operating segments include Air Medical Services, Tourism Division and United Rotorcraft. Air Medical Services provides air medical transportation services to the general population as an independent service and to hospitals or other institutions under exclusive operating agreements. The division operates 380 helicopters and 26 fixed wing aircraft under both Instrument Flight Rules and Visual Flight Rules. Tourism Division provides helicopter tours and charter flights, mainly focusing on Grand Canyon and Hawaiian Island tours. The division operates 48 helicopters under two Part 135 Air Carrier Certificates. United Rotorcraft Division designs, manufactures, and installs aircraft medical interiors and other aerospace and medical transport products for domestic and international customers. The Company maintains patents covering several products, including the Litter Lift System used in the U.S. Army's HH-60M helicopter and Medical Evacuation Vehicle, and the Articulating Patient Loading System and Modular Equipment Frame developed as part of the modular interior concept. The Company competes with several national and regional air medical transportation providers for contracts with hospitals and other healthcare institutions. It also competes with larger aerial tourism operators in the Grand Canyon market and a number of smaller operators in both the Grand Canyon and Hawaiian Island markets. The Company is subject to the Federal Aviation Act of 1958. All of its flight and maintenance operations-including equipment, ground facilities, dispatch, communications, flight training personnel and other matters affecting air safety are regulated and actively supervised by the U.S. Department of Transportation through the FAA. It is also subject to laws, regulations, and standards relating to corporate governance and public disclosure, including the Sarbanes-Oxley Act of 2002, Dodd-Frank Wall Street Reform and Consumer Protection Act, Securities and Exchange Commission (SEC) regulations, NASDAQ Stock Market rules, and other federal and state securities laws.

Executives

Mark D Carleton	director	12300 LIBERTY BLVD., ENGLEWOOD CO 80112
Joseph E Whitters	director
Claire M Gulmi	director
Peter P. Csapo	officer: Chief Financial Officer	ACCRETIVE HEALTH, INC. 401 NORTH MICHIGAN AVENUE, SUITE 2700 CHICAGO IL 60611
Crystal L Gordon	officer: General Counsel and Secretary	945 BUNKER HILL, SUITE 650, HOUSTON TX 77024
David Roehr	director	ONE CABELA DRIVE, SIDNEY NE 69160