Cover Page
Cover Page - shares | 3 Months Ended | |
Mar. 31, 2024 | Apr. 22, 2024 | |
Cover [Abstract] | ||
Document Type | 10-Q | |
Document Quarterly Report | true | |
Document Period End Date | Mar. 31, 2024 | |
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 $0.01 per share | |
Trading Symbol | EHC | |
Security Exchange Name | NYSE | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Large Accelerated Filer | |
Entity Small Business | false | |
Entity Emerging Growth Company | false | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding | 100,685,317 | |
Entity Central Index Key | 0000785161 | |
Current Fiscal Year End Date | --12-31 | |
Document Fiscal Year Focus | 2024 | |
Document Fiscal Period Focus | Q1 | |
Amendment Flag | false |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Comprehensive Income - USD ($) shares in Millions, $ in Millions | 3 Months Ended | |
Mar. 31, 2024 | Mar. 31, 2023 | |
Income Statement [Abstract] | ||
Net operating revenues | $ 1,316 | $ 1,160.4 |
Operating expenses: | ||
Salaries and benefits | 711.6 | 629 |
Other operating expenses | 203.9 | 177.9 |
Occupancy costs | 14 | 13.8 |
Supplies | 58.5 | 53.8 |
General and administrative expenses | 50.2 | 43.4 |
Depreciation and amortization | 70.3 | 63.9 |
Total operating expenses | 1,108.5 | 981.8 |
Interest expense and amortization of debt discounts and fees | 35.2 | 36.4 |
Other income | (5.4) | (3.6) |
Equity in net income of nonconsolidated affiliates | (0.7) | (0.4) |
Income from continuing operations before income tax expense | 178.4 | 146.2 |
Provision for income tax expense | 38.3 | 31.9 |
Income from continuing operations | 140.1 | 114.3 |
Loss from discontinued operations, net of tax | (1.3) | (1) |
Net and comprehensive income | 138.8 | 113.3 |
Net and comprehensive income | 138.8 | 113.3 |
Less: Net and comprehensive income attributable to noncontrolling interests | (26.3) | (25.6) |
Less: Net and comprehensive income attributable to noncontrolling interests | (26.3) | (25.6) |
Net and comprehensive income attributable to Encompass Health | 112.5 | 87.7 |
Net and comprehensive income attributable to Encompass Health | $ 112.5 | $ 87.7 |
Weighted average common shares outstanding: | ||
Basic (in shares) | 99.8 | 99.4 |
Diluted (in shares) | 102.2 | 100.9 |
Basic earnings per share attributable to Encompass Health common shareholders: | ||
Continuing operations (in dollars per share) | $ 1.13 | $ 0.89 |
Discontinued operations (in dollars per share) | (0.01) | (0.01) |
Net income (in dollars per share) | 1.12 | 0.88 |
Diluted earnings per share attributable to Encompass Health common shareholders: | ||
Continuing operations (in dollars per share) | 1.11 | 0.88 |
Discontinued operations (in dollars per share) | (0.01) | (0.01) |
Net income (in dollars per share) | $ 1.10 | $ 0.87 |
Amounts attributable to Encompass Health common shareholders: | ||
Income from continuing operations | $ 113.8 | $ 88.7 |
Loss from discontinued operations, net of tax | (1.3) | (1) |
Net and comprehensive income attributable to Encompass Health | $ 112.5 | $ 87.7 |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets - USD ($) $ in Millions | Mar. 31, 2024 | Dec. 31, 2023 | |
Current assets: | |||
Cash and cash equivalents | $ 134.4 | $ 69.1 | |
Restricted cash | 38.3 | 35.1 | |
Accounts receivable | 619.3 | 611.6 | |
Other current assets | 137.8 | 126 | |
Total current assets | 929.8 | 841.8 | |
Property and equipment, net | 3,370.3 | 3,301 | |
Operating lease right-of-use assets | 199.1 | 208.5 | |
Goodwill | 1,281.3 | 1,281.3 | |
Intangible assets, net | 272.2 | 278.2 | |
Other long-term assets | 178.7 | 191.6 | |
Total assets | [1] | 6,231.4 | 6,102.4 |
Current liabilities: | |||
Current portion of long-term debt | 25.6 | 24.8 | |
Current operating lease liabilities | 25.4 | 24.1 | |
Accounts payable | 166.1 | 170 | |
Accrued expenses and other current liabilities | 463.2 | 437.5 | |
Total current liabilities | 680.3 | 656.4 | |
Long-term debt, net of current portion | 2,682.6 | 2,687.8 | |
Long-term operating lease liabilities | 185.8 | 196.1 | |
Deferred income tax liabilities | 93.5 | 87 | |
Other long-term liabilities | 185.8 | 177.9 | |
Total liabilities | 3,828 | 3,805.2 | |
Commitments and contingencies | |||
Redeemable noncontrolling interests | 41.1 | 42 | |
Shareholders’ equity: | |||
Encompass Health shareholders’ equity | 1,741.9 | 1,647.5 | |
Noncontrolling interests | 620.4 | 607.7 | |
Total shareholders’ equity | 2,362.3 | 2,255.2 | |
Total liabilities and shareholders' equity | [1] | $ 6,231.4 | $ 6,102.4 |
[1] Our consolidated assets as of March 31, 2024 and December 31, 2023 include total assets of variable interest entities of $212.7 million and $207.7 million, respectively, which cannot be used by us to settle the obligations of other entities. Our consolidated liabilities as of March 31, 2024 and December 31, 2023 include total liabilities of the variable interest entities of $42.7 million and $42.2 million, respectively. See Note 2, Variable Interest Entities. |
Condensed Consolidated Balanc_2
Condensed Consolidated Balance Sheets (Parenthetical) - USD ($) $ in Millions | Mar. 31, 2024 | Dec. 31, 2023 | |
Assets | [1] | $ 6,231.4 | $ 6,102.4 |
Liabilities | 3,828 | 3,805.2 | |
VIE | |||
Assets | 212.7 | 207.7 | |
Liabilities | $ 42.7 | $ 42.2 | |
[1] Our consolidated assets as of March 31, 2024 and December 31, 2023 include total assets of variable interest entities of $212.7 million and $207.7 million, respectively, which cannot be used by us to settle the obligations of other entities. Our consolidated liabilities as of March 31, 2024 and December 31, 2023 include total liabilities of the variable interest entities of $42.7 million and $42.2 million, respectively. See Note 2, Variable Interest Entities. |
Condensed Consolidated Statem_2
Condensed Consolidated Statements of Shareholders' Equity - USD ($) 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, 2022 | 99.8 | |||||
Balance at beginning of period at Dec. 31, 2022 | $ 1,826.3 | $ 1.1 | $ 1,730.2 | $ 115.7 | $ (536.7) | $ 516 |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Net income | 111.2 | 87.7 | 23.5 | |||
Receipt of treasury stock (shares) | (0.1) | |||||
Receipt of treasury stock | (7.7) | (7.7) | ||||
Dividends declared | (15.1) | (15.1) | ||||
Stock-based compensation | 7.9 | 7.9 | ||||
Distributions declared | (31.2) | (31.2) | ||||
Capital contributions from consolidated affiliates | 33.9 | 33.9 | ||||
Other (shares) | 0.5 | |||||
Other | 0.4 | $ 0.1 | 1 | (0.7) | ||
Balance at end of period (shares) at Mar. 31, 2023 | 100.2 | |||||
Balance at end of period at Mar. 31, 2023 | 1,925.7 | $ 1.2 | 1,739.1 | 188.3 | (545.1) | 542.2 |
Balance at beginning of period (shares) at Dec. 31, 2023 | 100.3 | |||||
Balance at beginning of period at Dec. 31, 2023 | 2,255.2 | $ 1.2 | 1,787 | 406.5 | (547.2) | 607.7 |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Net income | 137.3 | 112.5 | 24.8 | |||
Receipt of treasury stock (shares) | (0.2) | |||||
Receipt of treasury stock | (12.1) | (12.1) | ||||
Dividends declared | (15.3) | 0.1 | (15.4) | |||
Stock-based compensation | 9.3 | 9.3 | ||||
Distributions declared | (30.5) | (30.5) | ||||
Capital contributions from consolidated affiliates | 18.4 | 18.4 | ||||
Other (shares) | 0.6 | |||||
Other | 0 | 0.8 | 0.1 | (0.9) | ||
Balance at end of period (shares) at Mar. 31, 2024 | 100.7 | |||||
Balance at end of period at Mar. 31, 2024 | $ 2,362.3 | $ 1.2 | $ 1,797.2 | $ 503.7 | $ (560.2) | $ 620.4 |
Condensed Consolidated Statem_3
Condensed Consolidated Statements of Shareholders' Equity (Parenthetical) - $ / shares | 3 Months Ended | |
Mar. 31, 2024 | Mar. 31, 2023 | |
Statement of Stockholders' Equity [Abstract] | ||
Dividends declared on common stock (in dollars per share) | $ 0.15 | $ 0.15 |
Condensed Consolidated Statem_4
Condensed Consolidated Statements of Cash Flows - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2024 | Mar. 31, 2023 | |
Cash flows from operating activities: | ||
Net income | $ 138.8 | $ 113.3 |
Loss from discontinued operations, net of tax | 1.3 | 1 |
Adjustments to reconcile net income to net cash provided by operating activities— | ||
Depreciation and amortization | 70.3 | 63.9 |
Stock-based compensation | 9.3 | 7.9 |
Deferred tax expense | 6.5 | 4 |
Other, net | 14.9 | 1.2 |
Change in assets and liabilities, net of acquisitions— | ||
Accounts receivable | (7.7) | 23.7 |
Other assets | (16) | (3.7) |
Accounts payable | (3.8) | 1.2 |
Other liabilities | 25.9 | 16.7 |
Net cash used in operating activities of discontinued operations | (0.7) | (1.3) |
Total adjustments | 98.7 | 113.6 |
Net cash provided by operating activities | 238.8 | 227.9 |
Cash flows from investing activities: | ||
Purchases of property, equipment, and intangible assets | (139.4) | (99.8) |
Proceeds from sale of restricted investments | 16 | 0.2 |
Other, net | (6.3) | (4.4) |
Net cash used in investing activities | (129.7) | (104) |
Cash flows from financing activities: | ||
Principal payments on debt, including pre-payments | (1) | (0.6) |
Borrowings on revolving credit facility | 50 | 30 |
Payments on revolving credit facility | (50) | (45) |
Taxes paid on behalf of employees for shares withheld | (12.1) | (7.7) |
Contributions from noncontrolling interests of consolidated affiliates | 18.4 | 17 |
Dividends paid on common stock | (15.9) | (15.6) |
Distributions paid to noncontrolling interests of consolidated affiliates | (24.7) | (31.8) |
Other, net | (5.3) | (4.3) |
Net cash used in financing activities | (40.6) | (58) |
Increase in cash, cash equivalents, and restricted cash | 68.5 | 65.9 |
Cash, cash equivalents, and restricted cash at beginning of period | 104.2 | 53.4 |
Cash, cash equivalents, and restricted cash at end of period | 172.7 | 119.3 |
Reconciliation of Cash, Cash Equivalents, and Restricted Cash | ||
Cash and cash equivalents at beginning of period | 69.1 | 21.8 |
Restricted cash at beginning of period | 35.1 | 31.6 |
Cash, cash equivalents, and restricted cash at beginning of period | 104.2 | 53.4 |
Cash and cash equivalents at end of period | 134.4 | 85 |
Restricted cash at end of period | 38.3 | 34.3 |
Cash, cash equivalents, and restricted cash at end of period | 172.7 | 119.3 |
Supplemental schedule of noncash operating, investing, and financing activities: | ||
Joint venture contributions | $ 0 | $ 16.9 |
Basis of Presentation
Basis of Presentation | 3 Months Ended |
Mar. 31, 2024 | |
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 provider of inpatient rehabilitation services. Our national network of inpatient rehabilitation hospitals stretches across 37 states and Puerto Rico, with concentrations of hospitals in Florida and Texas. As of March 31, 2024, we operate 160 inpatient rehabilitation hospitals. We are the sole owner of 98 of these hospitals. We retain 50.0% to 97.5% ownership in the remaining 62 jointly owned hospitals. 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 28, 2024 (the “2023 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, 2023 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. Certain prior year amounts may have been reclassified for comparative purposes to conform to the current-year financial statement presentation. 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. Net Operating Revenues — Our Net operating revenues disaggregated by payor source are as follows (in millions): Three Months Ended March 31, 2024 2023 Medicare $ 854.1 $ 757.7 Medicare Advantage 223.8 186.2 Managed care 142.8 127.1 Medicaid 44.8 47.4 Other third-party payors 9.5 10.9 Workers’ compensation 7.0 5.7 Patients 3.9 2.7 Other income 30.1 22.7 Total $ 1,316.0 $ 1,160.4 See Note 1, Summary of Significant Accounting Policies , to the consolidated financial statements accompanying the 2023 Form 10-K for our policy related to Net operating revenues . Recently Adopted Accounting Pronouncements — In November 2023, the FASB issued ASU 2023-07, “Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures,” which requires all public entities, including entities with a single reportable segment, to provide disclosure of (1) significant segment expenses that are regularly provided to the chief operating decision maker (“CODM”) and included within each reported measure of segment profit or loss, (2) the amount and description of the composition of other segment items which reconcile to segment profit or loss, and (3) the title and position of the entity’s CODM and an explanation of how the CODM uses the reported measure(s) of segment profit or loss in assessing segment performance and allocating resources. ASU 2023-07 is effective for our annual periods beginning January 1, 2024 and interim periods beginning January 1, 2025. Early adoption is permitted with retrospective application required for all prior periods presented in the financial statements. We are currently evaluating the requirements of this standard and any potential impact it may have on our condensed consolidated financial statements. In December 2023, the FASB issued ASU 2023-09, “Income Taxes (Topic 740): Improvements to Income Tax Disclosures,” which intends to improve the transparency of income tax disclosures by requiring companies to (1) disclose consistent categories and greater disaggregation of information in the effective rate reconciliation and (2) provide information on income taxes paid disaggregated by jurisdiction. ASU 2023-09 is effective for our annual periods beginning January 1, 2025, with early adoption permitted. We are required to apply the guidance prospectively but have the option to apply it retrospectively. We are currently evaluating the requirements of this standard and any potential impact it may have on our condensed consolidated financial statements. We do not believe any other 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. |
Variable Interest Entities
Variable Interest Entities | 3 Months Ended |
Mar. 31, 2024 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Variable Interest Entities | Variable Interest Entities As of March 31, 2024 and December 31, 2023, we consolidated eight limited partnership-like entities that are variable interest entities (“VIEs”) and of which we are the primary beneficiary. Our ownership percentages in these entities range from 50.0% to 75.0% as of March 31, 2024. 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 sheets, are as follows (in millions): March 31, 2024 December 31, 2023 Assets Current assets: Cash and cash equivalents $ 0.7 $ 0.2 Accounts receivable 35.4 36.7 Other current assets 7.0 5.0 Total current assets 43.1 41.9 Property and equipment, net 132.6 128.8 Operating lease right-of-use assets 1.4 1.4 Goodwill 15.9 15.9 Intangible assets, net 1.1 1.2 Other long-term assets 18.6 18.5 Total assets $ 212.7 $ 207.7 Liabilities Current liabilities: Current portion of long-term debt $ 0.9 $ 0.9 Accounts payable 9.3 7.6 Accrued expenses and other current liabilities 17.7 18.7 Total current liabilities 27.9 27.2 Long-term debt, net of current portion 13.4 13.6 Long-term operating lease liabilities 1.4 1.4 Total liabilities $ 42.7 $ 42.2 |
Long-term Debt
Long-term Debt | 3 Months Ended |
Mar. 31, 2024 | |
Debt Disclosure [Abstract] | |
Long-term Debt | Long-term Debt Our long-term debt outstanding consists of the following (in millions): March 31, 2024 December 31, 2023 Credit Agreement— Advances under revolving credit facility $ — $ — Bonds payable— 5.75% Senior Notes due 2025 348.7 348.5 4.50% Senior Notes due 2028 785.9 785.0 4.75% Senior Notes due 2030 782.2 781.5 4.625% Senior Notes due 2031 391.8 391.5 Other notes payable 64.8 66.0 Finance lease obligations 334.8 340.1 2,708.2 2,712.6 Less: Current portion (25.6) (24.8) Long-term debt, net of current portion $ 2,682.6 $ 2,687.8 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 April 1 through December 31, 2024 $ 19.0 $ 19.0 2025 381.4 380.2 2026 29.2 29.2 2027 43.2 43.2 2028 831.7 817.6 2029 40.5 40.5 Thereafter 1,404.8 1,378.5 Total $ 2,749.8 $ 2,708.2 |
Redeemable Noncontrolling Inter
Redeemable Noncontrolling Interests | 3 Months Ended |
Mar. 31, 2024 | |
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): Three Months Ended March 31, 2024 2023 Balance at beginning of period $ 42.0 $ 35.6 Net income attributable to noncontrolling interests 1.5 2.1 Distributions declared (2.4) (0.2) Balance at end of period $ 41.1 $ 37.5 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 March 31, 2024 2023 Net income attributable to nonredeemable noncontrolling interests $ 24.8 $ 23.5 Net income attributable to redeemable noncontrolling interests 1.5 2.1 Net income attributable to noncontrolling interests $ 26.3 $ 25.6 See also Note 5, Fair Value Measurements . |
Fair Value Measurements
Fair Value Measurements | 3 Months Ended |
Mar. 31, 2024 | |
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 March 31, 2024 Fair Value Quoted Prices in Active Markets for Identical Assets Significant Other Observable Inputs Significant Unobservable Inputs Valuation Technique (1) Equity securities (2) $ 113.0 $ 4.1 $ 108.9 $ — M Redeemable noncontrolling interests 41.1 — — 41.1 I As of December 31, 2023 Equity securities (2) $ 126.2 $ 4.0 $ 122.2 $ — M Redeemable noncontrolling interests 42.0 — — 42.0 I (1) The three valuation techniques are: market approach (M), cost approach (C), and income approach (I). (2) As of March 31, 2024, $35.8 million are included in Other current assets and $77.2 million are included in Other long-term assets in the condensed consolidated balance sheet. As of December 31, 2023, $37.6 million are included in Other current assets and $88.6 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 months ended March 31, 2024 and 2023, 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 2023 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 March 31, 2024 As of December 31, 2023 Carrying Amount Estimated Fair Value Carrying Amount Estimated Fair Value Long-term debt: 5.75% Senior Notes due 2025 $ 348.7 $ 349.8 $ 348.5 $ 349.3 4.50% Senior Notes due 2028 785.9 760.0 785.0 763.6 4.75% Senior Notes due 2030 782.2 750.7 781.5 755.0 4.625% Senior Notes due 2031 391.8 364.9 391.5 369.4 Other notes payable 64.8 64.8 66.0 66.0 Financial commitments: Letters of credit — 36.3 — 31.9 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 2023 Form 10‑K. |
Share-Based Payments
Share-Based Payments | 3 Months Ended |
Mar. 31, 2024 | |
Share-Based Payment Arrangement [Abstract] | |
Share-Based Payments | Share-Based Payments During the three months ended March 31, 2024, we issued a total of 0.5 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 a service and/or performance condition as well as a market condition for certain members of management. For the awards that include a performance and market condition, the number of shares that will ultimately be granted to employees may vary based on the Company’s performance during the applicable three-year performance measurement period and the applicable three-year market condition 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 2023 Form 10‑K. |
Income Taxes
Income Taxes | 3 Months Ended |
Mar. 31, 2024 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Income Taxes Our Provision for income tax expense of $38.3 million and $31.9 million for the three months ended March 31, 2024 and March 31, 2023, respectively, primarily resulted from the application of our estimated effective blended federal and state income tax rate. |
Earnings per Common Share
Earnings per Common Share | 3 Months Ended |
Mar. 31, 2024 | |
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 March 31, 2024 2023 Basic: Numerator: Income from continuing operations $ 140.1 $ 114.3 Less: Net income attributable to noncontrolling interests included in continuing operations (26.3) (25.6) Less: Income allocated to participating securities (0.8) (0.6) Income from continuing operations attributable to Encompass Health common shareholders 113.0 88.1 Loss from discontinued operations attributable to Encompass Health common shareholders (1.3) (1.0) Net income attributable to Encompass Health common shareholders $ 111.7 $ 87.1 Denominator: Basic weighted average common shares outstanding 99.8 99.4 Basic earnings per share attributable to Encompass Health common shareholders: Continuing operations $ 1.13 $ 0.89 Discontinued operations (0.01) (0.01) Net income $ 1.12 $ 0.88 Diluted: Numerator: Income from continuing operations $ 140.1 $ 114.3 Less: Net income attributable to noncontrolling interests included in continuing operations (26.3) (25.6) Income from continuing operations attributable to Encompass Health common shareholders 113.8 88.7 Loss from discontinued operations attributable to Encompass Health common shareholders (1.3) (1.0) Net income attributable to Encompass Health common shareholders $ 112.5 $ 87.7 Denominator: Diluted weighted average common shares outstanding 102.2 100.9 Diluted earnings per share attributable to Encompass Health common shareholders: Continuing operations $ 1.11 $ 0.88 Discontinued operations (0.01) (0.01) Net income $ 1.10 $ 0.87 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 March 31, 2024 2023 Basic weighted average common shares outstanding 99.8 99.4 Restricted stock awards, dilutive stock options, and restricted stock units 2.4 1.5 Diluted weighted average common shares outstanding 102.2 100.9 See Note 17, Earnings per Common Share , to the consolidated financial statements accompanying the 2023 Form 10‑K for additional information related to our common stock. |
Contingencies and Other Commitm
Contingencies and Other Commitments | 3 Months Ended |
Mar. 31, 2024 | |
Commitments and Contingencies Disclosure [Abstract] | |
Contingencies and Other Commitments | Contingencies and Other Commitments We provide services in the highly regulated healthcare industry. Furthermore, operating inpatient rehabilitation hospitals requires significant staffing and involves intensive therapy for individuals suffering from significant physical or cognitive disabilities or injuries. 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 or its specific claims 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, and may in the future result in, Encompass Health refunding amounts to Medicare or other federal healthcare programs. Other Commitments— We are a party to service and other contracts in connection with conducting our business. Minimum amounts due under these agreements are $43.1 million for the remainder of 2024, $33.2 million in 2025, $24.7 million in 2026, $23.3 million in 2027, $21.9 million in 2028, and $62.3 million thereafter. These contracts primarily relate to software licensing and support and contract services. |
Pay vs Performance Disclosure
Pay vs Performance Disclosure - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2024 | Mar. 31, 2023 | |
Pay vs Performance Disclosure | ||
Net Income (Loss) | $ 112.5 | $ 87.7 |
Insider Trading Arrangements
Insider Trading Arrangements | 3 Months Ended |
Mar. 31, 2024 | |
Trading Arrangements, by Individual | |
Rule 10b5-1 Arrangement Adopted | false |
Non-Rule 10b5-1 Arrangement Adopted | false |
Rule 10b5-1 Arrangement Terminated | false |
Non-Rule 10b5-1 Arrangement Terminated | false |
Basis of Presentation (Policies
Basis of Presentation (Policies) | 3 Months Ended |
Mar. 31, 2024 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Recently Adopted Accounting Pronouncements | Recently Adopted Accounting Pronouncements — In November 2023, the FASB issued ASU 2023-07, “Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures,” which requires all public entities, including entities with a single reportable segment, to provide disclosure of (1) significant segment expenses that are regularly provided to the chief operating decision maker (“CODM”) and included within each reported measure of segment profit or loss, (2) the amount and description of the composition of other segment items which reconcile to segment profit or loss, and (3) the title and position of the entity’s CODM and an explanation of how the CODM uses the reported measure(s) of segment profit or loss in assessing segment performance and allocating resources. ASU 2023-07 is effective for our annual periods beginning January 1, 2024 and interim periods beginning January 1, 2025. Early adoption is permitted with retrospective application required for all prior periods presented in the financial statements. We are currently evaluating the requirements of this standard and any potential impact it may have on our condensed consolidated financial statements. In December 2023, the FASB issued ASU 2023-09, “Income Taxes (Topic 740): Improvements to Income Tax Disclosures,” which intends to improve the transparency of income tax disclosures by requiring companies to (1) disclose consistent categories and greater disaggregation of information in the effective rate reconciliation and (2) provide information on income taxes paid disaggregated by jurisdiction. ASU 2023-09 is effective for our annual periods beginning January 1, 2025, with early adoption permitted. We are required to apply the guidance prospectively but have the option to apply it retrospectively. We are currently evaluating the requirements of this standard and any potential impact it may have on our condensed consolidated financial statements. We do not believe any other 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) | 3 Months Ended |
Mar. 31, 2024 | |
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 are as follows (in millions): Three Months Ended March 31, 2024 2023 Medicare $ 854.1 $ 757.7 Medicare Advantage 223.8 186.2 Managed care 142.8 127.1 Medicaid 44.8 47.4 Other third-party payors 9.5 10.9 Workers’ compensation 7.0 5.7 Patients 3.9 2.7 Other income 30.1 22.7 Total $ 1,316.0 $ 1,160.4 |
Variable Interest Entities (Tab
Variable Interest Entities (Tables) | 3 Months Ended |
Mar. 31, 2024 | |
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 sheets, are as follows (in millions): March 31, 2024 December 31, 2023 Assets Current assets: Cash and cash equivalents $ 0.7 $ 0.2 Accounts receivable 35.4 36.7 Other current assets 7.0 5.0 Total current assets 43.1 41.9 Property and equipment, net 132.6 128.8 Operating lease right-of-use assets 1.4 1.4 Goodwill 15.9 15.9 Intangible assets, net 1.1 1.2 Other long-term assets 18.6 18.5 Total assets $ 212.7 $ 207.7 Liabilities Current liabilities: Current portion of long-term debt $ 0.9 $ 0.9 Accounts payable 9.3 7.6 Accrued expenses and other current liabilities 17.7 18.7 Total current liabilities 27.9 27.2 Long-term debt, net of current portion 13.4 13.6 Long-term operating lease liabilities 1.4 1.4 Total liabilities $ 42.7 $ 42.2 |
Long-term Debt (Tables)
Long-term Debt (Tables) | 3 Months Ended |
Mar. 31, 2024 | |
Debt Disclosure [Abstract] | |
Schedule of Outstanding Long-term Debt | Our long-term debt outstanding consists of the following (in millions): March 31, 2024 December 31, 2023 Credit Agreement— Advances under revolving credit facility $ — $ — Bonds payable— 5.75% Senior Notes due 2025 348.7 348.5 4.50% Senior Notes due 2028 785.9 785.0 4.75% Senior Notes due 2030 782.2 781.5 4.625% Senior Notes due 2031 391.8 391.5 Other notes payable 64.8 66.0 Finance lease obligations 334.8 340.1 2,708.2 2,712.6 Less: Current portion (25.6) (24.8) Long-term debt, net of current portion $ 2,682.6 $ 2,687.8 |
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 April 1 through December 31, 2024 $ 19.0 $ 19.0 2025 381.4 380.2 2026 29.2 29.2 2027 43.2 43.2 2028 831.7 817.6 2029 40.5 40.5 Thereafter 1,404.8 1,378.5 Total $ 2,749.8 $ 2,708.2 |
Redeemable Noncontrolling Int_2
Redeemable Noncontrolling Interests (Tables) | 3 Months Ended |
Mar. 31, 2024 | |
Noncontrolling Interest [Abstract] | |
Schedule of Redeemable Noncontrolling Interests Activity | The following is a summary of the activity related to our Redeemable noncontrolling interests (in millions): Three Months Ended March 31, 2024 2023 Balance at beginning of period $ 42.0 $ 35.6 Net income attributable to noncontrolling interests 1.5 2.1 Distributions declared (2.4) (0.2) Balance at end of period $ 41.1 $ 37.5 |
Schedule of 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 March 31, 2024 2023 Net income attributable to nonredeemable noncontrolling interests $ 24.8 $ 23.5 Net income attributable to redeemable noncontrolling interests 1.5 2.1 Net income attributable to noncontrolling interests $ 26.3 $ 25.6 |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 3 Months Ended |
Mar. 31, 2024 | |
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 March 31, 2024 Fair Value Quoted Prices in Active Markets for Identical Assets Significant Other Observable Inputs Significant Unobservable Inputs Valuation Technique (1) Equity securities (2) $ 113.0 $ 4.1 $ 108.9 $ — M Redeemable noncontrolling interests 41.1 — — 41.1 I As of December 31, 2023 Equity securities (2) $ 126.2 $ 4.0 $ 122.2 $ — M Redeemable noncontrolling interests 42.0 — — 42.0 I (1) The three valuation techniques are: market approach (M), cost approach (C), and income approach (I). (2) As of March 31, 2024, $35.8 million are included in Other current assets and $77.2 million are included in Other long-term assets in the condensed consolidated balance sheet. As of December 31, 2023, $37.6 million are included in Other current assets and $88.6 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 March 31, 2024 As of December 31, 2023 Carrying Amount Estimated Fair Value Carrying Amount Estimated Fair Value Long-term debt: 5.75% Senior Notes due 2025 $ 348.7 $ 349.8 $ 348.5 $ 349.3 4.50% Senior Notes due 2028 785.9 760.0 785.0 763.6 4.75% Senior Notes due 2030 782.2 750.7 781.5 755.0 4.625% Senior Notes due 2031 391.8 364.9 391.5 369.4 Other notes payable 64.8 64.8 66.0 66.0 Financial commitments: Letters of credit — 36.3 — 31.9 |
Earnings per Common Share (Tabl
Earnings per Common Share (Tables) | 3 Months Ended |
Mar. 31, 2024 | |
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 March 31, 2024 2023 Basic: Numerator: Income from continuing operations $ 140.1 $ 114.3 Less: Net income attributable to noncontrolling interests included in continuing operations (26.3) (25.6) Less: Income allocated to participating securities (0.8) (0.6) Income from continuing operations attributable to Encompass Health common shareholders 113.0 88.1 Loss from discontinued operations attributable to Encompass Health common shareholders (1.3) (1.0) Net income attributable to Encompass Health common shareholders $ 111.7 $ 87.1 Denominator: Basic weighted average common shares outstanding 99.8 99.4 Basic earnings per share attributable to Encompass Health common shareholders: Continuing operations $ 1.13 $ 0.89 Discontinued operations (0.01) (0.01) Net income $ 1.12 $ 0.88 Diluted: Numerator: Income from continuing operations $ 140.1 $ 114.3 Less: Net income attributable to noncontrolling interests included in continuing operations (26.3) (25.6) Income from continuing operations attributable to Encompass Health common shareholders 113.8 88.7 Loss from discontinued operations attributable to Encompass Health common shareholders (1.3) (1.0) Net income attributable to Encompass Health common shareholders $ 112.5 $ 87.7 Denominator: Diluted weighted average common shares outstanding 102.2 100.9 Diluted earnings per share attributable to Encompass Health common shareholders: Continuing operations $ 1.11 $ 0.88 Discontinued operations (0.01) (0.01) Net income $ 1.10 $ 0.87 |
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 March 31, 2024 2023 Basic weighted average common shares outstanding 99.8 99.4 Restricted stock awards, dilutive stock options, and restricted stock units 2.4 1.5 Diluted weighted average common shares outstanding 102.2 100.9 |
Basis of Presentation - Additio
Basis of Presentation - Additional Information (Details) | Mar. 31, 2024 hospital state |
Class of Stock [Line Items] | |
Number of states in which entity operates | state | 37 |
Number of inpatient rehabilitation hospitals operated | 160 |
Number of solely owned inpatient rehabilitation hospitals | 98 |
Number of jointly owned inpatient rehabilitation hospitals | 62 |
Minimum | |
Class of Stock [Line Items] | |
Joint venture ownership percentage | 50% |
Maximum | |
Class of Stock [Line Items] | |
Joint venture ownership percentage | 97.50% |
Basis of Presentation - Net Ope
Basis of Presentation - Net Operating Revenues (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2024 | Mar. 31, 2023 | |
Disaggregation of Revenue [Line Items] | ||
Net operating revenues | $ 1,316 | $ 1,160.4 |
Medicare | ||
Disaggregation of Revenue [Line Items] | ||
Net operating revenues | 854.1 | 757.7 |
Medicare Advantage | ||
Disaggregation of Revenue [Line Items] | ||
Net operating revenues | 223.8 | 186.2 |
Managed care | ||
Disaggregation of Revenue [Line Items] | ||
Net operating revenues | 142.8 | 127.1 |
Medicaid | ||
Disaggregation of Revenue [Line Items] | ||
Net operating revenues | 44.8 | 47.4 |
Other third-party payors | ||
Disaggregation of Revenue [Line Items] | ||
Net operating revenues | 9.5 | 10.9 |
Workers’ compensation | ||
Disaggregation of Revenue [Line Items] | ||
Net operating revenues | 7 | 5.7 |
Patients | ||
Disaggregation of Revenue [Line Items] | ||
Net operating revenues | 3.9 | 2.7 |
Other income | ||
Disaggregation of Revenue [Line Items] | ||
Net operating revenues | $ 30.1 | $ 22.7 |
Variable Interest Entities - Ad
Variable Interest Entities - Additional Information (Details) - VIE - entity | 3 Months Ended | 12 Months Ended |
Mar. 31, 2024 | Dec. 31, 2023 | |
Variable Interest Entity [Line Items] | ||
Number of consolidated limited partnership-like entities | 8 | 8 |
Minimum | ||
Variable Interest Entity [Line Items] | ||
Ownership interest in consolidated entities (as percent) | 50% | |
Maximum | ||
Variable Interest Entity [Line Items] | ||
Ownership interest in consolidated entities (as percent) | 75% |
Variable Interest Entities - Sc
Variable Interest Entities - Schedule of Carrying Amounts and Classifications of VIE's Assets and Liabilities (Details) - USD ($) $ in Millions | Mar. 31, 2024 | Dec. 31, 2023 | Mar. 31, 2023 | Dec. 31, 2022 | |
Current assets: | |||||
Cash and cash equivalents | $ 134.4 | $ 69.1 | $ 85 | $ 21.8 | |
Accounts receivable | 619.3 | 611.6 | |||
Other current assets | 137.8 | 126 | |||
Total current assets | 929.8 | 841.8 | |||
Property and equipment, net | 3,370.3 | 3,301 | |||
Operating lease right-of-use assets | 199.1 | 208.5 | |||
Goodwill | 1,281.3 | 1,281.3 | |||
Intangible assets, net | 272.2 | 278.2 | |||
Other long-term assets | 178.7 | 191.6 | |||
Total assets | [1] | 6,231.4 | 6,102.4 | ||
Current liabilities: | |||||
Current portion of long-term debt | 25.6 | 24.8 | |||
Accounts payable | 166.1 | 170 | |||
Accrued expenses and other current liabilities | 463.2 | 437.5 | |||
Total current liabilities | 680.3 | 656.4 | |||
Long-term debt, net of current portion | 2,682.6 | 2,687.8 | |||
Long-term operating lease liabilities | 185.8 | 196.1 | |||
Total liabilities | 3,828 | 3,805.2 | |||
VIE | |||||
Current assets: | |||||
Cash and cash equivalents | 0.7 | 0.2 | |||
Accounts receivable | 35.4 | 36.7 | |||
Other current assets | 7 | 5 | |||
Total current assets | 43.1 | 41.9 | |||
Property and equipment, net | 132.6 | 128.8 | |||
Operating lease right-of-use assets | 1.4 | 1.4 | |||
Goodwill | 15.9 | 15.9 | |||
Intangible assets, net | 1.1 | 1.2 | |||
Other long-term assets | 18.6 | 18.5 | |||
Total assets | 212.7 | 207.7 | |||
Current liabilities: | |||||
Current portion of long-term debt | 0.9 | 0.9 | |||
Accounts payable | 9.3 | 7.6 | |||
Accrued expenses and other current liabilities | 17.7 | 18.7 | |||
Total current liabilities | 27.9 | 27.2 | |||
Long-term debt, net of current portion | 13.4 | 13.6 | |||
Long-term operating lease liabilities | 1.4 | 1.4 | |||
Total liabilities | $ 42.7 | $ 42.2 | |||
[1] Our consolidated assets as of March 31, 2024 and December 31, 2023 include total assets of variable interest entities of $212.7 million and $207.7 million, respectively, which cannot be used by us to settle the obligations of other entities. Our consolidated liabilities as of March 31, 2024 and December 31, 2023 include total liabilities of the variable interest entities of $42.7 million and $42.2 million, respectively. See Note 2, Variable Interest Entities. |
Long-term Debt - Long-term Debt
Long-term Debt - Long-term Debt Outstanding (Details) - USD ($) $ in Millions | Mar. 31, 2024 | Dec. 31, 2023 |
Schedule of Outstanding Long-term Debt | ||
Finance lease obligations | $ 334.8 | $ 340.1 |
Total debt and finance lease obligations | 2,708.2 | 2,712.6 |
Less: Current portion | (25.6) | (24.8) |
Long-term debt, net of current portion | $ 2,682.6 | $ 2,687.8 |
Senior Notes | 5.75% Senior Notes due 2025 | ||
Schedule of Outstanding Long-term Debt | ||
Debt instrument interest rate (as percent) | 5.75% | 5.75% |
Long-term debt | $ 348.7 | $ 348.5 |
Senior Notes | 4.50% Senior Notes due 2028 | ||
Schedule of Outstanding Long-term Debt | ||
Debt instrument interest rate (as percent) | 4.50% | 4.50% |
Long-term debt | $ 785.9 | $ 785 |
Senior Notes | 4.75% Senior Notes due 2030 | ||
Schedule of Outstanding Long-term Debt | ||
Debt instrument interest rate (as percent) | 4.75% | 4.75% |
Long-term debt | $ 782.2 | $ 781.5 |
Senior Notes | 4.625% Senior Notes due 2031 | ||
Schedule of Outstanding Long-term Debt | ||
Debt instrument interest rate (as percent) | 4.625% | 4.625% |
Long-term debt | $ 391.8 | $ 391.5 |
Other notes payable | ||
Schedule of Outstanding Long-term Debt | ||
Long-term debt | 64.8 | 66 |
Advances under revolving credit facility | Line of credit | Credit Agreement | ||
Schedule of Outstanding Long-term Debt | ||
Long-term debt | $ 0 | $ 0 |
Long-term Debt - Principal Paym
Long-term Debt - Principal Payments Due on Long-term Debt (Details) $ in Millions | Mar. 31, 2024 USD ($) |
Face Amount | |
Long-term Debt by Maturity | |
April 1 through December 31, 2024 | $ 19 |
2025 | 381.4 |
2026 | 29.2 |
2027 | 43.2 |
2028 | 831.7 |
2029 | 40.5 |
Thereafter | 1,404.8 |
Total | 2,749.8 |
Net Amount | |
Long-term Debt by Maturity | |
April 1 through December 31, 2024 | 19 |
2025 | 380.2 |
2026 | 29.2 |
2027 | 43.2 |
2028 | 817.6 |
2029 | 40.5 |
Thereafter | 1,378.5 |
Total | $ 2,708.2 |
Redeemable Noncontrolling Int_3
Redeemable Noncontrolling Interests - Redeemable Noncontrolling Interests Activity (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2024 | Mar. 31, 2023 | |
Redeemable Noncontrolling Interest, Equity, Carrying Amount [Roll Forward] | ||
Balance at beginning of period | $ 42 | |
Net income attributable to noncontrolling interests | 1.5 | $ 2.1 |
Distributions declared | (30.5) | (31.2) |
Balance at end of period | 41.1 | |
Redeemable Noncontrolling Interest | ||
Redeemable Noncontrolling Interest, Equity, Carrying Amount [Roll Forward] | ||
Balance at beginning of period | 42 | 35.6 |
Net income attributable to noncontrolling interests | 1.5 | 2.1 |
Distributions declared | (2.4) | (0.2) |
Balance at end of period | $ 41.1 | $ 37.5 |
Redeemable Noncontrolling Int_4
Redeemable Noncontrolling Interests - Reconciliation of Noncontrolling Interests (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2024 | Mar. 31, 2023 | |
Noncontrolling Interest [Abstract] | ||
Net income attributable to nonredeemable noncontrolling interests | $ 24.8 | $ 23.5 |
Net income attributable to redeemable noncontrolling interests | 1.5 | 2.1 |
Net income attributable to noncontrolling interests | $ 26.3 | $ 25.6 |
Fair Value Measurements - Fair
Fair Value Measurements - Fair Value, Assets and Liabilities Measured on a Recurring Basis (Details) - Recurring - USD ($) $ in Millions | Mar. 31, 2024 | Dec. 31, 2023 |
Fair Value, Assets and Liabilities Measured on Recurring Basis [Abstract] | ||
Equity securities | $ 113 | $ 126.2 |
Redeemable noncontrolling interests | 41.1 | 42 |
Other Current Assets | ||
Fair Value, Assets and Liabilities Measured on Recurring Basis [Abstract] | ||
Equity securities | 35.8 | 37.6 |
Other Noncurrent Assets | ||
Fair Value, Assets and Liabilities Measured on Recurring Basis [Abstract] | ||
Equity securities | 77.2 | 88.6 |
Quoted Prices in Active Markets for Identical Assets (Level 1) | ||
Fair Value, Assets and Liabilities Measured on Recurring Basis [Abstract] | ||
Equity securities | 4.1 | 4 |
Redeemable noncontrolling interests | 0 | 0 |
Significant Other Observable Inputs (Level 2) | ||
Fair Value, Assets and Liabilities Measured on Recurring Basis [Abstract] | ||
Equity securities | 108.9 | 122.2 |
Redeemable noncontrolling interests | 0 | 0 |
Significant Unobservable Inputs (Level 3) | ||
Fair Value, Assets and Liabilities Measured on Recurring Basis [Abstract] | ||
Equity securities | 0 | 0 |
Redeemable noncontrolling interests | $ 41.1 | $ 42 |
Fair Value Measurements - Addit
Fair Value Measurements - Additional Information (Details) $ in Millions | 3 Months Ended |
Mar. 31, 2024 USD ($) | |
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 |
Fair Value Measurements - Carry
Fair Value Measurements - Carrying Amounts and Estimated Fair Values, Financial Instruments (Details) - USD ($) $ in Millions | Mar. 31, 2024 | Dec. 31, 2023 |
Senior Notes | 5.75% Senior Notes due 2025 | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Debt instrument interest rate (as 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 | $ 348.7 | $ 348.5 |
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 | $ 349.8 | $ 349.3 |
Senior Notes | 4.50% Senior Notes due 2028 | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Debt instrument interest rate (as 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 | $ 785.9 | $ 785 |
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 | $ 760 | $ 763.6 |
Senior Notes | 4.75% Senior Notes due 2030 | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Debt instrument interest rate (as 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 | $ 782.2 | $ 781.5 |
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 | $ 750.7 | $ 755 |
Senior Notes | 4.625% Senior Notes due 2031 | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Debt instrument interest rate (as 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 | $ 391.8 | $ 391.5 |
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 | 364.9 | 369.4 |
Other notes payable | Carrying Amount | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Carrying amounts and estimated fair values of financial instruments | 64.8 | 66 |
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 | 64.8 | 66 |
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 | $ 36.3 | $ 31.9 |
Share-Based Payments (Details)
Share-Based Payments (Details) shares in Millions | 3 Months Ended |
Mar. 31, 2024 shares | |
Restricted Stock | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Restricted stock awards issued (in shares) | 0.5 |
Restricted Stock | Service Condition | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Restricted stock awards issued (in shares) | 0.2 |
Restricted Stock | Service and Performance Condition | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Performance measurement period (in years) | 3 years |
Restricted Stock | Service and Market Condition | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Performance measurement period (in years) | 3 years |
Stock Options | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Stock options granted (in shares) | 0.1 |
Income Taxes (Details)
Income Taxes (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2024 | Mar. 31, 2023 | |
Income Tax Disclosure [Abstract] | ||
Provision for income taxes | $ 38.3 | $ 31.9 |
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 | |
Mar. 31, 2024 | Mar. 31, 2023 | |
Numerator: | ||
Income from continuing operations | $ 140.1 | $ 114.3 |
Less: Net income attributable to noncontrolling interests included in continuing operations | (26.3) | (25.6) |
Less: Income allocated to participating securities | (0.8) | (0.6) |
Income from continuing operations attributable to Encompass Health common shareholders | 113 | 88.1 |
Loss from discontinued operations attributable to Encompass Health common shareholders | (1.3) | (1) |
Net income attributable to Encompass Health common shareholders | $ 111.7 | $ 87.1 |
Denominator: | ||
Basic weighted average common shares outstanding (in shares) | 99.8 | 99.4 |
Basic earnings per share attributable to Encompass Health common shareholders: | ||
Continuing operations (in dollars per share) | $ 1.13 | $ 0.89 |
Discontinued operations (in dollars per share) | (0.01) | (0.01) |
Net income (in dollars per share) | $ 1.12 | $ 0.88 |
Numerator: | ||
Income from continuing operations | $ 140.1 | $ 114.3 |
Less: Net income attributable to noncontrolling interests included in continuing operations | (26.3) | (25.6) |
Income from continuing operations attributable to Encompass Health common shareholders | 113.8 | 88.7 |
Loss from discontinued operations attributable to Encompass Health common shareholders | (1.3) | (1) |
Net income attributable to Encompass Health common shareholders | $ 112.5 | $ 87.7 |
Denominator: | ||
Diluted weighted average common shares outstanding (in shares) | 102.2 | 100.9 |
Diluted earnings per share attributable to Encompass Health common shareholders: | ||
Continuing operations (in dollars per share) | $ 1.11 | $ 0.88 |
Discontinued operations (in dollars per share) | (0.01) | (0.01) |
Net income (in dollars per share) | $ 1.10 | $ 0.87 |
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 | |
Mar. 31, 2024 | Mar. 31, 2023 | |
Earnings Per Share [Abstract] | ||
Basic weighted average common shares outstanding (in shares) | 99.8 | 99.4 |
Restricted stock awards, dilutive stock options, and restricted stock units (in shares) | 2.4 | 1.5 |
Diluted weighted average common shares outstanding (in shares) | 102.2 | 100.9 |
Contingencies and Other Commi_2
Contingencies and Other Commitments (Details) $ in Millions | Mar. 31, 2024 USD ($) |
Commitments and Contingencies Disclosure [Abstract] | |
Remainder of 2024 | $ 43.1 |
2025 | 33.2 |
2026 | 24.7 |
2027 | 23.3 |
2028 | 21.9 |
Thereafter | $ 62.3 |