Thank you for having me. Some of our capture down. So the pluses and minuses have allowed us at least from operational perspective to smooth out some of those.

Okay. So it sounds like what you're saying is sort of just continued strong operational thing, but not necessarily like a shift versus things you were doing earlier in the year. No. Is that fair?

Yes.

Yeah. Yeah. Okay. Perfect. Thank you very much.

Your next question comes from the line of Scott Fidel with Goldman Sachs. Your line is open. Please go ahead.

Hi, thanks. Good morning. I was hoping maybe you could just give us an update on just the IDR revenue collections and sort of how those are trending. I did see the disclosures you provided in the 10Q and appreciate that. But, you know, maybe just against the backdrop, too, of... of obviously this has become a very, you know, sort of, you know, visible issue in the healthcare system as well. So just maybe walk us through sort of, you know, the revenue collection there and then sort of, you know, how you see that against the backdrop of the current, you know, sort of environment around the payers in particular, you know, contesting the sort of the structure of the IDR process.

Hey Scott, this is Nick. Thanks for the question. I'll start in reverse with the overview of how we're tackling some of the noise that you're all seeing and hearing in IDR, and then I'll ask Brian to get to some of the more granular points at the beginning of your question. What we feel confident, I think we, you know, we said it and we put it down in writing. With respect to emergency health, you know, the EMS environment, and I think There was a Paragon report as well that went out probably a month or two ago that stated almost exactly what I had spoken to Dr. Oz about several months ago, where you've got to treat EMS, you know, especially 911 response very differently. You know, emergency versus elective, which is where I think most of the noise is. And when I spend my time on the Hill, which I spend a lot of time on the Hill with legislators, you know, the lawmakers get it. The administration gets it. We remain highly confident that we have a lot of support there with the differentiation. And then even from a scale perspective, and Brian can get into some of the numbers, you know, you'll recall this is a very small portion, one of our overall interventions. And even from an air perspective, we continue to grow our in-network. Partnerships with payers. So look, we get it. We see the noise. We fight it. Just recently, I've engaged with state lawmakers as well and even AGs on getting their attention with some of the behavior we're seeing out of the payers. So our bias is we're being thrown into a mix unfairly. We believe that what we've got into the process with one or all not only eligible, but justifiable. And we'll continue to win at the rates we do and continue to demand and get justification for payment on all of these. I don't know, Brian, if you want to add a little bit more to Scott's question.

Yeah, this is not a new topic. It's getting a little bit more volume We've had payers that have not paid per the No Surprises Act timelines really since the inception. We work with the industry, as Nick mentioned, and lawmakers and other stuff to try to advance this. I'd rather have everybody in network. We renewed a couple of contracts with some very large multi-state payers during the quarter. It shows that We can get in-network and stay in-network with folks that are interested in being in-network. And yeah, this is not a new topic, and we'll continue to fight.

Okay, great. And then just as my follow-up question, can you maybe just unpack the Labor costs seem to be, the expense management around that seem to be quite strong. In the quarter, you know, did see some of the commentary in the queue about, you know, some lower, you know, stock comp expense year over year, but even despite that... Excluding that, the overall employee wages and benefits and just sort of cost control were better than we expected. Can you maybe just talk about that in terms of your underlying labor cost trends and then how you see that sort of progressing into the fourth quarter? Thanks.

Thanks, Ted. The teams continue and it's kind of core to our culture and teams and how we operationalize every single business unit and how the local leaders actually manage their teams. So it is a market by market and it's a very broad program that we have on the utilization of the assets. And we use the right employees for the right types of calls and the labor rates. We've also seen quite a bit with nurse navigation, improving our operational efficiency in some of these really large markets you see. The growth we've had with nurse navigation and that makes the systems overall more efficient. The right ambulance is going to the right calls in the emergency side. So it provides for quite a bit of efficiency throughout the operations where we have it rolled out. And just fundamentally in how we operate, you know, in the air and ground side, that's a core piece to what we do is utilization management of our teams.

Yeah, and Scott, this is Nick. Just to add to that and probably segue from the question Elizabeth asked earlier in my Alluding to the proverbial dials we talk about, one of the things we continue to see as we deploy nurse navigation in our own markets is that efficiency that we've referred to in the past. So that helps us avoid some of the dry runs and dispatching the wrong teams. And so you continue to see that improvement inherent in the numbers that we're presenting.

Okay, thank you.

Your next question comes from the line of Benjamin Rossi with JP Morgan. Your line is open. Please go ahead.

Good morning. Thanks for taking my questions here. So I know you aren't providing formal guidance for 2027, but in setting up puts and takes, can you remind us what's being incorporated into your revised guidance for fuel costs, IDR rollover from last year's trend, and some of the payments impact related to the ACA exchanges? And then for next year's ACA exchange impact, Any initial thoughts about trends and whether you think it's fair that you'll run rate, call it the 15 to 16 million impact into the first quarter of 2027, given some of the more minimal impact felt in the first quarter of this year?

Yeah, Ben, this is Brian. Thank you. Yeah, fuel costs were to continue to use the fuel futures. I'm not going to guess what fuel prices are. So we just take the benefit of everybody else's knowledge. They've moved, as you can imagine, they move all over the place. But so we're using the fuel futures really from the end of last week. So they have the benefit of the post midterm election change. But that's still higher than we'd like to see. We'll continue to try to drive efficiencies, make sure we've got all of our fuel card program, bulk purchasing programs, other stuff to minimize the fuel costs as much as we can. Related to IDR, again, The change of estimates, we continue to believe that these will drive closer to zero. There's some very old stuff that's still out there. We'll continue to try to chase it. It's not on the books, which is why it's a change of estimate when we do collect it. Second quarter, I think, was about 5 million. Third quarter was in the 18 million range. So it's going to be low, and we're going to continue to try to collect on that really old stuff. Related to the exchanges, $16 million run rate is, I think, the right number. We saw a little bit of it in the first quarter this year of 26. So there'll be a little bit of impact there. What we're watching right now for 27 is the work requirements for Medicaid. There's a number of different estimates out there we're trying to refine as we think about 27. So that's the known headwind that we see from an NRT perspective.

Thanks for the details there. As a follow-up on IDR, for the $18 million in IDR claims received this quarter, can you just remind us what the breakdown is between claims that occurred during 3Q versus claims that came through from prior periods?

This is all related to claims for much older dates of service. Our revenue recognition process for Both air and ground, although they have slightly different timing, is to make an estimate at the time that we provide the service and then wait six months for the air, 12 months for the ground to update those. And then so these changes are older than six months on the air side. and frankly most of them are in the 18 to 24 month range from a perspective. So this is not change of estimate. Change of estimate by definition is an older date of service.

Great. Thanks for the details.

Your next question comes from the line of Craig Hettenbach with Morgan Stanley. Your line is open. Please go ahead.

Yes, thank you. Can you just touch on capital allocation priorities and really the extent to which maybe it's used towards balance sheet deleveraging near term versus potential M&A opportunities that may arise on a longer term basis?

So, Craig, this is Nick. Again, as usual, I'll give you a bit of high level and then Brian and Ted can chime in with a little bit more color. You know, delevering, I'll say, is priority one. on the list. Then there's operating the business. If we can get some opportunities to bring some assets in to help us launch contracts sooner, I would tell you that's priority two. M&A, as we've discussed, obviously, we do have some targets. The multiples expected out in the market are at times a little prohibitive. That said, We are engaged on a few smaller ones in adjacent markets that we think are very synergistic. So we can make the case and have a high degree of conviction around the M&A and the ROI around it. We're going to move forward on it. But those three buckets we will manage with a lot of scrutiny and a high level of discretion on which one makes more sense.

We just recently saw the announcement on adding more Bell aircraft into the fleet on purpose in the last couple of weeks here, and those are ongoing over the course of the next year. We're going to continue to reinvest in there on not only the technology that the new aircraft bring in, but then obviously the ability to grow further. And as the business continues to generate cash, we're going to

Use some of that to delever like we did during the third quarter. We did reprice the term loan, bought down about $200 million worth of the term loan as well. We thought that was the right time. We're generating plenty of cash to continue to operate and do the M&A when the time comes and to do the aircraft purchases when the time comes. And so feel good about our positions.

and Brian, just a follow up for you on the back of, you know, solid EBITDA B in Q2 and Q3. You guys talked about kind of the revenue range for Q4. Anything you're considering in terms of implied guide for Q4 in terms of any headwinds or tailwinds that you would call out specifically?

Just the inflationary environment continues to be more challenging than I think any of us would like. You've got the variability of fuel prices, but they're much higher than even earlier in the year. We've seen that continue to trickle through other lines in the P&L. Initially started with transport related things like freight and travel, but we've seen it really start to pop into all of the other lines as well. And we continue to work. We've got a very good purchasing team that manages all of our contracts. Our frontline staff do a great job making sure we're using only what we need. But we are seeing that inflation pop through into other lines, and so we've incorporated that into our guidance.

Got it. Thank you.

Your next question comes from the line of Andrew Mock with Barclays. Your line is open. Please go ahead.

Hi, good morning. Weather cancellations were up 100 basis points year over year and the highest 3Q cancellation rate we've seen in recent years. I know you were expecting moderating weather to be a tailwind this year. So can you help us understand what drove that increase in cancellations, including any impact of El Nino and how that impacts your view of flight growth for 4Q? Thanks.

You said the words there, El Nino, and what we saw obviously was certain pockets of the U.S. had very unseasonal weather issues in the summer months, heavily also in the west, Colorado. So those western states got hit unusually hard this year. And then we had a couple of really bad storms, as we know, not only the As that kind of hurricane came through, if you remember the month or so prior to that hurricane in the Gulf, there was just quite a bit of southeastern storms, long lines. And when those types of weather fronts come through, it does increase the weather cancellation rates. Even if we have the IFR aircraft, we're not flying in those kind of conditions. So we did see that unusually higher number that we in the summer months. It usually isn't that way. So that's what we saw the year over year increase in the cancellation rates because of the weather.

Yeah, and Andrew, Nick here. Look, as we, you know, continue to learn and look at the business, we also know we have opportunities at times as weather patterns are coming in. You know, we've often stated our assets are mobile. We can move some of those rotor assets to other markets that are not having some of the weather issues and maybe to pick up some volume as well. So we continue to, you know, Look at those patterns and how do we mitigate this? With your question on what does El Nino do next year? I can't tell you what those patterns are going to be, but we continue to look inward. Ted mentioned earlier, continued investment in IFR technologies, training on how we can mitigate Some of these weather patterns as they move through the system.

Let me pile on to the IFR comment. The Bell aircraft that we ordered during the quarter are instrument flight rules, IFR, which means that you can use GPS and other things to fly in conditions that you can't do if you're flying visual flight rules or VFR. And so we continue to invest in those types of aircraft. You know, the order of those aircraft will come in in 27. So that's our plan is all aircraft as we go forward from Bell that will come in, will come in with the IFR aircraft, all twin engines will come in with IFR. And so as we continue to change that mix, then hopefully we will eventually decrease a little bit the weather impacts.

Great. And can you talk a little bit more about the pace of air bases we can expect over the next five quarters or so? Just remind us what the targets are and cadence. Thanks.

I don't have the numbers at hand and we're still working with the suppliers on the delivery timeline. I think we had mentioned we had on the previous call, we had seen some delays from one of the suppliers. We've worked through a lot of that. We don't have complete line of sight yet, but we do have a lot of aircraft coming. A couple at the very end of this year that will fund bases to start early next year and then a number throughout 2027. So as we get into doing the 2027 guidance, we'll have a clearer picture and share that at that time.

And Andrew, I want to come back to a point, says Nick, that we've realized as we've messaged out to all of you, we talk about bases, but I think one of the things we've not highlighted as well, I'll go back to a point I raised earlier, is As we look at demand around our current bases, we have the ability, again, to move some of those assets in higher demand areas and pick up more volume. So we can still get the ultimate impact of increased volume without necessarily opening up new bases. I just want to highlight that point. And we'll continue to improve how we report against that as well.

Great.

Thank you.

Your next question comes from the line of Joanna Gajic with Bank of America. Your line is open. Please go ahead.

Hey, good morning. Thanks so much for taking the question. So when I look at the revenue per transport growth, right, and if we normalize for the year ahead, when you talk about the $37 million from the lower NSA adjustment year over year, we come up with, call it, you know, 5.5% or so of growth. So is that the right math? And also, is this the level of RPT growth we should be assuming into next year? Because it sounds like those adjustments will be close to zero, right? So if that's the case, right, if your core pricing or revenue for transport is growing mid-single digits, I understand the fuel inflationary cost pressure. But if that's what's happening with the pricing of these, is it fair to assume that at this Thank you. Elizabeth, thanks for the question.

We've got a couple of different things that fit into that. One is the underlying just NRTs of the business, some of it within the emergent and non-emergent service lines. And then we have the mix shift that sits on top, offset a little bit by the payer mix. Our expectation for NRTs as we go into the fourth quarter, we'll provide guidance on 27 when we do our call at that time. is still to be in that low to mid single digits, just like we talked about ahead of the roadshows and the IPO, in that 2%, 3%, 4%. And then we'll benefit from a little bit of a big shift as we continue to focus on the emergent business and then the non-emergent business that makes economic sense. Our goal in the long term, and we always view this from a long-term perspective, is mid-single-digit plus revenue growth, high single-digit EBITDA growth, leveraging the size and scale of the business. That hasn't changed.

Great. Thanks for that. And if I may, I guess as it relates to next year, another question around the Rural Health Transformation Fund. So I guess by now, all the states I've received some approvals, sorry, for funding. So can you help us understand how material, if at all, could this be for the company? Maybe, you know, how many projects are you involved in? You know, when we should expect to see some revenue contribution flowing from that. Any caller will be appreciated. Thank you.

Joanna, this is Nick. Look, I am I will be candid, this first year rollout, we saw a lot of confusion and a lot of the dollars just ultimately went back to the hospitals where we had understood was not the intention. We've worked hard with all of the states to come up with these innovative models. I think it's a little premature to give you an assessment of what the potential is. We know that they are looking at targeting and earmarking dollars for EMS. We also believe that We GMR Can benefit from a few other categories. I know we mentioned NurseNav. We mentioned some of other innovations. And that's the REACT model that we went out. We believe this year we should start being able to see some of the contracts. We're engaged with some states and respective counties in those states to look at getting some traction with our models and benefiting from Some of those dollars, still a little bit of noise and how the government is allocating those funds and what they're awarding on the true innovative models. Aside from your recall, the first half of dollars were just prorated out to every state. Now they're getting a little more prescriptive around what What programs and what innovative models will be awarded the dollars? So we remain optimistic about this. We're still promoting and actually engaged with a few states and a few counties on getting to contracts.

Great, thank you.

We've reached the end of the Q&A session. I will now turn the call back to Nick for closing remarks.

Thank you, Tracy. Thank you all again for joining us today. As you see, the third quarter demonstrated continued momentum and resiliency across our business and continues to reinforce our confidence in GMR strategy. We continue to grow our core services, expand innovative solutions like nurse navigation, maintain discipline across our operations and strengthen our financial position. We believe our national scale, integrated model and clinical capabilities position GMR well to capture the opportunities ahead Our exceptional clinicians, pilots, mechanics, dispatchers, support personnel, and regional leaders are what makes this possible. And I want to thank them for their unwavering commitment to our patients, partners, and communities. Thank you for your continued support and have a wonderful day.

This concludes today's call. Thank you for attending. You may now disconnect.