Cover Page
Cover Page - shares | 6 Months Ended | |
Jun. 30, 2022 | Jul. 25, 2022 | |
Cover [Abstract] | ||
Document Type | 10-Q | |
Document Quarterly Report | true | |
Document Period End Date | Jun. 30, 2022 | |
Document Transition Report | false | |
Entity File Number | 001-10315 | |
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, par value $0.01 per share | |
Trading Symbol | EHC | |
Security Exchange Name | NYSE | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Large Accelerated Filer | |
Entity Small Business | false | |
Entity Emerging Growth Company | false | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding | 99,777,626 | |
Entity Central Index Key | 0000785161 | |
Current Fiscal Year End Date | --12-31 | |
Document Fiscal Year Focus | 2022 | |
Document Fiscal Period Focus | Q2 | |
Amendment Flag | false |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Comprehensive Income (Unaudited) - USD ($) shares in Millions, $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2022 | Jun. 30, 2021 | Jun. 30, 2022 | Jun. 30, 2021 | |
Statement Of Comprehensive Income And Income Statement [Abstract] | ||||
Net operating revenues | $ 1,330.5 | $ 1,287.7 | $ 2,664.1 | $ 2,518.1 |
Operating expenses: | ||||
Salaries and benefits | 773.8 | 708.2 | 1,549.8 | 1,395.4 |
Other operating expenses | 193.4 | 172.7 | 375.5 | 335 |
Occupancy costs | 19.3 | 20.2 | 40.2 | 40.4 |
Supplies | 52.8 | 50 | 108.9 | 101.9 |
General and administrative expenses | 60.3 | 54.2 | 108.7 | 92.8 |
Depreciation and amortization | 68.8 | 63.4 | 135 | 125.9 |
Total operating expenses | 1,168.4 | 1,068.7 | 2,318.1 | 2,091.4 |
Loss on early extinguishment of debt | 1.1 | 1 | 1.4 | 1 |
Interest expense and amortization of debt discounts and fees | 60.6 | 41.8 | 100.2 | 84.6 |
Other expense (income) | 6.3 | (4.6) | 9.9 | (6) |
Equity in net income of nonconsolidated affiliates | (1) | (1) | (1.9) | (2) |
Income from continuing operations before income tax expense | 95.1 | 181.8 | 236.4 | 349.1 |
Provision for income tax expense | 23.8 | 39.5 | 55 | 74 |
Income from continuing operations | 71.3 | 142.3 | 181.4 | 275.1 |
Loss from discontinued operations, net of tax | 0 | (0.3) | 0 | (0.3) |
Net and comprehensive income | 71.3 | 142 | 181.4 | 274.8 |
Net and comprehensive income | 71.3 | 142 | 181.4 | 274.8 |
Less: Net and comprehensive income attributable to noncontrolling interests | (22.6) | (28.7) | (45.2) | (54.2) |
Less: Net and comprehensive income attributable to noncontrolling interests | (22.6) | (28.7) | (45.2) | (54.2) |
Net income attributable to Encompass Health | 48.7 | 113.3 | 136.2 | 220.6 |
Net and comprehensive income attributable to Encompass Health | $ 48.7 | $ 113.3 | $ 136.2 | $ 220.6 |
Weighted average common shares outstanding: | ||||
Basic (in shares) | 99.2 | 99 | 99.2 | 99 |
Diluted (in shares) | 100.3 | 100.2 | 100.2 | 100.2 |
Basic earnings per share attributable to Encompass Health common shareholders: | ||||
Continuing operations (in dollars per share) | $ 0.49 | $ 1.14 | $ 1.37 | $ 2.22 |
Discontinued operations (in dollars per share) | 0 | 0 | 0 | 0 |
Net income (in dollars per share) | 0.49 | 1.14 | 1.37 | 2.22 |
Diluted earnings per share attributable to Encompass Health common shareholders: | ||||
Continuing operations (in dollars per share) | 0.49 | 1.13 | 1.36 | 2.20 |
Discontinued operations (in dollars per share) | 0 | 0 | 0 | 0 |
Net income (in dollars per share) | $ 0.49 | $ 1.13 | $ 1.36 | $ 2.20 |
Amounts attributable to Encompass Health common shareholders: | ||||
Income from continuing operations | $ 48.7 | $ 113.6 | $ 136.2 | $ 220.9 |
Loss from discontinued operations, net of tax | 0 | (0.3) | 0 | (0.3) |
Net income attributable to Encompass Health | $ 48.7 | $ 113.3 | $ 136.2 | $ 220.6 |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets (Unaudited) - USD ($) $ in Millions | Jun. 30, 2022 | Dec. 31, 2021 | |
Current assets: | |||
Cash and cash equivalents | $ 186.5 | $ 54.8 | |
Restricted cash | 70.8 | 65.1 | |
Accounts receivable | 658.7 | 680.3 | |
Other current assets | 116.4 | 121.2 | |
Total current assets | 1,032.4 | 921.4 | |
Property and equipment, net | 2,730.1 | 2,601.6 | |
Operating lease right-of-use assets | 238.5 | 242 | |
Goodwill | 2,456.5 | 2,427.9 | |
Intangible assets, net | 398.4 | 417.5 | |
Other long-term assets | 226.3 | 254.5 | |
Total assets | [1] | 7,082.2 | 6,864.9 |
Current liabilities: | |||
Current portion of long-term debt | 49.2 | 42.8 | |
Current operating lease liabilities | 36.7 | 38.4 | |
Accounts payable | 138.3 | 137.6 | |
Accrued expenses and other current liabilities | 611.2 | 530 | |
Total current liabilities | 835.4 | 748.8 | |
Long-term debt, net of current portion | 3,233.5 | 3,243.9 | |
Long-term operating lease liabilities | 211.9 | 213.1 | |
Deferred income tax liabilities | 79.8 | 86.7 | |
Other long-term liabilities | 177 | 173.2 | |
Total liabilities | 4,537.6 | 4,465.7 | |
Commitments and contingencies | |||
Redeemable noncontrolling interests | 43.3 | 42.2 | |
Shareholders’ equity: | |||
Encompass Health shareholders’ equity | 2,003 | 1,911.3 | |
Noncontrolling interests | 498.3 | 445.7 | |
Total shareholders’ equity | 2,501.3 | 2,357 | |
Total liabilities and shareholders' equity | [1] | $ 7,082.2 | $ 6,864.9 |
[1] Our consolidated assets as of June 30, 2022 and December 31, 2021 include total assets of variable interest entities of $227.4 million and $226.2 million, respectively, which cannot be used by us to settle the obligations of other entities. Our consolidated liabilities as of June 30, 2022 and December 31, 2021 include total liabilities of the variable interest entities of $38.5 million and $38.2 million, respectively. See Note 3, Variable Interest Entities. |
Condensed Consolidated Balanc_2
Condensed Consolidated Balance Sheets (Unaudited) (Parenthetical) - USD ($) $ in Millions | Jun. 30, 2022 | Dec. 31, 2021 | |
Assets | [1] | $ 7,082.2 | $ 6,864.9 |
Liabilities | 4,537.6 | 4,465.7 | |
VIE | |||
Assets | 227.4 | 226.2 | |
Liabilities | $ 38.5 | $ 38.2 | |
[1] Our consolidated assets as of June 30, 2022 and December 31, 2021 include total assets of variable interest entities of $227.4 million and $226.2 million, respectively, which cannot be used by us to settle the obligations of other entities. Our consolidated liabilities as of June 30, 2022 and December 31, 2021 include total liabilities of the variable interest entities of $38.5 million and $38.2 million, respectively. See Note 3, Variable Interest Entities. |
Condensed Consolidated Statem_2
Condensed Consolidated Statements of Shareholders' Equity (Unaudited) - USD ($) shares in Millions, $ in Millions | Total | Common Stock | Capital in Excess of Par Value | Accumulated Income | Treasury Stock | Noncontrolling Interests |
Balance at beginning of period (shares) at Dec. 31, 2020 | 99.4 | |||||
Balance at beginning of period at Dec. 31, 2020 | $ 1,970 | $ 1.1 | $ 2,326.6 | $ (242.3) | $ (497.4) | $ 382 |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Net income | 269.7 | 220.6 | 49.1 | |||
Receipt of treasury stock (shares) | (0.2) | |||||
Receipt of treasury stock | (16.4) | (16.4) | ||||
Dividends declared | (55.9) | (55.9) | ||||
Stock-based compensation | 14.8 | 14.8 | ||||
Distributions declared | (45.4) | (45.4) | ||||
Capital contributions from consolidated affiliates | 41.8 | 41.8 | ||||
Other (shares) | 0.3 | |||||
Other | (2.5) | 15.1 | (4.2) | (13.4) | ||
Balance at end of period (shares) at Jun. 30, 2021 | 99.5 | |||||
Balance at end of period at Jun. 30, 2021 | 2,176.1 | $ 1.1 | 2,300.6 | (21.7) | (518) | 414.1 |
Balance at beginning of period (shares) at Mar. 31, 2021 | 99.6 | |||||
Balance at beginning of period at Mar. 31, 2021 | 2,043 | $ 1.1 | 2,302.7 | (135) | (513.7) | 387.9 |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Net income | 139.3 | 113.3 | 26 | |||
Receipt of treasury stock | (0.8) | (0.8) | ||||
Dividends declared | (28.1) | (28.1) | ||||
Stock-based compensation | 12 | 12 | ||||
Distributions declared | (23) | (23) | ||||
Capital contributions from consolidated affiliates | 36 | 36 | ||||
Other (shares) | (0.1) | |||||
Other | (2.3) | 14 | (3.5) | (12.8) | ||
Balance at end of period (shares) at Jun. 30, 2021 | 99.5 | |||||
Balance at end of period at Jun. 30, 2021 | 2,176.1 | $ 1.1 | 2,300.6 | (21.7) | (518) | 414.1 |
Balance at beginning of period (shares) at Dec. 31, 2021 | 99.5 | |||||
Balance at beginning of period at Dec. 31, 2021 | 2,357 | $ 1.1 | 2,289.6 | 141.8 | (521.2) | 445.7 |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Net income | 178 | 136.2 | 41.8 | |||
Receipt of treasury stock (shares) | (0.1) | |||||
Receipt of treasury stock | (7.7) | (7.7) | ||||
Dividends declared | (56.1) | (56.1) | ||||
Stock-based compensation | 16.3 | 16.3 | ||||
Distributions declared | (45.4) | (45.4) | ||||
Capital contributions from consolidated affiliates | 44.2 | 44.2 | ||||
Other (shares) | 0.4 | |||||
Other | 15 | 4.9 | (1.9) | 12 | ||
Balance at end of period (shares) at Jun. 30, 2022 | 99.8 | |||||
Balance at end of period at Jun. 30, 2022 | 2,501.3 | $ 1.1 | 2,310.8 | 221.9 | (530.8) | 498.3 |
Balance at beginning of period (shares) at Mar. 31, 2022 | 99.8 | |||||
Balance at beginning of period at Mar. 31, 2022 | 2,448.4 | $ 1.1 | 2,301.1 | 201.2 | (529.9) | 474.9 |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Net income | 69.8 | 48.7 | 21.1 | |||
Receipt of treasury stock | (0.1) | (0.1) | ||||
Dividends declared | (28) | (28) | ||||
Stock-based compensation | 8.8 | 8.8 | ||||
Distributions declared | (20.5) | (20.5) | ||||
Capital contributions from consolidated affiliates | 22.8 | 22.8 | ||||
Other | 0.1 | 0.9 | (0.8) | |||
Balance at end of period (shares) at Jun. 30, 2022 | 99.8 | |||||
Balance at end of period at Jun. 30, 2022 | $ 2,501.3 | $ 1.1 | $ 2,310.8 | $ 221.9 | $ (530.8) | $ 498.3 |
Condensed Consolidated Statem_3
Condensed Consolidated Statements of Shareholders' Equity (Unaudited) (Parenthetical) - $ / shares | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2022 | Jun. 30, 2021 | Jun. 30, 2022 | Jun. 30, 2021 | |
Statement of Stockholders' Equity [Abstract] | ||||
Dividends declared on common stock (in dollars per share) | $ 0.28 | $ 0.28 | $ 0.56 | $ 0.56 |
Condensed Consolidated Statem_4
Condensed Consolidated Statements of Cash Flows (Unaudited) - USD ($) $ in Millions | 6 Months Ended | |
Jun. 30, 2022 | Jun. 30, 2021 | |
Cash flows from operating activities: | ||
Net income | $ 181.4 | $ 274.8 |
Loss from discontinued operations, net of tax | 0 | 0.3 |
Adjustments to reconcile net income to net cash provided by operating activities— | ||
Depreciation and amortization | 135 | 125.9 |
Stock-based compensation | 16.3 | 14.8 |
Deferred tax expense | (7.9) | 6.2 |
Other, net | 22 | 4 |
Change in assets and liabilities, net of acquisitions— | ||
Accounts receivable | 29.8 | (38.1) |
Other assets | 2.2 | (17.2) |
Accounts payable | 3.9 | 6.6 |
Accrued payroll | 16.1 | 27.4 |
Other liabilities | 64.7 | 10.3 |
Net cash used in operating activities of discontinued operations | 0 | (0.6) |
Total adjustments | 282.1 | 139.3 |
Net cash provided by operating activities | 463.5 | 414.4 |
Cash flows from investing activities: | ||
Acquisitions of businesses, net of cash acquired | 0 | (97.7) |
Purchases of property and equipment | (230) | (212.7) |
Additions to capitalized software costs | (4.9) | (10) |
Other, net | (11.4) | (1.2) |
Net cash used in investing activities | (246.3) | (321.6) |
Cash flows from financing activities: | ||
Principal borrowings on notes | 400 | 0 |
Principal payments on debt, including pre-payments | (345.2) | (207.3) |
Borrowings on revolving credit facility | 300 | 45 |
Payments on revolving credit facility | (330) | 0 |
Principal payments under finance lease obligations | (11.9) | (11.8) |
Debt amendment and issuance costs | (25) | 0 |
Taxes paid on behalf of employees for shares withheld | (7.7) | (16.4) |
Contributions from noncontrolling interests of consolidated affiliates | 42.6 | 36.1 |
Dividends paid on common stock | (56.3) | (56.9) |
Distributions paid to noncontrolling interests of consolidated affiliates | (46.6) | (52.7) |
Other, net | (0.1) | 0.1 |
Net cash used in financing activities | (80.2) | (263.9) |
Increase (decrease) in cash, cash equivalents, and restricted cash | 137 | (171.1) |
Cash, cash equivalents, and restricted cash at beginning of period | 120.3 | 310.9 |
Cash, cash equivalents, and restricted cash at end of period | 257.3 | 139.8 |
Reconciliation of Cash, Cash Equivalents, and Restricted Cash | ||
Cash and cash equivalents at beginning of period | 54.8 | 224 |
Restricted cash at beginning of period | 65.1 | 65.4 |
Restricted cash included in other long-term assets at beginning of period | 0.4 | 21.5 |
Cash, cash equivalents, and restricted cash at beginning of period | 120.3 | 310.9 |
Cash and cash equivalents at end of period | 186.5 | 73.2 |
Restricted cash at end of period | 70.8 | 65 |
Restricted cash included in other long-term assets at end of period | 0 | 1.6 |
Cash, cash equivalents, and restricted cash at end of period | 257.3 | 139.8 |
Supplemental schedule of noncash operating, investing and financing activities: | ||
Property and equipment additions through finance leases | 2.3 | 46.6 |
Accrued purchases of property and equipment | (4.2) | 20.4 |
Operating lease additions and adjustments | $ 19.5 | $ 28 |
Basis of Presentation
Basis of Presentation | 6 Months Ended |
Jun. 30, 2022 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Basis of Presentation | Basis of Presentation Encompass Health Corporation (the “Company” or “Encompass Health”), incorporated in Delaware in 1984, including its subsidiaries, is a leading provider of post-acute healthcare services, offering both facility-based and home-based patient services in 42 states and Puerto Rico through its 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 also Note 11, Segment Reporting . The accompanying unaudited condensed consolidated financial statements of Encompass Health Corporation and Subsidiaries should be read in conjunction with the consolidated financial statements and accompanying notes contained in Encompass Health’s Annual Report on Form 10-K filed with the United States Securities and Exchange Commission on February 25, 2022 (the “2021 Form 10‑K”). The unaudited condensed consolidated financial statements have been prepared in accordance with the rules and regulations of the SEC applicable to interim financial information. Certain information and note disclosures included in financial statements prepared in accordance with generally accepted accounting principles in the United States of America have been omitted in these interim statements, as allowed by such SEC rules and regulations. The condensed consolidated balance sheet as of December 31, 2021 has been derived from audited financial statements, but it does not include all disclosures required by GAAP. However, we believe the disclosures are adequate to make the information presented not misleading. The unaudited results of operations for the interim periods shown in these financial statements are not necessarily indicative of operating results for the entire year. In our opinion, the accompanying condensed consolidated financial statements recognize all adjustments of a normal recurring nature considered necessary to fairly state the financial position, results of operations, and cash flows for each interim period presented. Certain prior-year amounts have been reclassified to conform to the current year presentation. Separation of Home Health and Hospice Business — On July 1, 2022, we completed the previously announced separation of our home health and hospice business through the distribution (the “Distribution”) of all of the outstanding shares of common stock, par value $0.01 per share, of Enhabit, Inc. (“Enhabit”) to the stockholders of record of Encompass Health as of the close of business on June 24, 2022 (the “Record Date”). The Distribution was effective at 12:01 a.m., Eastern Time, on July 1, 2022. The Distribution was structured as a pro rata distribution of one share of Enhabit common stock for every two shares of Encompass Health common stock held of record as of the Record Date. No fractional shares have been or will be distributed. A cash payment will be made in lieu of any fractional shares. As a result of the Distribution, Enhabit is now an independent public company and its common stock is listed under the symbol “EHAB” on the New York Stock Exchange. The accompanying unaudited condensed consolidated financial statements include the historical results of Encompass Health, as the Distribution did not take place until July 1, 2022. Immediately after the Distribution, we will no longer consolidate our home health and hospice business into our financial results. Beginning in the third quarter of 2022, Enhabit's historical financial results for periods prior to July 1, 2022 will be reflected in our condensed consolidated financial statements as discontinued operations. Prior to July 1, 2022, we operated under two reporting segments. In future filings, we expect to operate under one reporting segment. As a result of the Distribution, the accompanying unaudited condensed consolidated financial statements are not indicative of our future financial position, results of operations or cash flows. In connection with the Distribution, on June 30, 2022, we entered into several agreements with Enhabit that govern the relationship of the parties following the Distribution, including a Separation and Distribution Agreement, a Transition Services Agreement, a Tax Matters Agreement and an Employee Matters Agreement. See also Note 4, Long-term Debt. 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 Three Months Ended June 30, Three Months Ended June 30, Three Months Ended June 30, 2022 2021 2022 2021 2022 2021 Medicare $ 690.7 $ 650.8 $ 210.2 $ 234.9 $ 900.9 $ 885.7 Medicare Advantage 160.7 153.6 36.9 29.9 197.6 183.5 Managed care 123.3 114.7 18.0 16.6 141.3 131.3 Medicaid 47.5 41.8 2.8 4.2 50.3 46.0 Other third-party payors 9.4 11.0 — — 9.4 11.0 Workers’ compensation 5.9 5.2 0.1 — 6.0 5.2 Patients 4.1 4.3 — 0.3 4.1 4.6 Other income 20.9 20.2 — 0.2 20.9 20.4 Total $ 1,062.5 $ 1,001.6 $ 268.0 $ 286.1 $ 1,330.5 $ 1,287.7 Inpatient Rehabilitation Home Health and Hospice Consolidated Six Months Ended June 30, Six Months Ended June 30, Six Months Ended June 30, 2022 2021 2022 2021 2022 2021 Medicare $ 1,380.8 $ 1,265.3 $ 427.4 $ 458.8 $ 1,808.2 $ 1,724.1 Medicare Advantage 316.7 312.0 71.4 57.9 388.1 369.9 Managed care 254.8 226.9 36.9 30.9 291.7 257.8 Medicaid 89.3 80.8 6.3 8.0 95.6 88.8 Other third-party payors 19.4 23.1 — — 19.4 23.1 Workers’ compensation 12.0 10.9 0.2 0.1 12.2 11.0 Patients 9.2 9.2 0.1 0.5 9.3 9.7 Other income 39.6 33.3 — 0.4 39.6 33.7 Total $ 2,121.8 $ 1,961.5 $ 542.3 $ 556.6 $ 2,664.1 $ 2,518.1 See Note 1, Summary of Significant Accounting Policies , to the consolidated financial statements accompanying the 2021 Form 10-K for our policy related to Net operating revenues . Recently Adopted Accounting Pronouncements — We do not believe any recently issued, but not yet effective, accounting standards will have a material effect on our condensed consolidated financial position, results of operations, or cash flows. |
Business Combinations
Business Combinations | 6 Months Ended |
Jun. 30, 2022 | |
Business Combination and Asset Acquisition [Abstract] | |
Business Combinations | Business Combinations Home Health and Hospice On January 1, 2022, we acquired a 50% equity interest from Frontier Home Health and Hospice, LLC in a joint venture with Saint Alphonsus System (“Saint Alphonsus”) which operates home health and hospice locations in Boise, Idaho. The total purchase price was $15.9 million and was funded on December 31, 2021. This acquisition was made to enhance our existing joint venture relationship with Saint Alphonsus and expand our footprint in this geographic area. This transaction was not material to our financial position, results of operations, or cash flows. We accounted for this transaction under the acquisition method of accounting and reported the results of operations of the acquired locations from the date of acquisition. Assets acquired, liabilities assumed, and noncontrolling interests were recorded at their estimated fair values as of the acquisition date. Estimated fair values were based on various valuation methodologies including: an income approach using primarily discounted cash flow techniques for the noncompete and license intangible assets; and an income approach utilizing the relief-from-royalty method for the trade name intangible asset. The aforementioned income methods utilize management’s estimates of future operating results and cash flows discounted using a weighted average cost of capital that reflects market participant assumptions. For all other assets and liabilities, the fair value was assumed to represent carrying value due to their short maturities. The excess of the fair value of the consideration conveyed over the fair value of the net assets acquired was recorded as goodwill. All goodwill recorded reflects our expectations of favorable growth opportunities in the home health and hospice markets based on positive demographic trends. At least $14.4 million of the goodwill recorded as a result of this transaction is deductible for federal income tax purposes. The fair values recorded were based upon a preliminary valuation. Estimates and assumptions used in such valuation are subject to change, which could be significant, within the measurement period (up to one year from the acquisition date). We expect to continue to obtain information to assist us in determining the fair value of the net assets acquired at the acquisition date during the measurement period. The preliminary fair value of the assets acquired and liabilities assumed at the acquisition date were as follows (in millions): Cash and cash equivalents $ 0.7 Accounts receivable, net 1.6 Operating lease right-of-use-assets 0.3 Identifiable intangible assets: Noncompete agreement (useful life of 5 years) 0.2 Trade name (useful life of 6 months) 0.1 Licenses (useful lives of 10 years) 0.9 Internal-use software (useful life of 3 years) 0.1 Goodwill 28.7 Total assets acquired 32.6 Liabilities assumed: Current operating lease liabilities 0.1 Accounts payable 0.1 Accrued payroll 0.2 Other current liabilities 0.2 Long-term operating lease liabilities 0.2 Total liabilities assumed 0.8 Noncontrolling interests 15.9 Net assets acquired $ 15.9 Information regarding the cash paid for the acquisition during each period presented is as follows (in millions): Three Months Ended June 30, Six Months Ended June 30, 2022 2021 2022 2021 Fair value of assets acquired $ — $ 11.9 $ 3.9 $ 11.9 Goodwill — 90.1 28.7 90.1 Fair value of liabilities assumed — (2.7) (0.8) (2.7) Fair value of noncontrolling interest owned by joint venture partner — (1.6) (15.9) (1.6) Cash paid for acquisition (1) $ — $ 97.7 $ 15.9 $ 97.7 ———————— (1) As discussed above, the $15.9 million was paid on December 31, 2021; therefore, this amount is not included in the condensed consolidated statement of cash flows for the six months ended June 30, 2022. Pro Forma Results of Operations The following table summarizes the results of operations of the above mentioned acquisition from the date 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 acquisition been January 1, 2021 (in millions): Net Operating Revenues Net (Loss) Income Attributable to Encompass Health Acquired entities only: Actual from acquisition date to June 30, 2022 Home Health and Hospice $ 3.1 $ (0.1) Combined entity: Supplemental pro forma from 04/01/2022-06/30/2022 1,330.5 48.7 Combined entity: Supplemental pro forma from 04/01/2021-06/30/2021 1,289.7 113.3 Combined entity: Supplemental pro forma from 01/01/2022-06/30/2022 2,664.1 136.2 Combined entity: Supplemental pro forma from 01/01/2021-06/30/2021 2,522.4 220.8 The information presented above is for illustrative purposes only and is not necessarily indicative of results that would have been achieved if the acquisition had occurred as of the beginning of our 2021 reporting period. See Note 2, Business Combinations , to the consolidated financial statements accompanying the 2021 Form 10‑K for information regarding acquisitions completed in 2021. |
Variable Interest Entities
Variable Interest Entities | 6 Months Ended |
Jun. 30, 2022 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Variable Interest Entities | Variable Interest Entities As of June 30, 2022 and December 31, 2021, we consolidated ten 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 90.0% as of June 30, 2022. 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 condensed consolidated balance sheet, are as follows (in millions): June 30, 2022 December 31, 2021 Assets Current assets: Cash and cash equivalents $ 0.5 $ — Accounts receivable 35.5 36.3 Other current assets 10.5 7.7 Total current assets 46.5 44.0 Property and equipment, net 115.7 116.3 Operating lease right-of-use assets 2.7 3.2 Goodwill 28.4 28.3 Intangible assets, net 3.0 3.3 Other long-term assets 31.1 31.1 Total assets $ 227.4 $ 226.2 Liabilities Current liabilities: Current portion of long-term debt $ 1.0 $ 1.0 Current operating lease liabilities 1.2 1.5 Accounts payable 5.9 5.9 Accrued expenses and other current liabilities 20.8 19.4 Total current liabilities 28.9 27.8 Long-term debt, net of current portion 8.1 8.6 Long-term operating lease liabilities 1.5 1.8 Total liabilities $ 38.5 $ 38.2 |
Long-term Debt
Long-term Debt | 6 Months Ended |
Jun. 30, 2022 | |
Debt Disclosure [Abstract] | |
Long-term Debt | Long-term Debt Our long-term debt outstanding consists of the following (in millions): June 30, 2022 December 31, 2021 Encompass Health Credit Agreement— Advances under revolving credit facility $ — $ 200.0 Term loan facilities — 238.5 Enhabit Credit Agreement— Advances under revolving credit facility 170.0 — Term loan A facility 397.7 — Bonds payable— 5.125% Senior Notes due 2023 — 99.6 5.75% Senior Notes due 2025 347.4 347.0 4.50% Senior Notes due 2028 780.2 786.8 4.75% Senior Notes due 2030 777.8 784.7 4.625% Senior Notes due 2031 390.1 393.7 Other notes payable 42.3 49.6 Finance lease obligations 377.2 386.8 3,282.7 3,286.7 Less: Current portion (49.2) (42.8) Long-term debt, net of current portion $ 3,233.5 $ 3,243.9 The following chart shows scheduled principal payments due on long-term debt for the next five years and thereafter (in millions): Face Amount Net Amount July 1 through December 31, 2022 $ 22.2 $ 22.2 2023 49.8 49.8 2024 61.9 61.9 2025 404.6 401.9 2026 49.9 49.9 2027 524.2 521.9 Thereafter 2,226.9 2,175.1 Total $ 3,339.5 $ 3,282.7 On December 9, 2021, we announced the commencement of a consent solicitation of holders of our 5.75% Senior Notes due 2025, 4.50% Senior Notes due 2028 (the “2028 Notes”), 4.75% Senior Notes due 2030 (the “2030 Notes”), and 4.625% Senior Notes due 2031 (the “2031 Notes” and collectively the “Senior Notes”) for the adoption of certain amendments 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”), which provided us with greater flexibility in effecting the spin off discussed in Note 1, Basis of Presentation . Each Indenture contains restrictive covenants that, among other things, limit our ability and the ability of certain of our subsidiaries to make certain asset dispositions, investments, and distributions to holders of our capital stock. The amendments to the Indentures permit us, subject to the leverage ratio condition set forth below, to distribute to our equity holders in one or more transactions (a “Distribution”) some or all of the common stock of a subsidiary that holds substantially all of the assets of our home health and hospice business. We may make any such distribution so long as the Leverage Ratio (as defined in each Indenture) is no more than 3.5 to 1.0 on a pro forma basis after giving effect thereto. The amendments also reduce the capacity under our restricted payments builder basket under each existing Indenture for the 2028 Notes, 2030 Notes, and 2031 Notes by $200 million and amends the definition of “Consolidated Net Income” to allow us to exclude from Consolidated Net Income (a component of the Leverage Ratio) any fees, expenses or charges related to any Distribution and the solicitation of consents from the holders of the Senior Notes. In December 2021 and January 2022, we received the requisite consents for the adoption of these amendments. Under the terms of the amendments, we agreed to pay the holders of the Senior Notes a total of $40.5 million, excluding fees. We paid $20.0 million and $20.5 million in January and June 2022, respectively. In March 2022, we redeemed the remaining $100 million in outstanding principal amount of the 5.125% Senior Notes due 2023 (the “2023 Notes”) using capacity under our revolving credit facility. Pursuant to the terms of the 2023 Notes, this optional redemption was made at a price of par. As a result of this redemption, we recorded a $0.3 million Loss on early extinguishment of debt during the three months ended March 31, 2022. In June 2022, Encompass Health entered into the Second Amendment to Fifth Amended and Restated Credit Agreement, by and among Encompass Health, certain of its subsidiaries, as guarantors, Barclays Bank PLC, as administrative agent and collateral agent and various other lenders, which provided a consent to the Enhabit Credit Facilities (as defined below) and related matters and modified certain terms of Encompass Health’s Fifth Amended and Restated Credit Agreement, dated as of November 25, 2019 (the “2019 Credit Agreement,” and, as amended, the “Credit Agreement”). Capitalized terms used, but not otherwise defined, in the following bullet points are defined in the Credit Agreement. The amendment includes the following modifications: • Amendment of definition of “Consolidated Net Income” to exclude from the calculation thereof, at Encompass Health’s option, net income or loss from disposed, abandoned, transferred, closed or discontinued operations until such disposition, abandonment, transfer, closure of discontinuance of operations shall have been consummated. • Addition of Section 1.08, “SpinCo Credit Facilities Transactions,” to provide that the Loan Documents will not prevent the consummation of the SpinCo Credit Facilities Transactions and that the SpinCo Credit Facilities Transactions will not give rise to any Default or constitute a utilization of any basket under any Loan Document. • Amendment of Section 2.11(e) to provide that a Prepayment Notice may be conditioned upon the effectiveness of other credit facilities, indentures or similar agreements or other transactions. • Addition of Section 5.18, “SpinCo Distribution,” to provide that within three (3) Business Days following the incurrence of indebtedness under the SpinCo Credit Facilities, Encompass will have consummated the SpinCo Distribution in compliance with the Restricted Payments covenants of the Credit Agreement, and following the consummation of the SpinCo Distribution, no obligors in respect of the SpinCo Credit Facilities will be Restricted Subsidiaries. • Amendment of the definition of “Senior Notes” to include Encompass’ 4.625% Senior Notes due 2031 and the definition of “Consolidated Total Indebtedness” to exclude Indebtedness under any Senior Note for which an irrevocable notice of redemption has been issued in connection with or incidental to any SpinCo Distribution. All other material terms of the existing credit agreement remain the same and are described in Note 10, Long-term Debt, to the consolidated financial statements accompanying the 2021 Form 10-K. Encompass Health’s obligations under the Credit Agreement are secured by the current and future personal property of Encompass Health and its subsidiary guarantors, which, in general, are Encompass Health’s wholly-owned subsidiaries. In connection with the spin off of Encompass Health’s home health and hospice business, Encompass’s wholly-owned subsidiary, Enhabit, Inc., entered into a Credit Agreement (the “Enhabit Credit Agreement”), in June 2022. The Enhabit Credit Agreement consists of a $400 million term loan A facility (the “Term Loan A Facility”) and a $350 million revolving credit facility (the “Revolving Credit Facility” and together with the Term Loan A Facility, the “Enhabit Credit Facilities”). The Enhabit Credit Facilities mature five years from the closing date thereof. Interest on the loans under the Enhabit Credit Facilities is calculated by reference to the Secured Overnight Financing Rate (“SOFR”) or an alternative base rate, plus an applicable interest rate margin. Enhabit may voluntarily prepay outstanding loans under the Enhabit Credit Facilities at any time without premium or penalty, other than customary breakage costs with respect to SOFR loans. The Term Loan A Facility contains customary mandatory prepayments, including with respect to proceeds from asset sales and from certain incurrences of indebtedness. The Term Loan A Facility amortizes by an amount per annum equal to 5.00% of the outstanding principal amount thereon as of the closing date, payable in equal quarterly installments, with the balance being payable on the date that is five years after the closing of the Term Loan A Facility. The Revolving Credit Facility provides Enhabit with the ability to borrow and obtain letters of credit, which will be subject to a $75 million sublimit in amounts available to be drawn at any time prior to the date that is five years after the closing of the Revolving Credit Facility. The obligations under the Enhabit Credit Facilities will be guaranteed by Enhabit’s existing and future wholly-owned domestic material subsidiaries, subject to certain exceptions. Borrowings under the Enhabit Credit Facilities will be secured by first priority liens on substantially all the assets of Enhabit and the guarantors, subject to certain exceptions. The Enhabit Credit Facilities contain representations and warranties, affirmative and negative covenants and events of default customary for secured financings of this type, including limitations with respect to liens, fundamental changes, indebtedness, restricted payments, investments and affiliate transactions, in each case, subject to a number of important exceptions and qualifications. In addition, the Enhabit Credit Facilities will obligate Enhabit to maintain a total net leverage ratio and an interest coverage ratio. On June 30, 2022, Enhabit drew the full $400 million of the Term Loan A Facility and $170 million on the Revolving Credit Facility. The net proceeds of $566.6 million were distributed to Encompass Health who used it to fully repay the $250 million outstanding balance of the Encompass Health revolving credit facility and approximately $236 million of the Encompass Health term loan. As a result of this repayment, we recorded a $1.1 million Loss on early extinguishment of debt during the three months ended June 30, 2022. |
Redeemable Noncontrolling Inter
Redeemable Noncontrolling Interests | 6 Months Ended |
Jun. 30, 2022 | |
Noncontrolling Interest [Abstract] | |
Redeemable Noncontrolling Interests | Redeemable Noncontrolling Interests The following is a summary of the activity related to our Redeemable noncontrolling interests (in millions): Six Months Ended June 30, 2022 2021 Balance at beginning of period $ 42.2 $ 31.6 Net income attributable to noncontrolling interests 3.4 5.1 Distributions declared (2.3) (4.4) Purchase of redeemable noncontrolling interests — 0.6 Balance at end of period $ 43.3 $ 32.9 The following table reconciles the net income attributable to nonredeemable Noncontrolling interests , as recorded in the shareholders’ equity section of the condensed consolidated balance sheets, and the net income attributable to Redeemable noncontrolling interests , as recorded in the mezzanine section of the condensed consolidated balance sheets, to the Net and comprehensive income attributable to noncontrolling interests presented in the condensed consolidated statements of comprehensive income (in millions): Three Months Ended June 30, Six Months Ended June 30, 2022 2021 2022 2021 Net income attributable to nonredeemable noncontrolling interests $ 21.1 $ 26.0 $ 41.8 $ 49.1 Net income attributable to redeemable noncontrolling interests 1.5 2.7 3.4 5.1 Net income attributable to noncontrolling interests $ 22.6 $ 28.7 $ 45.2 $ 54.2 See also Note 6, Fair Value Measurements . |
Fair Value Measurements
Fair Value Measurements | 6 Months Ended |
Jun. 30, 2022 | |
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 June 30, 2022 Fair Value Quoted Prices in Active Markets for Identical Assets Significant Other Observable Inputs Significant Unobservable Inputs Valuation Technique (1) Equity securities (2) $ 78.0 $ 3.7 $ 74.3 $ — M Redeemable noncontrolling interests 43.3 — — 43.3 I As of December 31, 2021 Equity securities (2) $ 82.2 $ 4.1 $ 78.1 $ — M Redeemable noncontrolling interests 42.2 — — 42.2 I (1) The three valuation techniques are: market approach (M), cost approach (C), and income approach (I). (2) As of June 30, 2022, $5.1 million are included in Other current assets and $72.9 million are included in Other long-term assets in the condensed consolidated balance sheet. As of December 31, 2021, $82.2 million are included in Other long-term assets in the condensed consolidated balance sheet. There are assets and liabilities that are not required to be measured at fair value on a recurring basis. However, these assets may be recorded at fair value as a result of impairment charges or other adjustments made to the carrying value of the applicable assets. During the three and six months ended June 30, 2022 and 2021, we did not record any material gains or losses related to these assets. As discussed in Note 1, Summary of Significant Accounting Policies , “Fair Value Measurements,” to the consolidated financial statements accompanying the 2021 Form 10‑K, 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 condensed consolidated balance sheets. The carrying amounts and estimated fair values for all of our other financial instruments are presented in the following table (in millions): As of June 30, 2022 As of December 31, 2021 Carrying Amount Estimated Fair Value Carrying Amount Estimated Fair Value Long-term debt: Encompass Health Credit Agreement— Advances under revolving credit facility $ — $ — $ 200.0 $ 200.0 Term loan facilities — — 238.5 239.6 Enhabit Credit Agreement— Advances under revolving credit facility 170.0 170.0 — — Term loan A facility 397.7 400.0 — — 5.125% Senior Notes due 2023 — — 99.6 100.2 5.75% Senior Notes due 2025 347.4 347.6 347.0 357.9 4.50% Senior Notes due 2028 780.2 685.3 786.8 823.0 4.75% Senior Notes due 2030 777.8 670.9 784.7 824.0 4.625% Senior Notes due 2031 390.1 324.7 393.7 407.0 Other notes payable 42.3 42.3 49.6 49.6 Financial commitments: Letters of credit — 32.7 — 38.2 Fair values for our long-term debt and financial commitments are determined using inputs, including quoted prices in nonactive markets, that are observable either directly or indirectly, or Level 2 inputs within the fair value hierarchy. See Note 1, Summary of Significant Accounting Policies , “Fair Value Measurements,” to the consolidated financial statements accompanying the 2021 Form 10‑K. |
Share-Based Payments
Share-Based Payments | 6 Months Ended |
Jun. 30, 2022 | |
Share-Based Payment Arrangement [Abstract] | |
Share-Based Payments | Share-Based Payments During the six months ended June 30, 2022, we issued a total of 0.6 million restricted stock awards to members of our management team and our board of directors. Of the restricted stock awards issued to members of our management team, 0.2 million contain only a service condition, while the remainder contain both a service and a performance condition. For the awards that include a performance condition, the number of shares that will ultimately be granted to employees may vary based on the Company’s performance during the applicable two year performance measurement period. Additionally, we granted 0.1 million stock options to members of our management team. The fair value of these awards and options was determined using the policies described in Note 1, Summary of Significant Accounting Policies , and Note 14, Share-Based Payments , to the consolidated financial statements accompanying the 2021 Form 10‑K. |
Income Taxes
Income Taxes | 6 Months Ended |
Jun. 30, 2022 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Income Taxes Our Provision for income tax expense of $23.8 million and $55.0 million for the three and six months ended June 30, 2022, respectively, primarily resulted from the application of our estimated effective blended federal and state income tax rate as well as the establishment of an uncertain tax position related to the separation of our home health and hospice business. Our Provision for income tax expense of $39.5 million for the three months ended June 30, 2021 primarily resulted from the application of our estimated effective blended federal and state income tax rate. Our Provision for income tax expense of $74.0 million for the six months ended June 30, 2021 primarily resulted from the application of our estimated effective blended federal and state income tax rate offset by tax benefits resulting from share-based compensation windfalls. |
Earnings per Common Share
Earnings per Common Share | 6 Months Ended |
Jun. 30, 2022 | |
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): Three Months Ended June 30, Six Months Ended June 30, 2022 2021 2022 2021 Basic: Numerator: Income from continuing operations $ 71.3 $ 142.3 $ 181.4 $ 275.1 Less: Net income attributable to noncontrolling interests included in continuing operations (22.6) (28.7) (45.2) (54.2) Less: Income allocated to participating securities (0.1) (0.5) (0.5) (1.0) Income from continuing operations attributable to Encompass Health common shareholders 48.6 113.1 135.7 219.9 Loss from discontinued operations, net of tax, attributable to Encompass Health common shareholders — (0.3) — (0.3) Net income attributable to Encompass Health common shareholders $ 48.6 $ 112.8 $ 135.7 $ 219.6 Denominator: Basic weighted average common shares outstanding 99.2 99.0 99.2 99.0 Basic earnings per share attributable to Encompass Health common shareholders: Continuing operations $ 0.49 $ 1.14 $ 1.37 $ 2.22 Discontinued operations — — — — Net income $ 0.49 $ 1.14 $ 1.37 $ 2.22 Diluted: Numerator: Income from continuing operations $ 71.3 $ 142.3 $ 181.4 $ 275.1 Less: Net income attributable to noncontrolling interests included in continuing operations (22.6) (28.7) (45.2) (54.2) Income from continuing operations attributable to Encompass Health common shareholders 48.7 113.6 136.2 220.9 Loss from discontinued operations, net of tax, attributable to Encompass Health common shareholders — (0.3) — (0.3) Net income attributable to Encompass Health common shareholders $ 48.7 $ 113.3 $ 136.2 $ 220.6 Denominator: Diluted weighted average common shares outstanding 100.3 100.2 100.2 100.2 Diluted earnings per share attributable to Encompass Health common shareholders: Continuing operations $ 0.49 $ 1.13 $ 1.36 $ 2.20 Discontinued operations — — — — Net income $ 0.49 $ 1.13 $ 1.36 $ 2.20 The following table sets forth the reconciliation between basic weighted average common shares outstanding and diluted weighted average common shares outstanding (in millions): Three Months Ended June 30, Six Months Ended June 30, 2022 2021 2022 2021 Basic weighted average common shares outstanding 99.2 99.0 99.2 99.0 Restricted stock awards, dilutive stock options, and restricted stock units 1.1 1.2 1.0 1.2 Diluted weighted average common shares outstanding 100.3 100.2 100.2 100.2 See Note 17, Earnings per Common Share |
Contingencies and Other Commitm
Contingencies and Other Commitments | 6 Months Ended |
Jun. 30, 2022 | |
Commitments and Contingencies Disclosure [Abstract] | |
Contingencies and Other Commitments | Contingencies and Other Commitments We operate in a highly regulated industry in which healthcare providers are routinely subject to litigation. As a result, various lawsuits, claims, and legal and regulatory proceedings have been and can be expected to be instituted or asserted against us. The resolution of any such lawsuits, claims, or legal and regulatory proceedings could materially and adversely affect our financial position, results of operations, and cash flows in a given period. 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 United States Department of Health and Human Services Office of Inspector General and the Centers for Medicare & Medicaid Services 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. |
Segment Reporting
Segment Reporting | 6 Months Ended |
Jun. 30, 2022 | |
Segment Reporting [Abstract] | |
Segment Reporting | Segment Reporting Our internal financial reporting and management structure is focused on the major types of services provided by Encompass Health. As of June 30, 2022, 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. Going forward, we expect to have one reportable segment: inpatient rehabilitation. The following is a brief description of our reportable segments as of June 30, 2022: • Inpatient Rehabilitation - Our national network of inpatient rehabilitation hospitals stretches across 35 states and Puerto Rico, with a concentration of hospitals in the eastern half of the United States and Texas. As of June 30, 2022, we operate 150 inpatient rehabilitation hospitals. We are the sole owner of 95 of these hospitals. We retain 50.0% to 97.5% ownership in the remaining 55 jointly owned hospitals. In addition, we manage two 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 June 30, 2022, we provide home health services in 251 locations and hospice services in 100 locations across 34 states with concentrations in the southern half of the United States. We are the sole owner of 336 of these locations. We retain 50.0% to 90.0% ownership in the remaining 15 jointly owned locations. Our home health services include a comprehensive range of Medicare-certified home nursing services to adult patients in need of care. These services include, among others, skilled nursing, physical, occupational, and speech therapy, medical social work, and home health aide services. Hospice care focuses on the quality of life for patients who are experiencing an advanced, life limiting illness while treating the person and symptoms of the disease, rather than the disease itself. The accounting policies of our reportable segments are the same as those described in Note 1, Summary of Significant Accounting Policies , to the consolidated financial statements accompanying the 2021 Form 10‑K. All revenues for our services are generated through external customers. See Note 1, Basis of Presentation , “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 Three Months Ended June 30, Six Months Ended June 30, Three Months Ended June 30, Six Months Ended June 30, 2022 2021 2022 2021 2022 2021 2022 2021 Net operating revenues $ 1,062.5 $ 1,001.6 $ 2,121.8 $ 1,961.5 $ 268.0 $ 286.1 $ 542.3 $ 556.6 Operating expenses: Inpatient rehabilitation: Salaries and benefits 585.9 515.9 1,173.3 1,017.8 — — — — Other operating expenses 166.4 147.5 324.7 287.5 — — — — Supplies 47.4 44.1 97.2 89.3 — — — — Occupancy costs 13.8 15.0 29.2 30.1 — — — — Home health and hospice: Cost of service (excluding depreciation and amortization) — — — — 124.2 122.6 248.6 240.7 Support and overhead costs — — — — 99.3 103.1 198.5 204.5 813.5 722.5 1,624.4 1,424.7 223.5 225.7 447.1 445.2 Other expense (income) 3.1 (2.3) 4.2 (3.8) — (1.6) — (1.6) Equity in net income of nonconsolidated affiliates (1.0) (0.8) (1.9) (1.6) — (0.2) — (0.4) Noncontrolling interests 21.9 28.2 43.9 53.3 0.7 0.5 1.3 0.9 Segment Adjusted EBITDA $ 225.0 $ 254.0 $ 451.2 $ 488.9 $ 43.8 $ 61.7 $ 93.9 $ 112.5 Capital expenditures $ 117.5 $ 120.4 $ 235.3 $ 220.2 $ 2.6 $ 2.2 $ 4.9 $ 3.1 Inpatient Rehabilitation Home Health and Hospice Encompass Health Consolidated As of June 30, 2022 Total assets $ 5,459.0 $ 1,623.2 $ 7,082.2 Investments in and advances to nonconsolidated affiliates 1.3 1.6 2.9 As of December 31, 2021 Total assets $ 5,143.0 $ 1,721.9 $ 6,864.9 Investments in and advances to nonconsolidated affiliates 2.4 1.6 4.0 Segment reconciliations (in millions): Three Months Ended June 30, Six Months Ended June 30, 2022 2021 2022 2021 Total Segment Adjusted EBITDA $ 268.8 $ 315.7 $ 545.1 $ 601.4 General and administrative expenses (60.3) (54.2) (108.7) (92.8) Depreciation and amortization (68.8) (63.4) (135.0) (125.9) Loss on disposal or impairment of assets (2.3) (2.9) (2.9) (2.8) Loss on early extinguishment of debt (1.1) (1.0) (1.4) (1.0) Interest expense and amortization of debt discounts and fees (60.6) (41.8) (100.2) (84.6) Net income attributable to noncontrolling interests 22.6 28.7 45.2 54.2 Change in fair market value of equity securities (3.2) 0.7 (5.7) 0.6 Income from continuing operations before income tax expense $ 95.1 $ 181.8 $ 236.4 $ 349.1 Additional detail regarding the revenues of our operating segments by service line follows (in millions): Three Months Ended June 30, Six Months Ended June 30, 2022 2021 2022 2021 Inpatient rehabilitation: Inpatient $ 1,037.8 $ 976.9 $ 2,074.0 $ 1,919.2 Outpatient and other 24.7 24.7 47.8 42.3 Total inpatient rehabilitation 1,062.5 1,001.6 2,121.8 1,961.5 Home health and hospice: Home health 220.2 232.3 445.1 452.2 Hospice 47.8 53.8 97.2 104.4 Total home health and hospice 268.0 286.1 542.3 556.6 Total net operating revenues $ 1,330.5 $ 1,287.7 $ 2,664.1 $ 2,518.1 |
Basis of Presentation (Policies
Basis of Presentation (Policies) | 6 Months Ended |
Jun. 30, 2022 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Recently Adopted Accounting Pronouncements | Recently Adopted Accounting Pronouncements — We do not believe any recently issued, but not yet effective, accounting standards will have a material effect on our condensed consolidated financial position, results of operations, or cash flows. |
Basis of Presentation (Tables)
Basis of Presentation (Tables) | 6 Months Ended |
Jun. 30, 2022 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Schedule of 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 Three Months Ended June 30, Three Months Ended June 30, Three Months Ended June 30, 2022 2021 2022 2021 2022 2021 Medicare $ 690.7 $ 650.8 $ 210.2 $ 234.9 $ 900.9 $ 885.7 Medicare Advantage 160.7 153.6 36.9 29.9 197.6 183.5 Managed care 123.3 114.7 18.0 16.6 141.3 131.3 Medicaid 47.5 41.8 2.8 4.2 50.3 46.0 Other third-party payors 9.4 11.0 — — 9.4 11.0 Workers’ compensation 5.9 5.2 0.1 — 6.0 5.2 Patients 4.1 4.3 — 0.3 4.1 4.6 Other income 20.9 20.2 — 0.2 20.9 20.4 Total $ 1,062.5 $ 1,001.6 $ 268.0 $ 286.1 $ 1,330.5 $ 1,287.7 Inpatient Rehabilitation Home Health and Hospice Consolidated Six Months Ended June 30, Six Months Ended June 30, Six Months Ended June 30, 2022 2021 2022 2021 2022 2021 Medicare $ 1,380.8 $ 1,265.3 $ 427.4 $ 458.8 $ 1,808.2 $ 1,724.1 Medicare Advantage 316.7 312.0 71.4 57.9 388.1 369.9 Managed care 254.8 226.9 36.9 30.9 291.7 257.8 Medicaid 89.3 80.8 6.3 8.0 95.6 88.8 Other third-party payors 19.4 23.1 — — 19.4 23.1 Workers’ compensation 12.0 10.9 0.2 0.1 12.2 11.0 Patients 9.2 9.2 0.1 0.5 9.3 9.7 Other income 39.6 33.3 — 0.4 39.6 33.7 Total $ 2,121.8 $ 1,961.5 $ 542.3 $ 556.6 $ 2,664.1 $ 2,518.1 |
Business Combinations (Tables)
Business Combinations (Tables) | 6 Months Ended |
Jun. 30, 2022 | |
Business Combination and Asset Acquisition [Abstract] | |
Schedule of Assets Acquired and Liabilities Assumed at the Acquisition Date | The preliminary fair value of the assets acquired and liabilities assumed at the acquisition date were as follows (in millions): Cash and cash equivalents $ 0.7 Accounts receivable, net 1.6 Operating lease right-of-use-assets 0.3 Identifiable intangible assets: Noncompete agreement (useful life of 5 years) 0.2 Trade name (useful life of 6 months) 0.1 Licenses (useful lives of 10 years) 0.9 Internal-use software (useful life of 3 years) 0.1 Goodwill 28.7 Total assets acquired 32.6 Liabilities assumed: Current operating lease liabilities 0.1 Accounts payable 0.1 Accrued payroll 0.2 Other current liabilities 0.2 Long-term operating lease liabilities 0.2 Total liabilities assumed 0.8 Noncontrolling interests 15.9 Net assets acquired $ 15.9 |
Schedule of Business Acquisitions, by Acquisition | Information regarding the cash paid for the acquisition during each period presented is as follows (in millions): Three Months Ended June 30, Six Months Ended June 30, 2022 2021 2022 2021 Fair value of assets acquired $ — $ 11.9 $ 3.9 $ 11.9 Goodwill — 90.1 28.7 90.1 Fair value of liabilities assumed — (2.7) (0.8) (2.7) Fair value of noncontrolling interest owned by joint venture partner — (1.6) (15.9) (1.6) Cash paid for acquisition (1) $ — $ 97.7 $ 15.9 $ 97.7 ———————— (1) As discussed above, the $15.9 million was paid on December 31, 2021; therefore, this amount is not included in the condensed consolidated statement of cash flows for the six months ended June 30, 2022. |
Schedule of Actual and Pro Forma Results of Operations for Acquisitions | The following table summarizes the results of operations of the above mentioned acquisition from the date 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 acquisition been January 1, 2021 (in millions): Net Operating Revenues Net (Loss) Income Attributable to Encompass Health Acquired entities only: Actual from acquisition date to June 30, 2022 Home Health and Hospice $ 3.1 $ (0.1) Combined entity: Supplemental pro forma from 04/01/2022-06/30/2022 1,330.5 48.7 Combined entity: Supplemental pro forma from 04/01/2021-06/30/2021 1,289.7 113.3 Combined entity: Supplemental pro forma from 01/01/2022-06/30/2022 2,664.1 136.2 Combined entity: Supplemental pro forma from 01/01/2021-06/30/2021 2,522.4 220.8 |
Variable Interest Entities (Tab
Variable Interest Entities (Tables) | 6 Months Ended |
Jun. 30, 2022 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Schedule of Carrying Amounts and Classifications of VIE's Assets and Liabilities | The carrying amounts and classifications of the consolidated VIEs’ assets and liabilities, which are included in our condensed consolidated balance sheet, are as follows (in millions): June 30, 2022 December 31, 2021 Assets Current assets: Cash and cash equivalents $ 0.5 $ — Accounts receivable 35.5 36.3 Other current assets 10.5 7.7 Total current assets 46.5 44.0 Property and equipment, net 115.7 116.3 Operating lease right-of-use assets 2.7 3.2 Goodwill 28.4 28.3 Intangible assets, net 3.0 3.3 Other long-term assets 31.1 31.1 Total assets $ 227.4 $ 226.2 Liabilities Current liabilities: Current portion of long-term debt $ 1.0 $ 1.0 Current operating lease liabilities 1.2 1.5 Accounts payable 5.9 5.9 Accrued expenses and other current liabilities 20.8 19.4 Total current liabilities 28.9 27.8 Long-term debt, net of current portion 8.1 8.6 Long-term operating lease liabilities 1.5 1.8 Total liabilities $ 38.5 $ 38.2 |
Long-term Debt (Tables)
Long-term Debt (Tables) | 6 Months Ended |
Jun. 30, 2022 | |
Debt Disclosure [Abstract] | |
Schedule of Outstanding Long-term Debt | Our long-term debt outstanding consists of the following (in millions): June 30, 2022 December 31, 2021 Encompass Health Credit Agreement— Advances under revolving credit facility $ — $ 200.0 Term loan facilities — 238.5 Enhabit Credit Agreement— Advances under revolving credit facility 170.0 — Term loan A facility 397.7 — Bonds payable— 5.125% Senior Notes due 2023 — 99.6 5.75% Senior Notes due 2025 347.4 347.0 4.50% Senior Notes due 2028 780.2 786.8 4.75% Senior Notes due 2030 777.8 784.7 4.625% Senior Notes due 2031 390.1 393.7 Other notes payable 42.3 49.6 Finance lease obligations 377.2 386.8 3,282.7 3,286.7 Less: Current portion (49.2) (42.8) Long-term debt, net of current portion $ 3,233.5 $ 3,243.9 |
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): Face Amount Net Amount July 1 through December 31, 2022 $ 22.2 $ 22.2 2023 49.8 49.8 2024 61.9 61.9 2025 404.6 401.9 2026 49.9 49.9 2027 524.2 521.9 Thereafter 2,226.9 2,175.1 Total $ 3,339.5 $ 3,282.7 |
Redeemable Noncontrolling Int_2
Redeemable Noncontrolling Interests (Tables) | 6 Months Ended |
Jun. 30, 2022 | |
Noncontrolling Interest [Abstract] | |
Redeemable Noncontrolling Interests Activity | The following is a summary of the activity related to our Redeemable noncontrolling interests (in millions): Six Months Ended June 30, 2022 2021 Balance at beginning of period $ 42.2 $ 31.6 Net income attributable to noncontrolling interests 3.4 5.1 Distributions declared (2.3) (4.4) Purchase of redeemable noncontrolling interests — 0.6 Balance at end of period $ 43.3 $ 32.9 |
Reconciliation of Noncontrolling Interests | The following table reconciles the net income attributable to nonredeemable Noncontrolling interests , as recorded in the shareholders’ equity section of the condensed consolidated balance sheets, and the net income attributable to Redeemable noncontrolling interests , as recorded in the mezzanine section of the condensed consolidated balance sheets, to the Net and comprehensive income attributable to noncontrolling interests presented in the condensed consolidated statements of comprehensive income (in millions): Three Months Ended June 30, Six Months Ended June 30, 2022 2021 2022 2021 Net income attributable to nonredeemable noncontrolling interests $ 21.1 $ 26.0 $ 41.8 $ 49.1 Net income attributable to redeemable noncontrolling interests 1.5 2.7 3.4 5.1 Net income attributable to noncontrolling interests $ 22.6 $ 28.7 $ 45.2 $ 54.2 |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 6 Months Ended |
Jun. 30, 2022 | |
Fair Value Disclosures [Abstract] | |
Schedule of Fair Value, Assets and Liabilities Measured on a 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 June 30, 2022 Fair Value Quoted Prices in Active Markets for Identical Assets Significant Other Observable Inputs Significant Unobservable Inputs Valuation Technique (1) Equity securities (2) $ 78.0 $ 3.7 $ 74.3 $ — M Redeemable noncontrolling interests 43.3 — — 43.3 I As of December 31, 2021 Equity securities (2) $ 82.2 $ 4.1 $ 78.1 $ — M Redeemable noncontrolling interests 42.2 — — 42.2 I (1) The three valuation techniques are: market approach (M), cost approach (C), and income approach (I). (2) As of June 30, 2022, $5.1 million are included in Other current assets and $72.9 million are included in Other long-term assets in the condensed consolidated balance sheet. As of December 31, 2021, $82.2 million are included in Other long-term assets in the condensed consolidated balance sheet. |
Schedule of Carrying Amounts and Estimated Fair Values, Financial Instruments | The carrying amounts and estimated fair values for all of our other financial instruments are presented in the following table (in millions): As of June 30, 2022 As of December 31, 2021 Carrying Amount Estimated Fair Value Carrying Amount Estimated Fair Value Long-term debt: Encompass Health Credit Agreement— Advances under revolving credit facility $ — $ — $ 200.0 $ 200.0 Term loan facilities — — 238.5 239.6 Enhabit Credit Agreement— Advances under revolving credit facility 170.0 170.0 — — Term loan A facility 397.7 400.0 — — 5.125% Senior Notes due 2023 — — 99.6 100.2 5.75% Senior Notes due 2025 347.4 347.6 347.0 357.9 4.50% Senior Notes due 2028 780.2 685.3 786.8 823.0 4.75% Senior Notes due 2030 777.8 670.9 784.7 824.0 4.625% Senior Notes due 2031 390.1 324.7 393.7 407.0 Other notes payable 42.3 42.3 49.6 49.6 Financial commitments: Letters of credit — 32.7 — 38.2 |
Earnings per Common Share (Tabl
Earnings per Common Share (Tables) | 6 Months Ended |
Jun. 30, 2022 | |
Earnings Per Share [Abstract] | |
Schedule of 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): Three Months Ended June 30, Six Months Ended June 30, 2022 2021 2022 2021 Basic: Numerator: Income from continuing operations $ 71.3 $ 142.3 $ 181.4 $ 275.1 Less: Net income attributable to noncontrolling interests included in continuing operations (22.6) (28.7) (45.2) (54.2) Less: Income allocated to participating securities (0.1) (0.5) (0.5) (1.0) Income from continuing operations attributable to Encompass Health common shareholders 48.6 113.1 135.7 219.9 Loss from discontinued operations, net of tax, attributable to Encompass Health common shareholders — (0.3) — (0.3) Net income attributable to Encompass Health common shareholders $ 48.6 $ 112.8 $ 135.7 $ 219.6 Denominator: Basic weighted average common shares outstanding 99.2 99.0 99.2 99.0 Basic earnings per share attributable to Encompass Health common shareholders: Continuing operations $ 0.49 $ 1.14 $ 1.37 $ 2.22 Discontinued operations — — — — Net income $ 0.49 $ 1.14 $ 1.37 $ 2.22 Diluted: Numerator: Income from continuing operations $ 71.3 $ 142.3 $ 181.4 $ 275.1 Less: Net income attributable to noncontrolling interests included in continuing operations (22.6) (28.7) (45.2) (54.2) Income from continuing operations attributable to Encompass Health common shareholders 48.7 113.6 136.2 220.9 Loss from discontinued operations, net of tax, attributable to Encompass Health common shareholders — (0.3) — (0.3) Net income attributable to Encompass Health common shareholders $ 48.7 $ 113.3 $ 136.2 $ 220.6 Denominator: Diluted weighted average common shares outstanding 100.3 100.2 100.2 100.2 Diluted earnings per share attributable to Encompass Health common shareholders: Continuing operations $ 0.49 $ 1.13 $ 1.36 $ 2.20 Discontinued operations — — — — Net income $ 0.49 $ 1.13 $ 1.36 $ 2.20 |
Schedule of 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): Three Months Ended June 30, Six Months Ended June 30, 2022 2021 2022 2021 Basic weighted average common shares outstanding 99.2 99.0 99.2 99.0 Restricted stock awards, dilutive stock options, and restricted stock units 1.1 1.2 1.0 1.2 Diluted weighted average common shares outstanding 100.3 100.2 100.2 100.2 |
Segment Reporting (Tables)
Segment Reporting (Tables) | 6 Months Ended |
Jun. 30, 2022 | |
Segment Reporting [Abstract] | |
Schedule of Segment Reporting Information, by Segment | Selected financial information for our reportable segments is as follows (in millions): Inpatient Rehabilitation Home Health and Hospice Three Months Ended June 30, Six Months Ended June 30, Three Months Ended June 30, Six Months Ended June 30, 2022 2021 2022 2021 2022 2021 2022 2021 Net operating revenues $ 1,062.5 $ 1,001.6 $ 2,121.8 $ 1,961.5 $ 268.0 $ 286.1 $ 542.3 $ 556.6 Operating expenses: Inpatient rehabilitation: Salaries and benefits 585.9 515.9 1,173.3 1,017.8 — — — — Other operating expenses 166.4 147.5 324.7 287.5 — — — — Supplies 47.4 44.1 97.2 89.3 — — — — Occupancy costs 13.8 15.0 29.2 30.1 — — — — Home health and hospice: Cost of service (excluding depreciation and amortization) — — — — 124.2 122.6 248.6 240.7 Support and overhead costs — — — — 99.3 103.1 198.5 204.5 813.5 722.5 1,624.4 1,424.7 223.5 225.7 447.1 445.2 Other expense (income) 3.1 (2.3) 4.2 (3.8) — (1.6) — (1.6) Equity in net income of nonconsolidated affiliates (1.0) (0.8) (1.9) (1.6) — (0.2) — (0.4) Noncontrolling interests 21.9 28.2 43.9 53.3 0.7 0.5 1.3 0.9 Segment Adjusted EBITDA $ 225.0 $ 254.0 $ 451.2 $ 488.9 $ 43.8 $ 61.7 $ 93.9 $ 112.5 Capital expenditures $ 117.5 $ 120.4 $ 235.3 $ 220.2 $ 2.6 $ 2.2 $ 4.9 $ 3.1 |
Schedule of Reconciliation of Assets from Segment to Consolidated | Inpatient Rehabilitation Home Health and Hospice Encompass Health Consolidated As of June 30, 2022 Total assets $ 5,459.0 $ 1,623.2 $ 7,082.2 Investments in and advances to nonconsolidated affiliates 1.3 1.6 2.9 As of December 31, 2021 Total assets $ 5,143.0 $ 1,721.9 $ 6,864.9 Investments in and advances to nonconsolidated affiliates 2.4 1.6 4.0 |
Schedule of Reconciliation of Segment Adjusted EBITDA to Income from Continuing Operations Before Income Tax Expense | Segment reconciliations (in millions): Three Months Ended June 30, Six Months Ended June 30, 2022 2021 2022 2021 Total Segment Adjusted EBITDA $ 268.8 $ 315.7 $ 545.1 $ 601.4 General and administrative expenses (60.3) (54.2) (108.7) (92.8) Depreciation and amortization (68.8) (63.4) (135.0) (125.9) Loss on disposal or impairment of assets (2.3) (2.9) (2.9) (2.8) Loss on early extinguishment of debt (1.1) (1.0) (1.4) (1.0) Interest expense and amortization of debt discounts and fees (60.6) (41.8) (100.2) (84.6) Net income attributable to noncontrolling interests 22.6 28.7 45.2 54.2 Change in fair market value of equity securities (3.2) 0.7 (5.7) 0.6 Income from continuing operations before income tax expense $ 95.1 $ 181.8 $ 236.4 $ 349.1 |
Schedule of Reconciliation of Revenue from Segments to Consolidated | Additional detail regarding the revenues of our operating segments by service line follows (in millions): Three Months Ended June 30, Six Months Ended June 30, 2022 2021 2022 2021 Inpatient rehabilitation: Inpatient $ 1,037.8 $ 976.9 $ 2,074.0 $ 1,919.2 Outpatient and other 24.7 24.7 47.8 42.3 Total inpatient rehabilitation 1,062.5 1,001.6 2,121.8 1,961.5 Home health and hospice: Home health 220.2 232.3 445.1 452.2 Hospice 47.8 53.8 97.2 104.4 Total home health and hospice 268.0 286.1 542.3 556.6 Total net operating revenues $ 1,330.5 $ 1,287.7 $ 2,664.1 $ 2,518.1 |
Basis of Presentation - Textual
Basis of Presentation - Textual (Details) | 1 Months Ended | 6 Months Ended | ||
Jul. 01, 2022 $ / shares | Aug. 04, 2022 numberOfSegment | Jun. 30, 2022 numberOfSegment state | Jun. 30, 2022 segment state | |
Class of Stock [Line Items] | ||||
Number of states in which entity operates | state | 42 | 42 | ||
Number of operating segments | 2 | 2 | ||
Enhabit | ||||
Class of Stock [Line Items] | ||||
Common stock, par value (in dollars per share) | $ / shares | $ 0.01 | |||
Subsequent Event | ||||
Class of Stock [Line Items] | ||||
Number of operating segments | numberOfSegment | 1 | |||
Common Stock | Subsequent Event | Enhabit | ||||
Class of Stock [Line Items] | ||||
Pro rata distribution of common stock | 0.5 |
Basis of Presentation - Net Ope
Basis of Presentation - Net Operating Revenues (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2022 | Jun. 30, 2021 | Jun. 30, 2022 | Jun. 30, 2021 | |
Disaggregation of Revenue [Line Items] | ||||
Net operating revenues | $ 1,330.5 | $ 1,287.7 | $ 2,664.1 | $ 2,518.1 |
Inpatient Rehabilitation | ||||
Disaggregation of Revenue [Line Items] | ||||
Net operating revenues | 1,062.5 | 1,001.6 | 2,121.8 | 1,961.5 |
Home Health and Hospice | ||||
Disaggregation of Revenue [Line Items] | ||||
Net operating revenues | 268 | 286.1 | 542.3 | 556.6 |
Medicare | ||||
Disaggregation of Revenue [Line Items] | ||||
Net operating revenues | 900.9 | 885.7 | 1,808.2 | 1,724.1 |
Medicare | Inpatient Rehabilitation | ||||
Disaggregation of Revenue [Line Items] | ||||
Net operating revenues | 690.7 | 650.8 | 1,380.8 | 1,265.3 |
Medicare | Home Health and Hospice | ||||
Disaggregation of Revenue [Line Items] | ||||
Net operating revenues | 210.2 | 234.9 | 427.4 | 458.8 |
Medicare Advantage | ||||
Disaggregation of Revenue [Line Items] | ||||
Net operating revenues | 197.6 | 183.5 | 388.1 | 369.9 |
Medicare Advantage | Inpatient Rehabilitation | ||||
Disaggregation of Revenue [Line Items] | ||||
Net operating revenues | 160.7 | 153.6 | 316.7 | 312 |
Medicare Advantage | Home Health and Hospice | ||||
Disaggregation of Revenue [Line Items] | ||||
Net operating revenues | 36.9 | 29.9 | 71.4 | 57.9 |
Managed care | ||||
Disaggregation of Revenue [Line Items] | ||||
Net operating revenues | 141.3 | 131.3 | 291.7 | 257.8 |
Managed care | Inpatient Rehabilitation | ||||
Disaggregation of Revenue [Line Items] | ||||
Net operating revenues | 123.3 | 114.7 | 254.8 | 226.9 |
Managed care | Home Health and Hospice | ||||
Disaggregation of Revenue [Line Items] | ||||
Net operating revenues | 18 | 16.6 | 36.9 | 30.9 |
Medicaid | ||||
Disaggregation of Revenue [Line Items] | ||||
Net operating revenues | 50.3 | 46 | 95.6 | 88.8 |
Medicaid | Inpatient Rehabilitation | ||||
Disaggregation of Revenue [Line Items] | ||||
Net operating revenues | 47.5 | 41.8 | 89.3 | 80.8 |
Medicaid | Home Health and Hospice | ||||
Disaggregation of Revenue [Line Items] | ||||
Net operating revenues | 2.8 | 4.2 | 6.3 | 8 |
Other third-party payors | ||||
Disaggregation of Revenue [Line Items] | ||||
Net operating revenues | 9.4 | 11 | 19.4 | 23.1 |
Other third-party payors | Inpatient Rehabilitation | ||||
Disaggregation of Revenue [Line Items] | ||||
Net operating revenues | 9.4 | 11 | 19.4 | 23.1 |
Other third-party payors | Home Health and Hospice | ||||
Disaggregation of Revenue [Line Items] | ||||
Net operating revenues | 0 | 0 | 0 | 0 |
Workers’ compensation | ||||
Disaggregation of Revenue [Line Items] | ||||
Net operating revenues | 6 | 5.2 | 12.2 | 11 |
Workers’ compensation | Inpatient Rehabilitation | ||||
Disaggregation of Revenue [Line Items] | ||||
Net operating revenues | 5.9 | 5.2 | 12 | 10.9 |
Workers’ compensation | Home Health and Hospice | ||||
Disaggregation of Revenue [Line Items] | ||||
Net operating revenues | 0.1 | 0 | 0.2 | 0.1 |
Patients | ||||
Disaggregation of Revenue [Line Items] | ||||
Net operating revenues | 4.1 | 4.6 | 9.3 | 9.7 |
Patients | Inpatient Rehabilitation | ||||
Disaggregation of Revenue [Line Items] | ||||
Net operating revenues | 4.1 | 4.3 | 9.2 | 9.2 |
Patients | Home Health and Hospice | ||||
Disaggregation of Revenue [Line Items] | ||||
Net operating revenues | 0 | 0.3 | 0.1 | 0.5 |
Other income | ||||
Disaggregation of Revenue [Line Items] | ||||
Net operating revenues | 20.9 | 20.4 | 39.6 | 33.7 |
Other income | Inpatient Rehabilitation | ||||
Disaggregation of Revenue [Line Items] | ||||
Net operating revenues | 20.9 | 20.2 | 39.6 | 33.3 |
Other income | Home Health and Hospice | ||||
Disaggregation of Revenue [Line Items] | ||||
Net operating revenues | $ 0 | $ 0.2 | $ 0 | $ 0.4 |
Business Combinations - Textual
Business Combinations - Textual (Details) - Home Health and Hospice - Saint Alphonsus - Corporate Joint Venture $ in Millions | Jan. 01, 2022 USD ($) |
Business Acquisition [Line Items] | |
Business acquisition percentage of voting interests acquired | 50% |
Purchase price | $ 15.9 |
Goodwill expected to be tax-deductible amount | $ 14.4 |
Business Combinations - Fair Va
Business Combinations - Fair Value of Assets and Liabilities Assumed (Details) - USD ($) $ in Millions | Jan. 01, 2022 | Jun. 30, 2022 | Dec. 31, 2021 |
Business Acquisition [Line Items] | |||
Goodwill | $ 2,456.5 | $ 2,427.9 | |
Home Health and Hospice | Saint Alphonsus | |||
Business Acquisition [Line Items] | |||
Cash and cash equivalents | $ 0.7 | ||
Accounts receivable, net | 1.6 | ||
Operating lease right-of-use-assets | 0.3 | ||
Goodwill | 28.7 | ||
Total assets acquired | 32.6 | ||
Liabilities assumed: | |||
Current operating lease liabilities | 0.1 | ||
Accounts payable | 0.1 | ||
Accrued payroll | 0.2 | ||
Other current liabilities | 0.2 | ||
Long-term operating lease liabilities | 0.2 | ||
Total liabilities assumed | 0.8 | ||
Noncontrolling interests | 15.9 | ||
Net assets acquired | 15.9 | ||
Home Health and Hospice | Noncompete agreements | Saint Alphonsus | |||
Business Acquisition [Line Items] | |||
Identifiable intangible assets | $ 0.2 | ||
Liabilities assumed: | |||
Finite-lived intangible asset useful life | 5 years | ||
Home Health and Hospice | Trade name | Saint Alphonsus | |||
Business Acquisition [Line Items] | |||
Identifiable intangible assets | $ 0.1 | ||
Liabilities assumed: | |||
Finite-lived intangible asset useful life | 6 months | ||
Home Health and Hospice | Licenses | Saint Alphonsus | |||
Business Acquisition [Line Items] | |||
Identifiable intangible assets | $ 0.9 | ||
Liabilities assumed: | |||
Finite-lived intangible asset useful life | 10 years | ||
Home Health and Hospice | Internal-use software | Saint Alphonsus | |||
Business Acquisition [Line Items] | |||
Identifiable intangible assets | $ 0.1 | ||
Liabilities assumed: | |||
Finite-lived intangible asset useful life | 3 years |
Business Combinations - Net Cas
Business Combinations - Net Cash Paid for Acquisitions (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | |||
Dec. 31, 2021 | Jun. 30, 2022 | Jun. 30, 2021 | Jun. 30, 2022 | Jun. 30, 2021 | |
Business Acquisition [Line Items] | |||||
Cash paid for acquisition | $ 0 | $ 97.7 | |||
Home Health and Hospice | Saint Alphonsus | |||||
Business Acquisition [Line Items] | |||||
Fair value of assets acquired | $ 0 | $ 11.9 | 3.9 | 11.9 | |
Goodwill | 0 | 90.1 | 28.7 | 90.1 | |
Fair value of liabilities assumed | 0 | (2.7) | (0.8) | (2.7) | |
Fair value of noncontrolling interest owned by joint venture partner | 0 | (1.6) | (15.9) | (1.6) | |
Cash paid for acquisition | $ 15.9 | $ 0 | $ 97.7 | $ 15.9 | $ 97.7 |
Business Combinations - Pro For
Business Combinations - Pro Forma Results of Operation (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2022 | Jun. 30, 2021 | Jun. 30, 2022 | Jun. 30, 2021 | |
Business Acquisition [Line Items] | ||||
Business acquisition, pro forma revenue | $ 1,330.5 | $ 1,289.7 | $ 2,664.1 | $ 2,522.4 |
Business acquisition, pro forma net income | $ 48.7 | $ 113.3 | 136.2 | $ 220.8 |
Home Health and Hospice | ||||
Business Acquisition [Line Items] | ||||
Business combination, pro forma information, revenue of acquiree since acquisition date, actual | 3.1 | |||
Business combination, pro forma information, earnings of acquiree since acquisition date, actual | $ (0.1) |
Variable Interest Entities - Te
Variable Interest Entities - Textual (Details) - VIE - entity | 6 Months Ended | 12 Months Ended |
Jun. 30, 2022 | Dec. 31, 2021 | |
Variable Interest Entity [Line Items] | ||
Number of consolidated limited partnership-like entities | 10 | 10 |
Minimum | ||
Variable Interest Entity [Line Items] | ||
Ownership interest in consolidated entities (percent) | 50% | |
Maximum | ||
Variable Interest Entity [Line Items] | ||
Ownership interest in consolidated entities (percent) | 90% |
Variable Interest Entities - Sc
Variable Interest Entities - Schedule of Carrying Amounts and Classifications of VIE's Assets and Liabilities (Details) - USD ($) $ in Millions | Jun. 30, 2022 | Dec. 31, 2021 | Jun. 30, 2021 | Dec. 31, 2020 | |
Current assets: | |||||
Cash and cash equivalents | $ 186.5 | $ 54.8 | $ 73.2 | $ 224 | |
Accounts receivable | 658.7 | 680.3 | |||
Other current assets | 116.4 | 121.2 | |||
Total current assets | 1,032.4 | 921.4 | |||
Property and equipment, net | 2,730.1 | 2,601.6 | |||
Operating lease right-of-use assets | 238.5 | 242 | |||
Goodwill | 2,456.5 | 2,427.9 | |||
Intangible assets, net | 398.4 | 417.5 | |||
Other long-term assets | 226.3 | 254.5 | |||
Total assets | [1] | 7,082.2 | 6,864.9 | ||
Current liabilities: | |||||
Current portion of long-term debt | 49.2 | 42.8 | |||
Current operating lease liabilities | 36.7 | 38.4 | |||
Accounts payable | 138.3 | 137.6 | |||
Accrued expenses and other current liabilities | 611.2 | 530 | |||
Total current liabilities | 835.4 | 748.8 | |||
Long-term debt, net of current portion | 3,233.5 | 3,243.9 | |||
Long-term operating lease liabilities | 211.9 | 213.1 | |||
Total liabilities | 4,537.6 | 4,465.7 | |||
VIE | |||||
Current assets: | |||||
Cash and cash equivalents | 0.5 | 0 | |||
Accounts receivable | 35.5 | 36.3 | |||
Other current assets | 10.5 | 7.7 | |||
Total current assets | 46.5 | 44 | |||
Property and equipment, net | 115.7 | 116.3 | |||
Operating lease right-of-use assets | 2.7 | 3.2 | |||
Goodwill | 28.4 | 28.3 | |||
Intangible assets, net | 3 | 3.3 | |||
Other long-term assets | 31.1 | 31.1 | |||
Total assets | 227.4 | 226.2 | |||
Current liabilities: | |||||
Current portion of long-term debt | 1 | 1 | |||
Current operating lease liabilities | 1.2 | 1.5 | |||
Accounts payable | 5.9 | 5.9 | |||
Accrued expenses and other current liabilities | 20.8 | 19.4 | |||
Total current liabilities | 28.9 | 27.8 | |||
Long-term debt, net of current portion | 8.1 | 8.6 | |||
Long-term operating lease liabilities | 1.5 | 1.8 | |||
Total liabilities | $ 38.5 | $ 38.2 | |||
[1] Our consolidated assets as of June 30, 2022 and December 31, 2021 include total assets of variable interest entities of $227.4 million and $226.2 million, respectively, which cannot be used by us to settle the obligations of other entities. Our consolidated liabilities as of June 30, 2022 and December 31, 2021 include total liabilities of the variable interest entities of $38.5 million and $38.2 million, respectively. See Note 3, Variable Interest Entities. |
Long-term Debt - Long-term Debt
Long-term Debt - Long-term Debt Outstanding (Details) - USD ($) $ in Millions | Jun. 30, 2022 | Mar. 31, 2022 | Dec. 31, 2021 | Dec. 09, 2021 |
Schedule of Outstanding Long-term Debt | ||||
Finance lease obligations | $ 377.2 | $ 386.8 | ||
Total debt and finance lease obligations | 3,282.7 | 3,286.7 | ||
Less: Current portion | (49.2) | (42.8) | ||
Long-term debt, net of current portion | $ 3,233.5 | 3,243.9 | ||
Senior Notes | 5.125% Senior Notes due 2023 | ||||
Schedule of Outstanding Long-term Debt | ||||
Debt instrument interest rate (percent) | 5.125% | 5.125% | ||
Long-term debt | $ 0 | 99.6 | ||
Senior Notes | 5.75% Senior Notes due 2025 | ||||
Schedule of Outstanding Long-term Debt | ||||
Debt instrument interest rate (percent) | 5.75% | 5.75% | ||
Long-term debt | $ 347.4 | 347 | ||
Senior Notes | 4.50% Senior Notes due 2028 | ||||
Schedule of Outstanding Long-term Debt | ||||
Debt instrument interest rate (percent) | 4.50% | 4.50% | ||
Long-term debt | $ 780.2 | 786.8 | ||
Senior Notes | 4.75% Senior Notes due 2030 | ||||
Schedule of Outstanding Long-term Debt | ||||
Debt instrument interest rate (percent) | 4.75% | 4.75% | ||
Long-term debt | $ 777.8 | 784.7 | ||
Senior Notes | 4.625% Senior Notes due 2031 | ||||
Schedule of Outstanding Long-term Debt | ||||
Debt instrument interest rate (percent) | 4.625% | 4.625% | ||
Long-term debt | $ 390.1 | 393.7 | ||
Other notes payable | ||||
Schedule of Outstanding Long-term Debt | ||||
Long-term debt | 42.3 | 49.6 | ||
Advances under revolving credit facility | Line of credit | EHC Credit Agreement | ||||
Schedule of Outstanding Long-term Debt | ||||
Long-term debt | 0 | 200 | ||
Advances under revolving credit facility | Line of credit | Enhabit Credit Agreement | ||||
Schedule of Outstanding Long-term Debt | ||||
Long-term debt | 170 | 0 | ||
Term loan facilities | Line of credit | EHC Credit Agreement | ||||
Schedule of Outstanding Long-term Debt | ||||
Long-term debt | 0 | 238.5 | ||
Term loan facilities | Line of credit | Enhabit Credit Agreement | ||||
Schedule of Outstanding Long-term Debt | ||||
Long-term debt | $ 397.7 | $ 0 |
Long-term Debt - Scheduled Prin
Long-term Debt - Scheduled Principal Payments Due on Long-term Debt (Details) $ in Millions | Jun. 30, 2022 USD ($) |
Face Amount | |
Long-term Debt by Maturity | |
July 1 through December 31, 2022 | $ 22.2 |
2023 | 49.8 |
2024 | 61.9 |
2025 | 404.6 |
2026 | 49.9 |
2027 | 524.2 |
Thereafter | 2,226.9 |
Total | 3,339.5 |
Net Amount | |
Long-term Debt by Maturity | |
July 1 through December 31, 2022 | 22.2 |
2023 | 49.8 |
2024 | 61.9 |
2025 | 401.9 |
2026 | 49.9 |
2027 | 521.9 |
Thereafter | 2,175.1 |
Total | $ 3,282.7 |
Long-term Debt - Textual (Detai
Long-term Debt - Textual (Details) - USD ($) | 1 Months Ended | 2 Months Ended | 3 Months Ended | 6 Months Ended | ||||||
Jun. 30, 2022 | Jun. 30, 2022 | Jan. 31, 2022 | Jan. 31, 2022 | Jun. 30, 2022 | Mar. 31, 2022 | Jun. 30, 2021 | Jun. 30, 2022 | Jun. 30, 2021 | Dec. 09, 2021 | |
Debt Instrument [Line Items] | ||||||||||
Loss on early extinguishment of debt | $ 1,100,000 | $ 1,000,000 | $ 1,400,000 | $ 1,000,000 | ||||||
Principal borrowings on notes | 400,000,000 | 0 | ||||||||
Borrowings on revolving credit facility | 300,000,000 | 45,000,000 | ||||||||
Repayments of Long-term Lines of Credit | $ 330,000,000 | $ 0 | ||||||||
Enhabit | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Proceeds from lines of credit | $ 566,600,000 | |||||||||
Senior Notes | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Leverage ratio | 3.5 | |||||||||
Debt instrument, reduction in capacity under restricted payments builder basket | $ 200,000,000 | |||||||||
Amendment agreement, amount to be paid | $ 40,500,000 | |||||||||
Senior Notes, total | $ 20,500,000 | $ 20,000,000 | ||||||||
Senior Notes | 5.75% Senior Notes due 2025 | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Debt instrument interest rate (percent) | 5.75% | 5.75% | 5.75% | 5.75% | 5.75% | |||||
Senior Notes | 4.50% Senior Notes due 2028 | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Debt instrument interest rate (percent) | 4.50% | 4.50% | 4.50% | 4.50% | 4.50% | |||||
Senior Notes | 4.75% Senior Notes due 2030 | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Debt instrument interest rate (percent) | 4.75% | 4.75% | 4.75% | 4.75% | 4.75% | |||||
Senior Notes | 4.625% Senior Notes due 2031 | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Debt instrument interest rate (percent) | 4.625% | 4.625% | 4.625% | 4.625% | 4.625% | |||||
Senior Notes | 5.125% Senior Notes due 2023 | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Debt instrument interest rate (percent) | 5.125% | 5.125% | 5.125% | 5.125% | 5.125% | |||||
Redemption amount | $ 100,000,000 | |||||||||
Loss on early extinguishment of debt | $ 300,000 | |||||||||
Line of credit | Enhabit Credit Agreement | Enhabit | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Debt instrument, term | 5 years | |||||||||
Line of credit | Enhabit Credit Agreement | Advances under revolving credit facility | Enhabit | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Maximum borrowing capacity | $ 350,000,000 | $ 350,000,000 | $ 350,000,000 | $ 350,000,000 | ||||||
Borrowings on revolving credit facility | 170,000,000 | |||||||||
Line of credit | Enhabit Credit Agreement | Term loan facilities | Enhabit | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Aggregate principal amount | $ 400,000,000 | $ 400,000,000 | $ 400,000,000 | $ 400,000,000 | ||||||
Debt instrument, term | 5 years | |||||||||
Debt instrument, periodic payment, percentage of principal outstanding | 0.0500 | 0.0500 | 0.0500 | 0.0500 | ||||||
Principal borrowings on notes | $ 400,000,000 | |||||||||
Line of credit | Enhabit Credit Agreement | Letters of credit | Enhabit | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Maximum borrowing capacity | 75,000,000 | $ 75,000,000 | $ 75,000,000 | $ 75,000,000 | ||||||
Debt instrument, term | 5 years | |||||||||
Line of credit | EHC Credit Agreement | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Loss on early extinguishment of debt | $ 1,100,000 | |||||||||
Line of credit | EHC Credit Agreement | Advances under revolving credit facility | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Repayments of Long-term Lines of Credit | 250,000,000 | |||||||||
Line of credit | EHC Credit Agreement | Term loan facilities | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Repayments of debt | $ 236,000,000 |
Redeemable Noncontrolling Int_3
Redeemable Noncontrolling Interests - Redeemable Noncontrolling Interests Activity (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2022 | Jun. 30, 2021 | Jun. 30, 2022 | Jun. 30, 2021 | |
Redeemable Noncontrolling Interest, Equity, Carrying Amount [Roll Forward] | ||||
Balance at beginning of period | $ 42.2 | |||
Net income attributable to noncontrolling interests | $ 1.5 | $ 2.7 | 3.4 | $ 5.1 |
Distributions declared | (20.5) | (23) | (45.4) | (45.4) |
Balance at end of period | 43.3 | 43.3 | ||
Redeemable Noncontrolling Interest | ||||
Redeemable Noncontrolling Interest, Equity, Carrying Amount [Roll Forward] | ||||
Balance at beginning of period | 42.2 | 31.6 | ||
Net income attributable to noncontrolling interests | 3.4 | 5.1 | ||
Distributions declared | (2.3) | (4.4) | ||
Purchase of redeemable noncontrolling interests | 0 | 0.6 | ||
Balance at end of period | $ 43.3 | $ 32.9 | $ 43.3 | $ 32.9 |
Redeemable Noncontrolling Int_4
Redeemable Noncontrolling Interests - Reconciliation of Noncontrolling Interests (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2022 | Jun. 30, 2021 | Jun. 30, 2022 | Jun. 30, 2021 | |
Noncontrolling Interest [Abstract] | ||||
Net income attributable to nonredeemable noncontrolling interests | $ 21.1 | $ 26 | $ 41.8 | $ 49.1 |
Net income attributable to redeemable noncontrolling interests | 1.5 | 2.7 | 3.4 | 5.1 |
Net income attributable to noncontrolling interests | $ 22.6 | $ 28.7 | $ 45.2 | $ 54.2 |
Fair Value Measurements - Sched
Fair Value Measurements - Schedule of Fair Value, Assets and Liabilities Measured on a Recurring Basis (Details) - Recurring - USD ($) $ in Millions | Jun. 30, 2022 | Dec. 31, 2021 |
Fair Value, Assets and Liabilities Measured on Recurring Basis [Abstract] | ||
Equity securities | $ 78 | $ 82.2 |
Redeemable noncontrolling interests | 43.3 | 42.2 |
Other Current Assets | ||
Fair Value, Assets and Liabilities Measured on Recurring Basis [Abstract] | ||
Equity securities | 5.1 | |
Other Noncurrent Assets | ||
Fair Value, Assets and Liabilities Measured on Recurring Basis [Abstract] | ||
Equity securities | 72.9 | 82.2 |
Fair Value, Inputs, Level 1 | ||
Fair Value, Assets and Liabilities Measured on Recurring Basis [Abstract] | ||
Equity securities | 3.7 | 4.1 |
Redeemable noncontrolling interests | 0 | 0 |
Fair Value, Inputs, Level 2 | ||
Fair Value, Assets and Liabilities Measured on Recurring Basis [Abstract] | ||
Equity securities | 74.3 | 78.1 |
Redeemable noncontrolling interests | 0 | 0 |
Fair Value, Inputs, Level 3 | ||
Fair Value, Assets and Liabilities Measured on Recurring Basis [Abstract] | ||
Equity securities | 0 | 0 |
Redeemable noncontrolling interests | $ 43.3 | $ 42.2 |
Fair Value Measurements - Textu
Fair Value Measurements - Textual (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2022 | Jun. 30, 2021 | Jun. 30, 2022 | Jun. 30, 2021 | |
Nonrecurring | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Gains or losses related to non-financial assets and liabilities | $ 0 | $ 0 | $ 0 | $ 0 |
Fair Value Measurements - Sch_2
Fair Value Measurements - Schedule of Carrying Amounts and Estimated Fair Values, Financial Instruments (Details) - USD ($) $ in Millions | Jun. 30, 2022 | Mar. 31, 2022 | Dec. 31, 2021 | Dec. 09, 2021 |
Senior Notes | 5.125% Senior Notes due 2023 | ||||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||||
Debt instrument interest rate (percent) | 5.125% | 5.125% | ||
Senior Notes | 5.125% Senior Notes due 2023 | Carrying Amount | ||||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||||
Carrying amounts and estimated fair values of financial instruments | $ 0 | $ 99.6 | ||
Senior Notes | 5.125% Senior Notes due 2023 | Estimated Fair Value | ||||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||||
Carrying amounts and estimated fair values of financial instruments | $ 0 | 100.2 | ||
Senior Notes | 5.75% Senior Notes due 2025 | ||||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||||
Debt instrument interest rate (percent) | 5.75% | 5.75% | ||
Senior Notes | 5.75% Senior Notes due 2025 | Carrying Amount | ||||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||||
Carrying amounts and estimated fair values of financial instruments | $ 347.4 | 347 | ||
Senior Notes | 5.75% Senior Notes due 2025 | Estimated Fair Value | ||||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||||
Carrying amounts and estimated fair values of financial instruments | $ 347.6 | 357.9 | ||
Senior Notes | 4.50% Senior Notes due 2028 | ||||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||||
Debt instrument interest rate (percent) | 4.50% | 4.50% | ||
Senior Notes | 4.50% Senior Notes due 2028 | Carrying Amount | ||||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||||
Carrying amounts and estimated fair values of financial instruments | $ 780.2 | 786.8 | ||
Senior Notes | 4.50% Senior Notes due 2028 | Estimated Fair Value | ||||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||||
Carrying amounts and estimated fair values of financial instruments | $ 685.3 | 823 | ||
Senior Notes | 4.75% Senior Notes due 2030 | ||||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||||
Debt instrument interest rate (percent) | 4.75% | 4.75% | ||
Senior Notes | 4.75% Senior Notes due 2030 | Carrying Amount | ||||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||||
Carrying amounts and estimated fair values of financial instruments | $ 777.8 | 784.7 | ||
Senior Notes | 4.75% Senior Notes due 2030 | Estimated Fair Value | ||||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||||
Carrying amounts and estimated fair values of financial instruments | $ 670.9 | 824 | ||
Senior Notes | 4.625% Senior Notes due 2031 | ||||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||||
Debt instrument interest rate (percent) | 4.625% | 4.625% | ||
Senior Notes | 4.625% Senior Notes due 2031 | Carrying Amount | ||||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||||
Carrying amounts and estimated fair values of financial instruments | $ 390.1 | 393.7 | ||
Senior Notes | 4.625% Senior Notes due 2031 | Estimated Fair Value | ||||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||||
Carrying amounts and estimated fair values of financial instruments | 324.7 | 407 | ||
Other notes payable | Carrying Amount | ||||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||||
Carrying amounts and estimated fair values of financial instruments | 42.3 | 49.6 | ||
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 | 42.3 | 49.6 | ||
Advances under revolving credit facility | Line of credit | EHC Credit Agreement | Carrying Amount | ||||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||||
Carrying amounts and estimated fair values of financial instruments | 0 | 200 | ||
Advances under revolving credit facility | Line of credit | EHC Credit Agreement | Estimated Fair Value | ||||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||||
Carrying amounts and estimated fair values of financial instruments | 0 | 200 | ||
Advances under revolving credit facility | Line of credit | Enhabit Credit Agreement | Carrying Amount | ||||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||||
Carrying amounts and estimated fair values of financial instruments | 170 | 0 | ||
Advances under revolving credit facility | Line of credit | Enhabit Credit Agreement | Estimated Fair Value | ||||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||||
Carrying amounts and estimated fair values of financial instruments | 170 | 0 | ||
Term loan facilities | Line of credit | EHC Credit Agreement | Carrying Amount | ||||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||||
Carrying amounts and estimated fair values of financial instruments | 0 | 238.5 | ||
Term loan facilities | Line of credit | EHC Credit Agreement | Estimated Fair Value | ||||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||||
Carrying amounts and estimated fair values of financial instruments | 0 | 239.6 | ||
Term loan facilities | Line of credit | Enhabit Credit Agreement | Carrying Amount | ||||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||||
Carrying amounts and estimated fair values of financial instruments | 397.7 | 0 | ||
Term loan facilities | Line of credit | Enhabit Credit Agreement | Estimated Fair Value | ||||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||||
Carrying amounts and estimated fair values of financial instruments | 400 | 0 | ||
Letters 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 | ||
Letters of credit | Estimated Fair Value | ||||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||||
Carrying amounts and estimated fair values of financial instruments | $ 32.7 | $ 38.2 |
Share-Based Payments (Details)
Share-Based Payments (Details) shares in Millions | 6 Months Ended |
Jun. 30, 2022 shares | |
Restricted Stock | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Restricted stock awards issued (shares) | 0.6 |
Restricted Stock | Service Condition | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Restricted stock awards issued (shares) | 0.2 |
Restricted Stock | Service and Performance Condition | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Performance measurement period | 2 years |
Stock Options | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Stock options granted (shares) | 0.1 |
Income Taxes (Details)
Income Taxes (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2022 | Jun. 30, 2021 | Jun. 30, 2022 | Jun. 30, 2021 | |
Income Tax Disclosure [Abstract] | ||||
Provision for income tax expense | $ 23.8 | $ 39.5 | $ 55 | $ 74 |
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 | 6 Months Ended | ||
Jun. 30, 2022 | Jun. 30, 2021 | Jun. 30, 2022 | Jun. 30, 2021 | |
Basic Numerator: | ||||
Income from continuing operations | $ 71.3 | $ 142.3 | $ 181.4 | $ 275.1 |
Less: Net income attributable to noncontrolling interests included in continuing operations | (22.6) | (28.7) | (45.2) | (54.2) |
Less: Income allocated to participating securities | (0.1) | (0.5) | (0.5) | (1) |
Income from continuing operations attributable to Encompass Health common shareholders | 48.6 | 113.1 | 135.7 | 219.9 |
Loss from discontinued operations, net of tax, attributable to Encompass Health common shareholders | 0 | (0.3) | 0 | (0.3) |
Net income attributable to Encompass Health common shareholders | $ 48.6 | $ 112.8 | $ 135.7 | $ 219.6 |
Denominator: | ||||
Basic weighted average common shares outstanding (in shares) | 99.2 | 99 | 99.2 | 99 |
Basic earnings per share attributable to Encompass Health common shareholders: | ||||
Continuing operations (in dollars per share) | $ 0.49 | $ 1.14 | $ 1.37 | $ 2.22 |
Discontinued operations (in dollars per share) | 0 | 0 | 0 | 0 |
Net income (in dollars per share) | $ 0.49 | $ 1.14 | $ 1.37 | $ 2.22 |
Diluted Numerator | ||||
Income from continuing operations | $ 71.3 | $ 142.3 | $ 181.4 | $ 275.1 |
Less: Net income attributable to noncontrolling interests included in continuing operations | (22.6) | (28.7) | (45.2) | (54.2) |
Income from continuing operations attributable to Encompass Health common shareholders | 48.7 | 113.6 | 136.2 | 220.9 |
Loss from discontinued operations, net of tax, attributable to Encompass Health common shareholders | 0 | (0.3) | 0 | (0.3) |
Net income attributable to Encompass Health common shareholders | $ 48.7 | $ 113.3 | $ 136.2 | $ 220.6 |
Denominator: | ||||
Diluted weighted average common shares outstanding (in shares) | 100.3 | 100.2 | 100.2 | 100.2 |
Diluted earnings per share attributable to Encompass Health common shareholders: | ||||
Continuing operations (in dollars per share) | $ 0.49 | $ 1.13 | $ 1.36 | $ 2.20 |
Discontinued operations (in dollars per share) | 0 | 0 | 0 | 0 |
Net income (in dollars per share) | $ 0.49 | $ 1.13 | $ 1.36 | $ 2.20 |
Earnings per Common Share - Rec
Earnings per Common Share - Reconciliation of Weighted Average Number of Shares Outstanding (Details) - shares shares in Millions | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2022 | Jun. 30, 2021 | Jun. 30, 2022 | Jun. 30, 2021 | |
Earnings Per Share [Abstract] | ||||
Basic weighted average common shares outstanding (in shares) | 99.2 | 99 | 99.2 | 99 |
Restricted stock awards, dilutive stock options, and restricted stock units (in shares) | 1.1 | 1.2 | 1 | 1.2 |
Diluted weighted average common shares outstanding (in shares) | 100.3 | 100.2 | 100.2 | 100.2 |
Segment Reporting - Textual (De
Segment Reporting - Textual (Details) | 1 Months Ended | 6 Months Ended | |
Aug. 04, 2022 numberOfSegment | Jun. 30, 2022 numberOfSegment hospital location state | Jun. 30, 2022 hospital location state segment | |
Segment Reporting Information [Line Items] | |||
Number of operating segments | 2 | 2 | |
Number of states in which entity operates | state | 42 | 42 | |
Subsequent Event | |||
Segment Reporting Information [Line Items] | |||
Number of operating segments | numberOfSegment | 1 | ||
Inpatient Rehabilitation | |||
Segment Reporting Information [Line Items] | |||
Number of states in which entity operates | state | 35 | 35 | |
Number of inpatient rehabilitation hospitals operated | hospital | 150 | 150 | |
Number of solely owned inpatient rehabilitation hospitals | hospital | 95 | 95 | |
Number of jointly owned inpatient rehabilitation hospitals | hospital | 55 | 55 | |
Number of inpatient rehabilitation units under management contracts | hospital | 2 | 2 | |
Inpatient Rehabilitation | Minimum | |||
Segment Reporting Information [Line Items] | |||
Joint venture ownership percentage | 50% | 50% | |
Inpatient Rehabilitation | Maximum | |||
Segment Reporting Information [Line Items] | |||
Joint venture ownership percentage | 97.50% | 97.50% | |
Home Health and Hospice | |||
Segment Reporting Information [Line Items] | |||
Number of states in which entity operates | state | 34 | 34 | |
Number of home health locations | location | 251 | 251 | |
Number of hospice locations | location | 100 | 100 | |
Number of solely owned hospital based home health and hospice locations | location | 336 | 336 | |
Number of jointly owned hospital based home health and hospice locations | location | 15 | 15 | |
Home Health and Hospice | Minimum | |||
Segment Reporting Information [Line Items] | |||
Joint venture ownership percentage | 50% | 50% | |
Home Health and Hospice | Maximum | |||
Segment Reporting Information [Line Items] | |||
Joint venture ownership percentage | 90% | 90% |
Segment Reporting - Segment Rep
Segment Reporting - Segment Reporting Information, Reconciliation of Net Operating Revenues to Segment Adjusted EBITDA (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2022 | Jun. 30, 2021 | Jun. 30, 2022 | Jun. 30, 2021 | |
Segment Reporting Information [Line Items] | ||||
Net operating revenues | $ 1,330.5 | $ 1,287.7 | $ 2,664.1 | $ 2,518.1 |
Operating expenses: | ||||
Salaries and benefits | 773.8 | 708.2 | 1,549.8 | 1,395.4 |
Other operating expenses | 193.4 | 172.7 | 375.5 | 335 |
Supplies | 52.8 | 50 | 108.9 | 101.9 |
Occupancy costs | 19.3 | 20.2 | 40.2 | 40.4 |
Total operating expenses | 1,168.4 | 1,068.7 | 2,318.1 | 2,091.4 |
Other expense (income) | 6.3 | (4.6) | 9.9 | (6) |
Equity in net income of nonconsolidated affiliates | (1) | (1) | (1.9) | (2) |
Noncontrolling interests | 22.6 | 28.7 | 45.2 | 54.2 |
Inpatient Rehabilitation | ||||
Segment Reporting Information [Line Items] | ||||
Net operating revenues | 1,062.5 | 1,001.6 | 2,121.8 | 1,961.5 |
Operating expenses: | ||||
Salaries and benefits | 585.9 | 515.9 | 1,173.3 | 1,017.8 |
Other operating expenses | 166.4 | 147.5 | 324.7 | 287.5 |
Supplies | 47.4 | 44.1 | 97.2 | 89.3 |
Occupancy costs | 13.8 | 15 | 29.2 | 30.1 |
Cost of service (excluding depreciation and amortization) | 0 | 0 | 0 | 0 |
Support and overhead costs | 0 | 0 | 0 | 0 |
Total operating expenses | 813.5 | 722.5 | 1,624.4 | 1,424.7 |
Other expense (income) | 3.1 | (2.3) | 4.2 | (3.8) |
Equity in net income of nonconsolidated affiliates | (1) | (0.8) | (1.9) | (1.6) |
Noncontrolling interests | 21.9 | 28.2 | 43.9 | 53.3 |
Segment Adjusted EBITDA | 225 | 254 | 451.2 | 488.9 |
Capital expenditures | 117.5 | 120.4 | 235.3 | 220.2 |
Home Health and Hospice | ||||
Segment Reporting Information [Line Items] | ||||
Net operating revenues | 268 | 286.1 | 542.3 | 556.6 |
Operating expenses: | ||||
Salaries and benefits | 0 | 0 | 0 | 0 |
Other operating expenses | 0 | 0 | 0 | 0 |
Supplies | 0 | 0 | 0 | 0 |
Occupancy costs | 0 | 0 | 0 | 0 |
Cost of service (excluding depreciation and amortization) | 124.2 | 122.6 | 248.6 | 240.7 |
Support and overhead costs | 99.3 | 103.1 | 198.5 | 204.5 |
Total operating expenses | 223.5 | 225.7 | 447.1 | 445.2 |
Other expense (income) | 0 | (1.6) | 0 | (1.6) |
Equity in net income of nonconsolidated affiliates | 0 | (0.2) | 0 | (0.4) |
Noncontrolling interests | 0.7 | 0.5 | 1.3 | 0.9 |
Segment Adjusted EBITDA | 43.8 | 61.7 | 93.9 | 112.5 |
Capital expenditures | $ 2.6 | $ 2.2 | $ 4.9 | $ 3.1 |
Segment Reporting - Reconciliat
Segment Reporting - Reconciliation of Segment Assets and Investments In and Advances to Affiliates (Details) - USD ($) $ in Millions | Jun. 30, 2022 | Dec. 31, 2021 | |
Segment Reporting, Asset Reconciling Item [Line Items] | |||
Assets | [1] | $ 7,082.2 | $ 6,864.9 |
Investments in and advances to nonconsolidated affiliates | 2.9 | 4 | |
Inpatient Rehabilitation | |||
Segment Reporting, Asset Reconciling Item [Line Items] | |||
Assets | 5,459 | 5,143 | |
Investments in and advances to nonconsolidated affiliates | 1.3 | 2.4 | |
Home Health and Hospice | |||
Segment Reporting, Asset Reconciling Item [Line Items] | |||
Assets | 1,623.2 | 1,721.9 | |
Investments in and advances to nonconsolidated affiliates | $ 1.6 | $ 1.6 | |
[1] Our consolidated assets as of June 30, 2022 and December 31, 2021 include total assets of variable interest entities of $227.4 million and $226.2 million, respectively, which cannot be used by us to settle the obligations of other entities. Our consolidated liabilities as of June 30, 2022 and December 31, 2021 include total liabilities of the variable interest entities of $38.5 million and $38.2 million, respectively. See Note 3, Variable Interest Entities. |
Segment Reporting - Reconcili_2
Segment Reporting - Reconciliation of Segment Adjusted EBITDA to Income from Continuing Operations Before Income Tax Expense (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2022 | Jun. 30, 2021 | Jun. 30, 2022 | Jun. 30, 2021 | |
Segment Reporting, Reconciling Item for Operating Profit (Loss) from Segment to Consolidated [Line Items] | ||||
General and administrative expenses | $ (60.3) | $ (54.2) | $ (108.7) | $ (92.8) |
Depreciation and amortization | (68.8) | (63.4) | (135) | (125.9) |
Loss on early extinguishment of debt | (1.1) | (1) | (1.4) | (1) |
Net income attributable to noncontrolling interests | 22.6 | 28.7 | 45.2 | 54.2 |
Income from continuing operations before income tax expense | 95.1 | 181.8 | 236.4 | 349.1 |
Operating Segments | ||||
Segment Reporting, Reconciling Item for Operating Profit (Loss) from Segment to Consolidated [Line Items] | ||||
Total Segment Adjusted EBITDA | 268.8 | 315.7 | 545.1 | 601.4 |
Segment Reconciling Items | ||||
Segment Reporting, Reconciling Item for Operating Profit (Loss) from Segment to Consolidated [Line Items] | ||||
General and administrative expenses | (60.3) | (54.2) | (108.7) | (92.8) |
Depreciation and amortization | (68.8) | (63.4) | (135) | (125.9) |
Loss on disposal or impairment of assets | (2.3) | (2.9) | (2.9) | (2.8) |
Loss on early extinguishment of debt | (1.1) | (1) | (1.4) | (1) |
Interest expense and amortization of debt discounts and fees | (60.6) | (41.8) | (100.2) | (84.6) |
Net income attributable to noncontrolling interests | 22.6 | 28.7 | 45.2 | 54.2 |
Change in fair market value of equity securities | $ (3.2) | $ 0.7 | $ (5.7) | $ 0.6 |
Segment Reporting - Reconcili_3
Segment Reporting - Reconciliation of Revenue from Segments to Consolidated (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2022 | Jun. 30, 2021 | Jun. 30, 2022 | Jun. 30, 2021 | |
Segment Reporting, Revenue Reconciling Item [Line Items] | ||||
Net operating revenues | $ 1,330.5 | $ 1,287.7 | $ 2,664.1 | $ 2,518.1 |
Inpatient Rehabilitation | ||||
Segment Reporting, Revenue Reconciling Item [Line Items] | ||||
Net operating revenues | 1,062.5 | 1,001.6 | 2,121.8 | 1,961.5 |
Inpatient Rehabilitation | Inpatient | ||||
Segment Reporting, Revenue Reconciling Item [Line Items] | ||||
Net operating revenues | 1,037.8 | 976.9 | 2,074 | 1,919.2 |
Inpatient Rehabilitation | Outpatient and other | ||||
Segment Reporting, Revenue Reconciling Item [Line Items] | ||||
Net operating revenues | 24.7 | 24.7 | 47.8 | 42.3 |
Home Health and Hospice | ||||
Segment Reporting, Revenue Reconciling Item [Line Items] | ||||
Net operating revenues | 268 | 286.1 | 542.3 | 556.6 |
Home Health and Hospice | Home health | ||||
Segment Reporting, Revenue Reconciling Item [Line Items] | ||||
Net operating revenues | 220.2 | 232.3 | 445.1 | 452.2 |
Home Health and Hospice | Hospice | ||||
Segment Reporting, Revenue Reconciling Item [Line Items] | ||||
Net operating revenues | $ 47.8 | $ 53.8 | $ 97.2 | $ 104.4 |