Cover Page
Cover Page - USD ($) $ in Billions | 12 Months Ended | ||
Dec. 31, 2019 | Feb. 13, 2020 | Jun. 30, 2019 | |
Cover page. | |||
Document Type | 10-K | ||
Document Annual Report | true | ||
Document Period End Date | Dec. 31, 2019 | ||
Document Transition Report | false | ||
Entity File Number | 001-10315 | ||
Entity Registrant Name | Encompass Health Corporation | ||
Entity Incorporation, State or Country Code | DE | ||
Entity Tax Identification Number | 63-0860407 | ||
Entity Address, Address Line One | 9001 Liberty Parkway | ||
Entity Address, City or Town | Birmingham | ||
Entity Address, State or Province | AL | ||
Entity Address, Postal Zip Code | 35242 | ||
City Area Code | 205 | ||
Local Phone Number | 967-7116 | ||
Title of 12(b) Security | Common Stock, $0.01 par value | ||
Trading Symbol | EHC | ||
Security Exchange Name | NYSE | ||
Entity Well-known Seasoned Issuer | Yes | ||
Entity Voluntary Filers | No | ||
Entity Current Reporting Status | Yes | ||
Entity Interactive Data Current | Yes | ||
Entity Filer Category | Large Accelerated Filer | ||
Entity Emerging Growth Company | false | ||
Entity Shell Company | false | ||
Entity Small Business | false | ||
Entity Public Float | $ 6.2 | ||
Entity Common Stock, Shares Outstanding | 98,433,352 | ||
Documents Incorporated by Reference | The definitive proxy statement relating to the registrant’s 2020 annual meeting of stockholders is incorporated by reference in Part III to the extent described therein. | ||
Entity Central Index Key | 0000785161 | ||
Current Fiscal Year End Date | --12-31 | ||
Document Fiscal Year Focus | 2019 | ||
Document Fiscal Period Focus | FY | ||
Amendment Flag | false |
Consolidated Statements of Oper
Consolidated Statements of Operations - USD ($) shares in Millions | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Income Statement [Abstract] | |||
Net operating revenues | $ 4,605,000,000 | $ 4,277,300,000 | $ 3,913,900,000 |
Operating expenses: | |||
Salaries and benefits | 2,573,000,000 | 2,354,000,000 | 2,154,600,000 |
Other operating expenses | 623,600,000 | 585,100,000 | 531,600,000 |
Occupancy costs | 82,300,000 | 78,000,000 | 73,500,000 |
Supplies | 167,900,000 | 158,700,000 | 149,300,000 |
General and administrative expenses | 247,000,000 | 220,200,000 | 171,700,000 |
Depreciation and amortization | 218,700,000 | 199,700,000 | 183,800,000 |
Government, class action, and related settlements | 0 | 52,000,000 | 0 |
Total operating expenses | 3,912,500,000 | 3,647,700,000 | 3,264,500,000 |
Loss on early extinguishment of debt | 7,700,000 | 0 | 10,700,000 |
Interest expense and amortization of debt discounts and fees | 159,700,000 | 147,300,000 | 154,400,000 |
Other income | (30,500,000) | (2,200,000) | (4,100,000) |
Equity in net income of nonconsolidated affiliates | (6,700,000) | (8,700,000) | (8,000,000) |
Income from continuing operations before income tax expense | 562,300,000 | 493,200,000 | 496,400,000 |
Provision for income tax expense | 115,900,000 | 118,900,000 | 145,800,000 |
Income from continuing operations | 446,400,000 | 374,300,000 | 350,600,000 |
(Loss) income from discontinued operations, net of tax | (600,000) | 1,100,000 | (400,000) |
Net income | 445,800,000 | 375,400,000 | 350,200,000 |
Less: Net income attributable to noncontrolling interests | (87,100,000) | (83,100,000) | (79,100,000) |
Net income attributable to Encompass Health | $ 358,700,000 | $ 292,300,000 | $ 271,100,000 |
Weighted average common shares outstanding: | |||
Basic (shares) | 98 | 97.9 | 93.7 |
Diluted (shares) | 99.4 | 99.8 | 99.3 |
Basic earnings per share attributable to Encompass Health common shareholders: | |||
Continuing operations (in dollars per share) | $ 3.66 | $ 2.97 | $ 2.88 |
Discontinued operations (in dollars per share) | (0.01) | 0.01 | 0 |
Net income (in dollars per share) | 3.65 | 2.98 | 2.88 |
Diluted earnings per share attributable to Encompass Health common shareholders: | |||
Continuing operations (in dollars per share) | 3.62 | 2.92 | 2.84 |
Discontinued operations (in dollars per share) | (0.01) | 0.01 | 0 |
Net income (in dollars per share) | $ 3.61 | $ 2.93 | $ 2.84 |
Amounts attributable to Encompass Health: | |||
Income from continuing operations | $ 359,300,000 | $ 291,200,000 | $ 271,500,000 |
(Loss) income from discontinued operations, net of tax | (600,000) | 1,100,000 | (400,000) |
Net income attributable to Encompass Health | $ 358,700,000 | $ 292,300,000 | $ 271,100,000 |
Consolidated Statements of Comp
Consolidated Statements of Comprehensive Income - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Comprehensive Income (Loss), Net of Tax, Attributable to Parent [Abstract] | |||
Net income | $ 445.8 | $ 375.4 | $ 350.2 |
Net change in unrealized loss on available-for-sale securities: | |||
Unrealized net holding loss arising during the period | 0 | 0 | (0.1) |
Other comprehensive loss before income taxes | 0 | 0 | (0.1) |
Provision for income tax benefit related to other comprehensive loss items | 0 | 0 | 0 |
Other comprehensive loss, net of tax: | 0 | 0 | (0.1) |
Comprehensive income | 445.8 | 375.4 | 350.1 |
Comprehensive income attributable to noncontrolling interests | (87.1) | (83.1) | (79.1) |
Comprehensive income attributable to Encompass Health | $ 358.7 | $ 292.3 | $ 271 |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) $ in Millions | Dec. 31, 2019 | Dec. 31, 2018 | |
Current assets: | |||
Cash and cash equivalents | $ 94.8 | $ 69.2 | |
Restricted cash | 57.4 | 59 | |
Accounts receivable | 506.1 | 467.7 | |
Prepaid expenses and other current assets | 97.5 | 66.2 | |
Total current assets | 755.8 | 662.1 | |
Property and equipment, net | 1,959.3 | 1,634.8 | |
Operating lease right-of-use assets | 276.5 | ||
Goodwill | 2,305.2 | 2,100.8 | |
Intangible assets, net | 476.3 | 443.4 | |
Deferred income tax assets | 2.9 | 42.9 | |
Other long-term assets | 304.7 | 291 | |
Total assets | [1] | 6,080.7 | 5,175 |
Current liabilities: | |||
Current portion of long-term debt | 39.3 | 35.8 | |
Current operating lease liabilities | 40.4 | ||
Accounts payable | 94.6 | 90 | |
Accrued payroll | 210.5 | 188.4 | |
Accrued interest payable | 32.4 | 24.4 | |
Other current liabilities | 303.8 | 333.9 | |
Total current liabilities | 721 | 672.5 | |
Long-term debt, net of current portion | 3,023.3 | 2,478.6 | |
Long-term operating lease liabilities | 243.8 | ||
Self-insured risks | 117.2 | 119.6 | |
Other long-term liabilities | 42.7 | 85.6 | |
Total liabilities | 4,148 | 3,356.3 | |
Commitments and contingencies | |||
Redeemable noncontrolling interests | 239.6 | 261.7 | |
Encompass Health shareholders’ equity: | |||
Common stock, $.01 par value; 200,000,000 shares authorized; issued: 113,230,774 in 2019; 112,492,690 in 2018 | 1.1 | 1.1 | |
Capital in excess of par value | 2,369.9 | 2,588.7 | |
Accumulated deficit | (526.5) | (885.2) | |
Treasury stock, at cost (14,637,858 shares in 2019 and 13,566,209 shares in 2018) | (492.3) | (427.9) | |
Total Encompass Health shareholders’ equity | 1,352.2 | 1,276.7 | |
Noncontrolling interests | 340.9 | 280.3 | |
Total shareholders’ equity | 1,693.1 | 1,557 | |
Total liabilities and shareholders’ equity | [1] | $ 6,080.7 | $ 5,175 |
[1] | Our consolidated assets as of December 31, 2019 and December 31, 2018 include total assets of variable interest entities of $215.0 million and $197.5 million , respectively, which cannot be used by us to settle the obligations of other entities. Our consolidated liabilities as of December 31, 2019 and December 31, 2018 include total liabilities of the variable interest entities of $41.1 million and $50.8 million , respectively. See Note 3, Variable Interest Entities . |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - USD ($) $ in Millions | Dec. 31, 2019 | Dec. 31, 2018 | |
Total assets | [1] | $ 6,080.7 | $ 5,175 |
Total liabilities | $ 4,148 | $ 3,356.3 | |
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) | 113,230,774 | 112,492,690 | |
Treasury stock, shares (in shares) | 14,637,858 | 13,566,209 | |
Variable Interest Entity, Primary Beneficiary, Aggregated Disclosure | |||
Total assets | $ 215 | $ 197.5 | |
Total liabilities | $ 41.1 | $ 50.8 | |
[1] | Our consolidated assets as of December 31, 2019 and December 31, 2018 include total assets of variable interest entities of $215.0 million and $197.5 million , respectively, which cannot be used by us to settle the obligations of other entities. Our consolidated liabilities as of December 31, 2019 and December 31, 2018 include total liabilities of the variable interest entities of $41.1 million and $50.8 million , respectively. See Note 3, Variable Interest Entities . |
Consolidated Statement of Share
Consolidated Statement of Shareholders' Equity - USD ($) shares in Thousands, $ in Millions | Total | Common Stock | Capital in Excess of Par Value | Accumulated Deficit | Accumulated Other Comprehensive Loss | Treasury Stock | Noncontrolling Interests |
Balance at beginning of period (shares) at Dec. 31, 2016 | 88,900 | ||||||
Balance at beginning of period at Dec. 31, 2016 | $ 910.6 | $ 1.1 | $ 2,781 | $ (1,448.4) | $ (1.2) | $ (614.7) | $ 192.8 |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||
Net income | 332.3 | 271.1 | 61.2 | ||||
Receipt of treasury stock (shares) | (900) | ||||||
Receipt of treasury stock | (19.8) | (19.8) | |||||
Dividends declared ($1.10 in 2019, $1.04 in 2018 and $0.98 in 2017) | (95.2) | (95.2) | |||||
Stock-based compensation | 21.3 | 21.3 | |||||
Stock options exercised (shares) | 1,100 | ||||||
Stock options exercised | 1.1 | 20.4 | (19.3) | ||||
Stock warrants exercised (shares) | 700 | ||||||
Stock warrants exercised | 26.6 | 26.6 | |||||
Distributions declared | (50.5) | (50.5) | |||||
Repurchases of common stock in open market (shares) | (900) | ||||||
Repurchases of common stock in open market | (38.1) | (38.1) | |||||
Capital contributions from consolidated affiliates | 46.2 | 46.2 | |||||
Fair value adjustments to redeemable noncontrolling interests | (67) | (67) | |||||
Conversion of convertible debt, net of tax (shares) | 8,900 | ||||||
Conversion of convertible debt, net of tax | 328.2 | 53.7 | 274.5 | ||||
Other (shares) | 500 | ||||||
Other | (0.3) | 6.6 | 1.1 | (0.1) | (1.1) | (6.8) | |
Balance at end of period (shares) at Dec. 31, 2017 | 98,300 | ||||||
Balance at end of period at Dec. 31, 2017 | 1,395.4 | $ 1.1 | 2,747.4 | (1,176.2) | (1.3) | (418.5) | 242.9 |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||
Net income | 361.5 | 292.3 | 69.2 | ||||
Receipt of treasury stock (shares) | (200) | ||||||
Receipt of treasury stock | (8.3) | (8.3) | |||||
Dividends declared ($1.10 in 2019, $1.04 in 2018 and $0.98 in 2017) | (103.7) | (103.7) | |||||
Stock-based compensation | 28.9 | 28.9 | |||||
Stock options exercised (shares) | 100 | ||||||
Stock options exercised | 3.2 | 3.2 | 0 | ||||
Distributions declared | (71.1) | (71.1) | |||||
Capital contributions from consolidated affiliates | 38.8 | 38.8 | |||||
Fair value adjustments to redeemable noncontrolling interests | (91) | (91) | |||||
Other (shares) | 700 | ||||||
Other | 3.3 | 3.9 | (1.3) | 1.3 | (1.1) | 0.5 | |
Balance at end of period (shares) at Dec. 31, 2018 | 98,900 | ||||||
Balance at end of period at Dec. 31, 2018 | 1,557 | $ 1.1 | 2,588.7 | (885.2) | 0 | (427.9) | 280.3 |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||
Net income | 433.2 | 358.7 | 74.5 | ||||
Receipt of treasury stock (shares) | (300) | ||||||
Receipt of treasury stock | (16.6) | (16.6) | |||||
Dividends declared ($1.10 in 2019, $1.04 in 2018 and $0.98 in 2017) | (109.3) | (109.3) | |||||
Stock-based compensation | $ 32.4 | 32.4 | |||||
Stock options exercised (shares) | 78 | 100 | |||||
Stock options exercised | $ 1.4 | 1.4 | 0 | ||||
Distributions declared | (70.2) | (70.2) | |||||
Repurchases of common stock in open market (shares) | (800) | ||||||
Repurchases of common stock in open market | (45.9) | (45.9) | |||||
Capital contributions from consolidated affiliates | 20 | 20 | |||||
Fair value adjustments to redeemable noncontrolling interests | (147.6) | (147.6) | |||||
Consolidation of Yuma Rehabilitation Hospital | 25 | 25 | |||||
Other (shares) | 700 | ||||||
Other | 13.7 | 4.3 | (1.9) | 11.3 | |||
Balance at end of period (shares) at Dec. 31, 2019 | 98,600 | ||||||
Balance at end of period at Dec. 31, 2019 | $ 1,693.1 | $ 1.1 | $ 2,369.9 | $ (526.5) | $ 0 | $ (492.3) | $ 340.9 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Cash flows from operating activities: | |||
Net income | $ 445,800,000 | $ 375,400,000 | $ 350,200,000 |
Loss (income) from discontinued operations, net of tax | 600,000 | (1,100,000) | 400,000 |
Adjustments to reconcile net income to net cash provided by operating activities— | |||
Provision for government, class action, and related settlements | 0 | 52,000,000 | 0 |
Depreciation and amortization | 218,700,000 | 199,700,000 | 183,800,000 |
Amortization of debt-related items | 4,500,000 | 4,000,000 | 8,700,000 |
Loss on early extinguishment of debt | 7,700,000 | 0 | 10,700,000 |
Equity in net income of nonconsolidated affiliates | (6,700,000) | (8,700,000) | (8,000,000) |
Distributions from nonconsolidated affiliates | 6,600,000 | 8,300,000 | 8,600,000 |
Stock-based compensation | 114,400,000 | 85,900,000 | 47,700,000 |
Deferred tax expense (benefit) | 40,000,000 | (9,100,000) | 60,800,000 |
Gain on consolidation of Yuma Rehabilitation Hospital | (19,200,000) | 0 | 0 |
Other, net | 7,400,000 | 9,200,000 | 3,400,000 |
Changes in assets and liabilities, net of acquisitions — | |||
Accounts receivable | (22,900,000) | 7,000,000 | (31,500,000) |
Prepaid expenses and other assets | (35,400,000) | 11,500,000 | (12,600,000) |
Accounts payable | (6,100,000) | 6,600,000 | 7,500,000 |
Accrued payroll | 13,200,000 | 14,800,000 | 24,400,000 |
Other liabilities | (128,900,000) | 6,100,000 | 4,800,000 |
Net cash (used in) provided by operating activities of discontinued operations | (4,400,000) | 800,000 | (600,000) |
Total adjustments | 188,900,000 | 388,100,000 | 307,700,000 |
Net cash provided by operating activities | 635,300,000 | 762,400,000 | 658,300,000 |
Cash flows from investing activities: | |||
Acquisition of businesses, net of cash acquired | (231,500,000) | (143,900,000) | (38,800,000) |
Purchases of property and equipment | (372,400,000) | (254,500,000) | (225,800,000) |
Additions to capitalized software costs | (13,000,000) | (16,000,000) | (19,200,000) |
Purchases of intangible assets | (18,700,000) | (5,700,000) | (3,700,000) |
Proceeds from sale of restricted investments | 17,600,000 | 11,600,000 | 4,200,000 |
Purchases of restricted investments | (32,900,000) | (13,300,000) | (8,500,000) |
Other, net | (6,500,000) | (2,700,000) | 8,800,000 |
Net cash used in investing activities | (657,400,000) | (424,500,000) | (283,000,000) |
Cash flows from financing activities: | |||
Proceeds from bond issuance | 1,000,000,000 | 0 | 0 |
Principal payments on debt, including pre-payments | (519,500,000) | (20,600,000) | (129,900,000) |
Borrowings on revolving credit facility | 635,000,000 | 325,000,000 | 273,300,000 |
Payments on revolving credit facility | (620,000,000) | (390,000,000) | (330,300,000) |
Principal payments under finance lease obligations | (19,500,000) | (17,900,000) | (15,300,000) |
Debt amendment and issuance costs | (21,500,000) | (100,000) | (4,100,000) |
Repurchases of common stock, including fees and expenses | (45,900,000) | 0 | (38,100,000) |
Dividends paid on common stock | (108,700,000) | (100,800,000) | (91,500,000) |
Purchase of equity interests in consolidated affiliates | (162,900,000) | (65,100,000) | 0 |
Proceeds from exercising stock warrants | 0 | 0 | 26,600,000 |
Distributions paid to noncontrolling interests of consolidated affiliates | (79,800,000) | (75,400,000) | (51,900,000) |
Taxes paid on behalf of employees for shares withheld | (16,600,000) | (8,300,000) | (19,800,000) |
Contributions from consolidated affiliates | 15,900,000 | 12,600,000 | 20,800,000 |
Other, net | (8,300,000) | 19,400,000 | 300,000 |
Net cash provided by (used in) financing activities | 48,200,000 | (321,200,000) | (359,900,000) |
Increase in cash, cash equivalents, and restricted cash | 26,100,000 | 16,700,000 | 15,400,000 |
Cash, cash equivalents, restricted cash and restricted cash equivalents at beginning of period | 133,500,000 | 116,800,000 | 101,400,000 |
Cash, cash equivalents, restricted cash and restricted cash equivalents at end of period | 159,600,000 | 133,500,000 | 116,800,000 |
Reconciliation of Cash, Cash Equivalents, and Restricted Cash | |||
Cash and cash equivalents at beginning of period | 69,200,000 | 54,400,000 | 40,500,000 |
Restricted cash at beginning of period | 59,000,000 | 62,400,000 | 60,900,000 |
Restricted cash included in other long-term assets at beginning of period | 5,300,000 | 0 | 0 |
Cash, cash equivalents, restricted cash and restricted cash equivalents at beginning of period | 133,500,000 | 116,800,000 | 101,400,000 |
Cash and cash equivalents at end of period | 94,800,000 | 69,200,000 | 54,400,000 |
Restricted cash at end of period | 57,400,000 | 59,000,000 | 62,400,000 |
Restricted cash included in other long-term assets at end of period | 7,400,000 | 5,300,000 | 0 |
Cash, cash equivalents, restricted cash and restricted cash equivalents at end of period | 159,600,000 | 133,500,000 | 116,800,000 |
Supplemental cash flow information: | |||
Interest | (155,700,000) | (149,600,000) | (150,500,000) |
Income tax refunds | 100,000 | 600,000 | 1,900,000 |
Income tax payments | (104,200,000) | (115,400,000) | (96,400,000) |
Supplemental schedule of noncash financing activities: | |||
Conversion of convertible debt | $ 0 | $ 0 | $ 319,400,000 |
Consolidated Statement of Sha_2
Consolidated Statement of Shareholders' Equity (Parentheticals) - $ / shares | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Shareholders' Equity Parenthetical [Abstract] | |||
Dividends declared on common stock, per share | $ 1.1 | $ 1.04 | $ 0.98 |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 12 Months Ended |
Dec. 31, 2019 | |
Accounting Policies [Abstract] | |
Summary of Significant Accounting Policies | Summary of Significant Accounting Policies Organization and Description of Business— Encompass Health Corporation, incorporated in Delaware in 1984, including its subsidiaries, is one of the nation’s largest providers of post-acute healthcare services, offering both facility-based and home-based post-acute services in 37 states and Puerto Rico through our network of inpatient rehabilitation hospitals, home health agencies, and hospice agencies. We manage our operations and disclose financial information using two reportable segments: (1) inpatient rehabilitation and (2) home health and hospice. See Note 19 , Segment Reporting Basis of Presentation and Consolidation— The accompanying consolidated financial statements of Encompass Health and its subsidiaries were prepared in accordance with generally accepted accounting principles in the United States of America and 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 where we have the ability to exercise significant influence over operating and financial policies. Consolidated Net income attributable to Encompass Health includes our share of the net earnings of these entities. The difference between consolidation and the equity method impacts certain of our financial ratios because of the presentation of the detailed line items reported in the consolidated financial statements for consolidated entities compared to a one line presentation of equity method investments. We use the cost method to account for our investments in entities we do not control and for which we do not have the ability to exercise significant influence over operating and financial policies. In accordance with the cost method, these investments are recorded at the lower of cost or fair value, as appropriate. We eliminate all significant intercompany accounts and transactions from our financial results. Variable Interest Entities — Any entity considered a variable interest entity (“VIE”) is evaluated to determine which party is the primary beneficiary and thus should consolidate the VIE. This analysis is complex, involves uncertainties, and requires significant judgment on various matters. In order to determine if we are the primary beneficiary of a VIE, we must determine what activities most significantly impact the economic performance of the entity, whether we have the power to direct those activities, and if our obligation to absorb losses or receive benefits from the VIE could potentially be significant to the VIE. Use of Estimates and Assumptions— The preparation of our consolidated financial statements in conformity with GAAP requires the use of estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the consolidated financial statements, and the reported amounts of revenues and expenses during the reporting periods. Significant estimates and assumptions are used for, but not limited to: (1) revenue reserves for contractual adjustments and uncollectible amounts; (2) fair value of acquired assets and assumed liabilities in business combinations; (3) asset impairments, including goodwill; (4) depreciable lives of assets; (5) useful lives of intangible assets; (6) economic lives and fair value of leased assets; (7) income tax valuation allowances; (8) uncertain tax positions; (9) fair value of stock options and restricted stock containing a market condition; (10) fair value of redeemable noncontrolling interests; (11) reserves for self-insured healthcare plans; (12) reserves for professional, workers’ compensation, and comprehensive general insurance liability risks; and (13) contingency and litigation reserves. Future events and their effects cannot be predicted with certainty; accordingly, our accounting estimates require the exercise of judgment. The accounting estimates used in the preparation of our consolidated financial statements will change as new events occur, as more experience is acquired, as additional information is obtained, and as our operating environment changes. We evaluate and update our assumptions and estimates on an ongoing basis and may employ outside experts to assist in our evaluation, as considered necessary. Actual results could differ from those estimates. Risks and Uncertainties— As a healthcare provider, we are required to comply with extensive and complex laws and regulations at the federal, state, and local government levels. These laws and regulations relate to, among other things: • licensure, certification, and accreditation; • policies, either at the national or local level, delineating what conditions must be met to qualify for reimbursement under Medicare (also referred to as coverage requirements); • coding and billing for services; • requirements of the 60% compliance threshold under The Medicare, Medicaid and State Children’s Health Insurance Program (SCHIP) Extension Act of 2007; • relationships with physicians and other referral sources, including physician self-referral and anti-kickback laws; • quality of medical care; • use and maintenance of medical supplies and equipment; • maintenance and security of patient information and medical records; • acquisition and dispensing of pharmaceuticals and controlled substances; and • disposal of medical and hazardous waste. In the future, changes in these laws or regulations or the manner in which they are enforced could subject our current or past practices to allegations of impropriety or illegality or could require us to make changes in our hospitals, equipment, personnel, services, capital expenditure programs, operating procedures, contractual arrangements, and patient admittance practices, as well as the way in which we deliver home health and hospice services. If we fail to comply with applicable laws and regulations, we could be required to return portions of reimbursements deemed after the fact to have not been appropriate. We could also be subjected to liabilities, including (1) criminal penalties, (2) civil penalties, including monetary penalties and the loss of our licenses to operate one or more of our hospitals or agencies, and (3) exclusion or suspension of one or more of our hospitals from participation in the Medicare, Medicaid, and other federal and state healthcare programs which, if lengthy in duration and material to us, could potentially trigger a default under our credit agreement. Because Medicare comprises a significant portion of our Net operating revenues , failure to comply with the laws and regulations governing the Medicare program and related matters, including anti-kickback and anti-fraud requirements, could materially and adversely affect us. Specifically, reductions in reimbursements, substantial damages, and other remedies assessed against us could have a material adverse effect on our business, financial position, results of operation, and cash flows. Even the assertion of a violation, depending on its nature, could have a material adverse effect upon our stock price or reputation. Historically, the United States Congress and some state legislatures have periodically proposed significant changes in regulations governing the healthcare system. Many of these changes have resulted in limitations on the increases in and, in some cases, significant roll-backs or reductions in the levels of payments to healthcare providers for services under many government reimbursement programs. There can be no assurance that future governmental initiatives will not result in pricing roll-backs or freezes or reimbursement reductions. Because we receive a significant percentage of our revenues from Medicare, such changes in legislation might have a material adverse effect on our financial position, results of operations, and cash flows. In addition, there are increasing pressures from many third-party payors to control healthcare costs and to reduce or limit increases in reimbursement rates for medical services. Our relationships with managed care and nongovernmental third-party payors are generally governed by negotiated agreements. These agreements set forth the amounts we are entitled to receive for our services. We could be adversely affected in some of the markets where we operate if we are unable to negotiate and maintain favorable agreements with third-party payors. Our third-party payors may also, from time to time, request audits of the amounts paid, or to be paid, to us. We could be adversely affected in some of the markets where we operate if the auditing payor alleges substantial overpayments were made to us due to coding errors or lack of documentation to support medical necessity determinations. As discussed in Note 18, Contingencies and Other Commitments , we are a party to a number of lawsuits. We cannot predict the outcome of litigation filed against us. Substantial damages or other monetary remedies assessed against us could have a material adverse effect on our business, financial position, results of operations, and cash flows. Net Operating Revenues— Our Net operating revenues disaggregated by payor source and segment are as follows (in millions): Inpatient Rehabilitation Home Health and Hospice Consolidated Year Ended December 31, Year Ended December 31, Year Ended December 31, 2019 2018 2017 2019 2018 2017 2019 2018 2017 Medicare $ 2,537.3 $ 2,451.7 $ 2,313.6 $ 920.0 $ 794.5 $ 662.9 $ 3,457.3 $ 3,246.2 $ 2,976.5 Medicare Advantage 375.5 306.5 261.0 111.9 88.6 74.8 487.4 395.1 335.8 Managed care 342.7 343.3 335.6 39.1 33.2 29.1 381.8 376.5 364.7 Medicaid 110.3 101.3 93.2 18.4 11.6 4.3 128.7 112.9 97.5 Other third-party payors 43.4 49.0 49.9 — — — 43.4 49.0 49.9 Workers’ compensation 29.2 27.4 27.5 1.0 1.5 0.1 30.2 28.9 27.6 Patients 23.3 18.7 18.4 0.6 0.8 0.7 23.9 19.5 19.1 Other income 51.3 48.3 42.1 1.0 0.9 0.7 52.3 49.2 42.8 Total $ 3,513.0 $ 3,346.2 $ 3,141.3 $ 1,092.0 $ 931.1 $ 772.6 $ 4,605.0 $ 4,277.3 $ 3,913.9 We record Net operating revenues on an accrual basis using our best estimate of the transaction price for the type of service provided to the patient. Our estimate of the transaction price includes estimates of price concessions for such items as contractual allowances, potential adjustments that may arise from payment and other reviews, and uncollectible amounts. Our accounting systems calculate contractual allowances on a patient-by-patient basis based on the rates in effect for each primary third-party payor. Adjustments related to payment reviews by third-party payors or their agents are based on our historical experience and success rates in the claims adjudication process. Estimates for uncollectible amounts are based on the aging of our accounts receivable, our historical collection experience for each type of payor, and other relevant factors. Management continually reviews the revenue transaction price estimation process to consider and incorporate updates to laws and regulations and the frequent changes in managed care contractual terms that result from contract renegotiations and renewals. Due to complexities involved in determining amounts ultimately due under reimbursement arrangements with third-party payors, which are often subject to interpretation, we may receive reimbursement for healthcare services authorized and provided that is different from our estimates, and such differences could be material. In addition, laws and regulations governing the Medicare and Medicaid programs are complex, subject to interpretation, and are routinely modified for provider reimbursement. All healthcare providers participating in the Medicare and Medicaid programs are required to meet certain financial reporting requirements. Federal regulations require submission of annual cost reports covering medical costs and expenses associated with the services provided under each hospital, home health, and hospice provider number to program beneficiaries. Annual cost reports required under the Medicare and Medicaid programs are subject to routine audits, which may result in adjustments to the amounts ultimately determined to be due to Encompass Health under these reimbursement programs. These audits often require several years to reach the final determination of amounts earned under the programs. If actual results are not consistent with our assumptions and judgments, we may be exposed to gains or losses that could be material. The Centers for Medicare and Medicaid Services (“CMS”) has been granted authority to suspend payments, in whole or in part, to Medicare providers if CMS possesses reliable information an overpayment, fraud, or willful misrepresentation exists. If CMS suspects payments are being made as the result of fraud or misrepresentation, CMS may suspend payment at any time without providing prior notice to us. The initial suspension period is limited to 180 days. However, the payment suspension period can be extended almost indefinitely if the matter is under investigation by the United States Department of Health and Human Services Office of Inspector General (the “HHS-OIG”) or the United States Department of Justice (the “DOJ”). Therefore, we are unable to predict if or when we may be subject to a suspension of payments by the Medicare and/or Medicaid programs, the possible length of the suspension period, or the potential cash flow impact of a payment suspension. Any such suspension would adversely impact our financial position, results of operations, and cash flows. Pursuant to legislative directives and authorizations from Congress, CMS has developed and instituted various Medicare audit programs under which CMS contracts with private companies to conduct claims and medical record audits. As a matter of course, we undertake significant efforts through training and education to ensure compliance with Medicare requirements. However, audits may lead to assertions we have been underpaid or overpaid by Medicare or submitted improper claims in some instances, require us to incur additional costs to respond to requests for records and defend the validity of payments and claims, and ultimately require us to refund any amounts determined to have been overpaid. In some circumstances auditors assert the authority to extrapolate denial rationales to large pools of claims not actually audited, which could increase the impact of the audit. We cannot predict when or how these audit programs will affect us. Medicare Administrative Contractors (“MACs”), under programs known as “widespread probes,” have conducted pre-payment claim reviews of our Medicare billings and in some cases denied payment for certain diagnosis codes. The majority of the denials we have encountered in these probes relate to determinations regarding medical necessity and provision of therapy services. We dispute, or “appeal,” most of these denials, and for claims we choose to take to administrative law judge hearings, we have historically experienced a success rate of approximately 70% . This historical success rate is a component of our estimate of transaction price as discussed above. The Medicare appeals adjudication process is administered by the Office of Medicare Hearings and Appeals (“OMHA”). For a period of years, OHMA has failed to adjudicate appeals in accordance with timelines established by Congress. Due to the sheer number of appeals and various administrative inefficiencies, appeals that are due to be resolved in a matter of months commonly take years to complete. The growing backlog of appeals contributes further to the delay. We currently have appeals pending for claims that were denied up to eight years ago. Accordingly, we believe the process for resolving individual Medicare payment claims that are denied will continue to take several years. We cannot provide assurance as to our ongoing and future success of these disputes. When the amount collected related to denied claims differs from the amount previously estimated, these collection differences are recorded as an adjustment to Net operating revenues . In August 2017, CMS announced the Targeted Probe and Educate (“TPE”) initiative. Under the TPE initiative, MACs use data analysis to identify healthcare providers with high claim error rates and items and services that have high national error rates. Once a MAC selects a provider for claims review, the initial volume of claims review is limited to 20 to 40 claims. The TPE initiative includes up to three rounds of claims review if necessary with corresponding provider education and a subsequent period to allow for improvement. If results do not improve sufficiently after three rounds, the MAC may refer the provider to CMS for further action, which may include extrapolation of error rates to a broader universe of claims or referral to a UPIC or RAC (defined below). We cannot predict the impact of the TPE initiative on our ability to collect claims on a timely basis. In connection with CMS approved and announced Recovery Audit Contractors (“RACs”) audits related to inpatient rehabilitation facilities (“IRFs”), we received requests from 2013 to 2019 to review certain patient files for discharges occurring from 2010 to 2019 . These RAC audits are focused on identifying Medicare claims that may contain improper payments. RAC contractors must have CMS approval before conducting these focused reviews which cover issues ranging from billing documentation to medical necessity. Medical necessity is an assessment by an independent physician of a patient’s ability to tolerate and benefit from intensive multi-disciplinary therapy provided in an IRF setting. CMS has also established Unified Program Integrity Contractors (“UPICs”), previously known as Zone Program Integrity Contractors. These contractors perform fraud, waste, and abuse detection, deterrence and prevention activities for Medicare and Medicaid claims. Like the RACs, the UPICs conduct audits and have the ability to refer matters to the HHS-OIG or the DOJ. Unlike RACs, however, UPICs do not receive a specific financial incentive based on the amount of the error as a result of UPIC audits. We have, from time to time, received UPIC record requests which have resulted in claim denials on paid claims. We have appealed substantially all UPIC denials arising from these audits using the same process we follow for appealing other denials by contractors. To date, the Medicare claims that are subject to these post-payment audit requests represent less than 1% of our Medicare patient discharges from 2010 to 2019 . Because we have confidence in the medical judgment of both the referring and admitting physicians who assess the treatment needs of their patients, we have appealed substantially all claim denials arising from these audits using the same process we follow for appealing denials by MACs. Due to the delays announced by CMS in the related adjudication process discussed above, we believe the resolution of any claims that are subsequently denied as a result of these claim audits could take several years. In addition, because we have limited experience with UPICs and RACs in the context of claims reviews of this nature, we cannot provide assurance as to the timing or outcomes of these disputes. As such, we make estimates for these claims based on our historical experience and success rates in the claims adjudication process, which is the same process we follow for appealing denials by MACs. During 2019 , 2018 , and 2017 , our adjustment to Net operating revenues for claims that are part of this post-payment claims review process was not material. Our performance obligations relate to contracts with a duration of less than one year. Therefore, we elected to apply the optional exemption to not disclose the aggregate amount of the transaction price allocated to performance obligations that are unsatisfied or partially unsatisfied at the end of the reporting period. These unsatisfied or partially unsatisfied performance obligations primarily relate to services provided at the end of the reporting period. We are subject to changes in government legislation that could impact Medicare payment levels and changes in payor patterns that may impact the level and timing of payments for services rendered. Inpatient Rehabilitation Revenues Inpatient rehabilitation segment revenues are recognized over time as the services are provided to the patient. The performance obligation is the rendering of services to the patient during the term of their inpatient stay. Revenues are recognized (or measured) using the input method as therapy, nursing, and auxiliary services are provided based on our estimate of the respective transaction price. Revenues recognized by our inpatient rehabilitation segment are subject to a number of elements which impact both the overall amount of revenue realized as well as the timing of the collection of the related accounts receivable. Factors considered in determining the estimated transaction price include the patient’s total length of stay for in-house patients, each patient’s discharge destination, the proportion of patients with secondary insurance coverage and the level of reimbursement under that secondary coverage, and the amount of charges that will be disallowed by payors. Such additional factors are assumed to remain consistent with the experience for patients discharged in similar time periods for the same payor classes. Home Health and Hospice Revenues Home Health Under the Medicare home health prospective payment system, we are paid by Medicare based on episodes of care. The performance obligation is the rendering of services to the patient during the term of the episode of care. An episode of care is defined as a length of stay up to 60 days, with multiple continuous episodes allowed. A base episode payment is established by the Medicare program through federal regulation. The base episode payment can be adjusted based on each patient’s health including clinical condition, functional abilities, and service needs, as well as for the applicable geographic wage index, low utilization, patient transfers, and other factors. The services covered by the episode payment include all disciplines of care in addition to medical supplies. We bill a portion of reimbursement from each Medicare episode near the start of each episode, and the resulting cash payment is typically received before all services are rendered. As we provide home health services to our patients on a scheduled basis over the episode of care in a manner that approximates a pro rata pattern, revenue for the episode of care is recorded over an average length of treatment period using a calendar day prorating method. The amount of revenue recognized for episodes of care which are incomplete at period end is based on the pro rata number of days in the episode which have been completed as of the period end date. As of December 31, 2019 and December 31, 2018 , the difference between the cash received from Medicare for a request for anticipated payment on episodes in progress and the associated estimated revenue was not material and was recorded in Other current liabilities in our consolidated balance sheets. We are subject to certain Medicare regulations affecting outlier revenue if our patient’s care was unusually costly. Regulations require a cap on all outlier revenue at 10% of total Medicare revenue received by each provider during a cost reporting year. Management has reviewed the potential cap. Adjustments to the transaction price for the outlier cap were not material as of December 31, 2019 and December 31, 2018 . For episodic-based rates that are paid by other insurance carriers, including Medicare Advantage, we recognize revenue in a similar manner as discussed above for Medicare revenues. However, these rates can vary based upon the negotiated terms. For non-episodic-based revenue, revenue is recorded on an accrual basis based upon the date of service at amounts equal to our estimated per-visit transaction price. Price concessions, including contractual allowances for the differences between our standard rates and the applicable contracted rates, as well as estimated uncollectible amounts from patients, are recorded as decreases to the transaction price. Hospice Medicare revenues for hospice are recognized and recorded on an accrual basis using the input method based on the number of days a patient has been on service at amounts equal to an estimated daily or hourly payment rate. The performance obligation is the rendering of services to the patient during each day that they are on hospice care. The payment rate is dependent on whether a patient is receiving routine home care, general inpatient care, continuous home care or respite care. Adjustments to Medicare revenues are recorded based on an inability to obtain appropriate billing documentation or authorizations acceptable to the payor or other reasons unrelated to credit risk. Hospice companies are subject to two specific payment limit caps under the Medicare program. One limit relates to inpatient care days that exceed 20% of the total days of hospice care provided for the year. The second limit relates to an aggregate Medicare reimbursement cap calculated by the MAC. Adjustments to the transaction price for these caps were not material as of December 31, 2019 and December 31, 2018 . For non-Medicare hospice revenues, we record gross revenue on an accrual basis based upon the date of service at amounts equal to our estimated per day transaction price. Price concessions, including contractual adjustments for the difference between our standard rates and the amounts estimated to be realizable from patients and third parties for services provided, are recorded as decreases to the transaction price and thus reduce our Net operating revenues . Cash and Cash Equivalents— Cash and cash equivalents include highly liquid investments with maturities of three months or less when purchased. Carrying values of Cash and cash equivalents approximate fair value due to the short-term nature of these instruments. We maintain amounts on deposit with various financial institutions, which may, at times, exceed federally insured limits. However, management periodically evaluates the credit-worthiness of those institutions, and we have not experienced any losses on such deposits. Marketable Securities— We record all equity securities with readily determinable fair values and for which we do not exercise significant influence at fair value and record the change in fair value for the reporting period in our consolidated statements of operations. We record debt securities with readily determinable fair values and for which we do not exercise significant influence as available-for-sale securities. We carry the available-for-sale securities at fair value and report unrealized holding gains or losses, net of income taxes, in Accumulated other comprehensive loss , which is a separate component of shareholders’ equity. We recognize realized gains and losses in our consolidated statements of operations using the specific identification method. Unrealized losses are charged against earnings when a decline in fair value was determined to be other than temporary. Management reviews several factors to determine whether a loss is other than temporary, such as the length of time a security is in an unrealized loss position, the extent to which fair value is less than cost, the financial condition and near term prospects of the issuer, industry, or geographic area and our ability and intent to hold the security for a period of time sufficient to allow for any anticipated recovery in fair value. Accounts Receivable— We report accounts receivable from services rendered at their estimated transaction price which takes into account price concessions from federal and state agencies (under the Medicare and Medicaid programs), managed care health plans, commercial insurance companies, workers’ compensation programs, employers, and patients. Our accounts receivable are concentrated by type of payor. The concentration of patient service accounts receivable by payor class, as a percentage of total patient service accounts receivable, is as follows: As of December 31, 2019 2018 Medicare 72.1 % 73.2 % Managed care and other discount plans, including Medicare Advantage 20.1 % 19.3 % Medicaid 3.1 % 2.8 % Other third-party payors 2.6 % 2.7 % Workers' compensation 1.2 % 1.1 % Patients 0.9 % 0.9 % Total 100.0 % 100.0 % While revenues and accounts receivable from the Medicare program are significant to our operations, we do not believe there are significant credit risks associated with this government agency. We do not believe there are any other significant concentrations of revenues from any particular payor that would subject us to any significant credit risks in the collection of our accounts receivable. Accounts requiring collection efforts are reviewed via system-generated work queues that automatically stage (based on age and size of outstanding balance) accounts requiring collection efforts for patient account representatives. Collection efforts include contacting the applicable party (both in writing and by telephone), providing information (both financial and clinical) to allow for payment or to overturn payor decisions to deny payment, and arranging payment plans with self-pay patients, among other techniques. When we determine all in-house efforts have been exhausted or it is a more prudent use of resources, accounts may be turned over to a collection agency. The collection of outstanding receivables from Medicare, managed care payors, other third-party payors, and patients is our primary source of cash and is critical to our operating performance. While it is our policy to verify insurance prior to a patient being admitted, there are various exceptions that can occur. Such exceptions include instances where we are (1) unable to obtain verification because the patient’s insurance company was unable to be reached or contacted, (2) a determination is made that a patient may be eligible for benefits under various government programs, such as Medicaid, and it takes several days, weeks, or months before qualification for such benefits is confirmed or denied, and (3) the patient is transferred to our hospital from an acute care hospital without having access to a credit card, cash, or check to pay the applicable patient responsibility amounts (i.e., deductibles and co-payments). Our primary collection risks relate to patient responsibility amounts and claims reviews conducted by MACs or other contractors. Patient responsibility amounts include accounts for which the patient was the primary payor or the primary insurance carrier has paid the amounts covered by the applicable agreement, but patient co-payment amounts remain outstanding. Changes in the economy, such as increased unemployment rates or periods of recession, can further exacerbate our ability to collect patient responsibility amounts. If actual results are not consistent with our assumptions and judgments, we may be exposed to gains or losses that could be material. Changes in general economic conditions, business office operations, payor mix, or trends in federal or state governmental and private employer healthcare coverage could affect our collection of accounts receivable, financial position, results of operations, and cash flows. Property and Equipment— We report land, buildings, improvements, vehicles, and equipment at cost, net of accumulated depreciation and amortization and any asset impairments. We depreciate our assets using the straight-line method over the shorter of the estimated useful life of the assets. Useful lives are generally as follows: Years Buildings 10 to 30 Leasehold improvements 2 to 15 Vehicles 5 Furniture, fixtures, and equipment 2 to 10 Maintenance and repairs of property and equipment are expensed as incurred. We capitalize replacements and betterments that increase the estimated useful life of an asset. We capitalize pre-acquisition costs when they are directly identifiable with a specific property, the costs would be capitalizable if the property were already acquired, and acquisition of the property is probable. We capitalize interest expense on major construction and development projects while in progress. We retain fully depreciated assets in property and accumulated depreciation accounts until we remove them f |
Business Combinations
Business Combinations | 12 Months Ended |
Dec. 31, 2019 | |
Business Combinations [Abstract] | |
Business Combinations | Business Combinations : 2019 Acquisitions Inpatient Rehabilitation During 2019 , we completed the following inpatient rehabilitation acquisitions, none of which were individually material to our financial position, results of operations, or cash flows. Each acquisition was made to enhance our position and ability to provide inpatient rehabilitation services to patients in the applicable geographic areas. • In July 2019, we acquired approximately 51% of the operations of a 30 -bed inpatient rehabilitation unit in Boise, Idaho when Saint Alphonsus Regional Medical Center contributed those operations to a joint venture with us. We funded our ownership interest in that consolidated joint venture through contributions of cash which the joint venture entity used to fund the construction of a 40 -bed de novo inpatient rehabilitation hospital. • In September 2019, we acquired 75% of the operations of Heritage Valley Sewickley Hospital’s 11 -bed inpatient rehabilitation unit in Sewickley, Pennsylvania, when Heritage Valley Health System, Inc. contributed those operations to our existing joint venture entity in connection with the opening of a new hospital. We accounted for these transactions under the acquisition method of accounting and reported the results of operations of the acquired hospitals from its respective date of acquisition. Assets acquired 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 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. The excess of the fair value of the consideration conveyed over the fair value of the assets acquired was recorded as goodwill. The goodwill reflects our expectations of our ability to gain access to and penetrate the acquired hospital’s historical patient base and the benefits of being able to leverage operational efficiencies with favorable growth opportunities based on positive demographic trends in this market. None of the goodwill recorded as a result from these transactions are deductible for federal income tax purposes. The fair value of the assets acquired and liabilities assumed at the acquisition date were as follows (in millions): Identifiable intangible assets: Noncompete agreements (useful lives of 2 years) $ 0.1 Trade name (useful life of 20 years) 0.4 Goodwill 4.8 Total assets acquired 5.3 Total liabilities assumed 0.2 Net assets acquired $ 5.1 Information regarding the net cash paid for the inpatient rehabilitation acquisitions during 2019 is as follows (in millions): Fair value of assets acquired $ 0.5 Goodwill 4.8 Fair value of liabilities assumed (0.2 ) Fair value of noncontrolling interest owned by joint venture partner (5.1 ) Net cash paid for acquisitions $ — Home Health and Hospice Alacare Acquisition In July 2019, we completed the acquisition of privately owned Alacare Home Health & Hospice (“Alacare”) for a cash purchase price of $217.8 million . The Alacare portfolio consisted of 23 home health locations and 23 hospice locations in Alabama. The acquisition was made to enhance our position and ability to provide post-acute healthcare services to patients across Alabama. We funded the transaction with cash on hand and borrowings under our revolving credit facility. We accounted for this transaction under the acquisition method of accounting and reported the results of operations of Alacare from its date of acquisition. Assets acquired and liabilities assumed were recorded at their estimated fair values as of the acquisition date. Estimated fair values were based on various valuation methodologies including: replacement cost and continued use methods for property and equipment; an income approach using primarily discounted cash flow techniques for the noncompete and certain license intangible assets; an income approach utilizing the relief-from-royalty method for the trade name intangible asset; an income approach utilizing the excess earnings method for the certificates of need; and present value of the remaining lease payments for leases. 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 as a result from this transaction is deductible for federal income tax purposes. The goodwill reflects our expectations of favorable growth opportunities in the home health and hospice markets based on positive demographic trends. The fair value of the assets acquired and liabilities assumed at the acquisition date were as follows (in millions): Accounts receivable $ 10.2 Prepaid expenses and other current assets 1.7 Property and equipment, net 0.7 Identifiable intangible assets: Noncompete agreements (useful lives of 5 years) 1.0 Trade name (useful life of 6 months) 1.0 Certificates of need (useful lives of 10 years) 34.3 Licenses (useful lives of 10 years) 14.6 Internal-use software (useful lives of 3 years) 0.1 Goodwill 163.9 Other long-term assets 5.0 Total assets acquired 232.5 Liabilities assumed: Current portion of long-term debt 0.3 Accounts payable 1.2 Accrued payroll 8.1 Other current liabilities 2.0 Long-term operating lease liabilities 3.1 Total liabilities assumed 14.7 Net assets acquired $ 217.8 Information regarding the net cash paid for Alacare is as follows (in millions): Fair value of assets acquired $ 68.6 Goodwill 163.9 Fair value of liabilities assumed (14.7 ) Net cash paid for acquisition $ 217.8 Other Home Health and Hospice Acquisitions During 2019, we completed the following home health and hospice acquisitions, none of which were individually material to our financial position, results of operations, or cash flows. Each acquisition was made to enhance our position and ability to provide post-acute healthcare services to patients in the applicable geographic areas. Each acquisition was funded using cash on hand. • In February 2019, we acquired the assets of Tidewater Home Health, PA in Columbia, South Carolina. • In March 2019, we acquired the assets and assumed the liabilities of two home health locations from Care Resource Group in East Providence, Rhode Island and Westport, Massachusetts. We accounted for these transactions under the acquisition method of accounting and reported the results of operations of the acquired locations from their respective dates of acquisition. Assets acquired and liabilities assumed were recorded at their estimated fair values as of the respective acquisition dates. The fair values of identifiable intangible assets were based on valuations using an income approach. The income approach is based on management’s estimates of future operating results and cash flows discounted using a weighted-average cost of capital that reflects market participant assumptions. The excess of the fair value of the consideration conveyed over the fair value of the net assets acquired was recorded as goodwill. The goodwill reflects our expectations of our ability to utilize the acquired locations’ mobile workforce and established relationships within each community and the benefits of being able to leverage operational efficiencies with favorable growth opportunities based on positive demographic trends in these markets. All goodwill recorded as a result of these transactions is deductible for federal income tax purposes. The fair value of the assets acquired and liabilities assumed at the acquisition date were as follows (in millions): Operating lease right-of-use assets $ 0.2 Identifiable intangible assets: Noncompete agreements (useful lives of 5 years) 0.2 Certificates of need (useful lives of 10 years) 2.0 License (useful life of 10 years) 0.8 Goodwill 10.8 Total assets acquired 14.0 Liabilities assumed: Current operating lease liabilities 0.1 Accrued payroll 0.1 Long-term lease liabilities 0.1 Total liabilities assumed 0.3 Net assets acquired $ 13.7 Information regarding the net cash paid for the other home health and hospice acquisitions during each period presented is as follows (in millions): Fair value of assets acquired $ 3.2 Goodwill 10.8 Fair value of liabilities assumed (0.3 ) Net cash paid for acquisitions $ 13.7 2019 Pro Forma Results of Operations The following table summarizes the results of operations of the above mentioned acquisitions from their respective dates of acquisition included in our consolidated results of operations and the unaudited pro forma results of operations of the combined entity had the date of the acquisitions been January 1, 2018 (in millions): Net Operating Revenues Net (Loss) Income Attributable to Encompass Health Acquired entities only: Actual from acquisition date to December 31, 2019 Inpatient Rehabilitation $ 4.4 $ (1.3 ) Alacare 58.5 1.6 Home Health and Hospice 6.5 (1.5 ) Combined entity: Supplemental pro forma from 01/01/2019-12/31/2019 (unaudited) 4,674.6 364.3 Combined entity: Supplemental pro forma from 01/01/2018-12/31/2018 (unaudited) 4,415.9 301.8 The information presented above is for illustrative purposes only and is not necessarily indicative of results that would have been achieved if the acquisitions had occurred as of the beginning of our 2018 period. 2018 Acquisitions Inpatient Rehabilitation During 2018 , we completed the following inpatient rehabilitation acquisitions, none of which were individually material to our financial position, results of operations, or cash flows. Each acquisition was made to enhance our position and ability to provide inpatient rehabilitation services to patients in the applicable geographic areas. • In September 2018, we acquired approximately 62% of a 29 -bed inpatient rehabilitation unit, including a 60 -bed certificate of need, in Murrells Inlet, South Carolina through a joint venture with Tidelands Health. The acquisition was funded through contributions of funds to be utilized by the consolidated joint venture to build a 46 -bed de novo inpatient rehabilitation satellite location. • In October 2018, we acquired approximately 50% of a 68 -bed inpatient rehabilitation unit in Winston-Salem, North Carolina through a joint venture with Novant Health Inc. This acquisition was funded through a contribution of a 68 ‑bed de novo inpatient rehabilitation hospital to the consolidated joint venture. • In November 2018, we acquired approximately 68% of a 17 -bed inpatient rehabilitation unit in Littleton, Colorado through a joint venture with Portercare Adventist Health System. The acquisition was funded through the contribution of our existing inpatient rehabilitation hospital in Littleton, Colorado to the consolidated joint venture. We accounted for these transactions under the acquisition method of accounting and reported the results of operations of the acquired hospitals from its respective date of acquisition. Assets acquired 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 intangible asset; an income approach utilizing the relief from royalty method for the trade name intangible asset; and an income approach utilizing the excess earnings method for the certificate of need 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. The excess of the fair value of the consideration conveyed over the fair value of the assets acquired was recorded as goodwill. The goodwill reflects our expectations of our ability to gain access to and penetrate the acquired hospital’s historical patient base and the benefits of being able to leverage operational efficiencies with favorable growth opportunities based on positive demographic trends in this market. None of the goodwill recorded as a result from these transactions is deductible for federal income tax purposes. The fair value of the assets acquired and liabilities assumed at the acquisition date were as follows (in millions): Property and equipment $ 0.1 Identifiable intangible assets: Noncompete agreements (useful lives of 2 to 3 years) 1.4 Trade names (useful lives of 20 years) 2.3 Certificates of need (useful lives of 20 years) 12.5 Goodwill 23.2 Total assets acquired 39.5 Total liabilities assumed (0.2 ) Net assets acquired $ 39.3 Information regarding the net cash paid for the inpatient rehabilitation acquisitions during 2018 is as follows (in millions): Fair value of assets acquired $ 16.3 Goodwill 23.2 Fair value of liabilities assumed (0.2 ) Fair value of noncontrolling interest owned by joint venture partner (39.3 ) Net cash paid for acquisitions $ — Home Health and Hospice Camellia Acquisition On May 1, 2018, we completed the previously announced acquisition of privately owned Camellia Healthcare and affiliated entities (“Camellia”). The Camellia portfolio consists of hospice, home health and private duty locations in Mississippi, Alabama, Louisiana and Tennessee. The acquisition leverages our home health and hospice operating platform across key certificate of need states and strengthens our geographic presence in the Southeastern United States. We funded the cash purchase price of the acquisition with cash on hand and borrowings under our revolving credit facility. We accounted for this transaction under the acquisition method of accounting and reported the results of operations of Camellia from its date of acquisition. Assets acquired and liabilities assumed were recorded at their estimated fair values as of the acquisition date. Estimated fair values were based on various valuation methodologies including: replacement cost and continued use methods for property and equipment; an income approach using primarily discounted cash flow techniques for the noncompete and certain license intangible assets; an income approach utilizing the relief-from-royalty method for the trade name intangible asset; and an income approach utilizing the excess earnings method for the certificate of need and certain license intangible assets. 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 as a result from this transaction is deductible for federal income tax purposes. The goodwill reflects our expectations of favorable growth opportunities in the home health and hospice markets based on positive demographic trends. The fair value of the assets acquired and liabilities assumed at the acquisition date were as follows (in millions) Cash and cash equivalents $ 1.3 Prepaid expenses and other current assets 0.3 Property and equipment, net 0.6 Identifiable intangible assets: Noncompete agreements (useful lives of 5 years) 0.5 Trade name (useful life of 1 year) 1.4 Certificates of need (useful lives of 10 years) 16.6 Licenses (useful lives of 10 years) 21.6 Goodwill 96.1 Total assets acquired 138.4 Liabilities assumed: Accounts payable 1.7 Accrued payroll 4.0 Total liabilities assumed 5.7 Net assets acquired $ 132.7 Information regarding the net cash paid for Camellia is as follows (in millions): Fair value of assets acquired, net of $1.3 million of cash acquired $ 41.0 Goodwill 96.1 Fair value of liabilities assumed (5.7 ) Net cash paid for acquisition $ 131.4 Other Home Health and Hospice Acquisitions During 2018 , we completed the following home health acquisitions, none of which were individually material to our financial position, results of operations, or cash flows. Each acquisition was made to enhance our position and ability to provide post-acute healthcare services to patients in the applicable geographic areas. Each acquisition was funded using cash on hand. • In January 2018, we acquired the assets of one hospice location from Golden Age Hospice, Inc. in Oklahoma City, Oklahoma. • In June 2018, we acquired the assets of one hospice location from Medical Services of America in Las Vegas, Nevada. • In November 2018, we acquired the assets of one home health and one hospice location from Tenet Hospital Limited in Birmingham, Alabama and El Paso, Texas. We also acquired 75% of the assets of a home health location in Talladega, Alabama through a joint venture with Tenet Hospital Limited. • In December 2018, we acquired 75% of the assets of a hospice location in Talladega, Alabama through a joint venture with Tenet Hospital Limited. We accounted for these transactions under the acquisition method of accounting and reported the results of operations of the acquired locations from their respective dates of acquisition. Assets acquired were recorded at their estimated fair values as of the respective acquisition dates. The fair values of identifiable intangible assets were based on valuations using an income approach. The income approach is based on management’s estimates of future operating results and cash flows discounted using a weighted-average cost of capital that reflects market participant assumptions. The excess of the fair value of the consideration conveyed over the fair value of the net assets acquired was recorded as goodwill. The goodwill reflects our expectations of our ability to utilize the acquired locations’ mobile workforce and established relationships within each community and the benefits of being able to leverage operational efficiencies with favorable growth opportunities based on positive demographic trends in these markets. All goodwill recorded as a result of these transactions is deductible for federal income tax purposes. The fair value of the assets acquired and liabilities assumed at the acquisition date were as follows (in millions): Total current assets $ 0.1 Identifiable intangible asset: Noncompete agreements (useful lives of 5 years) 0.2 Certificates of need (useful lives of 10 years) 2.5 Licenses (useful lives of 10 years) 1.5 Goodwill 8.9 Total assets acquired 13.2 Total liabilities assumed (0.1 ) Net assets acquired $ 13.1 Information regarding the net cash paid for the home health acquisitions during 2018 is as follows (in millions): Fair value of assets acquired $ 4.3 Goodwill 8.9 Fair value of liabilities assumed (0.1 ) Fair value of noncontrolling interest owned by joint venture partner (0.6 ) Net cash paid for acquisitions $ 12.5 2018 Pro Forma Results of Operations The following table summarizes the results of operations of the above mentioned acquisitions from their respective dates of acquisition included in our consolidated results of operations and the unaudited pro forma results of operations of the combined entity had the date of the acquisitions been January 1, 2017 (in millions): Net Operating Revenues Net (Loss) Income Attributable to Encompass Health Acquired entities only: Actual from acquisition date to December 31, 2018 Inpatient Rehabilitation $ 9.1 $ (1.6 ) Camellia 50.0 (0.9 ) All Other Home Health and Hospice 3.5 (0.3 ) Combined entity: Supplemental pro forma from 01/01/2018-12/31/2018 (unaudited) 4,337.4 300.0 Combined entity: Supplemental pro forma from 01/01/2017-12/31/2017 (unaudited) 4,039.9 289.0 The information presented above is for illustrative purposes only and is not necessarily indicative of results that would have been achieved if the acquisitions had occurred as of the beginning of our 2017 reporting period. 2017 Acquisitions Inpatient Rehabilitation During 2017 , we completed the following inpatient rehabilitation acquisitions, none of which were individually material to our financial position, results of operations, or cash flows. Each acquisition was made to enhance our position and ability to provide inpatient rehabilitation services to patients in the applicable geographic areas. • In April 2017, we acquired 80% of the 33 -bed inpatient rehabilitation unit of Memorial Hospital at Gulfport in Gulfport, Mississippi, through a joint venture with Memorial Hospital at Gulfport. This acquisition was funded on March 31, 2017 using cash on hand. • In April 2017, we also acquired approximately 80% of the inpatient rehabilitation unit of Mount Carmel West in Columbus, Ohio, through a joint venture with Mount Carmel Health System. This acquisition was funded through a contribution of a 60 ‑bed de novo inpatient rehabilitation hospital to the consolidated joint venture. • In July 2017, we acquired 50% of the inpatient rehabilitation unit at Jackson-Madison County General Hospital through a joint venture with West Tennessee Healthcare. The acquisition was funded through a contribution of our existing inpatient rehabilitation hospital in Martin, Tennessee to the consolidated joint venture. • In September 2017, we acquired 75% of Heritage Valley Beaver Hospital’s inpatient rehabilitation unit in Beaver, Pennsylvania, through a joint venture with Heritage Valley Health System, Inc. The acquisition was funded through the exchange of 25% of our existing inpatient rehabilitation hospital in Sewickley, Pennsylvania. We accounted for these transactions under the acquisition method of accounting and reported the results of operations of the acquired hospitals from their respective dates of acquisition. Assets acquired were recorded at their estimated fair values as of the respective acquisition dates. The fair values of the identifiable intangible assets were based on valuations using the income approach. The income approach is based on management’s estimates of future operating results and cash flows discounted using a weighted-average cost of capital that reflects market participant assumptions. The excess of the fair value of the consideration conveyed over the fair value of the net assets acquired was recorded as goodwill. The goodwill reflects our expectations of our ability to gain access to and penetrate the acquired hospital’s historical patient base and the benefits of being able to leverage operational efficiencies with favorable growth opportunities based on positive demographic trends in these markets. None of the goodwill recorded as a result of these transactions is deductible for federal income tax purposes. The fair value of the assets acquired at the acquisition date were as follows (in millions): Property and equipment $ 0.1 Identifiable intangible assets: Noncompete agreements (useful lives of 2 to 3 years) 0.6 Trade name (useful life of 20 years) 0.5 Certificate of need (useful life of 20 years) 9.8 Goodwill 24.0 Total assets acquired $ 35.0 Information regarding the net cash paid for all inpatient rehabilitation acquisitions during 2017 is as follows (in millions): Fair value of assets acquired $ 11.0 Goodwill 24.0 Fair value of noncontrolling interest owned by joint venture partner (24.1 ) Net cash paid for acquisitions $ 10.9 Home Health and Hospice During 2017 , we completed the following home health acquisitions, none of which were individually material to our financial position, results of operations, or cash flows. Each acquisition was made to enhance our position and ability to provide post-acute healthcare services to patients in the applicable geographic areas. Each acquisition was funded using cash on hand. • In February 2017, we acquired the assets of Celtic Healthcare of Maryland, Inc., a home health provider with locations in Owings Mill, Maryland and Rockville, Maryland. • In February 2017, we also acquired the assets of two home health locations from Community Health Services, Inc., located in Owensboro, Kentucky and Elizabethtown, Kentucky. • In May 2017, we acquired the assets of two home health locations from Bio Care Home Health Services, Inc. and Kinsman Enterprises, Inc., located in Irving, Texas and Longview, Texas. • In July 2017, we acquired the assets of four home health locations from VNA Healthtrends, located in Bourbonnais, Illinois; Des Plaines, Illinois; Schererville, Indiana; and Tempe, Arizona. • In August 2017, we acquired the assets of two home health locations from VNA Healthtrends, located in Canton, Ohio and Forsyth, Illinois. • In October 2017, we acquired the assets of a home health location from Ware Visiting Nurses Services, Inc. located in Savannah, Georgia; and • In October 2017, we also acquired the assets of a home health location from Pickens County Health Care Authority located in Carrollton, Alabama. We accounted for these transactions under the acquisition method of accounting and reported the results of operations of the acquired locations from their respective dates of acquisition. Assets acquired or liabilities assumed were recorded at their estimated fair values as of the respective acquisition dates. The fair values of identifiable intangible assets were based on valuations using the cost and income approaches. The cost approach is based on amounts that would be required to replace the asset (i.e., replacement cost). The income approach is based on management’s estimates of future operating results and cash flows discounted using a weighted-average cost of capital that reflects market participant assumptions. The excess of the fair value of the consideration conveyed over the fair value of the net assets acquired was recorded as goodwill. The goodwill reflects our expectations of our ability to utilize the acquired locations’ mobile workforce and established relationships within each community and the benefits of being able to leverage operational efficiencies with favorable growth opportunities based on positive demographic trends in these markets. All of the goodwill recorded as a result of these transactions is deductible for federal income tax purposes. The fair value of the assets acquired and liabilities assumed at the acquisition date were as follows (in millions): Total current assets $ 0.1 Identifiable intangible asset: Noncompete agreements (useful lives of 5 years) 0.8 Trade name (useful life of 1 year) 0.1 Certificates of need (useful lives of 10 years) 1.8 Licenses (useful lives of 10 years) 4.0 Goodwill 21.4 Total assets acquired 28.2 Total liabilities assumed (0.3 ) Net assets acquired $ 27.9 Information regarding the net cash paid for home health and hospice acquisitions during 2017 is as follows (in millions): Fair value of assets acquired $ 6.8 Goodwill 21.4 Fair value of liabilities assumed (0.3 ) Net cash paid for acquisitions $ 27.9 2017 Pro Forma Results of Operations The following table summarizes the results of operations of the above mentioned inpatient rehabilitation hospitals and home health and hospice agencies from their respective dates of acquisition included in our consolidated results of operations and the unaudited pro forma results of operations of the combined entity had the date of the acquisitions been January 1, 2016 (in millions): Net Operating Revenues Net (Loss) Income Attributable to Encompass Health Acquired entities only: Actual from acquisition date to December 31, 2017 $ 32.9 $ (6.3 ) Combined entity: Supplemental pro forma from 01/01/2017-12/31/2017 (unaudited) 3,996.1 260.3 Combined entity: Supplemental pro forma from 01/01/2016-12/31/2016 (unaudited) 3,771.5 254.8 The information presented above is for illustrative purposes only and is not necessarily indicative of results that would have been achieved if the acquisitions had occurred as of the beginning of our 2016 |
Cash and Marketable Securities
Cash and Marketable Securities | 12 Months Ended |
Dec. 31, 2019 | |
Cash and Cash Equivalents [Abstract] | |
Cash and Marketable Securities | Cash and Marketable Securities : The components of our investments as of December 31, 2019 are as follows (in millions): Cash & Cash Equivalents Restricted Cash Restricted Marketable Securities Total Cash $ 94.8 $ 64.8 $ — $ 159.6 Equity securities — — 63.5 63.5 Debt securities — — 12.6 12.6 Total $ 94.8 $ 64.8 $ 76.1 $ 235.7 The components of our investments as of December 31, 2018 are as follows (in millions): Cash & Cash Equivalents Restricted Cash Restricted Marketable Securities Total Cash $ 69.2 $ 64.3 $ — $ 133.5 Equity securities — — 55.6 55.6 Debt securities — — 6.4 6.4 Total $ 69.2 $ 64.3 $ 62.0 $ 195.5 Restricted Cash— As of December 31, 2019 and 2018 , Restricted cash consisted of the following (in millions): As of December 31, 2019 2018 Current: Affiliate cash $ 16.0 $ 16.4 Self-insured captive funds 41.4 42.6 57.4 59.0 Noncurrent: Self-insured captive funds 7.4 5.3 Total restricted cash $ 64.8 $ 64.3 Affiliate cash represents cash accounts maintained by joint ventures in which we participate where one or more of our external partners requested, and we agreed, that the joint venture’s cash not be commingled with other corporate cash accounts and be used only to fund the operations of those joint ventures. Self-insured captive funds represent cash held at our wholly owned insurance captive, HCS, Ltd., as discussed in Note 11, Self-Insured Risks . These funds are committed to pay third-party administrators for claims incurred and are restricted by insurance regulations and requirements. These funds cannot be used for purposes outside HCS without the permission of the Cayman Islands Monetary Authority. The classification of restricted cash held by HCS as current or noncurrent depends on the classification of the corresponding claims liability. Marketable Securities— Restricted marketable securities at both balance sheet dates represent restricted assets held at HCS. HCS insures a substantial portion of Encompass Health’s professional liability, workers’ compensation, and other insurance claims. These funds are committed for payment of claims incurred, and the classification of these marketable securities as current or noncurrent depends on the classification of the corresponding claims liability. As of December 31, 2019 and 2018 , $76.1 million and $62.0 million , respectively, of restricted marketable securities are included in Other long-term assets in our consolidated balance sheets. During the year ended December 31, 2019 and 2018 , $1.2 million and $(1.7) million , respectively, of unrealized net gains (losses) were recognized in our consolidated statement of operations on marketable securities still held at the reporting date. A summary of our available-for-sale marketable securities as of December 31, 2019 is as follows (in millions): Cost Gross Unrealized Gains Gross Unrealized Losses Fair Value Debt securities $ 12.6 $ — $ — $ 12.6 A summary of our available-for-sale marketable securities as of December 31, 2018 is as follows (in millions): Cost Gross Unrealized Gains Gross Unrealized Losses Fair Value Debt securities $ 6.4 $ — $ — $ 6.4 Cost in the above tables includes adjustments made to the cost basis of our debt securities for other-than-temporary impairments. During the years ended December 31, 2019 , 2018 , and 2017 , we did not record any impairment charges related to our restricted marketable securities. Investing information related to our available-for-sale marketable securities is as follows (in millions): For the Year Ended December 31, 2019 2018 2017 Proceeds from sales and maturities of available-for-sale marketable securities $ 6.4 $ — $ 4.0 Our portfolio of marketable securities is comprised of investments in mutual funds that hold investments in a variety of industries and geographies. As discussed in Note 1, Summary of Significant Accounting Policies , “Marketable Securities,” when our portfolio included marketable securities with unrealized losses that are not deemed to be other-than-temporarily impaired, we examined the severity and duration of the impairments in relation to the cost of the individual investments. We also considered the industry and geography in which each investment is held and the near-term prospects for a recovery in each. Scheduled maturities of investments in debt securities at December 31, 2019 were as follows (in millions): Cost Fair Value Due in one year or less $ 12.6 $ 12.6 Due after one year through five years — — Due after five years through ten years — — Due after ten years — — Total $ 12.6 $ 12.6 |
Variable Interest Entities
Variable Interest Entities | 12 Months Ended |
Dec. 31, 2019 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Variable Interest Entities | Variable Interest Entities : As of December 31, 2019 and December 31, 2018 , we consolidated eight limited partnership-like entities that are variable interest entities (“VIEs”) and of which we are the primary beneficiary. Our ownership percentages in these entities range from 50.0% to 75.0% as of December 31, 2019 . Through partnership and management agreements with or governing each of these entities, we manage all of 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 our VIEs and an obligation to absorb losses or receive benefits from the VIE that could potentially be significant to the VIE. 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 each of our VIEs prohibit us from using the assets of each VIE to satisfy the obligations of other entities. The carrying amounts and classifications of the consolidated VIEs’ assets and liabilities, which are included in our consolidated balance sheet, are as follows (in millions): December 31, 2019 December 31, 2018 Assets Current assets: Cash and cash equivalents $ 0.2 $ 0.3 Accounts receivable 29.3 31.0 Other current assets 6.4 4.9 Total current assets 35.9 36.2 Property and equipment, net 122.6 111.5 Operating lease right-of-use assets 6.0 — Goodwill 15.9 15.9 Intangible assets, net 3.3 4.3 Deferred income tax assets 0.7 0.6 Other long-term assets 30.6 29.0 Total assets $ 215.0 $ 197.5 Liabilities Current liabilities: Current portion of long-term debt $ 0.8 $ 0.6 Current operating lease liabilities 1.4 — Accounts payable 6.7 5.2 Accrued payroll 7.7 7.0 Other current liabilities 9.3 38.0 Total current liabilities 25.9 50.8 Long-term debt, net of current portion 10.5 — Long-term operating lease liabilities 4.7 — Total liabilities $ 41.1 $ 50.8 |
Accounts Receivable
Accounts Receivable | 12 Months Ended |
Dec. 31, 2019 | |
Receivables [Abstract] | |
Accounts Receivable | Accounts Receivable : Accounts receivable consists of the following (in millions): As of December 31, 2019 2018 Current: Patient accounts receivable $ 498.7 $ 459.9 Other accounts receivable 7.4 7.8 506.1 467.7 Noncurrent patient accounts receivable 152.1 155.5 Accounts receivable $ 658.2 $ 623.2 Because the resolution of claims that are part of Medicare audit programs can take several years, we review the patient receivables that are part of this adjudication process to determine their appropriate classification as either current or noncurrent. Amounts considered noncurrent are included in Other long-term assets in our consolidated balance sheet. See Note 1, Summary of Significant Accounting Policies , “Net Operating Revenues,” for additional information. |
Property and Equipment
Property and Equipment | 12 Months Ended |
Dec. 31, 2019 | |
Property, Plant and Equipment [Abstract] | |
Property and Equipment | Property and Equipment : Property and equipment consists of the following (in millions): As of December 31, 2019 2018 Land $ 169.6 $ 142.4 Buildings 2,084.8 1,875.2 Leasehold improvements 192.6 147.5 Vehicles 31.2 24.6 Furniture, fixtures, and equipment 505.1 441.6 2,983.3 2,631.3 Less: Accumulated depreciation and amortization (1,211.8 ) (1,147.0 ) 1,771.5 1,484.3 Construction in progress 187.8 150.5 Property and equipment, net $ 1,959.3 $ 1,634.8 As of December 31, 2019 , approximately 70% of our consolidated Property and equipment, net held by Encompass Health Corporation and its guarantor subsidiaries was pledged to the lenders under our credit agreement. See Note 10, Long-term Debt , and Note 21, Condensed Consolidating Financial Information . The amount of depreciation expense and interest capitalized is as follows (in millions): For the Year Ended December 31, 2019 2018 2017 Depreciation expense $ 130.0 $ 124.2 $ 111.8 Interest capitalized $ 8.3 $ 6.0 $ 3.7 In February 2016, we entered into a development/lease agreement with CR HQ, LLC (the “Developer”) to construct our new home office in Birmingham, Alabama. Under the terms of this agreement, the Developer was responsible for all costs of constructing the new facility ‘shell’ which is being leased to us for an initial term of 15 years with four , five -year renewal options. The lease commenced in April of 2018. We were responsible for the costs associated with improvements to the interior of the building. Due to the nature and extent of the tenant improvements we made to the new home office and certain provisions of the development/lease agreement, we were deemed to be the accounting owner of the new home office during the construction period. Construction commenced in the second quarter of 2016. As of December 31, 2018 , Property and equipment, net included $55.0 million for the construction costs incurred by the Developer, and Long-term debt, net of current portion included a corresponding financing obligation liability of $54.8 million . The remaining corresponding financing obligation liability of $0.2 million as of December 31, 2018 is included in the Current portion of long-term debt . The amounts recorded for construction costs and the corresponding liability are noncash activities for purposes of our consolidated statement of cash flows. As a result of adopting ASC 842 on January 1, 2019, this lease became a finance lease obligation. See Note 1, Summary of Significant Accounting Policies , “Recent Accounting Pronouncements,” for additional information on ASC 842. See also Note 10, Long-term Debt . |
Leases
Leases | 12 Months Ended |
Dec. 31, 2019 | |
Leases [Abstract] | |
Leases | Leases : We lease real estate, vehicles, and equipment under operating and finance leases with non-cancelable terms generally expiring at various dates through 2037. Our operating and finance leases generally have 1 - to 25 -year terms, with one or more renewal options, primarily relating to our real estate leases, with terms to be determined at the time of renewal. The exercise of such lease renewal options is at our sole discretion, and to the extent we are reasonably certain we will exercise a renewal option, the years related to that option are included in our determination of the lease term for purposes of classifying and measuring a given lease. Certain leases also include options to purchase the leased property. The components of lease costs are as follows (in millions): For the Year Ended December 31, 2019 Operating lease cost $ 72.9 Finance lease cost: Amortization of right-of-use assets 30.3 Interest on lease liabilities 29.5 Total finance lease cost 59.8 Variable lease cost 1.5 Sublease income (3.2 ) Total lease cost $ 131.0 Supplemental consolidated balance sheet information related to leases is as follows (in millions): Classification As of December 31, 2019 Assets Operating lease Operating lease right-of-use assets $ 276.5 Finance lease (1) Property and equipment, net 327.0 Total leased assets $ 603.5 Liabilities Current liabilities: Operating lease Current operating lease liabilities $ 40.4 Finance lease Current portion of long-term debt 21.0 Noncurrent liabilities: Operating lease Long-term operating lease liabilities 243.8 Finance lease Long-term debt, net of current portion 363.1 Total leased liabilities $ 668.3 (1) Finance lease assets are recorded net of accumulated amortization of $99.6 million as of December 31, 2019 . As of December 31, 2019 Weighted Average Remaining Lease Term Operating lease 9.1 years Finance lease 13.4 years Weighted Average Discount Rate Operating lease 6.2 % Finance lease 7.9 % Maturities of lease liabilities as of December 31, 2019 are as follows (in millions): Year Ending December 31, Operating Leases Finance Leases 2020 $ 57.5 $ 50.4 2021 53.2 48.9 2022 45.4 45.5 2023 40.7 45.3 2024 34.4 44.7 2025 and thereafter 153.0 405.7 Total lease payments 384.2 640.5 Less: Interest portion (100.0 ) (256.4 ) Total lease liabilities $ 284.2 $ 384.1 Supplemental cash flow information related to our leases is as follows (in millions): For the Year Ended December 31, 2019 Cash paid for amounts included in the measurement of lease liabilities: Operating cash flows from operating leases $ 70.4 Operating cash flows from finance leases 30.0 Financing cash flows from finance leases 19.5 Right-of-use assets obtained in exchange for lease obligations: Operating leases $ 43.8 Finance leases 34.2 Information prior to the adoption of ASC 842— Information related to assets under capital lease obligations is as follows (in millions): As of December 31, 2018 Assets under capital lease obligations: Buildings $ 329.6 Vehicles 21.1 Equipment 0.3 351.0 Less: Accumulated amortization (126.9 ) Assets under capital lease obligations, net $ 224.1 The amount of amortization expense relating to assets under capital lease obligations and rent expense under operating leases is as follows (in millions): For the Year Ended December 31, 2018 2017 Amortization expense $ 24.1 $ 22.7 Rent expense: Minimum rent payments $ 69.8 $ 66.5 Contingent and other rents 24.9 24.1 Other 9.1 8.9 Total rent expense $ 103.8 $ 99.5 Future minimum lease payments at December 31, 2018, for those leases having an initial or remaining noncancelable lease term in excess of one year, are as follows (in millions): Year Ending December 31, Operating Leases Capital Lease Obligations 2019 $ 71.4 $ 36.2 2020 65.8 32.3 2021 54.3 30.3 2022 41.0 28.7 2023 35.3 28.0 2024 and thereafter 148.2 299.7 $ 416.0 455.2 Less: Interest portion (191.4 ) Obligations under capital leases $ 263.8 Rental income from subleases approximated $3.0 million and $2.9 million |
Leases | Leases : We lease real estate, vehicles, and equipment under operating and finance leases with non-cancelable terms generally expiring at various dates through 2037. Our operating and finance leases generally have 1 - to 25 -year terms, with one or more renewal options, primarily relating to our real estate leases, with terms to be determined at the time of renewal. The exercise of such lease renewal options is at our sole discretion, and to the extent we are reasonably certain we will exercise a renewal option, the years related to that option are included in our determination of the lease term for purposes of classifying and measuring a given lease. Certain leases also include options to purchase the leased property. The components of lease costs are as follows (in millions): For the Year Ended December 31, 2019 Operating lease cost $ 72.9 Finance lease cost: Amortization of right-of-use assets 30.3 Interest on lease liabilities 29.5 Total finance lease cost 59.8 Variable lease cost 1.5 Sublease income (3.2 ) Total lease cost $ 131.0 Supplemental consolidated balance sheet information related to leases is as follows (in millions): Classification As of December 31, 2019 Assets Operating lease Operating lease right-of-use assets $ 276.5 Finance lease (1) Property and equipment, net 327.0 Total leased assets $ 603.5 Liabilities Current liabilities: Operating lease Current operating lease liabilities $ 40.4 Finance lease Current portion of long-term debt 21.0 Noncurrent liabilities: Operating lease Long-term operating lease liabilities 243.8 Finance lease Long-term debt, net of current portion 363.1 Total leased liabilities $ 668.3 (1) Finance lease assets are recorded net of accumulated amortization of $99.6 million as of December 31, 2019 . As of December 31, 2019 Weighted Average Remaining Lease Term Operating lease 9.1 years Finance lease 13.4 years Weighted Average Discount Rate Operating lease 6.2 % Finance lease 7.9 % Maturities of lease liabilities as of December 31, 2019 are as follows (in millions): Year Ending December 31, Operating Leases Finance Leases 2020 $ 57.5 $ 50.4 2021 53.2 48.9 2022 45.4 45.5 2023 40.7 45.3 2024 34.4 44.7 2025 and thereafter 153.0 405.7 Total lease payments 384.2 640.5 Less: Interest portion (100.0 ) (256.4 ) Total lease liabilities $ 284.2 $ 384.1 Supplemental cash flow information related to our leases is as follows (in millions): For the Year Ended December 31, 2019 Cash paid for amounts included in the measurement of lease liabilities: Operating cash flows from operating leases $ 70.4 Operating cash flows from finance leases 30.0 Financing cash flows from finance leases 19.5 Right-of-use assets obtained in exchange for lease obligations: Operating leases $ 43.8 Finance leases 34.2 Information prior to the adoption of ASC 842— Information related to assets under capital lease obligations is as follows (in millions): As of December 31, 2018 Assets under capital lease obligations: Buildings $ 329.6 Vehicles 21.1 Equipment 0.3 351.0 Less: Accumulated amortization (126.9 ) Assets under capital lease obligations, net $ 224.1 The amount of amortization expense relating to assets under capital lease obligations and rent expense under operating leases is as follows (in millions): For the Year Ended December 31, 2018 2017 Amortization expense $ 24.1 $ 22.7 Rent expense: Minimum rent payments $ 69.8 $ 66.5 Contingent and other rents 24.9 24.1 Other 9.1 8.9 Total rent expense $ 103.8 $ 99.5 Future minimum lease payments at December 31, 2018, for those leases having an initial or remaining noncancelable lease term in excess of one year, are as follows (in millions): Year Ending December 31, Operating Leases Capital Lease Obligations 2019 $ 71.4 $ 36.2 2020 65.8 32.3 2021 54.3 30.3 2022 41.0 28.7 2023 35.3 28.0 2024 and thereafter 148.2 299.7 $ 416.0 455.2 Less: Interest portion (191.4 ) Obligations under capital leases $ 263.8 Rental income from subleases approximated $3.0 million and $2.9 million |
Goodwill and Other Intangible A
Goodwill and Other Intangible Assets | 12 Months Ended |
Dec. 31, 2019 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Goodwill and Other Intangible Assets | Goodwill and Other Intangible Assets : The following table shows changes in the carrying amount of Goodwill for the years ended December 31, 2019 , 2018 , and 2017 (in millions): Inpatient Rehabilitation Home Health and Hospice Consolidated Goodwill as of December 31, 2016 $ 1,142.0 $ 785.2 $ 1,927.2 Acquisitions 24.0 21.4 45.4 Goodwill as of December 31, 2017 1,166.0 806.6 1,972.6 Acquisitions 23.2 105.0 128.2 Goodwill as of December 31, 2018 1,189.2 911.6 2,100.8 Acquisitions 4.8 174.7 179.5 Consolidation of joint venture formerly accounted for under the equity method of accounting 24.9 — 24.9 Goodwill as of December 31, 2019 $ 1,218.9 $ 1,086.3 $ 2,305.2 Goodwill increased in 2017 as a result of our acquisitions of inpatient and home health operations. Goodwill increased in 2018 as a result of our acquisitions of Camellia and other inpatient and home health and hospice operations. Goodwill increased in 2019 as a result of our consolidation of Yuma Rehabilitation Hospital and the remeasurement of our previously held equity interest at fair value and our acquisitions of Alacare and other inpatient and home health and hospice operations. See Note 2, Business Combinations , and Note 9, Investments in and Advances to Nonconsolidated Affiliates . We performed impairment reviews as of October 1, 2019 , 2018 , and 2017 and concluded no Goodwill impairment existed. As of December 31, 2019 , we had no accumulated impairment losses related to Goodwill . The following table provides information regarding our other intangible assets (in millions): Gross Carrying Amount Accumulated Amortization Net Certificates of need: 2019 $ 197.2 $ (40.4 ) $ 156.8 2018 148.3 (28.2 ) 120.1 Licenses: 2019 $ 187.3 $ (94.1 ) $ 93.2 2018 169.1 (82.2 ) 86.9 Noncompete agreements: 2019 $ 74.2 $ (62.3 ) $ 11.9 2018 65.6 (58.6 ) 7.0 Trade name - Encompass: 2019 $ 135.2 $ — $ 135.2 2018 135.2 — 135.2 Trade names - all other: 2019 $ 41.6 $ (22.4 ) $ 19.2 2018 38.9 (19.4 ) 19.5 Internal-use software: 2019 $ 173.8 $ (116.0 ) $ 57.8 2018 161.3 (89.3 ) 72.0 Market access assets: 2019 $ 13.2 $ (11.0 ) $ 2.2 2018 13.2 (10.5 ) 2.7 Total intangible assets: 2019 $ 822.5 $ (346.2 ) $ 476.3 2018 731.6 (288.2 ) 443.4 Amortization expense for other intangible assets is as follows (in millions): For the Year Ended December 31, 2019 2018 2017 Amortization expense $ 58.4 $ 51.4 $ 49.3 Total estimated amortization expense for our other intangible assets for the next five years is as follows (in millions): Year Ending December 31, Estimated Amortization Expense 2020 $ 55.9 2021 46.2 2022 38.2 2023 33.9 2024 31.0 |
Investments in and Advances to
Investments in and Advances to Nonconsolidated Affiliates | 12 Months Ended |
Dec. 31, 2019 | |
Investments in and Advances to Affiliates, Schedule of Investments [Abstract] | |
Investments in and Advances to Nonconsolidated Affiliates | Investments in and Advances to Nonconsolidated Affiliates : Investments in and advances to nonconsolidated affiliates as of December 31, 2019 represents our investment in five partially owned subsidiaries, of which four are general or limited partnerships, limited liability companies, or joint ventures in which Encompass Health or one of its subsidiaries is a general or limited partner, managing member, member, or venturer, as applicable. We do not control these affiliates but have the ability to exercise significant influence over the operating and financial policies of certain of these affiliates. Our ownership percentages in these affiliates range from approximately 8% to 60% . We account for these investments using the cost and equity methods of accounting. Our investments, which are included in Other long-term assets in our consolidated balance sheets, consist of the following (in millions): As of December 31, 2019 2018 Equity method investments: Capital contributions $ 0.9 $ 0.9 Cumulative share of income 68.1 114.0 Cumulative share of distributions (63.6 ) (102.7 ) 5.4 12.2 Cost method investments: Capital contributions, net of distributions and impairments 2.0 — Total investments in and advances to nonconsolidated affiliates $ 7.4 $ 12.2 The following summarizes the combined assets, liabilities, and equity and the combined results of operations of our equity method affiliates (on a 100% basis, in millions): As of December 31, 2019 2018 Assets— Current $ 4.2 $ 9.9 Noncurrent 9.3 17.8 Total assets $ 13.5 $ 27.7 Liabilities and equity— Current liabilities $ 0.5 $ 1.4 Noncurrent liabilities 0.3 0.1 Partners’ capital and shareholders’ equity— Encompass Health 4.9 12.2 Outside partners 7.8 14.0 Total liabilities and equity $ 13.5 $ 27.7 Condensed statements of operations (in millions): For the Year Ended December 31, 2019 2018 2017 Net operating revenues $ 32.6 $ 42.6 $ 40.9 Operating expenses (19.1 ) (25.6 ) (24.1 ) Income from continuing operations, net of tax 13.4 17.1 17.0 Net income 13.4 17.1 17.0 As a result of an amendment to the joint venture agreement related to Yuma Rehabilitation Hospital, the accounting for this hospital changed from the equity method of accounting to a consolidated entity effective July 1, 2019. The amendment revised certain participatory rights held by our joint venture partner resulting in Encompass Health gaining control of this entity from an accounting perspective. We accounted for this change in control as a business combination and consolidated this entity using the acquisition method. The consolidation of Yuma Rehabilitation Hospital did not have a material impact on our financial position, results of operations, or cash flows. As a result of our consolidation of this hospital and the remeasurement of our previously held equity interest at fair value, Goodwill increased by $24.9 million and we recorded a $19.2 million gain as part of Other income during the year ended December 31, 2019. |
Long-term Debt
Long-term Debt | 12 Months Ended |
Dec. 31, 2019 | |
Debt Disclosure [Abstract] | |
Long-term Debt | Long-term Debt : Our long-term debt outstanding consists of the following (in millions): As of December 31, 2019 2018 Credit Agreement— Advances under revolving credit facility $ 45.0 $ 30.0 Term loan facilities 265.2 280.1 Bonds payable— 5.125% Senior Notes due 2023 297.3 296.6 5.75% Senior Notes due 2024 697.3 1,194.7 5.75% Senior Notes due 2025 345.6 345.0 4.50% Senior Notes due 2028 491.7 — 4.75% Senior Notes due 2030 491.7 — Other notes payable 44.7 104.2 Finance lease obligations 384.1 263.8 3,062.6 2,514.4 Less: Current portion (39.3 ) (35.8 ) Long-term debt, net of current portion $ 3,023.3 $ 2,478.6 The following chart shows scheduled principal payments due on long-term debt for the next five years and thereafter (in millions): Year Ending December 31, Face Amount Net Amount 2020 $ 39.3 $ 39.3 2021 35.5 35.5 2022 46.3 46.3 2023 335.1 332.4 2024 995.7 991.6 Thereafter 1,638.6 1,617.5 Total $ 3,090.5 $ 3,062.6 As a result of the 2019 and 2017 redemptions discussed below, we recorded a $7.7 million and $10.7 million Loss on early extinguishment of debt in 2019 and 2017 , respectively. There were no redemptions resulting in a Loss on early extinguishment of debt during 2018. Senior Secured Credit Agreement— Credit Agreement In November 2019, we amended our existing credit agreement, previously amended in September 2017 (the “Credit Agreement”). The Credit Agreement provided for a $270 million term loan commitment and a $1 billion revolving credit facility, with a $260 million letter of credit subfacility and a swingline loan subfacility, all of which mature in November 2024. Outstanding term loan borrowings are payable in equal consecutive quarterly installments, commencing on December 31, 2019, of 1.25% of the aggregate principal amount of the term loans outstanding as of December 31, 2019, with the remainder due at maturity. We have the right at any time to prepay, in whole or in part, any borrowing under the term loan facilities. Amounts drawn on the term loan facilities and the revolving credit facility bear interest at a rate per annum of, at our option, (1) LIBOR or (2) the higher of (a) Barclays Bank PLC’s (“Barclays”) prime rate and (b) the federal funds rate plus 0.5% , in each case, plus, in each case, an applicable margin that varies depending upon our leverage ratio. We are also subject to a commitment fee of 0.375% per annum on the daily amount of the unutilized commitments under the term loan facilities and revolving credit facility. The current interest rate on borrowings under the Credit Agreement is LIBOR plus 1.50% . The Credit Agreement contains affirmative and negative covenants and default and acceleration provisions, including a minimum interest coverage ratio and a maximum leverage ratio. Under one such negative covenant, we are restricted from paying common stock dividends, prepaying certain senior notes, making certain investments, and repurchasing preferred and common equity unless (1) we are not in default under the terms of the Credit Agreement and (2) our senior secured leverage ratio, as defined in the Credit Agreement, does not exceed 2x . In the event the senior secured leverage ratio exceeds 2x, these payments are subject to a limit of $200 million plus an amount equal to a portion of available excess cash flows each fiscal year. Our obligations under the Credit Agreement are secured by the current and future personal property of the Company and its subsidiary guarantors. The maximum leverage ratio in the financial covenants is 4.50x through December 2021 and 4.25x from then until maturity. As of December 31, 2019 and 2018 , $45 million and $30 million were drawn under the revolving credit facility with an interest rate of 3.2% and 3.9% , respectively. Amounts drawn as of December 31, 2019 and 2018 exclude $38.9 million and $37.4 million , respectively, utilized under the letter of credit subfacility, which were being used in the ordinary course of business to secure workers’ compensation and other insurance coverages and for general corporate purposes. Currently, there are no undrawn term loan commitments under the Credit Agreement. 2017 Credit Agreement In September 2017, we amended our existing credit agreement (the “ 2017 Credit Agreement”). The 2017 Credit Agreement provided for a $300 million term loan commitment and a $700 million revolving credit facility, with a $260 million letter of credit subfacility and a swingline loan subfacility, all of which would have matured in September 2022. Outstanding term loan borrowings were payable in equal consecutive quarterly installments, commencing on December 31, 2017, of 1.25% of the aggregate principal amount of the term loans outstanding as of December 31, 2017, with the remainder due at maturity. The 2017 Credit Agreement contained similar affirmative and negative covenants and default and acceleration provisions as the Credit Agreement. The 2017 amendment to our existing credit agreement included a net repayment of approximately $110 million to our existing term loan facility. Bonds Payable— Nonconvertible Notes The Company’s 2023 Notes, 2024 Notes, 2025 Notes, 2028 Notes, and 2030 Notes (collectively, the “Senior Notes”) were issued pursuant to an indenture (the “Base Indenture”) dated as of December 1, 2009, as supplemented by each Senior Notes’ respective supplemental indenture (together with the Base Indenture, the “Indenture”). Pursuant to the terms of the Indenture, the Senior Notes are jointly and severally guaranteed on a senior, unsecured basis by all of our existing and future subsidiaries that guarantee borrowings under our Credit Agreement and other capital markets debt (see Note 21, Condensed Consolidating Financial Information ). The Senior Notes are senior, unsecured obligations of Encompass Health and rank equally with our other senior indebtedness, senior to any of our subordinated indebtedness, and effectively junior to our secured indebtedness to the extent of the value of the collateral securing such indebtedness. Upon the occurrence of a change in control (as defined in the Indenture), each holder of the Senior Notes may require us to repurchase all or a portion of the notes in cash at a price equal to 101% of the principal amount of the Senior Notes to be repurchased, plus accrued and unpaid interest. The Senior Notes contain covenants and default and acceleration provisions, that, among other things, limit our and certain of our subsidiaries’ ability to (1) incur additional debt, (2) make certain restricted payments, (3) consummate specified asset sales, (4) incur liens, and (5) merge or consolidate with another person. 2023 Notes In March 2015, we issued $300 million of 5.125% Senior Notes due 2023 (“the 2023 Notes”) at par, which resulted in approximately $295 million in net proceeds from the public offering. The 2023 Notes mature on March 15, 2023 and bear interest at a per annum rate of 5.125% . Inclusive of financing costs, the effective interest rate on the 2023 Notes is 5.4% . Interest on the 2023 Notes is payable semiannually in arrears on March 15 and September 15. We may redeem the 2023 Notes, in whole or in part, at any time on or after March 15, 2018 at the redemption prices set forth below: Period Redemption Price* 2019 102.563 % 2020 101.281 % 2021 and thereafter 100.000 % * Expressed in percentage of principal amount 2024 Notes In September 2012, we completed a public offering of $275 million aggregate principal amount of the 5.75% Senior Notes due 2024 (“the 2024 Notes”) at par. In September 2014, we issued an additional $175 million of the 2024 Notes at a price of 103.625% of the principal amount, in January 2015, we issued an additional $400 million of the 2024 Notes at a price of 102% of the principal amount, and in August 2015, we issued an additional $350 million of our 2024 Notes at a price of 100.5% of the principal amount. The 2024 Notes mature on November 1, 2024 and bear interest at a per annum rate of 5.75% . Inclusive of premiums and financing costs, the effective interest rate on the 2024 Notes is 5.8% . Interest is payable semiannually in arrears on May 1 and November 1 of each year. In June 2019, we redeemed $100 million of outstanding principal amount of our 2024 Notes using cash on hand and capacity under our revolving credit facility. Pursuant to the terms of the 2024 Notes, this optional redemption was made at a price of 101.917% , which resulted in a total cash outlay of approximately $102 million . In November 2019, we redeemed $400 million of the outstanding principal amount of our 2024 Notes. Pursuant to the terms of the 2024 Notes, this optional redemption was made at a price of 100.958% , which resulted in a total cash outlay of approximately $404 million . We may redeem the 2024 Notes, in whole or in part, at any time on or after November 1, 2017, at the redemption prices set forth below: Period Redemption Price* 2019 100.958 % 2020 and thereafter 100.000 % * Expressed in percentage of principal amount 2025 Notes In September 2015, we issued $350 million of 5.75% Senior Notes due 2025 (“the 2025 Notes”) at par. The 2025 Notes mature on September 15, 2025 and bear interest at a per annum rate of 5.75% . Inclusive of financing costs, the effective interest rate on the 2025 Notes is 6.0% . Interest on the 2025 Notes is payable semiannually in arrears on March 15 and September 15. We may redeem the 2025 Notes, in whole or in part, at any time on or after September 15, 2020, at the redemption prices set forth below: Period Redemption Price* 2020 102.875 % 2021 101.917 % 2022 100.958 % 2023 and thereafter 100.000 % * Expressed in percentage of principal amount 2028 and 2030 Notes In September 2019, we issued $500 million of 4.50% Senior Notes due 2028 (the “2028 Notes”) at par and $500 million of 4.75% Senior Notes due 2030 (the “2030 Notes”) at par. The proceeds from this offering were used to fund the purchase of equity and vested stock appreciation rights from management investors of our home health and hospice segment, redeem a portion of our 2024 Notes as discussed above, and repay borrowings under our revolving credit facility. The 2028 Notes mature on February 1, 2028. Inclusive of financing costs, the effective interest rate on the 2028 Notes is 4.7% . Interest on the 2028 Notes is payable semiannually in arrears on February 1 and August 1. We may redeem the 2028 Notes, in whole or in part, at any time on or after February 1, 2023 at the redemption prices set forth below: Period Redemption Price* 2023 102.250 % 2024 101.125 % 2025 and thereafter 100.000 % * Expressed in percentage of principal amount The 2030 Notes mature on February 1, 2030. Inclusive of financing costs, the effective interest rate on the 2030 Notes is 5.0% . Interest on the 2030 Notes is payable semiannually in arrears on February 1 and August 1. We may redeem the 2030 Notes, in whole or in part, at any time on or after February 1, 2025 at the redemption prices set forth below: Period Redemption Price* 2025 102.375 % 2026 101.583 % 2027 100.792 % 2028 and thereafter 100.000 % * Expressed in percentage of principal amount Convertible Notes Former Convertible Senior Subordinated Notes Due 2043 In November 2013, we exchanged $320 million in aggregate principal amount of newly issued 2.00% Convertible Senior Subordinated Notes due 2043 (the “Former Convertible Notes”) for 257,110 shares of our outstanding 6.50% Series A Convertible Perpetual Preferred Stock. Our Former Convertible Notes were issued pursuant to an indenture dated November 18, 2013 (the “ Former Convertible Notes Indenture”) between us and Wells Fargo Bank, National Association, as trustee and conversion agent. In May 2017, we provided notice of our intent to exercise our early redemption option on the $320 million outstanding principal amount of the Former Convertible Notes. Pursuant to the Former Convertible Notes Indenture, the holders had the right to convert their Former Convertible Notes into shares of our common stock at a conversion rate of 27.2221 shares per $1,000 principal amount of Former Convertible Notes, which rate was increased by the make-whole premium. Holders of $319.4 million in principal of these Former Convertible Notes chose to convert their notes to shares of our common stock resulting in the issuance of 8.9 million shares from treasury stock, including 0.2 million shares due to the make-whole premium. Approximately 8.6 million of these shares were included in Diluted earnings per share attributable to Encompass Health common shareholders as of March 31, 2017 . We redeemed the remaining $0.6 million in principal at par in cash. The redemption and all conversions occurred in the second quarter of 2017. The Former Convertible Notes would have matured on December 1, 2043. Inclusive of discounts and financing costs, the effective interest rate on the Former Convertible Notes was 6.0% . Interest was payable semiannually in arrears in cash on June 1 and December 1 of each year. Other Notes Payable— Our notes payable consist of the following (in millions): As of December 31, 2019 2018 Interest Rates Sale/leaseback transactions involving real estate accounted for as financings $ 28.0 $ 82.8 8.1% to 11.2% as of December 31, 2019; Construction of a new hospital 12.9 14.6 5.0% as of December 31, 2019; Other 3.8 6.8 4.3% to 6.8% Other notes payable $ 44.7 $ 104.2 As a result of adopting ASC 842 on January 1, 2019, notes payable of approximately $52 million related to a sale/leaseback transaction involving real estate became a finance lease obligation. See Note 1, Summary of Significant Accounting Policies , “Recent Accounting Pronouncements,” for additional information on ASC 842. |
Self-Insured Risks
Self-Insured Risks | 12 Months Ended |
Dec. 31, 2019 | |
Insurance [Abstract] | |
Self-Insured Risks | Self-Insured Risks : We insure a substantial portion of our professional liability, general liability, and workers’ compensation risks through a self-insured retention program (“SIR”) underwritten by our consolidated wholly owned offshore captive insurance subsidiary, HCS, Ltd., which we fund via regularly scheduled premium payments. HCS is an insurance company licensed by the Cayman Island Monetary Authority. We use HCS to fund our first layer of insurance coverage up to approximately $30 million for annual aggregate losses associated with general and professional liability risks. Workers’ compensation exposures are capped on a per claim basis. Risks in excess of specified limits per claim and in excess of our aggregate SIR amount are covered by unrelated commercial carriers. The following table presents the changes in our self-insurance reserves for the years ended December 31, 2019 , 2018 , and 2017 (in millions): 2019 2018 2017 Balance at beginning of period, gross $ 160.9 $ 171.0 $ 171.4 Less: Reinsurance receivables (25.6 ) (39.9 ) (41.4 ) Balance at beginning of period, net 135.3 131.1 130.0 Increase for the provision of current year claims 46.9 47.1 44.7 Decrease for the provision of prior year claims (12.6 ) (8.7 ) (3.0 ) Expenses related to discontinued operations (0.1 ) (0.2 ) (0.5 ) Payments related to current year claims (7.5 ) (7.0 ) (5.0 ) Payments related to prior year claims (31.1 ) (27.0 ) (35.1 ) Balance at end of period, net 130.9 135.3 131.1 Add: Reinsurance receivables 26.4 25.6 39.9 Balance at end of period, gross $ 157.3 $ 160.9 $ 171.0 As of December 31, 2019 and 2018 , $40.1 million and $41.3 million , respectively, of these reserves are included in Other current liabilities in our consolidated balance sheets. Provisions for these risks are based primarily upon actuarially determined estimates. These reserves represent the unpaid portion of the estimated ultimate cost of all reported and unreported losses incurred through the respective consolidated balance sheet dates. The reserves are estimated using individual case-basis valuations and actuarial analyses. Those estimates are subject to the effects of trends in loss severity and frequency. The estimates are continually reviewed and adjustments are recorded as experience develops or new information becomes known. The changes to the estimated ultimate loss amounts are included in current operating results. The reserves for these self-insured risks cover approximately 1,000 individual claims at December 31, 2019 and 2018 , and estimates for potential unreported claims. The time period required to resolve these claims can vary depending upon the jurisdiction, the nature, and the form of resolution of the claims. The estimation of the timing of payments beyond a year can vary significantly. Although considerable variability is inherent in reserve estimates, management believes the reserves for losses and loss expenses are adequate; however, there can be no assurance the ultimate liability will not exceed management’s estimates. |
Redeemable Noncontrolling Inter
Redeemable Noncontrolling Interests | 12 Months Ended |
Dec. 31, 2019 | |
Noncontrolling Interest [Abstract] | |
Redeemable Noncontolling Interests | Redeemable Noncontrolling Interests : The following is a summary of the activity related to our Redeemable noncontrolling interests (in millions): For the Year Ended December 31, 2019 2018 2017 Balance at beginning of period $ 261.7 $ 220.9 $ 138.3 Net income attributable to noncontrolling interests 12.6 13.9 17.9 Distributions declared (9.2 ) (8.6 ) (4.6 ) Contribution to joint venture 1.0 9.6 2.3 Reclassification to noncontrolling interests (11.2 ) — — Purchase of redeemable noncontrolling interests (162.9 ) (65.1 ) — Change in fair value 147.6 91.0 67.0 Balance at end of period $ 239.6 $ 261.7 $ 220.9 The following table reconciles the net income attributable to nonredeemable Noncontrolling interests , as recorded in the shareholders’ equity section of the consolidated balance sheets, and the net income attributable to Redeemable noncontrolling interests , as recorded in the mezzanine section of the consolidated balance sheets, to the Net income attributable to noncontrolling interests presented in the consolidated statements of operations (in millions): For the Year Ended December 31, 2019 2018 2017 Net income attributable to nonredeemable noncontrolling interests $ 74.5 $ 69.2 $ 61.2 Net income attributable to redeemable noncontrolling interests 12.6 13.9 17.9 Net income attributable to noncontrolling interests $ 87.1 $ 83.1 $ 79.1 On December 31, 2014, we acquired 83.3% of our home health and hospice business when we purchased EHHI Holdings, Inc. (“EHHI”). In the acquisition, we acquired all of the issued and outstanding equity interests of EHHI, other than equity interests contributed to Encompass Health Home Health Holdings, Inc. (“Holdings”), a subsidiary of Encompass Health and an indirect parent of EHHI, by certain sellers in exchange for shares of common stock of Holdings. Those sellers were members of EHHI management, and they contributed a portion of their shares of common stock of EHHI, valued at approximately $64 million on the acquisition date, in exchange for approximately 16.7% of the outstanding shares of common stock of Holdings. At any time after December 31, 2017, each management investor has the right (but not the obligation) to have his or her shares of Holdings stock repurchased by Encompass Health for a cash purchase price per share equal to the fair value. Specifically, up to one-third of each management investor’s shares of Holdings stock may be sold prior to December 31, 2018; two-thirds of each management investor’s shares of Holdings stock may be sold prior to December 31, 2019; and all of each management investor’s shares of Holdings stock may be sold thereafter. At any time after December 31, 2019, Encompass Health will have the right (but not the obligation) to repurchase all or any portion of the shares of Holdings stock owned by one or more management investors for a cash purchase price per share equal to the fair value. In February 2018, each management investor exercised the right to sell one-third of his or her shares of Holdings stock to Encompass Health, representing approximately 5.6% of the outstanding shares of the common stock of Holdings. On February 21, 2018, Encompass Health settled the acquisition of those shares upon payment of approximately $65 million in cash. In July 2019, we received additional exercise notices, representing approximately 5.6% of the outstanding shares of the common stock of Holdings. In September 2019, Encompass Health settled the acquisition of those shares upon payment of approximately $163 million in cash. As of December 31, 2019 , the value of the outstanding shares of Holdings owned by management investors was approximately $208 million . In January 2020, we received additional exercise notices, representing approximately 4.3% of the outstanding shares of the common stock of Holdings. On February 18, 2020, Encompass Health settled the acquisition of those shares upon payment of approximately $162 million in cash. Upon settlement of these exercises, approximately $46 million of the shares of Holdings held by two management investors remained outstanding. On February 20, 2020, Encompass Health entered into exchange agreements (each, an “Exchange Agreement”) with these two management investors, pursuant to which they have the right to exchange all of the remaining shares of Holdings held by them for shares of common stock of Encompass Health (the “EHC Shares”). Each of the Exchange Agreements provides that the management investor must deliver a written exchange notice (an “Exchange Notice”) to Encompass Health in order to exchange his or her remaining shares of Holdings for EHC Shares. Each Exchange Agreement further provides that the number of EHC Shares to be delivered to the management investor is to be determined by dividing the fair value of the shares of Holdings held by the management investor on the date of the Exchange Agreement by the last reported sales price of Encompass Health’s common stock on the New York Stock Exchange (the “NYSE”) on the date of delivery of the Exchange Notice. On February 20, 2020, Encompass Health received an Exchange Notice from each of the management investors. Based on the last sales price of Encompass Health’s common stock on the NYSE on February 20, 2020, Encompass Health anticipates delivering an aggregate of approximately 561,000 EHC Shares, less than 0.6% of the total number of outstanding shares of the Encompass Health’s common stock, to the management investors. The settlement of the exchanges is expected to occur prior to the end of the first quarter of 2020. Encompass Health anticipates issuing the EHC Shares from its treasury shares. See also Note 13, Fair Value Measurements . |
Fair Value Measurements
Fair Value Measurements | 12 Months Ended |
Dec. 31, 2019 | |
Fair Value Disclosures [Abstract] | |
Fair Value Measurements | Fair Value Measurements : Our financial assets and liabilities that are measured at fair value on a recurring basis are as follows (in millions): Fair Value Measurements at Reporting Date Using As of December 31, 2019 Fair Value Quoted Prices in Active Markets for Identical Assets (Level 1) Significant Other Observable Inputs (Level 2) Significant Unobservable Inputs (Level 3) Valuation Technique (1) Other long-term assets: Equity securities $ 63.5 $ — $ 63.5 $ — M Debt securities 12.6 12.6 — — M Redeemable noncontrolling interests 239.6 — — 239.6 I As of December 31, 2018 Other long-term assets: Equity securities $ 55.6 $ — $ 55.6 $ — M Debt securities 6.4 6.4 — — M Redeemable noncontrolling interests 261.7 — — 261.7 I (1) The three valuation techniques are: market approach (M), cost approach (C), and income approach (I). In addition to assets and liabilities recorded at fair value on a recurring basis, we are also required to record assets and liabilities at fair value on a nonrecurring basis. Generally, assets are recorded at fair value on a nonrecurring basis as a result of impairment charges or similar adjustments made to the carrying value of the applicable assets. As a result of our consolidation of Yuma Rehabilitation Hospital and the remeasurement of our previously held equity interest at fair value, we recorded a $19.2 million gain as part of Other income during the year ended December 31, 2019. We determined the fair value of our previously held equity interest using the income approach valuation technique. The income approach included the use of the hospital's projected operating results and cash flows discounted using a rate that reflects market participant assumptions for the hospital. The projected operating results use management's best estimates of economic and market conditions over the forecasted period including assumptions for pricing and volume, operating expenses, and capital expenditures. During the years ended December 31, 2018 and 2017 , we did not record any gains or losses related to our nonfinancial assets and liabilities that are recognized or disclosed at fair value in the financial statements on a nonrecurring basis as part of our continuing operations. As discussed in Note 1, Summary of Significant Accounting Policies , “Fair Value Measurements,” the carrying value equals fair value for our financial instruments that are not included in the table below and are classified as current in our consolidated balance sheets. The carrying amounts and estimated fair values for our other financial instruments are presented in the following table (in millions): As of December 31, 2019 As of December 31, 2018 Carrying Amount Estimated Fair Value Carrying Amount Estimated Fair Value Long-term debt: Advances under revolving credit facility $ 45.0 $ 45.0 $ 30.0 $ 30.0 Term loan facilities 265.2 266.6 280.1 281.3 5.125% Senior Notes due 2023 297.3 306.6 296.6 298.5 5.75% Senior Notes due 2024 697.3 708.8 1,194.7 1,200.0 5.75% Senior Notes due 2025 345.6 369.7 345.0 339.5 4.50% Senior Notes due 2028 491.7 519.4 — — 4.75% Senior Notes due 2030 491.7 520.0 — — Other notes payable 44.7 44.7 104.2 104.2 Financial commitments: Letters of credit — 38.9 — 37.4 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” and “Redeemable Noncontrolling Interests.” |
Share-Based Payments
Share-Based Payments | 12 Months Ended |
Dec. 31, 2019 | |
Share-based Payment Arrangement [Abstract] | |
Share-Based Payments | Share-Based Payments : The Company has awarded employee stock-based compensation in the form of stock options, SARs, and restricted stock awards (“RSAs”) under the terms of share-based incentive plans designed to align employee and executive interests to those of its stockholders. All employee stock-based compensation awarded during 2019, 2018, and 2017 was issued under the 2016 Omnibus Performance Incentive Plan, a stockholder-approved plan that reserves and provides for the grant of up to 14,000,000 shares of common stock. This plan allows for the grants of nonqualified stock options, incentive stock options, restricted stock, SARs, performance shares, performance share units, dividend equivalents, restricted stock units (“RSUs”), and/or other stock-based awards. Stock Options— Under our share-based incentive plans, officers and employees are given the right to purchase shares of Encompass Health common stock at a fixed grant price determined on the day the options are granted. The terms and conditions of the options, including exercise prices and the periods in which options are exercisable, are generally at the discretion of the compensation and human capital committee of our board of directors. However, no options are exercisable beyond ten years from the date of grant. Granted options vest over the awards’ requisite service periods, which are generally three years . The fair values of the options granted during the years ended December 31, 2019 , 2018 , and 2017 have been estimated at the grant date using the Black-Scholes option-pricing model with the following weighted-average assumptions: For the Year Ended December 31, 2019 2018 2017 Expected volatility 25.3 % 29.2 % 30.5 % Risk-free interest rate 2.7 % 2.7 % 2.1 % Expected life (years) 7.1 7.1 7.7 Dividend yield 2.1 % 2.2 % 2.2 % The Black-Scholes option-pricing model was developed for use in estimating the fair value of traded options which have no vesting restrictions and are fully transferable. In addition, the Black-Scholes option-pricing model requires the input of highly subjective assumptions, including the expected stock price volatility. We estimate our expected term through an analysis of actual, historical post-vesting exercise, cancellation, and expiration behavior by our employees and projected post-vesting activity of outstanding options. We calculate volatility based on the historical volatility of our common stock over the period commensurate with the expected term of the options. The risk-free interest rate is the implied daily yield currently available on U.S. Treasury issues with a remaining term closely approximating the expected term used as the input to the Black-Scholes option-pricing model. We estimated our dividend yield based on our annual dividend rate and our stock price on the dividend payment dates. Under the Black-Scholes option-pricing model, the weighted-average grant date fair value per share of employee stock options granted during the years ended December 31, 2019 , 2018 , and 2017 was $15.45 , $14.57 , and $11.55 , respectively. A summary of our stock option activity and related information is as follows: Shares (In Thousands) Weighted- Average Exercise Price per Share Weighted- Average Remaining Life (Years) Aggregate Intrinsic Value (In Millions) Outstanding, December 31, 2018 537 $ 35.22 Granted 106 63.77 Exercised (78 ) 17.73 Outstanding, December 31, 2019 565 43.02 6.3 $ 14.8 Exercisable, December 31, 2019 364 35.16 5.1 12.4 We recognized approximatel y $1.4 million , $1.1 million , and $0.8 million of compensation expense related to our stock options for the years ended December 31, 2019 , 2018 , and 2017 , respectively. As of December 31, 2019 , there was $1.8 million o f unrecognized compensation cost related to unvested stock options. This cost is expected to be recognized over a weighted-average period of 22 months. The total intrinsic value of options exercised during the years ended December 31, 2019 , 2018 , and 2017 was $3.6 million , $5.2 million , and $29.0 million , respectively. Stock Appreciation Rights— In conjunction with the EHHI acquisition, we granted SARs based on Encompass Health Home Health Holdings, Inc. (“Holdings”) common stock to certain members of EHHI management at closing on December 31, 2014. Under a separate plan, we granted 122,976 SARs that vest based on continued employment and an additional maximum number of 129,124 SARs that vest based on continued employment and the extent of the attainment of a specified 2017 performance measure. The maximum number of performance SARs was achieved. Half of the SARs of each type vested on December 31, 2018 with the remainder vested on December 31, 2019. The vested SARs will expire on the tenth anniversary of the grant date or within a specified period following any earlier termination of employment. Upon exercise, each SAR must be settled for cash in the amount by which the per share fair value of Holdings’ common stock on the exercise date exceeds the per share fair value on the grant date. The fair value of Holdings’ common stock is determined using the product of the trailing 12-month specified performance measure for Holdings and a specified median market price multiple based on a basket of public home health companies and publicly disclosed home health acquisitions with a value of $400 million or more. The fair value of the SARs granted in conjunction with the EHHI acquisition has been estimated using the Black-Scholes option-pricing model with the following weighted-average assumptions: As of December 31, 2019 2018 Expected volatility 38.6 % 27.1 % Risk-free interest rate 1.5 % 2.6 % Expected life (years) 0.3 1.3 Dividend yield — % — % We did not include a dividend payment as part of our pricing model because Holdings currently does not pay dividends on its common stock. Under the Black-Scholes option-pricing model, the weighted-average fair value per share of SARs granted in conjunction with the EHHI acquisition was $870.28 and $419.28 as of December 31, 2019 and 2018 , respectively. In February 2019, members of the management team exercised a portion of their vested SARs for approximately $13 million in cash. In July 2019, members of the management team exercised the remainder of the vested SARs for approximately $55 million in cash. As of December 31, 2019 , the fair value of the remaining 115,545 SARs is approximately $101 million , all of which is included in Other current liabilities . In January 2020, members of the management team exercised the remaining SARs, and in February 2020, we settled those awards upon payment of approximately $101 million in cash. We recognized approximately $81.9 million , $56.2 million , and $26.0 million of compensation expense related to our SARs for the years ended December 31, 2019 , 2018 and 2017 , respectively. As of December 31, 2019 , there was no unrecognized compensation cost related to unvested SARs. Restricted Stock— The RSAs granted in 2019 , 2018 , and 2017 included service-based awards and performance-based awards (that also included a service requirement). These awards generally vest over a three-year requisite service period. For RSAs with a service and/or performance requirement, the fair value of the RSA is determined by the closing price of our common stock on the grant date. A summary of our issued restricted stock awards is as follows (share information in thousands): Shares Weighted-Average Grant Date Fair Value Nonvested shares at December 31, 2018 907 $ 37.61 Granted 660 49.84 Vested (718 ) 34.84 Forfeited (31 ) 48.65 Nonvested shares at December 31, 2019 818 49.49 The weighted-average grant-date fair value of restricted stock granted during the years ended December 31, 2018 and 2017 was $37.61 and $42.85 per share, respectively. We recognized approximate ly $29.5 million , $27.1 million , and $19.6 million of compensation expense related to our restricted stock awards for the years ended December 31, 2019 , 2018 , and 2017 , respectively. As of December 31, 2019 , there was $32.3 million of unrecognized compensation expense related to unvested restricted stock. This cost is expected to be recognized over a weighted-average period of 21 months. T he remaining unrecognized compensation expense for the performance-based awards may vary each reporting period based on changes in the expected achievement of performance measures. The total fair value of shares vested during the years ended December 31, 2019 , 2018 , and 2017 wa s $45.2 million , $22.1 million , and $17.7 million , respectively. We accrue dividends on outstanding RSAs, which are paid upon vesting. Nonemployee Stock-Based Compensation Plans— During the years ended December 31, 2019 , 2018 , and 2017 , we provided incentives to our nonemployee members of our board of directors through the issuance of RSUs out of our share-based incentive plans. RSUs are fully vested when awarded and receive dividend equivalents in the form of additional RSUs upon the payment of a cash dividend on our common stock. During the years ended December 31, 2019 , 2018 , and 2017 , we issued 23,270 , 24,771 , and 27,594 RSUs, respectively, with a fair value of $64.48 , $62.88 , and $47.30 , respectively, per unit. We recognized approximately $1.5 million , $1.6 million , and $1.3 million , respectively, of compensation expense upon their issuance in 2019 , 2018 , and 2017 . There was no unrecognized compensation related to unvested shares as of December 31, 2019 . During the years ended 2019 , 2018 , and 2017 , we issued an a dditional 8,876 , 8,045 , and 9,968 , respectively, of RSUs as dividend equivalents. As of December 31, 2019 , 536,658 RSUs were ou tstanding. |
Employee Benefit Plans
Employee Benefit Plans | 12 Months Ended |
Dec. 31, 2019 | |
Retirement Benefits [Abstract] | |
Employee Benefit Plans | Employee Benefit Plans : Substantially all Encompass Health employees are eligible to enroll in Encompass Health-sponsored healthcare plans, including coverage for medical and dental benefits. Our primary healthcare plans are national plans administered by third-party administrators. We are self-insured for these plans. During 2019 , 2018 , and 2017 , costs associated with these plans, net of amounts paid by employees and stop-loss recoveries, approximated $178.4 million , $164.7 million , and $145.0 million , respectively. Encompass Health offers two qualified 401(k) savings plans, the Encompass Health Retirement Investment Plan (the “RIP”) and the Encompass Home Health Savings Plan (the “HHSP”). The RIP allows eligible employees to contribute up to 100% of their pay on a pre-tax basis into their individual retirement account in the plan subject to the normal maximum limits set annually by the Internal Revenue Service. Inpatient rehabilitation employees who are at least 21 years of age are eligible to participate in the RIP and all contributions to the plan are in the form of cash. Encompass Health’s employer matching contribution under the RIP is 50% of the first 6% of each participant’s elective deferrals , which vest 100% after three years of service. Participants are always fully vested in their own contributions. The HHSP allows eligible employees to contribute up to 60% of their pay on a pre-tax basis into their individual retirement account in the plan subject to the normal maximum limits set annually by the Internal Revenue Service. All home health and hospice full-time and part-time employees are eligible to participate in the HHSP and all contributions to the plan are in the form of cash. Encompass Health’s employer matching contribution under the HHSP is 25% of the first 3% of each participant’s elective deferrals, which vest gradually over a six -year service period. Participants are always fully vested in their own contributions. Employer contributions to the RIP and HHSP approximated $23.4 million , $21.5 million , and $19.3 million in 2019 , 2018 , and 2017 , respectively. In 2019 , 2018 , and 2017 , approximately $1.4 million , $2.5 million , and $1.5 million , respectively, from forfeited accounts were used to fund the matching contributions in accordance with the terms of the RIP and HHSP. Senior Management Bonus Program— We maintain a Senior Management Bonus Program to reward senior management for performance based on a combination of corporate or regional goals and individual goals. The corporate and regional goals are approved on an annual basis by our board of directors as part of our routine budgeting and financial planning process. The individual goals, which are weighted according to importance, are determined between each participant and his or her immediate supervisor. The program applies to persons who join the Company in, or are promoted to, senior management positions. In 2020 , we expect to pay approximately $18.6 million under the program for the year ended December 31, 2019 . In March 2019 and March 2018 , we paid $19.7 million and $14.7 million , respectively, under the program for the years ended December 31, 2018 and 2017 . |
Income Taxes
Income Taxes | 12 Months Ended |
Dec. 31, 2019 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Income Taxes : The significant components of the Provision for income tax expense related to continuing operations are as follows (in millions): For the Year Ended December 31, 2019 2018 2017 Current: Federal $ 58.1 $ 103.8 $ 72.2 State and other 17.8 24.2 12.8 Total current expense 75.9 128.0 85.0 Deferred: Federal 32.0 (13.7 ) 58.4 State and other 8.0 4.6 2.4 Total deferred expense (benefit) 40.0 (9.1 ) 60.8 Total income tax expense related to continuing operations $ 115.9 $ 118.9 $ 145.8 A reconciliation of differences between the federal income tax at statutory rates and our actual income tax expense on our income from continuing operations, which include federal, state, and other income taxes, is presented below: For the Year Ended December 31, 2019 2018 2017 Tax expense at statutory rate 21.0 % 21.0 % 35.0 % Increase (decrease) in tax rate resulting from: State and other income taxes, net of federal tax benefit 4.3 % 4.5 % 3.5 % Increase (decrease) in valuation allowance 0.8 % (0.4 )% 0.4 % Government, class action, and related settlements (1.2 )% 2.7 % — % Noncontrolling interests (3.0 )% (3.2 )% (4.6 )% Share-based windfall tax benefits (1.0 )% (0.4 )% (1.8 )% Tax Act — % — % (2.8 )% Other, net (0.3 )% (0.1 )% (0.3 )% Income tax expense 20.6 % 24.1 % 29.4 % The Provision for income tax expense in 2019 was less than the federal statutory rate primarily due to: (1) the impact of noncontrolling interests, (2) g overnment, class action, and related settlements , and (3) share-based windfall tax benefits offset by (4) state and other income tax expense. See Note 1, Summary of Significant Accounting Policies , “Income Taxes,” for a discussion of the allocation of income or loss related to pass-through entities, which is referred to as the impact of noncontrolling interests in this discussion. The Provision for income tax expense in 2018 was greater than the federal statutory rate primarily due to: (1) state and other income tax expense and (2) g overnment, class action, and related settlements offset by (3) the impact of noncontrolling interests. The Provision for income tax expense in 2017 was less than the federal statutory rate primarily due to: (1) the impact of noncontrolling interests, (2) the impact of the 2017 Tax Cuts and Jobs Act (the “Tax Act”) and (3) share-based windfall tax benefits offset by (4) state and other income tax expense. On December 22, 2017, the US enacted the Tax Act. The Tax Act, which is commonly referred to as “US tax reform,” significantly changes US corporate income tax laws by, among other things, reducing the US corporate income tax rate from 35% to 21% starting in 2018. As a result, we recorded a net benefit of $13.6 million during the fourth quarter of 2017. This amount, which is included in Provision for income tax expense in the consolidated statement of operations, consists of three components: (i) a $5.8 million credit resulting from the remeasurement of our net federal deferred tax assets based on the new lower corporate income tax rate, (ii) a $13.8 million credit resulting from the remeasurement of our net state deferred tax assets as a result of the decreased federal benefit implicit in the new lower corporate income tax rate, and (iii) a $5.8 million charge resulting from the remeasurement of our net valuation allowances for state NOLs as a result of the decreased federal benefit implicit in the new lower corporate income tax rate. In addition, we adopted the Tax Act’s provisions allowing for 100% bonus depreciation on qualifying assets placed in service after September 27, 2017, which resulted in additional bonus depreciation deductions of $8.8 million in the fourth quarter of 2017. Deferred income taxes recognize the net tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and amounts used for income tax purposes and the impact of available NOLs. The significant components of our deferred tax assets and liabilities are presented in the following table (in millions): As of December 31, 2019 2018 Deferred income tax assets: Net operating loss $ 61.8 $ 66.0 Property, net 33.9 30.8 Insurance reserve 17.0 16.8 Stock-based compensation 38.3 33.0 Revenue reserves — 6.1 Operating lease liabilities 30.6 — Other accruals 23.4 22.5 Tax credits 6.8 4.7 Other 0.2 0.6 Total deferred income tax assets 212.0 180.5 Less: Valuation allowance (38.4 ) (33.7 ) Net deferred income tax assets 173.6 146.8 Deferred income tax liabilities: Revenue reserves (11.6 ) — Intangibles (94.6 ) (88.5 ) Operating lease right-of-use assets (30.3 ) — Carrying value of partnerships (34.0 ) (15.2 ) Other (0.2 ) (0.2 ) Total deferred income tax liabilities (170.7 ) (103.9 ) Net deferred income tax assets $ 2.9 $ 42.9 We have state NOLs of $61.8 million that expire in various amounts at varying times through 2031. For the years ended December 31, 2019 , 2018 , and 2017 , the net increase (decrease) in our valuation allowance was $4.7 million , $(2.1) million , and $7.9 million , respectively. The increase in our valuation allowance in 2019 related primarily to our expected inability to realize related net operating losses prior to their expiration. The decrease in our valuation allowance in 2018 related primarily to expirations of state net operating losses. As of December 31, 2019 , we have a remaining valuation allowance of $38.4 million . This valuation allowance remains recorded due to uncertainties regarding our ability to utilize a portion of our state NOLs and other credits before they expire. The amount of the valuation allowance has been determined for each tax jurisdiction based on the weight of all available evidence including management’s estimates of taxable income for each jurisdiction in which we operate over the periods in which the related deferred tax assets will be recoverable. It is possible we may be required to increase or decrease our valuation allowance at some future time if our forecast of future earnings varies from actual results on a consolidated basis or in the applicable state tax jurisdictions, if the timing of future tax deductions differs from our expectations, or pursuant to changes in state tax laws and rates. During the third quarter of 2016, we filed a non-automatic tax accounting method change related to billings denied under pre-payment claims reviews conducted by certain of our MACs. In March 2017, the IRS approved our request resulting in establishment of a deferred tax liability and additional cash tax benefits of approximately $51.3 million through December 31, 2017. This amount was reduced to $33.7 million after considering the federal tax rate reduction to 21% provided for in the Tax Act. The Tax Act included revisions to Internal Revenue Code §451 that might have eliminated a portion of this deferral of revenue for tax purposes. Accordingly, we reversed $23.6 million of our revenue reserves and carrying value of partnerships deferred tax liabilities and recorded a current tax payable for the same amount in the first quarter of 2018. In September 2019, a Treasury Regulation was issued that supported the accounting method change we received calling for continued deferral of denied prepayment claims. As a result, we have recorded additional deferred tax liabilities of $22.2 million and a corresponding benefit to our income tax receivable to fully defer taxable income related to pre-payment claim denials as of December 31, 2019. These changes did not have a material impact on our effective tax rate in any period of adjustment and all benefits are expected to reverse as pre-payment claims denials are settled or collected. As of January 1, 2017 , total remaining gross unrecognized tax benefits were $2.8 million , all of which would have affected our effective tax rate if recognized. The amount of unrecognized tax benefits decreased $2.5 million during 2017, primarily related to the favorable settlement of a federal interest claim. Total remaining gross unrecognized tax benefits were $0.3 million as of December 31, 2017 , all of which would have affected our effective tax rate if recognized. The amount of unrecognized tax benefits did not change significantly during 2018 or 2019 . Total remaining gross unrecognized tax benefits were $0.9 million and $0.4 million as of December 31, 2018 and 2019 , respectively, all of which would have affected our effective tax rate if recognized. A reconciliation of the beginning and ending liability for unrecognized tax benefits is as follows (in millions): Gross Unrecognized Income Tax Benefits Accrued Interest and Penalties January 1, 2017 $ 2.8 $ — Gross amount of decreases in unrecognized tax benefits related to prior periods (0.4 ) — Decreases in unrecognized tax benefits relating to settlements with taxing authorities (2.1 ) — December 31, 2017 0.3 — Gross amount of increases in unrecognized tax benefits related to prior periods 0.8 0.1 Reductions to unrecognized tax benefits as a result of a lapse of the applicable statute of limitations (0.2 ) — December 31, 2018 0.9 0.1 Reductions to unrecognized tax benefits as a result of a lapse of the applicable statute of limitations (0.5 ) — December 31, 2019 $ 0.4 $ 0.1 Our continuing practice is to recognize interest and penalties related to income tax matters in income tax expense. Interest recorded as part of our income tax provision during 2019 , 2018 , and 2017 was not material. Accrued interest income related to income taxes as of December 31, 2019 and 2018 was not material. In December 2016, we signed an agreement with the IRS to participate in their Compliance Assurance Process (“CAP”) for the 2017 tax year. CAP is a program in which we and the IRS endeavor to agree on the treatment of significant tax positions prior to the filing of our federal income tax returns. We renewed this agreement in January 2018 for the 2018 tax year, in December 2018 for the 2019 tax year, and in February 2020 for the 2020 tax year. As a result of these agreements, the IRS is currently examining the 2018, 2019, and 2020 tax years. In July 2019, the IRS issued a no-change Letter effectively closing our 2017 tax year audit. The statute of limitations has expired or we have settled federal income tax examinations with the IRS for all tax years through 2017. Our state income tax returns are also periodically examined by various regulatory taxing authorities. We are not currently under audit by any states. For the tax years that remain open under the applicable statutes of limitations, amounts related to unrecognized tax benefits have been considered by management in its estimate of our potential net recovery of prior years’ income taxes. Based on discussions with taxing authorities, we anticipate $0.3 million of our unrecognized tax benefits will be released within the next 12 months. |
Earnings per Common Share
Earnings per Common Share | 12 Months Ended |
Dec. 31, 2019 | |
Earnings Per Share [Abstract] | |
Earnings per Common Share | Earnings per Common Share : The following table sets forth the computation of basic and diluted earnings per common share (in millions, except per share amounts): For the Year Ended December 31, 2019 2018 2017 Basic: Numerator: Income from continuing operations $ 446.4 $ 374.3 $ 350.6 Less: Net income attributable to noncontrolling interests included in continuing operations (87.1 ) (83.1 ) (79.1 ) Less: Income allocated to participating securities (1.3 ) (0.9 ) (0.9 ) Income from continuing operations attributable to Encompass Health common shareholders 358.0 290.3 270.6 (Loss) income from discontinued operations, net of tax, attributable to Encompass Health common shareholders (0.6 ) 1.1 (0.4 ) Net income attributable to Encompass Health common shareholders $ 357.4 $ 291.4 $ 270.2 Denominator: Basic weighted average common shares outstanding 98.0 97.9 93.7 Basic earnings per share attributable to Encompass Health common shareholders: Continuing operations $ 3.66 $ 2.97 $ 2.88 Discontinued operations (0.01 ) 0.01 — Net income $ 3.65 $ 2.98 $ 2.88 Diluted: Numerator: Income from continuing operations $ 446.4 $ 374.3 $ 350.6 Less: Net income attributable to noncontrolling interests included in continuing operations (87.1 ) (83.1 ) (79.1 ) Add: Interest on convertible debt, net of tax — — 4.6 Add: Loss on extinguishment of convertible debt, net of tax — — 6.2 Income from continuing operations attributable to Encompass Health common shareholders 359.3 291.2 282.3 (Loss) income from discontinued operations, net of tax, attributable to Encompass Health common shareholders (0.6 ) 1.1 (0.4 ) Net income attributable to Encompass Health common shareholders $ 358.7 $ 292.3 $ 281.9 Denominator: Diluted weighted average common shares outstanding 99.4 99.8 99.3 Diluted earnings per share attributable to Encompass Health common shareholders: Continuing operations $ 3.62 $ 2.92 $ 2.84 Discontinued operations (0.01 ) 0.01 — Net income $ 3.61 $ 2.93 $ 2.84 The following table sets forth the reconciliation between basic weighted average common shares outstanding and diluted weighted average common shares outstanding (in millions): For the Year Ended December 31, 2019 2018 2017 Basic weighted average common shares outstanding 98.0 97.9 93.7 Convertible senior subordinated notes — — 4.0 Restricted stock awards, dilutive stock options, and restricted stock units 1.4 1.9 1.6 Diluted weighted average common shares outstanding 99.4 99.8 99.3 Options to purchase approximately 0.1 million and 0.2 million shares of common stock were outstanding as of December 31, 2019 and 2017, respectively, but were not included in the computation of diluted weighted-average shares because to do so would have been antidilutive. There were no antidilutive options to purchase shares of common stock outstanding as of December 31, 2018. In February 2014, our board of directors approved an increase in our common stock repurchase authorization from $200 million to $250 million . The repurchase authorization does not require the repurchase of a specific number of shares, has an indefinite term, and is subject to termination at any time by our board of directors. On July 24, 2018, the Company's board approved resetting the aggregate common stock repurchase authorization to $250 million . During 2019 and 2017 , we repurchased 0.8 million and 0.9 million shares of our common stock in the open market for $45.9 million and $38.1 million , respectively. There were no repurchases of our common stock during 2018. In July 2016, our board of directors approved an increase in the quarterly cash dividend on our common stock and declared a dividend of $0.24 per share. The cash dividend of $0.24 per common share was declared and paid each quarter through July 2017. In July 2017, our board of directors approved an increase in our quarterly dividend and declared a cash dividend of $0.25 per share. The cash dividend of $0.25 per common share was declared and paid in each quarter through July 2018. In July 2018, our board of directors approved an increase in our quarterly dividend and declared a cash dividend of $0.27 per share. The cash dividend of $0.27 per common share was declared and paid in each quarter through July 2019. In July 2019, our board of directors approved an increase in our quarterly dividend and declared a cash dividend of $0.28 per share. The cash dividend of $0.28 per share was declared in July 2019 and October 2019 and paid in October 2019 and January 2020, respectively. As of December 31, 2019 and 2018 , accrued common stock dividends of $29.0 million and $28.4 million were included in Other current liabilities in our consolidated balance sheet. Future dividend payments are subject to declaration by our board of directors. On September 30, 2009, we issued 5.0 million shares of common stock and 8.2 million common stock warrants in full satisfaction of our obligation to do so under the January 2007 comprehensive settlement of the consolidated securities action brought against us by our stockholders and bondholders. Prior to their expiration on January 17, 2017, the warrants were exercisable at a price of $41.40 per share by means of a cash or a cashless exercise at the option of the holder. The warrants were not assumed exercised for dilutive shares outstanding because they were antidilutive in 2016. The following table summarizes information relating to these warrants and their activity through their expiration date (number of warrants in millions): Number of Warrants Weighted Average Exercise Price Common stock warrants outstanding as of December 31, 2016 8.2 $ 41.40 Cashless exercise (6.5 ) 41.40 Cash exercise (0.6 ) 41.40 Expired (1.1 ) 41.40 Common stock warrants outstanding as of January 17, 2017 — The above exercises resulted in the issuance of 0.7 million shares of common stock in January 2017. Cash exercises resulted in gross proceeds of $26.7 million in January 2017. See also Note 10, Long-term Debt . |
Contingencies and Other Commitm
Contingencies and Other Commitments | 12 Months Ended |
Dec. 31, 2019 | |
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. Nichols Litigation— We were named as a defendant in a lawsuit filed March 28, 2003 by several individual stockholders in the Circuit Court of Jefferson County, Alabama, captioned Nichols v. HealthSouth Corp . In July 2019, we entered into settlement agreements with all but one plaintiff and paid those settling plaintiffs an aggregate amount of cash less than $0.1 million . The remaining plaintiff alleges that we, some of our former officers, and our former investment bank engaged in a scheme to overstate and misrepresent our earnings and financial position. The plaintiff is seeking compensatory and punitive damages. This case was stayed in the circuit court on August 8, 2005. However, the complaint has been amended from time to time, including to request certification as a class action. Additionally, one of the former officers named as a defendant has repeatedly attempted to remove the case to federal district court. We filed our latest motion to remand the case back to state court on January 10, 2013. On September 27, 2013, the federal court remanded the case back to state court. On December 10, 2014, we filed a motion to dismiss on the grounds the plaintiffs lacked standing because their claims were derivative in nature, and the claims were time-barred by the statute of limitations. On May 26, 2016, the trial court granted our motion to dismiss. On appeal, the Supreme Court of Alabama reversed the trial court’s dismissal on March 23, 2018. On April 6, 2018, we filed an application for rehearing with the Alabama Supreme Court. On March 22, 2019, the Alabama Supreme Court denied our application for rehearing and remanded the case to the trial court for further proceedings. The court has scheduled the trial to begin August 10, 2020. We intend to vigorously defend ourselves in this case against the sole remaining plaintiff. Based on the stage of litigation, review of the current facts and circumstances as we understand them, the nature of the underlying claim, the results of the proceedings to date, and the nature and scope of the defense we continue to mount, we do not believe an adverse judgment or settlement is probable in this matter, and it is also not possible to estimate an amount of loss, if any, or range of possible loss that might result from an adverse judgment or settlement of this case. Other Litigation— One of our hospital subsidiaries was named as a defendant in a lawsuit filed August 12, 2013 by an individual in the Circuit Court of Etowah County, Alabama, captioned Honts v. HealthSouth Rehabilitation Hospital of Gadsden, LLC. The plaintiff alleged that her mother, who died more than three months after being discharged from our hospital, received an unprescribed opiate medication at the hospital. We deny the patient received any such medication, accounted for all the opiates at the hospital and argued the plaintiff established no causal liability between the actions of our staff and her mother’s death. The plaintiff sought recovery for punitive damages. On May 18, 2016, the jury in this case returned a verdict in favor of the plaintiff for $20.0 million . On June 17, 2016, we filed a renewed motion for judgment as a matter of law or, in the alternative, a motion for new trial or, in the further alternative, a motion seeking reduction of the damages awarded (collectively, the “post-judgment motions”). The trial court denied the post-judgment motions. We appealed the verdict as well as the rulings on the post-judgment motions to the Supreme Court of Alabama on October 12, 2016. On September 28, 2018, the Alabama Supreme Court reversed the trial court’s judgment and remanded the case for a new trial. As a result of the Alabama Supreme Court’s reversal, we reduced the associated liability below our insurance retention level of $6.0 million , and no longer maintained an insurance receivable in our consolidated balance sheet because we believed the liability did not exceed that retention level. As of December 31, 2018, we maintained a liability included in Other current liabilities in our consolidated balance sheet in connection with this matter. On February 27, 2019, we entered into a settlement with the plaintiff for an amount less than the remaining liability reserved and not material to us. Governmental Inquiries and Investigations— On March 4, 2013, we received document subpoenas from an office of the HHS-OIG addressed to four of our hospitals. On April 24, 2014, we received document subpoenas relating to an additional seven of our hospitals. The associated investigation led by the United States Department of Justice (“DOJ”) was based on relator claims of alleged improper or fraudulent claims submitted to Medicare and Medicaid and requested documents and materials relating to practices, procedures, protocols and policies, of certain pre- and post-admissions activities at these hospitals including, among other things, marketing functions, pre-admission screening, post-admission physician evaluations, patient assessment instruments, individualized patient plans of care, and compliance with the Medicare 60% rule. Under the Medicare rule commonly referred to as the “ 60% rule,” an inpatient rehabilitation hospital must treat 60% or more of its patients from at least one of a specified list of medical conditions in order to be reimbursed at the inpatient rehabilitation hospital payment rates, rather than at the lower acute care hospital payment rates. The investigation focused on a specific set diagnoses made by independent physicians at our hospitals. We relied on the medical judgment of these independent physicians to code the diagnoses. DOJ claimed, among other things, that under CMS regulations we improperly used the codes. However, CMS periodically reviewed industry usage of the codes and confirmed our reliance was appropriate. In addition, throughout the period of the investigation, CMS continued to pay our claims under those codes. The seven-year investigation produced no evidence of falsity or fraudulent conduct. Eventually, the court refused to give DOJ more time to decide whether to intervene and unsealed the related qui tam cases. DOJ chose not to intervene to prosecute the matter. Based on discussions with the government during the fourth quarter of 2018 as well as the burdens and distractions associated with continuing the investigation and the likely costs of future litigation, we estimated a settlement value of $48 million and accrued a loss contingency in that amount which was included in Other current liabilities in our consolidated balance sheet for the year ended December 31, 2018. Following further discussions, we settled the DOJ investigation, together with related qui tam or “whistleblower” lawsuits, in 2019 for a payment of $48 million , and we expressly denied any wrongdoing. In return for the settlement payment, the plaintiffs dismissed with prejudice their pending qui tam claims, and the DOJ provided Encompass Health and all its subsidiaries with a release from civil liability. Other Matters— The False Claims Act allows private citizens, called “relators,” to institute civil proceedings on behalf of the United States alleging violations of the False Claims Act. These lawsuits, also known as “whistleblower” or “ qui tam ” actions, can involve significant monetary damages, fines, attorneys’ fees and the award of bounties to the relators who successfully prosecute or bring these suits to the government. Qui tam cases are sealed at the time of filing, which means knowledge of the information contained in the complaint typically is limited to the relator, the federal government, and the presiding court. The defendant in a qui tam action may remain unaware of the existence of a sealed complaint for years. While the complaint is under seal, the government reviews the merits of the case and may conduct a broad investigation and seek discovery from the defendant and other parties before deciding whether to intervene in the case and take the lead on litigating the claims. The court lifts the seal when the government makes its decision on whether to intervene. If the government decides not to intervene, the relator may elect to continue to pursue the lawsuit individually on behalf of the government. It is possible that qui tam lawsuits have been filed against us, which suits remain under seal, or that we are unaware of such filings or precluded by existing law or court order from discussing or disclosing the filing of such suits. We may be subject to liability under one or more undisclosed qui tam cases brought pursuant to the False Claims Act. It is our obligation as a participant in Medicare and other federal healthcare programs to routinely conduct audits and reviews of the accuracy of our billing systems and other regulatory compliance matters. As a result of these reviews, we have made, and will continue to make, disclosures to the HHS-OIG and CMS relating to amounts we suspect represent over-payments from these programs, whether due to inaccurate billing or otherwise. Some of these disclosures have resulted in, or may result in, Encompass Health refunding amounts to Medicare or other federal healthcare programs. Other Commitments— We are a party to service and other contracts in connection with conducting our business. Minimum amounts due under these agreements are $61.4 million in 2020 , $41.7 million in 2021 , $15.1 million in 2022 , $10.8 million in 2023 , $6.9 million in 2024 , and $7.1 million thereafter. These contracts primarily relate to software licensing and support. |
Segment Reporting
Segment Reporting | 12 Months Ended |
Dec. 31, 2019 | |
Segment Reporting [Abstract] | |
Segment Reporting | Segment Reporting : Our internal financial reporting and management structure is focused on the major types of services provided by Encompass Health. We manage our operations using two operating segments which are also our reportable segments: (1) inpatient rehabilitation and (2) home health and 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: • Inpatient Rehabilitation - Our national network of inpatient rehabilitation hospitals stretches across 33 states and Puerto Rico, with a concentration of hospitals in the eastern half of the United States and Texas. As of December 31, 2019 , we operate 133 inpatient rehabilitation hospitals. We are the sole owner of 86 of these hospitals. We retain 50.0% to 97.5% ownership in the remaining 47 jointly owned hospitals. In addition, we manage four inpatient rehabilitation units through management contracts. We provide specialized rehabilitative treatment on both an inpatient and outpatient basis. Our inpatient rehabilitation hospitals provide a higher level of rehabilitative care to patients who are recovering from conditions such as stroke and other neurological disorders, cardiac and pulmonary conditions, brain and spinal cord injuries, complex orthopedic conditions, and amputations. • Home Health and Hospice - As of December 31, 2019 , we provide home health services in 245 locations and hospice services in 83 locations across 31 states with concentrations in the Southeast and Texas. In addition, two of these home health agencies operate as joint ventures which we account for using the equity method of accounting. We are the sole owner of 320 of these locations. We retain 50.0% to 81.0% ownership in the remaining eight 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. 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 . All revenues for our services are generated through external customers. See Note 1, Summary of Significant Accounting Policies , “Net Operating Revenues,” 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”). Selected financial information for our reportable segments is as follows (in millions): Inpatient Rehabilitation Home Health and Hospice For the Year Ended December 31, For the Year Ended December 31, 2019 2018 2017 2019 2018 2017 Net operating revenues $ 3,513.0 $ 3,346.2 $ 3,141.3 $ 1,092.0 $ 931.1 $ 772.6 Operating expenses: Inpatient rehabilitation: Salaries and benefits 1,813.1 1,701.5 1,603.8 — — — Other operating expenses 521.9 502.3 462.5 — — — Supplies 147.0 140.6 135.7 — — — Occupancy costs 64.8 63.8 61.9 — — — Home health and hospice: Cost of services sold (excluding depreciation and amortization) — — — 506.2 438.4 363.3 Support and overhead costs — — — 381.7 323.5 277.2 2,546.8 2,408.2 2,263.9 887.9 761.9 640.5 Other income (10.5 ) (3.6 ) (4.1 ) — (0.5 ) — Equity in net income of nonconsolidated affiliates (5.5 ) (7.5 ) (7.3 ) (1.2 ) (1.2 ) (0.7 ) Noncontrolling interests 82.6 77.2 67.6 9.5 8.5 6.9 Segment Adjusted EBITDA $ 899.6 $ 871.9 $ 821.2 $ 195.8 $ 162.4 $ 125.9 Capital expenditures $ 391.4 $ 264.6 $ 238.0 $ 12.7 $ 11.6 $ 10.7 Inpatient Rehabilitation Home Health and Hospice Encompass Health Consolidated As of December 31, 2019 Total assets $ 4,501.4 $ 1,612.8 $ 6,080.7 Investments in and advances to nonconsolidated affiliates 2.0 5.4 7.4 As of December 31, 2018 Total assets $ 3,900.9 $ 1,314.6 $ 5,175.0 Investments in and advances to nonconsolidated affiliates 9.5 2.7 12.2 Segment reconciliations (in millions): For the Year Ended December 31, 2019 2018 2017 Total segment Adjusted EBITDA $ 1,095.4 $ 1,034.3 $ 947.1 General and administrative expenses (247.0 ) (220.2 ) (171.7 ) Depreciation and amortization (218.7 ) (199.7 ) (183.8 ) Loss on disposal of assets (11.1 ) (5.7 ) (4.6 ) Government, class action, and related settlements — (52.0 ) — Loss on early extinguishment of debt (7.7 ) — (10.7 ) Interest expense and amortization of debt discounts and fees (159.7 ) (147.3 ) (154.4 ) Net income attributable to noncontrolling interests 87.1 83.1 79.1 SARs mark-to-market impact on noncontrolling interests 5.0 2.6 — Change in fair market value of equity securities 0.8 (1.9 ) — Tax reform impact on noncontrolling interests — — (4.6 ) Gain on consolidation of Yuma 19.2 — — Payroll taxes on SARs exercise (1.0 ) — — Income from continuing operations before income tax expense $ 562.3 $ 493.2 $ 496.4 As of December 31, 2019 As of December 31, 2018 Total assets for reportable segments $ 6,114.2 $ 5,215.5 Reclassification of noncurrent deferred income tax liabilities to net noncurrent deferred income tax assets (33.5 ) (40.5 ) Total consolidated assets $ 6,080.7 $ 5,175.0 Additional detail regarding the revenues of our operating segments by service line follows (in millions): For the Year Ended December 31, 2019 2018 2017 Inpatient rehabilitation: Inpatient $ 3,423.5 $ 3,247.9 $ 3,039.3 Outpatient and other 89.5 98.3 102.0 Total inpatient rehabilitation 3,513.0 3,346.2 3,141.3 Home health and hospice: Home health 918.0 814.6 702.4 Hospice 174.0 116.5 70.2 Total home health and hospice 1,092.0 931.1 772.6 Total net operating revenues $ 4,605.0 $ 4,277.3 $ 3,913.9 |
Quarterly Data (Unaudited)
Quarterly Data (Unaudited) | 12 Months Ended |
Dec. 31, 2019 | |
Quarterly Financial Information Disclosure [Abstract] | |
Quarterly Data (Unaudited) | Quarterly Data (Unaudited) : 2019 First Second Third Fourth Total (In Millions, Except Per Share Data) Net operating revenues $ 1,124.0 $ 1,135.0 $ 1,161.6 $ 1,184.4 $ 4,605.0 Operating earnings (a) 167.1 152.6 151.2 141.2 612.1 Provision for income tax expense 30.8 23.5 34.3 27.3 115.9 Income from continuing operations 125.7 111.0 119.5 90.2 446.4 Loss from discontinued operations, net of tax (0.5 ) (0.1 ) — — (0.6 ) Net income 125.2 110.9 119.5 90.2 445.8 Less: Net income attributable to noncontrolling interests (22.9 ) (19.7 ) (21.9 ) (22.6 ) (87.1 ) Net income attributable to Encompass Health $ 102.3 $ 91.2 $ 97.6 $ 67.6 $ 358.7 Earnings per common share: Basic earnings per share attributable to Encompass Health common shareholders: (b) Continuing operations $ 1.05 $ 0.93 $ 0.99 $ 0.69 $ 3.66 Discontinued operations (0.01 ) — — — (0.01 ) Net income $ 1.04 $ 0.93 $ 0.99 $ 0.69 $ 3.65 Diluted earnings per share attributable to Encompass Health common shareholders: (b) Continuing operations $ 1.04 $ 0.92 $ 0.98 $ 0.68 $ 3.62 Discontinued operations (0.01 ) — — — (0.01 ) Net income $ 1.03 $ 0.92 $ 0.98 $ 0.68 $ 3.61 (a) We define operating earnings as income from continuing operations attributable to Encompass Health before (1) loss on early extinguishment of debt; (2) interest expense and amortization of debt discounts and fees; (3) other income; and (4) income tax expense. (b) Per share amounts may not sum due to the weighted average common shares outstanding during each quarter compared to the weighted average common shares outstanding during the entire year. 2018 First Second Third Fourth Total (In Millions, Except Per Share Data) Net operating revenues $ 1,046.0 $ 1,067.7 $ 1,067.6 $ 1,096.0 $ 4,277.3 Operating earnings (a) 150.0 157.3 154.5 93.4 555.2 Provision for income tax expense 30.0 29.3 30.2 29.4 118.9 Income from continuing operations 105.7 113.0 109.4 46.2 374.3 (Loss) income from discontinued operations, net of tax (0.5 ) 0.2 (0.1 ) 1.5 1.1 Net income 105.2 113.2 109.3 47.7 375.4 Less: Net income attributable to noncontrolling interests (21.4 ) (21.4 ) (20.7 ) (19.6 ) (83.1 ) Net income attributable to Encompass Health $ 83.8 $ 91.8 $ 88.6 $ 28.1 $ 292.3 Earnings per common share: Basic earnings per share attributable to Encompass Health common shareholders: (b) Continuing operations $ 0.86 $ 0.93 $ 0.90 $ 0.27 $ 2.97 Discontinued operations (0.01 ) — — 0.02 0.01 Net income $ 0.85 $ 0.93 $ 0.90 $ 0.29 $ 2.98 Diluted earnings per share attributable to Encompass Health common shareholders: (b) Continuing operations $ 0.85 $ 0.92 $ 0.89 $ 0.26 $ 2.92 Discontinued operations (0.01 ) — — 0.02 0.01 Net income $ 0.84 $ 0.92 $ 0.89 $ 0.28 $ 2.93 (a) We define operating earnings as income from continuing operations attributable to Encompass Health before (1) loss on early extinguishment of debt; (2) interest expense and amortization of debt discounts and fees; (3) other income; and (4) income tax expense. (b) Per share amounts may not sum due to the weighted average common shares outstanding during each quarter compared to the weighted average common shares outstanding during the entire year. |
Condensed Consolidating Financi
Condensed Consolidating Financial Information | 12 Months Ended |
Dec. 31, 2019 | |
Condensed Financial Information Disclosure [Abstract] | |
Condensed Consolidating Financial Information | Condensed Consolidating Financial Information : The accompanying condensed consolidating financial information has been prepared and presented pursuant to SEC Regulation S-X, Rule 3-10, “Financial Statements of Guarantors and Issuers of Guaranteed Securities Registered or Being Registered.” Each of the subsidiary guarantors is 100% owned by Encompass Health, and all guarantees are full and unconditional and joint and several, subject to certain customary conditions for release. Encompass Health’s investments in its consolidated subsidiaries, as well as guarantor subsidiaries’ investments in nonguarantor subsidiaries and nonguarantor subsidiaries’ investments in guarantor subsidiaries, are presented under the equity method of accounting with the related investment presented within the line items Intercompany receivable and Intercompany payable in the accompanying condensed consolidating balance sheets. The terms of our credit agreement allow us to declare and pay cash dividends on our common stock so long as: (1) we are not in default under our credit agreement and (2) our senior secured leverage ratio (as defined in our credit agreement) remains less than or equal to 2 x. The terms of our senior note indenture allow us to declare and pay cash dividends on our common stock so long as (1) we are not in default, (2) the consolidated coverage ratio (as defined in the indenture) exceeds 2 x or we are otherwise allowed under the indenture to incur debt, and (3) we have capacity under the indenture’s restricted payments covenant to declare and pay dividends. See Note 10, Long-term Debt . Periodically, certain wholly owned subsidiaries of Encompass Health make dividends or distributions of available cash and/or intercompany receivable balances to their parents. In addition, Encompass Health makes contributions to certain wholly owned subsidiaries. When made, these dividends, distributions, and contributions impact the Intercompany receivable , Intercompany payable , and Encompass Health shareholders’ equity line items in the accompanying condensed consolidating balance sheet but have no impact on the consolidated financial statements of Encompass Health Corporation. The “Holdings” column in the condensed consolidating financial statements below represents Holdings and its wholly-owned subsidiaries. As discussed in Note 12, Redeemable Noncontrolling Interests , Holdings had 5.5% noncontrolling interest as of December 31, 2019, and accordingly, Holdings and its wholly-owned subsidiaries were not guarantors of our debt. In February 2020, we acquired for cash all but 1.2% of the remaining noncontrolling interest in Holdings following the most recent exercise of the put option by the management investors. On February 20, 2020, Encompass Health Corporation and each of the two remaining management investors agreed to exchange the remaining shares representing the noncontrolling interest for an equal value of shares of common stock of Encompass Health Corporation. We expect to settle the exchanges in March 2020. For the Year Ended December 31, 2019 Encompass Health Corporation Guarantor Subsidiaries Non-guarantor Subsidiaries Holdings Eliminating Entries Encompass Health Consolidated (In Millions) Net operating revenues $ 20.7 $ 2,425.5 $ 1,221.7 $ 1,074.1 $ (137.0 ) $ 4,605.0 Operating expenses: Salaries and benefits 59.6 1,176.5 608.7 748.9 (20.7 ) 2,573.0 Other operating expenses 45.0 351.8 189.3 88.4 (50.9 ) 623.6 Occupancy costs 2.1 100.8 27.5 17.3 (65.4 ) 82.3 Supplies — 98.0 49.3 20.6 — 167.9 General and administrative expenses 160.0 — — 87.0 — 247.0 Depreciation and amortization 19.9 106.8 54.9 37.1 — 218.7 Total operating expenses 286.6 1,833.9 929.7 999.3 (137.0 ) 3,912.5 Loss on early extinguishment of debt 7.7 — — — — 7.7 Interest expense and amortization of debt discounts and fees 131.0 24.7 5.6 28.4 (30.0 ) 159.7 Other income (32.3 ) (21.1 ) (7.1 ) — 30.0 (30.5 ) Equity in net income of nonconsolidated affiliates — (5.1 ) (0.4 ) (1.2 ) — (6.7 ) Equity in net income of consolidated affiliates (492.6 ) (67.0 ) — — 559.6 — Management fees (160.8 ) 117.8 43.0 — — — Income from continuing operations before income tax (benefit) expense 281.1 542.3 250.9 47.6 (559.6 ) 562.3 Provision for income tax (benefit) expense (78.2 ) 140.3 40.3 13.5 — 115.9 Income from continuing operations 359.3 402.0 210.6 34.1 (559.6 ) 446.4 Loss from discontinued operations, net of tax (0.6 ) — — — — (0.6 ) Net income 358.7 402.0 210.6 34.1 (559.6 ) 445.8 Less: Net income attributable to noncontrolling interests — — (83.3 ) (3.8 ) — (87.1 ) Net income attributable to Encompass Health $ 358.7 $ 402.0 $ 127.3 $ 30.3 $ (559.6 ) $ 358.7 Comprehensive income $ 358.7 $ 402.0 $ 210.6 $ 34.1 $ (559.6 ) $ 445.8 Comprehensive income attributable to Encompass Health $ 358.7 $ 402.0 $ 127.3 $ 30.3 $ (559.6 ) $ 358.7 For the Year Ended December 31, 2018 Encompass Health Corporation Guarantor Subsidiaries Non-guarantor Subsidiaries Holdings Eliminating Entries Encompass Health Consolidated (In Millions) Net operating revenues $ 21.0 $ 2,351.8 $ 1,118.9 $ 915.9 $ (130.3 ) $ 4,277.3 Operating expenses: Salaries and benefits 49.5 1,132.2 550.4 643.3 (21.4 ) 2,354.0 Other operating expenses 37.9 344.3 177.4 75.3 (49.8 ) 585.1 Occupancy costs 1.9 95.7 25.4 14.1 (59.1 ) 78.0 Supplies — 95.8 44.9 18.0 — 158.7 General and administrative expenses 161.0 — — 59.2 — 220.2 Depreciation and amortization 14.3 108.2 47.6 29.6 — 199.7 Government, class action, and related settlements 52.0 — — — — 52.0 Total operating expenses 316.6 1,776.2 845.7 839.5 (130.3 ) 3,647.7 Interest expense and amortization of debt discounts and fees 124.2 22.6 2.2 23.5 (25.2 ) 147.3 Other income (22.4 ) (1.0 ) (3.5 ) (0.5 ) 25.2 (2.2 ) Equity in net income of nonconsolidated affiliates — (7.1 ) (0.4 ) (1.2 ) — (8.7 ) Equity in net income of consolidated affiliates (465.6 ) (63.4 ) — — 529.0 — Management fees (153.1 ) 114.0 39.1 — — — Income from continuing operations before income tax (benefit) expense 221.3 510.5 235.8 54.6 (529.0 ) 493.2 Provision for income tax (benefit) expense (69.9 ) 136.6 38.4 13.8 — 118.9 Income from continuing operations 291.2 373.9 197.4 40.8 (529.0 ) 374.3 Income from discontinued operations, net of tax 1.1 — — — — 1.1 Net income 292.3 373.9 197.4 40.8 (529.0 ) 375.4 Less: Net income attributable to noncontrolling interests — — (77.8 ) (5.3 ) — (83.1 ) Net income attributable to Encompass Health $ 292.3 $ 373.9 $ 119.6 $ 35.5 $ (529.0 ) $ 292.3 Comprehensive income $ 292.3 $ 373.9 $ 197.4 $ 40.8 $ (529.0 ) $ 375.4 Comprehensive income attributable to Encompass Health $ 292.3 $ 373.9 $ 119.6 $ 35.5 $ (529.0 ) $ 292.3 For the Year Ended December 31, 2017 Encompass Health Corporation Guarantor Subsidiaries Non-guarantor Subsidiaries Holdings Eliminating Entries Encompass Health Consolidated (In Millions) Net operating revenues $ 21.3 $ 2,252.5 $ 1,006.4 $ 759.8 $ (126.1 ) $ 3,913.9 Operating expenses: Salaries and benefits 34.7 1,088.7 508.9 543.3 (21.0 ) 2,154.6 Other operating expenses 32.8 324.8 160.2 62.4 (48.6 ) 531.6 Occupancy costs 1.9 93.7 23.0 11.4 (56.5 ) 73.5 Supplies — 94.2 41.7 13.4 — 149.3 General and administrative 143.7 — — 28.0 — 171.7 Depreciation and amortization 8.8 106.6 44.7 23.7 — 183.8 Total operating expenses 221.9 1,708.0 778.5 682.2 (126.1 ) 3,264.5 Loss on early extinguishment of debt 10.7 — — — — 10.7 Interest expense and amortization of debt discounts and fees 130.5 23.2 2.5 19.2 (21.0 ) 154.4 Other (income) loss (21.7 ) 0.2 (3.6 ) — 21.0 (4.1 ) Equity in net income of nonconsolidated affiliates — (6.9 ) (0.4 ) (0.7 ) — (8.0 ) Equity in net income of consolidated affiliates (342.1 ) (39.0 ) — — 381.1 — Management fees (145.0 ) 109.5 35.5 — — — Income from continuing operations before income tax (benefit) expense 167.0 457.5 193.9 59.1 (381.1 ) 496.4 Provision for income tax (benefit) expense (104.5 ) 182.6 66.8 0.9 — 145.8 Income from continuing operations 271.5 274.9 127.1 58.2 (381.1 ) 350.6 Loss from discontinued operations, net of tax (0.4 ) — — — — (0.4 ) Net income 271.1 274.9 127.1 58.2 (381.1 ) 350.2 Less: Net income attributable to noncontrolling interests — — (68.7 ) (10.4 ) — (79.1 ) Net income attributable to Encompass Health $ 271.1 $ 274.9 $ 58.4 $ 47.8 $ (381.1 ) $ 271.1 Comprehensive income $ 271.0 $ 274.9 $ 127.1 $ 58.2 $ (381.1 ) $ 350.1 Comprehensive income attributable to Encompass Health $ 271.0 $ 274.9 $ 58.4 $ 47.8 $ (381.1 ) $ 271.0 As of December 31, 2019 Encompass Health Corporation Guarantor Subsidiaries Non-guarantor Subsidiaries Holdings Eliminating Entries Encompass Health Consolidated (In Millions) Assets Current assets: Cash and cash equivalents $ 53.7 $ 5.2 $ 6.0 $ 29.9 $ — $ 94.8 Restricted cash — — 57.4 — — 57.4 Accounts receivable — 280.4 125.6 100.1 — 506.1 Prepaid expenses and other current assets 64.3 35.4 9.3 7.8 (19.3 ) 97.5 Total current assets 118.0 321.0 198.3 137.8 (19.3 ) 755.8 Property and equipment, net 133.4 1,246.0 551.2 28.7 — 1,959.3 Operating lease right-of-use assets 10.1 171.5 86.5 43.7 (35.3 ) 276.5 Goodwill — 912.2 323.0 1,070.0 — 2,305.2 Intangible assets, net 17.7 101.7 65.3 291.6 — 476.3 Deferred income tax assets 27.2 11.1 0.1 — (35.5 ) 2.9 Other long-term assets 53.6 85.4 151.6 14.1 — 304.7 Intercompany notes receivable 737.8 — — — (737.8 ) — Intercompany receivable and investments in consolidated affiliates 3,155.4 523.6 — — (3,679.0 ) — Total assets $ 4,253.2 $ 3,372.5 $ 1,376.0 $ 1,585.9 $ (4,506.9 ) $ 6,080.7 Liabilities and Shareholders’ Equity Current liabilities: Current portion of long-term debt $ 17.0 $ 10.4 $ 3.8 $ 8.1 $ — $ 39.3 Current operating lease liabilities 1.3 21.9 16.0 12.1 (10.9 ) 40.4 Accounts payable 9.8 56.5 24.3 4.0 — 94.6 Accrued payroll 34.8 76.2 40.4 59.1 — 210.5 Accrued interest payable 30.4 2.0 — — — 32.4 Other current liabilities 82.2 30.5 68.8 141.6 (19.3 ) 303.8 Total current liabilities 175.5 197.5 153.3 224.9 (30.2 ) 721.0 Long-term debt, net of current portion 2,670.6 305.4 41.6 5.7 — 3,023.3 Long-term operating lease liabilities 9.0 153.9 73.6 31.9 (24.6 ) 243.8 Intercompany notes payable — — — 737.8 (737.8 ) — Self-insured risks 19.3 — 97.9 — — 117.2 Other long-term liabilities 26.6 12.2 2.4 37.0 (35.5 ) 42.7 Intercompany payable — — 66.0 4.4 (70.4 ) — 2,901.0 669.0 434.8 1,041.7 (898.5 ) 4,148.0 Commitments and contingencies Redeemable noncontrolling interests — — 31.4 208.2 — 239.6 Shareholders ’ equity: Encompass Health shareholders ’ equity 1,352.2 2,703.5 568.9 336.0 (3,608.4 ) 1,352.2 Noncontrolling interests — — 340.9 — — 340.9 Total shareholders ’ equity 1,352.2 2,703.5 909.8 336.0 (3,608.4 ) 1,693.1 Total liabilities and shareholders ’ equity $ 4,253.2 $ 3,372.5 $ 1,376.0 $ 1,585.9 $ (4,506.9 ) $ 6,080.7 As of December 31, 2018 Encompass Health Corporation Guarantor Subsidiaries Non-guarantor Subsidiaries Holdings Eliminating Entries Encompass Health Consolidated (In Millions) Assets Current assets: Cash and cash equivalents $ 41.5 $ 3.0 $ 5.1 $ 19.6 $ — $ 69.2 Restricted cash — — 59.0 — — 59.0 Accounts receivable — 270.7 121.6 75.4 — 467.7 Prepaid expenses and other current assets 36.3 17.6 26.2 4.9 (18.8 ) 66.2 Total current assets 77.8 291.3 211.9 99.9 (18.8 ) 662.1 Property and equipment, net 123.9 1,041.5 445.2 24.2 — 1,634.8 Goodwill — 912.2 293.3 895.3 — 2,100.8 Intangible assets, net 21.4 96.6 67.5 257.9 — 443.4 Deferred income tax assets 47.9 28.9 0.1 — (34.0 ) 42.9 Other long-term assets 47.9 100.4 130.9 11.8 — 291.0 Intercompany notes receivable 535.3 — — — (535.3 ) — Intercompany receivable and investments in consolidated affiliates 2,904.4 457.6 — — (3,362.0 ) — Total assets $ 3,758.6 $ 2,928.5 $ 1,148.9 $ 1,289.1 $ (3,950.1 ) $ 5,175.0 Liabilities and Shareholders’ Equity Current liabilities: Current portion of long-term debt $ 35.0 $ 7.5 $ 4.4 $ 6.4 $ (17.5 ) $ 35.8 Accounts payable 8.9 46.4 30.4 4.3 — 90.0 Accrued payroll 35.0 69.1 35.4 48.9 — 188.4 Accrued interest payable 22.3 2.4 — — (0.3 ) 24.4 Other current liabilities 154.5 5.1 85.7 89.6 (1.0 ) 333.9 Total current liabilities 255.7 130.5 155.9 149.2 (18.8 ) 672.5 Long-term debt, net of current portion 2,188.7 262.1 20.0 7.8 — 2,478.6 Intercompany notes payable — — — 535.3 (535.3 ) — Self-insured risks 16.1 — 103.5 — — 119.6 Other long-term liabilities 21.4 17.1 5.0 76.0 (33.9 ) 85.6 Intercompany payable — — 48.9 4.2 (53.1 ) — 2,481.9 409.7 333.3 772.5 (641.1 ) 3,356.3 Commitments and contingencies Redeemable noncontrolling interests — — 38.3 223.4 — 261.7 Shareholders ’ equity Encompass Health shareholders ’ equity 1,276.7 2,518.8 497.0 293.2 (3,309.0 ) 1,276.7 Noncontrolling interests — — 280.3 — — 280.3 Total shareholders ’ equity 1,276.7 2,518.8 777.3 293.2 (3,309.0 ) 1,557.0 Total liabilities and shareholders ’ equity $ 3,758.6 $ 2,928.5 $ 1,148.9 $ 1,289.1 $ (3,950.1 ) $ 5,175.0 For the Year Ended December 31, 2019 Encompass Health Corporation Guarantor Subsidiaries Non-guarantor Subsidiaries Holdings Eliminating Entries Encompass Health Consolidated (In Millions) Net cash (used in) provided by operating activities $ (110.8 ) $ 450.3 $ 247.9 $ 47.9 $ — $ 635.3 Cash flows from investing activities: Acquisition of businesses, net of cash acquired (217.8 ) — — (13.7 ) — (231.5 ) Purchases of property and equipment (38.6 ) (207.3 ) (117.9 ) (8.6 ) — (372.4 ) Additions to capitalized software costs (7.4 ) (0.7 ) (1.4 ) (3.5 ) — (13.0 ) Purchases of intangible assets — (18.0 ) — (0.7 ) — (18.7 ) Proceeds from sale of restricted investments — — 17.6 — — 17.6 Purchases of restricted investments — — (30.9 ) (2.0 ) — (32.9 ) Funding of intercompany note receivable (64.0 ) — — — 64.0 — Proceeds from repayment of intercompany note receivable 93.0 — 17.5 — (110.5 ) — Other, net (8.3 ) 8.2 (6.7 ) 0.3 — (6.5 ) Net cash provided used in investing activities (243.1 ) (217.8 ) (121.8 ) (28.2 ) (46.5 ) (657.4 ) Cash flows from financing activities: Proceeds from bond issuance 1,000.0 — — — — 1,000.0 Principal payments on debt, including pre-payments (517.8 ) — (1.7 ) — — (519.5 ) Principal borrowings on intercompany note payable — — — 64.0 (64.0 ) — Principal payments on intercompany note payable (17.5 ) — — (93.0 ) 110.5 — Borrowings on revolving credit facility 635.0 — — — — 635.0 Payments on revolving credit facility (620.0 ) — — — — (620.0 ) Principal payments under finance lease obligations (0.7 ) (8.3 ) (2.6 ) (7.9 ) — (19.5 ) Debt amendment and issuance costs (21.5 ) — — — — (21.5 ) Repurchases of common stock, including fees and expenses (45.9 ) — — — — (45.9 ) Dividends paid on common stock (108.6 ) — — (0.1 ) — (108.7 ) Purchase of equity interests in consolidated affiliates (162.9 ) — — — — (162.9 ) Distributions paid to noncontrolling interests of consolidated affiliates — — (79.8 ) — — (79.8 ) Taxes paid on behalf of employees for shares withheld (15.4 ) — — (1.2 ) — (16.6 ) Contributions from consolidated affiliates — — 15.9 — — 15.9 Other, net (4.4 ) — — (3.9 ) — (8.3 ) Change in intercompany advances 245.8 (222.0 ) (56.5 ) 32.7 — — Net cash provided by (used in) financing activities 366.1 (230.3 ) (124.7 ) (9.4 ) 46.5 48.2 Increase in cash, cash equivalents, and restricted cash 12.2 2.2 1.4 10.3 — 26.1 Cash, cash equivalents, and restricted cash at beginning of year 41.5 3.0 69.4 19.6 — 133.5 Cash, cash equivalents and restricted cash at end of year $ 53.7 $ 5.2 $ 70.8 $ 29.9 $ — $ 159.6 Reconciliation of Cash, Cash Equivalents, and Restricted Cash Cash and cash equivalents at beginning of period $ 41.5 $ 3.0 $ 5.1 $ 19.6 $ — $ 69.2 Restricted cash at beginning of period — — 59.0 — — 59.0 Restricted cash included in other long-term assets at beginning of period — — 5.3 — — 5.3 Cash, cash equivalents, and restricted cash at beginning of period $ 41.5 $ 3.0 $ 69.4 $ 19.6 $ — $ 133.5 Cash and cash equivalents at end of period $ 53.7 $ 5.2 $ 6.0 $ 29.9 $ — $ 94.8 Restricted cash at end of period — — 57.4 — — 57.4 Restricted cash included in other long-term assets at end of period — — 7.4 — — 7.4 Cash, cash equivalents, and restricted cash at end of period $ 53.7 $ 5.2 $ 70.8 $ 29.9 $ — $ 159.6 Supplemental schedule of noncash financing activity: Intercompany note activity $ (232.9 ) $ — $ — $ 232.9 $ — $ — For the Year Ended December 31, 2018 Encompass Health Corporation Guarantor Subsidiaries Non-guarantor Subsidiaries Holdings Eliminating Entries Encompass Health Consolidated (In Millions) Net cash (used in) provided by operating activities $ (11.3 ) $ 422.2 $ 259.0 $ 92.5 $ — $ 762.4 Cash flows from investing activities: Acquisition of businesses, net of cash acquired (131.4 ) — — (12.5 ) — (143.9 ) Purchases of property and equipment (34.1 ) (133.9 ) (79.9 ) (6.6 ) — (254.5 ) Additions to capitalized software costs (14.1 ) (0.1 ) — (1.8 ) — (16.0 ) Purchases of intangible assets (2.5 ) — (0.1 ) (3.1 ) — (5.7 ) Proceeds from sale of restricted investments — — 11.6 — — 11.6 Purchases of restricted investments — — (13.3 ) — — (13.3 ) Proceeds from repayment of intercompany note receivable 87.0 — — — (87.0 ) — Other, net (6.0 ) 2.8 — 0.5 — (2.7 ) Net cash used in investing activities (101.1 ) (131.2 ) (81.7 ) (23.5 ) (87.0 ) (424.5 ) Cash flows from financing activities: Principal payments on debt, including pre-payments (17.6 ) — (3.0 ) — — (20.6 ) Principal payments on intercompany notes payable — — — (87.0 ) 87.0 — Borrowings on revolving credit facility 325.0 — — — — 325.0 Payments on revolving credit facility (390.0 ) — — — — (390.0 ) Principal payments under finance lease obligations — (8.4 ) (4.2 ) (5.3 ) — (17.9 ) Debt amendment and issuance costs — — (0.1 ) — — (0.1 ) Dividends paid on common stock (100.7 ) — — (0.1 ) — (100.8 ) Purchase of equity interests in consolidated affiliates (65.1 ) — — — — (65.1 ) Distributions paid to noncontrolling interests of consolidated affiliates — — (75.4 ) — — (75.4 ) Taxes paid on behalf of employees for shares withheld (7.4 ) — — (0.9 ) — (8.3 ) Contributions from consolidated affiliates — — 12.6 — — 12.6 Other, net 3.0 — 13.2 3.2 — 19.4 Change in intercompany advances 372.4 (282.5 ) (118.9 ) 29.0 — — Net cash provided by (used in) financing activities 119.6 (290.9 ) (175.8 ) (61.1 ) 87.0 (321.2 ) Increase in cash, cash equivalents, and restricted cash 7.2 0.1 1.5 7.9 — 16.7 Cash, cash equivalents, and restricted cash at beginning of year 34.3 2.9 67.9 11.7 — 116.8 Cash, cash equivalents, and restricted cash at end of year $ 41.5 $ 3.0 $ 69.4 $ 19.6 $ — $ 133.5 Reconciliation of Cash, Cash Equivalents, and Restricted Cash Cash and cash equivalents at beginning of period $ 34.3 $ 2.9 $ 5.5 $ 11.7 $ — $ 54.4 Restricted cash at beginning of period — — 62.4 — — 62.4 Cash, cash equivalents, and restricted cash at beginning of period $ 34.3 $ 2.9 $ 67.9 $ 11.7 $ — $ 116.8 Cash and cash equivalents at end of period $ 41.5 $ 3.0 $ 5.1 $ 19.6 $ — $ 69.2 Restricted cash at end of period — — 59.0 — — 59.0 Restricted cash included in other long-term assets at end of period — — 5.3 — — 5.3 Cash, cash equivalents, and restricted cash at end of period $ 41.5 $ 3.0 $ 69.4 $ 19.6 $ — $ 133.5 Supplemental schedule of noncash investing activities: Intercompany note activity $ (136.8 ) $ — $ — $ 136.8 $ — $ — For the Year Ended December 31, 2017 Encompass Health Corporation Guarantor Subsidiaries Non-guarantor Subsidiaries Holdings Eliminating Entries Encompass Health Consolidated (In Millions) Net cash provided by operating activities $ 28.2 $ 385.9 $ 181.2 $ 63.0 $ — $ 658.3 Cash flows from investing activities: Acquisition of businesses, net of cash acquired (10.9 ) — — (27.9 ) — (38.8 ) Purchases of property and equipment (39.4 ) (106.5 ) (75.4 ) (4.5 ) — (225.8 ) Additions to capitalized software costs (16.3 ) (0.3 ) (0.1 ) (2.5 ) — (19.2 ) Purchases of intangible assets — — — (3.7 ) — (3.7 ) Proceeds from sale of restricted investments — — 4.2 — — 4.2 Purchases of restricted investments — — (8.5 ) — — (8.5 ) Proceeds from repayment of intercompany note receivable 51.0 — — — (51.0 ) — Other, net (3.7 ) 11.7 0.2 0.6 — 8.8 Net cash used in investing activities (19.3 ) (95.1 ) (79.6 ) (38.0 ) (51.0 ) (283.0 ) Cash flows from financing activities: Principal payments on debt, including pre-payments (126.9 ) — (3.0 ) — — (129.9 ) Principal payments on intercompany notes payable — — — (51.0 ) 51.0 — Borrowings on revolving credit facility 273.3 — — — — 273.3 Payments on revolving credit facility (330.3 ) — — — — (330.3 ) Principal payments under finance lease obligations — (7.3 ) (3.9 ) (4.1 ) — (15.3 ) Debt amendment and issuance costs (4.1 ) — — — — (4.1 ) Repurchases of common stock, including fees and expenses (38.1 ) — — — — (38.1 ) Dividends paid on common stock (91.5 ) — — — — (91.5 ) Proceeds from exercising stock warrants 26.6 — — — — 26.6 Distributions paid to noncontrolling interests of consolidated affiliates — — (51.9 ) — — (51.9 ) Taxes paid on behalf of employees for shares withheld (19.5 ) — — (0.3 ) — (19.8 ) Contributions from consolidated affiliates — — 20.8 — — 20.8 Other, net 1.0 — — (0.7 ) — 0.3 Change in intercompany advances 314.3 (282.2 ) (62.0 ) 29.9 — — Net cash provided by (used in) financing activities 4.8 (289.5 ) (100.0 ) (26.2 ) 51.0 (359.9 ) Increase in cash, cash equivalents, and restricted cash 13.7 1.3 1.6 (1.2 ) — 15.4 Cash, cash equivalents, and restricted cash at beginning of year 20.6 1.6 66.3 12.9 — 101.4 Cash, cash equivalents, and restricted cash at end of year $ 34.3 $ 2.9 $ 67.9 $ 11.7 $ — $ 116.8 Reconciliation of Cash, Cash Equivalents, and Restricted Cash Cash and cash equivalents at beginning of period $ 20.6 $ 1.6 $ 5.4 $ 12.9 $ — $ 40.5 Restricted cash at beginning of period — — 60.9 — — 60.9 Cash, cash equivalents, and restricted cash at beginning of period $ 20.6 $ 1.6 $ 66.3 $ 12.9 $ — $ 101.4 Cash and cash equivalents at end of period $ 34.3 $ 2.9 $ 5.5 $ 11.7 $ — $ 54.4 Restricted cash at end of period — — 62.4 — — 62.4 Cash, cash equivalents, and restricted cash at end of period $ 34.3 $ 2.9 $ 67.9 $ 11.7 $ — $ 116.8 Supplemental schedule of noncash financing activities: Intercompany note activity $ (8.8 ) $ — $ — $ 8.8 $ — $ — Conversion of convertible debt 319.4 — — — — 319.4 |
Summary of Significant Accoun_2
Summary of Significant Accounting Policies (Policies) | 12 Months Ended |
Dec. 31, 2019 | |
Accounting Policies [Abstract] | |
Basis of Presentation and Consolidation | Basis of Presentation and Consolidation— The accompanying consolidated financial statements of Encompass Health and its subsidiaries were prepared in accordance with generally accepted accounting principles in the United States of America and 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 where we have the ability to exercise significant influence over operating and financial policies. Consolidated Net income attributable to Encompass Health includes our share of the net earnings of these entities. The difference between consolidation and the equity method impacts certain of our financial ratios because of the presentation of the detailed line items reported in the consolidated financial statements for consolidated entities compared to a one line presentation of equity method investments. We use the cost method to account for our investments in entities we do not control and for which we do not have the ability to exercise significant influence over operating and financial policies. In accordance with the cost method, these investments are recorded at the lower of cost or fair value, as appropriate. We eliminate all significant intercompany accounts and transactions from our financial results. |
Variable Interest Entities | Variable Interest Entities — Any entity considered a variable interest entity (“VIE”) is evaluated to determine which party is the primary beneficiary and thus should consolidate the VIE. This analysis is complex, involves uncertainties, and requires significant judgment on various matters. In order to determine if we are the primary beneficiary of a VIE, we must determine what activities most significantly impact the economic performance of the entity, whether we have the power to direct those activities, and if our obligation to absorb losses or receive benefits from the VIE could potentially be significant to the VIE. |
Use of Estimates and Assumptions | Use of Estimates and Assumptions— The preparation of our consolidated financial statements in conformity with GAAP requires the use of estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the consolidated financial statements, and the reported amounts of revenues and expenses during the reporting periods. Significant estimates and assumptions are used for, but not limited to: (1) revenue reserves for contractual adjustments and uncollectible amounts; (2) fair value of acquired assets and assumed liabilities in business combinations; (3) asset impairments, including goodwill; (4) depreciable lives of assets; (5) useful lives of intangible assets; (6) economic lives and fair value of leased assets; (7) income tax valuation allowances; (8) uncertain tax positions; (9) fair value of stock options and restricted stock containing a market condition; (10) fair value of redeemable noncontrolling interests; (11) reserves for self-insured healthcare plans; (12) reserves for professional, workers’ compensation, and comprehensive general insurance liability risks; and (13) contingency and litigation reserves. Future events and their effects cannot be predicted with certainty; accordingly, our accounting estimates require the exercise of judgment. The accounting estimates used in the preparation of our consolidated financial statements will change as new events occur, as more experience is acquired, as additional information is obtained, and as our operating environment changes. We evaluate and update our assumptions and estimates on an ongoing basis and may employ outside experts to assist in our evaluation, as considered necessary. Actual results could differ from those estimates. |
Net Operating Revenues | We record Net operating revenues on an accrual basis using our best estimate of the transaction price for the type of service provided to the patient. Our estimate of the transaction price includes estimates of price concessions for such items as contractual allowances, potential adjustments that may arise from payment and other reviews, and uncollectible amounts. Our accounting systems calculate contractual allowances on a patient-by-patient basis based on the rates in effect for each primary third-party payor. Adjustments related to payment reviews by third-party payors or their agents are based on our historical experience and success rates in the claims adjudication process. Estimates for uncollectible amounts are based on the aging of our accounts receivable, our historical collection experience for each type of payor, and other relevant factors. Management continually reviews the revenue transaction price estimation process to consider and incorporate updates to laws and regulations and the frequent changes in managed care contractual terms that result from contract renegotiations and renewals. Due to complexities involved in determining amounts ultimately due under reimbursement arrangements with third-party payors, which are often subject to interpretation, we may receive reimbursement for healthcare services authorized and provided that is different from our estimates, and such differences could be material. In addition, laws and regulations governing the Medicare and Medicaid programs are complex, subject to interpretation, and are routinely modified for provider reimbursement. All healthcare providers participating in the Medicare and Medicaid programs are required to meet certain financial reporting requirements. Federal regulations require submission of annual cost reports covering medical costs and expenses associated with the services provided under each hospital, home health, and hospice provider number to program beneficiaries. Annual cost reports required under the Medicare and Medicaid programs are subject to routine audits, which may result in adjustments to the amounts ultimately determined to be due to Encompass Health under these reimbursement programs. These audits often require several years to reach the final determination of amounts earned under the programs. If actual results are not consistent with our assumptions and judgments, we may be exposed to gains or losses that could be material. The Centers for Medicare and Medicaid Services (“CMS”) has been granted authority to suspend payments, in whole or in part, to Medicare providers if CMS possesses reliable information an overpayment, fraud, or willful misrepresentation exists. If CMS suspects payments are being made as the result of fraud or misrepresentation, CMS may suspend payment at any time without providing prior notice to us. The initial suspension period is limited to 180 days. However, the payment suspension period can be extended almost indefinitely if the matter is under investigation by the United States Department of Health and Human Services Office of Inspector General (the “HHS-OIG”) or the United States Department of Justice (the “DOJ”). Therefore, we are unable to predict if or when we may be subject to a suspension of payments by the Medicare and/or Medicaid programs, the possible length of the suspension period, or the potential cash flow impact of a payment suspension. Any such suspension would adversely impact our financial position, results of operations, and cash flows. Pursuant to legislative directives and authorizations from Congress, CMS has developed and instituted various Medicare audit programs under which CMS contracts with private companies to conduct claims and medical record audits. As a matter of course, we undertake significant efforts through training and education to ensure compliance with Medicare requirements. However, audits may lead to assertions we have been underpaid or overpaid by Medicare or submitted improper claims in some instances, require us to incur additional costs to respond to requests for records and defend the validity of payments and claims, and ultimately require us to refund any amounts determined to have been overpaid. In some circumstances auditors assert the authority to extrapolate denial rationales to large pools of claims not actually audited, which could increase the impact of the audit. We cannot predict when or how these audit programs will affect us. Medicare Administrative Contractors (“MACs”), under programs known as “widespread probes,” have conducted pre-payment claim reviews of our Medicare billings and in some cases denied payment for certain diagnosis codes. The majority of the denials we have encountered in these probes relate to determinations regarding medical necessity and provision of therapy services. We dispute, or “appeal,” most of these denials, and for claims we choose to take to administrative law judge hearings, we have historically experienced a success rate of approximately 70% . This historical success rate is a component of our estimate of transaction price as discussed above. The Medicare appeals adjudication process is administered by the Office of Medicare Hearings and Appeals (“OMHA”). For a period of years, OHMA has failed to adjudicate appeals in accordance with timelines established by Congress. Due to the sheer number of appeals and various administrative inefficiencies, appeals that are due to be resolved in a matter of months commonly take years to complete. The growing backlog of appeals contributes further to the delay. We currently have appeals pending for claims that were denied up to eight years ago. Accordingly, we believe the process for resolving individual Medicare payment claims that are denied will continue to take several years. We cannot provide assurance as to our ongoing and future success of these disputes. When the amount collected related to denied claims differs from the amount previously estimated, these collection differences are recorded as an adjustment to Net operating revenues . In August 2017, CMS announced the Targeted Probe and Educate (“TPE”) initiative. Under the TPE initiative, MACs use data analysis to identify healthcare providers with high claim error rates and items and services that have high national error rates. Once a MAC selects a provider for claims review, the initial volume of claims review is limited to 20 to 40 claims. The TPE initiative includes up to three rounds of claims review if necessary with corresponding provider education and a subsequent period to allow for improvement. If results do not improve sufficiently after three rounds, the MAC may refer the provider to CMS for further action, which may include extrapolation of error rates to a broader universe of claims or referral to a UPIC or RAC (defined below). We cannot predict the impact of the TPE initiative on our ability to collect claims on a timely basis. In connection with CMS approved and announced Recovery Audit Contractors (“RACs”) audits related to inpatient rehabilitation facilities (“IRFs”), we received requests from 2013 to 2019 to review certain patient files for discharges occurring from 2010 to 2019 . These RAC audits are focused on identifying Medicare claims that may contain improper payments. RAC contractors must have CMS approval before conducting these focused reviews which cover issues ranging from billing documentation to medical necessity. Medical necessity is an assessment by an independent physician of a patient’s ability to tolerate and benefit from intensive multi-disciplinary therapy provided in an IRF setting. CMS has also established Unified Program Integrity Contractors (“UPICs”), previously known as Zone Program Integrity Contractors. These contractors perform fraud, waste, and abuse detection, deterrence and prevention activities for Medicare and Medicaid claims. Like the RACs, the UPICs conduct audits and have the ability to refer matters to the HHS-OIG or the DOJ. Unlike RACs, however, UPICs do not receive a specific financial incentive based on the amount of the error as a result of UPIC audits. We have, from time to time, received UPIC record requests which have resulted in claim denials on paid claims. We have appealed substantially all UPIC denials arising from these audits using the same process we follow for appealing other denials by contractors. To date, the Medicare claims that are subject to these post-payment audit requests represent less than 1% of our Medicare patient discharges from 2010 to 2019 . Because we have confidence in the medical judgment of both the referring and admitting physicians who assess the treatment needs of their patients, we have appealed substantially all claim denials arising from these audits using the same process we follow for appealing denials by MACs. Due to the delays announced by CMS in the related adjudication process discussed above, we believe the resolution of any claims that are subsequently denied as a result of these claim audits could take several years. In addition, because we have limited experience with UPICs and RACs in the context of claims reviews of this nature, we cannot provide assurance as to the timing or outcomes of these disputes. As such, we make estimates for these claims based on our historical experience and success rates in the claims adjudication process, which is the same process we follow for appealing denials by MACs. During 2019 , 2018 , and 2017 , our adjustment to Net operating revenues for claims that are part of this post-payment claims review process was not material. Our performance obligations relate to contracts with a duration of less than one year. Therefore, we elected to apply the optional exemption to not disclose the aggregate amount of the transaction price allocated to performance obligations that are unsatisfied or partially unsatisfied at the end of the reporting period. These unsatisfied or partially unsatisfied performance obligations primarily relate to services provided at the end of the reporting period. We are subject to changes in government legislation that could impact Medicare payment levels and changes in payor patterns that may impact the level and timing of payments for services rendered. Inpatient Rehabilitation Revenues Inpatient rehabilitation segment revenues are recognized over time as the services are provided to the patient. The performance obligation is the rendering of services to the patient during the term of their inpatient stay. Revenues are recognized (or measured) using the input method as therapy, nursing, and auxiliary services are provided based on our estimate of the respective transaction price. Revenues recognized by our inpatient rehabilitation segment are subject to a number of elements which impact both the overall amount of revenue realized as well as the timing of the collection of the related accounts receivable. Factors considered in determining the estimated transaction price include the patient’s total length of stay for in-house patients, each patient’s discharge destination, the proportion of patients with secondary insurance coverage and the level of reimbursement under that secondary coverage, and the amount of charges that will be disallowed by payors. Such additional factors are assumed to remain consistent with the experience for patients discharged in similar time periods for the same payor classes. Home Health and Hospice Revenues Home Health Under the Medicare home health prospective payment system, we are paid by Medicare based on episodes of care. The performance obligation is the rendering of services to the patient during the term of the episode of care. An episode of care is defined as a length of stay up to 60 days, with multiple continuous episodes allowed. A base episode payment is established by the Medicare program through federal regulation. The base episode payment can be adjusted based on each patient’s health including clinical condition, functional abilities, and service needs, as well as for the applicable geographic wage index, low utilization, patient transfers, and other factors. The services covered by the episode payment include all disciplines of care in addition to medical supplies. We bill a portion of reimbursement from each Medicare episode near the start of each episode, and the resulting cash payment is typically received before all services are rendered. As we provide home health services to our patients on a scheduled basis over the episode of care in a manner that approximates a pro rata pattern, revenue for the episode of care is recorded over an average length of treatment period using a calendar day prorating method. The amount of revenue recognized for episodes of care which are incomplete at period end is based on the pro rata number of days in the episode which have been completed as of the period end date. As of December 31, 2019 and December 31, 2018 , the difference between the cash received from Medicare for a request for anticipated payment on episodes in progress and the associated estimated revenue was not material and was recorded in Other current liabilities in our consolidated balance sheets. We are subject to certain Medicare regulations affecting outlier revenue if our patient’s care was unusually costly. Regulations require a cap on all outlier revenue at 10% of total Medicare revenue received by each provider during a cost reporting year. Management has reviewed the potential cap. Adjustments to the transaction price for the outlier cap were not material as of December 31, 2019 and December 31, 2018 . For episodic-based rates that are paid by other insurance carriers, including Medicare Advantage, we recognize revenue in a similar manner as discussed above for Medicare revenues. However, these rates can vary based upon the negotiated terms. For non-episodic-based revenue, revenue is recorded on an accrual basis based upon the date of service at amounts equal to our estimated per-visit transaction price. Price concessions, including contractual allowances for the differences between our standard rates and the applicable contracted rates, as well as estimated uncollectible amounts from patients, are recorded as decreases to the transaction price. Hospice Medicare revenues for hospice are recognized and recorded on an accrual basis using the input method based on the number of days a patient has been on service at amounts equal to an estimated daily or hourly payment rate. The performance obligation is the rendering of services to the patient during each day that they are on hospice care. The payment rate is dependent on whether a patient is receiving routine home care, general inpatient care, continuous home care or respite care. Adjustments to Medicare revenues are recorded based on an inability to obtain appropriate billing documentation or authorizations acceptable to the payor or other reasons unrelated to credit risk. Hospice companies are subject to two specific payment limit caps under the Medicare program. One limit relates to inpatient care days that exceed 20% of the total days of hospice care provided for the year. The second limit relates to an aggregate Medicare reimbursement cap calculated by the MAC. Adjustments to the transaction price for these caps were not material as of December 31, 2019 and December 31, 2018 . For non-Medicare hospice revenues, we record gross revenue on an accrual basis based upon the date of service at amounts equal to our estimated per day transaction price. Price concessions, including contractual adjustments for the difference between our standard rates and the amounts estimated to be realizable from patients and third parties for services provided, are recorded as decreases to the transaction price and thus reduce our Net operating revenues . |
Cash and Cash Equivalents | Cash and Cash Equivalents— Cash and cash equivalents include highly liquid investments with maturities of three months or less when purchased. Carrying values of Cash and cash equivalents approximate fair value due to the short-term nature of these instruments. We maintain amounts on deposit with various financial institutions, which may, at times, exceed federally insured limits. However, management periodically evaluates the credit-worthiness of those institutions, and we have not experienced any losses on such deposits. |
Marketable Securities | Marketable Securities— We record all equity securities with readily determinable fair values and for which we do not exercise significant influence at fair value and record the change in fair value for the reporting period in our consolidated statements of operations. We record debt securities with readily determinable fair values and for which we do not exercise significant influence as available-for-sale securities. We carry the available-for-sale securities at fair value and report unrealized holding gains or losses, net of income taxes, in Accumulated other comprehensive loss , which is a separate component of shareholders’ equity. We recognize realized gains and losses in our consolidated statements of operations using the specific identification method. Unrealized losses are charged against earnings when a decline in fair value was determined to be other than temporary. Management reviews several factors to determine whether a loss is other than temporary, such as the length of time a security is in an unrealized loss position, the extent to which fair value is less than cost, the financial condition and near term prospects of the issuer, industry, or geographic area and our ability and intent to hold the security for a period of time sufficient to allow for any anticipated recovery in fair value. |
Accounts Receivable | Accounts Receivable— We report accounts receivable from services rendered at their estimated transaction price which takes into account price concessions from federal and state agencies (under the Medicare and Medicaid programs), managed care health plans, commercial insurance companies, workers’ compensation programs, employers, and patients. Our accounts receivable are concentrated by type of payor. The concentration of patient service accounts receivable by payor class, as a percentage of total patient service accounts receivable, is as follows: As of December 31, 2019 2018 Medicare 72.1 % 73.2 % Managed care and other discount plans, including Medicare Advantage 20.1 % 19.3 % Medicaid 3.1 % 2.8 % Other third-party payors 2.6 % 2.7 % Workers' compensation 1.2 % 1.1 % Patients 0.9 % 0.9 % Total 100.0 % 100.0 % While revenues and accounts receivable from the Medicare program are significant to our operations, we do not believe there are significant credit risks associated with this government agency. We do not believe there are any other significant concentrations of revenues from any particular payor that would subject us to any significant credit risks in the collection of our accounts receivable. Accounts requiring collection efforts are reviewed via system-generated work queues that automatically stage (based on age and size of outstanding balance) accounts requiring collection efforts for patient account representatives. Collection efforts include contacting the applicable party (both in writing and by telephone), providing information (both financial and clinical) to allow for payment or to overturn payor decisions to deny payment, and arranging payment plans with self-pay patients, among other techniques. When we determine all in-house efforts have been exhausted or it is a more prudent use of resources, accounts may be turned over to a collection agency. The collection of outstanding receivables from Medicare, managed care payors, other third-party payors, and patients is our primary source of cash and is critical to our operating performance. While it is our policy to verify insurance prior to a patient being admitted, there are various exceptions that can occur. Such exceptions include instances where we are (1) unable to obtain verification because the patient’s insurance company was unable to be reached or contacted, (2) a determination is made that a patient may be eligible for benefits under various government programs, such as Medicaid, and it takes several days, weeks, or months before qualification for such benefits is confirmed or denied, and (3) the patient is transferred to our hospital from an acute care hospital without having access to a credit card, cash, or check to pay the applicable patient responsibility amounts (i.e., deductibles and co-payments). Our primary collection risks relate to patient responsibility amounts and claims reviews conducted by MACs or other contractors. Patient responsibility amounts include accounts for which the patient was the primary payor or the primary insurance carrier has paid the amounts covered by the applicable agreement, but patient co-payment amounts remain outstanding. Changes in the economy, such as increased unemployment rates or periods of recession, can further exacerbate our ability to collect patient responsibility amounts. If actual results are not consistent with our assumptions and judgments, we may be exposed to gains or losses that could be material. Changes in general economic conditions, business office operations, payor mix, or trends in federal or state governmental and private employer healthcare coverage could affect our collection of accounts receivable, financial position, results of operations, and cash flows. |
Property and Equipment | Property and Equipment— We report land, buildings, improvements, vehicles, and equipment at cost, net of accumulated depreciation and amortization and any asset impairments. We depreciate our assets using the straight-line method over the shorter of the estimated useful life of the assets. Useful lives are generally as follows: Years Buildings 10 to 30 Leasehold improvements 2 to 15 Vehicles 5 Furniture, fixtures, and equipment 2 to 10 Maintenance and repairs of property and equipment are expensed as incurred. We capitalize replacements and betterments that increase the estimated useful life of an asset. We capitalize pre-acquisition costs when they are directly identifiable with a specific property, the costs would be capitalizable if the property were already acquired, and acquisition of the property is probable. We capitalize interest expense on major construction and development projects while in progress. We retain fully depreciated assets in property and accumulated depreciation accounts until we remove them from service. In the case of sale, retirement, or disposal, the asset cost and related accumulated depreciation balances are removed from the respective accounts, and the resulting net amount, less any proceeds, is included as a component of income from continuing operations in the consolidated statements of operations. However, if the sale, retirement, or disposal involves a discontinued operation, the resulting net amount, less any proceeds, is included in the results of discontinued operations. |
Leases | Leases— We determine if an arrangement is a lease or contains a lease at inception and perform an analysis to determine whether the lease is an operating lease or a finance lease. We measure right-of-use assets and lease liabilities at the lease commencement date based on the present value of the remaining lease payments. As most of our leases do not provide a readily determinable implicit rate, we estimate an incremental borrowing rate based on the credit quality of the Company and by comparing interest rates available in the market for similar borrowings, and adjusting this amount based on the impact of collateral over the term of each lease. We use this rate to discount the remaining lease payments in measuring the right-of-use asset and lease liability. We use the implicit rate when readily determinable. We recognize lease expense for operating leases on a straight-line basis over the lease term. For our finance leases, we recognize amortization expense from the amortization of the right-of-use asset and interest expense on the related lease liability. Certain of our lease agreements contain annual escalation clauses based on changes in the Consumer Price Index. The changes to the Consumer Price Index, as compared to our initial estimate at the lease commencement date, are treated as variable lease payments and recognized in the period in which the obligation for those payments was incurred. We do not account for lease and nonlease components separately for purposes of establishing right-of-use assets and lease liabilities. Leases with an initial term of twelve months or less are not recorded on the consolidated balance sheet. We recognize lease expense for these leases on a straight-line basis over the lease term. |
Goodwill and Other Intangible Assets | Goodwill and Other Intangible Assets— We are required to test our goodwill and indefinite-lived intangible asset for impairment at least annually, absent some triggering event that would accelerate an impairment assessment. Absent any impairment indicators, we perform this impairment testing as of October 1st of each year. We recognize an impairment charge for any amount by which the carrying amount of the asset exceeds its implied fair value. We present an impairment charge as a separate line item within income from continuing operations in the consolidated statements of operations, unless the impairment is associated with a discontinued operation. In that case, we include the impairment charge, on a net-of-tax basis, within the results of discontinued operations. We assess qualitative factors in our inpatient rehabilitation and home health and hospice reporting units to determine whether it is necessary to perform the quantitative impairment test. If, based on this qualitative assessment, we were to believe we must perform the quantitative goodwill impairment test, we would determine the fair value of our reporting units using generally accepted valuation techniques including the income approach and the market approach. The income approach includes the use of each reporting unit’s discounted projected operating results and cash flows. This approach includes many assumptions related to pricing and volume, operating expenses, capital expenditures, discount factors, tax rates, etc. Changes in economic and operating conditions impacting these assumptions could result in goodwill impairment in future periods. We reconcile the estimated fair value of our reporting units to our market capitalization. When we dispose of a hospital or home health or hospice agency, goodwill is allocated to the gain or loss on disposition using the relative fair value methodology. We assess qualitative factors related to our indefinite-lived intangible asset to determine whether it is necessary to perform the quantitative impairment test. If, based on this qualitative assessment, we were to believe we must perform the quantitative goodwill impairment test, we would determine the fair value of our indefinite-lived intangible asset using generally accepted valuation techniques including the relief-from-royalty method. This method is a form of the income approach in which value is equated to a series of cash flows and discounted at a risk-adjusted rate. It is based on a hypothetical royalty, calculated as a percentage of forecasted revenue, that we would otherwise be willing to pay to use the asset, assuming it were not already owned. This approach includes assumptions related to pricing and volume, as well as a royalty rate a hypothetical third party would be willing to pay for use of the asset. When making our royalty rate assumption, we consider rates paid in arms-length licensing transactions for assets comparable to our asset. We amortize the cost of intangible assets with finite useful lives over their respective estimated useful lives to their estimated residual value. As of December 31, 2019 , none of our finite useful lived intangible assets has an estimated residual value. We also review these assets for impairment whenever events or changes in circumstances indicate we may not be able to recover the asset’s carrying amount. The range of estimated useful lives and the amortization basis for our intangible assets, excluding goodwill, are generally as follows: Estimated Useful Life and Amortization Basis Certificates of need 10 to 30 years using straight-line basis Licenses 10 to 20 years using straight-line basis Noncompete agreements 1 to 18 years using straight-line basis Trade names: Encompass indefinite-lived asset All other 1 to 20 years using straight-line basis Internal-use software 3 to 7 years using straight-line basis Market access assets 20 years using accelerated basis We capitalize the costs of obtaining or developing internal-use software, including external direct costs of material and services and directly related payroll costs. Amortization begins when the internal-use software is ready for its intended use. Costs incurred during the preliminary project and post-implementation stages, as well as maintenance and training costs, are expensed as incurred. Our market access assets are valued using discounted cash flows under the income approach. The value of the market access assets is attributable to our ability to gain access to and penetrate an acquired facility’s historical market patient base. To determine this value, we first develop a debt-free net cash flow forecast under various patient volume scenarios. The debt-free net cash flow is then discounted back to present value using a discount factor, which includes an adjustment for company-specific risk. As noted in the above table, we amortize these assets over 20 years using an accelerated basis that reflects the pattern in which we believe the economic benefits of the market access will be consumed. |
Impairment of Long-Lived Assets and Other Intangible Assets | Impairment of Long-Lived Assets and Other Intangible Assets— We assess the recoverability of long-lived assets (excluding goodwill and our indefinite-lived asset) and identifiable acquired intangible assets with finite useful lives, whenever events or changes in circumstances indicate we may not be able to recover the asset’s carrying amount. We measure the recoverability of assets to be held and used by a comparison of the carrying amount of the asset to the expected net future cash flows to be generated by that asset, or, for identifiable intangibles with finite useful lives, by determining whether the amortization of the intangible asset balance over its remaining life can be recovered through undiscounted future cash flows. The amount of impairment of identifiable intangible assets with finite useful lives, if any, to be recognized is measured based on projected discounted future cash flows. We measure the amount of impairment of other long-lived assets (excluding goodwill) as the amount by which the carrying value of the asset exceeds the fair market value of the asset, which is generally determined based on projected discounted future cash flows or appraised values. We classify long-lived assets to be disposed of other than by sale as held and used until they are disposed. We report long-lived assets to be disposed of by sale as held for sale and recognize those assets in the balance sheet at the lower of carrying amount or fair value less cost to sell, and we cease depreciation. |
Investments in and Advances to Nonconsolidated Affiliates | Investments in and Advances to Nonconsolidated Affiliates— Investments in entities we do not control but in which we have the ability to exercise significant influence over the operating and financial policies of the investee are accounted for under the equity method. Equity method investments are recorded at original cost and adjusted periodically to recognize our proportionate share of the investees’ net income or losses after the date of investment, additional contributions made, dividends or distributions received, and impairment losses resulting from adjustments to net realizable value. We record equity method losses in excess of the carrying amount of an investment when we guarantee obligations or we are otherwise committed to provide further financial support to the affiliate. We use the cost method to account for equity investments for which the equity securities do not have readily determinable fair values and for which we do not have the ability to exercise significant influence. Under the cost method of accounting, private equity investments are carried at cost and are adjusted only for other-than-temporary declines in fair value, additional investments, or distributions deemed to be a return of capital. Management periodically assesses the recoverability of our equity method and cost method investments and equity method goodwill for impairment. We consider all available information, including the recoverability of the investment, the earnings and near-term prospects of the affiliate, factors related to the industry, conditions of the affiliate, and our ability, if any, to influence the management of the affiliate. We assess fair value based on valuation methodologies, as appropriate, including discounted cash flows, estimates of sales proceeds, and external appraisals, as appropriate. If an investment or equity method goodwill is considered to be impaired and the decline in value is other than temporary, we record an appropriate write-down. |
Investments in and Advances to Nonconsolidated Affiliates | Investments in and Advances to Nonconsolidated Affiliates— Investments in entities we do not control but in which we have the ability to exercise significant influence over the operating and financial policies of the investee are accounted for under the equity method. Equity method investments are recorded at original cost and adjusted periodically to recognize our proportionate share of the investees’ net income or losses after the date of investment, additional contributions made, dividends or distributions received, and impairment losses resulting from adjustments to net realizable value. We record equity method losses in excess of the carrying amount of an investment when we guarantee obligations or we are otherwise committed to provide further financial support to the affiliate. We use the cost method to account for equity investments for which the equity securities do not have readily determinable fair values and for which we do not have the ability to exercise significant influence. Under the cost method of accounting, private equity investments are carried at cost and are adjusted only for other-than-temporary declines in fair value, additional investments, or distributions deemed to be a return of capital. Management periodically assesses the recoverability of our equity method and cost method investments and equity method goodwill for impairment. We consider all available information, including the recoverability of the investment, the earnings and near-term prospects of the affiliate, factors related to the industry, conditions of the affiliate, and our ability, if any, to influence the management of the affiliate. We assess fair value based on valuation methodologies, as appropriate, including discounted cash flows, estimates of sales proceeds, and external appraisals, as appropriate. If an investment or equity method goodwill is considered to be impaired and the decline in value is other than temporary, we record an appropriate write-down. |
Financing Costs | Financing Costs— We amortize financing costs using the effective interest method over the expected life of the related debt. Excluding financing costs related to our revolving line of credit (which are included in Other long-term assets ), financing costs are presented as a direct deduction from the face amount of the financings. The related expense is included in Interest expense and amortization of debt discounts and fees in our consolidated statements of operations. We accrete discounts and amortize premiums using the effective interest method over the expected life of the related debt, and we report discounts or premiums as a direct deduction from, or addition to, the face amount of the financing. The related income or expense is included in Interest expense and amortization of debt discounts and fees in our consolidated statements of operations. |
Fair Value Measurements | Fair Value Measurements— Fair value is an exit price, representing the amount that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants. As such, fair value is a market-based measurement that should be determined based on assumptions market participants would use in pricing an asset or liability. The basis for these assumptions establishes a three-tier fair value hierarchy, which prioritizes the inputs used in measuring fair value as follows: • Level 1 – Observable inputs such as quoted prices in active markets; • Level 2 – Inputs, other than quoted prices in active markets, that are observable either directly or indirectly; and • Level 3 – Unobservable inputs in which there is little or no market data, which require the reporting entity to develop its own assumptions. Assets and liabilities measured at fair value are based on one or more of three valuation techniques. The three valuation techniques are as follows: • Market approach – Prices and other relevant information generated by market transactions involving identical or comparable assets or liabilities; • Cost approach – Amount that would be required to replace the service capacity of an asset (i.e., replacement cost); and • Income approach – Techniques to convert future cash flows to a single present amount based on market expectations (including present value techniques, option-pricing models, and lattice models). Our financial instruments consist mainly of cash and cash equivalents, restricted cash, restricted marketable securities, accounts receivable, accounts payable, letters of credit, and long-term debt. The carrying amounts of cash and cash equivalents, restricted cash, accounts receivable, and accounts payable approximate fair value because of the short-term maturity of these instruments. The fair value of our letters of credit is deemed to be the amount of payment guaranteed on our behalf by third-party financial institutions. We determine the fair value of our long-term debt using quoted market prices, when available, or discounted cash flows based on various factors, including maturity schedules, call features, and current market rates. On a recurring basis, we are required to measure our restricted marketable securities at fair value. The fair values of our restricted marketable securities are determined based on quoted market prices in active markets or quoted prices, dealer quotations, or alternative pricing sources supported by observable inputs in markets that are not considered to be active. On a nonrecurring basis, we are required to measure property and equipment, goodwill, other intangible assets, investments in nonconsolidated affiliates, and assets and liabilities of discontinued operations at fair value. Generally, assets are recorded at fair value on a nonrecurring basis as a result of impairment charges or similar adjustments made to the carrying value of the applicable assets. The fair value of our property and equipment is determined using discounted cash flows and significant unobservable inputs, unless there is an offer to purchase such assets, which could be the basis for determining fair value. The fair value of our intangible assets, excluding goodwill, is determined using discounted cash flows and significant unobservable inputs. The fair value of our investments in nonconsolidated affiliates is determined using quoted prices in private markets, discounted cash flows or earnings, or market multiples derived from a set of comparables. The fair value of our assets and liabilities of discontinued operations is determined using discounted cash flows and significant unobservable inputs unless there is an offer to purchase such assets and liabilities, which would be the basis for determining fair value. The fair value of our goodwill is determined using discounted projected operating results and cash flows, which involve significant unobservable inputs. |
Noncontrolling Interests in Consolidated Affiliates and Redeemable Noncontrolling Interests | Noncontrolling Interests in Consolidated Affiliates— The consolidated financial statements include all assets, liabilities, revenues, and expenses of less-than-100%-owned affiliates we control. Accordingly, we have recorded noncontrolling interests in the earnings and equity of such entities. We record adjustments to noncontrolling interests for the allocable portion of income or loss to which the noncontrolling interests holders are entitled based upon their portion of the subsidiaries they own. Distributions to holders of noncontrolling interests are adjusted to the respective noncontrolling interests holders’ balance. Redeemable Noncontrolling Interests— Certain of our joint venture agreements contain provisions that allow our partners to require us to purchase their interests in the joint venture at fair value at certain points in the future. Likewise, certain members of the home health and hospice management team hold similar put rights regarding their interests in our home health and hospice business, as discussed in Note 12, Redeemable Noncontrolling Interests . Because these noncontrolling interests provide for redemption features that are not solely within our control, we classify them as Redeemable noncontrolling interests outside of permanent equity in our consolidated balance sheets. At the end of each reporting period, we compare the carrying value of the Redeemable noncontrolling interests to their estimated redemption value. If the estimated redemption value is greater than the current carrying value, the carrying value is adjusted to the estimated redemption value, with the adjustments recorded through equity in the line item Capital in excess of par value . The fair value of the Redeemable noncontrolling interests related to our home health segment is determined using the product of a 12-month specified performance measure and a specified median market price multiple based on a basket of public health companies and publicly disclosed home health acquisitions with a value of $400 million or more. The fair value of our Redeemable noncontrolling interests in our joint venture hospitals is determined primarily using the income approach. The income approach includes the use of the hospital’s projected operating results and cash flows discounted using a rate that reflects market participant assumptions for the applicable hospitals, or Level 3 inputs. The projected operating results use management’s best estimates of economic and market conditions over the forecasted periods including assumptions for pricing and volume, operating expenses, and capital expenditures. |
Share-Based Payments | Share-Based Payments— Encompass Health has shareholder-approved stock-based compensation plans that provide for the granting of stock-based compensation to certain employees and directors. All share-based payments to employees, excluding stock appreciation rights (“SARs”), are recognized in the financial statements based on their estimated grant-date fair value and amortized on a straight-line basis over the applicable requisite service period. Share-based payments to employees in the form of SARs are recognized in the financial statements based on their current fair value and expensed ratably over the applicable service period. |
Litigation Reserves | Litigation Reserves— We accrue for loss contingencies associated with outstanding litigation for which management has determined it is probable a loss contingency exists and the amount of loss can be reasonably estimated. If the accrued amount associated with a loss contingency is greater than $5.0 million , we also accrue estimated future legal fees associated with the loss contingency. This requires management to estimate the amount of legal fees that will be incurred in the defense of the litigation. These estimates are based on our expectations of the scope, length to complete, and complexity of the claims. In the future, additional adjustments may be recorded as the scope, length to complete, or complexity of outstanding litigation changes. |
Advertising Costs | Advertising Costs— We expense costs of print, radio, television, and other advertisements as incurred. Advertising expenses, primarily included in Other operating expenses within the accompanying consolidated statements of operations, were $6.1 million , $6.7 million , and $6.3 million in each of the years ended December 31, 2019 , 2018 , and 2017 , respectively. |
Income Taxes | Income Taxes— We provide for income taxes using the asset and liability method . This approach recognizes the amount of income taxes payable or refundable for the current year, as well as deferred tax assets and liabilities for the future tax consequence of events recognized in the consolidated financial statements and income tax returns. Deferred income tax assets and liabilities are adjusted to recognize the effects of changes in tax laws or enacted tax rates. A valuation allowance is required when it is more likely than not some portion of the deferred tax assets will not be realized. Realization is dependent on generating sufficient future taxable income in the applicable tax jurisdiction. On a quarterly basis, we assess the likelihood of realization of our deferred tax assets considering all available evidence, both positive and negative. Our most recent operating performance, the scheduled reversal of temporary differences, our forecast of taxable income in future periods by jurisdiction, our ability to sustain a core level of earnings, and the availability of prudent tax planning strategies are important considerations in our assessment. We evaluate our tax positions and establish assets and liabilities in accordance with the applicable accounting guidance on uncertainty in income taxes. We review these tax uncertainties in light of changing facts and circumstances, such as the progress of tax audits, and adjust them accordingly. We have used the with-and-without method to determine when we will recognize excess tax benefits from stock-based compensation. Encompass Health and its corporate subsidiaries file a consolidated federal income tax return. Some subsidiaries consolidated for financial reporting purposes are not part of the consolidated group for federal income tax purposes and file separate federal income tax returns. State income tax returns are filed on a separate, combined, or consolidated basis in accordance with relevant state laws and regulations. Partnerships, limited liability companies, and other pass-through entities we consolidate or account for using the equity method of accounting file separate federal and state income tax returns. We include the allocable portion of each pass-through entity’s income or loss in our federal income tax return. We allocate the remaining income or loss of each pass-through entity to the other partners or members who are responsible for their portion of the taxes. |
Assets and Liabilities in and Results of Discontinued Operations | Assets and Liabilities in and Results of Discontinued Operations— Effective January 1, 2015, in connection with a new standard issued by the FASB, we changed our criteria for determining which disposals are presented as discontinued operations. Historically, any component that had been disposed of or was classified as held for sale qualified for discontinued operations reporting unless there was significant continuing involvement with the disposed component or continuing cash flows. In contrast, we now report the disposal of the component, or group of components, as discontinued operations only when it represents a strategic shift that has, or will have, a major effect on our operations and financial results. As a result, the sale or disposal of a single Encompass Health facility or location no longer qualifies as a discontinued operation. This accounting change was made prospectively. No new components were recognized as discontinued operations since this guidance became effective. In the period a component of an entity has been disposed of or classified as held for sale, we reclassify the results of operations for current and prior periods into a single caption titled (Loss) income from discontinued operations, net of tax . In addition, we classify the assets and liabilities of those components as current and noncurrent assets and liabilities within Prepaid expenses and other current assets , Other long-term assets , Other current liabilities , and Other long-term liabilities in our consolidated balance sheets. We also classify cash flows related to discontinued operations as one line item within each category of cash flows in our consolidated statements of cash flows. |
Earnings per Common Share | Earnings per Common Share— The calculation of earnings per common share is based on the weighted-average number of our common shares outstanding during the applicable period. The calculation for diluted earnings per common share recognizes the effect of all potential dilutive common shares, including warrants, that were outstanding during the respective periods, unless their impact would be antidilutive. The calculation of earnings per common share also considers the effect of participating securities. Stock-based compensation awards that contain nonforfeitable rights to dividends and dividend equivalents, such as our restricted stock units, are considered participating securities and are included in the computation of earnings per common share pursuant to the two-class method. In applying the two-class method, earnings are allocated to both common stock shares and participating securities based on their respective weighted-average shares outstanding for the period. We used the if-converted method to include our convertible senior subordinated notes in our computation of 2017 diluted earnings per share. All other potential dilutive shares, including warrants, are included in our weighted-average diluted share count using the treasury stock method. |
Treasury Stock | Treasury Stock— Shares of common stock repurchased by us are recorded at cost as treasury stock. When shares are reissued, we use an average cost method to determine cost. The difference between the cost of the shares and the re-issuance price is added to or deducted from Capital in excess of par value . We account for the retirement of treasury stock as a reduction of retained earnings. However, due to our Accumulated deficit , the retirement of treasury stock is currently recorded as a reduction of Capital in excess of par value . |
Comprehensive Income | Comprehensive Income— Comprehensive income is comprised of Net income and changes in unrealized gains or losses on available-for-sale securities and is included in the consolidated statements of comprehensive income. |
Recent Accounting Pronouncements and Recent Accounting Pronouncements Not Yet Adopted | Recent Adopted Accounting Pronouncements — In February 2016, the FASB issued ASU 2016-02, “Leases (Topic 842),” and has subsequently issued supplemental and/or clarifying ASUs (collectively “ASC 842”), in order to increase transparency and comparability by recognizing lease assets and liabilities on the balance sheet and disclosing key information about leasing arrangements. We adopted ASC 842 using the modified retrospective approach and applied the transition provisions with an effective date as of January 1, 2019 for leases that existed on that date. Prior period results continue to be presented under ASC 840 based on the accounting originally in effect for such periods. ASC 842 provides optional practical expedients in transition. We elected the ‘package of practical expedients,’ which permits us to not reassess under ASC 842 our prior conclusions about lease identification, lease classification and initial direct costs, and the practical expedient to not reassess certain land easements. We did not elect the use-of-hindsight practical expedient during the transition to ASC 842. The adoption of ASC 842 resulted in the addition of approximately $349 million in assets and $347 million in liabilities to our consolidated balance sheet as of January 1, 2019, with the remaining $2 million being recorded as an adjustment to Capital in excess of par value . The adoption of ASC 842 also resulted in increased disclosure, including qualitative and quantitative disclosures about the nature, amount, timing and uncertainty of cash flows arising from leases. See the “Leases” section of this note and Note 7, Leases , and Note 10, Long-term Debt , for additional information about our leases. Recent Accounting Pronouncements Not Yet Adopted— In June 2016, the FASB issued ASU 2016-13, “Financial Instruments – Credit Losses (Topic 326),” which provides guidance for accounting for credit losses on financial instruments. The new guidance introduces an approach based on expected losses to estimate credit losses on certain types of financial instruments and modifies the impairment model for available-for-sale debt securities. The new guidance is effective for us beginning January 1, 2020, including interim periods within that reporting period. The adoption of this guidance will result in an immaterial change to our consolidated financial statements. In August 2018, the FASB issued ASU 2018-15, “Intangibles—Goodwill and Other—Internal-Use Software (Subtopic 350-40): Customer’s Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That Is a Service Contract.” The update helps entities evaluate the accounting for fees paid by a customer in a cloud computing arrangement (hosting arrangement), by providing guidance in determining when the arrangement includes a software license. It requires entities to account for such costs consistent with the guidance on capitalizing costs associated with developing or obtaining internal-use software. The new guidance is effective for us beginning January 1, 2020, including interim periods within that reporting period. We do not expect the adoption of this guidance to have a material impact to our consolidated financial statements. In December 2019, the FASB issues ASU 2019-12, “Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes.” The standard removes certain exceptions to the general principles of ASC 740 and simplifies other areas such as accounting for outside basis differences of equity method investments. Either prospective or retrospective transition of this standard is dependent upon the specific amendments. The new guidance is effective for us beginning January 1, 2021, including interim periods within that reporting period. Early adoption is permitted. We continue to review the requirements of this standard and any potential impact it may have on our consolidated financial statements. We do not believe any other recently issued, but not yet effective, accounting standards will have a material effect on our consolidated financial position, results of operations, or cash flows. |
Summary of Significant Accoun_3
Summary of Significant Accounting Policies (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Accounting Policies [Abstract] | |
Concentration of Net Operating Revenues by Payor | Our Net operating revenues disaggregated by payor source and segment are as follows (in millions): Inpatient Rehabilitation Home Health and Hospice Consolidated Year Ended December 31, Year Ended December 31, Year Ended December 31, 2019 2018 2017 2019 2018 2017 2019 2018 2017 Medicare $ 2,537.3 $ 2,451.7 $ 2,313.6 $ 920.0 $ 794.5 $ 662.9 $ 3,457.3 $ 3,246.2 $ 2,976.5 Medicare Advantage 375.5 306.5 261.0 111.9 88.6 74.8 487.4 395.1 335.8 Managed care 342.7 343.3 335.6 39.1 33.2 29.1 381.8 376.5 364.7 Medicaid 110.3 101.3 93.2 18.4 11.6 4.3 128.7 112.9 97.5 Other third-party payors 43.4 49.0 49.9 — — — 43.4 49.0 49.9 Workers’ compensation 29.2 27.4 27.5 1.0 1.5 0.1 30.2 28.9 27.6 Patients 23.3 18.7 18.4 0.6 0.8 0.7 23.9 19.5 19.1 Other income 51.3 48.3 42.1 1.0 0.9 0.7 52.3 49.2 42.8 Total $ 3,513.0 $ 3,346.2 $ 3,141.3 $ 1,092.0 $ 931.1 $ 772.6 $ 4,605.0 $ 4,277.3 $ 3,913.9 |
Concentration of Net Operating Revenues and Net Patient Service Accounts Receivable by Payor and Payor Class | The concentration of patient service accounts receivable by payor class, as a percentage of total patient service accounts receivable, is as follows: As of December 31, 2019 2018 Medicare 72.1 % 73.2 % Managed care and other discount plans, including Medicare Advantage 20.1 % 19.3 % Medicaid 3.1 % 2.8 % Other third-party payors 2.6 % 2.7 % Workers' compensation 1.2 % 1.1 % Patients 0.9 % 0.9 % Total 100.0 % 100.0 % |
Useful Lives of Property and Equipment | Useful lives are generally as follows: Years Buildings 10 to 30 Leasehold improvements 2 to 15 Vehicles 5 Furniture, fixtures, and equipment 2 to 10 Property and equipment consists of the following (in millions): As of December 31, 2019 2018 Land $ 169.6 $ 142.4 Buildings 2,084.8 1,875.2 Leasehold improvements 192.6 147.5 Vehicles 31.2 24.6 Furniture, fixtures, and equipment 505.1 441.6 2,983.3 2,631.3 Less: Accumulated depreciation and amortization (1,211.8 ) (1,147.0 ) 1,771.5 1,484.3 Construction in progress 187.8 150.5 Property and equipment, net $ 1,959.3 $ 1,634.8 |
Estimated Useful Lives and Amortization Basis of Other Finite-lived Intangible Assets | The range of estimated useful lives and the amortization basis for our intangible assets, excluding goodwill, are generally as follows: Estimated Useful Life and Amortization Basis Certificates of need 10 to 30 years using straight-line basis Licenses 10 to 20 years using straight-line basis Noncompete agreements 1 to 18 years using straight-line basis Trade names: Encompass indefinite-lived asset All other 1 to 20 years using straight-line basis Internal-use software 3 to 7 years using straight-line basis Market access assets 20 years using accelerated basis The following table provides information regarding our other intangible assets (in millions): Gross Carrying Amount Accumulated Amortization Net Certificates of need: 2019 $ 197.2 $ (40.4 ) $ 156.8 2018 148.3 (28.2 ) 120.1 Licenses: 2019 $ 187.3 $ (94.1 ) $ 93.2 2018 169.1 (82.2 ) 86.9 Noncompete agreements: 2019 $ 74.2 $ (62.3 ) $ 11.9 2018 65.6 (58.6 ) 7.0 Trade name - Encompass: 2019 $ 135.2 $ — $ 135.2 2018 135.2 — 135.2 Trade names - all other: 2019 $ 41.6 $ (22.4 ) $ 19.2 2018 38.9 (19.4 ) 19.5 Internal-use software: 2019 $ 173.8 $ (116.0 ) $ 57.8 2018 161.3 (89.3 ) 72.0 Market access assets: 2019 $ 13.2 $ (11.0 ) $ 2.2 2018 13.2 (10.5 ) 2.7 Total intangible assets: 2019 $ 822.5 $ (346.2 ) $ 476.3 2018 731.6 (288.2 ) 443.4 |
Estimated Basis of Other Indefinite-lived Intangible Assets | The range of estimated useful lives and the amortization basis for our intangible assets, excluding goodwill, are generally as follows: Estimated Useful Life and Amortization Basis Certificates of need 10 to 30 years using straight-line basis Licenses 10 to 20 years using straight-line basis Noncompete agreements 1 to 18 years using straight-line basis Trade names: Encompass indefinite-lived asset All other 1 to 20 years using straight-line basis Internal-use software 3 to 7 years using straight-line basis Market access assets 20 years using accelerated basis |
Business Combinations (Tables)
Business Combinations (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Business Combinations [Abstract] | |
Schedule of Assets Acquired and Liabilities Assumed at the Acquisition Date | The fair value of the assets acquired and liabilities assumed at the acquisition date were as follows (in millions): Property and equipment $ 0.1 Identifiable intangible assets: Noncompete agreements (useful lives of 2 to 3 years) 1.4 Trade names (useful lives of 20 years) 2.3 Certificates of need (useful lives of 20 years) 12.5 Goodwill 23.2 Total assets acquired 39.5 Total liabilities assumed (0.2 ) Net assets acquired $ 39.3 The fair value of the assets acquired at the acquisition date were as follows (in millions): Property and equipment $ 0.1 Identifiable intangible assets: Noncompete agreements (useful lives of 2 to 3 years) 0.6 Trade name (useful life of 20 years) 0.5 Certificate of need (useful life of 20 years) 9.8 Goodwill 24.0 Total assets acquired $ 35.0 The fair value of the assets acquired and liabilities assumed at the acquisition date were as follows (in millions): Accounts receivable $ 10.2 Prepaid expenses and other current assets 1.7 Property and equipment, net 0.7 Identifiable intangible assets: Noncompete agreements (useful lives of 5 years) 1.0 Trade name (useful life of 6 months) 1.0 Certificates of need (useful lives of 10 years) 34.3 Licenses (useful lives of 10 years) 14.6 Internal-use software (useful lives of 3 years) 0.1 Goodwill 163.9 Other long-term assets 5.0 Total assets acquired 232.5 Liabilities assumed: Current portion of long-term debt 0.3 Accounts payable 1.2 Accrued payroll 8.1 Other current liabilities 2.0 Long-term operating lease liabilities 3.1 Total liabilities assumed 14.7 Net assets acquired $ 217.8 The fair value of the assets acquired and liabilities assumed at the acquisition date were as follows (in millions): Total current assets $ 0.1 Identifiable intangible asset: Noncompete agreements (useful lives of 5 years) 0.8 Trade name (useful life of 1 year) 0.1 Certificates of need (useful lives of 10 years) 1.8 Licenses (useful lives of 10 years) 4.0 Goodwill 21.4 Total assets acquired 28.2 Total liabilities assumed (0.3 ) Net assets acquired $ 27.9 The fair value of the assets acquired and liabilities assumed at the acquisition date were as follows (in millions): Identifiable intangible assets: Noncompete agreements (useful lives of 2 years) $ 0.1 Trade name (useful life of 20 years) 0.4 Goodwill 4.8 Total assets acquired 5.3 Total liabilities assumed 0.2 Net assets acquired $ 5.1 The fair value of the assets acquired and liabilities assumed at the acquisition date were as follows (in millions): Total current assets $ 0.1 Identifiable intangible asset: Noncompete agreements (useful lives of 5 years) 0.2 Certificates of need (useful lives of 10 years) 2.5 Licenses (useful lives of 10 years) 1.5 Goodwill 8.9 Total assets acquired 13.2 Total liabilities assumed (0.1 ) Net assets acquired $ 13.1 The fair value of the assets acquired and liabilities assumed at the acquisition date were as follows (in millions): Operating lease right-of-use assets $ 0.2 Identifiable intangible assets: Noncompete agreements (useful lives of 5 years) 0.2 Certificates of need (useful lives of 10 years) 2.0 License (useful life of 10 years) 0.8 Goodwill 10.8 Total assets acquired 14.0 Liabilities assumed: Current operating lease liabilities 0.1 Accrued payroll 0.1 Long-term lease liabilities 0.1 Total liabilities assumed 0.3 Net assets acquired $ 13.7 The fair value of the assets acquired and liabilities assumed at the acquisition date were as follows (in millions) Cash and cash equivalents $ 1.3 Prepaid expenses and other current assets 0.3 Property and equipment, net 0.6 Identifiable intangible assets: Noncompete agreements (useful lives of 5 years) 0.5 Trade name (useful life of 1 year) 1.4 Certificates of need (useful lives of 10 years) 16.6 Licenses (useful lives of 10 years) 21.6 Goodwill 96.1 Total assets acquired 138.4 Liabilities assumed: Accounts payable 1.7 Accrued payroll 4.0 Total liabilities assumed 5.7 Net assets acquired $ 132.7 |
Schedule of Noncash or Part Noncash Acquisitions | Information regarding the net cash paid for the inpatient rehabilitation acquisitions during 2019 is as follows (in millions): Fair value of assets acquired $ 0.5 Goodwill 4.8 Fair value of liabilities assumed (0.2 ) Fair value of noncontrolling interest owned by joint venture partner (5.1 ) Net cash paid for acquisitions $ — Information regarding the net cash paid for the other home health and hospice acquisitions during each period presented is as follows (in millions): Fair value of assets acquired $ 3.2 Goodwill 10.8 Fair value of liabilities assumed (0.3 ) Net cash paid for acquisitions $ 13.7 Information regarding the net cash paid for Camellia is as follows (in millions): Fair value of assets acquired, net of $1.3 million of cash acquired $ 41.0 Goodwill 96.1 Fair value of liabilities assumed (5.7 ) Net cash paid for acquisition $ 131.4 Information regarding the net cash paid for Alacare is as follows (in millions): Fair value of assets acquired $ 68.6 Goodwill 163.9 Fair value of liabilities assumed (14.7 ) Net cash paid for acquisition $ 217.8 Information regarding the net cash paid for all inpatient rehabilitation acquisitions during 2017 is as follows (in millions): Fair value of assets acquired $ 11.0 Goodwill 24.0 Fair value of noncontrolling interest owned by joint venture partner (24.1 ) Net cash paid for acquisitions $ 10.9 Information regarding the net cash paid for the home health acquisitions during 2018 is as follows (in millions): Fair value of assets acquired $ 4.3 Goodwill 8.9 Fair value of liabilities assumed (0.1 ) Fair value of noncontrolling interest owned by joint venture partner (0.6 ) Net cash paid for acquisitions $ 12.5 Information regarding the net cash paid for the inpatient rehabilitation acquisitions during 2018 is as follows (in millions): Fair value of assets acquired $ 16.3 Goodwill 23.2 Fair value of liabilities assumed (0.2 ) Fair value of noncontrolling interest owned by joint venture partner (39.3 ) Net cash paid for acquisitions $ — Information regarding the net cash paid for home health and hospice acquisitions during 2017 is as follows (in millions): Fair value of assets acquired $ 6.8 Goodwill 21.4 Fair value of liabilities assumed (0.3 ) Net cash paid for acquisitions $ 27.9 |
Summary of Actual and Pro Forma Results of Operations for Acquisitions | The following table summarizes the results of operations of the above mentioned acquisitions from their respective dates of acquisition included in our consolidated results of operations and the unaudited pro forma results of operations of the combined entity had the date of the acquisitions been January 1, 2018 (in millions): Net Operating Revenues Net (Loss) Income Attributable to Encompass Health Acquired entities only: Actual from acquisition date to December 31, 2019 Inpatient Rehabilitation $ 4.4 $ (1.3 ) Alacare 58.5 1.6 Home Health and Hospice 6.5 (1.5 ) Combined entity: Supplemental pro forma from 01/01/2019-12/31/2019 (unaudited) 4,674.6 364.3 Combined entity: Supplemental pro forma from 01/01/2018-12/31/2018 (unaudited) 4,415.9 301.8 The following table summarizes the results of operations of the above mentioned inpatient rehabilitation hospitals and home health and hospice agencies from their respective dates of acquisition included in our consolidated results of operations and the unaudited pro forma results of operations of the combined entity had the date of the acquisitions been January 1, 2016 (in millions): Net Operating Revenues Net (Loss) Income Attributable to Encompass Health Acquired entities only: Actual from acquisition date to December 31, 2017 $ 32.9 $ (6.3 ) Combined entity: Supplemental pro forma from 01/01/2017-12/31/2017 (unaudited) 3,996.1 260.3 Combined entity: Supplemental pro forma from 01/01/2016-12/31/2016 (unaudited) 3,771.5 254.8 The following table summarizes the results of operations of the above mentioned acquisitions from their respective dates of acquisition included in our consolidated results of operations and the unaudited pro forma results of operations of the combined entity had the date of the acquisitions been January 1, 2017 (in millions): Net Operating Revenues Net (Loss) Income Attributable to Encompass Health Acquired entities only: Actual from acquisition date to December 31, 2018 Inpatient Rehabilitation $ 9.1 $ (1.6 ) Camellia 50.0 (0.9 ) All Other Home Health and Hospice 3.5 (0.3 ) Combined entity: Supplemental pro forma from 01/01/2018-12/31/2018 (unaudited) 4,337.4 300.0 Combined entity: Supplemental pro forma from 01/01/2017-12/31/2017 (unaudited) 4,039.9 289.0 |
Cash and Marketable Securities
Cash and Marketable Securities (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Cash and Cash Equivalents [Abstract] | |
Schedule of Investment Components | The components of our investments as of December 31, 2018 are as follows (in millions): Cash & Cash Equivalents Restricted Cash Restricted Marketable Securities Total Cash $ 69.2 $ 64.3 $ — $ 133.5 Equity securities — — 55.6 55.6 Debt securities — — 6.4 6.4 Total $ 69.2 $ 64.3 $ 62.0 $ 195.5 The components of our investments as of December 31, 2019 are as follows (in millions): Cash & Cash Equivalents Restricted Cash Restricted Marketable Securities Total Cash $ 94.8 $ 64.8 $ — $ 159.6 Equity securities — — 63.5 63.5 Debt securities — — 12.6 12.6 Total $ 94.8 $ 64.8 $ 76.1 $ 235.7 |
Schedule of Restricted Cash | As of December 31, 2019 and 2018 , Restricted cash consisted of the following (in millions): As of December 31, 2019 2018 Current: Affiliate cash $ 16.0 $ 16.4 Self-insured captive funds 41.4 42.6 57.4 59.0 Noncurrent: Self-insured captive funds 7.4 5.3 Total restricted cash $ 64.8 $ 64.3 |
Available-for-sale Securities Cost to Fair Value Reconciliation | A summary of our available-for-sale marketable securities as of December 31, 2019 is as follows (in millions): Cost Gross Unrealized Gains Gross Unrealized Losses Fair Value Debt securities $ 12.6 $ — $ — $ 12.6 A summary of our available-for-sale marketable securities as of December 31, 2018 is as follows (in millions): Cost Gross Unrealized Gains Gross Unrealized Losses Fair Value Debt securities $ 6.4 $ — $ — $ 6.4 |
Investment Information Related to Restricted Marketable Securities | Investing information related to our available-for-sale marketable securities is as follows (in millions): For the Year Ended December 31, 2019 2018 2017 Proceeds from sales and maturities of available-for-sale marketable securities $ 6.4 $ — $ 4.0 |
Debt Securities, Held-to-maturity | Scheduled maturities of investments in debt securities at December 31, 2019 were as follows (in millions): Cost Fair Value Due in one year or less $ 12.6 $ 12.6 Due after one year through five years — — Due after five years through ten years — — Due after ten years — — Total $ 12.6 $ 12.6 |
Variable Interest Entities (Tab
Variable Interest Entities (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
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 consolidated balance sheet, are as follows (in millions): December 31, 2019 December 31, 2018 Assets Current assets: Cash and cash equivalents $ 0.2 $ 0.3 Accounts receivable 29.3 31.0 Other current assets 6.4 4.9 Total current assets 35.9 36.2 Property and equipment, net 122.6 111.5 Operating lease right-of-use assets 6.0 — Goodwill 15.9 15.9 Intangible assets, net 3.3 4.3 Deferred income tax assets 0.7 0.6 Other long-term assets 30.6 29.0 Total assets $ 215.0 $ 197.5 Liabilities Current liabilities: Current portion of long-term debt $ 0.8 $ 0.6 Current operating lease liabilities 1.4 — Accounts payable 6.7 5.2 Accrued payroll 7.7 7.0 Other current liabilities 9.3 38.0 Total current liabilities 25.9 50.8 Long-term debt, net of current portion 10.5 — Long-term operating lease liabilities 4.7 — Total liabilities $ 41.1 $ 50.8 |
Accounts Receivable (Tables)
Accounts Receivable (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Receivables [Abstract] | |
Schedule of Accounts Receivable | Accounts receivable consists of the following (in millions): As of December 31, 2019 2018 Current: Patient accounts receivable $ 498.7 $ 459.9 Other accounts receivable 7.4 7.8 506.1 467.7 Noncurrent patient accounts receivable 152.1 155.5 Accounts receivable $ 658.2 $ 623.2 |
Property and Equipment (Tables)
Property and Equipment (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Property, Plant and Equipment [Abstract] | |
Components of Property and Equipment | Useful lives are generally as follows: Years Buildings 10 to 30 Leasehold improvements 2 to 15 Vehicles 5 Furniture, fixtures, and equipment 2 to 10 Property and equipment consists of the following (in millions): As of December 31, 2019 2018 Land $ 169.6 $ 142.4 Buildings 2,084.8 1,875.2 Leasehold improvements 192.6 147.5 Vehicles 31.2 24.6 Furniture, fixtures, and equipment 505.1 441.6 2,983.3 2,631.3 Less: Accumulated depreciation and amortization (1,211.8 ) (1,147.0 ) 1,771.5 1,484.3 Construction in progress 187.8 150.5 Property and equipment, net $ 1,959.3 $ 1,634.8 |
Depreciation Expense, Interest Capitalized, Under Operating Leases | The amount of depreciation expense and interest capitalized is as follows (in millions): For the Year Ended December 31, 2019 2018 2017 Depreciation expense $ 130.0 $ 124.2 $ 111.8 Interest capitalized $ 8.3 $ 6.0 $ 3.7 |
Leases (Tables)
Leases (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Leases [Abstract] | |
Lease, Cost | The components of lease costs are as follows (in millions): For the Year Ended December 31, 2019 Operating lease cost $ 72.9 Finance lease cost: Amortization of right-of-use assets 30.3 Interest on lease liabilities 29.5 Total finance lease cost 59.8 Variable lease cost 1.5 Sublease income (3.2 ) Total lease cost $ 131.0 |
Schedule of Supplemental Balance Sheet Information Related to Leases | Supplemental consolidated balance sheet information related to leases is as follows (in millions): Classification As of December 31, 2019 Assets Operating lease Operating lease right-of-use assets $ 276.5 Finance lease (1) Property and equipment, net 327.0 Total leased assets $ 603.5 Liabilities Current liabilities: Operating lease Current operating lease liabilities $ 40.4 Finance lease Current portion of long-term debt 21.0 Noncurrent liabilities: Operating lease Long-term operating lease liabilities 243.8 Finance lease Long-term debt, net of current portion 363.1 Total leased liabilities $ 668.3 (1) Finance lease assets are recorded net of accumulated amortization of $99.6 million as of December 31, 2019 . |
Schedule of Weighted Average Remaining Lease Term and Discount Rate | As of December 31, 2019 Weighted Average Remaining Lease Term Operating lease 9.1 years Finance lease 13.4 years Weighted Average Discount Rate Operating lease 6.2 % Finance lease 7.9 % |
Operating Lease, Liability, Maturity | Maturities of lease liabilities as of December 31, 2019 are as follows (in millions): Year Ending December 31, Operating Leases Finance Leases 2020 $ 57.5 $ 50.4 2021 53.2 48.9 2022 45.4 45.5 2023 40.7 45.3 2024 34.4 44.7 2025 and thereafter 153.0 405.7 Total lease payments 384.2 640.5 Less: Interest portion (100.0 ) (256.4 ) Total lease liabilities $ 284.2 $ 384.1 |
Finance Lease, Liability, Maturity | Maturities of lease liabilities as of December 31, 2019 are as follows (in millions): Year Ending December 31, Operating Leases Finance Leases 2020 $ 57.5 $ 50.4 2021 53.2 48.9 2022 45.4 45.5 2023 40.7 45.3 2024 34.4 44.7 2025 and thereafter 153.0 405.7 Total lease payments 384.2 640.5 Less: Interest portion (100.0 ) (256.4 ) Total lease liabilities $ 284.2 $ 384.1 |
Supplemental Cash Flow Information | Supplemental cash flow information related to our leases is as follows (in millions): For the Year Ended December 31, 2019 Cash paid for amounts included in the measurement of lease liabilities: Operating cash flows from operating leases $ 70.4 Operating cash flows from finance leases 30.0 Financing cash flows from finance leases 19.5 Right-of-use assets obtained in exchange for lease obligations: Operating leases $ 43.8 Finance leases 34.2 |
Fully Depreciated Assets and Assets Under Capital Lease Obligations | Information related to assets under capital lease obligations is as follows (in millions): As of December 31, 2018 Assets under capital lease obligations: Buildings $ 329.6 Vehicles 21.1 Equipment 0.3 351.0 Less: Accumulated amortization (126.9 ) Assets under capital lease obligations, net $ 224.1 |
Amortization Expense Relating to Assets Under Capital Lease Obligations, Rent Expense Under Operating Leases | The amount of amortization expense relating to assets under capital lease obligations and rent expense under operating leases is as follows (in millions): For the Year Ended December 31, 2018 2017 Amortization expense $ 24.1 $ 22.7 Rent expense: Minimum rent payments $ 69.8 $ 66.5 Contingent and other rents 24.9 24.1 Other 9.1 8.9 Total rent expense $ 103.8 $ 99.5 |
Schedule of Future Minimum Rental Payments for Operating Leases | Future minimum lease payments at December 31, 2018, for those leases having an initial or remaining noncancelable lease term in excess of one year, are as follows (in millions): Year Ending December 31, Operating Leases Capital Lease Obligations 2019 $ 71.4 $ 36.2 2020 65.8 32.3 2021 54.3 30.3 2022 41.0 28.7 2023 35.3 28.0 2024 and thereafter 148.2 299.7 $ 416.0 455.2 Less: Interest portion (191.4 ) Obligations under capital leases $ 263.8 |
Goodwill and Other Intangible_2
Goodwill and Other Intangible Assets (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of Changes in the Carrying Amount of Goodwill | The following table shows changes in the carrying amount of Goodwill for the years ended December 31, 2019 , 2018 , and 2017 (in millions): Inpatient Rehabilitation Home Health and Hospice Consolidated Goodwill as of December 31, 2016 $ 1,142.0 $ 785.2 $ 1,927.2 Acquisitions 24.0 21.4 45.4 Goodwill as of December 31, 2017 1,166.0 806.6 1,972.6 Acquisitions 23.2 105.0 128.2 Goodwill as of December 31, 2018 1,189.2 911.6 2,100.8 Acquisitions 4.8 174.7 179.5 Consolidation of joint venture formerly accounted for under the equity method of accounting 24.9 — 24.9 Goodwill as of December 31, 2019 $ 1,218.9 $ 1,086.3 $ 2,305.2 |
Schedule of Intangible Assets by Major Class | The range of estimated useful lives and the amortization basis for our intangible assets, excluding goodwill, are generally as follows: Estimated Useful Life and Amortization Basis Certificates of need 10 to 30 years using straight-line basis Licenses 10 to 20 years using straight-line basis Noncompete agreements 1 to 18 years using straight-line basis Trade names: Encompass indefinite-lived asset All other 1 to 20 years using straight-line basis Internal-use software 3 to 7 years using straight-line basis Market access assets 20 years using accelerated basis The following table provides information regarding our other intangible assets (in millions): Gross Carrying Amount Accumulated Amortization Net Certificates of need: 2019 $ 197.2 $ (40.4 ) $ 156.8 2018 148.3 (28.2 ) 120.1 Licenses: 2019 $ 187.3 $ (94.1 ) $ 93.2 2018 169.1 (82.2 ) 86.9 Noncompete agreements: 2019 $ 74.2 $ (62.3 ) $ 11.9 2018 65.6 (58.6 ) 7.0 Trade name - Encompass: 2019 $ 135.2 $ — $ 135.2 2018 135.2 — 135.2 Trade names - all other: 2019 $ 41.6 $ (22.4 ) $ 19.2 2018 38.9 (19.4 ) 19.5 Internal-use software: 2019 $ 173.8 $ (116.0 ) $ 57.8 2018 161.3 (89.3 ) 72.0 Market access assets: 2019 $ 13.2 $ (11.0 ) $ 2.2 2018 13.2 (10.5 ) 2.7 Total intangible assets: 2019 $ 822.5 $ (346.2 ) $ 476.3 2018 731.6 (288.2 ) 443.4 |
Schedule of Amortization Expense, Intangible Assets | Amortization expense for other intangible assets is as follows (in millions): For the Year Ended December 31, 2019 2018 2017 Amortization expense $ 58.4 $ 51.4 $ 49.3 |
Schedule of Future Estimated Amortization Expense, Intangible Assets | Total estimated amortization expense for our other intangible assets for the next five years is as follows (in millions): Year Ending December 31, Estimated Amortization Expense 2020 $ 55.9 2021 46.2 2022 38.2 2023 33.9 2024 31.0 |
Investments in and Advances t_2
Investments in and Advances to Nonconsolidated Affiliates (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Investments in and Advances to Affiliates, Schedule of Investments [Abstract] | |
Schedule of Aggregate Equity and Cost Method Investments | Our investments, which are included in Other long-term assets in our consolidated balance sheets, consist of the following (in millions): As of December 31, 2019 2018 Equity method investments: Capital contributions $ 0.9 $ 0.9 Cumulative share of income 68.1 114.0 Cumulative share of distributions (63.6 ) (102.7 ) 5.4 12.2 Cost method investments: Capital contributions, net of distributions and impairments 2.0 — Total investments in and advances to nonconsolidated affiliates $ 7.4 $ 12.2 |
Schedule of Combined Assets, Liabilities, and Equity of Equity Method Affiliates | The following summarizes the combined assets, liabilities, and equity and the combined results of operations of our equity method affiliates (on a 100% basis, in millions): As of December 31, 2019 2018 Assets— Current $ 4.2 $ 9.9 Noncurrent 9.3 17.8 Total assets $ 13.5 $ 27.7 Liabilities and equity— Current liabilities $ 0.5 $ 1.4 Noncurrent liabilities 0.3 0.1 Partners’ capital and shareholders’ equity— Encompass Health 4.9 12.2 Outside partners 7.8 14.0 Total liabilities and equity $ 13.5 $ 27.7 Condensed statements of operations (in millions): For the Year Ended December 31, 2019 2018 2017 Net operating revenues $ 32.6 $ 42.6 $ 40.9 Operating expenses (19.1 ) (25.6 ) (24.1 ) Income from continuing operations, net of tax 13.4 17.1 17.0 Net income 13.4 17.1 17.0 |
Long-term Debt (Tables)
Long-term Debt (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Debt Disclosure [Abstract] | |
Schedule of Outstanding Long-term Debt | Our notes payable consist of the following (in millions): As of December 31, 2019 2018 Interest Rates Sale/leaseback transactions involving real estate accounted for as financings $ 28.0 $ 82.8 8.1% to 11.2% as of December 31, 2019; Construction of a new hospital 12.9 14.6 5.0% as of December 31, 2019; Other 3.8 6.8 4.3% to 6.8% Other notes payable $ 44.7 $ 104.2 Our long-term debt outstanding consists of the following (in millions): As of December 31, 2019 2018 Credit Agreement— Advances under revolving credit facility $ 45.0 $ 30.0 Term loan facilities 265.2 280.1 Bonds payable— 5.125% Senior Notes due 2023 297.3 296.6 5.75% Senior Notes due 2024 697.3 1,194.7 5.75% Senior Notes due 2025 345.6 345.0 4.50% Senior Notes due 2028 491.7 — 4.75% Senior Notes due 2030 491.7 — Other notes payable 44.7 104.2 Finance lease obligations 384.1 263.8 3,062.6 2,514.4 Less: Current portion (39.3 ) (35.8 ) Long-term debt, net of current portion $ 3,023.3 $ 2,478.6 |
Schedule of Debt Maturities | The following chart shows scheduled principal payments due on long-term debt for the next five years and thereafter (in millions): Year Ending December 31, Face Amount Net Amount 2020 $ 39.3 $ 39.3 2021 35.5 35.5 2022 46.3 46.3 2023 335.1 332.4 2024 995.7 991.6 Thereafter 1,638.6 1,617.5 Total $ 3,090.5 $ 3,062.6 |
Schedule of Redemption Prices for Senior Notes | We may redeem the 2030 Notes, in whole or in part, at any time on or after February 1, 2025 at the redemption prices set forth below: Period Redemption Price* 2025 102.375 % 2026 101.583 % 2027 100.792 % 2028 and thereafter 100.000 % We may redeem the 2025 Notes, in whole or in part, at any time on or after September 15, 2020, at the redemption prices set forth below: Period Redemption Price* 2020 102.875 % 2021 101.917 % 2022 100.958 % 2023 and thereafter 100.000 % * Expressed in percentage of principal amount We may redeem the 2024 Notes, in whole or in part, at any time on or after November 1, 2017, at the redemption prices set forth below: Period Redemption Price* 2019 100.958 % 2020 and thereafter 100.000 % * Expressed in percentage of principal amount Period Redemption Price* 2023 102.250 % 2024 101.125 % 2025 and thereafter 100.000 % We may redeem the 2023 Notes, in whole or in part, at any time on or after March 15, 2018 at the redemption prices set forth below: Period Redemption Price* 2019 102.563 % 2020 101.281 % 2021 and thereafter 100.000 % * Expressed in percentage of principal amount |
Self-Insured Risks Self-Insured
Self-Insured Risks Self-Insured Risks (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Insurance [Abstract] | |
Self-Insurance Reserves | The following table presents the changes in our self-insurance reserves for the years ended December 31, 2019 , 2018 , and 2017 (in millions): 2019 2018 2017 Balance at beginning of period, gross $ 160.9 $ 171.0 $ 171.4 Less: Reinsurance receivables (25.6 ) (39.9 ) (41.4 ) Balance at beginning of period, net 135.3 131.1 130.0 Increase for the provision of current year claims 46.9 47.1 44.7 Decrease for the provision of prior year claims (12.6 ) (8.7 ) (3.0 ) Expenses related to discontinued operations (0.1 ) (0.2 ) (0.5 ) Payments related to current year claims (7.5 ) (7.0 ) (5.0 ) Payments related to prior year claims (31.1 ) (27.0 ) (35.1 ) Balance at end of period, net 130.9 135.3 131.1 Add: Reinsurance receivables 26.4 25.6 39.9 Balance at end of period, gross $ 157.3 $ 160.9 $ 171.0 |
Redeemable Noncontrolling Int_2
Redeemable Noncontrolling Interests (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Noncontrolling Interest [Abstract] | |
Redeemable Noncontrolling Interest | The following is a summary of the activity related to our Redeemable noncontrolling interests (in millions): For the Year Ended December 31, 2019 2018 2017 Balance at beginning of period $ 261.7 $ 220.9 $ 138.3 Net income attributable to noncontrolling interests 12.6 13.9 17.9 Distributions declared (9.2 ) (8.6 ) (4.6 ) Contribution to joint venture 1.0 9.6 2.3 Reclassification to noncontrolling interests (11.2 ) — — Purchase of redeemable noncontrolling interests (162.9 ) (65.1 ) — Change in fair value 147.6 91.0 67.0 Balance at end of period $ 239.6 $ 261.7 $ 220.9 |
Reconciliation of Net Income Attributable to Noncontrolling Interests | The following table reconciles the net income attributable to nonredeemable Noncontrolling interests , as recorded in the shareholders’ equity section of the consolidated balance sheets, and the net income attributable to Redeemable noncontrolling interests , as recorded in the mezzanine section of the consolidated balance sheets, to the Net income attributable to noncontrolling interests presented in the consolidated statements of operations (in millions): For the Year Ended December 31, 2019 2018 2017 Net income attributable to nonredeemable noncontrolling interests $ 74.5 $ 69.2 $ 61.2 Net income attributable to redeemable noncontrolling interests 12.6 13.9 17.9 Net income attributable to noncontrolling interests $ 87.1 $ 83.1 $ 79.1 |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Fair Value Disclosures [Abstract] | |
Schedule of Fair Value, Assets and Liabilities Measured on Recurring Basis | Our financial assets and liabilities that are measured at fair value on a recurring basis are as follows (in millions): Fair Value Measurements at Reporting Date Using As of December 31, 2019 Fair Value Quoted Prices in Active Markets for Identical Assets (Level 1) Significant Other Observable Inputs (Level 2) Significant Unobservable Inputs (Level 3) Valuation Technique (1) Other long-term assets: Equity securities $ 63.5 $ — $ 63.5 $ — M Debt securities 12.6 12.6 — — M Redeemable noncontrolling interests 239.6 — — 239.6 I As of December 31, 2018 Other long-term assets: Equity securities $ 55.6 $ — $ 55.6 $ — M Debt securities 6.4 6.4 — — M Redeemable noncontrolling interests 261.7 — — 261.7 I (1) The three valuation techniques are: market approach (M), cost approach (C), and income approach (I). |
Schedule of Carrying Amounts and Estimated Fair Values, Financial Instruments | The carrying amounts and estimated fair values for our other financial instruments are presented in the following table (in millions): As of December 31, 2019 As of December 31, 2018 Carrying Amount Estimated Fair Value Carrying Amount Estimated Fair Value Long-term debt: Advances under revolving credit facility $ 45.0 $ 45.0 $ 30.0 $ 30.0 Term loan facilities 265.2 266.6 280.1 281.3 5.125% Senior Notes due 2023 297.3 306.6 296.6 298.5 5.75% Senior Notes due 2024 697.3 708.8 1,194.7 1,200.0 5.75% Senior Notes due 2025 345.6 369.7 345.0 339.5 4.50% Senior Notes due 2028 491.7 519.4 — — 4.75% Senior Notes due 2030 491.7 520.0 — — Other notes payable 44.7 44.7 104.2 104.2 Financial commitments: Letters of credit — 38.9 — 37.4 |
Share-Based Payments (Tables)
Share-Based Payments (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Share-based Payment Arrangement [Abstract] | |
Schedule of Weighted-Average Assumptions Used to Determine Fair Value of Stock Options | The fair value of the SARs granted in conjunction with the EHHI acquisition has been estimated using the Black-Scholes option-pricing model with the following weighted-average assumptions: As of December 31, 2019 2018 Expected volatility 38.6 % 27.1 % Risk-free interest rate 1.5 % 2.6 % Expected life (years) 0.3 1.3 Dividend yield — % — % The fair values of the options granted during the years ended December 31, 2019 , 2018 , and 2017 have been estimated at the grant date using the Black-Scholes option-pricing model with the following weighted-average assumptions: For the Year Ended December 31, 2019 2018 2017 Expected volatility 25.3 % 29.2 % 30.5 % Risk-free interest rate 2.7 % 2.7 % 2.1 % Expected life (years) 7.1 7.1 7.7 Dividend yield 2.1 % 2.2 % 2.2 % |
Schedule of Stock Option Activity | A summary of our stock option activity and related information is as follows: Shares (In Thousands) Weighted- Average Exercise Price per Share Weighted- Average Remaining Life (Years) Aggregate Intrinsic Value (In Millions) Outstanding, December 31, 2018 537 $ 35.22 Granted 106 63.77 Exercised (78 ) 17.73 Outstanding, December 31, 2019 565 43.02 6.3 $ 14.8 Exercisable, December 31, 2019 364 35.16 5.1 12.4 |
Schedule of Restricted Stock Activity | A summary of our issued restricted stock awards is as follows (share information in thousands): Shares Weighted-Average Grant Date Fair Value Nonvested shares at December 31, 2018 907 $ 37.61 Granted 660 49.84 Vested (718 ) 34.84 Forfeited (31 ) 48.65 Nonvested shares at December 31, 2019 818 49.49 |
Income Taxes (Tables)
Income Taxes (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Income Tax Disclosure [Abstract] | |
Schedule of Components of Income Tax Expense (Benefit) | The significant components of the Provision for income tax expense related to continuing operations are as follows (in millions): For the Year Ended December 31, 2019 2018 2017 Current: Federal $ 58.1 $ 103.8 $ 72.2 State and other 17.8 24.2 12.8 Total current expense 75.9 128.0 85.0 Deferred: Federal 32.0 (13.7 ) 58.4 State and other 8.0 4.6 2.4 Total deferred expense (benefit) 40.0 (9.1 ) 60.8 Total income tax expense related to continuing operations $ 115.9 $ 118.9 $ 145.8 |
Schedule of Effective Income Tax Rate Reconciliation | A reconciliation of differences between the federal income tax at statutory rates and our actual income tax expense on our income from continuing operations, which include federal, state, and other income taxes, is presented below: For the Year Ended December 31, 2019 2018 2017 Tax expense at statutory rate 21.0 % 21.0 % 35.0 % Increase (decrease) in tax rate resulting from: State and other income taxes, net of federal tax benefit 4.3 % 4.5 % 3.5 % Increase (decrease) in valuation allowance 0.8 % (0.4 )% 0.4 % Government, class action, and related settlements (1.2 )% 2.7 % — % Noncontrolling interests (3.0 )% (3.2 )% (4.6 )% Share-based windfall tax benefits (1.0 )% (0.4 )% (1.8 )% Tax Act — % — % (2.8 )% Other, net (0.3 )% (0.1 )% (0.3 )% Income tax expense 20.6 % 24.1 % 29.4 % |
Schedule of Components of Deferred Tax Assets and Liabilities | The significant components of our deferred tax assets and liabilities are presented in the following table (in millions): As of December 31, 2019 2018 Deferred income tax assets: Net operating loss $ 61.8 $ 66.0 Property, net 33.9 30.8 Insurance reserve 17.0 16.8 Stock-based compensation 38.3 33.0 Revenue reserves — 6.1 Operating lease liabilities 30.6 — Other accruals 23.4 22.5 Tax credits 6.8 4.7 Other 0.2 0.6 Total deferred income tax assets 212.0 180.5 Less: Valuation allowance (38.4 ) (33.7 ) Net deferred income tax assets 173.6 146.8 Deferred income tax liabilities: Revenue reserves (11.6 ) — Intangibles (94.6 ) (88.5 ) Operating lease right-of-use assets (30.3 ) — Carrying value of partnerships (34.0 ) (15.2 ) Other (0.2 ) (0.2 ) Total deferred income tax liabilities (170.7 ) (103.9 ) Net deferred income tax assets $ 2.9 $ 42.9 |
Schedule of Unrecognized Tax Benefits Rollforward | A reconciliation of the beginning and ending liability for unrecognized tax benefits is as follows (in millions): Gross Unrecognized Income Tax Benefits Accrued Interest and Penalties January 1, 2017 $ 2.8 $ — Gross amount of decreases in unrecognized tax benefits related to prior periods (0.4 ) — Decreases in unrecognized tax benefits relating to settlements with taxing authorities (2.1 ) — December 31, 2017 0.3 — Gross amount of increases in unrecognized tax benefits related to prior periods 0.8 0.1 Reductions to unrecognized tax benefits as a result of a lapse of the applicable statute of limitations (0.2 ) — December 31, 2018 0.9 0.1 Reductions to unrecognized tax benefits as a result of a lapse of the applicable statute of limitations (0.5 ) — December 31, 2019 $ 0.4 $ 0.1 |
Earnings Per Common Share (Tabl
Earnings Per Common Share (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Earnings Per Share [Abstract] | |
Computation of Basic and Diluted Earnings per Common Share | The following table sets forth the computation of basic and diluted earnings per common share (in millions, except per share amounts): For the Year Ended December 31, 2019 2018 2017 Basic: Numerator: Income from continuing operations $ 446.4 $ 374.3 $ 350.6 Less: Net income attributable to noncontrolling interests included in continuing operations (87.1 ) (83.1 ) (79.1 ) Less: Income allocated to participating securities (1.3 ) (0.9 ) (0.9 ) Income from continuing operations attributable to Encompass Health common shareholders 358.0 290.3 270.6 (Loss) income from discontinued operations, net of tax, attributable to Encompass Health common shareholders (0.6 ) 1.1 (0.4 ) Net income attributable to Encompass Health common shareholders $ 357.4 $ 291.4 $ 270.2 Denominator: Basic weighted average common shares outstanding 98.0 97.9 93.7 Basic earnings per share attributable to Encompass Health common shareholders: Continuing operations $ 3.66 $ 2.97 $ 2.88 Discontinued operations (0.01 ) 0.01 — Net income $ 3.65 $ 2.98 $ 2.88 Diluted: Numerator: Income from continuing operations $ 446.4 $ 374.3 $ 350.6 Less: Net income attributable to noncontrolling interests included in continuing operations (87.1 ) (83.1 ) (79.1 ) Add: Interest on convertible debt, net of tax — — 4.6 Add: Loss on extinguishment of convertible debt, net of tax — — 6.2 Income from continuing operations attributable to Encompass Health common shareholders 359.3 291.2 282.3 (Loss) income from discontinued operations, net of tax, attributable to Encompass Health common shareholders (0.6 ) 1.1 (0.4 ) Net income attributable to Encompass Health common shareholders $ 358.7 $ 292.3 $ 281.9 Denominator: Diluted weighted average common shares outstanding 99.4 99.8 99.3 Diluted earnings per share attributable to Encompass Health common shareholders: Continuing operations $ 3.62 $ 2.92 $ 2.84 Discontinued operations (0.01 ) 0.01 — Net income $ 3.61 $ 2.93 $ 2.84 |
Reconciliation of Weighted Average Number of Shares Outstanding | The following table sets forth the reconciliation between basic weighted average common shares outstanding and diluted weighted average common shares outstanding (in millions): For the Year Ended December 31, 2019 2018 2017 Basic weighted average common shares outstanding 98.0 97.9 93.7 Convertible senior subordinated notes — — 4.0 Restricted stock awards, dilutive stock options, and restricted stock units 1.4 1.9 1.6 Diluted weighted average common shares outstanding 99.4 99.8 99.3 |
Schedule of Warrants | The following table summarizes information relating to these warrants and their activity through their expiration date (number of warrants in millions): Number of Warrants Weighted Average Exercise Price Common stock warrants outstanding as of December 31, 2016 8.2 $ 41.40 Cashless exercise (6.5 ) 41.40 Cash exercise (0.6 ) 41.40 Expired (1.1 ) 41.40 Common stock warrants outstanding as of January 17, 2017 — |
Segment Reporting (Tables)
Segment Reporting (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Segment Reporting [Abstract] | |
Schedule of Selected Financial Information of Reportable Segments | Selected financial information for our reportable segments is as follows (in millions): Inpatient Rehabilitation Home Health and Hospice For the Year Ended December 31, For the Year Ended December 31, 2019 2018 2017 2019 2018 2017 Net operating revenues $ 3,513.0 $ 3,346.2 $ 3,141.3 $ 1,092.0 $ 931.1 $ 772.6 Operating expenses: Inpatient rehabilitation: Salaries and benefits 1,813.1 1,701.5 1,603.8 — — — Other operating expenses 521.9 502.3 462.5 — — — Supplies 147.0 140.6 135.7 — — — Occupancy costs 64.8 63.8 61.9 — — — Home health and hospice: Cost of services sold (excluding depreciation and amortization) — — — 506.2 438.4 363.3 Support and overhead costs — — — 381.7 323.5 277.2 2,546.8 2,408.2 2,263.9 887.9 761.9 640.5 Other income (10.5 ) (3.6 ) (4.1 ) — (0.5 ) — Equity in net income of nonconsolidated affiliates (5.5 ) (7.5 ) (7.3 ) (1.2 ) (1.2 ) (0.7 ) Noncontrolling interests 82.6 77.2 67.6 9.5 8.5 6.9 Segment Adjusted EBITDA $ 899.6 $ 871.9 $ 821.2 $ 195.8 $ 162.4 $ 125.9 Capital expenditures $ 391.4 $ 264.6 $ 238.0 $ 12.7 $ 11.6 $ 10.7 |
Reconciliation of Assets from Segment to Consolidated | Inpatient Rehabilitation Home Health and Hospice Encompass Health Consolidated As of December 31, 2019 Total assets $ 4,501.4 $ 1,612.8 $ 6,080.7 Investments in and advances to nonconsolidated affiliates 2.0 5.4 7.4 As of December 31, 2018 Total assets $ 3,900.9 $ 1,314.6 $ 5,175.0 Investments in and advances to nonconsolidated affiliates 9.5 2.7 12.2 As of December 31, 2019 As of December 31, 2018 Total assets for reportable segments $ 6,114.2 $ 5,215.5 Reclassification of noncurrent deferred income tax liabilities to net noncurrent deferred income tax assets (33.5 ) (40.5 ) Total consolidated assets $ 6,080.7 $ 5,175.0 |
Reconciliation of Segment Adjusted EBITDA to Income from Continuing Operations Before Income Tax Expense | Segment reconciliations (in millions): For the Year Ended December 31, 2019 2018 2017 Total segment Adjusted EBITDA $ 1,095.4 $ 1,034.3 $ 947.1 General and administrative expenses (247.0 ) (220.2 ) (171.7 ) Depreciation and amortization (218.7 ) (199.7 ) (183.8 ) Loss on disposal of assets (11.1 ) (5.7 ) (4.6 ) Government, class action, and related settlements — (52.0 ) — Loss on early extinguishment of debt (7.7 ) — (10.7 ) Interest expense and amortization of debt discounts and fees (159.7 ) (147.3 ) (154.4 ) Net income attributable to noncontrolling interests 87.1 83.1 79.1 SARs mark-to-market impact on noncontrolling interests 5.0 2.6 — Change in fair market value of equity securities 0.8 (1.9 ) — Tax reform impact on noncontrolling interests — — (4.6 ) Gain on consolidation of Yuma 19.2 — — Payroll taxes on SARs exercise (1.0 ) — — Income from continuing operations before income tax expense $ 562.3 $ 493.2 $ 496.4 |
Reconciliation of Revenue from Segments to Consolidated | Additional detail regarding the revenues of our operating segments by service line follows (in millions): For the Year Ended December 31, 2019 2018 2017 Inpatient rehabilitation: Inpatient $ 3,423.5 $ 3,247.9 $ 3,039.3 Outpatient and other 89.5 98.3 102.0 Total inpatient rehabilitation 3,513.0 3,346.2 3,141.3 Home health and hospice: Home health 918.0 814.6 702.4 Hospice 174.0 116.5 70.2 Total home health and hospice 1,092.0 931.1 772.6 Total net operating revenues $ 4,605.0 $ 4,277.3 $ 3,913.9 |
Quarterly Data (Unaudited) (Tab
Quarterly Data (Unaudited) (Tables) | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Quarterly Financial Information Disclosure [Abstract] | ||
Quarterly Data (Unaudited) Table | 2019 First Second Third Fourth Total (In Millions, Except Per Share Data) Net operating revenues $ 1,124.0 $ 1,135.0 $ 1,161.6 $ 1,184.4 $ 4,605.0 Operating earnings (a) 167.1 152.6 151.2 141.2 612.1 Provision for income tax expense 30.8 23.5 34.3 27.3 115.9 Income from continuing operations 125.7 111.0 119.5 90.2 446.4 Loss from discontinued operations, net of tax (0.5 ) (0.1 ) — — (0.6 ) Net income 125.2 110.9 119.5 90.2 445.8 Less: Net income attributable to noncontrolling interests (22.9 ) (19.7 ) (21.9 ) (22.6 ) (87.1 ) Net income attributable to Encompass Health $ 102.3 $ 91.2 $ 97.6 $ 67.6 $ 358.7 Earnings per common share: Basic earnings per share attributable to Encompass Health common shareholders: (b) Continuing operations $ 1.05 $ 0.93 $ 0.99 $ 0.69 $ 3.66 Discontinued operations (0.01 ) — — — (0.01 ) Net income $ 1.04 $ 0.93 $ 0.99 $ 0.69 $ 3.65 Diluted earnings per share attributable to Encompass Health common shareholders: (b) Continuing operations $ 1.04 $ 0.92 $ 0.98 $ 0.68 $ 3.62 Discontinued operations (0.01 ) — — — (0.01 ) Net income $ 1.03 $ 0.92 $ 0.98 $ 0.68 $ 3.61 (a) We define operating earnings as income from continuing operations attributable to Encompass Health before (1) loss on early extinguishment of debt; (2) interest expense and amortization of debt discounts and fees; (3) other income; and (4) income tax expense. (b) Per share amounts may not sum due to the weighted average common shares outstanding during each quarter compared to the weighted average common shares outstanding during the entire year. | 2018 First Second Third Fourth Total (In Millions, Except Per Share Data) Net operating revenues $ 1,046.0 $ 1,067.7 $ 1,067.6 $ 1,096.0 $ 4,277.3 Operating earnings (a) 150.0 157.3 154.5 93.4 555.2 Provision for income tax expense 30.0 29.3 30.2 29.4 118.9 Income from continuing operations 105.7 113.0 109.4 46.2 374.3 (Loss) income from discontinued operations, net of tax (0.5 ) 0.2 (0.1 ) 1.5 1.1 Net income 105.2 113.2 109.3 47.7 375.4 Less: Net income attributable to noncontrolling interests (21.4 ) (21.4 ) (20.7 ) (19.6 ) (83.1 ) Net income attributable to Encompass Health $ 83.8 $ 91.8 $ 88.6 $ 28.1 $ 292.3 Earnings per common share: Basic earnings per share attributable to Encompass Health common shareholders: (b) Continuing operations $ 0.86 $ 0.93 $ 0.90 $ 0.27 $ 2.97 Discontinued operations (0.01 ) — — 0.02 0.01 Net income $ 0.85 $ 0.93 $ 0.90 $ 0.29 $ 2.98 Diluted earnings per share attributable to Encompass Health common shareholders: (b) Continuing operations $ 0.85 $ 0.92 $ 0.89 $ 0.26 $ 2.92 Discontinued operations (0.01 ) — — 0.02 0.01 Net income $ 0.84 $ 0.92 $ 0.89 $ 0.28 $ 2.93 (a) We define operating earnings as income from continuing operations attributable to Encompass Health before (1) loss on early extinguishment of debt; (2) interest expense and amortization of debt discounts and fees; (3) other income; and (4) income tax expense. (b) Per share amounts may not sum due to the weighted average common shares outstanding during each quarter compared to the weighted average common shares outstanding during the entire year. |
Condensed Consolidating Finan_2
Condensed Consolidating Financial Information (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Condensed Financial Information Disclosure [Abstract] | |
Condensed Consolidating Statement of Operations | For the Year Ended December 31, 2019 Encompass Health Corporation Guarantor Subsidiaries Non-guarantor Subsidiaries Holdings Eliminating Entries Encompass Health Consolidated (In Millions) Net operating revenues $ 20.7 $ 2,425.5 $ 1,221.7 $ 1,074.1 $ (137.0 ) $ 4,605.0 Operating expenses: Salaries and benefits 59.6 1,176.5 608.7 748.9 (20.7 ) 2,573.0 Other operating expenses 45.0 351.8 189.3 88.4 (50.9 ) 623.6 Occupancy costs 2.1 100.8 27.5 17.3 (65.4 ) 82.3 Supplies — 98.0 49.3 20.6 — 167.9 General and administrative expenses 160.0 — — 87.0 — 247.0 Depreciation and amortization 19.9 106.8 54.9 37.1 — 218.7 Total operating expenses 286.6 1,833.9 929.7 999.3 (137.0 ) 3,912.5 Loss on early extinguishment of debt 7.7 — — — — 7.7 Interest expense and amortization of debt discounts and fees 131.0 24.7 5.6 28.4 (30.0 ) 159.7 Other income (32.3 ) (21.1 ) (7.1 ) — 30.0 (30.5 ) Equity in net income of nonconsolidated affiliates — (5.1 ) (0.4 ) (1.2 ) — (6.7 ) Equity in net income of consolidated affiliates (492.6 ) (67.0 ) — — 559.6 — Management fees (160.8 ) 117.8 43.0 — — — Income from continuing operations before income tax (benefit) expense 281.1 542.3 250.9 47.6 (559.6 ) 562.3 Provision for income tax (benefit) expense (78.2 ) 140.3 40.3 13.5 — 115.9 Income from continuing operations 359.3 402.0 210.6 34.1 (559.6 ) 446.4 Loss from discontinued operations, net of tax (0.6 ) — — — — (0.6 ) Net income 358.7 402.0 210.6 34.1 (559.6 ) 445.8 Less: Net income attributable to noncontrolling interests — — (83.3 ) (3.8 ) — (87.1 ) Net income attributable to Encompass Health $ 358.7 $ 402.0 $ 127.3 $ 30.3 $ (559.6 ) $ 358.7 Comprehensive income $ 358.7 $ 402.0 $ 210.6 $ 34.1 $ (559.6 ) $ 445.8 Comprehensive income attributable to Encompass Health $ 358.7 $ 402.0 $ 127.3 $ 30.3 $ (559.6 ) $ 358.7 For the Year Ended December 31, 2018 Encompass Health Corporation Guarantor Subsidiaries Non-guarantor Subsidiaries Holdings Eliminating Entries Encompass Health Consolidated (In Millions) Net operating revenues $ 21.0 $ 2,351.8 $ 1,118.9 $ 915.9 $ (130.3 ) $ 4,277.3 Operating expenses: Salaries and benefits 49.5 1,132.2 550.4 643.3 (21.4 ) 2,354.0 Other operating expenses 37.9 344.3 177.4 75.3 (49.8 ) 585.1 Occupancy costs 1.9 95.7 25.4 14.1 (59.1 ) 78.0 Supplies — 95.8 44.9 18.0 — 158.7 General and administrative expenses 161.0 — — 59.2 — 220.2 Depreciation and amortization 14.3 108.2 47.6 29.6 — 199.7 Government, class action, and related settlements 52.0 — — — — 52.0 Total operating expenses 316.6 1,776.2 845.7 839.5 (130.3 ) 3,647.7 Interest expense and amortization of debt discounts and fees 124.2 22.6 2.2 23.5 (25.2 ) 147.3 Other income (22.4 ) (1.0 ) (3.5 ) (0.5 ) 25.2 (2.2 ) Equity in net income of nonconsolidated affiliates — (7.1 ) (0.4 ) (1.2 ) — (8.7 ) Equity in net income of consolidated affiliates (465.6 ) (63.4 ) — — 529.0 — Management fees (153.1 ) 114.0 39.1 — — — Income from continuing operations before income tax (benefit) expense 221.3 510.5 235.8 54.6 (529.0 ) 493.2 Provision for income tax (benefit) expense (69.9 ) 136.6 38.4 13.8 — 118.9 Income from continuing operations 291.2 373.9 197.4 40.8 (529.0 ) 374.3 Income from discontinued operations, net of tax 1.1 — — — — 1.1 Net income 292.3 373.9 197.4 40.8 (529.0 ) 375.4 Less: Net income attributable to noncontrolling interests — — (77.8 ) (5.3 ) — (83.1 ) Net income attributable to Encompass Health $ 292.3 $ 373.9 $ 119.6 $ 35.5 $ (529.0 ) $ 292.3 Comprehensive income $ 292.3 $ 373.9 $ 197.4 $ 40.8 $ (529.0 ) $ 375.4 Comprehensive income attributable to Encompass Health $ 292.3 $ 373.9 $ 119.6 $ 35.5 $ (529.0 ) $ 292.3 For the Year Ended December 31, 2017 Encompass Health Corporation Guarantor Subsidiaries Non-guarantor Subsidiaries Holdings Eliminating Entries Encompass Health Consolidated (In Millions) Net operating revenues $ 21.3 $ 2,252.5 $ 1,006.4 $ 759.8 $ (126.1 ) $ 3,913.9 Operating expenses: Salaries and benefits 34.7 1,088.7 508.9 543.3 (21.0 ) 2,154.6 Other operating expenses 32.8 324.8 160.2 62.4 (48.6 ) 531.6 Occupancy costs 1.9 93.7 23.0 11.4 (56.5 ) 73.5 Supplies — 94.2 41.7 13.4 — 149.3 General and administrative 143.7 — — 28.0 — 171.7 Depreciation and amortization 8.8 106.6 44.7 23.7 — 183.8 Total operating expenses 221.9 1,708.0 778.5 682.2 (126.1 ) 3,264.5 Loss on early extinguishment of debt 10.7 — — — — 10.7 Interest expense and amortization of debt discounts and fees 130.5 23.2 2.5 19.2 (21.0 ) 154.4 Other (income) loss (21.7 ) 0.2 (3.6 ) — 21.0 (4.1 ) Equity in net income of nonconsolidated affiliates — (6.9 ) (0.4 ) (0.7 ) — (8.0 ) Equity in net income of consolidated affiliates (342.1 ) (39.0 ) — — 381.1 — Management fees (145.0 ) 109.5 35.5 — — — Income from continuing operations before income tax (benefit) expense 167.0 457.5 193.9 59.1 (381.1 ) 496.4 Provision for income tax (benefit) expense (104.5 ) 182.6 66.8 0.9 — 145.8 Income from continuing operations 271.5 274.9 127.1 58.2 (381.1 ) 350.6 Loss from discontinued operations, net of tax (0.4 ) — — — — (0.4 ) Net income 271.1 274.9 127.1 58.2 (381.1 ) 350.2 Less: Net income attributable to noncontrolling interests — — (68.7 ) (10.4 ) — (79.1 ) Net income attributable to Encompass Health $ 271.1 $ 274.9 $ 58.4 $ 47.8 $ (381.1 ) $ 271.1 Comprehensive income $ 271.0 $ 274.9 $ 127.1 $ 58.2 $ (381.1 ) $ 350.1 Comprehensive income attributable to Encompass Health $ 271.0 $ 274.9 $ 58.4 $ 47.8 $ (381.1 ) $ 271.0 |
Condensed Consolidating Balance Sheet | As of December 31, 2019 Encompass Health Corporation Guarantor Subsidiaries Non-guarantor Subsidiaries Holdings Eliminating Entries Encompass Health Consolidated (In Millions) Assets Current assets: Cash and cash equivalents $ 53.7 $ 5.2 $ 6.0 $ 29.9 $ — $ 94.8 Restricted cash — — 57.4 — — 57.4 Accounts receivable — 280.4 125.6 100.1 — 506.1 Prepaid expenses and other current assets 64.3 35.4 9.3 7.8 (19.3 ) 97.5 Total current assets 118.0 321.0 198.3 137.8 (19.3 ) 755.8 Property and equipment, net 133.4 1,246.0 551.2 28.7 — 1,959.3 Operating lease right-of-use assets 10.1 171.5 86.5 43.7 (35.3 ) 276.5 Goodwill — 912.2 323.0 1,070.0 — 2,305.2 Intangible assets, net 17.7 101.7 65.3 291.6 — 476.3 Deferred income tax assets 27.2 11.1 0.1 — (35.5 ) 2.9 Other long-term assets 53.6 85.4 151.6 14.1 — 304.7 Intercompany notes receivable 737.8 — — — (737.8 ) — Intercompany receivable and investments in consolidated affiliates 3,155.4 523.6 — — (3,679.0 ) — Total assets $ 4,253.2 $ 3,372.5 $ 1,376.0 $ 1,585.9 $ (4,506.9 ) $ 6,080.7 Liabilities and Shareholders’ Equity Current liabilities: Current portion of long-term debt $ 17.0 $ 10.4 $ 3.8 $ 8.1 $ — $ 39.3 Current operating lease liabilities 1.3 21.9 16.0 12.1 (10.9 ) 40.4 Accounts payable 9.8 56.5 24.3 4.0 — 94.6 Accrued payroll 34.8 76.2 40.4 59.1 — 210.5 Accrued interest payable 30.4 2.0 — — — 32.4 Other current liabilities 82.2 30.5 68.8 141.6 (19.3 ) 303.8 Total current liabilities 175.5 197.5 153.3 224.9 (30.2 ) 721.0 Long-term debt, net of current portion 2,670.6 305.4 41.6 5.7 — 3,023.3 Long-term operating lease liabilities 9.0 153.9 73.6 31.9 (24.6 ) 243.8 Intercompany notes payable — — — 737.8 (737.8 ) — Self-insured risks 19.3 — 97.9 — — 117.2 Other long-term liabilities 26.6 12.2 2.4 37.0 (35.5 ) 42.7 Intercompany payable — — 66.0 4.4 (70.4 ) — 2,901.0 669.0 434.8 1,041.7 (898.5 ) 4,148.0 Commitments and contingencies Redeemable noncontrolling interests — — 31.4 208.2 — 239.6 Shareholders ’ equity: Encompass Health shareholders ’ equity 1,352.2 2,703.5 568.9 336.0 (3,608.4 ) 1,352.2 Noncontrolling interests — — 340.9 — — 340.9 Total shareholders ’ equity 1,352.2 2,703.5 909.8 336.0 (3,608.4 ) 1,693.1 Total liabilities and shareholders ’ equity $ 4,253.2 $ 3,372.5 $ 1,376.0 $ 1,585.9 $ (4,506.9 ) $ 6,080.7 As of December 31, 2018 Encompass Health Corporation Guarantor Subsidiaries Non-guarantor Subsidiaries Holdings Eliminating Entries Encompass Health Consolidated (In Millions) Assets Current assets: Cash and cash equivalents $ 41.5 $ 3.0 $ 5.1 $ 19.6 $ — $ 69.2 Restricted cash — — 59.0 — — 59.0 Accounts receivable — 270.7 121.6 75.4 — 467.7 Prepaid expenses and other current assets 36.3 17.6 26.2 4.9 (18.8 ) 66.2 Total current assets 77.8 291.3 211.9 99.9 (18.8 ) 662.1 Property and equipment, net 123.9 1,041.5 445.2 24.2 — 1,634.8 Goodwill — 912.2 293.3 895.3 — 2,100.8 Intangible assets, net 21.4 96.6 67.5 257.9 — 443.4 Deferred income tax assets 47.9 28.9 0.1 — (34.0 ) 42.9 Other long-term assets 47.9 100.4 130.9 11.8 — 291.0 Intercompany notes receivable 535.3 — — — (535.3 ) — Intercompany receivable and investments in consolidated affiliates 2,904.4 457.6 — — (3,362.0 ) — Total assets $ 3,758.6 $ 2,928.5 $ 1,148.9 $ 1,289.1 $ (3,950.1 ) $ 5,175.0 Liabilities and Shareholders’ Equity Current liabilities: Current portion of long-term debt $ 35.0 $ 7.5 $ 4.4 $ 6.4 $ (17.5 ) $ 35.8 Accounts payable 8.9 46.4 30.4 4.3 — 90.0 Accrued payroll 35.0 69.1 35.4 48.9 — 188.4 Accrued interest payable 22.3 2.4 — — (0.3 ) 24.4 Other current liabilities 154.5 5.1 85.7 89.6 (1.0 ) 333.9 Total current liabilities 255.7 130.5 155.9 149.2 (18.8 ) 672.5 Long-term debt, net of current portion 2,188.7 262.1 20.0 7.8 — 2,478.6 Intercompany notes payable — — — 535.3 (535.3 ) — Self-insured risks 16.1 — 103.5 — — 119.6 Other long-term liabilities 21.4 17.1 5.0 76.0 (33.9 ) 85.6 Intercompany payable — — 48.9 4.2 (53.1 ) — 2,481.9 409.7 333.3 772.5 (641.1 ) 3,356.3 Commitments and contingencies Redeemable noncontrolling interests — — 38.3 223.4 — 261.7 Shareholders ’ equity Encompass Health shareholders ’ equity 1,276.7 2,518.8 497.0 293.2 (3,309.0 ) 1,276.7 Noncontrolling interests — — 280.3 — — 280.3 Total shareholders ’ equity 1,276.7 2,518.8 777.3 293.2 (3,309.0 ) 1,557.0 Total liabilities and shareholders ’ equity $ 3,758.6 $ 2,928.5 $ 1,148.9 $ 1,289.1 $ (3,950.1 ) $ 5,175.0 |
Condensed Consolidating Statement of Cash Flows | For the Year Ended December 31, 2019 Encompass Health Corporation Guarantor Subsidiaries Non-guarantor Subsidiaries Holdings Eliminating Entries Encompass Health Consolidated (In Millions) Net cash (used in) provided by operating activities $ (110.8 ) $ 450.3 $ 247.9 $ 47.9 $ — $ 635.3 Cash flows from investing activities: Acquisition of businesses, net of cash acquired (217.8 ) — — (13.7 ) — (231.5 ) Purchases of property and equipment (38.6 ) (207.3 ) (117.9 ) (8.6 ) — (372.4 ) Additions to capitalized software costs (7.4 ) (0.7 ) (1.4 ) (3.5 ) — (13.0 ) Purchases of intangible assets — (18.0 ) — (0.7 ) — (18.7 ) Proceeds from sale of restricted investments — — 17.6 — — 17.6 Purchases of restricted investments — — (30.9 ) (2.0 ) — (32.9 ) Funding of intercompany note receivable (64.0 ) — — — 64.0 — Proceeds from repayment of intercompany note receivable 93.0 — 17.5 — (110.5 ) — Other, net (8.3 ) 8.2 (6.7 ) 0.3 — (6.5 ) Net cash provided used in investing activities (243.1 ) (217.8 ) (121.8 ) (28.2 ) (46.5 ) (657.4 ) Cash flows from financing activities: Proceeds from bond issuance 1,000.0 — — — — 1,000.0 Principal payments on debt, including pre-payments (517.8 ) — (1.7 ) — — (519.5 ) Principal borrowings on intercompany note payable — — — 64.0 (64.0 ) — Principal payments on intercompany note payable (17.5 ) — — (93.0 ) 110.5 — Borrowings on revolving credit facility 635.0 — — — — 635.0 Payments on revolving credit facility (620.0 ) — — — — (620.0 ) Principal payments under finance lease obligations (0.7 ) (8.3 ) (2.6 ) (7.9 ) — (19.5 ) Debt amendment and issuance costs (21.5 ) — — — — (21.5 ) Repurchases of common stock, including fees and expenses (45.9 ) — — — — (45.9 ) Dividends paid on common stock (108.6 ) — — (0.1 ) — (108.7 ) Purchase of equity interests in consolidated affiliates (162.9 ) — — — — (162.9 ) Distributions paid to noncontrolling interests of consolidated affiliates — — (79.8 ) — — (79.8 ) Taxes paid on behalf of employees for shares withheld (15.4 ) — — (1.2 ) — (16.6 ) Contributions from consolidated affiliates — — 15.9 — — 15.9 Other, net (4.4 ) — — (3.9 ) — (8.3 ) Change in intercompany advances 245.8 (222.0 ) (56.5 ) 32.7 — — Net cash provided by (used in) financing activities 366.1 (230.3 ) (124.7 ) (9.4 ) 46.5 48.2 Increase in cash, cash equivalents, and restricted cash 12.2 2.2 1.4 10.3 — 26.1 Cash, cash equivalents, and restricted cash at beginning of year 41.5 3.0 69.4 19.6 — 133.5 Cash, cash equivalents and restricted cash at end of year $ 53.7 $ 5.2 $ 70.8 $ 29.9 $ — $ 159.6 Reconciliation of Cash, Cash Equivalents, and Restricted Cash Cash and cash equivalents at beginning of period $ 41.5 $ 3.0 $ 5.1 $ 19.6 $ — $ 69.2 Restricted cash at beginning of period — — 59.0 — — 59.0 Restricted cash included in other long-term assets at beginning of period — — 5.3 — — 5.3 Cash, cash equivalents, and restricted cash at beginning of period $ 41.5 $ 3.0 $ 69.4 $ 19.6 $ — $ 133.5 Cash and cash equivalents at end of period $ 53.7 $ 5.2 $ 6.0 $ 29.9 $ — $ 94.8 Restricted cash at end of period — — 57.4 — — 57.4 Restricted cash included in other long-term assets at end of period — — 7.4 — — 7.4 Cash, cash equivalents, and restricted cash at end of period $ 53.7 $ 5.2 $ 70.8 $ 29.9 $ — $ 159.6 Supplemental schedule of noncash financing activity: Intercompany note activity $ (232.9 ) $ — $ — $ 232.9 $ — $ — For the Year Ended December 31, 2018 Encompass Health Corporation Guarantor Subsidiaries Non-guarantor Subsidiaries Holdings Eliminating Entries Encompass Health Consolidated (In Millions) Net cash (used in) provided by operating activities $ (11.3 ) $ 422.2 $ 259.0 $ 92.5 $ — $ 762.4 Cash flows from investing activities: Acquisition of businesses, net of cash acquired (131.4 ) — — (12.5 ) — (143.9 ) Purchases of property and equipment (34.1 ) (133.9 ) (79.9 ) (6.6 ) — (254.5 ) Additions to capitalized software costs (14.1 ) (0.1 ) — (1.8 ) — (16.0 ) Purchases of intangible assets (2.5 ) — (0.1 ) (3.1 ) — (5.7 ) Proceeds from sale of restricted investments — — 11.6 — — 11.6 Purchases of restricted investments — — (13.3 ) — — (13.3 ) Proceeds from repayment of intercompany note receivable 87.0 — — — (87.0 ) — Other, net (6.0 ) 2.8 — 0.5 — (2.7 ) Net cash used in investing activities (101.1 ) (131.2 ) (81.7 ) (23.5 ) (87.0 ) (424.5 ) Cash flows from financing activities: Principal payments on debt, including pre-payments (17.6 ) — (3.0 ) — — (20.6 ) Principal payments on intercompany notes payable — — — (87.0 ) 87.0 — Borrowings on revolving credit facility 325.0 — — — — 325.0 Payments on revolving credit facility (390.0 ) — — — — (390.0 ) Principal payments under finance lease obligations — (8.4 ) (4.2 ) (5.3 ) — (17.9 ) Debt amendment and issuance costs — — (0.1 ) — — (0.1 ) Dividends paid on common stock (100.7 ) — — (0.1 ) — (100.8 ) Purchase of equity interests in consolidated affiliates (65.1 ) — — — — (65.1 ) Distributions paid to noncontrolling interests of consolidated affiliates — — (75.4 ) — — (75.4 ) Taxes paid on behalf of employees for shares withheld (7.4 ) — — (0.9 ) — (8.3 ) Contributions from consolidated affiliates — — 12.6 — — 12.6 Other, net 3.0 — 13.2 3.2 — 19.4 Change in intercompany advances 372.4 (282.5 ) (118.9 ) 29.0 — — Net cash provided by (used in) financing activities 119.6 (290.9 ) (175.8 ) (61.1 ) 87.0 (321.2 ) Increase in cash, cash equivalents, and restricted cash 7.2 0.1 1.5 7.9 — 16.7 Cash, cash equivalents, and restricted cash at beginning of year 34.3 2.9 67.9 11.7 — 116.8 Cash, cash equivalents, and restricted cash at end of year $ 41.5 $ 3.0 $ 69.4 $ 19.6 $ — $ 133.5 Reconciliation of Cash, Cash Equivalents, and Restricted Cash Cash and cash equivalents at beginning of period $ 34.3 $ 2.9 $ 5.5 $ 11.7 $ — $ 54.4 Restricted cash at beginning of period — — 62.4 — — 62.4 Cash, cash equivalents, and restricted cash at beginning of period $ 34.3 $ 2.9 $ 67.9 $ 11.7 $ — $ 116.8 Cash and cash equivalents at end of period $ 41.5 $ 3.0 $ 5.1 $ 19.6 $ — $ 69.2 Restricted cash at end of period — — 59.0 — — 59.0 Restricted cash included in other long-term assets at end of period — — 5.3 — — 5.3 Cash, cash equivalents, and restricted cash at end of period $ 41.5 $ 3.0 $ 69.4 $ 19.6 $ — $ 133.5 Supplemental schedule of noncash investing activities: Intercompany note activity $ (136.8 ) $ — $ — $ 136.8 $ — $ — For the Year Ended December 31, 2017 Encompass Health Corporation Guarantor Subsidiaries Non-guarantor Subsidiaries Holdings Eliminating Entries Encompass Health Consolidated (In Millions) Net cash provided by operating activities $ 28.2 $ 385.9 $ 181.2 $ 63.0 $ — $ 658.3 Cash flows from investing activities: Acquisition of businesses, net of cash acquired (10.9 ) — — (27.9 ) — (38.8 ) Purchases of property and equipment (39.4 ) (106.5 ) (75.4 ) (4.5 ) — (225.8 ) Additions to capitalized software costs (16.3 ) (0.3 ) (0.1 ) (2.5 ) — (19.2 ) Purchases of intangible assets — — — (3.7 ) — (3.7 ) Proceeds from sale of restricted investments — — 4.2 — — 4.2 Purchases of restricted investments — — (8.5 ) — — (8.5 ) Proceeds from repayment of intercompany note receivable 51.0 — — — (51.0 ) — Other, net (3.7 ) 11.7 0.2 0.6 — 8.8 Net cash used in investing activities (19.3 ) (95.1 ) (79.6 ) (38.0 ) (51.0 ) (283.0 ) Cash flows from financing activities: Principal payments on debt, including pre-payments (126.9 ) — (3.0 ) — — (129.9 ) Principal payments on intercompany notes payable — — — (51.0 ) 51.0 — Borrowings on revolving credit facility 273.3 — — — — 273.3 Payments on revolving credit facility (330.3 ) — — — — (330.3 ) Principal payments under finance lease obligations — (7.3 ) (3.9 ) (4.1 ) — (15.3 ) Debt amendment and issuance costs (4.1 ) — — — — (4.1 ) Repurchases of common stock, including fees and expenses (38.1 ) — — — — (38.1 ) Dividends paid on common stock (91.5 ) — — — — (91.5 ) Proceeds from exercising stock warrants 26.6 — — — — 26.6 Distributions paid to noncontrolling interests of consolidated affiliates — — (51.9 ) — — (51.9 ) Taxes paid on behalf of employees for shares withheld (19.5 ) — — (0.3 ) — (19.8 ) Contributions from consolidated affiliates — — 20.8 — — 20.8 Other, net 1.0 — — (0.7 ) — 0.3 Change in intercompany advances 314.3 (282.2 ) (62.0 ) 29.9 — — Net cash provided by (used in) financing activities 4.8 (289.5 ) (100.0 ) (26.2 ) 51.0 (359.9 ) Increase in cash, cash equivalents, and restricted cash 13.7 1.3 1.6 (1.2 ) — 15.4 Cash, cash equivalents, and restricted cash at beginning of year 20.6 1.6 66.3 12.9 — 101.4 Cash, cash equivalents, and restricted cash at end of year $ 34.3 $ 2.9 $ 67.9 $ 11.7 $ — $ 116.8 Reconciliation of Cash, Cash Equivalents, and Restricted Cash Cash and cash equivalents at beginning of period $ 20.6 $ 1.6 $ 5.4 $ 12.9 $ — $ 40.5 Restricted cash at beginning of period — — 60.9 — — 60.9 Cash, cash equivalents, and restricted cash at beginning of period $ 20.6 $ 1.6 $ 66.3 $ 12.9 $ — $ 101.4 Cash and cash equivalents at end of period $ 34.3 $ 2.9 $ 5.5 $ 11.7 $ — $ 54.4 Restricted cash at end of period — — 62.4 — — 62.4 Cash, cash equivalents, and restricted cash at end of period $ 34.3 $ 2.9 $ 67.9 $ 11.7 $ — $ 116.8 Supplemental schedule of noncash financing activities: Intercompany note activity $ (8.8 ) $ — $ — $ 8.8 $ — $ — Conversion of convertible debt 319.4 — — — — 319.4 |
Summary of Significant Accoun_4
Summary of Significant Accounting Policies - Textual (Details) $ in Millions | 12 Months Ended | |||||
Dec. 31, 2019USD ($)segmentstate | Dec. 31, 2018USD ($) | Dec. 31, 2017USD ($) | Jan. 01, 2019USD ($) | Dec. 31, 2016USD ($) | ||
Finite-Lived Intangible Assets [Line Items] | ||||||
Number of states in which entity operates | state | 37 | |||||
Number of reportable segments | segment | 2 | |||||
Collection success rate of denied payments (percent) | 70.00% | |||||
Minimum accrual of loss contingency needed to accrue for related legal fees | $ 5 | |||||
Advertising expense | 6.1 | $ 6.7 | $ 6.3 | |||
Fair value of the Redeemable noncontrolling interests | 400 | |||||
Total assets | [1] | 6,080.7 | 5,175 | |||
Total liabilities | 4,148 | 3,356.3 | ||||
Capital in excess of par value | $ 1,693.1 | 1,557 | 1,395.4 | $ 910.6 | ||
Payor Source | Revenue from Contract with Customer Benchmark | Medicare | RAC Audits | ||||||
Finite-Lived Intangible Assets [Line Items] | ||||||
Percentage of Medicare patient discharges (percent) | 1.00% | |||||
Accounting Standards Update 2016-02 | ||||||
Finite-Lived Intangible Assets [Line Items] | ||||||
Total assets | $ 349 | |||||
Total liabilities | $ 347 | |||||
Additional Paid-in Capital | ||||||
Finite-Lived Intangible Assets [Line Items] | ||||||
Capital in excess of par value | $ 2,369.9 | $ 2,588.7 | $ 2,747.4 | $ 2,781 | ||
Additional Paid-in Capital | Accounting Standards Update 2016-02 | ||||||
Finite-Lived Intangible Assets [Line Items] | ||||||
Capital in excess of par value | $ 2 | |||||
[1] | Our consolidated assets as of December 31, 2019 and December 31, 2018 include total assets of variable interest entities of $215.0 million and $197.5 million , respectively, which cannot be used by us to settle the obligations of other entities. Our consolidated liabilities as of December 31, 2019 and December 31, 2018 include total liabilities of the variable interest entities of $41.1 million and $50.8 million , respectively. See Note 3, Variable Interest Entities . |
Summary of Significant Accoun_5
Summary of Significant Accounting Policies - Net Operating Revenues & Accounts Receivable (Details) - USD ($) $ in Millions | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2019 | Sep. 30, 2019 | Jun. 30, 2019 | Mar. 31, 2019 | Dec. 31, 2018 | Sep. 30, 2018 | Jun. 30, 2018 | Mar. 31, 2018 | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Concentration Risk [Line Items] | |||||||||||
Net operating revenues | $ 1,184.4 | $ 1,161.6 | $ 1,135 | $ 1,124 | $ 1,096 | $ 1,067.6 | $ 1,067.7 | $ 1,046 | $ 4,605 | $ 4,277.3 | $ 3,913.9 |
Inpatient Rehabilitation | |||||||||||
Concentration Risk [Line Items] | |||||||||||
Net operating revenues | 3,513 | 3,346.2 | 3,141.3 | ||||||||
Home Health and Hospice | |||||||||||
Concentration Risk [Line Items] | |||||||||||
Net operating revenues | 1,092 | 931.1 | 772.6 | ||||||||
Payor Source | Revenue from Contract with Customer Benchmark | |||||||||||
Concentration Risk [Line Items] | |||||||||||
Net operating revenues | 4,605 | 4,277.3 | 3,913.9 | ||||||||
Payor Source | Revenue from Contract with Customer Benchmark | Inpatient Rehabilitation | |||||||||||
Concentration Risk [Line Items] | |||||||||||
Net operating revenues | 3,513 | 3,346.2 | 3,141.3 | ||||||||
Payor Source | Revenue from Contract with Customer Benchmark | Home Health and Hospice | |||||||||||
Concentration Risk [Line Items] | |||||||||||
Net operating revenues | 1,092 | 931.1 | 772.6 | ||||||||
Payor Source | Revenue from Contract with Customer Benchmark | Medicare | Third-Party Payor | |||||||||||
Concentration Risk [Line Items] | |||||||||||
Net operating revenues | 3,457.3 | 3,246.2 | 2,976.5 | ||||||||
Payor Source | Revenue from Contract with Customer Benchmark | Medicare | Third-Party Payor | Inpatient Rehabilitation | |||||||||||
Concentration Risk [Line Items] | |||||||||||
Net operating revenues | 2,537.3 | 2,451.7 | 2,313.6 | ||||||||
Payor Source | Revenue from Contract with Customer Benchmark | Medicare | Third-Party Payor | Home Health and Hospice | |||||||||||
Concentration Risk [Line Items] | |||||||||||
Net operating revenues | 920 | 794.5 | 662.9 | ||||||||
Payor Source | Revenue from Contract with Customer Benchmark | Medicare Advantage | Third-Party Payor | |||||||||||
Concentration Risk [Line Items] | |||||||||||
Net operating revenues | 487.4 | 395.1 | 335.8 | ||||||||
Payor Source | Revenue from Contract with Customer Benchmark | Medicare Advantage | Third-Party Payor | Inpatient Rehabilitation | |||||||||||
Concentration Risk [Line Items] | |||||||||||
Net operating revenues | 375.5 | 306.5 | 261 | ||||||||
Payor Source | Revenue from Contract with Customer Benchmark | Medicare Advantage | Third-Party Payor | Home Health and Hospice | |||||||||||
Concentration Risk [Line Items] | |||||||||||
Net operating revenues | 111.9 | 88.6 | 74.8 | ||||||||
Payor Source | Revenue from Contract with Customer Benchmark | Managed Care | Third-Party Payor | |||||||||||
Concentration Risk [Line Items] | |||||||||||
Net operating revenues | 381.8 | 376.5 | 364.7 | ||||||||
Payor Source | Revenue from Contract with Customer Benchmark | Managed Care | Third-Party Payor | Inpatient Rehabilitation | |||||||||||
Concentration Risk [Line Items] | |||||||||||
Net operating revenues | 342.7 | 343.3 | 335.6 | ||||||||
Payor Source | Revenue from Contract with Customer Benchmark | Managed Care | Third-Party Payor | Home Health and Hospice | |||||||||||
Concentration Risk [Line Items] | |||||||||||
Net operating revenues | 39.1 | 33.2 | 29.1 | ||||||||
Payor Source | Revenue from Contract with Customer Benchmark | Medicaid | Third-Party Payor | |||||||||||
Concentration Risk [Line Items] | |||||||||||
Net operating revenues | 128.7 | 112.9 | 97.5 | ||||||||
Payor Source | Revenue from Contract with Customer Benchmark | Medicaid | Third-Party Payor | Inpatient Rehabilitation | |||||||||||
Concentration Risk [Line Items] | |||||||||||
Net operating revenues | 110.3 | 101.3 | 93.2 | ||||||||
Payor Source | Revenue from Contract with Customer Benchmark | Medicaid | Third-Party Payor | Home Health and Hospice | |||||||||||
Concentration Risk [Line Items] | |||||||||||
Net operating revenues | 18.4 | 11.6 | 4.3 | ||||||||
Payor Source | Revenue from Contract with Customer Benchmark | Other Third-party Payors | Third-Party Payor | |||||||||||
Concentration Risk [Line Items] | |||||||||||
Net operating revenues | 43.4 | 49 | 49.9 | ||||||||
Payor Source | Revenue from Contract with Customer Benchmark | Other Third-party Payors | Third-Party Payor | Inpatient Rehabilitation | |||||||||||
Concentration Risk [Line Items] | |||||||||||
Net operating revenues | 43.4 | 49 | 49.9 | ||||||||
Payor Source | Revenue from Contract with Customer Benchmark | Other Third-party Payors | Third-Party Payor | Home Health and Hospice | |||||||||||
Concentration Risk [Line Items] | |||||||||||
Net operating revenues | 0 | 0 | 0 | ||||||||
Payor Source | Revenue from Contract with Customer Benchmark | Workers' Compensation | Third-Party Payor | |||||||||||
Concentration Risk [Line Items] | |||||||||||
Net operating revenues | 30.2 | 28.9 | 27.6 | ||||||||
Payor Source | Revenue from Contract with Customer Benchmark | Workers' Compensation | Third-Party Payor | Inpatient Rehabilitation | |||||||||||
Concentration Risk [Line Items] | |||||||||||
Net operating revenues | 29.2 | 27.4 | 27.5 | ||||||||
Payor Source | Revenue from Contract with Customer Benchmark | Workers' Compensation | Third-Party Payor | Home Health and Hospice | |||||||||||
Concentration Risk [Line Items] | |||||||||||
Net operating revenues | 1 | 1.5 | 0.1 | ||||||||
Payor Source | Revenue from Contract with Customer Benchmark | Patients | Self-Pay | |||||||||||
Concentration Risk [Line Items] | |||||||||||
Net operating revenues | 23.9 | 19.5 | 19.1 | ||||||||
Payor Source | Revenue from Contract with Customer Benchmark | Patients | Self-Pay | Inpatient Rehabilitation | |||||||||||
Concentration Risk [Line Items] | |||||||||||
Net operating revenues | 23.3 | 18.7 | 18.4 | ||||||||
Payor Source | Revenue from Contract with Customer Benchmark | Patients | Self-Pay | Home Health and Hospice | |||||||||||
Concentration Risk [Line Items] | |||||||||||
Net operating revenues | 0.6 | 0.8 | 0.7 | ||||||||
Payor Source | Revenue from Contract with Customer Benchmark | Other Income Source | |||||||||||
Concentration Risk [Line Items] | |||||||||||
Net operating revenues | 52.3 | 49.2 | 42.8 | ||||||||
Payor Source | Revenue from Contract with Customer Benchmark | Other Income Source | Inpatient Rehabilitation | |||||||||||
Concentration Risk [Line Items] | |||||||||||
Net operating revenues | 51.3 | 48.3 | 42.1 | ||||||||
Payor Source | Revenue from Contract with Customer Benchmark | Other Income Source | Home Health and Hospice | |||||||||||
Concentration Risk [Line Items] | |||||||||||
Net operating revenues | $ 1 | $ 0.9 | $ 0.7 | ||||||||
Payor Source | Accounts Receivable | |||||||||||
Concentration Risk [Line Items] | |||||||||||
Net operating revenues by payor source (percent) | 100.00% | 100.00% | |||||||||
Payor Source | Accounts Receivable | Medicare | Third-Party Payor | |||||||||||
Concentration Risk [Line Items] | |||||||||||
Net operating revenues by payor source (percent) | 72.10% | 73.20% | |||||||||
Payor Source | Accounts Receivable | Managed Care, Medicare Advantage and Other Discount Plans | Third-Party Payor | |||||||||||
Concentration Risk [Line Items] | |||||||||||
Net operating revenues by payor source (percent) | 20.10% | 19.30% | |||||||||
Payor Source | Accounts Receivable | Medicaid | Third-Party Payor | |||||||||||
Concentration Risk [Line Items] | |||||||||||
Net operating revenues by payor source (percent) | 3.10% | 2.80% | |||||||||
Payor Source | Accounts Receivable | Other Third-party Payors | Third-Party Payor | |||||||||||
Concentration Risk [Line Items] | |||||||||||
Net operating revenues by payor source (percent) | 2.60% | 2.70% | |||||||||
Payor Source | Accounts Receivable | Workers' Compensation | Third-Party Payor | |||||||||||
Concentration Risk [Line Items] | |||||||||||
Net operating revenues by payor source (percent) | 1.20% | 1.10% | |||||||||
Payor Source | Accounts Receivable | Patients | Self-Pay | |||||||||||
Concentration Risk [Line Items] | |||||||||||
Net operating revenues by payor source (percent) | 0.90% | 0.90% |
Summary of Significant Accoun_6
Summary of Significant Accounting Policies - PP&E Useful Lives (Details) | 12 Months Ended |
Dec. 31, 2019 | |
Buildings | Minimum | |
Property, Plant and Equipment [Line Items] | |
Useful life | 10 years |
Buildings | Maximum | |
Property, Plant and Equipment [Line Items] | |
Useful life | 30 years |
Leasehold improvements | Minimum | |
Property, Plant and Equipment [Line Items] | |
Useful life | 2 years |
Leasehold improvements | Maximum | |
Property, Plant and Equipment [Line Items] | |
Useful life | 15 years |
Vehicles | |
Property, Plant and Equipment [Line Items] | |
Useful life | 5 years |
Furniture and Fixtures | Minimum | |
Property, Plant and Equipment [Line Items] | |
Useful life | 2 years |
Furniture and Fixtures | Maximum | |
Property, Plant and Equipment [Line Items] | |
Useful life | 10 years |
Summary of Significant Accoun_7
Summary of Significant Accounting Policies - Intangible Asset Useful Lives (Details) | 12 Months Ended |
Dec. 31, 2019 | |
Finite-Lived Intangible Assets [Line Items] | |
Finite-lived intangible assets, remaining amortization period | 20 years |
Certificates of need | Minimum | |
Finite-Lived Intangible Assets [Line Items] | |
Finite-lived intangible asset useful life | 10 years |
Certificates of need | Maximum | |
Finite-Lived Intangible Assets [Line Items] | |
Finite-lived intangible asset useful life | 30 years |
Licenses | Minimum | |
Finite-Lived Intangible Assets [Line Items] | |
Finite-lived intangible asset useful life | 10 years |
Licenses | Maximum | |
Finite-Lived Intangible Assets [Line Items] | |
Finite-lived intangible asset useful life | 20 years |
Noncompete agreements | Minimum | |
Finite-Lived Intangible Assets [Line Items] | |
Finite-lived intangible asset useful life | 1 year |
Noncompete agreements | Maximum | |
Finite-Lived Intangible Assets [Line Items] | |
Finite-lived intangible asset useful life | 18 years |
Trade names | Minimum | |
Finite-Lived Intangible Assets [Line Items] | |
Finite-lived intangible asset useful life | 1 year |
Trade names | Maximum | |
Finite-Lived Intangible Assets [Line Items] | |
Finite-lived intangible asset useful life | 20 years |
Internal-use software | Minimum | |
Finite-Lived Intangible Assets [Line Items] | |
Finite-lived intangible asset useful life | 3 years |
Internal-use software | Maximum | |
Finite-Lived Intangible Assets [Line Items] | |
Finite-lived intangible asset useful life | 7 years |
Market access assets | |
Finite-Lived Intangible Assets [Line Items] | |
Finite-lived intangible asset useful life | 20 years |
Business Combinations - Textual
Business Combinations - Textual (Details) | Sep. 01, 2017 | Jul. 31, 2019USD ($)locationbed | Dec. 31, 2019USD ($) | Sep. 30, 2019bed | Mar. 31, 2019location | Dec. 31, 2018USD ($) | Nov. 01, 2018locationbed | Oct. 08, 2018bed | Sep. 05, 2018bed | Jun. 01, 2018location | May 01, 2018USD ($) | Jan. 01, 2018location | Dec. 31, 2017USD ($) | Aug. 01, 2017location | Jul. 01, 2017location | May 01, 2017location | Apr. 08, 2017bed | Apr. 01, 2017bed | Feb. 01, 2017location | Dec. 31, 2016USD ($) |
Business Acquisition [Line Items] | ||||||||||||||||||||
Goodwill | $ 2,305,200,000 | $ 2,100,800,000 | $ 1,972,600,000 | $ 1,927,200,000 | ||||||||||||||||
Inpatient Rehabilitation | ||||||||||||||||||||
Business Acquisition [Line Items] | ||||||||||||||||||||
Goodwill | 1,218,900,000 | 1,189,200,000 | 1,166,000,000 | 1,142,000,000 | ||||||||||||||||
Inpatient Rehabilitation | Saint Alphonsus and Heritage Valley | ||||||||||||||||||||
Business Acquisition [Line Items] | ||||||||||||||||||||
Goodwill expected to be tax-deductible | 0 | |||||||||||||||||||
Goodwill | 4,800,000 | |||||||||||||||||||
Inpatient Rehabilitation | Murrells Inlet, Winston-Salem and Littleton | ||||||||||||||||||||
Business Acquisition [Line Items] | ||||||||||||||||||||
Goodwill expected to be tax-deductible | 0 | |||||||||||||||||||
Inpatient Rehabilitation | Gulfport, Mount Carmel, Jackson and Heritage Valley | ||||||||||||||||||||
Business Acquisition [Line Items] | ||||||||||||||||||||
Goodwill expected to be tax-deductible | 0 | |||||||||||||||||||
Home Health and Hospice Segment | ||||||||||||||||||||
Business Acquisition [Line Items] | ||||||||||||||||||||
Goodwill | 1,086,300,000 | 911,600,000 | $ 806,600,000 | $ 785,200,000 | ||||||||||||||||
Home Health and Hospice Segment | Tidewater and Care Resource Group | ||||||||||||||||||||
Business Acquisition [Line Items] | ||||||||||||||||||||
Goodwill expected to be tax-deductible | 10,800,000 | |||||||||||||||||||
Goodwill | 10,800,000 | |||||||||||||||||||
Home Health and Hospice Segment | Alacare | ||||||||||||||||||||
Business Acquisition [Line Items] | ||||||||||||||||||||
Goodwill expected to be tax-deductible | $ 163,900,000 | |||||||||||||||||||
Payments to acquire businesses, gross | 217,800,000 | |||||||||||||||||||
Goodwill | $ 163,900,000 | |||||||||||||||||||
Home Health and Hospice Segment | Camellia Healthcare | ||||||||||||||||||||
Business Acquisition [Line Items] | ||||||||||||||||||||
Goodwill expected to be tax-deductible | 96,100,000 | |||||||||||||||||||
Goodwill | $ 96,100,000 | |||||||||||||||||||
Home Health and Hospice Segment | Celtic, Community, Bio Care, VNA, Ware, and Pickens County | ||||||||||||||||||||
Business Acquisition [Line Items] | ||||||||||||||||||||
Goodwill expected to be tax-deductible | $ 8,900,000 | |||||||||||||||||||
Goodwill | 8,900,000 | |||||||||||||||||||
Home health | Home Health and Hospice Segment | Community Health Services, Inc. | ||||||||||||||||||||
Business Acquisition [Line Items] | ||||||||||||||||||||
Number of locations | location | 2 | |||||||||||||||||||
Home health | Home Health and Hospice Segment | Bio Care Home Health Services and Kinsman Enterprises | ||||||||||||||||||||
Business Acquisition [Line Items] | ||||||||||||||||||||
Number of locations | location | 2 | |||||||||||||||||||
Home health | Home Health and Hospice Segment | VNA Healthtrends - IL, IN, AZ | ||||||||||||||||||||
Business Acquisition [Line Items] | ||||||||||||||||||||
Number of locations | location | 4 | |||||||||||||||||||
Home health | Home Health and Hospice Segment | VNA Healthtrends - OH and IL | ||||||||||||||||||||
Business Acquisition [Line Items] | ||||||||||||||||||||
Number of locations | location | 2 | |||||||||||||||||||
Home health | Home Health and Hospice Segment | Care Resource Group | ||||||||||||||||||||
Business Acquisition [Line Items] | ||||||||||||||||||||
Number of locations | location | 2 | |||||||||||||||||||
Home health | Home Health and Hospice Segment | Alacare | ||||||||||||||||||||
Business Acquisition [Line Items] | ||||||||||||||||||||
Number of locations | location | 23 | |||||||||||||||||||
Hospice | Home Health and Hospice Segment | Golden Age Hospice, Inc. | ||||||||||||||||||||
Business Acquisition [Line Items] | ||||||||||||||||||||
Number of locations | location | 1 | |||||||||||||||||||
Hospice | Home Health and Hospice Segment | Medical Services of America | ||||||||||||||||||||
Business Acquisition [Line Items] | ||||||||||||||||||||
Number of locations | location | 1 | |||||||||||||||||||
Hospice | Home Health and Hospice Segment | Alacare | ||||||||||||||||||||
Business Acquisition [Line Items] | ||||||||||||||||||||
Number of locations | location | 23 | |||||||||||||||||||
Corporate Joint Venture | Inpatient Rehabilitation | Saint Alphonsus | ||||||||||||||||||||
Business Acquisition [Line Items] | ||||||||||||||||||||
Noncontrolling interest, ownership percentage by parent | 51.00% | |||||||||||||||||||
Number of beds acquired | bed | 30 | |||||||||||||||||||
Number of beds contributed | bed | 40 | |||||||||||||||||||
Corporate Joint Venture | Inpatient Rehabilitation | Murrells Inlet | ||||||||||||||||||||
Business Acquisition [Line Items] | ||||||||||||||||||||
Number of beds acquired | bed | 29 | |||||||||||||||||||
Interest acquired in business acquisition (percent) | 62.00% | |||||||||||||||||||
Number of certificate of need beds acquired | bed | 60 | |||||||||||||||||||
Number of de novo beds | bed | 46 | |||||||||||||||||||
Corporate Joint Venture | Inpatient Rehabilitation | Winston-Salem (Novant) | ||||||||||||||||||||
Business Acquisition [Line Items] | ||||||||||||||||||||
Number of beds acquired | bed | 68 | |||||||||||||||||||
Number of beds contributed | bed | 68 | |||||||||||||||||||
Interest acquired in business acquisition (percent) | 50.00% | |||||||||||||||||||
Corporate Joint Venture | Inpatient Rehabilitation | Littleton | ||||||||||||||||||||
Business Acquisition [Line Items] | ||||||||||||||||||||
Number of beds acquired | bed | 17 | |||||||||||||||||||
Interest acquired in business acquisition (percent) | 68.00% | |||||||||||||||||||
Corporate Joint Venture | Inpatient Rehabilitation | Murrells Inlet, Winston-Salem and Littleton | ||||||||||||||||||||
Business Acquisition [Line Items] | ||||||||||||||||||||
Goodwill | $ 23,200,000 | |||||||||||||||||||
Corporate Joint Venture | Inpatient Rehabilitation | Memorial Hospital at Gulfport | ||||||||||||||||||||
Business Acquisition [Line Items] | ||||||||||||||||||||
Number of beds acquired | bed | 33 | |||||||||||||||||||
Interest acquired in business acquisition (percent) | 80.00% | |||||||||||||||||||
Corporate Joint Venture | Inpatient Rehabilitation | Mount Carmel West | ||||||||||||||||||||
Business Acquisition [Line Items] | ||||||||||||||||||||
Number of beds contributed | bed | 60 | |||||||||||||||||||
Interest acquired in business acquisition (percent) | 80.00% | |||||||||||||||||||
Corporate Joint Venture | Inpatient Rehabilitation | Jackson-Madison County General Hospital | ||||||||||||||||||||
Business Acquisition [Line Items] | ||||||||||||||||||||
Interest acquired in business acquisition (percent) | 50.00% | |||||||||||||||||||
Corporate Joint Venture | Inpatient Rehabilitation | Heritage Valley Beaver Hospital | ||||||||||||||||||||
Business Acquisition [Line Items] | ||||||||||||||||||||
Interest acquired in business acquisition (percent) | 75.00% | |||||||||||||||||||
Interest exchanged in business acquisition (percent) | 25.00% | |||||||||||||||||||
Corporate Joint Venture | Inpatient Rehabilitation | Heritage Valley | ||||||||||||||||||||
Business Acquisition [Line Items] | ||||||||||||||||||||
Noncontrolling interest, ownership percentage by parent | 75.00% | |||||||||||||||||||
Number of beds acquired | bed | 11 | |||||||||||||||||||
Corporate Joint Venture | Home Health and Hospice Segment | Tenet | ||||||||||||||||||||
Business Acquisition [Line Items] | ||||||||||||||||||||
Interest acquired in business acquisition (percent) | 75.00% | |||||||||||||||||||
Corporate Joint Venture | Home health | Home Health and Hospice Segment | Tenet | ||||||||||||||||||||
Business Acquisition [Line Items] | ||||||||||||||||||||
Interest acquired in business acquisition (percent) | 75.00% | |||||||||||||||||||
Number of locations | location | 1 |
Business Combinations - Fair Va
Business Combinations - Fair Value of Assets and Liabilities Assumed (Details) - USD ($) $ in Millions | May 01, 2018 | Jul. 31, 2019 | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 |
Business Acquisition [Line Items] | ||||||
Operating lease right-of-use assets | $ 276.5 | |||||
Goodwill | 2,305.2 | $ 2,100.8 | $ 1,972.6 | $ 1,927.2 | ||
Current operating lease liabilities | 40.4 | |||||
Home Health and Hospice Segment | ||||||
Business Acquisition [Line Items] | ||||||
Goodwill | 1,086.3 | 911.6 | 806.6 | 785.2 | ||
Home Health and Hospice Segment | Alacare | ||||||
Business Acquisition [Line Items] | ||||||
Accounts receivable | $ 10.2 | |||||
Prepaid expenses and other current assets | 1.7 | |||||
Property and equipment | 0.7 | |||||
Goodwill | 163.9 | |||||
Other long-term assets | 5 | |||||
Total assets acquired | 232.5 | |||||
Current portion of long-term debt | 0.3 | |||||
Accounts payable | 1.2 | |||||
Accrued payroll | 8.1 | |||||
Other current liabilities | 2 | |||||
Long-term operating lease liabilities | 3.1 | |||||
Total liabilities assumed | (14.7) | |||||
Net assets acquired | 217.8 | |||||
Home Health and Hospice Segment | Tidewater and Care Resource Group | ||||||
Business Acquisition [Line Items] | ||||||
Operating lease right-of-use assets | 0.2 | |||||
Goodwill | 10.8 | |||||
Total assets acquired | 14 | |||||
Current operating lease liabilities | 0.1 | |||||
Accrued payroll | 0.1 | |||||
Long-term operating lease liabilities | 0.1 | |||||
Total liabilities assumed | (0.3) | |||||
Net assets acquired | 13.7 | |||||
Home Health and Hospice Segment | Camellia Healthcare | ||||||
Business Acquisition [Line Items] | ||||||
Cash and cash equivalents | $ 1.3 | |||||
Prepaid expenses and other current assets | 0.3 | |||||
Property and equipment | 0.6 | |||||
Goodwill | 96.1 | |||||
Other long-term assets | 138.4 | |||||
Accounts payable | 1.7 | |||||
Accrued payroll | 4 | |||||
Total liabilities assumed | (5.7) | |||||
Net assets acquired | 132.7 | |||||
Home Health and Hospice Segment | Celtic, Community, Bio Care, VNA, Ware, and Pickens County | ||||||
Business Acquisition [Line Items] | ||||||
Total current assets | 0.1 | |||||
Goodwill | 8.9 | |||||
Total assets acquired | 13.2 | |||||
Total liabilities assumed | (0.1) | |||||
Net assets acquired | $ 13.1 | |||||
Home Health and Hospice Segment | Series of individually immaterial business acquisitions | ||||||
Business Acquisition [Line Items] | ||||||
Total current assets | 0.1 | |||||
Goodwill | 21.4 | |||||
Total assets acquired | 28.2 | |||||
Total liabilities assumed | (0.3) | |||||
Net assets acquired | 27.9 | |||||
Home Health and Hospice Segment | Noncompete agreements | Golden Age, MSA and Tenet | ||||||
Business Acquisition [Line Items] | ||||||
Finite-lived intangible asset useful life | 5 years | |||||
Home Health and Hospice Segment | Noncompete agreements | Alacare | ||||||
Business Acquisition [Line Items] | ||||||
Identifiable intangible assets | $ 1 | |||||
Finite-lived intangible asset useful life | 5 years | |||||
Home Health and Hospice Segment | Noncompete agreements | Tidewater and Care Resource Group | ||||||
Business Acquisition [Line Items] | ||||||
Identifiable intangible assets | $ 0.2 | |||||
Finite-lived intangible asset useful life | 5 years | |||||
Home Health and Hospice Segment | Noncompete agreements | Camellia Healthcare | ||||||
Business Acquisition [Line Items] | ||||||
Identifiable intangible assets | $ 0.5 | |||||
Finite-lived intangible asset useful life | 5 years | |||||
Home Health and Hospice Segment | Noncompete agreements | Celtic, Community, Bio Care, VNA, Ware, and Pickens County | ||||||
Business Acquisition [Line Items] | ||||||
Identifiable intangible assets | $ 0.2 | |||||
Home Health and Hospice Segment | Noncompete agreements | Series of individually immaterial business acquisitions | ||||||
Business Acquisition [Line Items] | ||||||
Identifiable intangible assets | $ 0.8 | |||||
Finite-lived intangible asset useful life | 5 years | |||||
Home Health and Hospice Segment | Trade names | Alacare | ||||||
Business Acquisition [Line Items] | ||||||
Identifiable intangible assets | $ 1 | |||||
Finite-lived intangible asset useful life | 6 months | |||||
Home Health and Hospice Segment | Trade names | Camellia Healthcare | ||||||
Business Acquisition [Line Items] | ||||||
Identifiable intangible assets | $ 1.4 | |||||
Finite-lived intangible asset useful life | 1 year | |||||
Home Health and Hospice Segment | Trade names | Series of individually immaterial business acquisitions | ||||||
Business Acquisition [Line Items] | ||||||
Identifiable intangible assets | $ 0.1 | |||||
Finite-lived intangible asset useful life | 1 year | |||||
Home Health and Hospice Segment | Certificates of need | Golden Age, MSA and Tenet | ||||||
Business Acquisition [Line Items] | ||||||
Finite-lived intangible asset useful life | 10 years | |||||
Home Health and Hospice Segment | Certificates of need | Alacare | ||||||
Business Acquisition [Line Items] | ||||||
Identifiable intangible assets | $ 34.3 | |||||
Finite-lived intangible asset useful life | 10 years | |||||
Home Health and Hospice Segment | Certificates of need | Tidewater and Care Resource Group | ||||||
Business Acquisition [Line Items] | ||||||
Identifiable intangible assets | $ 2 | |||||
Finite-lived intangible asset useful life | 10 years | |||||
Home Health and Hospice Segment | Certificates of need | Camellia Healthcare | ||||||
Business Acquisition [Line Items] | ||||||
Identifiable intangible assets | $ 16.6 | |||||
Finite-lived intangible asset useful life | 10 years | |||||
Home Health and Hospice Segment | Certificates of need | Celtic, Community, Bio Care, VNA, Ware, and Pickens County | ||||||
Business Acquisition [Line Items] | ||||||
Identifiable intangible assets | $ 2.5 | |||||
Home Health and Hospice Segment | Certificates of need | Series of individually immaterial business acquisitions | ||||||
Business Acquisition [Line Items] | ||||||
Identifiable intangible assets | $ 1.8 | |||||
Finite-lived intangible asset useful life | 10 years | |||||
Home Health and Hospice Segment | Licenses | Golden Age, MSA and Tenet | ||||||
Business Acquisition [Line Items] | ||||||
Finite-lived intangible asset useful life | 10 years | |||||
Home Health and Hospice Segment | Licenses | Alacare | ||||||
Business Acquisition [Line Items] | ||||||
Identifiable intangible assets | $ 14.6 | |||||
Finite-lived intangible asset useful life | 10 years | |||||
Home Health and Hospice Segment | Licenses | Tidewater and Care Resource Group | ||||||
Business Acquisition [Line Items] | ||||||
Identifiable intangible assets | $ 0.8 | |||||
Finite-lived intangible asset useful life | 10 years | |||||
Home Health and Hospice Segment | Licenses | Camellia Healthcare | ||||||
Business Acquisition [Line Items] | ||||||
Identifiable intangible assets | $ 21.6 | |||||
Finite-lived intangible asset useful life | 10 years | |||||
Home Health and Hospice Segment | Licenses | Celtic, Community, Bio Care, VNA, Ware, and Pickens County | ||||||
Business Acquisition [Line Items] | ||||||
Identifiable intangible assets | $ 1.5 | |||||
Home Health and Hospice Segment | Licenses | Series of individually immaterial business acquisitions | ||||||
Business Acquisition [Line Items] | ||||||
Identifiable intangible assets | $ 4 | |||||
Finite-lived intangible asset useful life | 10 years | |||||
Home Health and Hospice Segment | Software Development | Alacare | ||||||
Business Acquisition [Line Items] | ||||||
Identifiable intangible assets | $ 0.1 | |||||
Finite-lived intangible asset useful life | 3 years | |||||
Inpatient Rehabilitation | ||||||
Business Acquisition [Line Items] | ||||||
Goodwill | $ 1,218.9 | $ 1,189.2 | $ 1,166 | $ 1,142 | ||
Inpatient Rehabilitation | Hot Springs, Bryan and Broken Arrow | ||||||
Business Acquisition [Line Items] | ||||||
Property and equipment | 0.1 | |||||
Identifiable intangible assets | 9.8 | |||||
Goodwill | 24 | |||||
Total assets acquired | 35 | |||||
Inpatient Rehabilitation | Saint Alphonsus and Heritage Valley | ||||||
Business Acquisition [Line Items] | ||||||
Goodwill | 4.8 | |||||
Total assets acquired | 5.3 | |||||
Total liabilities assumed | (0.2) | |||||
Net assets acquired | 5.1 | |||||
Inpatient Rehabilitation | Noncompete agreements | Hot Springs, Bryan and Broken Arrow | ||||||
Business Acquisition [Line Items] | ||||||
Identifiable intangible assets | 0.6 | |||||
Inpatient Rehabilitation | Noncompete agreements | Saint Alphonsus and Heritage Valley | ||||||
Business Acquisition [Line Items] | ||||||
Identifiable intangible assets | $ 0.1 | |||||
Finite-lived intangible asset useful life | 2 years | |||||
Inpatient Rehabilitation | Trade names | Murrells Inlet, Winston-Salem and Littleton | ||||||
Business Acquisition [Line Items] | ||||||
Finite-lived intangible asset useful life | 20 years | |||||
Inpatient Rehabilitation | Trade names | Hot Springs, Bryan and Broken Arrow | ||||||
Business Acquisition [Line Items] | ||||||
Identifiable intangible assets | $ 0.5 | |||||
Finite-lived intangible asset useful life | 20 years | |||||
Inpatient Rehabilitation | Trade names | Saint Alphonsus and Heritage Valley | ||||||
Business Acquisition [Line Items] | ||||||
Identifiable intangible assets | $ 0.4 | |||||
Finite-lived intangible asset useful life | 20 years | |||||
Inpatient Rehabilitation | Certificates of need | Murrells Inlet, Winston-Salem and Littleton | ||||||
Business Acquisition [Line Items] | ||||||
Finite-lived intangible asset useful life | 20 years | |||||
Inpatient Rehabilitation | Certificates of need | Hot Springs, Bryan and Broken Arrow | ||||||
Business Acquisition [Line Items] | ||||||
Finite-lived intangible asset useful life | 20 years | |||||
Minimum | Noncompete agreements | ||||||
Business Acquisition [Line Items] | ||||||
Finite-lived intangible asset useful life | 1 year | |||||
Minimum | Trade names | ||||||
Business Acquisition [Line Items] | ||||||
Finite-lived intangible asset useful life | 1 year | |||||
Minimum | Certificates of need | ||||||
Business Acquisition [Line Items] | ||||||
Finite-lived intangible asset useful life | 10 years | |||||
Minimum | Licenses | ||||||
Business Acquisition [Line Items] | ||||||
Finite-lived intangible asset useful life | 10 years | |||||
Minimum | Inpatient Rehabilitation | Noncompete agreements | Murrells Inlet, Winston-Salem and Littleton | ||||||
Business Acquisition [Line Items] | ||||||
Finite-lived intangible asset useful life | 2 years | |||||
Minimum | Inpatient Rehabilitation | Noncompete agreements | Hot Springs, Bryan and Broken Arrow | ||||||
Business Acquisition [Line Items] | ||||||
Finite-lived intangible asset useful life | 2 years | |||||
Maximum | Noncompete agreements | ||||||
Business Acquisition [Line Items] | ||||||
Finite-lived intangible asset useful life | 18 years | |||||
Maximum | Trade names | ||||||
Business Acquisition [Line Items] | ||||||
Finite-lived intangible asset useful life | 20 years | |||||
Maximum | Certificates of need | ||||||
Business Acquisition [Line Items] | ||||||
Finite-lived intangible asset useful life | 30 years | |||||
Maximum | Licenses | ||||||
Business Acquisition [Line Items] | ||||||
Finite-lived intangible asset useful life | 20 years | |||||
Maximum | Inpatient Rehabilitation | Noncompete agreements | Murrells Inlet, Winston-Salem and Littleton | ||||||
Business Acquisition [Line Items] | ||||||
Finite-lived intangible asset useful life | 3 years | |||||
Maximum | Inpatient Rehabilitation | Noncompete agreements | Hot Springs, Bryan and Broken Arrow | ||||||
Business Acquisition [Line Items] | ||||||
Finite-lived intangible asset useful life | 3 years | |||||
Corporate Joint Venture | Inpatient Rehabilitation | Murrells Inlet, Winston-Salem and Littleton | ||||||
Business Acquisition [Line Items] | ||||||
Property and equipment | $ 0.1 | |||||
Goodwill | 23.2 | |||||
Total assets acquired | 39.5 | |||||
Total liabilities assumed | (0.2) | |||||
Net assets acquired | 39.3 | |||||
Corporate Joint Venture | Inpatient Rehabilitation | Noncompete agreements | Murrells Inlet, Winston-Salem and Littleton | ||||||
Business Acquisition [Line Items] | ||||||
Identifiable intangible assets | 1.4 | |||||
Corporate Joint Venture | Inpatient Rehabilitation | Trade names | Murrells Inlet, Winston-Salem and Littleton | ||||||
Business Acquisition [Line Items] | ||||||
Identifiable intangible assets | 2.3 | |||||
Corporate Joint Venture | Inpatient Rehabilitation | Certificates of need | Murrells Inlet, Winston-Salem and Littleton | ||||||
Business Acquisition [Line Items] | ||||||
Identifiable intangible assets | $ 12.5 |
Business Combinations - Net Cas
Business Combinations - Net Cash Paid for Acquisition (Details) - USD ($) $ in Millions | May 01, 2018 | Jul. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 |
Business Acquisition [Line Items] | ||||||
Goodwill | $ 179.5 | $ 128.2 | $ 45.4 | |||
Net cash paid for acquisition | 231.5 | 143.9 | 38.8 | |||
Inpatient Rehabilitation | ||||||
Business Acquisition [Line Items] | ||||||
Goodwill | 4.8 | 23.2 | 24 | |||
Inpatient Rehabilitation | Murrells Inlet, Winston-Salem and Littleton | ||||||
Business Acquisition [Line Items] | ||||||
Fair value of assets acquired | 16.3 | |||||
Goodwill | 23.2 | |||||
Fair value of liabilities assumed | (0.2) | |||||
Fair value of noncontrolling interest owned by joint venture partner | $ (39.3) | (39.3) | ||||
Inpatient Rehabilitation | Saint Alphonsus and Heritage Valley | ||||||
Business Acquisition [Line Items] | ||||||
Fair value of assets acquired | 0.5 | |||||
Goodwill | 4.8 | |||||
Fair value of liabilities assumed | (0.2) | |||||
Fair value of noncontrolling interest owned by joint venture partner | (5.1) | |||||
Net cash paid for acquisition | 0 | |||||
Inpatient Rehabilitation | Hot Springs, Bryan and Broken Arrow | ||||||
Business Acquisition [Line Items] | ||||||
Fair value of assets acquired | 11 | |||||
Goodwill | 24 | |||||
Fair value of noncontrolling interest owned by joint venture partner | (24.1) | |||||
Net cash paid for acquisition | 10.9 | |||||
Home Health and Hospice Segment | ||||||
Business Acquisition [Line Items] | ||||||
Goodwill | 174.7 | 105 | 21.4 | |||
Home Health and Hospice Segment | Tidewater and Care Resource Group | ||||||
Business Acquisition [Line Items] | ||||||
Fair value of assets acquired | 3.2 | |||||
Goodwill | 10.8 | |||||
Fair value of liabilities assumed | (0.3) | |||||
Net cash paid for acquisition | $ 13.7 | |||||
Home Health and Hospice Segment | Alacare | ||||||
Business Acquisition [Line Items] | ||||||
Fair value of assets acquired | $ 68.6 | |||||
Goodwill | 163.9 | |||||
Fair value of liabilities assumed | (14.7) | |||||
Net cash paid for acquisition | $ 217.8 | |||||
Home Health and Hospice Segment | Celtic, Community, Bio Care, VNA, Ware, and Pickens County | ||||||
Business Acquisition [Line Items] | ||||||
Fair value of assets acquired | 4.3 | |||||
Goodwill | 8.9 | |||||
Fair value of liabilities assumed | 0.1 | |||||
Fair value of noncontrolling interest owned by joint venture partner | (0.6) | (0.6) | ||||
Net cash paid for acquisition | 12.5 | |||||
Home Health and Hospice Segment | Camellia Healthcare | ||||||
Business Acquisition [Line Items] | ||||||
Fair value net cash acquired | 1.3 | |||||
Fair value of assets acquired | 41 | |||||
Goodwill | 96.1 | |||||
Fair value of liabilities assumed | $ (5.7) | |||||
Net cash paid for acquisition | $ 131.4 | |||||
Home Health and Hospice Segment | Series of individually immaterial business acquisitions | ||||||
Business Acquisition [Line Items] | ||||||
Fair value of assets acquired | 6.8 | |||||
Goodwill | 21.4 | |||||
Fair value of liabilities assumed | (0.3) | |||||
Net cash paid for acquisition | $ 27.9 | |||||
Corporate Joint Venture | Inpatient Rehabilitation | Murrells Inlet, Winston-Salem and Littleton | ||||||
Business Acquisition [Line Items] | ||||||
Net cash paid for acquisition | $ 0 |
Business Combinations - Pro For
Business Combinations - Pro Forma Results of Operation (Details) - USD ($) $ in Millions | 4 Months Ended | 8 Months Ended | 12 Months Ended | |||
Dec. 31, 2018 | Dec. 31, 2018 | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Business Acquisition [Line Items] | ||||||
Business acquisition, pro forma revenue | $ 4,674.6 | $ 4,415.9 | ||||
Business acquisition, pro forma net income (loss) | 364.3 | 301.8 | ||||
2017 Acquisitions | ||||||
Business Acquisition [Line Items] | ||||||
Business acquisition, pro forma revenue | $ 4,039.9 | |||||
Business acquisition, pro forma net income (loss) | 289 | |||||
2018 Acquisitions | ||||||
Business Acquisition [Line Items] | ||||||
Business acquisition, pro forma revenue | 4,337.4 | |||||
Business acquisition, pro forma net income (loss) | 300 | |||||
2016 Acquisitions | ||||||
Business Acquisition [Line Items] | ||||||
Business combination, pro forma information, revenue of acquiree since acquisition date, actual | 32.9 | |||||
Business combination, pro forma information, earnings or loss of acquiree since acquisition date, actual | (6.3) | |||||
Business acquisition, pro forma revenue | 3,996.1 | $ 3,771.5 | ||||
Business acquisition, pro forma net income (loss) | $ 260.3 | $ 254.8 | ||||
Inpatient Rehabilitation Segment | 2018 Acquisitions | ||||||
Business Acquisition [Line Items] | ||||||
Business combination, pro forma information, revenue of acquiree since acquisition date, actual | $ 9.1 | |||||
Business combination, pro forma information, earnings or loss of acquiree since acquisition date, actual | $ (1.6) | |||||
Inpatient Rehabilitation Segment | Saint Alphonsus and Heritage Valley | ||||||
Business Acquisition [Line Items] | ||||||
Business combination, pro forma information, revenue of acquiree since acquisition date, actual | 4.4 | |||||
Business combination, pro forma information, earnings or loss of acquiree since acquisition date, actual | (1.3) | |||||
Home Health and Hospice Segment | 2018 Acquisitions | ||||||
Business Acquisition [Line Items] | ||||||
Business combination, pro forma information, revenue of acquiree since acquisition date, actual | 3.5 | |||||
Business combination, pro forma information, earnings or loss of acquiree since acquisition date, actual | $ (0.3) | |||||
Home Health and Hospice Segment | Alacare | ||||||
Business Acquisition [Line Items] | ||||||
Business combination, pro forma information, revenue of acquiree since acquisition date, actual | 58.5 | |||||
Business combination, pro forma information, earnings or loss of acquiree since acquisition date, actual | 1.6 | |||||
Home Health and Hospice Segment | Tidewater and Care Resource Group | ||||||
Business Acquisition [Line Items] | ||||||
Business combination, pro forma information, revenue of acquiree since acquisition date, actual | 6.5 | |||||
Business combination, pro forma information, earnings or loss of acquiree since acquisition date, actual | $ (1.5) | |||||
Home Health and Hospice Segment | Camellia Healthcare | ||||||
Business Acquisition [Line Items] | ||||||
Business combination, pro forma information, revenue of acquiree since acquisition date, actual | $ 50 | |||||
Business combination, pro forma information, earnings or loss of acquiree since acquisition date, actual | $ (0.9) |
Cash and Marketable Securitie_2
Cash and Marketable Securities - Components of Investments (Details) - USD ($) $ in Millions | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 |
Cash and Cash Equivalents [Line Items] | ||||
Cash & Cash Equivalents | $ 94.8 | $ 69.2 | $ 54.4 | $ 40.5 |
Restricted Cash | 64.8 | 64.3 | ||
Restricted Marketable Securities | 76.1 | 62 | ||
Total | 235.7 | 195.5 | ||
Cash | ||||
Cash and Cash Equivalents [Line Items] | ||||
Cash & Cash Equivalents | 94.8 | 69.2 | ||
Restricted Cash | 64.8 | 64.3 | ||
Restricted Marketable Securities | 0 | 0 | ||
Total | 159.6 | 133.5 | ||
Equity Securities | ||||
Cash and Cash Equivalents [Line Items] | ||||
Cash & Cash Equivalents | 0 | 0 | ||
Restricted Cash | 0 | 0 | ||
Restricted Marketable Securities | 63.5 | 55.6 | ||
Total | 63.5 | 55.6 | ||
Debt Securities | ||||
Cash and Cash Equivalents [Line Items] | ||||
Cash & Cash Equivalents | 0 | 0 | ||
Restricted Cash | 0 | 0 | ||
Restricted Marketable Securities | 12.6 | 6.4 | ||
Total | $ 12.6 | $ 6.4 |
Variable Interest Entities - Te
Variable Interest Entities - Textuals (Details) - Variable Interest Entity, Primary Beneficiary, Aggregated Disclosure - entity | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Variable Interest Entity [Line Items] | ||
Number of consolidated limited partnership-like entities | 8 | 8 |
Minimum | ||
Variable Interest Entity [Line Items] | ||
Ownership interest in the consolidated entities (percent) | 50.00% | |
Maximum | ||
Variable Interest Entity [Line Items] | ||
Ownership interest in the consolidated entities (percent) | 75.00% |
Cash and Marketable Securitie_3
Cash and Marketable Securities - Restricted Cash (Details) - USD ($) $ in Millions | Dec. 31, 2019 | Dec. 31, 2018 |
Restricted Cash and Cash Equivalents Items [Line Items] | ||
Restricted cash | $ 57.4 | $ 59 |
Noncurrent restricted cash | 64.8 | 64.3 |
Affiliate cash | ||
Restricted Cash and Cash Equivalents Items [Line Items] | ||
Restricted cash | 16 | 16.4 |
Self-insured captive funds | ||
Restricted Cash and Cash Equivalents Items [Line Items] | ||
Restricted cash | 41.4 | 42.6 |
Noncurrent restricted cash | $ 7.4 | $ 5.3 |
Variable Interest Entities - Ca
Variable Interest Entities - Carrying Amounts and Classification of Consolidated VIEs (Details) - USD ($) $ in Millions | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Current assets: | |||||
Cash and cash equivalents | $ 94.8 | $ 69.2 | $ 54.4 | $ 40.5 | |
Accounts receivable | 498.7 | 459.9 | |||
Total current assets | 755.8 | 662.1 | |||
Property and equipment, net | 1,959.3 | 1,634.8 | |||
Operating lease right-of-use assets | 276.5 | ||||
Goodwill | 2,305.2 | 2,100.8 | $ 1,972.6 | $ 1,927.2 | |
Intangible assets, net | 476.3 | 443.4 | |||
Deferred income tax assets | 2.9 | 42.9 | |||
Other long-term assets | 304.7 | 291 | |||
Total assets | [1] | 6,080.7 | 5,175 | ||
Current liabilities: | |||||
Current portion of long-term debt | 39.3 | 35.8 | |||
Current operating lease liabilities | 40.4 | ||||
Accounts payable | 94.6 | 90 | |||
Other current liabilities | 303.8 | 333.9 | |||
Total current liabilities | 721 | 672.5 | |||
Long-term debt, net of current portion | 3,023.3 | 2,478.6 | |||
Long-term operating lease liabilities | 243.8 | ||||
Total liabilities | 4,148 | 3,356.3 | |||
Variable Interest Entity, Primary Beneficiary, Aggregated Disclosure | |||||
Current assets: | |||||
Cash and cash equivalents | 0.2 | 0.3 | |||
Accounts receivable | 29.3 | 31 | |||
Other current assets | 6.4 | 4.9 | |||
Total current assets | 35.9 | 36.2 | |||
Property and equipment, net | 122.6 | 111.5 | |||
Operating lease right-of-use assets | 6 | ||||
Goodwill | 15.9 | 15.9 | |||
Intangible assets, net | 3.3 | 4.3 | |||
Deferred income tax assets | 0.7 | 0.6 | |||
Other long-term assets | 30.6 | 29 | |||
Total assets | 215 | 197.5 | |||
Current liabilities: | |||||
Current portion of long-term debt | 0.8 | 0.6 | |||
Current operating lease liabilities | 1.4 | ||||
Accounts payable | 6.7 | 5.2 | |||
Accrued payroll | 7.7 | 7 | |||
Other current liabilities | 9.3 | 38 | |||
Total current liabilities | 25.9 | 50.8 | |||
Long-term debt, net of current portion | 10.5 | 0 | |||
Long-term operating lease liabilities | 4.7 | ||||
Total liabilities | $ 41.1 | $ 50.8 | |||
[1] | Our consolidated assets as of December 31, 2019 and December 31, 2018 include total assets of variable interest entities of $215.0 million and $197.5 million , respectively, which cannot be used by us to settle the obligations of other entities. Our consolidated liabilities as of December 31, 2019 and December 31, 2018 include total liabilities of the variable interest entities of $41.1 million and $50.8 million , respectively. See Note 3, Variable Interest Entities . |
Cash and Marketable Securitie_4
Cash and Marketable Securities - Textual (Details) - USD ($) $ in Millions | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Cash and Cash Equivalents [Abstract] | ||
Restricted marketable securities | $ 76.1 | $ 62 |
Unrealized net gain (loss) on marketable securities | $ 1.2 | $ (1.7) |
Cash and Marketable Securitie_5
Cash and Marketable Securities - Marketable Securities (Details) - USD ($) $ in Millions | Dec. 31, 2019 | Dec. 31, 2018 |
Cash and Cash Equivalents [Abstract] | ||
Restricted debt securities, cost | $ 12.6 | $ 6.4 |
Restricted debt securities, gross unrealized gains | 0 | 0 |
Restricted debt securities, gross unrealized losses | 0 | 0 |
Restricted debt securities, fair value | $ 12.6 | $ 6.4 |
Cash and Marketable Securitie_6
Cash and Marketable Securities - Investing Information Related to Marketable Securities (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Investment information related to restricted marketable securities | |||
Proceeds from sales and maturities of available-for-sale marketable securities | $ 6.4 | $ 0 | |
Proceeds from sales and maturities of available-for-sale marketable securities | $ 4 |
Cash and Marketable Securitie_7
Cash and Marketable Securities - Scheduled Maturities of Investments in Debt Securities (Details) $ in Millions | Dec. 31, 2019USD ($) |
Cost | |
Due in one year or less | $ 12.6 |
Due after one year through five years | 0 |
Due after five years through ten years | 0 |
Due after ten years | 0 |
Total | 12.6 |
Fair Value | |
Due in one year or less | 12.6 |
Due after one year through five years | 0 |
Due after five years through ten years | 0 |
Due after ten years | 0 |
Total | $ 12.6 |
Accounts Receivable - Component
Accounts Receivable - Components of Accounts Receivable (Details) - USD ($) $ in Millions | Dec. 31, 2019 | Dec. 31, 2018 |
Current: | ||
Patient accounts receivable | $ 498.7 | $ 459.9 |
Other accounts receivable | 7.4 | 7.8 |
Accounts receivable, current | 506.1 | 467.7 |
Noncurrent patient accounts receivable | 152.1 | 155.5 |
Accounts receivable | $ 658.2 | $ 623.2 |
Property and Equipment - Compon
Property and Equipment - Components of Property and Equipment (Details) - USD ($) $ in Millions | Dec. 31, 2019 | Dec. 31, 2018 |
Components of Property and Equipment | ||
Property and Equipment, net | $ 1,959.3 | $ 1,634.8 |
Land, Building, Improvements, Equipment and Furniture [Member] | ||
Components of Property and Equipment | ||
Property and equipment, gross | 2,983.3 | 2,631.3 |
Less: Accumulated depreciation and amortization | (1,211.8) | (1,147) |
Property and Equipment, net | 1,771.5 | 1,484.3 |
Land | ||
Components of Property and Equipment | ||
Property and equipment, gross | 169.6 | 142.4 |
Buildings | ||
Components of Property and Equipment | ||
Property and equipment, gross | 2,084.8 | 1,875.2 |
Leasehold improvements | ||
Components of Property and Equipment | ||
Property and equipment, gross | 192.6 | 147.5 |
Vehicles | ||
Components of Property and Equipment | ||
Property and equipment, gross | 31.2 | 24.6 |
Furniture and Fixtures | ||
Components of Property and Equipment | ||
Property and equipment, gross | 505.1 | 441.6 |
Construction in Progress | ||
Components of Property and Equipment | ||
Property and Equipment, net | $ 187.8 | $ 150.5 |
Property and Equipment - Textua
Property and Equipment - Textual (Details) $ in Millions | 12 Months Ended | ||
Dec. 31, 2018USD ($) | Dec. 31, 2019 | Feb. 29, 2016renewal_option | |
Property, Plant and Equipment [Line Items] | |||
Percentage of property and equipment, net pledged to lenders under credit agreement (percent) | 70.00% | ||
Financing obligation liability | $ 263.8 | ||
Development / Lease Agreement | |||
Property, Plant and Equipment [Line Items] | |||
Lease term | 15 years | ||
Number of lease renewal options available | renewal_option | 4 | ||
Term of lease renewal options | 5 years | ||
Increase in Property and equipment, net | 55 | ||
Other Notes Payable | Development / Lease Agreement | |||
Property, Plant and Equipment [Line Items] | |||
Financing obligation liability | 54.8 | ||
Financing obligation liability, current | $ 0.2 |
Property and Equipment - Deprec
Property and Equipment - Depreciation, Capitalized Interest Expense (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Property, Plant and Equipment [Abstract] | |||
Depreciation expense | $ 130 | $ 124.2 | $ 111.8 |
Interest capitalized | $ 8.3 | $ 6 | $ 3.7 |
Leases - Textuals (Details)
Leases - Textuals (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Lessee, Lease, Description [Line Items] | |||
Finance lease right-of-use asset accumulated depreciation | $ 99.6 | ||
Rental income from subleases | $ 3 | $ 2.9 | |
Minimum | |||
Lessee, Lease, Description [Line Items] | |||
Operating and finance lease contract term | 1 year | ||
Maximum | |||
Lessee, Lease, Description [Line Items] | |||
Operating and finance lease contract term | 25 years |
Leases - Components of Lease Co
Leases - Components of Lease Costs (Details) $ in Millions | 12 Months Ended |
Dec. 31, 2019USD ($) | |
Leases [Abstract] | |
Operating lease cost | $ 72.9 |
Finance lease cost: | |
Amortization of right-of-use assets | 30.3 |
Interest on lease liabilities | 29.5 |
Total finance lease cost | 59.8 |
Variable lease cost | 1.5 |
Sublease income | (3.2) |
Total lease cost | $ 131 |
Leases - Schedule of Supplement
Leases - Schedule of Supplemental Balance Sheet Information Related to Leases (Details) $ in Millions | Dec. 31, 2019USD ($) |
Assets | |
Operating lease right-of-use assets | $ 276.5 |
Finance lease | 327 |
Total leased assets | 603.5 |
Current liabilities: | |
Current operating lease liabilities | 40.4 |
Finance lease | 21 |
Noncurrent liabilities: | |
Long-term operating lease liabilities | 243.8 |
Finance lease | 363.1 |
Total lease liabilities | 668.3 |
Finance lease right-of-use asset accumulated depreciation | $ 99.6 |
Leases - Schedule of Weighted A
Leases - Schedule of Weighted Average Remaining Lease Term and Discount Rate (Details) | Dec. 31, 2019Rate |
Weighted Average Remaining Lease Term | |
Operating lease (in years) | 9 years 1 month 6 days |
Finance lease (in years) | 13 years 4 months 24 days |
Weighted Average Discount Rate | |
Operating lease (in percent) | 6.20% |
Finance lease (in percent) | 7.90% |
Leases - Maturities of Lease Li
Leases - Maturities of Lease Liabilities (Details) $ in Millions | Dec. 31, 2019USD ($) |
Operating Leases | |
2020 | $ 57.5 |
2021 | 53.2 |
2022 | 45.4 |
2023 | 40.7 |
2024 | 34.4 |
2025 and thereafter | 153 |
Total lease payments | 384.2 |
Less: Interest portion | (100) |
Total lease liabilities | 284.2 |
Finance Leases | |
2020 | 50.4 |
2021 | 48.9 |
2022 | 45.5 |
2023 | 45.3 |
2024 | 44.7 |
2025 and thereafter | 405.7 |
Total lease payments | 640.5 |
Less: Interest portion | (256.4) |
Total lease liabilities | $ 384.1 |
Leases - Supplemental Cash Flow
Leases - Supplemental Cash Flow Information (Details) $ in Millions | 12 Months Ended |
Dec. 31, 2019USD ($) | |
Cash paid for amounts included in the measurement of lease liabilities: | |
Operating cash flows from operating leases | $ 70.4 |
Operating cash flows from finance leases | 30 |
Financing cash flows from finance leases | 19.5 |
Right-of-use assets obtained in exchange for lease obligations: | |
Right-of-Use Asset Obtained in Exchange for Operating Lease Liability | 43.8 |
Right-of-Use Asset Obtained in Exchange for Finance Lease Liability | $ 34.2 |
Leases - Information Related to
Leases - Information Related to Fully Depreciated Assets and Assets Under Capital Lease Obligations (Details) $ in Millions | Dec. 31, 2018USD ($) |
Lessor, Lease, Description [Line Items] | |
Capital leased assets, gross | $ 351 |
Less: Accumulated amortization | (126.9) |
Assets under capital lease obligations, net | 224.1 |
Buildings | |
Lessor, Lease, Description [Line Items] | |
Capital leased assets, gross | 329.6 |
Vehicles | |
Lessor, Lease, Description [Line Items] | |
Capital leased assets, gross | 21.1 |
Equipment | |
Lessor, Lease, Description [Line Items] | |
Capital leased assets, gross | $ 0.3 |
Leases - Amortization, Capital
Leases - Amortization, Capital Lease Obligation and Rent Expense (Details) - USD ($) $ in Millions | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Leases [Abstract] | ||
Amortization expense | $ 24.1 | $ 22.7 |
Rent expense: | ||
Minimum rent payments | 69.8 | 66.5 |
Contingent and other rents | 24.9 | 24.1 |
Other | 9.1 | 8.9 |
Total rent expense | $ 103.8 | $ 99.5 |
Leases - Schedule of Future Min
Leases - Schedule of Future Minimum Rental Payments for Operating Leases (Details) $ in Millions | Dec. 31, 2018USD ($) |
Operating Leases | |
2019 | $ 71.4 |
2020 | 65.8 |
2021 | 54.3 |
2022 | 41 |
2023 | 35.3 |
2024 and thereafter | 148.2 |
Operating leases, total | 416 |
Capital Lease Obligations | |
2019 | 36.2 |
2020 | 32.3 |
2021 | 30.3 |
2022 | 28.7 |
2023 | 28 |
2024 and thereafter | 299.7 |
Capital lease obligations, total | 455.2 |
Less: Interest portion | (191.4) |
Obligations under capital leases | $ 263.8 |
Goodwill and Other Intangible_3
Goodwill and Other Intangible Assets - Carrying Amounts of Goodwill (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Schedule of Changes in the Carrying Amount of Goodwill | |||
Goodwill, beginning balance | $ 2,100.8 | $ 1,972.6 | $ 1,927.2 |
Acquisitions | 179.5 | 128.2 | 45.4 |
Consolidation of joint venture formerly accounted for under the equity method of accounting | 24.9 | ||
Goodwill, ending balance | 2,305.2 | 2,100.8 | 1,972.6 |
Inpatient Rehabilitation | |||
Schedule of Changes in the Carrying Amount of Goodwill | |||
Goodwill, beginning balance | 1,189.2 | 1,166 | 1,142 |
Acquisitions | 4.8 | 23.2 | 24 |
Consolidation of joint venture formerly accounted for under the equity method of accounting | 24.9 | ||
Goodwill, ending balance | 1,218.9 | 1,189.2 | 1,166 |
Home Health and Hospice | |||
Schedule of Changes in the Carrying Amount of Goodwill | |||
Goodwill, beginning balance | 911.6 | 806.6 | 785.2 |
Acquisitions | 174.7 | 105 | 21.4 |
Consolidation of joint venture formerly accounted for under the equity method of accounting | 0 | ||
Goodwill, ending balance | $ 1,086.3 | $ 911.6 | $ 806.6 |
Goodwill and Other Intangible_4
Goodwill and Other Intangible Assets - Textuals (Details) - USD ($) | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |||
Goodwill impairment loss | $ 0 | $ 0 | $ 0 |
Accumulated goodwill impairment | $ 0 | ||
Finite-lived intangible assets, remaining amortization period | 20 years |
Goodwill and Other Intangible_5
Goodwill and Other Intangible Assets - Other Intangible Assets (Details) - USD ($) $ in Millions | Dec. 31, 2019 | Dec. 31, 2018 |
Schedule of Intangible Assets by Major Class | ||
Gross Carrying Amount | $ 822.5 | $ 731.6 |
Accumulated Amortization | (346.2) | (288.2) |
Net | 476.3 | 443.4 |
Certificates of need | ||
Schedule of Intangible Assets by Major Class | ||
Gross Carrying Amount | 197.2 | 148.3 |
Accumulated Amortization | (40.4) | (28.2) |
Net | 156.8 | 120.1 |
Licenses | ||
Schedule of Intangible Assets by Major Class | ||
Gross Carrying Amount | 187.3 | 169.1 |
Accumulated Amortization | (94.1) | (82.2) |
Net | 93.2 | 86.9 |
Noncompete agreements | ||
Schedule of Intangible Assets by Major Class | ||
Gross Carrying Amount | 74.2 | 65.6 |
Accumulated Amortization | (62.3) | (58.6) |
Net | 11.9 | 7 |
Trade Name - Encompass | ||
Schedule of Intangible Assets by Major Class | ||
Gross Carrying Amount | 135.2 | 135.2 |
Accumulated Amortization | 0 | 0 |
Net | 135.2 | 135.2 |
Trade names | ||
Schedule of Intangible Assets by Major Class | ||
Gross Carrying Amount | 41.6 | 38.9 |
Accumulated Amortization | (22.4) | (19.4) |
Net | 19.2 | 19.5 |
Internal-use Software | ||
Schedule of Intangible Assets by Major Class | ||
Gross Carrying Amount | 173.8 | 161.3 |
Accumulated Amortization | (116) | (89.3) |
Net | 57.8 | 72 |
Market access assets | ||
Schedule of Intangible Assets by Major Class | ||
Gross Carrying Amount | 13.2 | 13.2 |
Accumulated Amortization | (11) | (10.5) |
Net | $ 2.2 | $ 2.7 |
Goodwill and Other Intangible_6
Goodwill and Other Intangible Assets - Amortization Expense (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |||
Amortization expense | $ 58.4 | $ 51.4 | $ 49.3 |
Goodwill and Other Intangible_7
Goodwill and Other Intangible Assets - Estimated Future Amortization Expense (Details) $ in Millions | Dec. 31, 2019USD ($) |
Schedule of Future Estimated Amortization Expense, Other Intangible Assets | |
2020 | $ 55.9 |
2021 | 46.2 |
2022 | 38.2 |
2023 | 33.9 |
2024 | $ 31 |
Investments in and Advances t_3
Investments in and Advances to Nonconsolidated Affiliates - Textual (Details) $ in Millions | 12 Months Ended | ||
Dec. 31, 2019USD ($)subsidiary | Dec. 31, 2018USD ($) | Dec. 31, 2017USD ($) | |
Schedule of Investments [Line Items] | |||
Number of partially-owned subsidiaries | subsidiary | 5 | ||
Number of general or limited partnerships, limited liability companies, or joint ventures | subsidiary | 4 | ||
Goodwill increase | $ | $ 24.9 | ||
Gain on consolidation of Yuma | $ | $ 19.2 | $ 0 | $ 0 |
Minimum | |||
Schedule of Investments [Line Items] | |||
Affiliates ownership percentage | 8.00% | ||
Maximum | |||
Schedule of Investments [Line Items] | |||
Affiliates ownership percentage | 60.00% |
Investments in and Advances t_4
Investments in and Advances to Nonconsolidated Affiliates - Schedule of Other Long-term Assets (Details) - USD ($) $ in Millions | Dec. 31, 2019 | Dec. 31, 2018 |
Equity method investments: | ||
Capital contributions | $ 0.9 | $ 0.9 |
Cumulative share of income | 68.1 | 114 |
Cumulative share of distributions | (63.6) | (102.7) |
Equity method investments | 5.4 | 12.2 |
Cost method investments: | ||
Capital contributions, net of distributions and impairments | 2 | 0 |
Total investments in and advances to nonconsolidated affiliates | $ 7.4 | $ 12.2 |
Investments in and Advances t_5
Investments in and Advances to Nonconsolidated Affiliates - Combined Assets, Liabilities and Equity (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Assets— | |||
Current | $ 4.2 | $ 9.9 | |
Noncurrent | 9.3 | 17.8 | |
Total assets | 13.5 | 27.7 | |
Liabilities and equity— | |||
Current liabilities | 0.5 | 1.4 | |
Noncurrent liabilities | 0.3 | 0.1 | |
Partners’ capital and shareholders’ equity— | |||
Encompass Health | 4.9 | 12.2 | |
Outside partners | 7.8 | 14 | |
Total liabilities and equity | 13.5 | 27.7 | |
Combined Statements of Operations of Equity Method Affiliates | |||
Net operating revenues | 32.6 | 42.6 | $ 40.9 |
Operating expenses | (19.1) | (25.6) | (24.1) |
Income from continuing operations, net of tax | 13.4 | 17.1 | 17 |
Net income | $ 13.4 | $ 17.1 | $ 17 |
Long-term Debt - Long-term Debt
Long-term Debt - Long-term Debt Outstanding (Details) - USD ($) $ in Millions | Dec. 31, 2019 | Sep. 30, 2019 | Dec. 31, 2018 | Mar. 31, 2016 | Sep. 30, 2015 | Mar. 31, 2015 | Sep. 11, 2012 |
Schedule of Outstanding Long-term Debt | |||||||
Finance lease obligations | $ 384.1 | ||||||
Finance lease obligations | $ 263.8 | ||||||
Total debt and Capital lease obligations | 3,062.6 | 2,514.4 | |||||
Less: Current portion | (39.3) | (35.8) | |||||
Long-term debt, net of current portion | 3,023.3 | 2,478.6 | |||||
Term Loan Facilities | Term loan facilities | |||||||
Schedule of Outstanding Long-term Debt | |||||||
Total debt | $ 265.2 | $ 280.1 | |||||
Senior Notes | 5.125% Senior Notes due 2023 | |||||||
Schedule of Outstanding Long-term Debt | |||||||
Debt instrument interest rate (percent) | 5.125% | 5.125% | 5.125% | ||||
Total debt | $ 297.3 | $ 296.6 | |||||
Senior Notes | 5.75% Senior Notes due 2024 | |||||||
Schedule of Outstanding Long-term Debt | |||||||
Debt instrument interest rate (percent) | 5.75% | 5.75% | 5.75% | ||||
Total debt | $ 697.3 | $ 1,194.7 | |||||
Senior Notes | 5.75% Senior Notes due 2025 | |||||||
Schedule of Outstanding Long-term Debt | |||||||
Debt instrument interest rate (percent) | 5.75% | 5.75% | 5.75% | 5.75% | |||
Total debt | $ 345.6 | $ 345 | |||||
Senior Notes | 4.50% Senior Notes due 2028 | |||||||
Schedule of Outstanding Long-term Debt | |||||||
Debt instrument interest rate (percent) | 4.50% | 4.50% | |||||
Total debt | $ 491.7 | 0 | |||||
Senior Notes | 4.75% Senior Notes due 2030 | |||||||
Schedule of Outstanding Long-term Debt | |||||||
Debt instrument interest rate (percent) | 4.75% | 4.75% | |||||
Total debt | $ 491.7 | 0 | |||||
Senior Notes | 2.00% Convertible Senior Subordinated Notes due 2043 [Member] | |||||||
Schedule of Outstanding Long-term Debt | |||||||
Debt instrument interest rate (percent) | 4.75% | ||||||
Other Notes Payable | |||||||
Schedule of Outstanding Long-term Debt | |||||||
Total debt | $ 44.7 | 104.2 | |||||
Revolving Credit Facility | |||||||
Schedule of Outstanding Long-term Debt | |||||||
Total debt | $ 45 | $ 30 |
Long-term Debt - Scheduled Prin
Long-term Debt - Scheduled Principal Payments Due on Long-term Debt (Details) $ in Millions | Dec. 31, 2019USD ($) |
Face Amount | |
Long-term Debt by Maturity | |
2020 | $ 39.3 |
2021 | 35.5 |
2022 | 46.3 |
2023 | 335.1 |
2024 | 995.7 |
Thereafter | 1,638.6 |
Total | 3,090.5 |
Net Amount | |
Long-term Debt by Maturity | |
2020 | 39.3 |
2021 | 35.5 |
2022 | 46.3 |
2023 | 332.4 |
2024 | 991.6 |
Thereafter | 1,617.5 |
Total | $ 3,062.6 |
Long-term Debt - Textual (Detai
Long-term Debt - Textual (Details) | 1 Months Ended | 3 Months Ended | 12 Months Ended | |||||||||||||||||
Nov. 30, 2019USD ($) | Sep. 30, 2019USD ($) | Jun. 30, 2019USD ($) | Sep. 30, 2017USD ($) | May 31, 2017USD ($)shares | Mar. 31, 2015USD ($) | Nov. 30, 2013USD ($)shares | Mar. 31, 2017shares | Dec. 31, 2019USD ($)shares | Dec. 31, 2018USD ($)shares | Dec. 31, 2017USD ($)shares | Jan. 01, 2019USD ($) | May 01, 2017 | Mar. 31, 2016 | Sep. 30, 2015USD ($) | Aug. 31, 2015USD ($) | Jan. 31, 2015USD ($) | Sep. 30, 2014USD ($) | Sep. 30, 2012USD ($) | Sep. 11, 2012 | |
Debt Instrument [Line Items] | ||||||||||||||||||||
Loss on early extinguishment of debt | $ 7,700,000 | $ 0 | $ 10,700,000 | |||||||||||||||||
Senior secured leverage ratio maximum | 2 | |||||||||||||||||||
Conversion of convertible debt | $ 0 | $ 0 | $ 319,400,000 | |||||||||||||||||
Convertible senior subordinated notes (shares) | shares | 0 | 0 | 4,000,000 | |||||||||||||||||
Finance lease obligations | $ 384,100,000 | |||||||||||||||||||
Term Loan Facilities | ||||||||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||||||||
Maximum leverage ratio under the financial covenants | 4.50 | |||||||||||||||||||
Senior Notes | ||||||||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||||||||
Redemption price, (percent) | 101.00% | |||||||||||||||||||
Convertible Preferred Stock | ||||||||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||||||||
Shares exchanged for convertible debt (shares) | shares | 257,110 | |||||||||||||||||||
Convertible debt dividend rate (percent) | 6.50% | |||||||||||||||||||
Revolving Credit Facility | ||||||||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||||||||
Notes payable | $ 45,000,000 | $ 30,000,000 | ||||||||||||||||||
The Credit Agreement | ||||||||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||||||||
Amounts outstanding under letter of credit facility | $ 38,900,000 | $ 37,400,000 | ||||||||||||||||||
The Credit Agreement | Term Loan Facilities | ||||||||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||||||||
Commitment fee (percent) | 0.375% | |||||||||||||||||||
Senior secured leverage ratio maximum | 2 | |||||||||||||||||||
Payment limit under the credit agreement's negative covenant | $ 200,000,000 | |||||||||||||||||||
Maximum leverage ratio under the financial covenants | 4.25 | |||||||||||||||||||
The Credit Agreement | Fed Funds Effective Rate Overnight Index Swap Rate | Term Loan Facilities | ||||||||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||||||||
Spread on variable rate (percent) | 0.50% | |||||||||||||||||||
The Credit Agreement | LIBOR | Term Loan Facilities | ||||||||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||||||||
Spread on variable rate (percent) | 1.50% | |||||||||||||||||||
The Credit Agreement | Term loan facilities | ||||||||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||||||||
Credit facility borrowing capacity | $ 270,000,000 | |||||||||||||||||||
Percentageof aggregate principal amount outstanding (percent) | 1.25% | |||||||||||||||||||
The Credit Agreement | Revolving Credit Facility | ||||||||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||||||||
Credit facility borrowing capacity | $ 1,000,000,000 | |||||||||||||||||||
Applicable interest rate under credit facility (percent) | 3.20% | 3.90% | ||||||||||||||||||
The Credit Agreement | Letter of Credit | ||||||||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||||||||
Credit facility borrowing capacity | 260,000,000 | |||||||||||||||||||
2017 Credit Agreement | Term loan facilities | ||||||||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||||||||
Credit facility borrowing capacity | $ 300,000,000 | |||||||||||||||||||
Percentageof aggregate principal amount outstanding (percent) | 1.25% | |||||||||||||||||||
Repayments of debt | $ 110,000,000 | |||||||||||||||||||
2017 Credit Agreement | Revolving Credit Facility | ||||||||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||||||||
Credit facility borrowing capacity | 700,000,000 | |||||||||||||||||||
2017 Credit Agreement | Letter of Credit | ||||||||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||||||||
Credit facility borrowing capacity | $ 260,000,000 | |||||||||||||||||||
5.125% Senior Notes due 2023 | Senior Notes | ||||||||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||||||||
Notes payable | $ 297,300,000 | $ 296,600,000 | ||||||||||||||||||
Aggregate principal amount | $ 300,000,000 | |||||||||||||||||||
Net proceeds for offering | $ 295,000,000 | |||||||||||||||||||
Debt instrument interest rate (percent) | 5.125% | 5.125% | 5.125% | |||||||||||||||||
Effective interest rate (percent) | 5.40% | |||||||||||||||||||
5.75% Senior Notes due 2024 | Senior Notes | ||||||||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||||||||
Notes payable | $ 697,300,000 | $ 1,194,700,000 | ||||||||||||||||||
Repayments of debt | $ 404,000,000 | $ 102,000,000 | ||||||||||||||||||
Redemption price, (percent) | 100.958% | 101.917% | ||||||||||||||||||
Aggregate principal amount | $ 350,000,000 | $ 400,000,000 | $ 175,000,000 | $ 275,000,000 | ||||||||||||||||
Debt issue price as percentage of principal (percent) | 100.50% | 102.00% | 103.625% | |||||||||||||||||
Debt instrument interest rate (percent) | 5.75% | 5.75% | 5.75% | |||||||||||||||||
Effective interest rate (percent) | 5.80% | |||||||||||||||||||
Debt redeemed | $ 400,000,000 | $ 100,000,000 | ||||||||||||||||||
5.75% Senior Notes due 2025 | Senior Notes | ||||||||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||||||||
Notes payable | $ 345,600,000 | $ 345,000,000 | ||||||||||||||||||
Aggregate principal amount | $ 350,000,000 | |||||||||||||||||||
Debt instrument interest rate (percent) | 5.75% | 5.75% | 5.75% | 5.75% | ||||||||||||||||
Effective interest rate (percent) | 6.00% | |||||||||||||||||||
4.50% Senior Notes due 2028 | Senior Notes | ||||||||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||||||||
Notes payable | $ 491,700,000 | $ 0 | ||||||||||||||||||
Redemption price, (percent) | 4.70% | |||||||||||||||||||
Aggregate principal amount | $ 500,000,000 | |||||||||||||||||||
Debt instrument interest rate (percent) | 4.50% | 4.50% | ||||||||||||||||||
4.75% Senior Notes due 2030 | Senior Notes | ||||||||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||||||||
Notes payable | $ 491,700,000 | $ 0 | ||||||||||||||||||
Redemption price, (percent) | 5.00% | |||||||||||||||||||
Aggregate principal amount | $ 500,000,000 | |||||||||||||||||||
Debt instrument interest rate (percent) | 4.75% | 4.75% | ||||||||||||||||||
2.00% Convertible Senior Subordinated Notes due 2043 [Member] | Senior Notes | ||||||||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||||||||
Debt instrument interest rate (percent) | 4.75% | |||||||||||||||||||
2.00% Convertible Senior Subordinated Notes due 2043 [Member] | Senior Subordinated Notes [Member] | ||||||||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||||||||
Repayments of debt | $ 600,000 | |||||||||||||||||||
Aggregate principal amount | $ 320,000,000 | |||||||||||||||||||
Debt instrument interest rate (percent) | 2.00% | |||||||||||||||||||
Effective interest rate (percent) | 6.00% | |||||||||||||||||||
Debt redeemed | $ 320,000,000 | |||||||||||||||||||
Debt instrument conversion rate | 0.0272221 | |||||||||||||||||||
Conversion of convertible debt | $ 319,400,000 | |||||||||||||||||||
Conversion of convertible debt, net of tax (shares) | shares | 8,900,000 | |||||||||||||||||||
Shares issued due to make-whole premium (in shares) | shares | 200,000 | |||||||||||||||||||
Convertible senior subordinated notes (shares) | shares | 8,600,000 | |||||||||||||||||||
Accounting Standards Update 2016-02 | ||||||||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||||||||
Finance lease obligations | $ 52,000,000 |
Long-term Debt - Senior Notes R
Long-term Debt - Senior Notes Redemption Prices (Details) - Senior Notes | 1 Months Ended | 12 Months Ended | ||||
Nov. 30, 2019 | Sep. 30, 2019 | Jun. 30, 2019 | Sep. 30, 2015 | Mar. 31, 2015 | Dec. 31, 2019 | |
Debt Instrument, Redemption [Line Items] | ||||||
Redemption price, (percent) | 101.00% | |||||
5.125% Senior Notes due 2023 | Redemption Period Two | ||||||
Debt Instrument, Redemption [Line Items] | ||||||
Redemption price, (percent) | 102.563% | |||||
5.125% Senior Notes due 2023 | Redemption Period Three | ||||||
Debt Instrument, Redemption [Line Items] | ||||||
Redemption price, (percent) | 101.281% | |||||
5.125% Senior Notes due 2023 | Redemption Period Four | ||||||
Debt Instrument, Redemption [Line Items] | ||||||
Redemption price, (percent) | 100.00% | |||||
5.75% Senior Notes due 2024 | ||||||
Debt Instrument, Redemption [Line Items] | ||||||
Redemption price, (percent) | 100.958% | 101.917% | ||||
5.75% Senior Notes due 2024 | Redemption Period Three | ||||||
Debt Instrument, Redemption [Line Items] | ||||||
Redemption price, (percent) | 100.958% | |||||
5.75% Senior Notes due 2024 | Redemption Period Four | ||||||
Debt Instrument, Redemption [Line Items] | ||||||
Redemption price, (percent) | 100.00% | |||||
5.75% Senior Notes due 2025 | Redemption Period One | ||||||
Debt Instrument, Redemption [Line Items] | ||||||
Redemption price, (percent) | 102.875% | |||||
5.75% Senior Notes due 2025 | Redemption Period Two | ||||||
Debt Instrument, Redemption [Line Items] | ||||||
Redemption price, (percent) | 101.917% | |||||
5.75% Senior Notes due 2025 | Redemption Period Three | ||||||
Debt Instrument, Redemption [Line Items] | ||||||
Redemption price, (percent) | 100.958% | |||||
5.75% Senior Notes due 2025 | Redemption Period Four | ||||||
Debt Instrument, Redemption [Line Items] | ||||||
Redemption price, (percent) | 100.00% | |||||
4.50% Senior Notes due 2028 | ||||||
Debt Instrument, Redemption [Line Items] | ||||||
Redemption price, (percent) | 4.70% | |||||
4.50% Senior Notes due 2028 | Redemption Period One | ||||||
Debt Instrument, Redemption [Line Items] | ||||||
Redemption price, (percent) | 102.25% | |||||
4.50% Senior Notes due 2028 | Redemption Period Two | ||||||
Debt Instrument, Redemption [Line Items] | ||||||
Redemption price, (percent) | 101.125% | |||||
4.50% Senior Notes due 2028 | Redemption Period Three | ||||||
Debt Instrument, Redemption [Line Items] | ||||||
Redemption price, (percent) | 100.00% | |||||
4.75% Senior Notes due 2030 | ||||||
Debt Instrument, Redemption [Line Items] | ||||||
Redemption price, (percent) | 5.00% | |||||
4.75% Senior Notes due 2030 | Redemption Period One | ||||||
Debt Instrument, Redemption [Line Items] | ||||||
Redemption price, (percent) | 102.375% | |||||
4.75% Senior Notes due 2030 | Redemption Period Two | ||||||
Debt Instrument, Redemption [Line Items] | ||||||
Redemption price, (percent) | 101.583% | |||||
4.75% Senior Notes due 2030 | Redemption Period Three | ||||||
Debt Instrument, Redemption [Line Items] | ||||||
Redemption price, (percent) | 100.792% | |||||
4.75% Senior Notes due 2030 | Redemption Period Four | ||||||
Debt Instrument, Redemption [Line Items] | ||||||
Redemption price, (percent) | 100.00% |
Long-term Debt - Schedule of No
Long-term Debt - Schedule of Notes Payable (Details) - Other Notes Payable - USD ($) $ in Millions | Dec. 31, 2019 | Dec. 31, 2018 |
Debt Instrument [Line Items] | ||
Notes payable | $ 44.7 | $ 104.2 |
Sale/leaseback transactions involving real estate accounted for as financings | ||
Debt Instrument [Line Items] | ||
Notes payable | 28 | 82.8 |
Construction of a new hospital | LIBOR | ||
Debt Instrument [Line Items] | ||
Notes payable | $ 12.9 | 14.6 |
Effective interest rate (percent) | 5.00% | |
Other | ||
Debt Instrument [Line Items] | ||
Notes payable | $ 3.8 | $ 6.8 |
Minimum | Sale/leaseback transactions involving real estate accounted for as financings | ||
Debt Instrument [Line Items] | ||
Effective interest rate (percent) | 8.10% | 7.80% |
Minimum | Construction of a new hospital | LIBOR | ||
Debt Instrument [Line Items] | ||
Effective interest rate (percent) | 4.80% | |
Minimum | Other | ||
Debt Instrument [Line Items] | ||
Effective interest rate (percent) | 4.30% | 4.30% |
Maximum | Sale/leaseback transactions involving real estate accounted for as financings | ||
Debt Instrument [Line Items] | ||
Effective interest rate (percent) | 11.20% | 11.20% |
Maximum | Construction of a new hospital | LIBOR | ||
Debt Instrument [Line Items] | ||
Effective interest rate (percent) | 5.00% | |
Maximum | Other | ||
Debt Instrument [Line Items] | ||
Effective interest rate (percent) | 6.80% | 6.80% |
Self-Insured Risks - Textual (D
Self-Insured Risks - Textual (Details) $ in Millions | Dec. 31, 2019USD ($)claim | Dec. 31, 2018USD ($)claim |
Insurance [Abstract] | ||
Maximum first layer of insurance coverage funded | $ 30 | |
Self-insurance reserves included in Other current liabilities | $ 40.1 | $ 41.3 |
Number of individual claims covered by reserves | claim | 1,000 | 1,000 |
Self-Insured Risks - Changes in
Self-Insured Risks - Changes in Self-insurance Reserves (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Liability for Unpaid Claims and Claims Adjustment Expense [Roll Forward] | |||
Balance at beginning of period, gross | $ 160.9 | $ 171 | $ 171.4 |
Less: Reinsurance receivables | (25.6) | (39.9) | (41.4) |
Balance at beginning of period, net | 135.3 | 131.1 | 130 |
Increase for the provision of current year claims | 46.9 | 47.1 | 44.7 |
Decrease for the provision of prior year claims | (12.6) | (8.7) | (3) |
Expenses related to discontinued operations | (0.1) | (0.2) | (0.5) |
Payments related to current year claims | (7.5) | (7) | (5) |
Payments related to prior year claims | (31.1) | (27) | (35.1) |
Balance at end of period, net | 130.9 | 135.3 | 131.1 |
Add: Reinsurance receivables | (26.4) | (25.6) | (39.9) |
Balance at end of period, gross | $ 157.3 | $ 160.9 | $ 171 |
Redeemable Noncontrolling Int_3
Redeemable Noncontrolling Interests - Table 1 (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Redeemable Noncontrolling Interest, Equity, Carrying Amount Roll Forward [Abstract] [Abstract] | |||
Balance at beginning of period | $ 261.7 | ||
Net income attributable to noncontrolling interests | 12.6 | $ 13.9 | $ 17.9 |
Distributions declared | (70.2) | (71.1) | (50.5) |
Change in fair value | (147.6) | (91) | (67) |
Balance at end of period | 239.6 | 261.7 | |
Redeemable Noncontrolling Interest | |||
Redeemable Noncontrolling Interest, Equity, Carrying Amount Roll Forward [Abstract] [Abstract] | |||
Balance at beginning of period | 261.7 | 220.9 | 138.3 |
Net income attributable to noncontrolling interests | 12.6 | 13.9 | 17.9 |
Distributions declared | (9.2) | (8.6) | (4.6) |
Contribution to joint venture | 1 | 9.6 | 2.3 |
Reclassification to noncontrolling interests | (11.2) | 0 | 0 |
Purchase of redeemable noncontrolling interests | (162.9) | (65.1) | 0 |
Change in fair value | 147.6 | 91 | 67 |
Balance at end of period | $ 239.6 | $ 261.7 | $ 220.9 |
Redeemable Noncontrolling Int_4
Redeemable Noncontrolling Interests - Table 2 (Details) - USD ($) $ in Millions | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2019 | Sep. 30, 2019 | Jun. 30, 2019 | Mar. 31, 2019 | Dec. 31, 2018 | Sep. 30, 2018 | Jun. 30, 2018 | Mar. 31, 2018 | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Noncontrolling Interest [Abstract] | |||||||||||
Net income attributable to nonredeemable Noncontrolling Interest | $ 74.5 | $ 69.2 | $ 61.2 | ||||||||
Net income attributable to redeemable noncontrolling interest | 12.6 | 13.9 | 17.9 | ||||||||
Net income attributable to noncontrolling interest | $ 22.6 | $ 21.9 | $ 19.7 | $ 22.9 | $ 19.6 | $ 20.7 | $ 21.4 | $ 21.4 | $ 87.1 | $ 83.1 | $ 79.1 |
Redeemable Noncontrolling Int_5
Redeemable Noncontrolling Interests Redeemable Noncontrolling Interests - Textuals (Details) - USD ($) $ in Millions | Feb. 18, 2020 | Feb. 21, 2018 | Jan. 31, 2020 | Sep. 30, 2019 | Jul. 31, 2019 | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | Feb. 20, 2020 | Dec. 31, 2014 |
Noncontrolling Interest [Line Items] | ||||||||||
Redeemable noncontrolling interests | $ 239.6 | $ 261.7 | ||||||||
Purchase of redeemable noncontrolling interests | 5.60% | 5.60% | ||||||||
Payments to settle the acquisition of Holdings common stock | $ 65 | $ 163 | 162.9 | $ 65.1 | $ 0 | |||||
EHHI | ||||||||||
Noncontrolling Interest [Line Items] | ||||||||||
Value of outstanding shares of Holdings | $ 208 | |||||||||
Home Health and Hospice Segment | EHHI | ||||||||||
Noncontrolling Interest [Line Items] | ||||||||||
Redeemable noncontrolling interest, equity, acquired percent | 83.30% | |||||||||
Redeemable noncontrolling interests | $ 64 | |||||||||
Subsidiary's common stock held by subsidiary 's management, Percent | 16.70% | |||||||||
Subsequent Event | ||||||||||
Noncontrolling Interest [Line Items] | ||||||||||
Purchase of redeemable noncontrolling interests | 4.30% | |||||||||
Payments to settle the acquisition of Holdings common stock | $ 162 | |||||||||
Delivering EHC shares to management investors (in shares) | 561,000 | |||||||||
Shares to be issued to the management investors pursuant to the exchange agreements represents (in percent) | 0.60% | |||||||||
Subsequent Event | EHHI | ||||||||||
Noncontrolling Interest [Line Items] | ||||||||||
Value of outstanding shares of Holdings | $ 46 |
Fair Value Measurements - Finan
Fair Value Measurements - Financial Assets and Liabilities Measured on a Recurring Basis (Details) - USD ($) $ in Millions | Dec. 31, 2019 | Dec. 31, 2018 |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Debt securities | $ 12.6 | $ 6.4 |
Fair Value, Recurring | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Equity securities | 63.5 | 55.6 |
Debt securities | 12.6 | 6.4 |
Redeemable noncontrolling interests | 239.6 | 261.7 |
Fair Value, Recurring | Fair Value, Inputs, Level 1 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Equity securities | 0 | 0 |
Debt securities | 12.6 | 6.4 |
Redeemable noncontrolling interests | 0 | 0 |
Fair Value, Recurring | Fair Value, Inputs, Level 2 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Equity securities | 63.5 | 55.6 |
Debt securities | 0 | 0 |
Redeemable noncontrolling interests | 0 | 0 |
Fair Value, Recurring | Fair Value, Inputs, Level 3 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Equity securities | 0 | 0 |
Debt securities | 0 | 0 |
Redeemable noncontrolling interests | $ 239.6 | $ 261.7 |
Fair Value Measurements - Textu
Fair Value Measurements - Textual (Details) - USD ($) | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Fair Value, Nonrecurring | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Gains or losses in assets disclosed at fair value | $ 19,200,000 | $ 0 | $ 0 |
Fair Value Measurements - Carry
Fair Value Measurements - Carrying Amounts and Estimated Fair Values of Financial Instruments (Details) - USD ($) $ in Millions | Dec. 31, 2019 | Sep. 30, 2019 | Dec. 31, 2018 | Mar. 31, 2016 | Sep. 30, 2015 | Mar. 31, 2015 | Sep. 11, 2012 |
Other Notes Payable | Carrying Amount | |||||||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | |||||||
Carrying amounts and estimated fair values of financial instruments | $ 44.7 | $ 104.2 | |||||
Other Notes Payable | Estimated Fair Value | |||||||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | |||||||
Carrying amounts and estimated fair values of financial instruments | 44.7 | 104.2 | |||||
Revolving Credit Facility | Carrying Amount | |||||||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | |||||||
Carrying amounts and estimated fair values of financial instruments | 45 | 30 | |||||
Revolving Credit Facility | Estimated Fair Value | |||||||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | |||||||
Carrying amounts and estimated fair values of financial instruments | 45 | 30 | |||||
Letter of Credit | Carrying Amount | |||||||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | |||||||
Carrying amounts and estimated fair values of financial instruments | 0 | 0 | |||||
Letter of Credit | Estimated Fair Value | |||||||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | |||||||
Carrying amounts and estimated fair values of financial instruments | 38.9 | 37.4 | |||||
Term loan facilities | Term Loan Facilities | Carrying Amount | |||||||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | |||||||
Carrying amounts and estimated fair values of financial instruments | 265.2 | 280.1 | |||||
Term loan facilities | Term Loan Facilities | Estimated Fair Value | |||||||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | |||||||
Carrying amounts and estimated fair values of financial instruments | $ 266.6 | $ 281.3 | |||||
5.125% Senior Notes due 2023 | Senior Notes | |||||||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | |||||||
Debt instrument interest rate (percent) | 5.125% | 5.125% | 5.125% | ||||
5.125% Senior Notes due 2023 | Senior Notes | Carrying Amount | |||||||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | |||||||
Carrying amounts and estimated fair values of financial instruments | $ 297.3 | $ 296.6 | |||||
5.125% Senior Notes due 2023 | Senior Notes | Estimated Fair Value | |||||||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | |||||||
Carrying amounts and estimated fair values of financial instruments | $ 306.6 | $ 298.5 | |||||
5.75% Senior Notes due 2024 | Senior Notes | |||||||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | |||||||
Debt instrument interest rate (percent) | 5.75% | 5.75% | 5.75% | ||||
5.75% Senior Notes due 2024 | Senior Notes | Carrying Amount | |||||||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | |||||||
Carrying amounts and estimated fair values of financial instruments | $ 697.3 | $ 1,194.7 | |||||
5.75% Senior Notes due 2024 | Senior Notes | Estimated Fair Value | |||||||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | |||||||
Carrying amounts and estimated fair values of financial instruments | $ 708.8 | $ 1,200 | |||||
5.75% Senior Notes due 2025 | Senior Notes | |||||||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | |||||||
Debt instrument interest rate (percent) | 5.75% | 5.75% | 5.75% | 5.75% | |||
5.75% Senior Notes due 2025 | Senior Notes | Carrying Amount | |||||||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | |||||||
Carrying amounts and estimated fair values of financial instruments | $ 345.6 | $ 345 | |||||
5.75% Senior Notes due 2025 | Senior Notes | Estimated Fair Value | |||||||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | |||||||
Carrying amounts and estimated fair values of financial instruments | $ 369.7 | 339.5 | |||||
4.50% Senior Notes due 2028 | Senior Notes | |||||||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | |||||||
Debt instrument interest rate (percent) | 4.50% | 4.50% | |||||
4.50% Senior Notes due 2028 | Senior Notes | Carrying Amount | |||||||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | |||||||
Carrying amounts and estimated fair values of financial instruments | $ 491.7 | 0 | |||||
4.50% Senior Notes due 2028 | Senior Notes | Estimated Fair Value | |||||||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | |||||||
Carrying amounts and estimated fair values of financial instruments | $ 519.4 | 0 | |||||
4.75% Senior Notes due 2030 | Senior Notes | |||||||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | |||||||
Debt instrument interest rate (percent) | 4.75% | 4.75% | |||||
4.75% Senior Notes due 2030 | Senior Notes | Carrying Amount | |||||||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | |||||||
Carrying amounts and estimated fair values of financial instruments | $ 491.7 | 0 | |||||
4.75% Senior Notes due 2030 | Senior Notes | Estimated Fair Value | |||||||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | |||||||
Carrying amounts and estimated fair values of financial instruments | $ 520 | $ 0 |
Share-Based Payments - Textual
Share-Based Payments - Textual (Details) - USD ($) | 1 Months Ended | 12 Months Ended | ||||
Feb. 27, 2020 | Jul. 31, 2019 | Feb. 28, 2019 | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Weighted-average fair value per share (in dollars per share) | $ 15.45 | $ 14.57 | $ 11.55 | |||
Unrecognized compensation cost | $ 1,800,000 | |||||
Intrinsic value of stock options exercised | $ 3,600,000 | $ 5,200,000 | $ 29,000,000 | |||
2016 Omnibus Performance Incentive Plan | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Shares authorized for grant under the Plan (shares) | 14,000,000 | |||||
Stock Options | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Expiration period | 10 years | |||||
Vesting period | 3 years | |||||
Share-based compensation expense | $ 1,400,000 | 1,100,000 | $ 800,000 | |||
Weighted-average recognition period for unrecognized compensation cost | 22 months | |||||
Employment Based SARS | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Shares granted during the period (shares) | 122,976 | |||||
Stock Appreciation Rights (SARs) | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Share-based compensation expense | $ 81,900,000 | $ 56,200,000 | $ 26,000,000 | |||
Weighted-average fair value per share of awards granted (in dollars per share) | $ 870.28 | $ 419.28 | ||||
Share-based compensation arrangement by share-based payment award, equity instruments other than options, share-based liabilities paid | $ 55,000,000 | $ 13,000,000 | ||||
Number of remaining shares | 115,545 | |||||
Fair value of SARs | $ 101,000,000 | |||||
Unrecognized compensation cost related to unvested SARs | 0 | |||||
Performance and Employment Based SARS | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Shares granted during the period (shares) | 129,124 | |||||
Value threshold for determining fair value of common stock | 400,000,000 | |||||
Restricted Stock | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Share-based compensation expense | $ 29,500,000 | $ 27,100,000 | $ 19,600,000 | |||
Weighted-average recognition period for unrecognized compensation cost | 21 months | |||||
Weighted-average fair value per share of awards granted (in dollars per share) | $ 49.84 | $ 37.61 | $ 42.85 | |||
Unrecognized compensation cost related to unvested SARs | $ 32,300,000 | |||||
Fair value of vested shares | $ 45,200,000 | $ 22,100,000 | $ 17,700,000 | |||
Awards issued during period (shares) | 660,000 | |||||
Non-employee Directors | Restricted Stock Units (RSUs) | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Weighted-average fair value per share of awards granted (in dollars per share) | $ 64.48 | $ 62.88 | $ 47.30 | |||
Number of remaining shares | 536,658 | |||||
Awards issued during period (shares) | 23,270 | 24,771 | 27,594 | |||
Compensation expense recognized | $ 1,500,000 | $ 1,600,000 | $ 1,300,000 | |||
Unrecognized compensation cost | $ 0 | |||||
Non-employee Directors | Dividend Equivalent, RSU | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Awards issued during period (shares) | 8,876 | 8,045 | 9,968 | |||
Subsequent Event | Stock Appreciation Rights (SARs) | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Settled the acquisition shares upon payment | $ 101,000,000 |
Share-Based Payments - Weighted
Share-Based Payments - Weighted-average Assumptions (Details) | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Stock Options | |||
Schedule of Weighted Average Assumptions Used to Determine Fair Value of Stock Options | |||
Expected volatility (percent) | 25.30% | 29.20% | 30.50% |
Risk-free interest rate (percent) | 2.70% | 2.70% | 2.10% |
Expected life (years) | 7 years 1 month 6 days | 7 years 1 month 6 days | 7 years 8 months 12 days |
Dividend yield (percent) | 2.10% | 2.20% | 2.20% |
Stock Appreciation Rights (SARs) | |||
Schedule of Weighted Average Assumptions Used to Determine Fair Value of Stock Options | |||
Expected volatility (percent) | 38.60% | 27.10% | |
Risk-free interest rate (percent) | 1.50% | 2.60% | |
Expected life (years) | 9 days | 1 year 3 months 18 days | |
Dividend yield (percent) | 0.00% | 0.00% |
Share-Based Payments - Stock Op
Share-Based Payments - Stock Option Activity (Details) $ / shares in Units, shares in Thousands, $ in Millions | 12 Months Ended |
Dec. 31, 2019USD ($)$ / sharesshares | |
Shares | |
Outstanding, December 31, 2018 (in shares) | shares | 537 |
Granted (in shares) | shares | 106 |
Exercised (in shares) | shares | (78) |
Outstanding, December 31, 2019 (in shares) | shares | 565 |
Exercisable, December 31, 2019 (in shares) | shares | 364 |
Weighted- Average Exercise Price per Share | |
Outstanding, December 31, 2018 (in USD per share) | $ / shares | $ 35.22 |
Granted (in USD per share) | $ / shares | 63.77 |
Exercised (in USD per share) | $ / shares | 17.73 |
Outstanding, December 31, 2019 (in USD per share) | $ / shares | 43.02 |
Exercisable, December 31, 2019 (in USD per share) | $ / shares | $ 35.16 |
Weighted- Average Remaining Life (Years) | |
Outstanding, December 31, 2019 | 6 years 3 months 18 days |
Exercisable, December 31, 2019 | 5 years 1 month 6 days |
Aggregate Intrinsic Value | |
Outstanding, December 31, 2019 | $ | $ 14.8 |
Exercisable, December 31, 2019 | $ | $ 12.4 |
Share-Based Payments - Summary
Share-Based Payments - Summary of Restricted Stock Awards (Details) - Restricted Stock - $ / shares shares in Thousands | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Shares | |||
Nonvested shares, Beginning Balance (in shares) | 907 | ||
Granted (in shares) | 660 | ||
Vested (in shares) | (718) | ||
Forfeited (in shares) | (31) | ||
Nonvested shares, Ending Balance (in shares) | 818 | 907 | |
Weighted-Average Grant Date Fair Value | |||
Nonvested shares, Beginning Balance (in dollar per share) | $ 37.61 | ||
Granted (in dollar per share) | 49.84 | $ 37.61 | $ 42.85 |
Vested (in dollar per share) | 34.84 | ||
Forfeited (in dollar per share) | 48.65 | ||
Nonvested shares, Ending Balance (in dollar per share) | $ 49.49 | $ 37.61 |
Employee Benefit Plans - Textua
Employee Benefit Plans - Textual (Details) $ in Millions | 12 Months Ended | ||
Dec. 31, 2019USD ($)yr | Dec. 31, 2018USD ($) | Dec. 31, 2017USD ($) | |
Defined Contribution Plan Disclosure [Line Items] | |||
Company healthcare plan costs, net of employee payments | $ 178.4 | $ 164.7 | $ 145 |
Employer contributions | 23.4 | 21.5 | 19.3 |
Employer contributions funded by forfeited accounts | 1.4 | 2.5 | 1.5 |
Payments under the Senior Management Bonus Program | $ 18.6 | $ 19.7 | $ 14.7 |
Encompass Health Retirement Investment Plan | |||
Defined Contribution Plan Disclosure [Line Items] | |||
Contribution as percentage of salary allowed under the Plan (percent) | 100.00% | ||
Age requirement to participate in the Plan | yr | 21 | ||
Vesting percentage | 100.00% | ||
Employer matching contribution | 50.00% | ||
Vesting percentage in employer contributions (percent) | 6.00% | ||
Vesting period | 3 | ||
Encompass Home Health Savings Plan HHSP | |||
Defined Contribution Plan Disclosure [Line Items] | |||
Contribution as percentage of salary allowed under the Plan (percent) | 60.00% | ||
Vesting percentage | 3.00% | ||
Employer matching contribution | 25.00% | ||
Vesting period | 6 |
Income Taxes - Components of Pr
Income Taxes - Components of Provision for Income Tax Expense (Details) - USD ($) $ in Millions | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2019 | Sep. 30, 2019 | Jun. 30, 2019 | Mar. 31, 2019 | Dec. 31, 2018 | Sep. 30, 2018 | Jun. 30, 2018 | Mar. 31, 2018 | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Current: | |||||||||||
Federal | $ 58.1 | $ 103.8 | $ 72.2 | ||||||||
State and other | 17.8 | 24.2 | 12.8 | ||||||||
Total current expense | 75.9 | 128 | 85 | ||||||||
Deferred: | |||||||||||
Federal | 32 | (13.7) | 58.4 | ||||||||
State and other | 8 | 4.6 | 2.4 | ||||||||
Total deferred expense (benefit) | 40 | (9.1) | 60.8 | ||||||||
Total income tax expense related to continuing operations | $ 27.3 | $ 34.3 | $ 23.5 | $ 30.8 | $ 29.4 | $ 30.2 | $ 29.3 | $ 30 | $ 115.9 | $ 118.9 | $ 145.8 |
Income Taxes - Reconciliation o
Income Taxes - Reconciliation of Effective Income Tax Rate (Details) | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Income Tax Disclosure [Abstract] | |||
Tax expense at statutory rate (percent) | 21.00% | 21.00% | 35.00% |
Increase (decrease) in tax rate resulting from: | |||
State and other income taxes, net of federal tax benefit (percent) | 4.30% | 4.50% | 3.50% |
Increase (decrease) in valuation allowance | 0.80% | (0.40%) | 0.40% |
Government, class action, and related settlements | (1.20%) | 2.70% | 0.00% |
Noncontrolling interests (percent) | (3.00%) | (3.20%) | (4.60%) |
Share-based windfall tax benefits (percent) | (1.00%) | (0.40%) | (1.80%) |
Tax Act (percent) | 0.00% | 0.00% | (2.80%) |
Other, net (percent) | (0.30%) | (0.10%) | (0.30%) |
Income tax expense (percent) | 20.60% | 24.10% | 29.40% |
Income Taxes - Deferred Tax Ass
Income Taxes - Deferred Tax Asset and Liabilities (Details) - USD ($) $ in Millions | Dec. 31, 2019 | Dec. 31, 2018 |
Deferred income tax assets: | ||
Net operating loss | $ 61.8 | $ 66 |
Property, net | 33.9 | 30.8 |
Insurance reserve | 17 | 16.8 |
Stock-based compensation | 38.3 | 33 |
Revenue reserves | 0 | 6.1 |
Operating lease liabilities | 30.6 | |
Other accruals | 23.4 | 22.5 |
Tax credits | 6.8 | 4.7 |
Other | 0.2 | 0.6 |
Total deferred income tax assets | 212 | 180.5 |
Less: Valuation allowance | (38.4) | (33.7) |
Net deferred income tax assets | 173.6 | 146.8 |
Deferred income tax liabilities: | ||
Revenue reserves | (11.6) | 0 |
Intangibles | (94.6) | (88.5) |
Operating lease right-of-use assets | (30.3) | |
Carrying value of partnerships | (34) | (15.2) |
Other | (0.2) | (0.2) |
Total deferred income tax liabilities | (170.7) | (103.9) |
Net deferred income tax assets | $ 2.9 | $ 42.9 |
Income Taxes - Textual (Details
Income Taxes - Textual (Details) - USD ($) $ in Millions | 3 Months Ended | 12 Months Ended | |||||
Dec. 31, 2017 | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | Sep. 30, 2019 | Mar. 31, 2018 | Jan. 01, 2017 | |
Valuation Allowance [Line Items] | |||||||
Tax expense or benefit resulting from the tax cuts and jobs act | $ 13.6 | ||||||
Bonus depreciation deductions, tax cuts and jobs act | 8.8 | ||||||
Changes to valuation allowance during the period | $ 4.7 | $ (2.1) | $ 7.9 | ||||
Remaining valuation allowance | 38.4 | 33.7 | |||||
Deferred tax liability and additional cash tax benefits | 51.3 | ||||||
Unrecognized tax benefits, decrease resulting from current period tax positions | 33.7 | ||||||
Deferred tax liabilities, deferred expense, reserves and accruals | $ 23.6 | ||||||
Deferred revenue, additions | $ 22.2 | ||||||
Unrecognized income tax benefits | 0.3 | 0.4 | 0.9 | 0.3 | $ 2.8 | ||
Unrecognized tax benefits, decrease | 2.5 | ||||||
Decrease in unrecognized tax benefits is reasonably possible | 0.3 | ||||||
Unrecognized tax benefits that would have affected effective tax rate if recognized | 0.3 | 0.4 | $ 0.9 | $ 0.3 | |||
Federal | |||||||
Valuation Allowance [Line Items] | |||||||
Income tax expense (benefit), continuing operations, adjustment of deferred tax (asset) liability | (5.8) | ||||||
State | |||||||
Valuation Allowance [Line Items] | |||||||
Income tax expense (benefit), continuing operations, adjustment of deferred tax (asset) liability | (13.8) | ||||||
Valuation allowance, deferred tax asset, increase (decrease), amount, tax cuts and jobs act | $ (5.8) | ||||||
Net operating loss | $ 61.8 |
Income Taxes - Reconciliation_2
Income Taxes - Reconciliation of Liability for Unrecognized Tax Benefits (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Gross Unrecognized Income Tax Benefits | |||
Gross unrecognized income tax benefits, Beginning Balance | $ 0.9 | $ 0.3 | |
Gross amount of decreases in unrecognized tax benefits related to prior periods | $ (0.4) | ||
Decreases in unrecognized tax benefits relating to settlements with taxing authorities | (2.1) | ||
Gross amount of increases in unrecognized tax benefits related to prior periods | 0.8 | ||
Reductions to unrecognized tax benefits as a result of a lapse of the applicable statute of limitations | (0.5) | (0.2) | |
Gross unrecognized income tax benefits, Ending Balance | 0.4 | 0.9 | $ 0.3 |
Accrued Interest and Penalties | |||
Unrecognized Tax Benefits, Accrued interest and penalties, Beginning Balance | 0.1 | ||
Gross amount of increases in unrecognized tax benefits related to prior periods | 0.1 | ||
Unrecognized Tax Benefits, Accrued interest and penalties, Ending Balance | $ 0.1 | $ 0.1 |
Earnings Per Common Share - Com
Earnings Per Common Share - Computation of Basic and Diluted Earnings per Common Share (Details) - USD ($) $ / shares in Units, shares in Millions, $ in Millions | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2019 | Sep. 30, 2019 | Jun. 30, 2019 | Mar. 31, 2019 | Dec. 31, 2018 | Sep. 30, 2018 | Jun. 30, 2018 | Mar. 31, 2018 | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Numerator: | |||||||||||
Income from continuing operations | $ 90.2 | $ 119.5 | $ 111 | $ 125.7 | $ 46.2 | $ 109.4 | $ 113 | $ 105.7 | $ 446.4 | $ 374.3 | $ 350.6 |
Less: Net income attributable to noncontrolling interests | $ (22.6) | $ (21.9) | $ (19.7) | $ (22.9) | $ (19.6) | $ (20.7) | $ (21.4) | $ (21.4) | (87.1) | (83.1) | (79.1) |
Less: Income allocated to participating securities | (1.3) | (0.9) | (0.9) | ||||||||
Income from continuing operations attributable to Encompass Health common shareholders | 358 | 290.3 | 270.6 | ||||||||
(Loss) income from discontinued operations, net of tax, attributable to Encompass Health common shareholders | (0.6) | 1.1 | (0.4) | ||||||||
Net income attributable to Encompass Health common shareholders | $ 357.4 | $ 291.4 | $ 270.2 | ||||||||
Denominator: | |||||||||||
Basic weighted average common shares outstanding (shares) | 98 | 97.9 | 93.7 | ||||||||
Basic earnings per share attributable to Encompass Health common shareholders: | |||||||||||
Continuing operations (in dollars per share) | $ 0.69 | $ 0.99 | $ 0.93 | $ 1.05 | $ 0.27 | $ 0.90 | $ 0.93 | $ 0.86 | $ 3.66 | $ 2.97 | $ 2.88 |
Discontinued operations (in dollars per share) | 0 | 0 | 0 | (0.01) | 0.02 | 0 | 0 | (0.01) | (0.01) | 0.01 | 0 |
Net income (in dollars per share) | $ 0.69 | $ 0.99 | $ 0.93 | $ 1.04 | $ 0.29 | $ 0.90 | $ 0.93 | $ 0.85 | $ 3.65 | $ 2.98 | $ 2.88 |
Numerator: | |||||||||||
Income from continuing operations | $ 90.2 | $ 119.5 | $ 111 | $ 125.7 | $ 46.2 | $ 109.4 | $ 113 | $ 105.7 | $ 446.4 | $ 374.3 | $ 350.6 |
Add: Interest on convertible debt, net of tax | 0 | 0 | 4.6 | ||||||||
Add: Loss on extinguishment of convertible debt, net of tax | 0 | 0 | 6.2 | ||||||||
Income from continuing operations attributable to Encompass Health common shareholders | 359.3 | 291.2 | 282.3 | ||||||||
(Loss) income from discontinued operations, net of tax, attributable to Encompass Health common shareholders | (0.6) | 1.1 | (0.4) | ||||||||
Net income attributable to Encompass Health common shareholders | $ 358.7 | $ 292.3 | $ 281.9 | ||||||||
Denominator: | |||||||||||
Diluted weighted average common shares outstanding (shares) | 99.4 | 99.8 | 99.3 | ||||||||
Diluted earnings per share attributable to Encompass Health common shareholders: | |||||||||||
Continuing operations (in dollars per share) | $ 0.68 | $ 0.98 | $ 0.92 | $ 1.04 | $ 0.26 | $ 0.89 | $ 0.92 | $ 0.85 | $ 3.62 | $ 2.92 | $ 2.84 |
Discontinued operations (in dollars per share) | 0 | 0 | 0 | (0.01) | 0.02 | 0 | 0 | (0.01) | (0.01) | 0.01 | 0 |
Net income (in dollars per share) | $ 0.68 | $ 0.98 | $ 0.92 | $ 1.03 | $ 0.28 | $ 0.89 | $ 0.92 | $ 0.84 | $ 3.61 | $ 2.93 | $ 2.84 |
Earnings per Common Share - Rec
Earnings per Common Share - Reconciliation Between Basic and Diluted Weighted-average Common Shares Outstanding (Details) - shares shares in Millions | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Earnings Per Share [Abstract] | |||
Basic weighted average common shares outstanding (shares) | 98 | 97.9 | 93.7 |
Convertible senior subordinated notes (shares) | 0 | 0 | 4 |
Restricted stock awards, dilutive stock options, and restricted stock units (shares) | 1.4 | 1.9 | 1.6 |
Diluted weighted average common shares outstanding (shares) | 99.4 | 99.8 | 99.3 |
Earnings Per Common Share - Tex
Earnings Per Common Share - Textual (Details) - USD ($) | Jul. 24, 2018 | Jul. 20, 2017 | Jul. 21, 2016 | Sep. 30, 2009 | Jan. 31, 2020 | Oct. 31, 2019 | Jul. 31, 2019 | Jan. 17, 2017 | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | Feb. 28, 2014 | Dec. 31, 2013 |
Earnings Per Share, Diluted, by Common Class, Including Two Class Method [Line Items] | ||||||||||||||
Antidilutive shares excluded from computation of diluted weighted-average shares (shares) | 100,000 | 0 | 200,000 | |||||||||||
Common stock repurchased | $ 45,900,000 | $ 38,100,000 | ||||||||||||
Cash dividends declared per common share (in dollars per share) | $ 1.1 | $ 1.04 | $ 0.98 | |||||||||||
Common stock issued (shares) | 5,000,000 | 700,000 | ||||||||||||
Common stock warrants issued | 8,200,000 | 0 | 8,200,000 | |||||||||||
Exercise price of warrants (in dollars per share) | $ 41.40 | $ 41.40 | $ 41.40 | |||||||||||
Proceeds from exercising stock warrants | $ 26,700,000 | $ 0 | $ 0 | $ 26,600,000 | ||||||||||
Common Stock | ||||||||||||||
Earnings Per Share, Diluted, by Common Class, Including Two Class Method [Line Items] | ||||||||||||||
Common stock repurchase authorization | $ 250,000,000 | $ 250,000,000 | $ 200,000,000 | |||||||||||
Common stock repurchased (shares) | 800,000 | 0 | 900,000 | |||||||||||
Common stock repurchased | $ 45,900,000 | $ 38,100,000 | ||||||||||||
Cash dividends declared per common share (in dollars per share) | $ 0.27 | $ 0.25 | $ 0.24 | $ 0.27 | $ 0.28 | |||||||||
Cash dividends paid per common share (in dollars per share) | $ 0.27 | $ 0.25 | $ 0.28 | |||||||||||
Accrued common stock dividends | $ 29,000,000 | $ 28,400,000 | ||||||||||||
Common Stock | Subsequent Event | ||||||||||||||
Earnings Per Share, Diluted, by Common Class, Including Two Class Method [Line Items] | ||||||||||||||
Cash dividends paid per common share (in dollars per share) | $ 0.28 |
Earnings per Common Share - Sch
Earnings per Common Share - Schedule of Warrant Activity (Details) - $ / shares shares in Millions | 1 Months Ended | ||
Jan. 17, 2017 | Dec. 31, 2016 | Sep. 30, 2009 | |
Warrants and Rights Note Disclosure Roll Forward [Abstract] | |||
Common stock warrants outstanding as of December 31, 2016 | 8.2 | ||
Expired | (1.1) | ||
Common stock warrants outstanding as of January 17, 2017 | 0 | ||
Weighted average exercise price (in dollars per share) | $ 41.40 | $ 41.40 | $ 41.40 |
Cashless exercise | |||
Warrants and Rights Note Disclosure Roll Forward [Abstract] | |||
Exercised | (6.5) | ||
Weighted average exercise price (in dollars per share) | $ 41.40 | ||
Cash exercise | |||
Warrants and Rights Note Disclosure Roll Forward [Abstract] | |||
Exercised | (0.6) | ||
Weighted average exercise price (in dollars per share) | $ 41.40 |
Contingencies and Other Commi_2
Contingencies and Other Commitments - Textual (Details) $ in Millions | May 18, 2016USD ($) | Jul. 31, 2019USD ($) | Dec. 31, 2019USD ($) | Dec. 31, 2018USD ($) | Apr. 24, 2014facilities | Mar. 04, 2013facilities |
Other Commitments [Abstract] | ||||||
2020 | $ 61.4 | |||||
2021 | 41.7 | |||||
2022 | 15.1 | |||||
2023 | 10.8 | |||||
2024 | 6.9 | |||||
Thereafter | 7.1 | |||||
Settled Litigation | HHS-OIG Investigation | ||||||
Loss Contingencies [Line Items] | ||||||
Litigation settlement, amount awarded to other party | $ 48 | |||||
Pending Litigation | Honts lawsuit | ||||||
Loss Contingencies [Line Items] | ||||||
Loss contingency, damages awarded, value | $ 20 | |||||
Malpractice insurance, maximum coverage per incident | $ 6 | |||||
Pending Litigation | HHS-OIG Investigation | ||||||
Loss Contingencies [Line Items] | ||||||
Number of hospitals that received subpoenas | facilities | 7 | 4 | ||||
Compliance threshold under health care act (percent) | 60.00% | |||||
Liability recorded | $ 48 | |||||
Maximum | Settled Litigation | Nichols Litigation | ||||||
Loss Contingencies [Line Items] | ||||||
Loss contingency accrual, payments | $ 0.1 |
Segment Reporting - Textuals (D
Segment Reporting - Textuals (Details) | 12 Months Ended |
Dec. 31, 2019locationsegmentstatehospitalfacilityfacilities | |
Segment Reporting Information [Line Items] | |
Number of operating segments | segment | 2 |
Number of states in which entity operates | state | 37 |
Inpatient Rehabilitation | |
Segment Reporting Information [Line Items] | |
Number of states in which entity operates | state | 33 |
Number of inpatient rehabilitation hospitals | facilities | 133 |
Number of solely owned inpatient rehabilitation hospitals | hospital | 86 |
Number of jointly owned inpatient rehabilitation hospitals | hospital | 47 |
Number of inpatient rehabilitation units under management contracts | facility | 4 |
Home health | |
Segment Reporting Information [Line Items] | |
Number of home health locations | 245 |
Hospice | |
Segment Reporting Information [Line Items] | |
Number of hospice locations | 83 |
Home Health and Hospice Segment | |
Segment Reporting Information [Line Items] | |
Number of states in which entity operates | state | 31 |
Number of joint venture agencies accounted for using the equity method | facility | 2 |
Number of solely owned hospital based home health and hospice locations | 320 |
Number of jointly owned hospital based home health and hospice locations | 8 |
Minimum | Inpatient Rehabilitation | |
Segment Reporting Information [Line Items] | |
Joint venture ownership percentage | 50.00% |
Minimum | Home Health and Hospice Segment | |
Segment Reporting Information [Line Items] | |
Joint venture ownership percentage | 50.00% |
Maximum | Inpatient Rehabilitation | |
Segment Reporting Information [Line Items] | |
Joint venture ownership percentage | 97.50% |
Maximum | Home Health and Hospice Segment | |
Segment Reporting Information [Line Items] | |
Joint venture ownership percentage | 81.00% |
Segment Reporting - Selected Fi
Segment Reporting - Selected Financial Information of Reportable Segments (Details) - USD ($) $ in Millions | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2019 | Sep. 30, 2019 | Jun. 30, 2019 | Mar. 31, 2019 | Dec. 31, 2018 | Sep. 30, 2018 | Jun. 30, 2018 | Mar. 31, 2018 | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Segment Reporting Information [Line Items] | |||||||||||
Net operating revenues | $ 1,184.4 | $ 1,161.6 | $ 1,135 | $ 1,124 | $ 1,096 | $ 1,067.6 | $ 1,067.7 | $ 1,046 | $ 4,605 | $ 4,277.3 | $ 3,913.9 |
Operating expenses: | |||||||||||
Salaries and benefits | 2,573 | 2,354 | 2,154.6 | ||||||||
Other operating expenses | 623.6 | 585.1 | 531.6 | ||||||||
Supplies | 167.9 | 158.7 | 149.3 | ||||||||
Total operating expenses | 3,912.5 | 3,647.7 | 3,264.5 | ||||||||
Other income | (30.5) | (2.2) | (4.1) | ||||||||
Equity in net income of nonconsolidated affiliates | (6.7) | (8.7) | (8) | ||||||||
Noncontrolling interests | $ (22.6) | $ (21.9) | $ (19.7) | $ (22.9) | $ (19.6) | $ (20.7) | $ (21.4) | $ (21.4) | (87.1) | (83.1) | (79.1) |
Inpatient Rehabilitation | |||||||||||
Segment Reporting Information [Line Items] | |||||||||||
Net operating revenues | 3,513 | 3,346.2 | 3,141.3 | ||||||||
Operating expenses: | |||||||||||
Salaries and benefits | 1,813.1 | 1,701.5 | 1,603.8 | ||||||||
Other operating expenses | 521.9 | 502.3 | 462.5 | ||||||||
Supplies | 147 | 140.6 | 135.7 | ||||||||
Occupancy costs | 64.8 | 63.8 | 61.9 | ||||||||
Cost of services sold (excluding depreciation and amortization) | 0 | 0 | 0 | ||||||||
Support and overhead costs | 0 | 0 | 0 | ||||||||
Total operating expenses | 2,546.8 | 2,408.2 | 2,263.9 | ||||||||
Other income | (10.5) | (3.6) | (4.1) | ||||||||
Equity in net income of nonconsolidated affiliates | (5.5) | (7.5) | (7.3) | ||||||||
Noncontrolling interests | 82.6 | 77.2 | 67.6 | ||||||||
Segment Adjusted EBITDA | 899.6 | 871.9 | 821.2 | ||||||||
Capital expenditures | 391.4 | 264.6 | 238 | ||||||||
Home Health and Hospice Segment | |||||||||||
Segment Reporting Information [Line Items] | |||||||||||
Net operating revenues | 1,092 | 931.1 | 772.6 | ||||||||
Operating expenses: | |||||||||||
Salaries and benefits | 0 | 0 | 0 | ||||||||
Other operating expenses | 0 | 0 | 0 | ||||||||
Supplies | 0 | 0 | 0 | ||||||||
Occupancy costs | 0 | 0 | 0 | ||||||||
Cost of services sold (excluding depreciation and amortization) | 506.2 | 438.4 | 363.3 | ||||||||
Support and overhead costs | 381.7 | 323.5 | 277.2 | ||||||||
Total operating expenses | 887.9 | 761.9 | 640.5 | ||||||||
Other income | 0 | (0.5) | 0 | ||||||||
Equity in net income of nonconsolidated affiliates | (1.2) | (1.2) | (0.7) | ||||||||
Noncontrolling interests | 9.5 | 8.5 | 6.9 | ||||||||
Segment Adjusted EBITDA | 195.8 | 162.4 | 125.9 | ||||||||
Capital expenditures | $ 12.7 | $ 11.6 | $ 10.7 |
Segment Reporting - Reconciliat
Segment Reporting - Reconciliation of Segment Assets and Investments to Consolidated Amounts (Details) - USD ($) $ in Millions | Dec. 31, 2019 | Dec. 31, 2018 | |
Segment Reporting, Asset Reconciling Item [Line Items] | |||
Total assets | [1] | $ 6,080.7 | $ 5,175 |
Investments in and advances to nonconsolidated affiliates | 7.4 | 12.2 | |
Inpatient Rehabilitation | |||
Segment Reporting, Asset Reconciling Item [Line Items] | |||
Total assets | 4,501.4 | 3,900.9 | |
Investments in and advances to nonconsolidated affiliates | 2 | 9.5 | |
Home Health and Hospice Segment | |||
Segment Reporting, Asset Reconciling Item [Line Items] | |||
Total assets | 1,612.8 | 1,314.6 | |
Investments in and advances to nonconsolidated affiliates | $ 5.4 | $ 2.7 | |
[1] | Our consolidated assets as of December 31, 2019 and December 31, 2018 include total assets of variable interest entities of $215.0 million and $197.5 million , respectively, which cannot be used by us to settle the obligations of other entities. Our consolidated liabilities as of December 31, 2019 and December 31, 2018 include total liabilities of the variable interest entities of $41.1 million and $50.8 million , respectively. See Note 3, Variable Interest Entities . |
Segment Reporting - Reconcili_2
Segment Reporting - Reconciliation of Adjusted EBITDA (Details) - USD ($) | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2019 | Sep. 30, 2019 | Jun. 30, 2019 | Mar. 31, 2019 | Dec. 31, 2018 | Sep. 30, 2018 | Jun. 30, 2018 | Mar. 31, 2018 | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Segment Reporting, Reconciling Item for Operating Profit (Loss) from Segment to Consolidated [Line Items] | |||||||||||
General and administrative expenses | $ (247,000,000) | $ (220,200,000) | $ (171,700,000) | ||||||||
Depreciation and amortization | (218,700,000) | (199,700,000) | (183,800,000) | ||||||||
Government, class action, and related settlements | 0 | (52,000,000) | 0 | ||||||||
Loss on early extinguishment of debt | (7,700,000) | 0 | (10,700,000) | ||||||||
Net income attributable to noncontrolling interests | $ (22,600,000) | $ (21,900,000) | $ (19,700,000) | $ (22,900,000) | $ (19,600,000) | $ (20,700,000) | $ (21,400,000) | $ (21,400,000) | (87,100,000) | (83,100,000) | (79,100,000) |
Gain on consolidation of Yuma | 19,200,000 | 0 | 0 | ||||||||
Income from continuing operations before income tax expense | 562,300,000 | 493,200,000 | 496,400,000 | ||||||||
Inpatient Rehabilitation Hospital and Home Health and Hospice | |||||||||||
Segment Reporting, Reconciling Item for Operating Profit (Loss) from Segment to Consolidated [Line Items] | |||||||||||
Total segment Adjusted EBITDA | 1,095,400,000 | 1,034,300,000 | 947,100,000 | ||||||||
Segment Reconciling Items | |||||||||||
Segment Reporting, Reconciling Item for Operating Profit (Loss) from Segment to Consolidated [Line Items] | |||||||||||
General and administrative expenses | (247,000,000) | (220,200,000) | (171,700,000) | ||||||||
Depreciation and amortization | (218,700,000) | (199,700,000) | (183,800,000) | ||||||||
Loss on disposal of assets | (11,100,000) | (5,700,000) | (4,600,000) | ||||||||
Government, class action, and related settlements | 0 | (52,000,000) | 0 | ||||||||
Loss on early extinguishment of debt | (7,700,000) | 0 | (10,700,000) | ||||||||
Interest expense and amortization of debt discounts and fees | (159,700,000) | (147,300,000) | (154,400,000) | ||||||||
Net income attributable to noncontrolling interests | 87,100,000 | 83,100,000 | 79,100,000 | ||||||||
SARs mark-to-market impact on noncontrolling interests | 5,000,000 | 2,600,000 | 0 | ||||||||
Change in fair market value of equity securities | 800,000 | (1,900,000) | 0 | ||||||||
Tax reform impact on noncontrolling interests | 0 | 0 | (4,600,000) | ||||||||
Gain on consolidation of Yuma | 19,200,000 | 0 | 0 | ||||||||
Payroll taxes on SARs exercise | $ (1,000,000) | $ 0 | $ 0 |
Segment Reporting - Reconcili_3
Segment Reporting - Reconciliation of reportable to Consolidated Assets (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | ||
Segment Reporting, Asset Reconciling Item [Line Items] | |||
Total assets for reportable segments | [1] | $ 6,080.7 | $ 5,175 |
Reclassification of noncurrent deferred income tax liabilities to net noncurrent deferred income tax assets | (33.5) | (40.5) | |
Total assets | [1] | 6,080.7 | 5,175 |
Inpatient Rehabilitation Hospital and Home Health and Hospice | |||
Segment Reporting, Asset Reconciling Item [Line Items] | |||
Total assets for reportable segments | 6,114.2 | 5,215.5 | |
Total assets | $ 6,114.2 | $ 5,215.5 | |
[1] | Our consolidated assets as of December 31, 2019 and December 31, 2018 include total assets of variable interest entities of $215.0 million and $197.5 million , respectively, which cannot be used by us to settle the obligations of other entities. Our consolidated liabilities as of December 31, 2019 and December 31, 2018 include total liabilities of the variable interest entities of $41.1 million and $50.8 million , respectively. See Note 3, Variable Interest Entities . |
Segment Reporting - Revenues of
Segment Reporting - Revenues of Operating Segments by Service Line (Details) - USD ($) $ in Millions | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2019 | Sep. 30, 2019 | Jun. 30, 2019 | Mar. 31, 2019 | Dec. 31, 2018 | Sep. 30, 2018 | Jun. 30, 2018 | Mar. 31, 2018 | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Segment Reporting, Revenue Reconciling Item [Line Items] | |||||||||||
Net operating revenues | $ 1,184.4 | $ 1,161.6 | $ 1,135 | $ 1,124 | $ 1,096 | $ 1,067.6 | $ 1,067.7 | $ 1,046 | $ 4,605 | $ 4,277.3 | $ 3,913.9 |
Inpatient Rehabilitation | |||||||||||
Segment Reporting, Revenue Reconciling Item [Line Items] | |||||||||||
Net operating revenues | 3,513 | 3,346.2 | 3,141.3 | ||||||||
Inpatient Rehabilitation | Inpatient | |||||||||||
Segment Reporting, Revenue Reconciling Item [Line Items] | |||||||||||
Net operating revenues | 3,423.5 | 3,247.9 | 3,039.3 | ||||||||
Inpatient Rehabilitation | Outpatient and other | |||||||||||
Segment Reporting, Revenue Reconciling Item [Line Items] | |||||||||||
Net operating revenues | 89.5 | 98.3 | 102 | ||||||||
Home Health and Hospice Segment | |||||||||||
Segment Reporting, Revenue Reconciling Item [Line Items] | |||||||||||
Net operating revenues | 1,092 | 931.1 | 772.6 | ||||||||
Home Health and Hospice Segment | Home health | |||||||||||
Segment Reporting, Revenue Reconciling Item [Line Items] | |||||||||||
Net operating revenues | 918 | 814.6 | 702.4 | ||||||||
Home Health and Hospice Segment | Hospice | |||||||||||
Segment Reporting, Revenue Reconciling Item [Line Items] | |||||||||||
Net operating revenues | $ 174 | $ 116.5 | $ 70.2 |
Quarterly Data (Unaudited) - Sc
Quarterly Data (Unaudited) - Schedule of Quarterly Data (Details) - USD ($) $ / shares in Units, $ in Millions | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2019 | Sep. 30, 2019 | Jun. 30, 2019 | Mar. 31, 2019 | Dec. 31, 2018 | Sep. 30, 2018 | Jun. 30, 2018 | Mar. 31, 2018 | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Quarterly Financial Data | |||||||||||
Net operating revenues | $ 1,184.4 | $ 1,161.6 | $ 1,135 | $ 1,124 | $ 1,096 | $ 1,067.6 | $ 1,067.7 | $ 1,046 | $ 4,605 | $ 4,277.3 | $ 3,913.9 |
Operating earnings | 141.2 | 151.2 | 152.6 | 167.1 | 93.4 | 154.5 | 157.3 | 150 | 612.1 | 555.2 | |
Provision for income tax expense | 27.3 | 34.3 | 23.5 | 30.8 | 29.4 | 30.2 | 29.3 | 30 | 115.9 | 118.9 | 145.8 |
Income from continuing operations | 90.2 | 119.5 | 111 | 125.7 | 46.2 | 109.4 | 113 | 105.7 | 446.4 | 374.3 | 350.6 |
(Loss) income from discontinued operations, net of tax | 0 | 0 | (0.1) | (0.5) | 1.5 | (0.1) | 0.2 | (0.5) | (0.6) | 1.1 | (0.4) |
Net income | 90.2 | 119.5 | 110.9 | 125.2 | 47.7 | 109.3 | 113.2 | 105.2 | 445.8 | 375.4 | 350.2 |
Less: Net income attributable to noncontrolling interests | (22.6) | (21.9) | (19.7) | (22.9) | (19.6) | (20.7) | (21.4) | (21.4) | (87.1) | (83.1) | (79.1) |
Net income attributable to Encompass Health | $ 67.6 | $ 97.6 | $ 91.2 | $ 102.3 | $ 28.1 | $ 88.6 | $ 91.8 | $ 83.8 | $ 358.7 | $ 292.3 | $ 271.1 |
Basic earnings per share attributable to Encompass Health common shareholders: | |||||||||||
Continuing operations (in dollars per share) | $ 0.69 | $ 0.99 | $ 0.93 | $ 1.05 | $ 0.27 | $ 0.90 | $ 0.93 | $ 0.86 | $ 3.66 | $ 2.97 | $ 2.88 |
Discontinued operations (in dollars per share) | 0 | 0 | 0 | (0.01) | 0.02 | 0 | 0 | (0.01) | (0.01) | 0.01 | 0 |
Net income (in dollars per share) | 0.69 | 0.99 | 0.93 | 1.04 | 0.29 | 0.90 | 0.93 | 0.85 | 3.65 | 2.98 | 2.88 |
Diluted earnings per share attributable to Encompass Health common shareholders: | |||||||||||
Continuing operations (in dollars per share) | 0.68 | 0.98 | 0.92 | 1.04 | 0.26 | 0.89 | 0.92 | 0.85 | 3.62 | 2.92 | 2.84 |
Discontinued operations (in dollars per share) | 0 | 0 | 0 | (0.01) | 0.02 | 0 | 0 | (0.01) | (0.01) | 0.01 | 0 |
Net income (in dollars per share) | $ 0.68 | $ 0.98 | $ 0.92 | $ 1.03 | $ 0.28 | $ 0.89 | $ 0.92 | $ 0.84 | $ 3.61 | $ 2.93 | $ 2.84 |
Condensed Consolidating Finan_3
Condensed Consolidating Financial Information - Textual (Details) | 12 Months Ended | |
Dec. 31, 2019 | Feb. 27, 2020 | |
Redeemable Noncontrolling Interest [Line Items] | ||
Encompass Health ownership percentage of subsidiary guarantors (percent) | 100.00% | |
Senior secured leverage ratio maximum | 2 | |
Consolidated coverage ratio minimum | 2 | |
Remaining noncontrolling interest | 5.50% | |
Subsequent Event | ||
Redeemable Noncontrolling Interest [Line Items] | ||
Remaining noncontrolling interest | 1.20% |
Condensed Consolidating Finan_4
Condensed Consolidating Financial Information - Condensed Consolidating Statement of Operations (Details) - USD ($) | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2019 | Sep. 30, 2019 | Jun. 30, 2019 | Mar. 31, 2019 | Dec. 31, 2018 | Sep. 30, 2018 | Jun. 30, 2018 | Mar. 31, 2018 | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Condensed Consolidating Statements of Operations | |||||||||||
Net operating revenues | $ 1,184,400,000 | $ 1,161,600,000 | $ 1,135,000,000 | $ 1,124,000,000 | $ 1,096,000,000 | $ 1,067,600,000 | $ 1,067,700,000 | $ 1,046,000,000 | $ 4,605,000,000 | $ 4,277,300,000 | $ 3,913,900,000 |
Operating expenses: | |||||||||||
Salaries and benefits | 2,573,000,000 | 2,354,000,000 | 2,154,600,000 | ||||||||
Other operating expenses | 623,600,000 | 585,100,000 | 531,600,000 | ||||||||
Occupancy costs | 82,300,000 | 78,000,000 | 73,500,000 | ||||||||
Supplies | 167,900,000 | 158,700,000 | 149,300,000 | ||||||||
General and administrative expenses | 247,000,000 | 220,200,000 | 171,700,000 | ||||||||
Depreciation and amortization | 218,700,000 | 199,700,000 | 183,800,000 | ||||||||
Government, class action, and related settlements | 0 | 52,000,000 | 0 | ||||||||
Total operating expenses | 3,912,500,000 | 3,647,700,000 | 3,264,500,000 | ||||||||
Loss on early extinguishment of debt | 7,700,000 | 0 | 10,700,000 | ||||||||
Interest expense and amortization of debt discounts and fees | 159,700,000 | 147,300,000 | 154,400,000 | ||||||||
Other (income) loss | (30,500,000) | (2,200,000) | (4,100,000) | ||||||||
Equity in net income of nonconsolidated affiliates | (6,700,000) | (8,700,000) | (8,000,000) | ||||||||
Equity in net income of consolidated affiliates | 0 | 0 | 0 | ||||||||
Management fees | 0 | 0 | 0 | ||||||||
Income from continuing operations before income tax expense | 562,300,000 | 493,200,000 | 496,400,000 | ||||||||
Provision for income tax (benefit) expense | 27,300,000 | 34,300,000 | 23,500,000 | 30,800,000 | 29,400,000 | 30,200,000 | 29,300,000 | 30,000,000 | 115,900,000 | 118,900,000 | 145,800,000 |
Income from continuing operations | 90,200,000 | 119,500,000 | 111,000,000 | 125,700,000 | 46,200,000 | 109,400,000 | 113,000,000 | 105,700,000 | 446,400,000 | 374,300,000 | 350,600,000 |
(Loss) income from discontinued operations, net of tax | 0 | 0 | (100,000) | (500,000) | 1,500,000 | (100,000) | 200,000 | (500,000) | (600,000) | 1,100,000 | (400,000) |
Net income | 90,200,000 | 119,500,000 | 110,900,000 | 125,200,000 | 47,700,000 | 109,300,000 | 113,200,000 | 105,200,000 | 445,800,000 | 375,400,000 | 350,200,000 |
Less: Net income attributable to noncontrolling interests | (22,600,000) | (21,900,000) | (19,700,000) | (22,900,000) | (19,600,000) | (20,700,000) | (21,400,000) | (21,400,000) | (87,100,000) | (83,100,000) | (79,100,000) |
Net income attributable to Encompass Health | $ 67,600,000 | $ 97,600,000 | $ 91,200,000 | $ 102,300,000 | $ 28,100,000 | $ 88,600,000 | $ 91,800,000 | $ 83,800,000 | 358,700,000 | 292,300,000 | 271,100,000 |
Comprehensive income | 445,800,000 | 375,400,000 | 350,100,000 | ||||||||
Comprehensive income attributable to Encompass Health | 358,700,000 | 292,300,000 | 271,000,000 | ||||||||
Encompass Health Corporation | |||||||||||
Condensed Consolidating Statements of Operations | |||||||||||
Net operating revenues | 20,700,000 | 21,000,000 | 21,300,000 | ||||||||
Operating expenses: | |||||||||||
Salaries and benefits | 59,600,000 | 49,500,000 | 34,700,000 | ||||||||
Other operating expenses | 45,000,000 | 37,900,000 | 32,800,000 | ||||||||
Occupancy costs | 2,100,000 | 1,900,000 | 1,900,000 | ||||||||
Supplies | 0 | 0 | 0 | ||||||||
General and administrative expenses | 160,000,000 | 161,000,000 | 143,700,000 | ||||||||
Depreciation and amortization | 19,900,000 | 14,300,000 | 8,800,000 | ||||||||
Government, class action, and related settlements | 52,000,000 | ||||||||||
Total operating expenses | 286,600,000 | 316,600,000 | 221,900,000 | ||||||||
Loss on early extinguishment of debt | 7,700,000 | 10,700,000 | |||||||||
Interest expense and amortization of debt discounts and fees | 131,000,000 | 124,200,000 | 130,500,000 | ||||||||
Other (income) loss | (32,300,000) | (22,400,000) | (21,700,000) | ||||||||
Equity in net income of nonconsolidated affiliates | 0 | 0 | 0 | ||||||||
Equity in net income of consolidated affiliates | (492,600,000) | (465,600,000) | (342,100,000) | ||||||||
Management fees | (160,800,000) | (153,100,000) | (145,000,000) | ||||||||
Income from continuing operations before income tax expense | 281,100,000 | 221,300,000 | 167,000,000 | ||||||||
Provision for income tax (benefit) expense | (78,200,000) | (69,900,000) | (104,500,000) | ||||||||
Income from continuing operations | 359,300,000 | 291,200,000 | 271,500,000 | ||||||||
(Loss) income from discontinued operations, net of tax | (600,000) | 1,100,000 | (400,000) | ||||||||
Net income | 358,700,000 | 292,300,000 | 271,100,000 | ||||||||
Less: Net income attributable to noncontrolling interests | 0 | 0 | 0 | ||||||||
Net income attributable to Encompass Health | 358,700,000 | 292,300,000 | 271,100,000 | ||||||||
Comprehensive income | 358,700,000 | 292,300,000 | 271,000,000 | ||||||||
Comprehensive income attributable to Encompass Health | 358,700,000 | 292,300,000 | 271,000,000 | ||||||||
Guarantor Subsidiaries | |||||||||||
Condensed Consolidating Statements of Operations | |||||||||||
Net operating revenues | 2,425,500,000 | 2,351,800,000 | 2,252,500,000 | ||||||||
Operating expenses: | |||||||||||
Salaries and benefits | 1,176,500,000 | 1,132,200,000 | 1,088,700,000 | ||||||||
Other operating expenses | 351,800,000 | 344,300,000 | 324,800,000 | ||||||||
Occupancy costs | 100,800,000 | 95,700,000 | 93,700,000 | ||||||||
Supplies | 98,000,000 | 95,800,000 | 94,200,000 | ||||||||
General and administrative expenses | 0 | 0 | 0 | ||||||||
Depreciation and amortization | 106,800,000 | 108,200,000 | 106,600,000 | ||||||||
Government, class action, and related settlements | 0 | ||||||||||
Total operating expenses | 1,833,900,000 | 1,776,200,000 | 1,708,000,000 | ||||||||
Loss on early extinguishment of debt | 0 | 0 | |||||||||
Interest expense and amortization of debt discounts and fees | 24,700,000 | 22,600,000 | 23,200,000 | ||||||||
Other (income) loss | (21,100,000) | (1,000,000) | 200,000 | ||||||||
Equity in net income of nonconsolidated affiliates | (5,100,000) | (7,100,000) | (6,900,000) | ||||||||
Equity in net income of consolidated affiliates | (67,000,000) | (63,400,000) | (39,000,000) | ||||||||
Management fees | 117,800,000 | 114,000,000 | 109,500,000 | ||||||||
Income from continuing operations before income tax expense | 542,300,000 | 510,500,000 | 457,500,000 | ||||||||
Provision for income tax (benefit) expense | 140,300,000 | 136,600,000 | 182,600,000 | ||||||||
Income from continuing operations | 402,000,000 | 373,900,000 | 274,900,000 | ||||||||
(Loss) income from discontinued operations, net of tax | 0 | 0 | 0 | ||||||||
Net income | 402,000,000 | 373,900,000 | 274,900,000 | ||||||||
Less: Net income attributable to noncontrolling interests | 0 | 0 | 0 | ||||||||
Net income attributable to Encompass Health | 402,000,000 | 373,900,000 | 274,900,000 | ||||||||
Comprehensive income | 402,000,000 | 373,900,000 | 274,900,000 | ||||||||
Comprehensive income attributable to Encompass Health | 402,000,000 | 373,900,000 | 274,900,000 | ||||||||
Non-Guarantor Subsidiaries | |||||||||||
Condensed Consolidating Statements of Operations | |||||||||||
Net operating revenues | 1,221,700,000 | 1,118,900,000 | 1,006,400,000 | ||||||||
Operating expenses: | |||||||||||
Salaries and benefits | 608,700,000 | 550,400,000 | 508,900,000 | ||||||||
Other operating expenses | 189,300,000 | 177,400,000 | 160,200,000 | ||||||||
Occupancy costs | 27,500,000 | 25,400,000 | 23,000,000 | ||||||||
Supplies | 49,300,000 | 44,900,000 | 41,700,000 | ||||||||
General and administrative expenses | 0 | 0 | 0 | ||||||||
Depreciation and amortization | 54,900,000 | 47,600,000 | 44,700,000 | ||||||||
Government, class action, and related settlements | 0 | ||||||||||
Total operating expenses | 929,700,000 | 845,700,000 | 778,500,000 | ||||||||
Loss on early extinguishment of debt | 0 | 0 | |||||||||
Interest expense and amortization of debt discounts and fees | 5,600,000 | 2,200,000 | 2,500,000 | ||||||||
Other (income) loss | (7,100,000) | (3,500,000) | (3,600,000) | ||||||||
Equity in net income of nonconsolidated affiliates | (400,000) | (400,000) | (400,000) | ||||||||
Equity in net income of consolidated affiliates | 0 | 0 | 0 | ||||||||
Management fees | 43,000,000 | 39,100,000 | 35,500,000 | ||||||||
Income from continuing operations before income tax expense | 250,900,000 | 235,800,000 | 193,900,000 | ||||||||
Provision for income tax (benefit) expense | 40,300,000 | 38,400,000 | 66,800,000 | ||||||||
Income from continuing operations | 210,600,000 | 197,400,000 | 127,100,000 | ||||||||
(Loss) income from discontinued operations, net of tax | 0 | 0 | 0 | ||||||||
Net income | 210,600,000 | 197,400,000 | 127,100,000 | ||||||||
Less: Net income attributable to noncontrolling interests | (83,300,000) | (77,800,000) | (68,700,000) | ||||||||
Net income attributable to Encompass Health | 127,300,000 | 119,600,000 | 58,400,000 | ||||||||
Comprehensive income | 210,600,000 | 197,400,000 | 127,100,000 | ||||||||
Comprehensive income attributable to Encompass Health | 127,300,000 | 119,600,000 | 58,400,000 | ||||||||
Holdings | |||||||||||
Condensed Consolidating Statements of Operations | |||||||||||
Net operating revenues | 1,074,100,000 | 915,900,000 | 759,800,000 | ||||||||
Operating expenses: | |||||||||||
Salaries and benefits | 748,900,000 | 643,300,000 | 543,300,000 | ||||||||
Other operating expenses | 88,400,000 | 75,300,000 | 62,400,000 | ||||||||
Occupancy costs | 17,300,000 | 14,100,000 | 11,400,000 | ||||||||
Supplies | 20,600,000 | 18,000,000 | 13,400,000 | ||||||||
General and administrative expenses | 87,000,000 | 59,200,000 | 28,000,000 | ||||||||
Depreciation and amortization | 37,100,000 | 29,600,000 | 23,700,000 | ||||||||
Government, class action, and related settlements | 0 | ||||||||||
Total operating expenses | 999,300,000 | 839,500,000 | 682,200,000 | ||||||||
Loss on early extinguishment of debt | 0 | 0 | |||||||||
Interest expense and amortization of debt discounts and fees | 28,400,000 | 23,500,000 | 19,200,000 | ||||||||
Other (income) loss | 0 | (500,000) | 0 | ||||||||
Equity in net income of nonconsolidated affiliates | (1,200,000) | (1,200,000) | (700,000) | ||||||||
Equity in net income of consolidated affiliates | 0 | 0 | 0 | ||||||||
Management fees | 0 | 0 | 0 | ||||||||
Income from continuing operations before income tax expense | 47,600,000 | 54,600,000 | 59,100,000 | ||||||||
Provision for income tax (benefit) expense | 13,500,000 | 13,800,000 | 900,000 | ||||||||
Income from continuing operations | 34,100,000 | 40,800,000 | 58,200,000 | ||||||||
(Loss) income from discontinued operations, net of tax | 0 | 0 | 0 | ||||||||
Net income | 34,100,000 | 40,800,000 | 58,200,000 | ||||||||
Less: Net income attributable to noncontrolling interests | (3,800,000) | (5,300,000) | (10,400,000) | ||||||||
Net income attributable to Encompass Health | 30,300,000 | 35,500,000 | 47,800,000 | ||||||||
Comprehensive income | 34,100,000 | 40,800,000 | 58,200,000 | ||||||||
Comprehensive income attributable to Encompass Health | 30,300,000 | 35,500,000 | 47,800,000 | ||||||||
Eliminating Entries | |||||||||||
Condensed Consolidating Statements of Operations | |||||||||||
Net operating revenues | (137,000,000) | (130,300,000) | (126,100,000) | ||||||||
Operating expenses: | |||||||||||
Salaries and benefits | (20,700,000) | (21,400,000) | (21,000,000) | ||||||||
Other operating expenses | (50,900,000) | (49,800,000) | (48,600,000) | ||||||||
Occupancy costs | (65,400,000) | (59,100,000) | (56,500,000) | ||||||||
Supplies | 0 | 0 | 0 | ||||||||
General and administrative expenses | 0 | 0 | 0 | ||||||||
Depreciation and amortization | 0 | 0 | 0 | ||||||||
Government, class action, and related settlements | 0 | ||||||||||
Total operating expenses | (137,000,000) | (130,300,000) | (126,100,000) | ||||||||
Loss on early extinguishment of debt | 0 | 0 | |||||||||
Interest expense and amortization of debt discounts and fees | (30,000,000) | (25,200,000) | (21,000,000) | ||||||||
Other (income) loss | 30,000,000 | 25,200,000 | 21,000,000 | ||||||||
Equity in net income of nonconsolidated affiliates | 0 | 0 | 0 | ||||||||
Equity in net income of consolidated affiliates | 559,600,000 | 529,000,000 | 381,100,000 | ||||||||
Management fees | 0 | 0 | 0 | ||||||||
Income from continuing operations before income tax expense | (559,600,000) | (529,000,000) | (381,100,000) | ||||||||
Provision for income tax (benefit) expense | 0 | 0 | 0 | ||||||||
Income from continuing operations | (559,600,000) | (529,000,000) | (381,100,000) | ||||||||
(Loss) income from discontinued operations, net of tax | 0 | 0 | 0 | ||||||||
Net income | (559,600,000) | (529,000,000) | (381,100,000) | ||||||||
Less: Net income attributable to noncontrolling interests | 0 | 0 | 0 | ||||||||
Net income attributable to Encompass Health | (559,600,000) | (529,000,000) | (381,100,000) | ||||||||
Comprehensive income | (559,600,000) | (529,000,000) | (381,100,000) | ||||||||
Comprehensive income attributable to Encompass Health | $ (559,600,000) | $ (529,000,000) | $ (381,100,000) |
Condensed Consolidating Finan_5
Condensed Consolidating Financial Information - Condensed Consolidating Balance Sheet (Details) - USD ($) $ in Millions | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Current assets: | |||||
Cash and cash equivalents | $ 94.8 | $ 69.2 | $ 54.4 | $ 40.5 | |
Restricted cash | 57.4 | 59 | 62.4 | 60.9 | |
Accounts receivable | 506.1 | 467.7 | |||
Prepaid expenses and other current assets | 97.5 | 66.2 | |||
Total current assets | 755.8 | 662.1 | |||
Property and equipment, net | 1,959.3 | 1,634.8 | |||
Operating lease right-of-use assets | 276.5 | ||||
Goodwill | 2,305.2 | 2,100.8 | 1,972.6 | 1,927.2 | |
Intangible assets, net | 476.3 | 443.4 | |||
Deferred income tax assets | 2.9 | 42.9 | |||
Other long-term assets | 304.7 | 291 | |||
Intercompany notes receivable | 0 | 0 | |||
Intercompany receivable and investments in consolidated affiliates | 0 | 0 | |||
Total assets | [1] | 6,080.7 | 5,175 | ||
Current liabilities: | |||||
Current portion of long-term debt | 39.3 | 35.8 | |||
Current operating lease liabilities | 40.4 | ||||
Accounts payable | 94.6 | 90 | |||
Accrued payroll | 210.5 | 188.4 | |||
Accrued interest payable | 32.4 | 24.4 | |||
Other current liabilities | 303.8 | 333.9 | |||
Total current liabilities | 721 | 672.5 | |||
Long-term debt, net of current portion | 3,023.3 | 2,478.6 | |||
Long-term operating lease liabilities | 243.8 | ||||
Intercompany notes payable | 0 | 0 | |||
Self-insured risks | 117.2 | 119.6 | |||
Other long-term liabilities | 42.7 | 85.6 | |||
Intercompany payable | 0 | 0 | |||
Total liabilities | 4,148 | 3,356.3 | |||
Commitments and contingencies | |||||
Redeemable noncontrolling interests | 239.6 | 261.7 | |||
Shareholders' equity | |||||
Encompass Health shareholders’ equity | 1,352.2 | 1,276.7 | |||
Noncontrolling interests | 340.9 | 280.3 | |||
Total shareholders’ equity | 1,693.1 | 1,557 | 1,395.4 | 910.6 | |
Total liabilities and shareholders’ equity | [1] | 6,080.7 | 5,175 | ||
Eliminating Entries | |||||
Current assets: | |||||
Cash and cash equivalents | 0 | 0 | 0 | 0 | |
Restricted cash | 0 | 0 | 0 | 0 | |
Accounts receivable | 0 | 0 | |||
Prepaid expenses and other current assets | (19.3) | (18.8) | |||
Total current assets | (19.3) | (18.8) | |||
Property and equipment, net | 0 | 0 | |||
Operating lease right-of-use assets | (35.3) | ||||
Goodwill | 0 | 0 | |||
Intangible assets, net | 0 | 0 | |||
Deferred income tax assets | (35.5) | (34) | |||
Other long-term assets | 0 | 0 | |||
Intercompany notes receivable | (737.8) | (535.3) | |||
Intercompany receivable and investments in consolidated affiliates | (3,679) | (3,362) | |||
Total assets | (4,506.9) | (3,950.1) | |||
Current liabilities: | |||||
Current portion of long-term debt | 0 | (17.5) | |||
Current operating lease liabilities | (10.9) | ||||
Accounts payable | 0 | 0 | |||
Accrued payroll | 0 | 0 | |||
Accrued interest payable | 0 | (0.3) | |||
Other current liabilities | (19.3) | (1) | |||
Total current liabilities | (30.2) | (18.8) | |||
Long-term debt, net of current portion | 0 | 0 | |||
Long-term operating lease liabilities | (24.6) | ||||
Intercompany notes payable | (737.8) | (535.3) | |||
Self-insured risks | 0 | 0 | |||
Other long-term liabilities | (35.5) | (33.9) | |||
Intercompany payable | (70.4) | (53.1) | |||
Total liabilities | (898.5) | (641.1) | |||
Commitments and contingencies | |||||
Redeemable noncontrolling interests | 0 | 0 | |||
Shareholders' equity | |||||
Encompass Health shareholders’ equity | (3,608.4) | (3,309) | |||
Noncontrolling interests | 0 | 0 | |||
Total shareholders’ equity | (3,608.4) | (3,309) | |||
Total liabilities and shareholders’ equity | (4,506.9) | (3,950.1) | |||
Encompass Health Corporation | |||||
Current assets: | |||||
Cash and cash equivalents | 53.7 | 41.5 | 34.3 | 20.6 | |
Restricted cash | 0 | 0 | 0 | 0 | |
Accounts receivable | 0 | 0 | |||
Prepaid expenses and other current assets | 64.3 | 36.3 | |||
Total current assets | 118 | 77.8 | |||
Property and equipment, net | 133.4 | 123.9 | |||
Operating lease right-of-use assets | 10.1 | ||||
Goodwill | 0 | 0 | |||
Intangible assets, net | 17.7 | 21.4 | |||
Deferred income tax assets | 27.2 | 47.9 | |||
Other long-term assets | 53.6 | 47.9 | |||
Intercompany notes receivable | 737.8 | 535.3 | |||
Intercompany receivable and investments in consolidated affiliates | 3,155.4 | 2,904.4 | |||
Total assets | 4,253.2 | 3,758.6 | |||
Current liabilities: | |||||
Current portion of long-term debt | 17 | 35 | |||
Current operating lease liabilities | 1.3 | ||||
Accounts payable | 9.8 | 8.9 | |||
Accrued payroll | 34.8 | 35 | |||
Accrued interest payable | 30.4 | 22.3 | |||
Other current liabilities | 82.2 | 154.5 | |||
Total current liabilities | 175.5 | 255.7 | |||
Long-term debt, net of current portion | 2,670.6 | 2,188.7 | |||
Long-term operating lease liabilities | 9 | ||||
Intercompany notes payable | 0 | 0 | |||
Self-insured risks | 19.3 | 16.1 | |||
Other long-term liabilities | 26.6 | 21.4 | |||
Intercompany payable | 0 | 0 | |||
Total liabilities | 2,901 | 2,481.9 | |||
Commitments and contingencies | |||||
Redeemable noncontrolling interests | 0 | 0 | |||
Shareholders' equity | |||||
Encompass Health shareholders’ equity | 1,352.2 | 1,276.7 | |||
Noncontrolling interests | 0 | 0 | |||
Total shareholders’ equity | 1,352.2 | 1,276.7 | |||
Total liabilities and shareholders’ equity | 4,253.2 | 3,758.6 | |||
Guarantor Subsidiaries | |||||
Current assets: | |||||
Cash and cash equivalents | 5.2 | 3 | 2.9 | 1.6 | |
Restricted cash | 0 | 0 | 0 | 0 | |
Accounts receivable | 280.4 | 270.7 | |||
Prepaid expenses and other current assets | 35.4 | 17.6 | |||
Total current assets | 321 | 291.3 | |||
Property and equipment, net | 1,246 | 1,041.5 | |||
Operating lease right-of-use assets | 171.5 | ||||
Goodwill | 912.2 | 912.2 | |||
Intangible assets, net | 101.7 | 96.6 | |||
Deferred income tax assets | 11.1 | 28.9 | |||
Other long-term assets | 85.4 | 100.4 | |||
Intercompany notes receivable | 0 | 0 | |||
Intercompany receivable and investments in consolidated affiliates | 523.6 | 457.6 | |||
Total assets | 3,372.5 | 2,928.5 | |||
Current liabilities: | |||||
Current portion of long-term debt | 10.4 | 7.5 | |||
Current operating lease liabilities | 21.9 | ||||
Accounts payable | 56.5 | 46.4 | |||
Accrued payroll | 76.2 | 69.1 | |||
Accrued interest payable | 2 | 2.4 | |||
Other current liabilities | 30.5 | 5.1 | |||
Total current liabilities | 197.5 | 130.5 | |||
Long-term debt, net of current portion | 305.4 | 262.1 | |||
Long-term operating lease liabilities | 153.9 | ||||
Intercompany notes payable | 0 | 0 | |||
Self-insured risks | 0 | 0 | |||
Other long-term liabilities | 12.2 | 17.1 | |||
Intercompany payable | 0 | 0 | |||
Total liabilities | 669 | 409.7 | |||
Commitments and contingencies | |||||
Redeemable noncontrolling interests | 0 | 0 | |||
Shareholders' equity | |||||
Encompass Health shareholders’ equity | 2,703.5 | 2,518.8 | |||
Noncontrolling interests | 0 | 0 | |||
Total shareholders’ equity | 2,703.5 | 2,518.8 | |||
Total liabilities and shareholders’ equity | 3,372.5 | 2,928.5 | |||
Non-Guarantor Subsidiaries | |||||
Current assets: | |||||
Cash and cash equivalents | 6 | 5.1 | 5.5 | 5.4 | |
Restricted cash | 57.4 | 59 | 62.4 | 60.9 | |
Accounts receivable | 125.6 | 121.6 | |||
Prepaid expenses and other current assets | 9.3 | 26.2 | |||
Total current assets | 198.3 | 211.9 | |||
Property and equipment, net | 551.2 | 445.2 | |||
Operating lease right-of-use assets | 86.5 | ||||
Goodwill | 323 | 293.3 | |||
Intangible assets, net | 65.3 | 67.5 | |||
Deferred income tax assets | 0.1 | 0.1 | |||
Other long-term assets | 151.6 | 130.9 | |||
Intercompany notes receivable | 0 | 0 | |||
Intercompany receivable and investments in consolidated affiliates | 0 | 0 | |||
Total assets | 1,376 | 1,148.9 | |||
Current liabilities: | |||||
Current portion of long-term debt | 3.8 | 4.4 | |||
Current operating lease liabilities | 16 | ||||
Accounts payable | 24.3 | 30.4 | |||
Accrued payroll | 40.4 | 35.4 | |||
Accrued interest payable | 0 | 0 | |||
Other current liabilities | 68.8 | 85.7 | |||
Total current liabilities | 153.3 | 155.9 | |||
Long-term debt, net of current portion | 41.6 | 20 | |||
Long-term operating lease liabilities | 73.6 | ||||
Intercompany notes payable | 0 | 0 | |||
Self-insured risks | 97.9 | 103.5 | |||
Other long-term liabilities | 2.4 | 5 | |||
Intercompany payable | 66 | 48.9 | |||
Total liabilities | 434.8 | 333.3 | |||
Commitments and contingencies | |||||
Redeemable noncontrolling interests | 31.4 | 38.3 | |||
Shareholders' equity | |||||
Encompass Health shareholders’ equity | 568.9 | 497 | |||
Noncontrolling interests | 340.9 | 280.3 | |||
Total shareholders’ equity | 909.8 | 777.3 | |||
Total liabilities and shareholders’ equity | 1,376 | 1,148.9 | |||
Holdings | |||||
Current assets: | |||||
Cash and cash equivalents | 29.9 | 19.6 | 11.7 | 12.9 | |
Restricted cash | 0 | 0 | $ 0 | $ 0 | |
Accounts receivable | 100.1 | 75.4 | |||
Prepaid expenses and other current assets | 7.8 | 4.9 | |||
Total current assets | 137.8 | 99.9 | |||
Property and equipment, net | 28.7 | 24.2 | |||
Operating lease right-of-use assets | 43.7 | ||||
Goodwill | 1,070 | 895.3 | |||
Intangible assets, net | 291.6 | 257.9 | |||
Deferred income tax assets | 0 | 0 | |||
Other long-term assets | 14.1 | 11.8 | |||
Intercompany notes receivable | 0 | 0 | |||
Intercompany receivable and investments in consolidated affiliates | 0 | 0 | |||
Total assets | 1,585.9 | 1,289.1 | |||
Current liabilities: | |||||
Current portion of long-term debt | 8.1 | 6.4 | |||
Current operating lease liabilities | 12.1 | ||||
Accounts payable | 4 | 4.3 | |||
Accrued payroll | 59.1 | 48.9 | |||
Accrued interest payable | 0 | 0 | |||
Other current liabilities | 141.6 | 89.6 | |||
Total current liabilities | 224.9 | 149.2 | |||
Long-term debt, net of current portion | 5.7 | 7.8 | |||
Long-term operating lease liabilities | 31.9 | ||||
Intercompany notes payable | 737.8 | 535.3 | |||
Self-insured risks | 0 | 0 | |||
Other long-term liabilities | 37 | 76 | |||
Intercompany payable | 4.4 | 4.2 | |||
Total liabilities | 1,041.7 | 772.5 | |||
Redeemable noncontrolling interests | 208.2 | 223.4 | |||
Shareholders' equity | |||||
Encompass Health shareholders’ equity | 336 | 293.2 | |||
Noncontrolling interests | 0 | 0 | |||
Total shareholders’ equity | 336 | 293.2 | |||
Total liabilities and shareholders’ equity | $ 1,585.9 | $ 1,289.1 | |||
[1] | Our consolidated assets as of December 31, 2019 and December 31, 2018 include total assets of variable interest entities of $215.0 million and $197.5 million , respectively, which cannot be used by us to settle the obligations of other entities. Our consolidated liabilities as of December 31, 2019 and December 31, 2018 include total liabilities of the variable interest entities of $41.1 million and $50.8 million , respectively. See Note 3, Variable Interest Entities . |
Condensed Consolidating Finan_6
Condensed Consolidating Financial Information - Condensed Consolidating Statements of Cash Flows (Details) - USD ($) $ in Millions | Feb. 21, 2018 | Sep. 30, 2019 | Jan. 17, 2017 | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 |
Consolidated Statements of Cash Flows [Abstract] | ||||||
Net cash provided by operating activities | $ 635.3 | $ 762.4 | $ 658.3 | |||
Cash flows from investing activities: | ||||||
Acquisition of businesses, net of cash acquired | (231.5) | (143.9) | (38.8) | |||
Purchases of property and equipment | (372.4) | (254.5) | (225.8) | |||
Additions to capitalized software costs | (13) | (16) | (19.2) | |||
Purchases of intangible assets | (18.7) | (5.7) | (3.7) | |||
Proceeds from sale of restricted investments | 17.6 | 11.6 | 4.2 | |||
Purchase of restricted investments | (32.9) | (13.3) | (8.5) | |||
Funding of intercompany note receivable | 0 | |||||
Proceeds from repayment of intercompany note receivable | 0 | 0 | 0 | |||
Other, net | (6.5) | (2.7) | 8.8 | |||
Net cash used in investing activities | (657.4) | (424.5) | (283) | |||
Cash flows from financing activities: | ||||||
Proceeds from bond issuance | 1,000 | 0 | 0 | |||
Principal payments on debt, including pre-payments | (519.5) | (20.6) | (129.9) | |||
Principal borrowings on intercompany note payable | 0 | |||||
Principal payments on intercompany notes payable | 0 | 0 | 0 | |||
Borrowings on revolving credit facility | 635 | 325 | 273.3 | |||
Payments on revolving credit facility | (620) | (390) | (330.3) | |||
Principal payments under finance lease obligations | (19.5) | (17.9) | (15.3) | |||
Principal payments under finance lease obligations | (19.5) | |||||
Debt amendment and issuance costs | (21.5) | (0.1) | (4.1) | |||
Repurchases of common stock, including fees and expenses | (45.9) | 0 | (38.1) | |||
Dividends paid on common stock | (108.7) | (100.8) | (91.5) | |||
Purchase of equity interests in consolidated affiliates | $ (65) | $ (163) | (162.9) | (65.1) | 0 | |
Proceeds from exercising stock warrants | $ 26.7 | 0 | 0 | 26.6 | ||
Distributions paid to noncontrolling interests of consolidated affiliates | (79.8) | (75.4) | (51.9) | |||
Taxes paid on behalf of employees for shares withheld | (16.6) | (8.3) | (19.8) | |||
Contributions from consolidated affiliates | 15.9 | 12.6 | 20.8 | |||
Other, net | (8.3) | 19.4 | 0.3 | |||
Change in intercompany advances | 0 | 0 | 0 | |||
Net cash provided by (used in) financing activities | 48.2 | (321.2) | (359.9) | |||
Increase in cash, cash equivalents, and restricted cash | 26.1 | 16.7 | 15.4 | |||
Cash, cash equivalents, restricted cash and restricted cash equivalents at beginning of period | 101.4 | 133.5 | 116.8 | 101.4 | ||
Cash, cash equivalents, restricted cash and restricted cash equivalents at end of period | 159.6 | 133.5 | 116.8 | |||
Reconciliation of Cash, Cash Equivalents, and Restricted Cash | ||||||
Cash and cash equivalents at beginning of period | 40.5 | 69.2 | 54.4 | 40.5 | ||
Restricted cash at beginning of period | 60.9 | 59 | 62.4 | 60.9 | ||
Restricted cash included in other long-term assets at beginning of period | 0 | 5.3 | 0 | 0 | ||
Cash and cash equivalents at end of period | 94.8 | 69.2 | 54.4 | |||
Restricted cash at end of period | 57.4 | 59 | 62.4 | |||
Restricted cash included in other long-term assets at end of period | 7.4 | 5.3 | 0 | |||
Supplemental schedule of noncash financing activities: | ||||||
Intercompany note activity | 0 | 0 | 0 | |||
Conversion of convertible debt | 319.4 | |||||
Eliminating Entries | ||||||
Consolidated Statements of Cash Flows [Abstract] | ||||||
Net cash provided by operating activities | 0 | 0 | 0 | |||
Cash flows from investing activities: | ||||||
Acquisition of businesses, net of cash acquired | 0 | 0 | 0 | |||
Purchases of property and equipment | 0 | 0 | 0 | |||
Additions to capitalized software costs | 0 | 0 | 0 | |||
Purchases of intangible assets | 0 | 0 | 0 | |||
Proceeds from sale of restricted investments | 0 | 0 | 0 | |||
Purchase of restricted investments | 0 | 0 | 0 | |||
Funding of intercompany note receivable | 64 | |||||
Proceeds from repayment of intercompany note receivable | (110.5) | (87) | (51) | |||
Other, net | 0 | 0 | 0 | |||
Net cash used in investing activities | (46.5) | (87) | (51) | |||
Cash flows from financing activities: | ||||||
Proceeds from bond issuance | 0 | |||||
Principal payments on debt, including pre-payments | 0 | 0 | 0 | |||
Principal borrowings on intercompany note payable | (64) | |||||
Principal payments on intercompany notes payable | 110.5 | 87 | 51 | |||
Borrowings on revolving credit facility | 0 | 0 | 0 | |||
Payments on revolving credit facility | 0 | 0 | 0 | |||
Principal payments under finance lease obligations | 0 | 0 | ||||
Principal payments under finance lease obligations | 0 | |||||
Debt amendment and issuance costs | 0 | 0 | 0 | |||
Repurchases of common stock, including fees and expenses | 0 | 0 | ||||
Dividends paid on common stock | 0 | 0 | 0 | |||
Purchase of equity interests in consolidated affiliates | 0 | 0 | ||||
Proceeds from exercising stock warrants | 0 | |||||
Distributions paid to noncontrolling interests of consolidated affiliates | 0 | 0 | 0 | |||
Taxes paid on behalf of employees for shares withheld | 0 | 0 | 0 | |||
Contributions from consolidated affiliates | 0 | 0 | 0 | |||
Other, net | 0 | 0 | 0 | |||
Change in intercompany advances | 0 | 0 | 0 | |||
Net cash provided by (used in) financing activities | 46.5 | 87 | 51 | |||
Increase in cash, cash equivalents, and restricted cash | 0 | 0 | 0 | |||
Cash, cash equivalents, restricted cash and restricted cash equivalents at beginning of period | 0 | 0 | 0 | 0 | ||
Cash, cash equivalents, restricted cash and restricted cash equivalents at end of period | 0 | 0 | 0 | |||
Reconciliation of Cash, Cash Equivalents, and Restricted Cash | ||||||
Cash and cash equivalents at beginning of period | 0 | 0 | 0 | 0 | ||
Restricted cash at beginning of period | 0 | 0 | 0 | 0 | ||
Restricted cash included in other long-term assets at beginning of period | 0 | |||||
Cash and cash equivalents at end of period | 0 | 0 | 0 | |||
Restricted cash at end of period | 0 | 0 | 0 | |||
Restricted cash included in other long-term assets at end of period | 0 | 0 | ||||
Supplemental schedule of noncash financing activities: | ||||||
Intercompany note activity | 0 | 0 | 0 | |||
Conversion of convertible debt | 0 | |||||
Encompass Health Corporation | ||||||
Consolidated Statements of Cash Flows [Abstract] | ||||||
Net cash provided by operating activities | (110.8) | (11.3) | 28.2 | |||
Cash flows from investing activities: | ||||||
Acquisition of businesses, net of cash acquired | (217.8) | (131.4) | (10.9) | |||
Purchases of property and equipment | (38.6) | (34.1) | (39.4) | |||
Additions to capitalized software costs | (7.4) | (14.1) | (16.3) | |||
Purchases of intangible assets | 0 | (2.5) | 0 | |||
Proceeds from sale of restricted investments | 0 | 0 | 0 | |||
Purchase of restricted investments | 0 | 0 | 0 | |||
Funding of intercompany note receivable | (64) | |||||
Proceeds from repayment of intercompany note receivable | 93 | 87 | 51 | |||
Other, net | (8.3) | (6) | (3.7) | |||
Net cash used in investing activities | (243.1) | (101.1) | (19.3) | |||
Cash flows from financing activities: | ||||||
Proceeds from bond issuance | 1,000 | |||||
Principal payments on debt, including pre-payments | (517.8) | (17.6) | (126.9) | |||
Principal borrowings on intercompany note payable | 0 | |||||
Principal payments on intercompany notes payable | (17.5) | 0 | 0 | |||
Borrowings on revolving credit facility | 635 | 325 | 273.3 | |||
Payments on revolving credit facility | (620) | (390) | (330.3) | |||
Principal payments under finance lease obligations | 0 | 0 | ||||
Principal payments under finance lease obligations | (0.7) | |||||
Debt amendment and issuance costs | (21.5) | 0 | (4.1) | |||
Repurchases of common stock, including fees and expenses | (45.9) | (38.1) | ||||
Dividends paid on common stock | (108.6) | (100.7) | (91.5) | |||
Purchase of equity interests in consolidated affiliates | (162.9) | (65.1) | ||||
Proceeds from exercising stock warrants | 26.6 | |||||
Distributions paid to noncontrolling interests of consolidated affiliates | 0 | 0 | 0 | |||
Taxes paid on behalf of employees for shares withheld | (15.4) | (7.4) | (19.5) | |||
Contributions from consolidated affiliates | 0 | 0 | 0 | |||
Other, net | (4.4) | 3 | 1 | |||
Change in intercompany advances | 245.8 | 372.4 | 314.3 | |||
Net cash provided by (used in) financing activities | 366.1 | 119.6 | 4.8 | |||
Increase in cash, cash equivalents, and restricted cash | 12.2 | 7.2 | 13.7 | |||
Cash, cash equivalents, restricted cash and restricted cash equivalents at beginning of period | 20.6 | 41.5 | 34.3 | 20.6 | ||
Cash, cash equivalents, restricted cash and restricted cash equivalents at end of period | 53.7 | 41.5 | 34.3 | |||
Reconciliation of Cash, Cash Equivalents, and Restricted Cash | ||||||
Cash and cash equivalents at beginning of period | 20.6 | 41.5 | 34.3 | 20.6 | ||
Restricted cash at beginning of period | 0 | 0 | 0 | 0 | ||
Restricted cash included in other long-term assets at beginning of period | 0 | |||||
Cash and cash equivalents at end of period | 53.7 | 41.5 | 34.3 | |||
Restricted cash at end of period | 0 | 0 | 0 | |||
Restricted cash included in other long-term assets at end of period | 0 | 0 | ||||
Supplemental schedule of noncash financing activities: | ||||||
Intercompany note activity | (232.9) | (136.8) | (8.8) | |||
Conversion of convertible debt | 319.4 | |||||
Guarantor Subsidiaries | ||||||
Consolidated Statements of Cash Flows [Abstract] | ||||||
Net cash provided by operating activities | 450.3 | 422.2 | 385.9 | |||
Cash flows from investing activities: | ||||||
Acquisition of businesses, net of cash acquired | 0 | 0 | 0 | |||
Purchases of property and equipment | (207.3) | (133.9) | (106.5) | |||
Additions to capitalized software costs | (0.7) | (0.1) | (0.3) | |||
Purchases of intangible assets | (18) | 0 | 0 | |||
Proceeds from sale of restricted investments | 0 | 0 | 0 | |||
Purchase of restricted investments | 0 | 0 | 0 | |||
Funding of intercompany note receivable | 0 | |||||
Proceeds from repayment of intercompany note receivable | 0 | 0 | 0 | |||
Other, net | 8.2 | 2.8 | 11.7 | |||
Net cash used in investing activities | (217.8) | (131.2) | (95.1) | |||
Cash flows from financing activities: | ||||||
Proceeds from bond issuance | 0 | |||||
Principal payments on debt, including pre-payments | 0 | 0 | 0 | |||
Principal borrowings on intercompany note payable | 0 | |||||
Principal payments on intercompany notes payable | 0 | 0 | 0 | |||
Borrowings on revolving credit facility | 0 | 0 | 0 | |||
Payments on revolving credit facility | 0 | 0 | 0 | |||
Principal payments under finance lease obligations | (8.4) | (7.3) | ||||
Principal payments under finance lease obligations | (8.3) | |||||
Debt amendment and issuance costs | 0 | 0 | 0 | |||
Repurchases of common stock, including fees and expenses | 0 | 0 | ||||
Dividends paid on common stock | 0 | 0 | 0 | |||
Purchase of equity interests in consolidated affiliates | 0 | 0 | ||||
Proceeds from exercising stock warrants | 0 | |||||
Distributions paid to noncontrolling interests of consolidated affiliates | 0 | 0 | 0 | |||
Taxes paid on behalf of employees for shares withheld | 0 | 0 | 0 | |||
Contributions from consolidated affiliates | 0 | 0 | 0 | |||
Other, net | 0 | 0 | 0 | |||
Change in intercompany advances | (222) | (282.5) | (282.2) | |||
Net cash provided by (used in) financing activities | (230.3) | (290.9) | (289.5) | |||
Increase in cash, cash equivalents, and restricted cash | 2.2 | 0.1 | 1.3 | |||
Cash, cash equivalents, restricted cash and restricted cash equivalents at beginning of period | 1.6 | 3 | 2.9 | 1.6 | ||
Cash, cash equivalents, restricted cash and restricted cash equivalents at end of period | 5.2 | 3 | 2.9 | |||
Reconciliation of Cash, Cash Equivalents, and Restricted Cash | ||||||
Cash and cash equivalents at beginning of period | 1.6 | 3 | 2.9 | 1.6 | ||
Restricted cash at beginning of period | 0 | 0 | 0 | 0 | ||
Restricted cash included in other long-term assets at beginning of period | 0 | |||||
Cash and cash equivalents at end of period | 5.2 | 3 | 2.9 | |||
Restricted cash at end of period | 0 | 0 | 0 | |||
Restricted cash included in other long-term assets at end of period | 0 | 0 | ||||
Supplemental schedule of noncash financing activities: | ||||||
Intercompany note activity | 0 | 0 | 0 | |||
Conversion of convertible debt | 0 | |||||
Non-Guarantor Subsidiaries | ||||||
Consolidated Statements of Cash Flows [Abstract] | ||||||
Net cash provided by operating activities | 247.9 | 259 | 181.2 | |||
Cash flows from investing activities: | ||||||
Acquisition of businesses, net of cash acquired | 0 | 0 | 0 | |||
Purchases of property and equipment | (117.9) | (79.9) | (75.4) | |||
Additions to capitalized software costs | (1.4) | 0 | (0.1) | |||
Purchases of intangible assets | 0 | (0.1) | 0 | |||
Proceeds from sale of restricted investments | 17.6 | 11.6 | 4.2 | |||
Purchase of restricted investments | (30.9) | (13.3) | (8.5) | |||
Funding of intercompany note receivable | 0 | |||||
Proceeds from repayment of intercompany note receivable | 17.5 | 0 | 0 | |||
Other, net | (6.7) | 0 | 0.2 | |||
Net cash used in investing activities | (121.8) | (81.7) | (79.6) | |||
Cash flows from financing activities: | ||||||
Proceeds from bond issuance | 0 | |||||
Principal payments on debt, including pre-payments | (1.7) | (3) | (3) | |||
Principal borrowings on intercompany note payable | 0 | |||||
Principal payments on intercompany notes payable | 0 | 0 | 0 | |||
Borrowings on revolving credit facility | 0 | 0 | 0 | |||
Payments on revolving credit facility | 0 | 0 | 0 | |||
Principal payments under finance lease obligations | (4.2) | (3.9) | ||||
Principal payments under finance lease obligations | (2.6) | |||||
Debt amendment and issuance costs | 0 | (0.1) | 0 | |||
Repurchases of common stock, including fees and expenses | 0 | 0 | ||||
Dividends paid on common stock | 0 | 0 | 0 | |||
Purchase of equity interests in consolidated affiliates | 0 | 0 | ||||
Proceeds from exercising stock warrants | 0 | |||||
Distributions paid to noncontrolling interests of consolidated affiliates | (79.8) | (75.4) | (51.9) | |||
Taxes paid on behalf of employees for shares withheld | 0 | 0 | 0 | |||
Contributions from consolidated affiliates | 15.9 | 12.6 | 20.8 | |||
Other, net | 0 | 13.2 | 0 | |||
Change in intercompany advances | (56.5) | (118.9) | (62) | |||
Net cash provided by (used in) financing activities | (124.7) | (175.8) | (100) | |||
Increase in cash, cash equivalents, and restricted cash | 1.4 | 1.5 | 1.6 | |||
Cash, cash equivalents, restricted cash and restricted cash equivalents at beginning of period | 66.3 | 69.4 | 67.9 | 66.3 | ||
Cash, cash equivalents, restricted cash and restricted cash equivalents at end of period | 70.8 | 69.4 | 67.9 | |||
Reconciliation of Cash, Cash Equivalents, and Restricted Cash | ||||||
Cash and cash equivalents at beginning of period | 5.4 | 5.1 | 5.5 | 5.4 | ||
Restricted cash at beginning of period | 60.9 | 59 | 62.4 | 60.9 | ||
Restricted cash included in other long-term assets at beginning of period | 5.3 | |||||
Cash and cash equivalents at end of period | 6 | 5.1 | 5.5 | |||
Restricted cash at end of period | 57.4 | 59 | 62.4 | |||
Restricted cash included in other long-term assets at end of period | 7.4 | 5.3 | ||||
Supplemental schedule of noncash financing activities: | ||||||
Intercompany note activity | 0 | 0 | 0 | |||
Conversion of convertible debt | 0 | |||||
Holdings | ||||||
Consolidated Statements of Cash Flows [Abstract] | ||||||
Net cash provided by operating activities | 47.9 | 92.5 | 63 | |||
Cash flows from investing activities: | ||||||
Acquisition of businesses, net of cash acquired | (13.7) | (12.5) | (27.9) | |||
Purchases of property and equipment | (8.6) | (6.6) | (4.5) | |||
Additions to capitalized software costs | (3.5) | (1.8) | (2.5) | |||
Purchases of intangible assets | (0.7) | (3.1) | (3.7) | |||
Proceeds from sale of restricted investments | 0 | 0 | 0 | |||
Purchase of restricted investments | (2) | 0 | 0 | |||
Funding of intercompany note receivable | 0 | |||||
Proceeds from repayment of intercompany note receivable | 0 | 0 | 0 | |||
Other, net | 0.3 | 0.5 | 0.6 | |||
Net cash used in investing activities | (28.2) | (23.5) | (38) | |||
Cash flows from financing activities: | ||||||
Proceeds from bond issuance | 0 | |||||
Principal payments on debt, including pre-payments | 0 | 0 | 0 | |||
Principal borrowings on intercompany note payable | 64 | |||||
Principal payments on intercompany notes payable | (93) | (87) | (51) | |||
Borrowings on revolving credit facility | 0 | 0 | 0 | |||
Payments on revolving credit facility | 0 | 0 | 0 | |||
Principal payments under finance lease obligations | (5.3) | (4.1) | ||||
Principal payments under finance lease obligations | (7.9) | |||||
Debt amendment and issuance costs | 0 | 0 | 0 | |||
Repurchases of common stock, including fees and expenses | 0 | 0 | ||||
Dividends paid on common stock | (0.1) | (0.1) | 0 | |||
Purchase of equity interests in consolidated affiliates | 0 | 0 | ||||
Proceeds from exercising stock warrants | 0 | |||||
Distributions paid to noncontrolling interests of consolidated affiliates | 0 | 0 | 0 | |||
Taxes paid on behalf of employees for shares withheld | (1.2) | (0.9) | (0.3) | |||
Contributions from consolidated affiliates | 0 | 0 | 0 | |||
Other, net | (3.9) | 3.2 | (0.7) | |||
Change in intercompany advances | 32.7 | 29 | 29.9 | |||
Net cash provided by (used in) financing activities | (9.4) | (61.1) | (26.2) | |||
Increase in cash, cash equivalents, and restricted cash | 10.3 | 7.9 | (1.2) | |||
Cash, cash equivalents, restricted cash and restricted cash equivalents at beginning of period | 12.9 | 19.6 | 11.7 | 12.9 | ||
Cash, cash equivalents, restricted cash and restricted cash equivalents at end of period | 29.9 | 19.6 | 11.7 | |||
Reconciliation of Cash, Cash Equivalents, and Restricted Cash | ||||||
Cash and cash equivalents at beginning of period | 12.9 | 19.6 | 11.7 | 12.9 | ||
Restricted cash at beginning of period | $ 0 | 0 | 0 | 0 | ||
Restricted cash included in other long-term assets at beginning of period | 0 | |||||
Cash and cash equivalents at end of period | 29.9 | 19.6 | 11.7 | |||
Restricted cash at end of period | 0 | 0 | 0 | |||
Restricted cash included in other long-term assets at end of period | 0 | 0 | ||||
Supplemental schedule of noncash financing activities: | ||||||
Intercompany note activity | $ 232.9 | $ 136.8 | 8.8 | |||
Conversion of convertible debt | $ 0 |