Valuation Accounts

6 Months Ended

Jun. 30, 2011

5. Valuation Accounts

We have established an allowance for doubtful accounts based upon factors surrounding the credit risk of specific customers, current market conditions, and other information. The allowance for doubtful accounts was approximately $0.1 million at June 30, 2011 and December 31, 2010.

Revenues related to emergency flights generated by the Company’s Air Medical segment are recorded net of contractual allowances under agreements with third party payors and estimated uncompensated care when the services are provided. The allowance for contractual discounts was $40.0 million and $34.7 million as of June 30, 2011 and December 31, 2010, respectively. The allowance for uncompensated care was $34.4 million and $39.3 million as of June 30, 2011 and December 31, 2010, respectively.

The allowance for contractual discounts and estimated uncompensated care as a percentage of gross accounts receivable are as follows:


	June 30,			December 31,
	2011			2010
Gross Accounts Receivable		100	%		100	%
Allowance for Contractual Discounts		37	%		33	%
Allowance for Uncompensated Care		32	%		37	%

We have also established valuation reserves related to obsolete and excess inventory. The inventory valuation reserves were $11.4 million at June 30, 2011 and December 31, 2010.