Cover Page
Cover Page - shares | 6 Months Ended | |
Jun. 30, 2022 | Aug. 08, 2022 | |
Cover [Abstract] | ||
Document Type | 10-Q | |
Document Quarterly Report | true | |
Document Period End Date | Jun. 30, 2022 | |
Document Transition Report | false | |
Entity File Number | 001-41406 | |
Entity Registrant Name | Enhabit, Inc. | |
Entity Incorporation, State or Country Code | DE | |
Entity Tax Identification Number | 47-2409192 | |
Entity Address, Address Line One | 6688 N. Central Expressway | |
Entity Address, Address Line Two | Suite 1300 | |
Entity Address, City or Town | Dallas | |
Entity Address, State or Province | TX | |
Entity Address, Postal Zip Code | 75206 | |
City Area Code | 214 | |
Local Phone Number | 239-6500 | |
Title of 12(b) Security | Common Stock, par value $0.01 per share | |
Trading Symbol | EHAB | |
Security Exchange Name | NYSE | |
Entity Current Reporting Status | No | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Non-accelerated Filer | |
Entity Small Business | false | |
Entity Emerging Growth Company | false | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding | 49,618,402 | |
Entity Central Index Key | 0001803737 | |
Current Fiscal Year End Date | --12-31 | |
Document Fiscal Year Focus | 2022 | |
Document Fiscal Period Focus | Q2 | |
Amendment Flag | false |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Income - USD ($) shares in Millions, $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2022 | Jun. 30, 2021 | Jun. 30, 2022 | Jun. 30, 2021 | |
Income Statement [Abstract] | ||||
Net service revenue | $ 268 | $ 286.1 | $ 542.3 | $ 556.6 |
Revenue, Product and Service [Extensible Enumeration] | Service [Member] | |||
Cost of service (excluding depreciation and amortization) | 130.3 | 129.6 | $ 260 | 254.2 |
Cost, Product and Service [Extensible Enumeration] | Service [Member] | |||
Gross margin | 137.7 | 156.5 | $ 282.3 | 302.4 |
General and administrative expenses | 102.2 | 105.7 | 202.9 | 205.6 |
Depreciation and amortization | 8.2 | 9.4 | 16.7 | 18.5 |
Operating income | 27.3 | 41.4 | 62.7 | 78.3 |
Interest expense and amortization of debt discounts and fees | 0.1 | 0 | 0.1 | 0.1 |
Equity in net income of nonconsolidated affiliates | 0 | (0.2) | 0 | (0.4) |
Other income | 0 | (1.6) | 0 | (1.6) |
Income before income taxes and noncontrolling interests | 27.2 | 43.2 | 62.6 | 80.2 |
Income tax expense | 6.4 | 10.4 | 15.1 | 19.1 |
Net income | 20.8 | 32.8 | 47.5 | 61.1 |
Less: Net income attributable to noncontrolling interests | 0.7 | 0.5 | 1.3 | 0.9 |
Net income attributable to Enhabit, Inc. | $ 20.1 | $ 32.3 | $ 46.2 | $ 60.2 |
Weighted average common shares outstanding: | ||||
Basic (in shares) | 49.6 | 49.6 | 49.6 | 49.6 |
Diluted (in shares) | 49.6 | 49.6 | 49.6 | 49.6 |
Earnings per common share: | ||||
Basic earnings per share attributable to Enhabit, Inc. common stockholders (in dollars per share) | $ 0.41 | $ 0.65 | $ 0.93 | $ 1.21 |
Diluted earnings per share attributable to Enhabit, Inc. common stockholders (in dollars per share) | $ 0.41 | $ 0.65 | $ 0.93 | $ 1.21 |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets - USD ($) $ in Millions | Jun. 30, 2022 | Dec. 31, 2021 | |
Current assets: | |||
Cash and cash equivalents | $ 50.2 | $ 5.4 | |
Restricted cash | 3.5 | 2.6 | |
Accounts receivable | 154.6 | 164.5 | |
Prepaid expenses and other current assets | 9.2 | 6.3 | |
Total current assets | 217.5 | 178.8 | |
Property and equipment, net | 22.7 | 20.4 | |
Operating lease right-of-use assets | 43.3 | 48.4 | |
Goodwill | 1,217.7 | 1,189 | |
Intangible assets, net | 111.6 | 259.1 | |
Other long-term assets | 8.6 | 24.3 | |
Total assets | [1] | 1,621.4 | 1,720 |
Current liabilities: | |||
Current portion of long-term debt | 23.6 | 5 | |
Current operating lease liabilities | 14.3 | 14.9 | |
Accounts payable | 2.8 | 3.5 | |
Accrued payroll | 72.8 | 66.4 | |
Refunds due patients and other third-party payors | 10.8 | 9.4 | |
Income tax payable | 0 | 4.2 | |
Accrued medical insurance | 7.2 | 8.3 | |
Other current liabilities | 22.9 | 24.8 | |
Total current liabilities | 154.4 | 136.5 | |
Long-term debt, net of current portion | 550.3 | 3.5 | |
Long-term operating lease liabilities | 29.1 | 33.5 | |
Deferred income tax liabilities | 31.7 | 63.2 | |
Total liabilities | 765.5 | 236.7 | |
Commitments and contingencies | |||
Redeemable noncontrolling interests | 5.2 | 5 | |
Enhabit, Inc. stockholders’ equity: | |||
Common stock, $.01 par value; 200,000,000 shares authorized; issued: 49,618,402 as of June 30, 2022 and 49,618,402 as of December 31, 2021 | 0.5 | 0.5 | |
Capital in excess of par value | 400.2 | 1,094.1 | |
Retained earnings | 421.6 | 375.4 | |
Total Enhabit, Inc. stockholders’ equity | 822.3 | 1,470 | |
Noncontrolling interests | 28.4 | 8.3 | |
Total stockholders’ equity | 850.7 | 1,478.3 | |
Total liabilities and stockholders' equity | [1] | $ 1,621.4 | $ 1,720 |
[1] Our consolidated assets as of June 30, 2022 and December 31, 2021 include total assets of variable interest entities of $20.0 million and $18.2 million, respectively, that cannot be used by us to settle the obligations of other entities. Our consolidated liabilities as of June 30, 2022 and December 31, 2021 include total liabilities of the variable interest entities of $0.7 million and $0.4 million, respectively. See Note 3, Variable Interest Entities. |
Condensed Consolidated Balanc_2
Condensed Consolidated Balance Sheets (Parenthetical) - USD ($) $ in Millions | Jun. 30, 2022 | Dec. 31, 2021 | |
Common stock, par value (in dollars per share) | $ 0.01 | $ 0.01 | |
Common stock, shares authorized (in shares) | 200,000,000 | 200,000,000 | |
Common stock, shares issued (in shares) | 49,618,402 | 49,618,402 | |
Assets | [1] | $ 1,621.4 | $ 1,720 |
Liabilities | 765.5 | 236.7 | |
VIE, Primary Beneficiary | |||
Assets | 20 | 18.2 | |
Liabilities | $ 0.7 | $ 0.4 | |
[1] Our consolidated assets as of June 30, 2022 and December 31, 2021 include total assets of variable interest entities of $20.0 million and $18.2 million, respectively, that cannot be used by us to settle the obligations of other entities. Our consolidated liabilities as of June 30, 2022 and December 31, 2021 include total liabilities of the variable interest entities of $0.7 million and $0.4 million, respectively. See Note 3, Variable Interest Entities. |
Condensed Consolidated Statem_2
Condensed Consolidated Statements of Stockholders' Equity - USD ($) shares in Millions, $ in Millions | Total | Common Stock | Capital in Excess of Par Value | Retained Earnings | Noncontrolling Interests |
Number of common shares outstanding, beginning balance (in shares) at Dec. 31, 2020 | 49.6 | ||||
Balance at beginning of period at Dec. 31, 2020 | $ 1,389.8 | $ 0.5 | $ 1,118.3 | $ 264.3 | $ 6.7 |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Net income | 61.1 | 60.2 | 0.9 | ||
Capital contributions | 85.6 | 85.6 | |||
Capital distributions (See Note 4) | (74.5) | (74.5) | |||
Distributions declared | (0.7) | (0.7) | |||
Acquisition | 1 | 1 | |||
Number of common shares outstanding, ending balance (in shares) at Jun. 30, 2021 | 49.6 | ||||
Balance at end of period at Jun. 30, 2021 | 1,462.3 | $ 0.5 | 1,129.4 | 324.5 | 7.9 |
Number of common shares outstanding, beginning balance (in shares) at Mar. 31, 2021 | 49.6 | ||||
Balance at beginning of period at Mar. 31, 2021 | 1,400.2 | $ 0.5 | 1,101 | 292.2 | 6.5 |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Net income | 32.8 | 32.3 | 0.5 | ||
Capital contributions | 80.5 | 80.5 | |||
Capital distributions (See Note 4) | (52.1) | (52.1) | |||
Distributions declared | (0.1) | (0.1) | |||
Acquisition | 1 | 1 | |||
Number of common shares outstanding, ending balance (in shares) at Jun. 30, 2021 | 49.6 | ||||
Balance at end of period at Jun. 30, 2021 | 1,462.3 | $ 0.5 | 1,129.4 | 324.5 | 7.9 |
Number of common shares outstanding, beginning balance (in shares) at Dec. 31, 2021 | 49.6 | ||||
Balance at beginning of period at Dec. 31, 2021 | 1,478.3 | $ 0.5 | 1,094.1 | 375.4 | 8.3 |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Net income | 47.5 | 46.2 | 1.3 | ||
Capital contributions | 62.3 | 62.3 | |||
Capital distributions (See Note 4) | (759.1) | (759.1) | |||
Distributions declared | (0.6) | (0.6) | |||
Acquisition | 15.9 | 15.9 | |||
Contributions from noncontrolling interests of consolidated affiliates | 6.4 | 2.9 | 3.5 | ||
Number of common shares outstanding, ending balance (in shares) at Jun. 30, 2022 | 49.6 | ||||
Balance at end of period at Jun. 30, 2022 | 850.7 | $ 0.5 | 400.2 | 421.6 | 28.4 |
Number of common shares outstanding, beginning balance (in shares) at Mar. 31, 2022 | 49.6 | ||||
Balance at beginning of period at Mar. 31, 2022 | 1,495.9 | $ 0.5 | 1,066 | 401.5 | 27.9 |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Net income | 20.8 | 20.1 | 0.7 | ||
Capital contributions | 37.5 | 37.5 | |||
Capital distributions (See Note 4) | (703.3) | (703.3) | |||
Distributions declared | (0.2) | (0.2) | |||
Number of common shares outstanding, ending balance (in shares) at Jun. 30, 2022 | 49.6 | ||||
Balance at end of period at Jun. 30, 2022 | $ 850.7 | $ 0.5 | $ 400.2 | $ 421.6 | $ 28.4 |
Condensed Consolidated Statem_3
Condensed Consolidated Statements of Cash Flows - USD ($) $ in Millions | 6 Months Ended | |
Jun. 30, 2022 | Jun. 30, 2021 | |
Cash flows from operating activities: | ||
Net income | $ 47.5 | $ 61.1 |
Adjustments to reconcile net income to net cash provided by operating activities— | ||
Depreciation and amortization | 16.7 | 18.5 |
Equity in net income of nonconsolidated affiliates | 0 | (0.4) |
Distributions from nonconsolidated affiliates | 0 | 0.2 |
Stock-based compensation | 2.5 | 1.8 |
Deferred tax (benefit) expense | (1.4) | 0.9 |
Other, net | (0.6) | (2.1) |
Changes in assets and liabilities, net of acquisitions— | ||
Accounts receivable | 13.4 | (28) |
Prepaid expenses and other assets | (2.7) | (0.8) |
Accounts payable | (0.8) | (1) |
Accrued payroll | 6.2 | 19.9 |
Other liabilities | (5.8) | 23.5 |
Net cash provided by operating activities | 75 | 93.6 |
Cash flows from investing activities: | ||
Acquisition of businesses, net of cash acquired | 0 | (97.7) |
Purchases of property and equipment | (4.5) | (2.1) |
Additions to capitalized software costs | (0.5) | (1) |
Other, net | 1.5 | 2.5 |
Net cash used in investing activities | (3.5) | (98.3) |
Cash flows from financing activities: | ||
Principal borrowings on notes | 400 | 0 |
Principal payments on debt | (0.4) | 0 |
Borrowings on revolving credit facility | 170 | 0 |
Principal payments under finance lease obligations | (2.6) | (3.7) |
Debt issuance costs | (4.4) | 0 |
Distributions paid to noncontrolling interests of consolidated affiliates | (0.7) | (1.3) |
Contributions from Encompass | 59.8 | 83.7 |
Distributions to Encompass | (654.9) | (74.3) |
Contributions from noncontrolling interests of consolidated affiliates | 7.4 | 0 |
Net cash (used in) provided by financing activities | (25.8) | 4.4 |
Increase (decrease) in cash, cash equivalents, and restricted cash | 45.7 | (0.3) |
Cash, cash equivalents, and restricted cash at beginning of year | 8 | 40 |
Cash, cash equivalents, and restricted cash at end of year | 53.7 | 39.7 |
Supplemental schedule of noncash activities: | ||
Property and equipment additions through finance leases | 2.3 | 3.8 |
Operating lease additions | 3.3 | 10.9 |
Trade name transfer to Encompass (including deferred tax liability) | $ (104.2) | $ 0 |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 6 Months Ended |
Jun. 30, 2022 | |
Accounting Policies [Abstract] | |
Summary of Significant Accounting Policies | Summary of Significant Accounting Policies: Organization and Description of Business— Enhabit, Inc. (“Enhabit,” “we,” “us,” “our,” and the “Company”), incorporated in Delaware in 2014, provides a comprehensive range of Medicare-certified skilled home health and hospice services in 34 states, with a concentration in the southern half of the United States. We manage our operations and disclose financial information using two reportable segments: (1) home health and (2) hospice. See Note 8, Segment Reporting . Prior to July 1, 2022, the Company operated as a reporting segment of Encompass Health Corporation (“Encompass”). On December 9, 2020, Encompass announced a formal process to explore strategic alternatives for its home health and hospice business. On January 19, 2022, Encompass announced its home health and hospice business would be rebranded and operate under the name Enhabit Home Health & Hospice. In March 2022, we changed our name from Encompass Health Home Health Holdings, Inc. to Enhabit, Inc. Separation from Encompass— On July 1, 2022, Encompass completed the previously announced separation of the Company through the distribution of all of the outstanding shares of common stock, par value $0.01 per share, of Enhabit to the stockholders of record of Encompass (the “Distribution”) as of the close of business on June 24, 2022 (the “Record Date”). The Distribution was effective at 12:01 a.m., Eastern Time, on July 1, 2022. The Distribution was structured as a pro rata distribution of one share of Enhabit common stock for every two shares of Encompass common stock held of record as of the Record Date. No fractional shares were distributed. A cash payment was made in lieu of any fractional shares. As a result of the Distribution, Enhabit is now an independent public company and its common stock is listed under the symbol “EHAB” on the New York Stock Exchange (the “Separation”). The Separation was completed pursuant to a separation and distribution agreement (“the Separation and Distribution Agreement”) and other agreements with Encompass related to the Separation, including, but not limited to, a tax matters agreement (the “Tax Matters Agreement”), an employee matters agreement (the “Employee Matters Agreement”), and a transition services agreement (the “Transition Services Agreement” or “TSA”). Following the Separation, certain functions continue to be provided by Encompass under the TSA or are being performed using the Company’s own resources or third-party providers. The Company incurred certain costs in its establishment as an independent, publicly-traded company and expects to incur ongoing additional costs associated with operating as an independent, publicly-traded company. In anticipation of the Distribution, we transferred the “Encompass” trade name with a book value of $135.2 million to Encompass as they will continue to operate under the Encompass brand. All share and earnings per share information have been retroactively adjusted for all periods presented to reflect the Distribution. See also Note 4, Long-term Debt. Basis of Presentation and Consolidation— The accompanying unaudited condensed consolidated financial statements of the Company and its subsidiaries should be read in conjunction with the audited consolidated financial statements and accompanying notes contained in the Company’s Registration Statement on Form 10 (the “Form 10”) filed with the United States Securities and Exchange Commission (the “SEC”) on May 25, 2022, as amended June 9, 2022 and June 14, 2022. The unaudited condensed consolidated financial statements have been prepared in accordance with the rules and regulations of the SEC applicable to interim financial information. Certain information and note disclosures included in financial statements prepared in accordance with generally accepted accounting principles in the United States of America (“GAAP”) have been omitted in these interim statements, as allowed by such SEC rules and regulations. The condensed consolidated balance sheet as of December 31, 2021 has been derived from audited financial statements, but it does not include all disclosures required by GAAP. However, we believe the disclosures are adequate to make the information presented not misleading. The unaudited results of operations for the interim periods shown in these financial statements are not necessarily indicative of operating results for the entire year. In our opinion, the accompanying unaudited condensed consolidated financial statements recognize all adjustments of a normal recurring nature considered necessary to fairly state the financial position, results of operations, and cash flows for each interim period presented. We have historically existed and functioned as part of the consolidated business of Encompass. The accompanying unaudited condensed consolidated financial statements of the Company and its subsidiaries have been derived from the consolidated financial statements and accounting records of Encompass as if the Company had operated on a stand-alone basis during the periods presented and were prepared utilizing the legal entity approach, in accordance with GAAP, and pursuant to the rules and regulations of the SEC. Historically, the Company was reported as a single reportable segment within Encompass’s reportable segments and did not operate as a stand-alone company. Accordingly, Encompass historically reported the financial position and the related results of operations, cash flows and changes in equity of the Company as a component of Encompass’s condensed consolidated financial statements. The unaudited condensed consolidated financial statements include an allocation of expenses related to certain Encompass corporate functions as discussed in Note 9, Related Party Transactions. The unaudited condensed consolidated financial statements also include revenues and expenses directly attributable to the Company and assets and liabilities specifically attributable to the Company. Encompass’s third-party debt and related interest expense have not been attributed to the Company because the Company is not the primary legal obligor of the debt and the borrowings are not specifically identifiable to the Company. However, subsequent to April 23, 2020, the Company was a guarantor for Encompass’s credit agreement and senior debt. In connection with the Distribution, the Company was released from its guarantee of Encompass’s indebtedness. The Company maintains its own cash management system and does not participate in a centralized cash management arrangement with Encompass. The income tax amounts in these unaudited condensed consolidated financial statements have been calculated based on a separate return methodology and are presented as if our income gave rise to separate federal and state consolidated income tax return filing obligations in the respective jurisdictions in which we operate. In addition to various separate state and local income tax filings, we joined with Encompass in various U.S. federal, state and local consolidated income tax filings prior to the Separation. See Note 6, Income Taxes , for information related to our Tax Sharing Agreement with Encompass. The unaudited condensed consolidated financial statements include the assets, liabilities, revenues, and expenses of all wholly-owned subsidiaries, majority-owned subsidiaries over which we exercise control, and, when applicable, entities in which we have a controlling financial interest. We use the equity method to account for our investments in entities we do not control, but for which we have the ability to exercise significant influence over operating and financial policies. Consolidated Net income attributable to Enhabit, Inc. includes our share of the net earnings of these entities. We eliminate all intercompany accounts and transactions within the Company from our financial results. Transactions between the Company and Encompass have been included in these condensed consolidated financial statements. The transfers with Encompass that are not expected to be settled in cash, are reflected in stockholders’ equity on the condensed consolidated balance sheets and within Capital in Excess of Par Value on the condensed consolidated statements of stockholders’ equity. Within the condensed consolidated statements of cash flows, these transfers are treated as an operating, financing or noncash activity determined by the nature of the transaction. Transactions between the Company and Encompass are considered related party transactions. Refer to Note 9, Related Party Transactions , for more information. Net Service Revenue— Our Net service revenue disaggregated by payor source and segment are as follows (in millions): Home Health Hospice Consolidated Three Months Ended Three Months Ended Three Months Ended 2022 2021 2022 2021 2022 2021 Medicare $ 164.0 $ 182.4 $ 46.2 $ 52.6 $ 210.2 $ 235.0 Medicare Advantage 36.9 29.9 — — 36.9 29.9 Managed care 16.6 15.8 1.4 0.8 18.0 16.6 Medicaid 2.6 3.7 0.2 0.4 2.8 4.1 Other 0.1 0.5 — — 0.1 0.5 Total $ 220.2 $ 232.3 $ 47.8 $ 53.8 $ 268.0 $ 286.1 Home Health Hospice Consolidated Six Months Ended Six Months Ended Six Months Ended 2022 2021 2022 2021 2022 2021 Medicare $ 333.3 $ 356.4 $ 94.1 $ 102.4 $ 427.4 $ 458.8 Medicare Advantage 71.4 57.9 — — 71.4 57.9 Managed care 34.4 29.6 2.5 1.3 36.9 30.9 Medicaid 5.7 7.3 0.6 0.7 6.3 8.0 Other 0.3 1.0 — — 0.3 1.0 Total $ 445.1 $ 452.2 $ 97.2 $ 104.4 $ 542.3 $ 556.6 For a discussion of our significant accounting policies, including our policy related to Net service revenue , see Note 1, Summary of Significant Accounting Policies , to the consolidated financial statements included in the Form 10. Recent Accounting Pronouncements — We do not believe any recently issued, but not yet effective, accounting standards will have a material effect on our condensed consolidated financial position, results of operations, or cash flows. |
Business Combinations
Business Combinations | 6 Months Ended |
Jun. 30, 2022 | |
Business Combination and Asset Acquisition [Abstract] | |
Business Combinations | Business Combinations: On January 1, 2022, we acquired a 50% equity interest from Frontier Home Health and Hospice, LLC in a joint venture with Saint Alphonsus System (“Saint Alphonsus”) which operates home health and hospice locations in Boise, Idaho. The total purchase price was $15.9 million and was funded on December 31, 2021. This acquisition was made to expand our footprint in this geographic area. This transaction was not material to our financial position, results of operations, or cash flows. We accounted for this transaction under the acquisition method of accounting and reported the results of operations of the acquired locations from the date of acquisition. Assets acquired, liabilities assumed, and noncontrolling interests were recorded at their estimated fair values as of the acquisition date. Estimated fair values were based on various valuation methodologies including: an income approach using primarily discounted cash flow techniques for the noncompete and license intangible assets; and an income approach utilizing the relief-from-royalty method for the trade name intangible asset. The aforementioned income methods utilize management’s estimates of future operating results and cash flows discounted using a weighted average cost of capital that reflects market participant assumptions. For all other assets and liabilities, the fair value was assumed to represent carrying value due to their short maturities. The excess of the fair value of the consideration conveyed over the fair value of the net assets acquired was recorded as goodwill. All goodwill recorded reflects our expectations of favorable growth opportunities in the home health and hospice markets based on positive demographic trends. At least $14.4 million of the goodwill recorded as a result of this transaction is deductible for federal income tax purposes. The fair values recorded were based upon a preliminary valuation. Estimates and assumptions used in such valuation are subject to change, which could be significant, within the measurement period (up to one year from the acquisition date). We expect to continue to obtain information to assist us in determining the fair value of the net assets acquired at the acquisition date during the measurement period. The preliminary fair value of the assets acquired and liabilities assumed at the acquisition date were as follows (in millions): Cash and cash equivalents $ 0.7 Accounts receivable, net 1.6 Operating lease right-of-use-assets 0.3 Identifiable intangible assets: Noncompete agreement (useful life of 5 years) 0.2 Trade name (useful life of 6 months) 0.1 Licenses (useful lives of 10 years) 0.9 Internal-use software (useful life of 3 years) 0.1 Goodwill 28.7 Total assets acquired 32.6 Liabilities assumed: Current operating lease liabilities 0.1 Accounts payable 0.1 Accrued payroll 0.2 Other current liabilities 0.2 Long-term operating lease liabilities 0.2 Total liabilities assumed 0.8 Noncontrolling interests 15.9 Net assets acquired $ 15.9 Information regarding the cash paid for the acquisitions during each period presented is as follows (in millions): Three Months Ended June 30, Six Months Ended June 30, 2022 2021 2022 2021 Fair value of assets acquired $ — $ 11.9 $ 3.9 $ 11.9 Goodwill — 92.4 28.7 92.4 Fair value of liabilities assumed — (2.0) (0.8) (2.0) Fair value of noncontrolling interest owned by joint venture partner — (3.9) (15.9) (3.9) Cash paid for acquisition (1) $ — $ 98.4 $ 15.9 $ 98.4 (1) As discussed above, the $15.9 million was paid on December 31, 2021; therefore, this amount is not included in the consolidated statement of cash flows for the six months ended June 30, 2022. Pro Forma Results of Operations The following table summarizes the results of operations of the above mentioned acquisition from its respective date of acquisition included in our condensed consolidated statements of income and the unaudited pro forma results of operations of the combined entity had the date of the acquisitions been January 1, 2021 (in millions): Net Service Net (Loss) Income Acquired entities only: Actual from acquisition date to June 30, 2022 $ 3.1 $ (0.1) Combined entity: Supplemental pro forma from 04/01/2022-06/30/2022 268.0 20.1 Combined entity: Supplemental pro forma from 04/01/2021-06/30/2021 288.1 32.3 Combined entity: Supplemental pro forma from 01/01/2022-06/30/2022 542.3 46.2 Combined entity: Supplemental pro forma from 01/01/2021-06/30/2021 560.9 60.4 The information presented above is for illustrative purposes only and is not necessarily indicative of results that would have been achieved if the acquisition had occurred as of the beginning of our 2021 period. For information regarding acquisitions completed in 2021, see Note 2, Business Combinations , to the consolidated financial statements included in the Form 10. |
Variable Interest Entities (VIE
Variable Interest Entities (VIEs) | 6 Months Ended |
Jun. 30, 2022 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Variable Interest Entities (VIEs) | Variable Interest Entities (“VIEs”):As of June 30, 2022 and December 31, 2021, we consolidated two limited partnership-like entities that are VIEs and of which we are the primary beneficiary. Our ownership percentages in these entities are 60% and 90% as of June 30, 2022. Through partnership and management agreements with or governing these entities, we manage these entities and handle all day-to-day operating decisions. Accordingly, we have the decision making power over the activities that most significantly impact the economic performance of the VIEs and an obligation to absorb losses or receive benefits from the VIEs that could potentially be significant to the VIEs. These decisions and significant activities include, but are not limited to, marketing efforts, oversight of patient admissions, medical training, nurse and therapist scheduling, provision of healthcare services, billing, collections and creation and maintenance of medical records. The terms of the agreements governing the VIEs prohibit us from using the assets of the VIEs to satisfy the obligations of other entities. The carrying amounts and classifications of the consolidated VIEs’ assets and liabilities, which are included in our condensed consolidated balance sheet, are as follows (in millions): June 30, December 31, Assets Current assets: Restricted cash $ 3.3 $ 1.7 Accounts receivable 2.8 2.8 Other current assets 0.1 — Total current assets 6.2 4.5 Operating lease right-of-use assets 0.2 0.1 Goodwill 12.4 12.3 Intangible assets, net 1.2 1.3 Total assets $ 20.0 $ 18.2 Liabilities Current liabilities: Current operating lease liabilities $ 0.1 $ 0.1 Accrued payroll 0.4 0.3 Other current liabilities 0.1 — Total current liabilities 0.6 0.4 Long-term operating lease liabilities 0.1 — Total liabilities $ 0.7 $ 0.4 |
Long-term Debt
Long-term Debt | 6 Months Ended |
Jun. 30, 2022 | |
Debt Disclosure [Abstract] | |
Long-term Debt | Long-term Debt: Our long-term debt outstanding consists of the following (in millions): June 30, 2022 December 31, 2021 Credit Agreement— Advances under revolving credit facility $ 170.0 $ — Term loan A facility 397.7 — Other notes payable — 2.0 Finance lease obligations 6.2 6.5 573.9 8.5 Less: Current portion (23.6) (5.0) Long-term debt, net of current portion $ 550.3 $ 3.5 The following chart shows scheduled principal payments due on long-term debt for the next five years and thereafter (in millions): Amount July 1 through December 31, 2022 $ 12.0 2023 22.7 2024 21.3 2025 20.2 2026 20.0 2027 480.0 2028 and thereafter — Gross maturities 576.2 Less unamortized debt issuance costs (2.3) Total $ 573.9 In June 2022, the Company entered into a credit agreement (the “Credit Agreement”) that consists of a $400 million term loan A facility (the “Term Loan A Facility”) and a $350 million revolving credit facility (the “Revolving Credit Facility” and together with the Term Loan A Facility, the “Credit Facilities”). The Credit Facilities mature five years from the closing date thereof. Interest on the loans under the Credit Facilities is calculated by reference to the Secured Overnight Financing Rate (“SOFR”) or an alternative base rate, plus an applicable interest rate margin. Enhabit may voluntarily prepay outstanding loans under the Credit Facilities at any time without premium or penalty, other than customary breakage costs with respect to SOFR loans. The Term Loan A Facility contains customary mandatory prepayments, including with respect to proceeds from asset sales and from certain incurrences of indebtedness. The Term Loan A Facility amortizes by an amount per annum equal to 5.0% of the outstanding principal amount thereon as of the closing date, payable in equal quarterly installments, with the balance being payable on the date that is five years after the closing of the Term Loan A Facility. The Revolving Credit Facility provides us with the ability to borrow and obtain letters of credit, which will be subject to a $75 million sublimit in amounts available to be drawn at any time prior to the date that is five years after the closing of the Revolving Credit Facility. The obligations under the Credit Facilities will be guaranteed by our existing and future wholly-owned domestic material subsidiaries, subject to certain exceptions. Borrowings under the Credit Facilities will be secured by first priority liens on substantially all the assets of Enhabit and the guarantors, subject to certain exceptions. The Credit Facilities contain representations and warranties, affirmative and negative covenants and events of default customary for secured financings of this type, including limitations with respect to liens, fundamental changes, indebtedness, restricted payments, investments and affiliate transactions, in each case, subject to a number of important exceptions and qualifications. In addition, the Credit Facilities will obligate us to maintain certain maximum total net leverage ratios and a minimum interest coverage ratio. On June 30, 2022, we drew the full $400 million of the Term Loan A Facility and $170 million on the Revolving Credit Facility. The net proceeds of $566.6 million were distributed to Encompass prior to the completion of the Distribution. As of June 30, 2022, amounts drawn under the Term Loan A Facility and the Revolving Credit Facility had an interest rate of 3.9%. For additional information on the Separation, see Note 1, Summary of Significant Accounting Policies. The carrying amounts and estimated fair values for our long-term debt are presented in the following table (in millions): As of June 30, 2022 As of December 31, 2021 Carrying Amount Estimated Fair Value Carrying Amount Estimated Fair Value Long-term debt: Advances under revolving credit facility $ 170.0 $ 170.0 $ — $ — Term loan A facility 397.7 400.0 — — Other notes payable — — 2.0 2.0 Fair values for our long-term debt and financial commitments are determined using inputs, including quoted prices in nonactive markets, that are observable either directly or indirectly, or Level 2 inputs within the fair value hierarchy. See Note 1, Summary of Significant Accounting Policies , “Fair Value Measurements” to the consolidated financial statements included in the Form 10. |
Stock-Based Payments
Stock-Based Payments | 6 Months Ended |
Jun. 30, 2022 | |
Share-Based Payment Arrangement [Abstract] | |
Stock-Based Payments | Stock-Based Payments: The Company’s employees have historically participated in Encompass’s various stock-based plans, which are described in the consolidated financial statements included in the Form 10. On July 1, 2022, all unvested Encompass restricted stock awards (“RSA”) and stock options issued to our employees were canceled and replaced with shares issued under the Enhabit 2022 Omnibus Performance Incentive Plan (the “2022 Plan”). See further discussion of the 2022 Plan in the Form 10. All references to shares in the discussion below refer to shares of Encompass’s common stock. During the six months ended June 30, 2022, Encompass issued a total of 128,000 RSAs to members of our management team. Approximately 47,000 of these awards contain only a service condition, while the remainder contain both a service and a performance condition. Additionally, Encompass granted approximately 22,000 stock options to a member of our management team. The fair value of these awards and options was determined using the policies described in Note 1, Summary of Significant Accounting Policies , and Note 10, Stock-Based Payments , to the consolidated financial statements included in the Form 10. Included in the allocation of expenses related to certain Encompass functions are stock compensation expenses resulting from RSAs and stock options totaling $0.6 million and $0.9 million for the three months ended June 30, 2022 and 2021, respectively, and $1.1 million and $1.1 million for the six months ended June 30, 2022 and 2021, respectively. |
Income Taxes
Income Taxes | 6 Months Ended |
Jun. 30, 2022 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Income Taxes: Our Income tax expense of $6.4 million and $10.4 million for the three months ended June 30, 2022 and 2021, respectively, primarily resulted from the application of our estimated effective blended federal and state income tax rate. Our Income tax expense of $15.1 million and $19.1 million for the six months ended June 30, 2022 and 2021, respectively, primarily resulted from the application of our estimated effective blended federal and state income tax rate. On March 27, 2020, President Trump signed into law the Coronavirus Aid, Relief, and Economic Security Act of 2020 (the ‘‘CARES Act’’), which includes provisions relating to net operating loss carryback periods, alternative minimum tax credit refunds, modifications to the net interest deduction limitations, technical corrections to tax depreciation methods for qualified improvement property and deferral of employer payroll taxes. The CARES Act did not materially impact our effective tax rate for the three and six months ended June 30, 2022 and 2021, although it has impacted the timing of cash payments for taxes. Deferred payments of social security taxes totaled $14.9 million as of June 30, 2022 and December 31, 2021, all of which is included in Accrued payroll in the condensed consolidated balance sheets. Historically, the Company has joined Encompass in the filing of various consolidated federal, state and local income tax returns and was a party to an income tax allocation agreement (the “Tax Sharing Agreement”). Under the Tax Sharing Agreement, the Company paid to or received from Encompass the amount, if any, by which the Encompass’s income tax liability was affected by virtue of inclusion of the Company in the consolidated income tax returns of Encompass. Effectively, that arrangement resulted in the Company’s annual income tax provision being computed, with adjustments, as if the Company filed separate consolidated income tax returns. At the Distribution, the Company entered into the Tax Matters Agreement with Encompass, which terminated the existing Tax Sharing Agreement. The Tax Matters Agreement governs the Company’s respective rights, responsibilities and obligations with respect to taxes (including responsibility for taxes arising in the ordinary course of business and taxes, if any, incurred as a result of any failure of the distribution to qualify as tax-free for U.S. federal income tax purposes), entitlement to refunds, allocation of tax attributes, preparation of tax returns, control of tax contests and other matters. In addition, the Tax Matters Agreement imposes certain restrictions on the Company and its subsidiaries until the second anniversary of the Distribution (including restrictions on share issuances, business combinations, sales of assets and similar transactions) that are designed to preserve the tax-free status of the Distribution and certain related transactions. The Tax Matters Agreement provides special rules that allocate tax liabilities in the event the Distribution or certain related transactions are not tax-free. In general, under the Tax Matters Agreement, each party is responsible for any taxes imposed on Encompass or the Company that arise from the failure of the Distribution or certain related transactions to qualify as a transaction that is generally tax-free for U.S. federal income tax purposes under Section 355 of the Code, to the extent that the failure to so qualify is attributable to actions, events or transactions relating to such party’s respective stock, assets or business, or a breach of the relevant covenants made by that party in the Tax Matters Agreement. |
Contingencies and Other Commitm
Contingencies and Other Commitments | 6 Months Ended |
Jun. 30, 2022 | |
Commitments and Contingencies Disclosure [Abstract] | |
Contingencies and Other Commitments | Contingencies and Other Commitments:We operate in a highly regulated industry in which healthcare providers are routinely subject to litigation. As a result, various lawsuits, claims, and legal and regulatory proceedings have been and can be expected to be instituted or asserted against us. The resolution of any such lawsuits, claims, or legal and regulatory proceedings could materially and adversely affect our financial position, results of operations, and cash flows in a given period. |
Segment Reporting
Segment Reporting | 6 Months Ended |
Jun. 30, 2022 | |
Segment Reporting [Abstract] | |
Segment Reporting | Segment Reporting : Our internal financial reporting and management structure is focused on the major types of services provided by the Company. We manage our operations using two operating segments that are also our reportable segments: (1) home health and (2) hospice. These reportable operating segments are consistent with information used by our chief executive officer, who is our chief operating decision maker, to assess performance and allocate resources. The following is a brief description of our reportable segments: • Home Health - Our home health operations represent the nation’s fourth largest provider of Medicare-certified skilled home health services in terms of Medicare revenues. We operate home health agencies in 34 states, with a concentration in the southern half of the United States. As of June 30, 2022, the Company operates 251 home health agencies. We are the sole owner of 240 of these locations. We retain 50.0% to 81.0% ownership in the remaining 11 jointly owned locations. Our home health services include a comprehensive range of Medicare-certified home nursing services to adult patients in need of care. These services include, among others, skilled nursing, physical, occupational, and speech therapy, medical social work, and home health aide services. • Hospice - Our hospice operations represent the nation’s twelfth largest provider of Medicare-certified hospice services in terms of Medicare revenues. We operate hospice agencies in 22 states, with a concentration in the southern half of the United States. As of June 30, 2022, the Company operates 100 hospice agencies. We are the sole owner of 96 of these locations. We retain 50.0% to 90.0% ownership in the remaining four jointly owned locations. Our hospice services include in-home services to terminally ill patients and their families to address patients’ physical needs, including pain control and symptom management, and to provide emotional and spiritual support. The accounting policies of our reportable segments are the same as those described in Note 1, Summary of Significant Accounting Policies, to the consolidated financial statements included in the Form 10. All revenues for our services are generated through external customers. See Note 1, Summary of Significant Accounting Policies , “Net Service Revenue,” for the disaggregation of our revenues. No corporate overhead is allocated to either of our reportable segments. Our chief operating decision maker evaluates the performance of our segments and allocates resources to them based on adjusted earnings before interest, taxes, depreciation, and amortization (“Segment Adjusted EBITDA”). Segment assets are not reviewed by our chief operating decision maker and therefore are not disclosed below. Selected financial information for our reportable segments is as follows (in millions): Home Health Hospice Three Months Ended Three Months Ended 2022 2021 2022 2021 Net service revenue $ 220.2 $ 232.3 $ 47.8 $ 53.8 Cost of service (excluding depreciation and amortization) 108.8 106.6 21.5 23.0 Gross margin 111.4 125.7 26.3 30.8 General and administrative expenses 57.8 63.7 15.5 16.3 Other income — (1.6) — — Equity in net income of nonconsolidated affiliates — (0.2) — — Noncontrolling interests 0.6 0.5 0.1 — Segment Adjusted EBITDA $ 53.0 $ 63.3 $ 10.7 $ 14.5 Home Health Hospice Six Months Ended June 30, Six Months Ended June 30, 2022 2021 2022 2021 Net service revenue $ 445.1 $ 452.2 $ 97.2 $ 104.4 Cost of service (excluding depreciation and amortization) 216.8 209.6 43.2 44.6 Gross margin 228.3 242.6 54.0 59.8 General and administrative expenses 116.5 124.4 30.4 31.8 Other income — (1.6) — — Equity in net income of nonconsolidated affiliates — (0.4) — — Noncontrolling interests 1.1 0.9 0.2 — Segment Adjusted EBITDA $ 110.7 $ 119.3 $ 23.4 $ 28.0 Segment reconciliations (in millions): Three Months Ended Six Months Ended 2022 2021 2022 2021 Total Segment Adjusted EBITDA $ 63.7 $ 77.8 $ 134.1 $ 147.3 Non-segment general and administrative expenses (27.7) (24.5) (53.5) (47.6) Depreciation and amortization (8.2) (9.4) (16.7) (18.5) Interest expense and amortization of debt discounts and fees (0.1) — (0.1) (0.1) Net income attributable to noncontrolling interests 0.7 0.5 1.3 0.9 Stock-based compensation expense (1.2) (1.2) (2.5) (1.8) Income before income taxes and noncontrolling interests $ 27.2 $ 43.2 $ 62.6 $ 80.2 Additional detail regarding the revenues of our operating segments by service line follows (in millions): Three Months Ended Six Months Ended 2022 2021 2022 2021 Home Health: Episodic $ 186.3 $ 201.3 $ 378.0 $ 395.5 Non-Episodic 31.2 27.2 61.6 49.4 Other 2.7 3.8 5.5 7.3 Total home health 220.2 232.3 445.1 452.2 Hospice 47.8 53.8 97.2 104.4 Total net service revenue $ 268.0 $ 286.1 $ 542.3 $ 556.6 |
Related Party Transactions
Related Party Transactions | 6 Months Ended |
Jun. 30, 2022 | |
Related Party Transactions [Abstract] | |
Related Party Transactions | Related Party Transactions: In connection with the Separation, we entered into several agreements with Encompass that govern the relationship of the parties following the Distribution, including a Separation and Distribution Agreement, a Transition Services Agreement, a Tax Matters Agreement and an Employee Matters Agreement. The Separation and Distribution Agreement contains provisions that, among other things, relate to (i) assets, liabilities, and contracts to be transferred, assumed, and assigned to each of Enhabit and Encompass as part of the Separation, (ii) cross-indemnities principally designed to place financial responsibility for the obligations and liabilities of the Enhabit business with Enhabit and financial responsibility for the obligations and liabilities of Encompass’s remaining business with Encompass, (iii) procedures with respect to claims subject to indemnification and related matters, (iv) the allocation between Enhabit and Encompass of rights and obligations under existing insurance policies with respect to occurrences prior to completion of the Distribution, as well as the right to proceeds and the obligation to incur certain deductibles under certain insurance policies, and (v) procedures governing Enhabit’s and Encompass’s obligations and allocations of liabilities with respect to ongoing litigation matters that may implicate each of Enhabit’s business and Encompass’s business. Allocation of Corporate Expenses Encompass provided the Company with certain services, including, but not limited to, executive oversight, treasury, legal, accounting, human resources, tax, internal audit, financial reporting, information technology and investor relations. Some of these services continue to be provided by Encompass to the Company on a temporary basis under the Transition Services Agreement. Our condensed consolidated financial statements reflect an allocation of these costs. When specific identification is not practicable, a proportional cost method is used, primarily based on revenue, and headcount. These cost allocations reasonably reflect these services and the benefits derived for the periods presented. These allocations may not be indicative of the actual expenses that would have been incurred as an independent, publicly-traded company. In addition, the Company’s employees have historically participated in Encompass’s various stock-based plans as discussed in Note 5, Stock-Based Payments . The allocations of services from Encompass to the Company and stock-based compensation are reflected in General and administrative expenses in the condensed consolidated statements of operations as follows (in millions): Three Months Ended June 30, Six Months Ended June 30, 2022 2021 2022 2021 Overhead allocation $ 4.1 $ 4.6 $ 7.7 $ 8.4 Stock-based compensation 1.2 1.2 2.5 1.8 For information related to our Tax Sharing Agreement with Encompass, see Note 6, Income Taxes. Software Services The Company is party to a client service and license agreement (the “HCHB Agreement”) with Homecare Homebase, LLC (“HCHB”) for a home health and hospice care management software product that includes multiple modules for collecting, storing, retrieving and disseminating patient health and health-related information by and on behalf of home health and hospice agencies, point of care staff, physicians, patients and patient family members via hand-held mobile computing devices and desktop computers linked with a website hosted by HCHB. The Company’s former chief executive officer along with others created this software product and eventually sold it to HCHB. This individual serves as the company’s executive chairman. As of June 19, 2021, this individual no longer serves as our chief executive officer or in any other role in the Company. Pursuant to the HCHB Agreement, we pay fees to HCHB based on, among other things, the software modules in use, the training programs, and the number of licensed users. Total HCHB expenses of $1.5 million and $3.0 million are included in General and administrative expenses in the condensed consolidated statements of income for the three and six months ended June 30, 2021, respectively. Data Analytics Investment During 2019, we made a $2.0 million investment in Medalogix, LLC, a healthcare predictive data and analytics company (“Medalogix”); this investment is accounted for under the measurement alternative for investments. In April 2021, Medalogix entered in an agreement whereby TVG Logic Holdings, LLC (“TVG”) acquired a majority of the issued and outstanding membership interests of Medalogix for cash. The transaction closed in May 2021. As a result of the transaction, the Company received $2.0 million of cash and a minority equity investment in TVG and recorded a $1.6 million gain as part of Other income during the three and six months ended June 30, 2021. During the three months ended June 30, 2022 and 2021, we incurred costs of approximately $0.7 million and $1.1 million, respectively, and during the six months ended June 30, 2022 and 2021, we incurred costs of approximately $2.3 million and $1.7 million, respectively, in connection with the usage of Medalogix’s analytics platforms. These costs are included in General and administrative expenses in the condensed consolidated statements of income. |
Summary of Significant Accoun_2
Summary of Significant Accounting Policies (Policies) | 6 Months Ended |
Jun. 30, 2022 | |
Accounting Policies [Abstract] | |
Basis of Presentation | The accompanying unaudited condensed consolidated financial statements of the Company and its subsidiaries should be read in conjunction with the audited consolidated financial statements and accompanying notes contained in the Company’s Registration Statement on Form 10 (the “Form 10”) filed with the United States Securities and Exchange Commission (the “SEC”) on May 25, 2022, as amended June 9, 2022 and June 14, 2022. The unaudited condensed consolidated financial statements have been prepared in accordance with the rules and regulations of the SEC applicable to interim financial information. Certain information and note disclosures included in financial statements prepared in accordance with generally accepted accounting principles in the United States of America (“GAAP”) have been omitted in these interim statements, as allowed by such SEC rules and regulations. The condensed consolidated balance sheet as of December 31, 2021 has been derived from audited financial statements, but it does not include all disclosures required by GAAP. However, we believe the disclosures are adequate to make the information presented not misleading. |
Consolidation | The accompanying unaudited condensed consolidated financial statements of the Company and its subsidiaries have been derived from the consolidated financial statements and accounting records of Encompass as if the Company had operated on a stand-alone basis during the periods presented and were prepared utilizing the legal entity approach, in accordance with GAAP, and pursuant to the rules and regulations of the SEC. Historically, the Company was reported as a single reportable segment within Encompass’s reportable segments and did not operate as a stand-alone company. Accordingly, Encompass historically reported the financial position and the related results of operations, cash flows and changes in equity of the Company as a component of Encompass’s condensed consolidated financial statements. The unaudited condensed consolidated financial statements include an allocation of expenses related to certain Encompass corporate functions as discussed in Note 9, Related Party Transactions. The unaudited condensed consolidated financial statements also include revenues and expenses directly attributable to the Company and assets and liabilities specifically attributable to the Company. Encompass’s third-party debt and related interest expense have not been attributed to the Company because the Company is not the primary legal obligor of the debt and the borrowings are not specifically identifiable to the Company. However, subsequent to April 23, 2020, the Company was a guarantor for Encompass’s credit agreement and senior debt. In connection with the Distribution, the Company was released from its guarantee of Encompass’s indebtedness. The Company maintains its own cash management system and does not participate in a centralized cash management arrangement with Encompass. The income tax amounts in these unaudited condensed consolidated financial statements have been calculated based on a separate return methodology and are presented as if our income gave rise to separate federal and state consolidated income tax return filing obligations in the respective jurisdictions in which we operate. In addition to various separate state and local income tax filings, we joined with Encompass in various U.S. federal, state and local consolidated income tax filings prior to the Separation. See Note 6, Income Taxes , for information related to our Tax Sharing Agreement with Encompass. The unaudited condensed consolidated financial statements include the assets, liabilities, revenues, and expenses of all wholly-owned subsidiaries, majority-owned subsidiaries over which we exercise control, and, when applicable, entities in which we have a controlling financial interest. We use the equity method to account for our investments in entities we do not control, but for which we have the ability to exercise significant influence over operating and financial policies. Consolidated Net income attributable to Enhabit, Inc. includes our share of the net earnings of these entities. We eliminate all intercompany accounts and transactions within the Company from our financial results. Transactions between the Company and Encompass have been included in these condensed consolidated financial statements. The transfers with Encompass that are not expected to be settled in cash, are reflected in stockholders’ equity on the condensed consolidated balance sheets and within Capital in Excess of Par Value |
Recent Accounting Pronouncements | Recent Accounting Pronouncements — We do not believe any recently issued, but not yet effective, accounting standards will have a material effect on our condensed consolidated financial position, results of operations, or cash flows. |
Summary of Significant Accoun_3
Summary of Significant Accounting Policies (Tables) | 6 Months Ended |
Jun. 30, 2022 | |
Accounting Policies [Abstract] | |
Disaggregation of Net Service Revenue by Payor Source and Segment | Our Net service revenue disaggregated by payor source and segment are as follows (in millions): Home Health Hospice Consolidated Three Months Ended Three Months Ended Three Months Ended 2022 2021 2022 2021 2022 2021 Medicare $ 164.0 $ 182.4 $ 46.2 $ 52.6 $ 210.2 $ 235.0 Medicare Advantage 36.9 29.9 — — 36.9 29.9 Managed care 16.6 15.8 1.4 0.8 18.0 16.6 Medicaid 2.6 3.7 0.2 0.4 2.8 4.1 Other 0.1 0.5 — — 0.1 0.5 Total $ 220.2 $ 232.3 $ 47.8 $ 53.8 $ 268.0 $ 286.1 Home Health Hospice Consolidated Six Months Ended Six Months Ended Six Months Ended 2022 2021 2022 2021 2022 2021 Medicare $ 333.3 $ 356.4 $ 94.1 $ 102.4 $ 427.4 $ 458.8 Medicare Advantage 71.4 57.9 — — 71.4 57.9 Managed care 34.4 29.6 2.5 1.3 36.9 30.9 Medicaid 5.7 7.3 0.6 0.7 6.3 8.0 Other 0.3 1.0 — — 0.3 1.0 Total $ 445.1 $ 452.2 $ 97.2 $ 104.4 $ 542.3 $ 556.6 |
Business Combinations (Tables)
Business Combinations (Tables) | 6 Months Ended |
Jun. 30, 2022 | |
Business Combination and Asset Acquisition [Abstract] | |
Schedule of Preliminary Fair Value of Assets Acquired and Liabilities Assumed | The preliminary fair value of the assets acquired and liabilities assumed at the acquisition date were as follows (in millions): Cash and cash equivalents $ 0.7 Accounts receivable, net 1.6 Operating lease right-of-use-assets 0.3 Identifiable intangible assets: Noncompete agreement (useful life of 5 years) 0.2 Trade name (useful life of 6 months) 0.1 Licenses (useful lives of 10 years) 0.9 Internal-use software (useful life of 3 years) 0.1 Goodwill 28.7 Total assets acquired 32.6 Liabilities assumed: Current operating lease liabilities 0.1 Accounts payable 0.1 Accrued payroll 0.2 Other current liabilities 0.2 Long-term operating lease liabilities 0.2 Total liabilities assumed 0.8 Noncontrolling interests 15.9 Net assets acquired $ 15.9 |
Schedule of Information Regarding Net Cash Paid for Acquisitions | Information regarding the cash paid for the acquisitions during each period presented is as follows (in millions): Three Months Ended June 30, Six Months Ended June 30, 2022 2021 2022 2021 Fair value of assets acquired $ — $ 11.9 $ 3.9 $ 11.9 Goodwill — 92.4 28.7 92.4 Fair value of liabilities assumed — (2.0) (0.8) (2.0) Fair value of noncontrolling interest owned by joint venture partner — (3.9) (15.9) (3.9) Cash paid for acquisition (1) $ — $ 98.4 $ 15.9 $ 98.4 (1) As discussed above, the $15.9 million was paid on December 31, 2021; therefore, this amount is not included in the consolidated statement of cash flows for the six months ended June 30, 2022. |
Summary of Pro Forma Information | The following table summarizes the results of operations of the above mentioned acquisition from its respective date of acquisition included in our condensed consolidated statements of income and the unaudited pro forma results of operations of the combined entity had the date of the acquisitions been January 1, 2021 (in millions): Net Service Net (Loss) Income Acquired entities only: Actual from acquisition date to June 30, 2022 $ 3.1 $ (0.1) Combined entity: Supplemental pro forma from 04/01/2022-06/30/2022 268.0 20.1 Combined entity: Supplemental pro forma from 04/01/2021-06/30/2021 288.1 32.3 Combined entity: Supplemental pro forma from 01/01/2022-06/30/2022 542.3 46.2 Combined entity: Supplemental pro forma from 01/01/2021-06/30/2021 560.9 60.4 |
Variable Interest Entities (V_2
Variable Interest Entities (VIEs) (Tables) | 6 Months Ended |
Jun. 30, 2022 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Schedule of Variable Interest Entities | The carrying amounts and classifications of the consolidated VIEs’ assets and liabilities, which are included in our condensed consolidated balance sheet, are as follows (in millions): June 30, December 31, Assets Current assets: Restricted cash $ 3.3 $ 1.7 Accounts receivable 2.8 2.8 Other current assets 0.1 — Total current assets 6.2 4.5 Operating lease right-of-use assets 0.2 0.1 Goodwill 12.4 12.3 Intangible assets, net 1.2 1.3 Total assets $ 20.0 $ 18.2 Liabilities Current liabilities: Current operating lease liabilities $ 0.1 $ 0.1 Accrued payroll 0.4 0.3 Other current liabilities 0.1 — Total current liabilities 0.6 0.4 Long-term operating lease liabilities 0.1 — Total liabilities $ 0.7 $ 0.4 |
Long-term Debt (Tables)
Long-term Debt (Tables) | 6 Months Ended |
Jun. 30, 2022 | |
Debt Disclosure [Abstract] | |
Schedule of Long-Term Debt Outstanding | Our long-term debt outstanding consists of the following (in millions): June 30, 2022 December 31, 2021 Credit Agreement— Advances under revolving credit facility $ 170.0 $ — Term loan A facility 397.7 — Other notes payable — 2.0 Finance lease obligations 6.2 6.5 573.9 8.5 Less: Current portion (23.6) (5.0) Long-term debt, net of current portion $ 550.3 $ 3.5 |
Schedule of Principal Payments Due on Long-term Debt | The following chart shows scheduled principal payments due on long-term debt for the next five years and thereafter (in millions): Amount July 1 through December 31, 2022 $ 12.0 2023 22.7 2024 21.3 2025 20.2 2026 20.0 2027 480.0 2028 and thereafter — Gross maturities 576.2 Less unamortized debt issuance costs (2.3) Total $ 573.9 |
Schedule of Carrying Values and Estimated Fair Values of Long-term Debt | The carrying amounts and estimated fair values for our long-term debt are presented in the following table (in millions): As of June 30, 2022 As of December 31, 2021 Carrying Amount Estimated Fair Value Carrying Amount Estimated Fair Value Long-term debt: Advances under revolving credit facility $ 170.0 $ 170.0 $ — $ — Term loan A facility 397.7 400.0 — — Other notes payable — — 2.0 2.0 |
Segment Reporting (Tables)
Segment Reporting (Tables) | 6 Months Ended |
Jun. 30, 2022 | |
Segment Reporting [Abstract] | |
Schedule of Selected Financial Information | Selected financial information for our reportable segments is as follows (in millions): Home Health Hospice Three Months Ended Three Months Ended 2022 2021 2022 2021 Net service revenue $ 220.2 $ 232.3 $ 47.8 $ 53.8 Cost of service (excluding depreciation and amortization) 108.8 106.6 21.5 23.0 Gross margin 111.4 125.7 26.3 30.8 General and administrative expenses 57.8 63.7 15.5 16.3 Other income — (1.6) — — Equity in net income of nonconsolidated affiliates — (0.2) — — Noncontrolling interests 0.6 0.5 0.1 — Segment Adjusted EBITDA $ 53.0 $ 63.3 $ 10.7 $ 14.5 Home Health Hospice Six Months Ended June 30, Six Months Ended June 30, 2022 2021 2022 2021 Net service revenue $ 445.1 $ 452.2 $ 97.2 $ 104.4 Cost of service (excluding depreciation and amortization) 216.8 209.6 43.2 44.6 Gross margin 228.3 242.6 54.0 59.8 General and administrative expenses 116.5 124.4 30.4 31.8 Other income — (1.6) — — Equity in net income of nonconsolidated affiliates — (0.4) — — Noncontrolling interests 1.1 0.9 0.2 — Segment Adjusted EBITDA $ 110.7 $ 119.3 $ 23.4 $ 28.0 |
Segment Reconciliation | Segment reconciliations (in millions): Three Months Ended Six Months Ended 2022 2021 2022 2021 Total Segment Adjusted EBITDA $ 63.7 $ 77.8 $ 134.1 $ 147.3 Non-segment general and administrative expenses (27.7) (24.5) (53.5) (47.6) Depreciation and amortization (8.2) (9.4) (16.7) (18.5) Interest expense and amortization of debt discounts and fees (0.1) — (0.1) (0.1) Net income attributable to noncontrolling interests 0.7 0.5 1.3 0.9 Stock-based compensation expense (1.2) (1.2) (2.5) (1.8) Income before income taxes and noncontrolling interests $ 27.2 $ 43.2 $ 62.6 $ 80.2 |
Additional Detail Regarding Revenues by Service Line | Additional detail regarding the revenues of our operating segments by service line follows (in millions): Three Months Ended Six Months Ended 2022 2021 2022 2021 Home Health: Episodic $ 186.3 $ 201.3 $ 378.0 $ 395.5 Non-Episodic 31.2 27.2 61.6 49.4 Other 2.7 3.8 5.5 7.3 Total home health 220.2 232.3 445.1 452.2 Hospice 47.8 53.8 97.2 104.4 Total net service revenue $ 268.0 $ 286.1 $ 542.3 $ 556.6 |
Related Party Transactions (Tab
Related Party Transactions (Tables) | 6 Months Ended |
Jun. 30, 2022 | |
Related Party Transactions [Abstract] | |
Schedule of Allocation of Services from Encompass to the Company | The allocations of services from Encompass to the Company and stock-based compensation are reflected in General and administrative expenses in the condensed consolidated statements of operations as follows (in millions): Three Months Ended June 30, Six Months Ended June 30, 2022 2021 2022 2021 Overhead allocation $ 4.1 $ 4.6 $ 7.7 $ 8.4 Stock-based compensation 1.2 1.2 2.5 1.8 |
Summary of Significant Accoun_4
Summary of Significant Accounting Policies - Additional Information (Details) $ / shares in Units, $ in Millions | 6 Months Ended | ||
Jul. 01, 2022 $ / shares | Jun. 30, 2022 USD ($) state segment $ / shares | Dec. 31, 2021 $ / shares | |
Class of Stock [Line Items] | |||
Number of states in which entity operates | state | 34 | ||
Number of reportable segments | segment | 2 | ||
Common stock, par value (in dollars per share) | $ 0.01 | $ 0.01 | |
Trade name | |||
Class of Stock [Line Items] | |||
Finite lived intangible asset | $ | $ 135.2 | ||
Subsequent Event | |||
Class of Stock [Line Items] | |||
Common stock, par value (in dollars per share) | $ 0.01 | ||
Stock conversion ratio | 0.5 |
Summary of Significant Accoun_5
Summary of Significant Accounting Policies - Net Service Revenue (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2022 | Jun. 30, 2021 | Jun. 30, 2022 | Jun. 30, 2021 | |
Disaggregation of Revenue [Line Items] | ||||
Net service revenue | $ 268 | $ 286.1 | $ 542.3 | $ 556.6 |
Medicare | ||||
Disaggregation of Revenue [Line Items] | ||||
Net service revenue | 210.2 | 235 | 427.4 | 458.8 |
Medicare Advantage | ||||
Disaggregation of Revenue [Line Items] | ||||
Net service revenue | 36.9 | 29.9 | 71.4 | 57.9 |
Managed care | ||||
Disaggregation of Revenue [Line Items] | ||||
Net service revenue | 18 | 16.6 | 36.9 | 30.9 |
Medicaid | ||||
Disaggregation of Revenue [Line Items] | ||||
Net service revenue | 2.8 | 4.1 | 6.3 | 8 |
Other | ||||
Disaggregation of Revenue [Line Items] | ||||
Net service revenue | 0.1 | 0.5 | 0.3 | 1 |
Home Health | ||||
Disaggregation of Revenue [Line Items] | ||||
Net service revenue | 220.2 | 232.3 | 445.1 | 452.2 |
Home Health | Medicare | ||||
Disaggregation of Revenue [Line Items] | ||||
Net service revenue | 164 | 182.4 | 333.3 | 356.4 |
Home Health | Medicare Advantage | ||||
Disaggregation of Revenue [Line Items] | ||||
Net service revenue | 36.9 | 29.9 | 71.4 | 57.9 |
Home Health | Managed care | ||||
Disaggregation of Revenue [Line Items] | ||||
Net service revenue | 16.6 | 15.8 | 34.4 | 29.6 |
Home Health | Medicaid | ||||
Disaggregation of Revenue [Line Items] | ||||
Net service revenue | 2.6 | 3.7 | 5.7 | 7.3 |
Home Health | Other | ||||
Disaggregation of Revenue [Line Items] | ||||
Net service revenue | 0.1 | 0.5 | 0.3 | 1 |
Hospice | ||||
Disaggregation of Revenue [Line Items] | ||||
Net service revenue | 47.8 | 53.8 | 97.2 | 104.4 |
Hospice | Medicare | ||||
Disaggregation of Revenue [Line Items] | ||||
Net service revenue | 46.2 | 52.6 | 94.1 | 102.4 |
Hospice | Medicare Advantage | ||||
Disaggregation of Revenue [Line Items] | ||||
Net service revenue | 0 | 0 | 0 | 0 |
Hospice | Managed care | ||||
Disaggregation of Revenue [Line Items] | ||||
Net service revenue | 1.4 | 0.8 | 2.5 | 1.3 |
Hospice | Medicaid | ||||
Disaggregation of Revenue [Line Items] | ||||
Net service revenue | 0.2 | 0.4 | 0.6 | 0.7 |
Hospice | Other | ||||
Disaggregation of Revenue [Line Items] | ||||
Net service revenue | $ 0 | $ 0 | $ 0 | $ 0 |
Business Combinations - Additio
Business Combinations - Additional Information (Details) - Joint Venture with Saint Alphonsus System - USD ($) $ in Millions | Dec. 31, 2021 | Jan. 01, 2022 |
Business Acquisition [Line Items] | ||
Equity interest acquired | 50% | |
Payment to acquire business | $ 15.9 | |
Goodwill expected to be tax deductible | $ 14.4 |
Business Combinations - Prelimi
Business Combinations - Preliminary Fair Value of Assets Acquired and Liabilities Assumed (Details) - USD ($) $ in Millions | Jan. 01, 2022 | Jun. 30, 2022 | Dec. 31, 2021 |
Business Acquisition [Line Items] | |||
Goodwill | $ 1,217.7 | $ 1,189 | |
Joint Venture with Saint Alphonsus System | |||
Business Acquisition [Line Items] | |||
Cash and cash equivalents | $ 0.7 | ||
Accounts receivable, net | 1.6 | ||
Operating lease right-of-use-assets | 0.3 | ||
Goodwill | 28.7 | ||
Total assets acquired | 32.6 | ||
Liabilities assumed: | |||
Current operating lease liabilities | 0.1 | ||
Accounts payable | 0.1 | ||
Accrued payroll | 0.2 | ||
Other current liabilities | 0.2 | ||
Long-term operating lease liabilities | 0.2 | ||
Total liabilities assumed | 0.8 | ||
Noncontrolling interests | 15.9 | ||
Net assets acquired | $ 15.9 | ||
Joint Venture with Saint Alphonsus System | Noncompete agreement | |||
Business Acquisition [Line Items] | |||
Intangible asset, useful life | 5 years | ||
Identifiable intangible assets | $ 0.2 | ||
Joint Venture with Saint Alphonsus System | Trade name | |||
Business Acquisition [Line Items] | |||
Intangible asset, useful life | 6 months | ||
Identifiable intangible assets | $ 0.1 | ||
Joint Venture with Saint Alphonsus System | Licenses | |||
Business Acquisition [Line Items] | |||
Intangible asset, useful life | 10 years | ||
Identifiable intangible assets | $ 0.9 | ||
Joint Venture with Saint Alphonsus System | Internal-use software | |||
Business Acquisition [Line Items] | |||
Intangible asset, useful life | 3 years | ||
Identifiable intangible assets | $ 0.1 |
Business Combinations - Net Cas
Business Combinations - Net Cash Paid for Acquisitions (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | |||
Dec. 31, 2021 | Jun. 30, 2022 | Jun. 30, 2021 | Jun. 30, 2022 | Jun. 30, 2021 | |
Business Acquisition [Line Items] | |||||
Cash paid for acquisition | $ 0 | $ 97.7 | |||
Joint Venture with Saint Alphonsus System | |||||
Business Acquisition [Line Items] | |||||
Fair value of assets acquired | $ 0 | $ 11.9 | 3.9 | 11.9 | |
Goodwill | 0 | 92.4 | 28.7 | 92.4 | |
Fair value of liabilities assumed | 0 | (2) | (0.8) | (2) | |
Fair value of noncontrolling interest owned by joint venture partner | 0 | (3.9) | (15.9) | (3.9) | |
Cash paid for acquisition | $ 0 | $ 98.4 | $ 15.9 | $ 98.4 | |
Payment to acquire business | $ 15.9 |
Business Combinations - Pro For
Business Combinations - Pro Forma (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2022 | Jun. 30, 2021 | Jun. 30, 2022 | Jun. 30, 2021 | |
Business Acquisition [Line Items] | ||||
Net service revenue, combined entity | $ 268 | $ 288.1 | $ 542.3 | $ 560.9 |
Net (loss) income attributable to the Company, combined entity | $ 20.1 | $ 32.3 | 46.2 | $ 60.4 |
Joint Venture with Saint Alphonsus System | ||||
Business Acquisition [Line Items] | ||||
Net service revenue, acquired entities only | 3.1 | |||
Net (loss) income attributable to the Company, acquired entities only | $ (0.1) |
Variable Interest Entities (V_3
Variable Interest Entities (VIEs) - Additional Information (Details) - VIE, Primary Beneficiary - variable_interest_entity | 6 Months Ended | |
Jun. 30, 2022 | Dec. 31, 2021 | |
Variable Interest Entity [Line Items] | ||
Number of entities consolidated | 2 | 2 |
Minimum | ||
Variable Interest Entity [Line Items] | ||
Ownership percentage | 60% | |
Maximum | ||
Variable Interest Entity [Line Items] | ||
Ownership percentage | 90% |
Variable Interest Entities (V_4
Variable Interest Entities (VIEs) (Details) - USD ($) $ in Millions | Jun. 30, 2022 | Dec. 31, 2021 | |
Current assets: | |||
Restricted cash | $ 3.5 | $ 2.6 | |
Accounts receivable | 154.6 | 164.5 | |
Total current assets | 217.5 | 178.8 | |
Operating lease right-of-use assets | 43.3 | 48.4 | |
Goodwill | 1,217.7 | 1,189 | |
Intangible assets, net | 111.6 | 259.1 | |
Total assets | [1] | 1,621.4 | 1,720 |
Current liabilities: | |||
Current operating lease liabilities | 14.3 | 14.9 | |
Accrued payroll | 72.8 | 66.4 | |
Other current liabilities | 22.9 | 24.8 | |
Total current liabilities | 154.4 | 136.5 | |
Long-term operating lease liabilities | 29.1 | 33.5 | |
Total liabilities | 765.5 | 236.7 | |
VIE, Primary Beneficiary | |||
Current assets: | |||
Restricted cash | 3.3 | 1.7 | |
Accounts receivable | 2.8 | 2.8 | |
Other current assets | 0.1 | 0 | |
Total current assets | 6.2 | 4.5 | |
Operating lease right-of-use assets | 0.2 | 0.1 | |
Goodwill | 12.4 | 12.3 | |
Intangible assets, net | 1.2 | 1.3 | |
Total assets | 20 | 18.2 | |
Current liabilities: | |||
Current operating lease liabilities | 0.1 | 0.1 | |
Accrued payroll | 0.4 | 0.3 | |
Other current liabilities | 0.1 | 0 | |
Total current liabilities | 0.6 | 0.4 | |
Long-term operating lease liabilities | 0.1 | 0 | |
Total liabilities | $ 0.7 | $ 0.4 | |
[1] Our consolidated assets as of June 30, 2022 and December 31, 2021 include total assets of variable interest entities of $20.0 million and $18.2 million, respectively, that cannot be used by us to settle the obligations of other entities. Our consolidated liabilities as of June 30, 2022 and December 31, 2021 include total liabilities of the variable interest entities of $0.7 million and $0.4 million, respectively. See Note 3, Variable Interest Entities. |
Long-term Debt (Details)
Long-term Debt (Details) - USD ($) $ in Millions | Jun. 30, 2022 | Dec. 31, 2021 |
Debt Instrument [Line Items] | ||
Finance lease obligations | $ 6.2 | $ 6.5 |
Long term debt including current maturities | 573.9 | 8.5 |
Less: Current portion | (23.6) | (5) |
Long-term debt, net of current portion | 550.3 | 3.5 |
Line of credit | Enhabit Credit Agreement | Revolving credit facility | ||
Debt Instrument [Line Items] | ||
Long-term debt | 170 | 0 |
Line of credit | Enhabit Credit Agreement | Term loan A facility | ||
Debt Instrument [Line Items] | ||
Long-term debt | 397.7 | 0 |
Other notes payable | ||
Debt Instrument [Line Items] | ||
Long-term debt | $ 0 | $ 2 |
Long-term Debt - Principal Paym
Long-term Debt - Principal Payments Due (Details) $ in Millions | Jun. 30, 2022 USD ($) |
Amount | |
July 1 through December 31, 2022 | $ 12 |
2023 | 22.7 |
2024 | 21.3 |
2025 | 20.2 |
2026 | 20 |
2027 | 480 |
2028 and thereafter | 0 |
Gross maturities | 576.2 |
Less unamortized debt issuance costs | (2.3) |
Total | $ 573.9 |
Long-term Debt - Additional Inf
Long-term Debt - Additional Information (Details) - USD ($) | 1 Months Ended | 6 Months Ended | ||
Jun. 30, 2022 | Jun. 30, 2022 | Jun. 30, 2022 | Jun. 30, 2021 | |
Debt Instrument [Line Items] | ||||
Principal borrowings on notes | $ 400,000,000 | $ 0 | ||
Borrowings on revolving credit facility | 170,000,000 | 0 | ||
Distributions to Encompass | $ 654,900,000 | $ 74,300,000 | ||
Enhabit Credit Agreement | Line of credit | ||||
Debt Instrument [Line Items] | ||||
Debt instrument, term | 5 years | |||
Interest rate | 3.90% | 3.90% | 3.90% | |
Distributions to Encompass | $ 566,600,000 | |||
Term loan A facility | Enhabit Credit Agreement | Line of credit | ||||
Debt Instrument [Line Items] | ||||
Debt instrument, face amount | 400,000,000 | $ 400,000,000 | $ 400,000,000 | |
Debt instrument, term | 5 years | |||
Percentage of outstanding principal payable in equal quarterly installments | 5% | |||
Principal borrowings on notes | 400,000,000 | |||
Revolving credit facility | Enhabit Credit Agreement | Line of credit | ||||
Debt Instrument [Line Items] | ||||
Line of credit facility, maximum borrowing capacity | 350,000,000 | $ 350,000,000 | 350,000,000 | |
Debt instrument, term | 5 years | |||
Borrowings on revolving credit facility | 170,000,000 | |||
Letter of credit | Enhabit Credit Agreement | Line of credit | ||||
Debt Instrument [Line Items] | ||||
Line of credit facility, maximum borrowing capacity | $ 75,000,000 | $ 75,000,000 | $ 75,000,000 |
Long-term Debt - Carrying Amoun
Long-term Debt - Carrying Amounts and Fair Value of Long-term Debt (Details) - USD ($) $ in Millions | Jun. 30, 2022 | Dec. 31, 2021 |
Line of credit | Enhabit Credit Agreement | Carrying Amount | Revolving credit facility | ||
Debt Instrument [Line Items] | ||
Long-term debt, fair value | $ 170 | $ 0 |
Line of credit | Enhabit Credit Agreement | Carrying Amount | Term loan A facility | ||
Debt Instrument [Line Items] | ||
Long-term debt, fair value | 397.7 | 0 |
Line of credit | Enhabit Credit Agreement | Estimated Fair Value | Revolving credit facility | ||
Debt Instrument [Line Items] | ||
Long-term debt, fair value | 170 | 0 |
Line of credit | Enhabit Credit Agreement | Estimated Fair Value | Term loan A facility | ||
Debt Instrument [Line Items] | ||
Long-term debt, fair value | 400 | 0 |
Other notes payable | Carrying Amount | ||
Debt Instrument [Line Items] | ||
Long-term debt, fair value | 0 | 2 |
Other notes payable | Estimated Fair Value | ||
Debt Instrument [Line Items] | ||
Long-term debt, fair value | $ 0 | $ 2 |
Stock-Based Payments (Details)
Stock-Based Payments (Details) - Encompass - Management - USD ($) shares in Thousands, $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2022 | Jun. 30, 2021 | Jun. 30, 2022 | Jun. 30, 2021 | |
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | ||||
Options granted (in shares) | 22 | |||
Stock compensation expense | $ 0.6 | $ 0.9 | $ 1.1 | $ 1.1 |
Restricted stock | ||||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | ||||
Shares issued in period (in shares) | 128 | |||
Restricted stock with a service condition | ||||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | ||||
Shares issued in period (in shares) | 47 |
Income Taxes (Details)
Income Taxes (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | |||
Jun. 30, 2022 | Jun. 30, 2021 | Jun. 30, 2022 | Jun. 30, 2021 | Dec. 31, 2021 | |
Tax Deferral [Line Items] | |||||
Income tax expense | $ 6.4 | $ 10.4 | $ 15.1 | $ 19.1 | |
Accrued Payroll | |||||
Tax Deferral [Line Items] | |||||
Deferred payments of social security taxes | $ 14.9 | $ 14.9 | $ 14.9 |
Segment Reporting - Additional
Segment Reporting - Additional Information (Details) | 6 Months Ended |
Jun. 30, 2022 state agency segment | |
Segment Reporting Information [Line Items] | |
Number of reportable segments | segment | 2 |
Number of states in which entity operates | state | 34 |
Home Health | |
Segment Reporting Information [Line Items] | |
Number of states in which entity operates | state | 34 |
Number of agencies | 251 |
Number of agencies with sole ownership | 240 |
Number of jointly owned home health locations | 11 |
Home Health | Minimum | |
Segment Reporting Information [Line Items] | |
Joint venture, ownership percentage | 50% |
Home Health | Maximum | |
Segment Reporting Information [Line Items] | |
Joint venture, ownership percentage | 81% |
Hospice | |
Segment Reporting Information [Line Items] | |
Number of states in which entity operates | state | 22 |
Number of agencies | 100 |
Number of agencies with sole ownership | 96 |
Number of jointly owned home health locations | 4 |
Hospice | Minimum | |
Segment Reporting Information [Line Items] | |
Joint venture, ownership percentage | 50% |
Hospice | Maximum | |
Segment Reporting Information [Line Items] | |
Joint venture, ownership percentage | 90% |
Segment Reporting - Selected Fi
Segment Reporting - Selected Financial Information (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2022 | Jun. 30, 2021 | Jun. 30, 2022 | Jun. 30, 2021 | |
Segment Reporting Information [Line Items] | ||||
Net service revenue | $ 268 | $ 286.1 | $ 542.3 | $ 556.6 |
Cost of service (excluding depreciation and amortization) | 130.3 | 129.6 | 260 | 254.2 |
Gross margin | 137.7 | 156.5 | 282.3 | 302.4 |
General and administrative expenses | 102.2 | 105.7 | 202.9 | 205.6 |
Other income | 0 | (1.6) | 0 | (1.6) |
Equity in net income of nonconsolidated affiliates | 0 | (0.2) | 0 | (0.4) |
Net income attributable to noncontrolling interests | 0.7 | 0.5 | 1.3 | 0.9 |
Home Health | ||||
Segment Reporting Information [Line Items] | ||||
Net service revenue | 220.2 | 232.3 | 445.1 | 452.2 |
Cost of service (excluding depreciation and amortization) | 108.8 | 106.6 | 216.8 | 209.6 |
Gross margin | 111.4 | 125.7 | 228.3 | 242.6 |
General and administrative expenses | 57.8 | 63.7 | 116.5 | 124.4 |
Other income | 0 | (1.6) | 0 | (1.6) |
Equity in net income of nonconsolidated affiliates | 0 | (0.2) | 0 | (0.4) |
Net income attributable to noncontrolling interests | 0.6 | 0.5 | 1.1 | 0.9 |
Segment Adjusted EBITDA | 53 | 63.3 | 110.7 | 119.3 |
Hospice | ||||
Segment Reporting Information [Line Items] | ||||
Net service revenue | 47.8 | 53.8 | 97.2 | 104.4 |
Cost of service (excluding depreciation and amortization) | 21.5 | 23 | 43.2 | 44.6 |
Gross margin | 26.3 | 30.8 | 54 | 59.8 |
General and administrative expenses | 15.5 | 16.3 | 30.4 | 31.8 |
Other income | 0 | 0 | 0 | 0 |
Equity in net income of nonconsolidated affiliates | 0 | 0 | 0 | 0 |
Net income attributable to noncontrolling interests | 0.1 | 0 | 0.2 | 0 |
Segment Adjusted EBITDA | $ 10.7 | $ 14.5 | $ 23.4 | $ 28 |
Segment Reporting - Reconciliat
Segment Reporting - Reconciliation (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2022 | Jun. 30, 2021 | Jun. 30, 2022 | Jun. 30, 2021 | |
Segment Reporting, Reconciling Item for Operating Profit (Loss) from Segment to Consolidated [Line Items] | ||||
Non-segment general and administrative expenses | $ (102.2) | $ (105.7) | $ (202.9) | $ (205.6) |
Depreciation and amortization | (8.2) | (9.4) | (16.7) | (18.5) |
Interest expense and amortization of debt discounts and fees | (0.1) | 0 | (0.1) | (0.1) |
Net income attributable to noncontrolling interests | 0.7 | 0.5 | 1.3 | 0.9 |
Income before income taxes and noncontrolling interests | 27.2 | 43.2 | 62.6 | 80.2 |
Operating Segments | ||||
Segment Reporting, Reconciling Item for Operating Profit (Loss) from Segment to Consolidated [Line Items] | ||||
Segment Adjusted EBITDA | 63.7 | 77.8 | 134.1 | 147.3 |
Segment Reconciling Items | ||||
Segment Reporting, Reconciling Item for Operating Profit (Loss) from Segment to Consolidated [Line Items] | ||||
Non-segment general and administrative expenses | (27.7) | (24.5) | (53.5) | (47.6) |
Depreciation and amortization | (8.2) | (9.4) | (16.7) | (18.5) |
Interest expense and amortization of debt discounts and fees | (0.1) | 0 | (0.1) | (0.1) |
Net income attributable to noncontrolling interests | 0.7 | 0.5 | 1.3 | 0.9 |
Stock-based compensation expense | $ (1.2) | $ (1.2) | $ (2.5) | $ (1.8) |
Segment Reporting - Revenue by
Segment Reporting - Revenue by Product Line (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2022 | Jun. 30, 2021 | Jun. 30, 2022 | Jun. 30, 2021 | |
Revenue from External Customer [Line Items] | ||||
Net service revenue | $ 268 | $ 286.1 | $ 542.3 | $ 556.6 |
Home Health | ||||
Revenue from External Customer [Line Items] | ||||
Net service revenue | 220.2 | 232.3 | 445.1 | 452.2 |
Hospice | ||||
Revenue from External Customer [Line Items] | ||||
Net service revenue | 47.8 | 53.8 | 97.2 | 104.4 |
Episodic | Home Health | ||||
Revenue from External Customer [Line Items] | ||||
Net service revenue | 186.3 | 201.3 | 378 | 395.5 |
Non-Episodic | Home Health | ||||
Revenue from External Customer [Line Items] | ||||
Net service revenue | 31.2 | 27.2 | 61.6 | 49.4 |
Other Service Line | Home Health | ||||
Revenue from External Customer [Line Items] | ||||
Net service revenue | $ 2.7 | $ 3.8 | $ 5.5 | $ 7.3 |
Related Party Transactions - Ad
Related Party Transactions - Additional Information (Details) - USD ($) $ in Millions | 1 Months Ended | 3 Months Ended | 6 Months Ended | 12 Months Ended | ||
May 31, 2021 | Jun. 30, 2022 | Jun. 30, 2021 | Jun. 30, 2022 | Jun. 30, 2021 | Dec. 31, 2019 | |
Medalogix, LLC | ||||||
Related Party Transaction [Line Items] | ||||||
Payments to acquire investment | $ 2 | |||||
HCHB Agreement | Affiliated Entity | Homecare Homebase, LLC | ||||||
Related Party Transaction [Line Items] | ||||||
Expenses from transactions with related party | $ 1.5 | $ 3 | ||||
Medalogix Analytics Platforms | Affiliated Entity | ||||||
Related Party Transaction [Line Items] | ||||||
Expenses from transactions with related party | $ 0.7 | $ 1.1 | $ 2.3 | 1.7 | ||
Cash received | $ 2 | |||||
Gain as a result of transaction | $ 1.6 |
Related Party Transactions (Det
Related Party Transactions (Details) - General and administrative expenses - Affiliated Entity - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2022 | Jun. 30, 2021 | Jun. 30, 2022 | Jun. 30, 2021 | |
Overhead allocation | ||||
Related Party Transaction [Line Items] | ||||
Expenses from transactions with related party | $ 4.1 | $ 4.6 | $ 7.7 | $ 8.4 |
Stock-based compensation | ||||
Related Party Transaction [Line Items] | ||||
Expenses from transactions with related party | $ 1.2 | $ 1.2 | $ 2.5 | $ 1.8 |