☒ | QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
☐ | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
Delaware | 63-0860407 | ||||
(State or Other Jurisdiction of Incorporation or Organization) | (I.R.S. Employer Identification No.) | ||||
Title of each class | Trading Symbol(s) | Name of each exchange on which registered | ||||||
Common Stock, par value $0.01 per share | EHC | New York Stock Exchange |
Large accelerated filer | ☒ | Accelerated filer | ☐ | Non-Accelerated filer | ☐ | ||||||||||||
Smaller reporting company | ☐ | Emerging growth company | ☐ |
Page | ||||||||
Three Months Ended June 30, | Six Months Ended June 30, | Three Months Ended March 31, | ||||||||||||||||||||||||||||||||||||
2020 | 2019 | 2020 | 2019 | 2021 | 2020 | |||||||||||||||||||||||||||||||||
(In Millions, Except Per Share Data) | (In Millions, Except Per Share Data) | |||||||||||||||||||||||||||||||||||||
Net operating revenues | $ | 1,074.1 | $ | 1,135.0 | $ | 2,256.1 | $ | 2,259.0 | Net operating revenues | $ | 1,230.4 | $ | 1,182.0 | |||||||||||||||||||||||||
Operating expenses: | Operating expenses: | |||||||||||||||||||||||||||||||||||||
Salaries and benefits | 651.9 | 622.9 | 1,331.0 | 1,243.7 | Salaries and benefits | 687.2 | 679.1 | |||||||||||||||||||||||||||||||
Other operating expenses | 148.3 | 149.8 | 307.9 | 299.9 | Other operating expenses | 162.3 | 159.6 | |||||||||||||||||||||||||||||||
Occupancy costs | 20.3 | 20.3 | 40.5 | 39.9 | Occupancy costs | 20.2 | 20.2 | |||||||||||||||||||||||||||||||
Supplies | 50.6 | 41.7 | 96.3 | 81.8 | Supplies | 51.9 | 45.7 | |||||||||||||||||||||||||||||||
General and administrative expenses | 43.0 | 77.1 | 78.6 | 130.5 | General and administrative expenses | 38.6 | 35.6 | |||||||||||||||||||||||||||||||
Depreciation and amortization | 60.7 | 52.7 | 119.5 | 105.2 | Depreciation and amortization | 62.5 | 58.8 | |||||||||||||||||||||||||||||||
Government, class action, and related settlements | — | — | 2.8 | — | Government, class action, and related settlements | 0 | 2.8 | |||||||||||||||||||||||||||||||
Total operating expenses | 974.8 | 964.5 | 1,976.6 | 1,901.0 | Total operating expenses | 1,022.7 | 1,001.8 | |||||||||||||||||||||||||||||||
Loss on early extinguishment of debt | — | 2.3 | — | 2.3 | ||||||||||||||||||||||||||||||||||
Interest expense and amortization of debt discounts and fees | 45.8 | 37.7 | 89.0 | 74.9 | Interest expense and amortization of debt discounts and fees | 42.8 | 43.2 | |||||||||||||||||||||||||||||||
Other income | (5.8 | ) | (2.2 | ) | (3.9 | ) | (5.9 | ) | ||||||||||||||||||||||||||||||
Other (income) expense | Other (income) expense | (1.4) | 1.9 | |||||||||||||||||||||||||||||||||||
Equity in net income of nonconsolidated affiliates | (0.7 | ) | (1.8 | ) | (1.5 | ) | (4.3 | ) | Equity in net income of nonconsolidated affiliates | (1.0) | (0.8) | |||||||||||||||||||||||||||
Income from continuing operations before income tax expense | 60.0 | 134.5 | 195.9 | 291.0 | Income from continuing operations before income tax expense | 167.3 | 135.9 | |||||||||||||||||||||||||||||||
Provision for income tax expense | 11.8 | 23.5 | 38.9 | 54.3 | Provision for income tax expense | 34.5 | 27.1 | |||||||||||||||||||||||||||||||
Income from continuing operations | 48.2 | 111.0 | 157.0 | 236.7 | Income from continuing operations | 132.8 | 108.8 | |||||||||||||||||||||||||||||||
Income (loss) from discontinued operations, net of tax | 0.1 | (0.1 | ) | — | (0.6 | ) | ||||||||||||||||||||||||||||||||
Loss from discontinued operations, net of tax | Loss from discontinued operations, net of tax | 0 | (0.1) | |||||||||||||||||||||||||||||||||||
Net and comprehensive income | 48.3 | 110.9 | 157.0 | 236.1 | Net and comprehensive income | 132.8 | 108.7 | |||||||||||||||||||||||||||||||
Less: Net and comprehensive income attributable to noncontrolling interests | (14.8 | ) | (19.7 | ) | (36.5 | ) | (42.6 | ) | Less: Net and comprehensive income attributable to noncontrolling interests | (25.5) | (21.7) | |||||||||||||||||||||||||||
Net and comprehensive income attributable to Encompass Health | $ | 33.5 | $ | 91.2 | $ | 120.5 | $ | 193.5 | Net and comprehensive income attributable to Encompass Health | $ | 107.3 | $ | 87.0 | |||||||||||||||||||||||||
Weighted average common shares outstanding: | Weighted average common shares outstanding: | |||||||||||||||||||||||||||||||||||||
Basic | 98.7 | 98.0 | 98.5 | 98.2 | Basic | 99.0 | 98.2 | |||||||||||||||||||||||||||||||
Diluted | 99.9 | 99.3 | 99.6 | 99.5 | Diluted | 100.2 | 99.6 | |||||||||||||||||||||||||||||||
Earnings per common share: | Earnings per common share: | |||||||||||||||||||||||||||||||||||||
Basic earnings per share attributable to Encompass Health common shareholders: | Basic earnings per share attributable to Encompass Health common shareholders: | |||||||||||||||||||||||||||||||||||||
Continuing operations | $ | 0.34 | $ | 0.93 | $ | 1.22 | $ | 1.97 | Continuing operations | $ | 1.08 | $ | 0.88 | |||||||||||||||||||||||||
Discontinued operations | — | — | — | (0.01 | ) | Discontinued operations | 0 | 0 | ||||||||||||||||||||||||||||||
Net income | $ | 0.34 | $ | 0.93 | $ | 1.22 | $ | 1.96 | Net income | $ | 1.08 | $ | 0.88 | |||||||||||||||||||||||||
Diluted earnings per share attributable to Encompass Health common shareholders: | Diluted earnings per share attributable to Encompass Health common shareholders: | |||||||||||||||||||||||||||||||||||||
Continuing operations | $ | 0.34 | $ | 0.92 | $ | 1.21 | $ | 1.95 | Continuing operations | $ | 1.07 | $ | 0.87 | |||||||||||||||||||||||||
Discontinued operations | — | — | — | (0.01 | ) | Discontinued operations | 0 | 0 | ||||||||||||||||||||||||||||||
Net income | $ | 0.34 | $ | 0.92 | $ | 1.21 | $ | 1.94 | Net income | $ | 1.07 | $ | 0.87 | |||||||||||||||||||||||||
Amounts attributable to Encompass Health common shareholders: | Amounts attributable to Encompass Health common shareholders: | |||||||||||||||||||||||||||||||||||||
Income from continuing operations | $ | 33.4 | $ | 91.3 | $ | 120.5 | $ | 194.1 | Income from continuing operations | $ | 107.3 | $ | 87.1 | |||||||||||||||||||||||||
Income (loss) from discontinued operations, net of tax | 0.1 | (0.1 | ) | — | (0.6 | ) | ||||||||||||||||||||||||||||||||
Loss from discontinued operations, net of tax | Loss from discontinued operations, net of tax | 0 | (0.1) | |||||||||||||||||||||||||||||||||||
Net income attributable to Encompass Health | $ | 33.5 | $ | 91.2 | $ | 120.5 | $ | 193.5 | Net income attributable to Encompass Health | $ | 107.3 | $ | 87.0 |
March 31, 2021 | December 31, 2020 | ||||||||||
(In Millions) | |||||||||||
Assets | |||||||||||
Current assets: | |||||||||||
Cash and cash equivalents | $ | 223.9 | $ | 224.0 | |||||||
Restricted cash | 62.2 | 65.4 | |||||||||
Accounts receivable | 633.6 | 572.8 | |||||||||
Other current assets | 81.4 | 86.4 | |||||||||
Total current assets | 1,001.1 | 948.6 | |||||||||
Property and equipment, net | 2,280.5 | 2,206.6 | |||||||||
Operating lease right-of-use assets | 248.3 | 245.7 | |||||||||
Goodwill | 2,318.7 | 2,318.7 | |||||||||
Intangible assets, net | 419.2 | 431.3 | |||||||||
Other long-term assets | 274.4 | 295.0 | |||||||||
Total assets(1) | $ | 6,542.2 | $ | 6,445.9 | |||||||
Liabilities and Shareholders’ Equity | |||||||||||
Current liabilities: | |||||||||||
Current portion of long-term debt | $ | 137.2 | $ | 38.3 | |||||||
Current operating lease liabilities | 44.2 | 44.8 | |||||||||
Accounts payable | 122.8 | 115.0 | |||||||||
Accrued expenses and other current liabilities | 508.0 | 519.2 | |||||||||
Total current liabilities | 812.2 | 717.3 | |||||||||
Long-term debt, net of current portion | 3,160.0 | 3,250.6 | |||||||||
Long-term operating lease liabilities | 214.2 | 209.6 | |||||||||
Deferred income tax liabilities | 60.6 | 51.8 | |||||||||
Other long-term liabilities | 220.5 | 215.0 | |||||||||
4,467.5 | 4,444.3 | ||||||||||
Commitments and contingencies | 0 | 0 | |||||||||
Redeemable noncontrolling interests | 31.7 | 31.6 | |||||||||
Shareholders’ equity: | |||||||||||
Encompass Health shareholders’ equity | 1,655.1 | 1,588.0 | |||||||||
Noncontrolling interests | 387.9 | 382.0 | |||||||||
Total shareholders’ equity | 2,043.0 | 1,970.0 | |||||||||
Total liabilities(1) and shareholders’ equity | $ | 6,542.2 | $ | 6,445.9 |
June 30, 2020 | December 31, 2019 | ||||||
(In Millions) | |||||||
Assets | |||||||
Current assets: | |||||||
Cash and cash equivalents | $ | 419.0 | $ | 94.8 | |||
Restricted cash | 56.4 | 57.4 | |||||
Accounts receivable | 553.2 | 506.1 | |||||
Other current assets | 73.1 | 97.5 | |||||
Total current assets | 1,101.7 | 755.8 | |||||
Property and equipment, net | 2,041.4 | 1,959.3 | |||||
Operating lease right-of-use assets | 268.5 | 276.5 | |||||
Goodwill | 2,318.7 | 2,305.2 | |||||
Intangible assets, net | 455.8 | 476.3 | |||||
Deferred income tax assets | 11.1 | 2.9 | |||||
Other long-term assets | 305.3 | 304.7 | |||||
Total assets(1) | $ | 6,502.5 | $ | 6,080.7 | |||
Liabilities and Shareholders’ Equity | |||||||
Current liabilities: | |||||||
Current portion of long-term debt | $ | 36.9 | $ | 39.3 | |||
Current operating lease liabilities | 42.2 | 40.4 | |||||
Accounts payable | 93.1 | 94.6 | |||||
Accrued expenses and other current liabilities | 492.2 | 546.7 | |||||
Total current liabilities | 664.4 | 721.0 | |||||
Long-term debt, net of current portion | 3,546.7 | 3,023.3 | |||||
Long-term operating lease liabilities | 234.9 | 243.8 | |||||
Other long-term liabilities | 191.7 | 159.9 | |||||
4,637.7 | 4,148.0 | ||||||
Commitments and contingencies | |||||||
Redeemable noncontrolling interests | 33.4 | 239.6 | |||||
Shareholders’ equity: | |||||||
Encompass Health shareholders’ equity | 1,462.8 | 1,352.2 | |||||
Noncontrolling interests | 368.6 | 340.9 | |||||
Total shareholders’ equity | 1,831.4 | 1,693.1 | |||||
Total liabilities(1) and shareholders’ equity | $ | 6,502.5 | $ | 6,080.7 |
Three Months Ended March 31, 2021 | |||||||||||||||||||||||||||||||||||||||||||||||
(In Millions) | |||||||||||||||||||||||||||||||||||||||||||||||
Encompass Health Common Shareholders | |||||||||||||||||||||||||||||||||||||||||||||||
Number of Common Shares Outstanding | Common Stock | Capital in Excess of Par Value | Accumulated Deficit | Treasury Stock | Noncontrolling Interests | Total | |||||||||||||||||||||||||||||||||||||||||
Balance at beginning of period | 99.4 | $ | 1.1 | $ | 2,326.6 | $ | (242.3) | $ | (497.4) | $ | 382.0 | $ | 1,970.0 | ||||||||||||||||||||||||||||||||||
Net income | — | — | — | 107.3 | — | 23.1 | 130.4 | ||||||||||||||||||||||||||||||||||||||||
Receipt of treasury stock | (0.2) | — | — | — | (15.6) | — | (15.6) | ||||||||||||||||||||||||||||||||||||||||
Dividends declared ($0.28 per share) | — | — | (27.8) | — | — | — | (27.8) | ||||||||||||||||||||||||||||||||||||||||
Stock-based compensation | — | — | 2.8 | — | — | — | 2.8 | ||||||||||||||||||||||||||||||||||||||||
Distributions declared | — | — | — | — | — | (22.4) | (22.4) | ||||||||||||||||||||||||||||||||||||||||
Capital contributions from consolidated affiliates | — | — | — | — | — | 5.8 | 5.8 | ||||||||||||||||||||||||||||||||||||||||
Other | 0.4 | — | 1.1 | — | (0.7) | (0.6) | (0.2) | ||||||||||||||||||||||||||||||||||||||||
Balance at end of period | 99.6 | $ | 1.1 | $ | 2,302.7 | $ | (135.0) | $ | (513.7) | $ | 387.9 | $ | 2,043.0 |
Three Months Ended March 31, 2020 | |||||||||||||||||||||||||||||||||||||||||||||||
(In Millions) | |||||||||||||||||||||||||||||||||||||||||||||||
Encompass Health Common Shareholders | |||||||||||||||||||||||||||||||||||||||||||||||
Number of Common Shares Outstanding | Common Stock | Capital in Excess of Par Value | Accumulated Deficit | Treasury Stock | Noncontrolling Interests | Total | |||||||||||||||||||||||||||||||||||||||||
Balance at beginning of period | 98.6 | $ | 1.1 | $ | 2,369.9 | $ | (526.5) | $ | (492.3) | $ | 340.9 | $ | 1,693.1 | ||||||||||||||||||||||||||||||||||
Net income | — | — | — | 87.0 | — | 19.7 | 106.7 | ||||||||||||||||||||||||||||||||||||||||
Receipt of treasury stock | (0.2) | — | — | — | (15.6) | — | (15.6) | ||||||||||||||||||||||||||||||||||||||||
Dividends declared ($0.28 per share) | — | — | (27.9) | — | — | — | (27.9) | ||||||||||||||||||||||||||||||||||||||||
Exchange of Holdings shares | 0.6 | — | 27.1 | — | 19.2 | — | 46.3 | ||||||||||||||||||||||||||||||||||||||||
Stock-based compensation | — | — | 7.1 | — | — | — | 7.1 | ||||||||||||||||||||||||||||||||||||||||
Distributions declared | — | — | — | — | — | (15.5) | (15.5) | ||||||||||||||||||||||||||||||||||||||||
Capital contributions from consolidated affiliates | — | — | — | — | — | 5.8 | 5.8 | ||||||||||||||||||||||||||||||||||||||||
Repurchases of common stock in open market | (0.1) | — | — | — | (4.9) | — | (4.9) | ||||||||||||||||||||||||||||||||||||||||
Other | 0.5 | — | 0 | — | (0.3) | 2.4 | 2.1 | ||||||||||||||||||||||||||||||||||||||||
Balance at end of period | 99.4 | $ | 1.1 | $ | 2,376.2 | $ | (439.5) | $ | (493.9) | $ | 353.3 | $ | 1,797.2 | ||||||||||||||||||||||||||||||||||
Three Months Ended June 30, 2020 | ||||||||||||||||||||||||||
(In Millions) | ||||||||||||||||||||||||||
Encompass Health Common Shareholders | ||||||||||||||||||||||||||
Number of Common Shares Outstanding | Common Stock | Capital in Excess of Par Value | Accumulated Deficit | Treasury Stock | Noncontrolling Interests | Total | ||||||||||||||||||||
Balance at beginning of period | 99.4 | $ | 1.1 | $ | 2,376.2 | $ | (439.5 | ) | $ | (493.9 | ) | $ | 353.3 | $ | 1,797.2 | |||||||||||
Net income | — | — | — | 33.5 | — | 13.3 | 46.8 | |||||||||||||||||||
Receipt of treasury stock | — | — | — | — | (0.1 | ) | — | (0.1 | ) | |||||||||||||||||
Dividends declared ($0.28 per share) | — | — | (28.0 | ) | — | — | — | (28.0 | ) | |||||||||||||||||
Stock-based compensation | — | — | 9.9 | — | — | — | 9.9 | |||||||||||||||||||
Distributions declared | — | — | — | — | — | (13.6 | ) | (13.6 | ) | |||||||||||||||||
Capital contributions from consolidated affiliates | — | — | — | — | — | 18.9 | 18.9 | |||||||||||||||||||
Other | — | — | 4.3 | — | (0.7 | ) | (3.3 | ) | 0.3 | |||||||||||||||||
Balance at end of period | 99.4 | $ | 1.1 | $ | 2,362.4 | $ | (406.0 | ) | $ | (494.7 | ) | $ | 368.6 | $ | 1,831.4 |
Three Months Ended June 30, 2019 | ||||||||||||||||||||||||||
(In Millions) | ||||||||||||||||||||||||||
Encompass Health Common Shareholders | ||||||||||||||||||||||||||
Number of Common Shares Outstanding | Common Stock | Capital in Excess of Par Value | Accumulated Deficit | Treasury Stock | Noncontrolling Interests | Total | ||||||||||||||||||||
Balance at beginning of period | 99.1 | $ | 1.1 | $ | 2,551.3 | $ | (782.9 | ) | $ | (455.2 | ) | $ | 302.2 | $ | 1,616.5 | |||||||||||
Net income | — | — | — | 91.2 | — | 17.3 | 108.5 | |||||||||||||||||||
Receipt of treasury stock | — | — | — | — | (0.2 | ) | — | (0.2 | ) | |||||||||||||||||
Dividends declared ($0.27 per share) | — | — | (26.8 | ) | — | — | — | (26.8 | ) | |||||||||||||||||
Stock-based compensation | — | — | 9.3 | — | — | — | 9.3 | |||||||||||||||||||
Distributions declared | — | — | — | — | — | (17.3 | ) | (17.3 | ) | |||||||||||||||||
Capital contributions from consolidated affiliates | — | — | — | — | — | 5.7 | 5.7 | |||||||||||||||||||
Fair value adjustments to redeemable noncontrolling interests | — | — | (80.4 | ) | — | — | — | (80.4 | ) | |||||||||||||||||
Repurchases of common stock in open market | (0.5 | ) | — | — | — | (32.8 | ) | — | (32.8 | ) | ||||||||||||||||
Other | — | — | 2.2 | — | (0.9 | ) | — | 1.3 | ||||||||||||||||||
Balance at end of period | 98.6 | $ | 1.1 | $ | 2,455.6 | $ | (691.7 | ) | $ | (489.1 | ) | $ | 307.9 | $ | 1,583.8 |
Three Months Ended March 31, | |||||||||||
2021 | 2020 | ||||||||||
(In Millions) | |||||||||||
Cash flows from operating activities: | |||||||||||
Net income | $ | 132.8 | $ | 108.7 | |||||||
Loss from discontinued operations, net of tax | 0 | 0.1 | |||||||||
Adjustments to reconcile net income to net cash provided by operating activities— | |||||||||||
Depreciation and amortization | 62.5 | 58.8 | |||||||||
Stock-based compensation | 2.8 | 7.1 | |||||||||
Deferred tax expense | 8.7 | 1.4 | |||||||||
Other, net | 2.0 | 7.7 | |||||||||
Change in assets and liabilities, net of acquisitions— | |||||||||||
Accounts receivable | (55.1) | (36.6) | |||||||||
Other assets | 1.3 | 15.8 | |||||||||
Accrued payroll | 5.7 | (24.0) | |||||||||
Other liabilities | (2.2) | (109.6) | |||||||||
Net cash used in operating activities of discontinued operations | 0 | (0.1) | |||||||||
Total adjustments | 25.7 | (79.5) | |||||||||
Net cash provided by operating activities | 158.5 | 29.3 | |||||||||
Cash flows from investing activities: | |||||||||||
Acquisitions of businesses, net of cash acquired | 0 | (1.1) | |||||||||
Purchases of property and equipment | (98.8) | (83.5) | |||||||||
Other, net | 3.2 | 1.6 | |||||||||
Net cash used in investing activities | (95.6) | (83.0) | |||||||||
Cash flows from financing activities: | |||||||||||
Borrowings on revolving credit facility | 0 | 330.0 | |||||||||
Payments on revolving credit facility | 0 | (25.0) | |||||||||
Taxes paid on behalf of employees for shares withheld | (15.6) | (15.6) | |||||||||
Dividends paid on common stock | (29.1) | (29.0) | |||||||||
Distributions paid to noncontrolling interests of consolidated affiliates | (27.8) | (19.1) | |||||||||
Purchase of equity interests in consolidated affiliates | 0 | (162.3) | |||||||||
Other, net | (5.0) | (7.9) | |||||||||
Net cash (used in) provided by financing activities | (77.5) | 71.1 | |||||||||
(Decrease) increase in cash, cash equivalents, and restricted cash | (14.6) | 17.4 | |||||||||
Cash, cash equivalents, and restricted cash at beginning of period | 310.9 | 159.6 | |||||||||
Cash, cash equivalents, and restricted cash at end of period | $ | 296.3 | $ | 177.0 | |||||||
Reconciliation of Cash, Cash Equivalents, and Restricted Cash | |||||||||||
Cash and cash equivalents at beginning of period | $ | 224.0 | $ | 94.8 | |||||||
Restricted cash at beginning of period | 65.4 | 57.4 | |||||||||
Restricted cash included in other long-term assets at beginning of period | 21.5 | 7.4 | |||||||||
Cash, cash equivalents, and restricted cash at beginning of period | $ | 310.9 | $ | 159.6 | |||||||
Cash and cash equivalents at end of period | $ | 223.9 | $ | 104.9 | |||||||
Restricted cash at end of period | 62.2 | 56.7 | |||||||||
Restricted cash included in other long-term assets at end of period | 10.2 | 15.4 | |||||||||
Cash, cash equivalents, and restricted cash at end of period | $ | 296.3 | $ | 177.0 | |||||||
Six Months Ended June 30, 2020 | ||||||||||||||||||||||||||
(In Millions) | ||||||||||||||||||||||||||
Encompass Health Common Shareholders | ||||||||||||||||||||||||||
Number of Common Shares Outstanding | Common Stock | Capital in Excess of Par Value | Accumulated Deficit | Treasury Stock | Noncontrolling Interests | Total | ||||||||||||||||||||
Balance at beginning of period | 98.6 | $ | 1.1 | $ | 2,369.9 | $ | (526.5 | ) | $ | (492.3 | ) | $ | 340.9 | $ | 1,693.1 | |||||||||||
Net income | — | — | — | 120.5 | — | 33.0 | 153.5 | |||||||||||||||||||
Receipt of treasury stock | (0.2 | ) | — | — | — | (15.7 | ) | — | (15.7 | ) | ||||||||||||||||
Dividends declared ($0.56 per share) | — | — | (55.9 | ) | — | — | — | (55.9 | ) | |||||||||||||||||
Exchange of Holding shares | 0.6 | — | 27.1 | — | 19.2 | — | 46.3 | |||||||||||||||||||
Stock-based compensation | — | — | 17.0 | — | — | — | 17.0 | |||||||||||||||||||
Distributions declared | — | — | — | — | — | (29.1 | ) | (29.1 | ) | |||||||||||||||||
Capital contributions from consolidated affiliates | — | — | — | — | — | 24.7 | 24.7 | |||||||||||||||||||
Repurchases of common stock in open market | (0.1 | ) | — | — | — | (4.9 | ) | — | (4.9 | ) | ||||||||||||||||
Other | 0.5 | — | 4.3 | — | (1.0 | ) | (0.9 | ) | 2.4 | |||||||||||||||||
Balance at end of period | 99.4 | $ | 1.1 | $ | 2,362.4 | $ | (406.0 | ) | $ | (494.7 | ) | $ | 368.6 | $ | 1,831.4 |
Six Months Ended June 30, 2019 | ||||||||||||||||||||||||||
(In Millions) | ||||||||||||||||||||||||||
Encompass Health Common Shareholders | ||||||||||||||||||||||||||
Number of Common Shares Outstanding | Common Stock | Capital in Excess of Par Value | Accumulated Deficit | Treasury Stock | Noncontrolling Interests | Total | ||||||||||||||||||||
Balance at beginning of period | 98.9 | $ | 1.1 | $ | 2,588.7 | $ | (885.2 | ) | $ | (427.9 | ) | $ | 280.3 | $ | 1,557.0 | |||||||||||
Net income | — | — | — | 193.5 | — | 36.2 | 229.7 | |||||||||||||||||||
Receipt of treasury stock | (0.3 | ) | — | — | — | (16.1 | ) | — | (16.1 | ) | ||||||||||||||||
Dividends declared ($0.54 per share) | — | — | (53.7 | ) | — | — | — | (53.7 | ) | |||||||||||||||||
Stock-based compensation | — | — | 16.3 | — | — | — | 16.3 | |||||||||||||||||||
Distributions declared | — | — | — | — | — | (32.6 | ) | (32.6 | ) | |||||||||||||||||
Capital contributions from consolidated affiliates | — | — | — | — | — | 12.8 | 12.8 | |||||||||||||||||||
Fair value adjustments to redeemable noncontrolling interests | — | — | (100.7 | ) | — | — | — | (100.7 | ) | |||||||||||||||||
Repurchases of common stock in open market | (0.7 | ) | — | — | — | (43.8 | ) | — | (43.8 | ) | ||||||||||||||||
Other | 0.7 | — | 5.0 | — | (1.3 | ) | 11.2 | 14.9 | ||||||||||||||||||
Balance at end of period | 98.6 | $ | 1.1 | $ | 2,455.6 | $ | (691.7 | ) | $ | (489.1 | ) | $ | 307.9 | $ | 1,583.8 |
Six Months Ended June 30, | |||||||
2020 | 2019 | ||||||
(In Millions) | |||||||
Cash flows from operating activities: | |||||||
Net income | $ | 157.0 | $ | 236.1 | |||
Loss from discontinued operations, net of tax | — | 0.6 | |||||
Adjustments to reconcile net income to net cash provided by operating activities— | |||||||
Depreciation and amortization | 119.5 | 105.2 | |||||
Stock-based compensation | 17.0 | 65.3 | |||||
Deferred tax (benefit) expense | (9.1 | ) | 0.5 | ||||
Other, net | 7.8 | 3.8 | |||||
Change in assets and liabilities, net of acquisitions— | |||||||
Accounts receivable | (38.5 | ) | (22.6 | ) | |||
Other assets | 20.0 | (11.8 | ) | ||||
Accounts payable | (0.4 | ) | (4.5 | ) | |||
Accrued payroll | 58.4 | (7.7 | ) | ||||
Other liabilities | (80.0 | ) | (55.1 | ) | |||
Net cash used in operating activities of discontinued operations | (0.1 | ) | (4.5 | ) | |||
Total adjustments | 94.6 | 68.6 | |||||
Net cash provided by operating activities | 251.6 | 305.3 | |||||
Cash flows from investing activities: | |||||||
Purchases of property and equipment | (166.6 | ) | (155.8 | ) | |||
Additions to capitalized software costs | (4.4 | ) | (6.6 | ) | |||
Acquisitions of businesses, net of cash acquired | (1.1 | ) | (13.7 | ) | |||
Other, net | (3.0 | ) | (15.5 | ) | |||
Net cash used in investing activities | (175.1 | ) | (191.6 | ) | |||
Six Months Ended June 30, | |||||||
2020 | 2019 | ||||||
(In Millions) | |||||||
Cash flows from financing activities: | |||||||
Proceeds from bond issuance | 592.5 | — | |||||
Principal payments on debt, including pre-payments | (11.0 | ) | (112.1 | ) | |||
Borrowings on revolving credit facility | 330.0 | 400.0 | |||||
Payments on revolving credit facility | (375.0 | ) | (95.0 | ) | |||
Principal payments under finance lease obligations | (10.9 | ) | (9.3 | ) | |||
Repurchases of common stock, including fees and expenses | (4.9 | ) | (43.8 | ) | |||
Dividends paid on common stock | (56.7 | ) | (54.9 | ) | |||
Purchase of equity interests in consolidated affiliates | (162.3 | ) | — | ||||
Distributions paid to noncontrolling interests of consolidated affiliates | (37.4 | ) | (36.5 | ) | |||
Taxes paid on behalf of employees for shares withheld | (15.7 | ) | (16.1 | ) | |||
Other, net | 5.3 | 8.2 | |||||
Net cash provided by financing activities | 253.9 | 40.5 | |||||
Increase in cash, cash equivalents, and restricted cash | 330.4 | 154.2 | |||||
Cash, cash equivalents, and restricted cash at beginning of period | 159.6 | 133.5 | |||||
Cash, cash equivalents, and restricted cash at end of period | $ | 490.0 | $ | 287.7 | |||
Reconciliation of Cash, Cash Equivalents, and Restricted Cash | |||||||
Cash and cash equivalents at beginning of period | $ | 94.8 | $ | 69.2 | |||
Restricted cash at beginning of period | 57.4 | 59.0 | |||||
Restricted cash included in other long-term assets at beginning of period | 7.4 | 5.3 | |||||
Cash, cash equivalents, and restricted cash at beginning of period | $ | 159.6 | $ | 133.5 | |||
Cash and cash equivalents at end of period | $ | 419.0 | $ | 221.7 | |||
Restricted cash at end of period | 56.4 | 56.8 | |||||
Restricted cash included in other long-term assets at end of period | 14.6 | 9.2 | |||||
Cash, cash equivalents, and restricted cash at end of period | $ | 490.0 | $ | 287.7 | |||
Supplemental schedule of noncash financing activity: | |||||||
Adoption of ASC 842 | $ | — | $ | 349.4 |
Inpatient Rehabilitation | Home Health and Hospice | Consolidated | |||||||||||||||||||||
Three Months Ended June 30, | Three Months Ended June 30, | Three Months Ended June 30, | |||||||||||||||||||||
2020 | 2019 | 2020 | 2019 | 2020 | 2019 | ||||||||||||||||||
Medicare | $ | 502.9 | $ | 629.0 | $ | 204.1 | $ | 221.1 | $ | 707.0 | $ | 850.1 | |||||||||||
Medicare Advantage | 166.1 | 97.0 | 29.2 | 26.7 | 195.3 | 123.7 | |||||||||||||||||
Managed care | 88.4 | 86.5 | 11.5 | 8.0 | 99.9 | 94.5 | |||||||||||||||||
Medicaid | 34.7 | 27.1 | 4.1 | 4.6 | 38.8 | 31.7 | |||||||||||||||||
Other third-party payors | 9.3 | 10.5 | — | — | 9.3 | 10.5 | |||||||||||||||||
Workers’ compensation | 4.2 | 6.5 | 0.3 | 0.3 | 4.5 | 6.8 | |||||||||||||||||
Patients | 4.2 | 5.6 | 0.2 | 0.1 | 4.4 | 5.7 | |||||||||||||||||
Other income | 14.7 | 11.7 | 0.2 | 0.3 | 14.9 | 12.0 | |||||||||||||||||
Total | $ | 824.5 | $ | 873.9 | $ | 249.6 | $ | 261.1 | $ | 1,074.1 | $ | 1,135.0 |
Inpatient Rehabilitation | Home Health and Hospice | Consolidated | |||||||||||||||||||||
Six Months Ended June 30, | Six Months Ended June 30, | Six Months Ended June 30, | |||||||||||||||||||||
2020 | 2019 | 2020 | 2019 | 2020 | 2019 | ||||||||||||||||||
Medicare | $ | 1,145.9 | $ | 1,268.4 | $ | 430.4 | $ | 436.1 | $ | 1,576.3 | $ | 1,704.5 | |||||||||||
Medicare Advantage | 277.0 | 181.5 | 58.7 | 52.2 | 335.7 | 233.7 | |||||||||||||||||
Managed care | 178.3 | 170.1 | 23.5 | 16.3 | 201.8 | 186.4 | |||||||||||||||||
Medicaid | 65.2 | 53.4 | 8.4 | 8.9 | 73.6 | 62.3 | |||||||||||||||||
Other third-party payors | 20.3 | 20.5 | — | — | 20.3 | 20.5 | |||||||||||||||||
Workers’ compensation | 11.1 | 14.7 | 0.5 | 0.4 | 11.6 | 15.1 | |||||||||||||||||
Patients | 9.7 | 11.7 | 0.6 | 0.5 | 10.3 | 12.2 | |||||||||||||||||
Other income | 26.2 | 23.7 | 0.3 | 0.6 | 26.5 | 24.3 | |||||||||||||||||
Total | $ | 1,733.7 | $ | 1,744.0 | $ | 522.4 | $ | 515.0 | $ | 2,256.1 | $ | 2,259.0 |
Inpatient Rehabilitation | Home Health and Hospice | Consolidated | |||||||||||||||||||||||||||||||||
Three Months Ended March 31, | Three Months Ended March 31, | Three Months Ended March 31, | |||||||||||||||||||||||||||||||||
2021 | 2020 | 2021 | 2020 | 2021 | 2020 | ||||||||||||||||||||||||||||||
Medicare | $ | 614.5 | $ | 641.9 | $ | 223.9 | $ | 226.2 | $ | 838.4 | $ | 868.1 | |||||||||||||||||||||||
Medicare Advantage | 158.4 | 111.5 | 28.0 | 29.4 | 186.4 | 140.9 | |||||||||||||||||||||||||||||
Managed care | 112.2 | 90.2 | 14.3 | 12.1 | 126.5 | 102.3 | |||||||||||||||||||||||||||||
Medicaid | 39.0 | 30.7 | 3.8 | 4.2 | 42.8 | 34.9 | |||||||||||||||||||||||||||||
Other third-party payors | 12.1 | 11.0 | 0 | 0 | 12.1 | 11.0 | |||||||||||||||||||||||||||||
Workers’ compensation | 5.7 | 6.9 | 0.1 | 0.3 | 5.8 | 7.2 | |||||||||||||||||||||||||||||
Patients | 4.9 | 5.5 | 0.2 | 0.4 | 5.1 | 5.9 | |||||||||||||||||||||||||||||
Other income | 13.1 | 11.5 | 0.2 | 0.2 | 13.3 | 11.7 | |||||||||||||||||||||||||||||
Total | $ | 959.9 | $ | 909.2 | $ | 270.5 | $ | 272.8 | $ | 1,230.4 | $ | 1,182.0 |
Property and equipment, net | $ | 0.1 | |
Identifiable intangible assets: | |||
Noncompete agreements (useful lives of 2 to 3 years) | 0.7 | ||
Trade name (useful life of 20 years) | 0.9 | ||
Goodwill | 9.2 | ||
Total assets acquired | $ | 10.9 |
Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||
2020 | 2019 | 2020 | 2019 | ||||||||||||
Fair value of assets acquired | $ | 1.4 | $ | — | $ | 1.7 | $ | — | |||||||
Goodwill | 6.6 | — | 9.2 | — | |||||||||||
Fair value of noncontrolling interest owned by joint venture partner | (8.0 | ) | — | (10.9 | ) | — | |||||||||
Net cash paid for acquisitions | $ | — | $ | — | $ | — | $ | — |
Identifiable intangible assets: | |||
Licenses (useful lives of 10 years) | $ | 0.1 | |
Goodwill | 1.0 | ||
Total assets acquired | $ | 1.1 |
Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||
2020 | 2019 | 2020 | 2019 | ||||||||||||
Fair value of assets acquired | $ | — | $ | — | $ | 0.1 | $ | 3.2 | |||||||
Goodwill | — | — | 1.0 | 10.8 | |||||||||||
Fair value of liabilities assumed | — | — | — | (0.3 | ) | ||||||||||
Net cash paid for acquisitions | $ | — | $ | — | $ | 1.1 | $ | 13.7 |
Net Operating Revenues | Net Income Attributable to Encompass Health | ||||||
Acquired entities only: Actual from acquisition date to June 30, 2020 | |||||||
Inpatient Rehabilitation | $ | — | $ | — | |||
Home Health and Hospice | 0.6 | — | |||||
Combined entity: Supplemental pro forma from 04/01/2020-06/30/2020 | 1,076.0 | 33.7 | |||||
Combined entity: Supplemental pro forma from 04/01/2019-06/30/2019 | 1,140.3 | 91.7 | |||||
Combined entity: Supplemental pro forma from 01/01/2020-06/30/2020 | 2,262.0 | 121.1 | |||||
Combined entity: Supplemental pro forma from 01/01/2019-06/30/2019 | 2,269.5 | 194.5 |
March 31, 2021 | December 31, 2020 | ||||||||||
Assets | |||||||||||
Current assets: | |||||||||||
Cash and cash equivalents | $ | 0.5 | $ | 0.1 | |||||||
Accounts receivable | 33.7 | 33.1 | |||||||||
Other current assets | 8.5 | 8.6 | |||||||||
Total current assets | 42.7 | 41.8 | |||||||||
Property and equipment, net | 118.7 | 121.1 | |||||||||
Operating lease right-of-use assets | 4.4 | 4.7 | |||||||||
Goodwill | 19.2 | 19.2 | |||||||||
Intangible assets, net | 3.1 | 3.3 | |||||||||
Other long-term assets | 31.1 | 31.1 | |||||||||
Total assets | $ | 219.2 | $ | 221.2 | |||||||
Liabilities | |||||||||||
Current liabilities: | |||||||||||
Current portion of long-term debt | $ | 0.9 | $ | 0.9 | |||||||
Current operating lease liabilities | 1.5 | 1.5 | |||||||||
Accounts payable | 5.9 | 6.1 | |||||||||
Accrued expenses and other current liabilities | 21.7 | 23.0 | |||||||||
Total current liabilities | 30.0 | 31.5 | |||||||||
Long-term debt, net of current portion | 9.4 | 9.6 | |||||||||
Long-term operating lease liabilities | 2.9 | 3.3 | |||||||||
Other long-term liabilities | 2.3 | 2.4 | |||||||||
Total liabilities | $ | 44.6 | $ | 46.8 |
June 30, 2020 | December 31, 2019 | ||||||
Assets | |||||||
Current assets: | |||||||
Cash and cash equivalents | $ | 0.5 | $ | 0.2 | |||
Accounts receivable | 33.0 | 29.3 | |||||
Other current assets | 7.2 | 6.4 | |||||
Total current assets | 40.7 | 35.9 | |||||
Property and equipment, net | 120.6 | 122.6 | |||||
Operating lease right-of-use assets | 5.5 | 6.0 | |||||
Goodwill | 19.2 | 15.9 | |||||
Intangible assets, net | 4.1 | 3.3 | |||||
Other long-term assets | 31.0 | 31.3 | |||||
Total assets | $ | 221.1 | $ | 215.0 | |||
Liabilities | |||||||
Current liabilities: | |||||||
Current portion of long-term debt | $ | 0.9 | $ | 0.8 | |||
Current operating lease liabilities | 1.5 | 1.4 | |||||
Accounts payable | 6.6 | 6.7 | |||||
Accrued expenses and other current liabilities | 17.5 | 17.0 | |||||
Total current liabilities | 26.5 | 25.9 | |||||
Long-term debt, net of current portion | 10.1 | 10.5 | |||||
Long-term operating lease liabilities | 4.0 | 4.7 | |||||
Other long-term liabilities | 1.5 | — | |||||
Total liabilities | $ | 42.1 | $ | 41.1 |
June 30, 2020 | December 31, 2019 | ||||||
Credit Agreement— | |||||||
Advances under revolving credit facility | $ | — | $ | 45.0 | |||
Term loan facilities | 258.0 | 265.2 | |||||
Bonds payable— | |||||||
5.125% Senior Notes due 2023 | 297.7 | 297.3 | |||||
5.75% Senior Notes due 2024 | 697.6 | 697.3 | |||||
5.75% Senior Notes due 2025 | 346.0 | 345.6 | |||||
4.50% Senior Notes due 2028 | 784.1 | 491.7 | |||||
4.75% Senior Notes due 2030 | 782.5 | 491.7 | |||||
Other notes payable | 40.4 | 44.7 | |||||
Finance lease obligations | 377.3 | 384.1 | |||||
3,583.6 | 3,062.6 | ||||||
Less: Current portion | (36.9 | ) | (39.3 | ) | |||
Long-term debt, net of current portion | $ | 3,546.7 | $ | 3,023.3 |
Our long-term debt outstanding consists of the following (in millions):
In March 2021, we issued notice for redemption of $100 million in outstanding principal amount of the 5.125% Senior Notes due 2023 (the “2023 Notes”). We completed this redemption on April 5, 2021 using cash on hand and capacity under our revolving credit facility. Pursuant to the |
Six Months Ended June 30, | |||||||
2020 | 2019 | ||||||
Balance at beginning of period | $ | 239.6 | $ | 261.7 | |||
Net income attributable to noncontrolling interests | 3.5 | 6.4 | |||||
Distributions declared | (4.2 | ) | (4.8 | ) | |||
Contribution to joint venture | 3.1 | — | |||||
Reclassification to noncontrolling interests | — | (11.2 | ) | ||||
Purchase of redeemable noncontrolling interests | (162.3 | ) | — | ||||
Exchange transaction | (46.3 | ) | — | ||||
Change in fair value | — | 100.7 | |||||
Balance at end of period | $ | 33.4 | $ | 352.8 |
Three Months Ended March 31, | |||||||||||
2021 | 2020 | ||||||||||
Balance at beginning of period | $ | 31.6 | $ | 239.6 | |||||||
Net income attributable to noncontrolling interests | 2.4 | 2.0 | |||||||||
Distributions declared | (2.3) | (2.1) | |||||||||
Contribution to joint venture | 0 | 3.1 | |||||||||
Purchase of redeemable noncontrolling interests | 0 | (162.3) | |||||||||
Exchange transaction | 0 | (46.3) | |||||||||
Balance at end of period | $ | 31.7 | $ | 34.0 |
Three Months Ended March 31, | |||||||||||||||||||||||
2021 | 2020 | ||||||||||||||||||||||
Net income attributable to nonredeemable noncontrolling interests | $ | 23.1 | $ | 19.7 | |||||||||||||||||||
Net income attributable to redeemable noncontrolling interests | 2.4 | 2.0 | |||||||||||||||||||||
Net income attributable to noncontrolling interests | $ | 25.5 | $ | 21.7 |
Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||
2020 | 2019 | 2020 | 2019 | ||||||||||||
Net income attributable to nonredeemable noncontrolling interests | $ | 13.3 | $ | 17.3 | $ | 33.0 | $ | 36.2 | |||||||
Net income attributable to redeemable noncontrolling interests | 1.5 | 2.4 | 3.5 | 6.4 | |||||||||||
Net income attributable to noncontrolling interests | $ | 14.8 | $ | 19.7 | $ | 36.5 | $ | 42.6 |
Fair Value Measurements at Reporting Date Using | ||||||||||||||||||||||||||||||||||||||||||||||
Fair Value Measurements at Reporting Date Using | ||||||||||||||||||||||||||||||||||||||||||||||
As of June 30, 2020 | Fair Value | Quoted Prices in Active Markets for Identical Assets (Level 1) | Significant Other Observable Inputs (Level 2) | Significant Unobservable Inputs (Level 3) | Valuation Technique (1) | |||||||||||||||||||||||||||||||||||||||||
As of March 31, 2021 | As of March 31, 2021 | Fair Value | Quoted Prices in Active Markets for Identical Assets (Level 1) | Significant Other Observable Inputs (Level 2) | Significant Unobservable Inputs (Level 3) | Valuation Technique (1) | ||||||||||||||||||||||||||||||||||||||||
Other long-term assets: | Other long-term assets: | |||||||||||||||||||||||||||||||||||||||||||||
Equity securities | $ | 69.9 | $ | — | $ | 69.9 | $ | — | M | Equity securities | $ | 73.1 | $ | 0 | $ | 73.1 | $ | 0 | M | |||||||||||||||||||||||||||
Debt securities | 5.4 | 5.4 | — | — | M | |||||||||||||||||||||||||||||||||||||||||
Redeemable noncontrolling interests | 33.4 | — | — | 33.4 | I | Redeemable noncontrolling interests | 31.7 | 0 | 0 | 31.7 | I | |||||||||||||||||||||||||||||||||||
As of December 31, 2019 | ||||||||||||||||||||||||||||||||||||||||||||||
As of December 31, 2020 | As of December 31, 2020 | |||||||||||||||||||||||||||||||||||||||||||||
Other long-term assets: | Other long-term assets: | |||||||||||||||||||||||||||||||||||||||||||||
Equity securities | $ | 63.5 | $ | — | $ | 63.5 | $ | — | M | Equity securities | $ | 72.6 | $ | 0 | $ | 72.6 | $ | 0 | M | |||||||||||||||||||||||||||
Debt securities | 12.6 | 12.6 | — | — | M | |||||||||||||||||||||||||||||||||||||||||
Redeemable noncontrolling interests | 239.6 | — | — | 239.6 | I | Redeemable noncontrolling interests | 31.6 | 0 | 0 | 31.6 | I |
As of June 30, 2020 | As of December 31, 2019 | ||||||||||||||
Carrying Amount | Estimated Fair Value | Carrying Amount | Estimated Fair Value | ||||||||||||
Long-term debt: | |||||||||||||||
Advances under revolving credit facility | $ | — | $ | — | $ | 45.0 | $ | 45.0 | |||||||
Term loan facilities | 258.0 | 259.9 | 265.2 | 266.6 | |||||||||||
5.125% Senior Notes due 2023 | 297.7 | 301.5 | 297.3 | 306.6 | |||||||||||
5.75% Senior Notes due 2024 | 697.6 | 703.5 | �� | 697.3 | 708.8 | ||||||||||
5.75% Senior Notes due 2025 | 346.0 | 359.7 | 345.6 | 369.7 | |||||||||||
4.50% Senior Notes due 2028 | 784.1 | 770.0 | 491.7 | 519.4 | |||||||||||
4.75% Senior Notes due 2030 | 782.5 | 771.2 | 491.7 | 520.0 | |||||||||||
Other notes payable | 40.4 | 40.4 | 44.7 | 44.7 | |||||||||||
Financial commitments: | |||||||||||||||
Letters of credit | — | 36.3 | — | 38.9 |
As of March 31, 2021 | As of December 31, 2020 | ||||||||||||||||||||||
Carrying Amount | Estimated Fair Value | Carrying Amount | Estimated Fair Value | ||||||||||||||||||||
Long-term debt: | |||||||||||||||||||||||
Term loan facilities | $ | 248.3 | $ | 249.8 | $ | 251.6 | $ | 253.1 | |||||||||||||||
5.125% Senior Notes due 2023 | 298.3 | 300.8 | 298.1 | 302.6 | |||||||||||||||||||
5.75% Senior Notes due 2025 | 346.5 | 361.6 | 346.3 | 361.4 | |||||||||||||||||||
4.50% Senior Notes due 2028 | 785.5 | 820.2 | 785.0 | 840.0 | |||||||||||||||||||
4.75% Senior Notes due 2030 | 783.5 | 824.0 | 783.2 | 856.0 | |||||||||||||||||||
4.625% Senior Notes due 2031 | 393.3 | 415.0 | 393.2 | 424.9 | |||||||||||||||||||
Other notes payable | 39.7 | 39.7 | 39.8 | 39.8 | |||||||||||||||||||
Financial commitments: | |||||||||||||||||||||||
Letters of credit | 0 | 37.7 | 0 | 36.7 |
Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||
2020 | 2019 | 2020 | 2019 | ||||||||||||
Basic: | |||||||||||||||
Numerator: | |||||||||||||||
Income from continuing operations | $ | 48.2 | $ | 111.0 | $ | 157.0 | $ | 236.7 | |||||||
Less: Net income attributable to noncontrolling interests included in continuing operations | (14.8 | ) | (19.7 | ) | (36.5 | ) | (42.6 | ) | |||||||
Less: Income allocated to participating securities | — | (0.3 | ) | (0.4 | ) | (0.7 | ) | ||||||||
Income from continuing operations attributable to Encompass Health common shareholders | 33.4 | 91.0 | 120.1 | 193.4 | |||||||||||
Income (loss) from discontinued operations, net of tax, attributable to Encompass Health common shareholders | 0.1 | (0.1 | ) | — | (0.6 | ) | |||||||||
Net income attributable to Encompass Health common shareholders | $ | 33.5 | $ | 90.9 | $ | 120.1 | $ | 192.8 | |||||||
Denominator: | |||||||||||||||
Basic weighted average common shares outstanding | 98.7 | 98.0 | 98.5 | 98.2 | |||||||||||
Basic earnings per share attributable to Encompass Health common shareholders: | |||||||||||||||
Continuing operations | $ | 0.34 | $ | 0.93 | $ | 1.22 | $ | 1.97 | |||||||
Discontinued operations | — | — | — | (0.01 | ) | ||||||||||
Net income | $ | 0.34 | $ | 0.93 | $ | 1.22 | $ | 1.96 | |||||||
Diluted: | |||||||||||||||
Numerator: | |||||||||||||||
Income from continuing operations | $ | 48.2 | $ | 111.0 | $ | 157.0 | $ | 236.7 | |||||||
Less: Net income attributable to noncontrolling interests included in continuing operations | (14.8 | ) | (19.7 | ) | (36.5 | ) | (42.6 | ) | |||||||
Income from continuing operations attributable to Encompass Health common shareholders | 33.4 | 91.3 | 120.5 | 194.1 | |||||||||||
Income (loss) from discontinued operations, net of tax, attributable to Encompass Health common shareholders | 0.1 | (0.1 | ) | — | (0.6 | ) | |||||||||
Net income attributable to Encompass Health common shareholders | $ | 33.5 | $ | 91.2 | $ | 120.5 | $ | 193.5 | |||||||
Denominator: | |||||||||||||||
Diluted weighted average common shares outstanding | 99.9 | 99.3 | 99.6 | 99.5 | |||||||||||
Diluted earnings per share attributable to Encompass Health common shareholders: | |||||||||||||||
Continuing operations | $ | 0.34 | $ | 0.92 | $ | 1.21 | $ | 1.95 | |||||||
Discontinued operations | — | — | — | (0.01 | ) | ||||||||||
Net income | $ | 0.34 | $ | 0.92 | $ | 1.21 | $ | 1.94 |
Three Months Ended March 31, | |||||||||||||||||||||||
2021 | 2020 | ||||||||||||||||||||||
Basic: | |||||||||||||||||||||||
Numerator: | |||||||||||||||||||||||
Income from continuing operations | $ | 132.8 | $ | 108.8 | |||||||||||||||||||
Less: Net income attributable to noncontrolling interests included in continuing operations | (25.5) | (21.7) | |||||||||||||||||||||
Less: Income allocated to participating securities | (0.5) | (0.3) | |||||||||||||||||||||
Income from continuing operations attributable to Encompass Health common shareholders | 106.8 | 86.8 | |||||||||||||||||||||
Loss from discontinued operations, net of tax, attributable to Encompass Health common shareholders | 0 | (0.1) | |||||||||||||||||||||
Net income attributable to Encompass Health common shareholders | $ | 106.8 | $ | 86.7 | |||||||||||||||||||
Denominator: | |||||||||||||||||||||||
Basic weighted average common shares outstanding | 99.0 | 98.2 | |||||||||||||||||||||
Basic earnings per share attributable to Encompass Health common shareholders: | |||||||||||||||||||||||
Continuing operations | $ | 1.08 | $ | 0.88 | |||||||||||||||||||
Discontinued operations | 0 | 0 | |||||||||||||||||||||
Net income | $ | 1.08 | $ | 0.88 | |||||||||||||||||||
Diluted: | |||||||||||||||||||||||
Numerator: | |||||||||||||||||||||||
Income from continuing operations | $ | 132.8 | $ | 108.8 | |||||||||||||||||||
Less: Net income attributable to noncontrolling interests included in continuing operations | (25.5) | (21.7) | |||||||||||||||||||||
Income from continuing operations attributable to Encompass Health common shareholders | 107.3 | 87.1 | |||||||||||||||||||||
Loss from discontinued operations, net of tax, attributable to Encompass Health common shareholders | 0 | (0.1) | |||||||||||||||||||||
Net income attributable to Encompass Health common shareholders | $ | 107.3 | $ | 87.0 | |||||||||||||||||||
Denominator: | |||||||||||||||||||||||
Diluted weighted average common shares outstanding | 100.2 | 99.6 | |||||||||||||||||||||
Diluted earnings per share attributable to Encompass Health common shareholders: | |||||||||||||||||||||||
Continuing operations | $ | 1.07 | $ | 0.87 | |||||||||||||||||||
Discontinued operations | 0 | 0 | |||||||||||||||||||||
Net income | $ | 1.07 | $ | 0.87 |
Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||
2020 | 2019 | 2020 | 2019 | ||||||||
Basic weighted average common shares outstanding | 98.7 | 98.0 | 98.5 | 98.2 | |||||||
Restricted stock awards, dilutive stock options, and restricted stock units | 1.2 | 1.3 | 1.1 | 1.3 | |||||||
Diluted weighted average common shares outstanding | 99.9 | 99.3 | 99.6 | 99.5 |
Three Months Ended March 31, | |||||||||||||||||||||||
2021 | 2020 | ||||||||||||||||||||||
Basic weighted average common shares outstanding | 99.0 | 98.2 | |||||||||||||||||||||
Restricted stock awards, dilutive stock options, and restricted stock units | 1.2 | 1.4 | |||||||||||||||||||||
Diluted weighted average common shares outstanding | 100.2 | 99.6 |
•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 March 31, 2021, we operate 138 inpatient rehabilitation hospitals. We are the sole owner of 86 of these hospitals. We retain 50.0% to 97.5% ownership in the remaining 52 jointly owned hospitals. In addition, we manage 4 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 March 31, 2021, we provide home health services in 241 locations and hospice services in 82 locations across 31 states with concentrations in the southern half of the United States. In addition, 1 of these home health agencies operates as a joint venture which we account for using the equity method of accounting. We are the sole owner of 317 of these locations. We retain 50.0% to 81.0% ownership in the remaining 6 jointly owned locations. Our home health services include a comprehensive range of Medicare-certified home nursing services to adult patients in need of care. These services include, among others, skilled nursing, physical, occupational, and speech therapy, medical social work, and home health aide services. Our hospice services include in-home services to terminally ill patients and their families to address patients’ physical needs, including pain control and symptom management, and to provide emotional and spiritual support. |
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, | ||||||||||||||||||||||||||||
2020 | 2019 | 2020 | 2019 | 2020 | 2019 | 2020 | 2019 | ||||||||||||||||||||||||
Net operating revenues | $ | 824.5 | $ | 873.9 | $ | 1,733.7 | $ | 1,744.0 | $ | 249.6 | $ | 261.1 | $ | 522.4 | $ | 515.0 | |||||||||||||||
Operating expenses: | |||||||||||||||||||||||||||||||
Inpatient rehabilitation: | |||||||||||||||||||||||||||||||
Salaries and benefits | 451.4 | 443.6 | 933.7 | 888.6 | — | — | — | — | |||||||||||||||||||||||
Other operating expenses | 124.3 | 127.2 | 259.0 | 254.8 | — | — | — | — | |||||||||||||||||||||||
Supplies | 42.0 | 36.7 | 81.6 | 72.3 | — | — | — | — | |||||||||||||||||||||||
Occupancy costs | 15.4 | 16.3 | 30.7 | 32.1 | — | — | — | — | |||||||||||||||||||||||
Home health and hospice: | |||||||||||||||||||||||||||||||
Cost of services sold (excluding depreciation and amortization) | — | — | — | — | 136.7 | 119.9 | 267.6 | 236.4 | |||||||||||||||||||||||
Support and overhead costs | — | — | — | — | 98.3 | 89.7 | 198.5 | 178.5 | |||||||||||||||||||||||
633.1 | 623.8 | 1,305.0 | 1,247.8 | 235.0 | 209.6 | 466.1 | 414.9 | ||||||||||||||||||||||||
Other income | (3.4 | ) | (1.9 | ) | (1.8 | ) | (4.7 | ) | — | — | — | — | |||||||||||||||||||
Equity in net income of nonconsolidated affiliates | (0.6 | ) | (1.4 | ) | (1.2 | ) | (3.5 | ) | (0.1 | ) | (0.4 | ) | (0.3 | ) | (0.8 | ) | |||||||||||||||
Noncontrolling interests | 15.1 | 19.5 | 35.9 | 40.5 | (0.3 | ) | 2.8 | 0.6 | 5.5 | ||||||||||||||||||||||
Segment Adjusted EBITDA | $ | 180.3 | $ | 233.9 | $ | 395.8 | $ | 463.9 | $ | 15.0 | $ | 49.1 | $ | 56.0 | $ | 95.4 | |||||||||||||||
Capital expenditures | $ | 88.9 | $ | 92.0 | $ | 172.2 | $ | 162.4 | $ | 0.6 | $ | 3.5 | $ | 2.1 | $ | 8.0 |
Inpatient Rehabilitation | Home Health and Hospice | ||||||||||||||||||||||||||||||||||||||||||||||
Three Months Ended March 31, | Three Months Ended March 31, | ||||||||||||||||||||||||||||||||||||||||||||||
2021 | 2020 | 2021 | 2020 | ||||||||||||||||||||||||||||||||||||||||||||
Net operating revenues | $ | 959.9 | $ | 909.2 | $ | 270.5 | $ | 272.8 | |||||||||||||||||||||||||||||||||||||||
Operating expenses: | |||||||||||||||||||||||||||||||||||||||||||||||
Inpatient rehabilitation: | |||||||||||||||||||||||||||||||||||||||||||||||
Salaries and benefits | 501.9 | 482.3 | 0 | 0 | |||||||||||||||||||||||||||||||||||||||||||
Other operating expenses | 140.0 | 134.7 | 0 | 0 | |||||||||||||||||||||||||||||||||||||||||||
Supplies | 45.2 | 39.6 | 0 | 0 | |||||||||||||||||||||||||||||||||||||||||||
Occupancy costs | 15.1 | 15.3 | 0 | 0 | |||||||||||||||||||||||||||||||||||||||||||
Home health and hospice: | |||||||||||||||||||||||||||||||||||||||||||||||
Cost of service (excluding depreciation and amortization) | 0 | 0 | 118.1 | 130.9 | |||||||||||||||||||||||||||||||||||||||||||
Support and overhead costs | 0 | 0 | 101.4 | 100.2 | |||||||||||||||||||||||||||||||||||||||||||
702.2 | 671.9 | 219.5 | 231.1 | ||||||||||||||||||||||||||||||||||||||||||||
Other (income) expense | (1.5) | 1.6 | 0 | 0 | |||||||||||||||||||||||||||||||||||||||||||
Equity in net income of nonconsolidated affiliates | (0.8) | (0.6) | (0.2) | (0.2) | |||||||||||||||||||||||||||||||||||||||||||
Noncontrolling interests | 25.1 | 20.8 | 0.4 | 0.9 | |||||||||||||||||||||||||||||||||||||||||||
Segment Adjusted EBITDA | $ | 234.9 | $ | 215.5 | $ | 50.8 | $ | 41.0 | |||||||||||||||||||||||||||||||||||||||
Capital expenditures | $ | 99.8 | $ | 83.3 | $ | 0.9 | $ | 1.5 |
Inpatient Rehabilitation | Home Health and Hospice | Encompass Health Consolidated | |||||||||
As of June 30, 2020 | |||||||||||
Total assets | $ | 4,921.4 | $ | 1,641.4 | $ | 6,502.5 | |||||
Investments in and advances to nonconsolidated affiliates | 1.5 | 3.9 | 5.4 | ||||||||
As of December 31, 2019 | |||||||||||
Total assets | $ | 4,501.4 | $ | 1,612.8 | $ | 6,080.7 | |||||
Investments in and advances to nonconsolidated affiliates | 2.0 | 5.4 | 7.4 |
Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||
2020 | 2019 | 2020 | 2019 | ||||||||||||
Total Segment Adjusted EBITDA | $ | 195.3 | $ | 283.0 | $ | 451.8 | $ | 559.3 | |||||||
General and administrative expenses | (43.0 | ) | (77.1 | ) | (78.6 | ) | (130.5 | ) | |||||||
Depreciation and amortization | (60.7 | ) | (52.7 | ) | (119.5 | ) | (105.2 | ) | |||||||
Loss on disposal or impairment of assets | (3.0 | ) | (1.3 | ) | (3.1 | ) | (2.4 | ) | |||||||
Government, class action, and related settlements | — | — | (2.8 | ) | — | ||||||||||
Loss on early extinguishment of debt | — | (2.3 | ) | — | (2.3 | ) | |||||||||
Interest expense and amortization of debt discounts and fees | (45.8 | ) | (37.7 | ) | (89.0 | ) | (74.9 | ) | |||||||
Net income attributable to noncontrolling interests | 14.8 | 19.7 | 36.5 | 42.6 | |||||||||||
SARs mark-to-market impact on noncontrolling interests | — | 2.6 | — | 3.4 | |||||||||||
Change in fair market value of equity securities | 2.4 | 0.3 | (0.1 | ) | 1.2 | ||||||||||
Gain on consolidation of Treasure Coast | — | — | 2.2 | — | |||||||||||
Payroll taxes on SARs exercise | — | — | (1.5 | ) | (0.2 | ) | |||||||||
Income from continuing operations before income tax expense | $ | 60.0 | $ | 134.5 | $ | 195.9 | $ | 291.0 |
June 30, 2020 | December 31, 2019 | ||||||
Total assets for reportable segments | $ | 6,562.8 | $ | 6,114.2 | |||
Reclassification of deferred income tax liabilities to net deferred income tax assets | (60.3 | ) | (33.5 | ) | |||
Total consolidated assets | $ | 6,502.5 | $ | 6,080.7 |
Three Months Ended March 31, | |||||||||||||||||||||||
2021 | 2020 | ||||||||||||||||||||||
Total Segment Adjusted EBITDA | $ | 285.7 | $ | 256.5 | |||||||||||||||||||
General and administrative expenses | (38.6) | (35.6) | |||||||||||||||||||||
Depreciation and amortization | (62.5) | (58.8) | |||||||||||||||||||||
Gain (loss) on disposal or impairment of assets | 0.1 | (0.1) | |||||||||||||||||||||
Government, class action, and related settlements | 0 | (2.8) | |||||||||||||||||||||
Interest expense and amortization of debt discounts and fees | (42.8) | (43.2) | |||||||||||||||||||||
Net income attributable to noncontrolling interests | 25.5 | 21.7 | |||||||||||||||||||||
Change in fair market value of equity securities | (0.1) | (2.5) | |||||||||||||||||||||
Gain on consolidation of joint venture formerly accounted for under the equity method of accounting | 0 | 2.2 | |||||||||||||||||||||
Payroll taxes on SARs exercise | 0 | (1.5) | |||||||||||||||||||||
Income from continuing operations before income tax expense | $ | 167.3 | $ | 135.9 |
Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||
2020 | 2019 | 2020 | 2019 | ||||||||||||
Inpatient rehabilitation: | |||||||||||||||
Inpatient | $ | 808.0 | $ | 851.8 | $ | 1,698.0 | $ | 1,699.4 | |||||||
Outpatient and other | 16.5 | 22.1 | 35.7 | 44.6 | |||||||||||
Total inpatient rehabilitation | 824.5 | 873.9 | 1,733.7 | 1,744.0 | |||||||||||
Home health and hospice: | |||||||||||||||
Home health | 201.8 | 222.7 | 426.6 | 442.2 | |||||||||||
Hospice | 47.8 | 38.4 | 95.8 | 72.8 | |||||||||||
Total home health and hospice | 249.6 | 261.1 | 522.4 | 515.0 | |||||||||||
Total net operating revenues | $ | 1,074.1 | $ | 1,135.0 | $ | 2,256.1 | $ | 2,259.0 |
Three Months Ended March 31, | |||||||||||||||||||||||
2021 | 2020 | ||||||||||||||||||||||
Inpatient rehabilitation: | |||||||||||||||||||||||
Inpatient | $ | 942.3 | $ | 890.0 | |||||||||||||||||||
Outpatient and other | 17.6 | 19.2 | |||||||||||||||||||||
Total inpatient rehabilitation | 959.9 | 909.2 | |||||||||||||||||||||
Home health and hospice: | |||||||||||||||||||||||
Home health | 219.9 | 224.8 | |||||||||||||||||||||
Hospice | 50.6 | 48.0 | |||||||||||||||||||||
Total home health and hospice | 270.5 | 272.8 | |||||||||||||||||||||
Total net operating revenues | $ | 1,230.4 | $ | 1,182.0 |
Number of New Beds | |||||||||||
2021 | 2022 | 2023 | |||||||||
De novos: | |||||||||||
Cumming, Georgia | 50 | — | — | ||||||||
North Tampa, Florida* | 50 | — | — | ||||||||
Stockbridge, Georgia | 50 | — | — | ||||||||
Greenville, South Carolina | 40 | — | — | ||||||||
Pensacola, Florida | 40 | — | — | ||||||||
Shreveport, Louisiana | 40 | — | — | ||||||||
Waco, Texas | 40 | — | — | ||||||||
Libertyville, Illinois | — | 60 | — | ||||||||
St. Augustine, Florida | — | 40 | — | ||||||||
Lakeland, Florida | — | 50 | — | ||||||||
Clermont, Florida | — | 50 | — | ||||||||
Naples, Florida | — | 50 | — | ||||||||
Cape Coral, Florida | — | 40 | — | ||||||||
Jacksonville, Florida | — | 50 | — | ||||||||
Bowie, Maryland | — | 60 | — | ||||||||
Kissimmee, Florida | — | — | 50 | ||||||||
Prosper, Texas | — | — | 40 | ||||||||
Fort Mill, South Carolina | — | — | 39 | ||||||||
Joint ventures: | |||||||||||
Knoxville, Tennessee | — | 73 | — | ||||||||
Shiloh, Illinois | — | 40 | — | ||||||||
Moline, Illinois | — | 40 | — | ||||||||
Owasso, Oklahoma | — | 40 | — |
•Operating in a Highly Regulated Industry. We are required to comply with extensive and complex laws and regulations at the federal, state, and local government levels. More specifically, because Medicare comprises a significant portion of our Net operating revenues, failure to comply with the laws and regulations governing the Medicare program and related matters could materially and adversely affect us. These rules and regulations have affected, or could in the future affect, our business activities by having an impact on the reimbursement we receive for services provided or the costs of compliance, mandating new documentation standards, requiring additional 17 |
•Maintaining Strong Volume Growth. In addition to the factors described in our 2020 Form 10‑K, we continued to experience decreased volumes in both segments which we believe resulted from a number of conditions related to the pandemic which are expected to continue as discussed in the “Results of Operations” section of this Item. 18 •Recruiting and Retaining High-Quality Personnel. See Item 1A, Risk Factors, of the 2020 Form 10‑K for a discussion of competition for staffing, shortages of qualified personnel, and other factors that may increase our labor costs. Additionally, our operations have been affected and may in the future be affected by staffing shortages where employees must self-quarantine due to exposure to COVID-19 or where employees are unavailable due to a lack of childcare or care for elderly family. |
Three Months Ended March 31, | |||||||||||||||||||||||
2021 | 2020 | ||||||||||||||||||||||
Medicare | 68.1 | % | 73.4 | % | |||||||||||||||||||
Medicare Advantage | 15.1 | % | 11.9 | % | |||||||||||||||||||
Managed care | 10.3 | % | 8.7 | % | |||||||||||||||||||
Medicaid | 3.5 | % | 3.0 | % | |||||||||||||||||||
Other third-party payors | 1.0 | % | 0.9 | % | |||||||||||||||||||
Workers’ compensation | 0.5 | % | 0.6 | % | |||||||||||||||||||
Patients | 0.4 | % | 0.5 | % | |||||||||||||||||||
Other income | 1.1 | % | 1.0 | % | |||||||||||||||||||
Total | 100.0 | % | 100.0 | % |
Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||
2020 | 2019 | 2020 | 2019 | ||||||||
Medicare | 65.8 | % | 74.9 | % | 69.8 | % | 75.4 | % | |||
Medicare Advantage | 18.2 | % | 10.9 | % | 14.9 | % | 10.3 | % | |||
Managed care | 9.3 | % | 8.3 | % | 8.9 | % | 8.3 | % | |||
Medicaid | 3.6 | % | 2.8 | % | 3.3 | % | 2.8 | % | |||
Other third-party payors | 0.9 | % | 0.9 | % | 0.9 | % | 0.9 | % | |||
Workers’ compensation | 0.4 | % | 0.6 | % | 0.5 | % | 0.7 | % | |||
Patients | 0.4 | % | 0.5 | % | 0.5 | % | 0.5 | % | |||
Other income | 1.4 | % | 1.1 | % | 1.2 | % | 1.1 | % | |||
Total | 100.0 | % | 100.0 | % | 100.0 | % | 100.0 | % |
Three Months Ended March 31, | Percentage Change | ||||||||||||||||||||||||||||||||||
2021 | 2020 | 2021 vs. 2020 | |||||||||||||||||||||||||||||||||
(In Millions, Except Percentage Change) | |||||||||||||||||||||||||||||||||||
Net operating revenues | $ | 1,230.4 | $ | 1,182.0 | 4.1 | % | |||||||||||||||||||||||||||||
Operating expenses: | |||||||||||||||||||||||||||||||||||
Salaries and benefits | 687.2 | 679.1 | 1.2 | % | |||||||||||||||||||||||||||||||
Other operating expenses | 162.3 | 159.6 | 1.7 | % | |||||||||||||||||||||||||||||||
Occupancy costs | 20.2 | 20.2 | — | % | |||||||||||||||||||||||||||||||
Supplies | 51.9 | 45.7 | 13.6 | % | |||||||||||||||||||||||||||||||
General and administrative expenses | 38.6 | 35.6 | 8.4 | % | |||||||||||||||||||||||||||||||
Depreciation and amortization | 62.5 | 58.8 | 6.3 | % | |||||||||||||||||||||||||||||||
Government, class action, and related settlements | — | 2.8 | (100.0) | % | |||||||||||||||||||||||||||||||
Total operating expenses | 1,022.7 | 1,001.8 | 2.1 | % | |||||||||||||||||||||||||||||||
Interest expense and amortization of debt discounts and fees | 42.8 | 43.2 | (0.9) | % | |||||||||||||||||||||||||||||||
Other (income) expense | (1.4) | 1.9 | (173.7) | % | |||||||||||||||||||||||||||||||
Equity in net income of nonconsolidated affiliates | (1.0) | (0.8) | 25.0 | % | |||||||||||||||||||||||||||||||
Income from continuing operations before income tax expense | 167.3 | 135.9 | 23.1 | % | |||||||||||||||||||||||||||||||
Provision for income tax expense | 34.5 | 27.1 | 27.3 | % | |||||||||||||||||||||||||||||||
Income from continuing operations | 132.8 | 108.8 | 22.1 | % | |||||||||||||||||||||||||||||||
Loss from discontinued operations, net of tax | — | (0.1) | (100.0) | % | |||||||||||||||||||||||||||||||
Net income | 132.8 | 108.7 | 22.2 | % | |||||||||||||||||||||||||||||||
Less: Net income attributable to noncontrolling interests | (25.5) | (21.7) | 17.5 | % | |||||||||||||||||||||||||||||||
Net income attributable to Encompass Health | $ | 107.3 | $ | 87.0 | 23.3 | % |
Three Months Ended June 30, | Percentage Change | Six Months Ended June 30, | Percentage Change | ||||||||||||||||||
2020 | 2019 | 2020 vs. 2019 | 2020 | 2019 | 2020 vs. 2019 | ||||||||||||||||
(In Millions, Except Percentage Change) | |||||||||||||||||||||
Net operating revenues | $ | 1,074.1 | $ | 1,135.0 | (5.4 | )% | $ | 2,256.1 | $ | 2,259.0 | (0.1 | )% | |||||||||
Operating expenses: | |||||||||||||||||||||
Salaries and benefits | 651.9 | 622.9 | 4.7 | % | 1,331.0 | 1,243.7 | 7.0 | % | |||||||||||||
Other operating expenses | 148.3 | 149.8 | (1.0 | )% | 307.9 | 299.9 | 2.7 | % | |||||||||||||
Occupancy costs | 20.3 | 20.3 | — | % | 40.5 | 39.9 | 1.5 | % | |||||||||||||
Supplies | 50.6 | 41.7 | 21.3 | % | 96.3 | 81.8 | 17.7 | % | |||||||||||||
General and administrative expenses | 43.0 | 77.1 | (44.2 | )% | 78.6 | 130.5 | (39.8 | )% | |||||||||||||
Depreciation and amortization | 60.7 | 52.7 | 15.2 | % | 119.5 | 105.2 | 13.6 | % | |||||||||||||
Government, class action, and related settlements | — | — | — | % | 2.8 | — | N/A | ||||||||||||||
Total operating expenses | 974.8 | 964.5 | 1.1 | % | 1,976.6 | 1,901.0 | 4.0 | % | |||||||||||||
Loss on early extinguishment of debt | — | 2.3 | (100.0 | )% | — | 2.3 | (100.0 | )% | |||||||||||||
Interest expense and amortization of debt discounts and fees | 45.8 | 37.7 | 21.5 | % | 89.0 | 74.9 | 18.8 | % | |||||||||||||
Other income | (5.8 | ) | (2.2 | ) | 163.6 | % | (3.9 | ) | (5.9 | ) | (33.9 | )% | |||||||||
Equity in net income of nonconsolidated affiliates | (0.7 | ) | (1.8 | ) | (61.1 | )% | (1.5 | ) | (4.3 | ) | (65.1 | )% | |||||||||
Income from continuing operations before income tax expense | 60.0 | 134.5 | (55.4 | )% | 195.9 | 291.0 | (32.7 | )% | |||||||||||||
Provision for income tax expense | 11.8 | 23.5 | (49.8 | )% | 38.9 | 54.3 | (28.4 | )% | |||||||||||||
Income from continuing operations | 48.2 | 111.0 | (56.6 | )% | 157.0 | 236.7 | (33.7 | )% | |||||||||||||
Income (loss) from discontinued operations, net of tax | 0.1 | (0.1 | ) | (200.0 | )% | — | (0.6 | ) | (100.0 | )% | |||||||||||
Net income | 48.3 | 110.9 | (56.4 | )% | 157.0 | 236.1 | (33.5 | )% | |||||||||||||
Less: Net income attributable to noncontrolling interests | (14.8 | ) | (19.7 | ) | (24.9 | )% | (36.5 | ) | (42.6 | ) | (14.3 | )% | |||||||||
Net income attributable to Encompass Health | $ | 33.5 | $ | 91.2 | (63.3 | )% | $ | 120.5 | $ | 193.5 | (37.7 | )% |
Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||
2020 | 2019 | 2020 | 2019 | ||||||||
Operating expenses: | |||||||||||
Salaries and benefits | 60.7 | % | 54.9 | % | 59.0 | % | 55.1 | % | |||
Other operating expenses | 13.8 | % | 13.2 | % | 13.6 | % | 13.3 | % | |||
Occupancy costs | 1.9 | % | 1.8 | % | 1.8 | % | 1.8 | % | |||
Supplies | 4.7 | % | 3.7 | % | 4.3 | % | 3.6 | % | |||
General and administrative expenses | 4.0 | % | 6.8 | % | 3.5 | % | 5.8 | % | |||
Depreciation and amortization | 5.7 | % | 4.6 | % | 5.3 | % | 4.7 | % | |||
Government, class action, and related settlements | — | % | — | % | 0.1 | % | — | % | |||
Total operating expenses | 90.8 | % | 85.0 | % | 87.6 | % | 84.2 | % |
Three Months Ended March 31, | |||||||||||||||||||||||
2021 | 2020 | ||||||||||||||||||||||
Operating expenses: | |||||||||||||||||||||||
Salaries and benefits | 55.9 | % | 57.5 | % | |||||||||||||||||||
Other operating expenses | 13.2 | % | 13.5 | % | |||||||||||||||||||
Occupancy costs | 1.6 | % | 1.7 | % | |||||||||||||||||||
Supplies | 4.2 | % | 3.9 | % | |||||||||||||||||||
General and administrative expenses | 3.1 | % | 3.0 | % | |||||||||||||||||||
Depreciation and amortization | 5.1 | % | 5.0 | % | |||||||||||||||||||
Government, class action, and related settlements | — | % | 0.2 | % | |||||||||||||||||||
Total operating expenses | 83.1 | % | 84.8 | % |
2020 vs. 2019 | |||||||
April | May | June | Q2 | ||||
Inpatient Rehabilitation | |||||||
Total discharges | (20.9)% | (11.8)% | 1.3% | (10.7)% | |||
Same-store discharges | (22.8)% | (13.8)% | (1.0)% | (12.8)% | |||
Home Health and Hospice | |||||||
Home health total admissions | (23.5)% | (8.2)% | 8.4% | (7.9)% | |||
Home health same-store admissions | (31.9)% | (17.4)% | (2.3)% | (17.3)% | |||
Hospice total admissions | 27.8% | 28.4% | 57.3% | 37.3% | |||
Hospice same-store admissions | (1.3)% | (1.0)% | 23.7% | 6.7% |
Inpatient Rehabilitation - Patient Census Information | ||||||
February 29, 2020 | March 31, 2020 | April 12, 2020 | April 29, 2020 | June 3, 2020 | July 1, 2020 | July 22, 2020 |
6,782 | 5,342 | 5,139 | 5,989 | 6,453 | 6,506 | 6,448 |
Home Health - Starts of Episodes (Includes Starts of Care and Recertifications) | ||||||
Week Ended March 1, 2020 | Week Ended March 29, 2020 | Week Ended April 12, 2020 | Week Ended April 26, 2020 | Week Ended May 31, 2020 | Week Ended June 28, 2020 | Week Ended July 19, 2020 |
5,242 | 4,540 | 4,073 | 4,241 | 4,786 | 5,368 | 5,514 |
Hospice - Admissions | ||||||
Week Ended March 1, 2020 | Week Ended March 29, 2020 | Week Ended April 12, 2020 | Week Ended April 26, 2020 | Week Ended May 31, 2020 | Week Ended June 28, 2020 | Week Ended July 19, 2020 |
270 | 197 | 236 | 239 | 250 | 257 | 235 |
Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||
2020 | 2019 | 2020 | 2019 | ||||||||
Medicare | 61.1 | % | 72.1 | % | 66.0 | % | 72.6 | % | |||
Medicare Advantage | 20.1 | % | 11.1 | % | 16.0 | % | 10.4 | % | |||
Managed care | 10.7 | % | 9.9 | % | 10.3 | % | 9.8 | % | |||
Medicaid | 4.2 | % | 3.1 | % | 3.8 | % | 3.1 | % | |||
Other third-party payors | 1.1 | % | 1.2 | % | 1.2 | % | 1.2 | % | |||
Workers’ compensation | 0.5 | % | 0.7 | % | 0.6 | % | 0.8 | % | |||
Patients | 0.5 | % | 0.6 | % | 0.6 | % | 0.7 | % | |||
Other income | 1.8 | % | 1.3 | % | 1.5 | % | 1.4 | % | |||
Total | 100.0 | % | 100.0 | % | 100.0 | % | 100.0 | % |
Three Months Ended March 31, | |||||||||||||||||||||||
2021 | 2020 | ||||||||||||||||||||||
Medicare | 63.9 | % | 70.5 | % | |||||||||||||||||||
Medicare Advantage | 16.5 | % | 12.3 | % | |||||||||||||||||||
Managed care | 11.7 | % | 9.9 | % | |||||||||||||||||||
Medicaid | 4.1 | % | 3.4 | % | |||||||||||||||||||
Other third-party payors | 1.3 | % | 1.2 | % | |||||||||||||||||||
Workers’ compensation | 0.6 | % | 0.8 | % | |||||||||||||||||||
Patients | 0.5 | % | 0.6 | % | |||||||||||||||||||
Other income | 1.4 | % | 1.3 | % | |||||||||||||||||||
Total | 100.0 | % | 100.0 | % |
Three Months Ended March 31, | Percentage Change | ||||||||||||||||||||||||||||||||||
2021 | 2020 | 2021 vs. 2020 | |||||||||||||||||||||||||||||||||
(In Millions, Except Percentage Change) | |||||||||||||||||||||||||||||||||||
Net operating revenues: | |||||||||||||||||||||||||||||||||||
Inpatient | $ | 942.3 | $ | 890.0 | 5.9 | % | |||||||||||||||||||||||||||||
Outpatient and other | 17.6 | 19.2 | (8.3) | % | |||||||||||||||||||||||||||||||
Inpatient rehabilitation segment revenues | 959.9 | 909.2 | 5.6 | % | |||||||||||||||||||||||||||||||
Operating expenses: | |||||||||||||||||||||||||||||||||||
Salaries and benefits | 501.9 | 482.3 | 4.1 | % | |||||||||||||||||||||||||||||||
Other operating expenses | 140.0 | 134.7 | 3.9 | % | |||||||||||||||||||||||||||||||
Supplies | 45.2 | 39.6 | 14.1 | % | |||||||||||||||||||||||||||||||
Occupancy costs | 15.1 | 15.3 | (1.3) | % | |||||||||||||||||||||||||||||||
Other (income) expense | (1.5) | 1.6 | (193.8) | % | |||||||||||||||||||||||||||||||
Equity in net income of nonconsolidated affiliates | (0.8) | (0.6) | 33.3 | % | |||||||||||||||||||||||||||||||
Noncontrolling interests | 25.1 | 20.8 | 20.7 | % | |||||||||||||||||||||||||||||||
Segment Adjusted EBITDA | $ | 234.9 | $ | 215.5 | 9.0 | % | |||||||||||||||||||||||||||||
(Actual Amounts) | |||||||||||||||||||||||||||||||||||
Discharges | 47,187 | 47,750 | (1.2) | % | |||||||||||||||||||||||||||||||
Net patient revenue per discharge | $ | 19,969 | $ | 18,639 | 7.1 | % | |||||||||||||||||||||||||||||
Outpatient visits | 40,194 | 69,743 | (42.4) | % | |||||||||||||||||||||||||||||||
Average length of stay (days) | 13.0 | 12.7 | 2.4 | % | |||||||||||||||||||||||||||||||
Occupancy % | 71.4 | % | 71.3 | % | 0.1 | % | |||||||||||||||||||||||||||||
# of licensed beds | 9,560 | 9,322 | 2.6 | % | |||||||||||||||||||||||||||||||
Full-time equivalents* | 22,383 | 22,318 | 0.3 | % | |||||||||||||||||||||||||||||||
Employees per occupied bed | 3.31 | 3.38 | (2.1) | % |
Three Months Ended June 30, | Percentage Change | Six Months Ended June 30, | Percentage Change | ||||||||||||||||||
2020 | 2019 | 2020 vs. 2019 | 2020 | 2019 | 2020 vs. 2019 | ||||||||||||||||
(In Millions, Except Percentage Change) | |||||||||||||||||||||
Net operating revenues: | |||||||||||||||||||||
Inpatient | $ | 808.0 | $ | 851.8 | (5.1 | )% | $ | 1,698.0 | $ | 1,699.4 | (0.1 | )% | |||||||||
Outpatient and other | 16.5 | 22.1 | (25.3 | )% | 35.7 | 44.6 | (20.0 | )% | |||||||||||||
Inpatient rehabilitation segment revenues | 824.5 | 873.9 | (5.7 | )% | 1,733.7 | 1,744.0 | (0.6 | )% | |||||||||||||
Operating expenses: | |||||||||||||||||||||
Salaries and benefits | 451.4 | 443.6 | 1.8 | % | 933.7 | 888.6 | 5.1 | % | |||||||||||||
Other operating expenses | 124.3 | 127.2 | (2.3 | )% | 259.0 | 254.8 | 1.6 | % | |||||||||||||
Supplies | 42.0 | 36.7 | 14.4 | % | 81.6 | 72.3 | 12.9 | % | |||||||||||||
Occupancy costs | 15.4 | 16.3 | (5.5 | )% | 30.7 | 32.1 | (4.4 | )% | |||||||||||||
Other income | (3.4 | ) | (1.9 | ) | 78.9 | % | (1.8 | ) | (4.7 | ) | (61.7 | )% | |||||||||
Equity in net income of nonconsolidated affiliates | (0.6 | ) | (1.4 | ) | (57.1 | )% | (1.2 | ) | (3.5 | ) | (65.7 | )% | |||||||||
Noncontrolling interests | 15.1 | 19.5 | (22.6 | )% | 35.9 | 40.5 | (11.4 | )% | |||||||||||||
Segment Adjusted EBITDA | $ | 180.3 | $ | 233.9 | (22.9 | )% | $ | 395.8 | $ | 463.9 | (14.7 | )% | |||||||||
(Actual Amounts) | |||||||||||||||||||||
Discharges | 41,682 | 46,679 | (10.7 | )% | 89,432 | 92,288 | (3.1 | )% | |||||||||||||
Net patient revenue per discharge | $ | 19,385 | $ | 18,248 | 6.2 | % | $ | 18,986 | $ | 18,414 | 3.1 | % | |||||||||
Outpatient visits | 15,760 | 104,566 | (84.9 | )% | 85,503 | 206,594 | (58.6 | )% | |||||||||||||
Average length of stay (days) | 13.2 | 12.5 | 5.6 | % | 12.9 | 12.6 | 2.4 | % | |||||||||||||
Occupancy % | 64.5 | % | 70.6 | % | (8.6 | )% | 67.6 | % | 71.0 | % | (4.8 | )% | |||||||||
# of licensed beds | 9,401 | 9,062 | 3.7 | % | 9,401 | 9,062 | 3.7 | % | |||||||||||||
Full-time equivalents* | 20,809 | 21,570 | (3.5 | )% | 21,564 | 21,457 | 0.5 | % | |||||||||||||
Employees per occupied bed | 3.45 | 3.41 | 1.2 | % | 3.41 | 3.37 | 1.2 | % |
Three Months Ended March 31, | |||||||||||||||||||||||
2021 | 2020 | ||||||||||||||||||||||
Operating expenses: | |||||||||||||||||||||||
Salaries and benefits | 52.3 | % | 53.0 | % | |||||||||||||||||||
Other operating expenses | 14.6 | % | 14.8 | % | |||||||||||||||||||
Supplies | 4.7 | % | 4.4 | % | |||||||||||||||||||
Occupancy costs | 1.6 | % | 1.7 | % | |||||||||||||||||||
Total operating expenses | 73.2 | % | 73.9 | % |
Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||
2020 | 2019 | 2020 | 2019 | ||||||||
Operating expenses: | |||||||||||
Salaries and benefits | 54.7 | % | 50.8 | % | 53.9 | % | 51.0 | % | |||
Other operating expenses | 15.1 | % | 14.6 | % | 14.9 | % | 14.6 | % | |||
Supplies | 5.1 | % | 4.2 | % | 4.7 | % | 4.1 | % | |||
Occupancy costs | 1.9 | % | 1.9 | % | 1.8 | % | 1.8 | % | |||
Total operating expenses | 76.8 | % | 71.4 | % | 75.3 | % | 71.5 | % |
Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||
2020 | 2019 | 2020 | 2019 | ||||||||
Medicare | 81.8 | % | 84.7 | % | 82.4 | % | 84.7 | % | |||
Medicare Advantage | 11.7 | % | 10.2 | % | 11.2 | % | 10.1 | % | |||
Managed care | 4.6 | % | 3.1 | % | 4.5 | % | 3.2 | % | |||
Medicaid | 1.6 | % | 1.8 | % | 1.6 | % | 1.7 | % | |||
Workers’ compensation | 0.1 | % | 0.1 | % | 0.1 | % | 0.1 | % | |||
Patients | 0.1 | % | — | % | 0.1 | % | 0.1 | % | |||
Other income | 0.1 | % | 0.1 | % | 0.1 | % | 0.1 | % | |||
Total | 100.0 | % | 100.0 | % | 100.0 | % | 100.0 | % |
Three Months Ended March 31, | |||||||||||||||||||||||
2021 | 2020 | ||||||||||||||||||||||
Medicare | 82.7 | % | 83.0 | % | |||||||||||||||||||
Medicare Advantage | 10.4 | % | 10.8 | % | |||||||||||||||||||
Managed care | 5.3 | % | 4.4 | % | |||||||||||||||||||
Medicaid | 1.4 | % | 1.5 | % | |||||||||||||||||||
Workers’ compensation | — | % | 0.1 | % | |||||||||||||||||||
Patients | 0.1 | % | 0.1 | % | |||||||||||||||||||
Other income | 0.1 | % | 0.1 | % | |||||||||||||||||||
Total | 100.0 | % | 100.0 | % |
Three Months Ended March 31, | Percentage Change | ||||||||||||||||||||||||||||||||||
2021 | 2020 | 2021 vs. 2020 | |||||||||||||||||||||||||||||||||
(In Millions, Except Percentage Change) | |||||||||||||||||||||||||||||||||||
Net operating revenues: | |||||||||||||||||||||||||||||||||||
Home health | $ | 219.9 | $ | 224.8 | (2.2) | % | |||||||||||||||||||||||||||||
Hospice | 50.6 | 48.0 | 5.4 | % | |||||||||||||||||||||||||||||||
Home health and hospice segment revenues | 270.5 | 272.8 | (0.8) | % | |||||||||||||||||||||||||||||||
Operating expenses: | |||||||||||||||||||||||||||||||||||
Cost of services (excluding depreciation and amortization) | 118.1 | 130.9 | (9.8) | % | |||||||||||||||||||||||||||||||
Support and overhead costs | 101.4 | 100.2 | 1.2 | % | |||||||||||||||||||||||||||||||
Equity in net income of nonconsolidated affiliates | (0.2) | (0.2) | — | % | |||||||||||||||||||||||||||||||
Noncontrolling interests | 0.4 | 0.9 | (55.6) | % | |||||||||||||||||||||||||||||||
Segment Adjusted EBITDA | $ | 50.8 | $ | 41.0 | 23.9 | % | |||||||||||||||||||||||||||||
(Actual Amounts) | |||||||||||||||||||||||||||||||||||
Home health: | |||||||||||||||||||||||||||||||||||
Total admissions | 50,799 | 52,754 | (3.7) | % | |||||||||||||||||||||||||||||||
Episodic admissions | 40,215 | 42,476 | (5.3) | % | |||||||||||||||||||||||||||||||
Total recertifications | 31,902 | 29,463 | 8.3 | % | |||||||||||||||||||||||||||||||
Episodic recertifications | 28,083 | 26,553 | 5.8 | % | |||||||||||||||||||||||||||||||
Episodes | 66,435 | 68,652 | (3.2) | % | |||||||||||||||||||||||||||||||
Total starts of care | 82,701 | 82,217 | 0.6 | % | |||||||||||||||||||||||||||||||
Revenue per episode | $ | 2,923 | $ | 2,909 | 0.5 | % | |||||||||||||||||||||||||||||
Episodic visits per episode | 15.8 | 16.3 | (3.1) | % | |||||||||||||||||||||||||||||||
Total visits | 1,239,073 | 1,306,230 | (5.1) | % | |||||||||||||||||||||||||||||||
Cost per visit | $ | 77 | $ | 81 | (4.9) | % | |||||||||||||||||||||||||||||
Hospice: | |||||||||||||||||||||||||||||||||||
Admissions | 3,330 | 2,986 | 11.5 | % | |||||||||||||||||||||||||||||||
Patient days | 334,400 | 334,545 | — | % | |||||||||||||||||||||||||||||||
Average daily census | 3,716 | 3,676 | 1.1 | % | |||||||||||||||||||||||||||||||
Revenue per day | $ | 151 | $ | 144 | 4.9 | % |
Three Months Ended June 30, | Percentage Change | Six Months Ended June 30, | Percentage Change | ||||||||||||||||||
2020 | 2019 | 2020 vs. 2019 | 2020 | 2019 | 2020 vs. 2019 | ||||||||||||||||
(In Millions, Except Percentage Change) | |||||||||||||||||||||
Net operating revenues: | |||||||||||||||||||||
Home health | $ | 201.8 | $ | 222.7 | (9.4 | )% | $ | 426.6 | $ | 442.2 | (3.5 | )% | |||||||||
Hospice | 47.8 | 38.4 | 24.5 | % | 95.8 | 72.8 | 31.6 | % | |||||||||||||
Home health and hospice segment revenues | 249.6 | 261.1 | (4.4 | )% | 522.4 | 515.0 | 1.4 | % | |||||||||||||
Operating expenses: | |||||||||||||||||||||
Cost of services sold (excluding depreciation and amortization) | 136.7 | 119.9 | 14.0 | % | 267.6 | 236.4 | 13.2 | % | |||||||||||||
Support and overhead costs | 98.3 | 89.7 | 9.6 | % | 198.5 | 178.5 | 11.2 | % | |||||||||||||
Equity in net income of nonconsolidated affiliates | (0.1 | ) | (0.4 | ) | (75.0 | )% | (0.3 | ) | (0.8 | ) | (62.5 | )% | |||||||||
Noncontrolling interests | (0.3 | ) | 2.8 | (110.7 | )% | 0.6 | 5.5 | (89.1 | )% | ||||||||||||
Segment Adjusted EBITDA | $ | 15.0 | $ | 49.1 | (69.5 | )% | $ | 56.0 | $ | 95.4 | (41.3 | )% | |||||||||
(Actual Amounts) | |||||||||||||||||||||
Home health: | |||||||||||||||||||||
Admissions | 34,841 | 37,828 | (7.9 | )% | 77,317 | 75,772 | 2.0 | % | |||||||||||||
Recertifications | 28,328 | 28,129 | 0.7 | % | 54,881 | 56,411 | (2.7 | )% | |||||||||||||
Episodes | 60,154 | 66,881 | (10.1 | )% | 128,806 | 130,507 | (1.3 | )% | |||||||||||||
Revenue per episode | $ | 2,920 | $ | 2,959 | (1.3 | )% | $ | 2,914 | $ | 3,007 | (3.1 | )% | |||||||||
Episodic visits per episode | 17.4 | 17.1 | 1.8 | % | 16.9 | 17.4 | (2.9 | )% | |||||||||||||
Total visits | 1,250,546 | 1,325,362 | (5.6 | )% | 2,556,776 | 2,633,972 | (2.9 | )% | |||||||||||||
Cost per visit | $ | 89 | $ | 76 | 17.1 | % | $ | 85 | $ | 75 | 13.3 | % | |||||||||
Hospice: | |||||||||||||||||||||
Admissions | 3,190 | 2,324 | 37.3 | % | 6,176 | 4,702 | 31.3 | % | |||||||||||||
Patient days | 336,507 | 259,501 | 29.7 | % | 671,052 | 498,523 | 34.6 | % | |||||||||||||
Average daily census | 3,698 | 2,852 | 29.7 | % | 3,687 | 2,754 | 33.9 | % | |||||||||||||
Revenue per day | $ | 142 | $ | 148 | (4.1 | )% | $ | 143 | $ | 146 | (2.1 | )% |
Three Months Ended June 30, | Six Months Ended June 30, | Three Months Ended March 31, | ||||||||||||||||||||||||||||||||
2020 | 2019 | 2020 | 2019 | 2021 | 2020 | |||||||||||||||||||||||||||||
Operating expenses: | Operating expenses: | |||||||||||||||||||||||||||||||||
Cost of services sold (excluding depreciation and amortization) | 54.8 | % | 45.9 | % | 51.2 | % | 45.9 | % | ||||||||||||||||||||||||||
Cost of services (excluding depreciation and amortization) | Cost of services (excluding depreciation and amortization) | 43.7 | % | 48.0 | % | |||||||||||||||||||||||||||||
Support and overhead costs | 39.4 | % | 34.4 | % | 38.0 | % | 34.7 | % | Support and overhead costs | 37.5 | % | 36.7 | % | |||||||||||||||||||||
Total operating expenses | 94.2 | % | 80.3 | % | 89.2 | % | 80.6 | % | Total operating expenses | 81.1 | % | 84.7 | % |
Six Months Ended June 30, | Three Months Ended March 31, | |||||||||||||||||
2020 | 2019 | 2021 | 2020 | |||||||||||||||
Net cash provided by operating activities | $ | 251.6 | $ | 305.3 | Net cash provided by operating activities | $ | 158.5 | $ | 29.3 | |||||||||
Net cash used in investing activities | (175.1 | ) | (191.6 | ) | Net cash used in investing activities | (95.6) | (83.0) | |||||||||||
Net cash provided by financing activities | 253.9 | 40.5 | ||||||||||||||||
Increase in cash, cash equivalents, and restricted cash | $ | 330.4 | $ | 154.2 | ||||||||||||||
Net cash (used in) provided by financing activities | Net cash (used in) provided by financing activities | (77.5) | 71.1 | |||||||||||||||
(Decrease) increase in cash, cash equivalents, and restricted cash | (Decrease) increase in cash, cash equivalents, and restricted cash | $ | (14.6) | $ | 17.4 |
Total | April 1 through December 31, 2021 | 2022 - 2023 | 2024 - 2025 | 2026 and thereafter | |||||||||||||||||||||||||
Long-term debt obligations: | |||||||||||||||||||||||||||||
Long-term debt, excluding revolving credit facility and finance lease obligations (a) | $ | 2,895.1 | $ | 110.3 | $ | 240.4 | $ | 582.1 | $ | 1,962.3 | |||||||||||||||||||
Interest on long-term debt (b) | 897.7 | 98.0 | 250.6 | 224.9 | 324.2 | ||||||||||||||||||||||||
Finance lease obligations (c) | 645.0 | 40.4 | 101.3 | 100.9 | 402.4 | ||||||||||||||||||||||||
Operating lease obligations (d) | 340.2 | 44.5 | 95.8 | 67.2 | 132.7 | ||||||||||||||||||||||||
Purchase obligations (e) | 110.8 | 40.6 | 43.0 | 17.9 | 9.3 | ||||||||||||||||||||||||
Other long-term liabilities (f)(g) | 3.3 | 0.3 | 0.4 | 0.4 | 2.2 | ||||||||||||||||||||||||
Total | $ | 4,892.1 | $ | 334.1 | $ | 731.5 | $ | 993.4 | $ | 2,833.1 |
Total | July 1 through December 31, 2020 | 2021 - 2022 | 2023 - 2024 | 2025 and thereafter | |||||||||||||||
Long-term debt obligations: | |||||||||||||||||||
Long-term debt, excluding revolving credit facility and finance lease obligations (a) | $ | 3,206.3 | $ | 7.3 | $ | 41.5 | $ | 1,237.0 | $ | 1,920.5 | |||||||||
Interest on long-term debt (b) | 997.5 | 81.5 | 317.8 | 279.4 | 318.8 | ||||||||||||||
Finance lease obligations (c) | 619.0 | 25.6 | 97.3 | 90.4 | 405.7 | ||||||||||||||
Operating lease obligations (d) | 370.4 | 28.0 | 107.0 | 81.7 | 153.7 | ||||||||||||||
Purchase obligations (e) | 124.6 | 34.2 | 64.5 | 19.6 | 6.3 | ||||||||||||||
Other long-term liabilities (f)(g) | 3.2 | 0.1 | 0.5 | 0.4 | 2.2 | ||||||||||||||
Total | $ | 5,321.0 | $ | 176.7 | $ | 628.6 | $ | 1,708.5 | $ | 2,807.2 |
(b) Interest on our fixed rate debt is presented using the stated interest rate. Interest expense on our variable rate debt is estimated using the rate in effect as of March 31, 2021. Interest pertaining to our credit agreement and bonds is included to their respective ultimate maturity dates. Interest related to finance lease obligations is excluded from this line. Amounts exclude amortization of debt discounts, amortization of loan fees, or fees for lines of credit that would be included in interest expense in our consolidated statements of comprehensive income. (c) Amounts include interest portion of future minimum finance lease payments. (d) Our inpatient rehabilitation segment leases approximately 12% of its hospitals as well as other property and equipment under operating leases in the normal course of business. Our home health and hospice segment leases relatively small office spaces in the localities it serves, space for its corporate office, and other equipment under operating leases in the normal course of business. Amounts include interest portion of future minimum operating lease payments. For more information, see Note 7, Leases, to the consolidated financial statements accompanying the 2020 Form 10‑K. (e) Purchase obligations include agreements to purchase goods or services that are enforceable and legally binding on Encompass Health and that specify all significant terms, including: fixed or minimum quantities to be purchased; fixed, minimum, or variable price provisions; and the approximate timing of the transaction. Purchase obligations exclude agreements that are cancelable without penalty. Our purchase obligations primarily relate to software licensing and support and medical equipment. Purchase obligations are not recognized in our condensed consolidated balance sheet. (f) Because their future cash outflows are uncertain, the following noncurrent liabilities are excluded from the table above: general liability, professional liability, and workers' compensation risks, noncurrent amounts related to third-party billing audits, and deferred income taxes. For more information, see Note 11, Self-Insured Risks, Note 16, Income Taxes, and Note 18, Contingencies and Other Commitments, to the consolidated financial statements accompanying the 2020 Form 10‑K and Note 8, Income Taxes, to the condensed consolidated financial statements included in Part I, Item 1, Financial Statements (Unaudited), of this report. (g) The table above does not include Redeemable noncontrolling interests of $31.7 million because of the uncertainty surrounding the timing and amounts of any related cash outflows. See Note 5, Redeemable Noncontrolling Interests, to the condensed consolidated financial statements included in Part I, Item 1, Financial Statements (Unaudited), of this report. |
Three Months Ended March 31, 2021 | For the Year Ended December 31, 2020 | ||||||||||
(In Millions) | |||||||||||
Net operating revenues | $ | 894.8 | $ | 3,387.1 | |||||||
Intercompany revenues generated from non-guarantor subsidiaries | 4.9 | 19.9 | |||||||||
Total net operating revenues | $ | 899.7 | $ | 3,407.0 | |||||||
Operating expenses | $ | 759.8 | $ | 2,976.0 | |||||||
Intercompany expenses incurred in transactions with non-guarantor subsidiaries | 7.6 | 30.3 | |||||||||
Total operating expenses | $ | 767.4 | $ | 3,006.3 | |||||||
Income from continuing operations | $ | 70.6 | $ | 166.2 | |||||||
Net income | $ | 70.6 | $ | 166.2 | |||||||
Net income attributable to Encompass Health | $ | 70.6 | $ | 165.7 |
Six Months Ended June 30, 2020 | |||
(In Millions) | |||
Net operating revenues | $ | 1,666.8 | |
Intercompany revenues generated from non-guarantor subsidiaries | 9.6 | ||
Total net operating revenues | $ | 1,676.4 | |
Operating expenses | $ | 1,489.4 | |
Intercompany expenses incurred in transactions with non-guarantor subsidiaries | 15.3 | ||
Total operating expenses | $ | 1,504.7 | |
Income from continuing operations | $ | 68.2 | |
Net income | $ | 68.3 | |
Net income attributable to Encompass Health | $ | 67.8 |
As of June 30, 2020 | As of December 31, 2019 | As of March 31, 2021 | As of December 31, 2020 | |||||||||||||||
(In Millions) | (In Millions) | |||||||||||||||||
Total current assets | $ | 893.8 | $ | 556.7 | Total current assets | $ | 767.4 | $ | 716.5 | |||||||||
Property and equipment, net | $ | 1,440.7 | $ | 1,385.9 | Property and equipment, net | $ | 1,648.3 | $ | 1,593.9 | |||||||||
Goodwill | 1,973.6 | 1,972.7 | Goodwill | 1,973.6 | 1,973.6 | |||||||||||||
Intercompany receivable due from non-guarantor subsidiaries | 81.6 | 118.4 | Intercompany receivable due from non-guarantor subsidiaries | 157.8 | 152.4 | |||||||||||||
Other noncurrent assets | 766.8 | 790.7 | Other noncurrent assets | 679.9 | 701.4 | |||||||||||||
Total noncurrent assets | $ | 4,262.7 | $ | 4,267.7 | Total noncurrent assets | $ | 4,459.6 | $ | 4,421.3 | |||||||||
Total current liabilities | $ | 543.4 | $ | 604.4 | Total current liabilities | $ | 679.5 | $ | 580.8 | |||||||||
Long-term debt, net of current portion | $ | 3,507.2 | $ | 2,981.7 | Long-term debt, net of current portion | $ | 3,106.9 | $ | 3,213.1 | |||||||||
Other noncurrent liabilities | 265.1 | 253.5 | Other noncurrent liabilities | 251.7 | 253.9 | |||||||||||||
Total noncurrent liabilities | $ | 3,772.3 | $ | 3,235.2 | Total noncurrent liabilities | $ | 3,358.6 | $ | 3,467.0 | |||||||||
Redeemable noncontrolling interests | $ | — | $ | 208.2 |
Three Months Ended March 31, | |||||||||||||||||||||||
2021 | 2020 | ||||||||||||||||||||||
Net income | $ | 132.8 | $ | 108.7 | |||||||||||||||||||
Loss from discontinued operations, net of tax, attributable to Encompass Health | — | 0.1 | |||||||||||||||||||||
Net income attributable to noncontrolling interests | (25.5) | (21.7) | |||||||||||||||||||||
Provision for income tax expense | 34.5 | 27.1 | |||||||||||||||||||||
Interest expense and amortization of debt discounts and fees | 42.8 | 43.2 | |||||||||||||||||||||
Government, class action, and related settlements | — | 2.8 | |||||||||||||||||||||
(Gain) loss on disposal of assets | (0.1) | 0.1 | |||||||||||||||||||||
Depreciation and amortization | 62.5 | 58.8 | |||||||||||||||||||||
Stock-based compensation expense | 2.8 | 7.1 | |||||||||||||||||||||
Costs associated with the strategic alternatives review | 0.9 | — | |||||||||||||||||||||
Gain on consolidation of joint venture formerly accounted for under the equity method of accounting | — | (2.2) | |||||||||||||||||||||
Change in fair market value of equity securities | 0.1 | 2.5 | |||||||||||||||||||||
Payroll taxes on SARs exercise | — | 1.5 | |||||||||||||||||||||
Adjusted EBITDA | $ | 250.8 | $ | 228.0 |
Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||
2020 | 2019 | 2020 | 2019 | ||||||||||||
Net income | $ | 48.3 | $ | 110.9 | $ | 157.0 | $ | 236.1 | |||||||
(Income) loss from discontinued operations, net of tax, attributable to Encompass Health | (0.1 | ) | 0.1 | — | 0.6 | ||||||||||
Net income attributable to noncontrolling interests | (14.8 | ) | (19.7 | ) | (36.5 | ) | (42.6 | ) | |||||||
Provision for income tax expense | 11.8 | 23.5 | 38.9 | 54.3 | |||||||||||
Interest expense and amortization of debt discounts and fees | 45.8 | 37.7 | 89.0 | 74.9 | |||||||||||
Government, class action, and related settlements | — | — | 2.8 | — | |||||||||||
Loss on disposal or impairment of assets | 3.0 | 1.3 | 3.1 | 2.4 | |||||||||||
Depreciation and amortization | 60.7 | 52.7 | 119.5 | 105.2 | |||||||||||
Loss on early extinguishment of debt | — | 2.3 | — | 2.3 | |||||||||||
Stock-based compensation expense | 9.9 | 45.9 | 17.0 | 65.3 | |||||||||||
Transaction costs | — | 0.4 | — | 1.0 | |||||||||||
Gain on consolidation of Treasure Coast | — | — | (2.2 | ) | — | ||||||||||
SARs mark-to-market impact on noncontrolling interests | — | (2.6 | ) | — | (3.4 | ) | |||||||||
Change in fair market value of equity securities | (2.4 | ) | (0.3 | ) | 0.1 | (1.2 | ) | ||||||||
Payroll taxes on SARs exercise | — | — | 1.5 | 0.2 | |||||||||||
Adjusted EBITDA | $ | 162.2 | $ | 252.2 | $ | 390.2 | $ | 495.1 |
Six Months Ended June 30, | Three Months Ended March 31, | |||||||||||||||||
2020 | 2019 | 2021 | 2020 | |||||||||||||||
Net cash provided by operating activities | $ | 251.6 | $ | 305.3 | Net cash provided by operating activities | $ | 158.5 | $ | 29.3 | |||||||||
Interest expense and amortization of debt discounts and fees | 89.0 | 74.9 | Interest expense and amortization of debt discounts and fees | 42.8 | 43.2 | |||||||||||||
Equity in net income of nonconsolidated affiliates | 1.5 | 4.3 | Equity in net income of nonconsolidated affiliates | 1.0 | 0.8 | |||||||||||||
Net income attributable to noncontrolling interests in continuing operations | (36.5 | ) | (42.6 | ) | Net income attributable to noncontrolling interests in continuing operations | (25.5) | (21.7) | |||||||||||
Amortization of debt-related items | (3.1 | ) | (2.0 | ) | Amortization of debt-related items | (2.0) | (1.4) | |||||||||||
Distributions from nonconsolidated affiliates | (2.0 | ) | (4.6 | ) | Distributions from nonconsolidated affiliates | (1.0) | (1.0) | |||||||||||
Current portion of income tax expense | 48.0 | 53.7 | Current portion of income tax expense | 25.8 | 25.7 | |||||||||||||
Change in assets and liabilities | 40.5 | 101.7 | Change in assets and liabilities | 50.3 | 154.4 | |||||||||||||
Cash used in operating activities of discontinued operations | 0.1 | 4.5 | Cash used in operating activities of discontinued operations | — | 0.1 | |||||||||||||
Transaction costs | — | 1.0 | ||||||||||||||||
SARs mark-to-market impact on noncontrolling interests | — | (3.4 | ) | |||||||||||||||
Costs associated with the strategic alternatives review | Costs associated with the strategic alternatives review | 0.9 | — | |||||||||||||||
Change in fair market value of equity securities | 0.1 | (1.2 | ) | Change in fair market value of equity securities | 0.1 | 2.5 | ||||||||||||
Payroll taxes on SARs exercise | 1.5 | 0.2 | Payroll taxes on SARs exercise | — | 1.5 | |||||||||||||
Other | (0.5 | ) | 3.3 | Other | (0.1) | (5.4) | ||||||||||||
Adjusted EBITDA | $ | 390.2 | $ | 495.1 | Adjusted EBITDA | $ | 250.8 | $ | 228.0 |
Period | Total Number of Shares (or Units) Purchased(1) | Average Price Paid per Share (or Unit) ($) | Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs | Maximum Number (or Approximate Dollar Value) of Shares That May Yet Be Purchased Under the Plans or Programs(2) | ||||||||||||||||||||||
January 1, through January 31, 2021 | 138,780 | $ | 82.69 | — | $ | 198,053,924 | ||||||||||||||||||||
February 1, through February 28, 2021 | 48,735 | 80.42 | — | 198,053,924 | ||||||||||||||||||||||
March 1, through March 31, 2021 | 2,618 | 79.94 | — | 198,053,924 | ||||||||||||||||||||||
Total | 190,133 | 82.07 | — |
Period | Total Number of Shares (or Units) Purchased(1) | Average Price Paid per Share (or Unit) ($) | Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs | Maximum Number (or Approximate Dollar Value) of Shares That May Yet Be Purchased Under the Plans or Programs(2) | ||||||||||
April 1 through April 30, 2020 | 1,102 | $ | 67.59 | — | $ | 199,253,887 | ||||||||
May 1 through May 31, 2020 | — | — | — | 199,253,887 | ||||||||||
June 1 through June 30, 2020 | 425 | 65.41 | — | 199,253,887 | ||||||||||
Total | 1,527 | 66.98 | — |
(2) On October 28, 2013, we announced our board of directors authorized the repurchase of up to $200 million of our common stock. On February 14, 2014, our board approved an increase in this common stock repurchase authorization from $200 million to $250 million. On July 24, 2018, our board approved resetting the aggregate common stock repurchase authorization to $250 million. The repurchase authorization does not require the repurchase of a specific number of shares, has an indefinite term, and is subject to termination at any time by our board of directors. Subject to certain terms and conditions, including a maximum price per share and compliance with federal and state securities and other laws, the repurchases may be made from time to time in open market transactions, privately negotiated transactions, or other transactions, including trades under a plan established in accordance with Rule 10b5-1 under the Securities Exchange Act of 1934, as amended. |
ENCOMPASS HEALTH CORPORATION | ||||||||
By: | /s/ Douglas E. Coltharp | |||||||
Douglas E. Coltharp | ||||||||
Executive Vice President and Chief Financial Officer | ||||||||
Date: |
No. | Description | |||||||||||||
101 | Sections of the Encompass Health Corporation Quarterly Report on Form 10-Q for the quarter ended | |||||||||||||
101.INS | XBRL Instance Document (the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document) | |||||||||||||
101.SCH | XBRL Taxonomy Extension Schema Document | |||||||||||||
101.CAL | XBRL Taxonomy Extension Calculation Linkbase Document | |||||||||||||
101.DEF | XBRL Taxonomy Extension Definition Linkbase Document | |||||||||||||
101.LAB | XBRL Taxonomy Extension Label Linkbase Document | |||||||||||||
101.PRE | XBRL Taxonomy Extension Presentation Linkbase Document | |||||||||||||
104 | Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101) |