Document and Entity Information
Document and Entity Information - shares | 6 Months Ended | |
Jun. 30, 2019 | Jul. 24, 2019 | |
Cover page. | ||
Document Transition Report | false | |
Document Quarterly Report | true | |
Document Type | 10-Q | |
Document Period End Date | Jun. 30, 2019 | |
Entity File Number | 001-10315 | |
Entity Registrant Name | Encompass Health Corporation | |
Entity Incorporation, State or Country Code | DE | |
Entity Tax Identification Number | 63-0860407 | |
Entity Address, Address Line One | 9001 Liberty Parkway | |
Entity Address, City or Town | Birmingham | |
Entity Address, State or Province | AL | |
Entity Address, Postal Zip Code | 35242 | |
City Area Code | 205 | |
Local Phone Number | 967-7116 | |
Entity Central Index Key | 0000785161 | |
Current Fiscal Year End Date | --12-31 | |
Entity Filer Category | Large Accelerated Filer | |
Document Fiscal Year Focus | 2019 | |
Document Fiscal Period Focus | Q2 | |
Amendment Flag | false | |
Entity Small Business | false | |
Entity Emerging Growth Company | false | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding | 98,644,648 | |
Title of 12(b) Security | Common Stock, par value $0.01 per share | |
Trading Symbol | EHC | |
Security Exchange Name | NYSE |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Comprehensive Income (Unaudited) - USD ($) shares in Millions, $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2019 | Jun. 30, 2018 | Jun. 30, 2019 | Jun. 30, 2018 | |
Income Statement [Abstract] | ||||
Net operating revenues | $ 1,135 | $ 1,067.7 | $ 2,259 | $ 2,113.7 |
Operating expenses: | ||||
Salaries and benefits | 622.9 | 578.2 | 1,243.7 | 1,148.4 |
Other operating expenses | 149.8 | 149.4 | 299.9 | 290.6 |
Occupancy costs | 20.3 | 19.5 | 39.9 | 38.1 |
Supplies | 41.7 | 39.3 | 81.8 | 79.2 |
General and administrative expenses | 77.1 | 54.9 | 130.5 | 116 |
Depreciation and amortization | 52.7 | 49.7 | 105.2 | 95.6 |
Total operating expenses | 964.5 | 891 | 1,901 | 1,767.9 |
Loss on early extinguishment of debt | (2.3) | 0 | (2.3) | 0 |
Interest expense and amortization of debt discounts and fees | 37.7 | 37.7 | 74.9 | 73.3 |
Other income | (2.2) | (1.3) | (5.9) | (1.2) |
Equity in net income of nonconsolidated affiliates | (1.8) | (2) | (4.3) | (4.3) |
Income from continuing operations before income tax expense | 134.5 | 142.3 | 291 | 278 |
Provision for income tax expense | 23.5 | 29.3 | 54.3 | 59.3 |
Income from continuing operations | 111 | 113 | 236.7 | 218.7 |
(Loss) income from discontinued operations, net of tax | (0.1) | 0.2 | (0.6) | (0.3) |
Net and comprehensive income | 110.9 | 113.2 | 236.1 | 218.4 |
Less: Net and comprehensive income attributable to noncontrolling interests | (19.7) | (21.4) | (42.6) | (42.8) |
Net and comprehensive income attributable to Encompass Health | $ 91.2 | $ 91.8 | $ 193.5 | $ 175.6 |
Weighted average common shares outstanding: | ||||
Basic (shares) | 98 | 97.9 | 98.2 | 97.9 |
Diluted (shares) | 99.3 | 99.6 | 99.5 | 99.6 |
Basic earnings per share attributable to Encompass Health common shareholders: | ||||
Continuing operations (in dollars per share) | $ 0.93 | $ 0.93 | $ 1.97 | $ 1.79 |
Discontinued operations (in dollars per share) | 0 | 0 | (0.01) | 0 |
Net Income (in dollars per share) | 0.93 | 0.93 | 1.96 | 1.79 |
Diluted earnings per share attributable to Encompass Health common shareholders: | ||||
Continuing operations (in dollars per share) | 0.92 | 0.92 | 1.95 | 1.76 |
Discontinued operations (in dollars per share) | 0 | 0 | (0.01) | 0 |
Net income (in dollars per share) | $ 0.92 | $ 0.92 | $ 1.94 | $ 1.76 |
Amounts attributable to Encompass Health common shareholders: | ||||
Income from continuing operations | $ 91.3 | $ 91.6 | $ 194.1 | $ 175.9 |
(Loss) income from discontinued operations, net of tax | (0.1) | 0.2 | (0.6) | (0.3) |
Net and comprehensive income attributable to Encompass Health | $ 91.2 | $ 91.8 | $ 193.5 | $ 175.6 |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets (Unaudited) - USD ($) $ in Millions | Jun. 30, 2019 | Mar. 31, 2019 | Dec. 31, 2018 | Jun. 30, 2018 | Mar. 31, 2018 | Dec. 31, 2017 | |
Current assets: | |||||||
Cash and cash equivalents | $ 221.7 | $ 69.2 | $ 59 | $ 54.4 | |||
Restricted cash | 56.8 | 59 | 65.8 | 62.4 | |||
Accounts receivable | 496 | 467.7 | |||||
Other current assets | 70.4 | 66.2 | |||||
Total current assets | 844.9 | 662.1 | |||||
Property and equipment, net | 1,788.1 | 1,634.8 | |||||
Operating lease right-of-use assets | 284.4 | 0 | |||||
Goodwill | 2,111.6 | 2,100.8 | |||||
Intangible assets, net | 443.6 | 443.4 | |||||
Deferred income tax assets | 42.6 | 42.9 | |||||
Other long-term assets | 296.9 | 291 | |||||
Total assets | 5,812.1 | [1] | 5,175 | ||||
Current liabilities: | |||||||
Current portion of long-term debt | 38.1 | 35.8 | |||||
Current operating lease liabilities | 45.2 | 0 | |||||
Accounts payable | 95.6 | 90 | |||||
Accrued expenses and other current liabilities | 574 | 546.7 | |||||
Total current liabilities | 752.9 | 672.5 | |||||
Long-term debt, net of current portion | 2,719.6 | 2,478.6 | |||||
Long-term operating lease liabilities | 245.8 | 0 | |||||
Other long-term liabilities | 157.2 | 205.2 | |||||
Total Liabilities | 3,875.5 | 3,356.3 | |||||
Commitments and contingencies | |||||||
Redeemable noncontrolling interests | 352.8 | 261.7 | |||||
Shareholders’ equity: | |||||||
Encompass Health shareholders’ equity | 1,275.9 | 1,276.7 | |||||
Noncontrolling interests | 307.9 | 280.3 | |||||
Total shareholders’ equity | 1,583.8 | $ 1,616.5 | 1,557 | $ 1,464 | $ 1,409.9 | $ 1,395.4 | |
Total liabilities and shareholders' equity | $ 5,812.1 | [1] | $ 5,175 | ||||
[1] | Our consolidated assets as of June 30, 2019 and December 31, 2018 include total assets of variable interest entities of $216.4 million and $197.5 million , respectively, which cannot be used by us to settle the obligations of other entities. Our consolidated liabilities as of June 30, 2019 and December 31, 2018 include total liabilities of the variable interest entities of $55.8 million and $50.8 million , respectively. See Note 3 , Variable Interest Entities . |
Condensed Consolidated Balanc_2
Condensed Consolidated Balance Sheets (Unaudited) (Parenthetical) - USD ($) $ in Millions | Jun. 30, 2019 | Dec. 31, 2018 |
Statement of Financial Position [Abstract] | ||
Total assets of variable interest entities | $ 216.4 | $ 197.5 |
Total liabilities of variable interest entities | $ 55.8 | $ 50.8 |
Condensed Consolidated Statem_2
Condensed Consolidated Statements of Shareholders' Equity (Unaudited) - USD ($) shares in Millions, $ in Millions | Total | Common Stock | Capital in Excess of Par Value | Accumulated Deficit | Accumulated Other Comprehensive Loss | Treasury Stock | Noncontrolling Interests |
Balance at beginning of period at Dec. 31, 2017 | $ 1,395.4 | $ 1.1 | $ 2,747.4 | $ (1,176.2) | $ (1.3) | $ (418.5) | $ 242.9 |
Balance at beginning of period (shares) at Dec. 31, 2017 | 98.3 | ||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||
Net income | 211.9 | 175.6 | 36.3 | ||||
Receipt of treasury stock | (8.3) | (8.3) | |||||
Receipt of treasury stock (shares) | (0.2) | ||||||
Dividends declared (per share) | (49.8) | (49.8) | |||||
Stock-based compensation | 13.3 | 13.3 | |||||
Distributions declared | (36.8) | (36.8) | |||||
Capital contributions from consolidated affiliates | 4 | 4 | |||||
Fair value adjustments to redeemable noncontrolling interests, net of tax | (66.3) | (66.3) | |||||
Other | 0.6 | $ 0 | 1.3 | (1.3) | 1.3 | (0.7) | 0 |
Other (shares) | 0.8 | ||||||
Balance at end of period at Jun. 30, 2018 | 1,464 | $ 1.1 | 2,645.9 | (1,001.9) | 0 | (427.5) | 246.4 |
Balance at end of period (shares) at Jun. 30, 2018 | 98.9 | ||||||
Balance at beginning of period at Mar. 31, 2018 | 1,409.9 | $ 1.1 | 2,685.9 | (1,093.7) | 0 | (427.2) | 243.8 |
Balance at beginning of period (shares) at Mar. 31, 2018 | 98.8 | ||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||
Net income | 109.5 | 91.8 | 17.7 | ||||
Dividends declared (per share) | (24.9) | (24.9) | |||||
Stock-based compensation | 8 | 8 | |||||
Distributions declared | (19.1) | (19.1) | |||||
Capital contributions from consolidated affiliates | 4 | 4 | |||||
Fair value adjustments to redeemable noncontrolling interests, net of tax | (24.1) | (24.1) | |||||
Other | 0.7 | $ 0 | 1 | 0 | 0 | (0.3) | 0 |
Other (shares) | 0.1 | ||||||
Balance at end of period at Jun. 30, 2018 | 1,464 | $ 1.1 | 2,645.9 | (1,001.9) | 0 | (427.5) | 246.4 |
Balance at end of period (shares) at Jun. 30, 2018 | 98.9 | ||||||
Balance at beginning of period at Dec. 31, 2018 | 1,557 | $ 1.1 | 2,588.7 | (885.2) | 0 | (427.9) | 280.3 |
Balance at beginning of period (shares) at Dec. 31, 2018 | 98.9 | ||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||
Net income | 229.7 | 193.5 | 36.2 | ||||
Receipt of treasury stock | (16.1) | (16.1) | |||||
Receipt of treasury stock (shares) | (0.3) | ||||||
Dividends declared (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, net of tax | (100.7) | (100.7) | |||||
Repurchases of common stock in open market | (43.8) | (43.8) | |||||
Repurchases of common stock in open market (shares) | (0.7) | ||||||
Other | 14.9 | 5 | 0 | 0 | (1.3) | 11.2 | |
Other (shares) | 0.7 | ||||||
Balance at end of period at Jun. 30, 2019 | 1,583.8 | $ 1.1 | 2,455.6 | (691.7) | 0 | (489.1) | 307.9 |
Balance at end of period (shares) at Jun. 30, 2019 | 98.6 | ||||||
Balance at beginning of period at Mar. 31, 2019 | 1,616.5 | $ 1.1 | 2,551.3 | (782.9) | 0 | (455.2) | 302.2 |
Balance at beginning of period (shares) at Mar. 31, 2019 | 99.1 | ||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||
Net income | 108.5 | 91.2 | 17.3 | ||||
Receipt of treasury stock | (0.2) | (0.2) | |||||
Receipt of treasury stock (shares) | 0 | ||||||
Dividends declared (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, net of tax | (80.4) | (80.4) | |||||
Repurchases of common stock in open market | (32.8) | (32.8) | |||||
Repurchases of common stock in open market (shares) | (0.5) | ||||||
Other | 1.3 | 2.2 | 0 | 0 | (0.9) | 0 | |
Other (shares) | 0 | ||||||
Balance at end of period at Jun. 30, 2019 | $ 1,583.8 | $ 1.1 | $ 2,455.6 | $ (691.7) | $ 0 | $ (489.1) | $ 307.9 |
Balance at end of period (shares) at Jun. 30, 2019 | 98.6 |
Condensed Consolidated Statem_3
Condensed Consolidated Statements of Shareholders' Equity (Unaudited) (Parenthetical) - $ / shares | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2019 | Jun. 30, 2018 | Jun. 30, 2019 | Jun. 30, 2018 | |
Statement of Stockholders' Equity (Parenthetical) [Abstract] | ||||
Dividends declared on common stock | $ 0.27 | $ 0.25 | $ 0.54 | $ 0.50 |
Condensed Consolidated Statem_4
Condensed Consolidated Statements of Cash Flows (Unaudited) - USD ($) $ in Millions | 6 Months Ended | |
Jun. 30, 2019 | Jun. 30, 2018 | |
Cash flows from operating activities: | ||
Net income | $ 236.1 | $ 218.4 |
Loss from discontinued operations, net of tax | 0.6 | 0.3 |
Adjustments to reconcile net income to net cash provided by operating activities— | ||
Depreciation and amortization | 105.2 | 95.6 |
Stock-based compensation | 65.3 | 47.5 |
Deferred tax expense (benefit) | 0.5 | (3.6) |
Other, net | 3.8 | 5.6 |
Change in assets and liabilities, net of acquisitions— | ||
Accounts receivable | (22.6) | 9.9 |
Other assets | (11.8) | 11.4 |
Accounts payable | (4.5) | (0.4) |
Accrued payroll | (7.7) | (10.6) |
Other liabilities | (55.1) | 12 |
Net cash used in operating activities of discontinued operations | (4.5) | (0.6) |
Total adjustments | 68.6 | 166.8 |
Net cash provided by operating activities | 305.3 | 385.5 |
Cash flows from investing activities: | ||
Purchases of property and equipment | (155.8) | (108.8) |
Additions to capitalized software costs | (6.6) | (9.7) |
Acquisitions of businesses, net of cash acquired | (13.7) | (135.8) |
Other, net | (15.5) | (6.7) |
Net cash used in investing activities | (191.6) | (261) |
Cash flows from financing activities: | ||
Principal payments on debt, including pre-payments | (112.1) | (9.1) |
Borrowings on revolving credit facility | 400 | 245 |
Payments on revolving credit facility | (95) | (190) |
Principal payments under finance lease obligations | (9.3) | (8.4) |
Repurchases of common stock, including fees and expenses | (43.8) | 0 |
Dividends paid on common stock | (54.9) | (49.9) |
Purchase of equity interests in consolidated affiliates | 0 | (65.1) |
Distributions paid to noncontrolling interests of consolidated affiliates | (36.5) | (35.2) |
Taxes paid on behalf of employees for shares withheld | (16.1) | (8.3) |
Other, net | 8.2 | 4.5 |
Net cash provided by (used in) financing activities | 40.5 | (116.5) |
Increase in cash, cash equivalents, and restricted cash | 154.2 | 8 |
Cash, cash equivalents, and restricted cash at beginning of period | 133.5 | 116.8 |
Cash, cash equivalents, and restricted cash at end of period | 287.7 | 124.8 |
Reconciliation of Cash, Cash Equivalents, and Restricted Cash | ||
Cash and cash equivalents at beginning of period | 69.2 | 54.4 |
Restricted cash at beginning of period | 59 | 62.4 |
Restricted cash included in other long-term assets at beginning of period | 5.3 | 0 |
Cash, cash equivalents, and restricted cash at beginning of period | 133.5 | 116.8 |
Cash and cash equivalents at end of period | 221.7 | 59 |
Restricted cash at end of period | 56.8 | 65.8 |
Restricted cash included in other long-term assets at end of period | 9.2 | 0 |
Cash, cash equivalents, and restricted cash at end of period | $ 287.7 | $ 124.8 |
Basis of Presentation
Basis of Presentation | 6 Months Ended |
Jun. 30, 2019 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Basis of Presentation | Basis of Presentation Encompass Health Corporation, incorporated in Delaware in 1984, including its subsidiaries, is one of the nation’s largest providers of post-acute healthcare services, offering both facility-based and home-based patient services in 37 states and Puerto Rico through its network of inpatient rehabilitation hospitals, home health agencies, and hospice agencies. We manage our operations and disclose financial information using two reportable segments: (1) inpatient rehabilitation and (2) home health and hospice. See also Note 13 , Segment Reporting . The accompanying unaudited condensed consolidated financial statements of Encompass Health Corporation and Subsidiaries should be read in conjunction with the consolidated financial statements and accompanying notes contained in Encompass Health’s Annual Report on Form 10-K filed with the United States Securities and Exchange Commission on February 27, 2019 (the “ 2018 Form 10‑K ”). The unaudited condensed consolidated financial statements have been prepared in accordance with the rules and regulations of the SEC applicable to interim financial information. Certain information and note disclosures included in financial statements prepared in accordance with generally accepted accounting principles in the United States of America have been omitted in these interim statements, as allowed by such SEC rules and regulations. The condensed consolidated balance sheet as of December 31, 2018 has been derived from audited financial statements, but it does not include all disclosures required by GAAP. However, we believe the disclosures are adequate to make the information presented not misleading. The unaudited results of operations for the interim periods shown in these financial statements are not necessarily indicative of operating results for the entire year. In our opinion, the accompanying condensed consolidated financial statements recognize all adjustments of a normal recurring nature considered necessary to fairly state the financial position, results of operations, and cash flows for each interim period presented. Net Operating Revenues — Our Net operating revenues disaggregated by payor source and segment are as follows (in millions): Inpatient Rehabilitation Home Health and Hospice Consolidated Three Months Ended June 30, Three Months Ended June 30, Three Months Ended June 30, 2019 2018 2019 2018 2019 2018 Medicare $ 629.0 $ 607.1 $ 221.1 $ 199.2 $ 850.1 $ 806.3 Medicare Advantage 97.0 78.7 26.7 21.8 123.7 100.5 Managed care 86.5 86.6 8.0 8.7 94.5 95.3 Medicaid 27.1 26.8 4.6 2.7 31.7 29.5 Other third-party payors 10.5 12.7 — — 10.5 12.7 Workers’ compensation 6.5 6.8 0.3 0.2 6.8 7.0 Patients 5.6 4.4 0.1 0.3 5.7 4.7 Other income 11.7 11.5 0.3 0.2 12.0 11.7 Total $ 873.9 $ 834.6 $ 261.1 $ 233.1 $ 1,135.0 $ 1,067.7 Inpatient Rehabilitation Home Health and Hospice Consolidated Six Months Ended June 30, Six Months Ended June 30, Six Months Ended June 30, 2019 2018 2019 2018 2019 2018 Medicare $ 1,268.4 $ 1,231.6 $ 436.1 $ 376.1 $ 1,704.5 $ 1,607.7 Medicare Advantage 181.5 151.2 52.2 41.8 233.7 193.0 Managed care 170.1 171.6 16.3 16.3 186.4 187.9 Medicaid 53.4 51.5 8.9 3.2 62.3 54.7 Other third-party payors 20.5 24.7 — — 20.5 24.7 Workers’ compensation 14.7 14.2 0.4 0.3 15.1 14.5 Patients 11.7 8.8 0.5 0.7 12.2 9.5 Other income 23.7 21.3 0.6 0.4 24.3 21.7 Total $ 1,744.0 $ 1,674.9 $ 515.0 $ 438.8 $ 2,259.0 $ 2,113.7 See Note 1, Summary of Significant Accounting Policies , to the consolidated financial statements accompanying the 2018 Form 10-K for our policy related to Net operating revenues . Leases— We determine if an arrangement is a lease or contains a lease at inception and perform an analysis to determine whether the lease is an operating lease or a finance lease. We measure right-of-use assets and lease liabilities at the lease commencement date based on the present value of the remaining lease payments. As most of our leases do not provide a readily determinable implicit rate, we estimate an incremental borrowing rate based on the credit quality of the Company and by comparing interest rates available in the market for similar borrowings, and adjusting this amount based on the impact of collateral over the term of each lease. We use this rate to discount the remaining lease payments in measuring the right-of-use asset and lease liability. We use the implicit rate when readily determinable. We recognize lease expense for operating leases on a straight-line basis over the lease term. For our finance leases, we recognize amortization expense from the amortization of the right-of-use asset and interest expense on the related lease liability. Certain of our lease agreements contain annual escalation clauses based on changes in the Consumer Price Index. The changes to the Consumer Price Index, as compared to our initial estimate at the lease commencement date, are treated as variable lease payments and recognized in the period in which the obligation for those payments was incurred. We do not account for lease and nonlease components separately for purposes of establishing right-of-use assets and lease liabilities. Leases with an initial term of twelve months or less are not recorded on the condensed consolidated balance sheet. We recognize lease expense for these leases on a straight-line basis over the lease term. Recently Adopted Accounting Pronouncements — In February 2016, the FASB issued ASU 2016-02, “Leases (Topic 842),” and has subsequently issued supplemental and/or clarifying ASUs (collectively “ASC 842”), in order to increase transparency and comparability by recognizing lease assets and liabilities on the balance sheet and disclosing key information about leasing arrangements. We adopted ASC 842 using the modified retrospective approach and applied the transition provisions with an effective date as of January 1, 2019 for leases that existed on that date. Prior period results continue to be presented under ASC 840 based on the accounting originally in effect for such periods. ASC 842 provides optional practical expedients in transition. We elected the ‘package of practical expedients,’ which permits us to not reassess under ASC 842 our prior conclusions about lease identification, lease classification and initial direct costs, and the practical expedient to not reassess certain land easements. We did not elect the use-of-hindsight practical expedient during the transition to ASC 842. The adoption of ASC 842 resulted in the addition of approximately $349 million in assets and $347 million in liabilities to our condensed consolidated balance sheet as of January 1, 2019, with the remaining $2 million being recorded as an adjustment to Capital in excess of par value . The adoption of ASC 842 also resulted in increased disclosure, including qualitative and quantitative disclosures about the nature, amount, timing and uncertainty of cash flows arising from leases. See the “Leases” section of this note and Note 4, Leases , and Note 6, Long-term Debt , for additional information about our leases. Recent Accounting Pronouncements Not Yet Adopted — In June 2016, the FASB issued ASU 2016-13, “Financial Instruments – Credit Losses (Topic 326),” which provides guidance for accounting for credit losses on financial instruments. The new guidance introduces an approach based on expected losses to estimate credit losses on certain types of financial instruments and modifies the impairment model for available-for-sale debt securities. The new guidance is effective for us beginning January 1, 2020, including interim periods within that reporting period. Early adoption is permitted beginning January 1, 2019. We continue to review the requirements of this standard and any potential impact it may have on our condensed consolidated financial statements. In August 2018, the FASB issued ASU 2018-15, “Intangibles—Goodwill and Other—Internal-Use Software (Subtopic 350-40): Customer’s Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That Is a Service Contract.” The update helps entities evaluate the accounting for fees paid by a customer in a cloud computing arrangement (hosting arrangement), by providing guidance in determining when the arrangement includes a software license. It requires entities to account for such costs consistent with the guidance on capitalizing costs associated with developing or obtaining internal-use software. The new guidance is effective for us beginning January 1, 2020, including interim periods within that reporting period. Early adoption is permitted. We continue to review the requirements of this standard and any potential impact it may have on our condensed consolidated financial statements. We do not believe any other recently issued, but not yet effective, accounting standards will have a material effect on our condensed consolidated financial position, results of operations, or cash flows. Revision of Previously Issued Financial Statements — During the preparation of our December 31, 2018 financial statements, an error was identified in the accounting for deferred tax assets related to fair value adjustments to redeemable noncontrolling interests. At that time, we assessed the materiality of the errors in deferred tax assets and related balances and concluded they were not material to any previously issued financial statements or disclosures. However, we revised our previously issued annual financial statements in connection with the issuance of our 2018 financial statements to correct for such errors. In addition, we have revised our condensed consolidated statement of shareholders’ equity for the six months ended June 30, 2018 presented herein to reflect the correction of these errors, which originated in years prior to 2018, as disclosed in the table below. For additional information on this revision, see Note 1, Summary of Significant Accounting Policies , “Revision of Previously Issued Financial Statements” to the consolidated financial statements accompanying the 2018 Form 10-K. For the Six Months Ended June 30, 2018 As Reported Adjustment As Revised (In Millions) Fair value adjustments to redeemable noncontrolling interests $ (58.2 ) $ (8.1 ) $ (66.3 ) Capital in excess of par value 2,698.0 (52.1 ) 2,645.9 Accumulated deficit (1,016.7 ) 14.8 (1,001.9 ) Total shareholders’ equity 1,501.3 (37.3 ) 1,464.0 |
Business Combinations
Business Combinations | 6 Months Ended |
Jun. 30, 2019 | |
Business Combinations [Abstract] | |
Business Combinations | Business Combinations Home Health and Hospice Alacare Acquisition On July 1, 2019, we completed the acquisition of privately owned Alacare Home Health & Hospice (“Alacare”) for a cash purchase price of $217.5 million . Alacare operates 23 home health locations and 23 hospice locations in Alabama. We funded the transaction with cash on hand and borrowings under our revolving credit facility. See Note 6, Long-term Debt. Other Home Health and Hospice Acquisitions During the six months ended June 30, 2019 , we completed the following home health and hospice acquisitions, none of which were individually material to our financial position, results of operations, or cash flows. Each acquisition was made to enhance our position and ability to provide post-acute healthcare services to patients in the applicable geographic areas. Each acquisition was funded using cash on hand. • In February 2019, we acquired the assets of Tidewater Home Health, PA in Columbia, South Carolina. • In March 2019, we acquired the assets and assumed the liabilities of two home health locations from Care Resource Group in East Providence, Rhode Island and Westport, Massachusetts. We accounted for these transactions under the acquisition method of accounting and reported the results of operations of the acquired locations from their respective dates of acquisition. Assets acquired and liabilities assumed were recorded at their estimated fair values as of the respective acquisition dates. The fair values of identifiable intangible assets were based on valuations using an income approach. The income approach is based on management’s estimates of future operating results and cash flows discounted using a weighted-average cost of capital that reflects market participant assumptions. The excess of the fair value of the consideration conveyed over the fair value of the net assets acquired was recorded as goodwill. The goodwill reflects our expectations of our ability to utilize the acquired locations’ mobile workforce and established relationships within each community and the benefits of being able to leverage operational efficiencies with favorable growth opportunities based on positive demographic trends in these markets. All goodwill recorded as a result of these transactions is deductible for federal income tax purposes. The fair value of the assets acquired and liabilities assumed at the acquisition date were as follows (in millions): Identifiable intangible assets: Noncompete agreements (useful lives of 5 years) $ 0.2 Certificates of need (useful lives of 10 years) 2.0 License (useful life of 10 years) 0.8 Goodwill 10.8 Other assets acquired 0.2 Total assets acquired 14.0 Liabilities assumed: Accrued payroll (0.1 ) Other current liabilities (0.1 ) Other long-term liabilities (0.1 ) Total liabilities assumed (0.3 ) Net assets acquired $ 13.7 Information regarding the net cash paid for the other home health and hospice acquisitions during each period presented is as follows (in millions): Three Months Ended June 30, Six Months Ended June 30, 2019 2018 2019 2018 Fair value of assets acquired $ — $ 41.9 $ 3.2 $ 42.0 Goodwill — 101.6 10.8 102.1 Fair value of liabilities assumed — (8.3 ) (0.3 ) (8.3 ) Net cash paid for acquisitions $ — $ 135.2 $ 13.7 $ 135.8 Pro Forma Results of Operations The following table summarizes the results of operations of the above mentioned acquisitions from their respective dates of acquisition included in our consolidated results of operations and the unaudited pro forma results of operations of the combined entity had the date of the acquisitions been January 1, 2018 (in millions): Net Operating Revenues Net Income Attributable to Encompass Health Acquired entities only: Actual from acquisition date to June 30, 2019 Home Health and Hospice $ 3.2 $ (0.6 ) Combined entity: Supplemental pro forma from 04/01/2019-06/30/2019 1,135.0 91.2 Combined entity: Supplemental pro forma from 04/01/2018-06/30/2018 1,071.1 92.4 Combined entity: Supplemental pro forma from 01/01/2019-06/30/2019 2,261.0 193.7 Combined entity: Supplemental pro forma from 01/01/2018-06/30/2018 2,119.5 176.4 The information presented above is for illustrative purposes only and is not necessarily indicative of results that would have been achieved if the acquisitions had occurred as of the beginning of our 2018 reporting period. See Note 2, Business Combinations , to the consolidated financial statements accompanying the 2018 Form 10‑K for information regarding acquisitions completed in 2018. |
Variable Interest Entities
Variable Interest Entities | 6 Months Ended |
Jun. 30, 2019 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Variable Interest Entities | Variable Interest Entities As of June 30, 2019 and December 31, 2018 , we consolidated eight limited partnership-like entities that are variable interest entities (“VIEs”) and of which we are the primary beneficiary. Our ownership percentages in these entities range from 50.0% to 75.0% . Through partnership and management agreements with or governing each of these entities, we manage all of these entities and handle all day-to-day operating decisions. Accordingly, we have the decision making power over the activities that most significantly impact the economic performance of our VIEs and an obligation to absorb losses or receive benefits from the VIE that could potentially be significant to the VIE. These decisions and significant activities include, but are not limited to, marketing efforts, oversight of patient admissions, medical training, nurse and therapist scheduling, provision of healthcare services, billing, collections, and creation and maintenance of medical records. The terms of the agreements governing each of our VIEs prohibit us from using the assets of each VIE to satisfy the obligations of other entities. The carrying amounts and classifications of the consolidated VIEs’ assets and liabilities, which are included in our consolidated balance sheet, are as follows (in millions): June 30, 2019 December 31, 2018 Assets Current assets: Cash and cash equivalents $ 0.9 $ 0.3 Accounts receivable 29.6 31.0 Other current assets 6.7 4.9 Total current assets 37.2 36.2 Property and equipment, net 121.9 111.5 Operating lease right-of-use assets 6.8 — Goodwill 15.9 15.9 Intangible assets, net 3.7 4.3 Other long-term assets 30.9 29.6 Total assets $ 216.4 $ 197.5 Liabilities Current liabilities: Current portion of long-term debt $ 0.8 $ 0.6 Current operating lease liabilities 1.4 — Accounts payable 7.3 5.2 Accrued expenses and other current liabilities 30.0 45.0 Total current liabilities 39.5 50.8 Long-term debt, net of current portion 10.9 — Long-term operating lease liabilities 5.4 — Total liabilities $ 55.8 $ 50.8 |
Leases Leases
Leases Leases | 6 Months Ended |
Jun. 30, 2019 | |
Leases [Abstract] | |
Leases of Lessee Disclosure | Leases We lease real estate, vehicles, and equipment under operating and finance leases with non-canceable terms generally expiring at various dates through 2037. Our operating and finance leases generally have 1 - to 25 -year terms, with one or more renewal options, primarily relating to our real estate leases, with terms to be determined at the time of renewal. The exercise of such lease renewal options is at our sole discretion, and to the extent we are reasonably certain we will exercise a renewal option, the years related to that option are included in our determination of the lease term for purposes of classifying and measuring a given lease. Certain leases also include options to purchase the leased property. The components of lease costs are as follows (in millions): Three Months Ended June 30, 2019 Six Months Ended June 30, 2019 Operating lease cost $ 18.3 $ 35.8 Finance lease cost: Amortization of right-of-use assets 7.9 15.8 Interest on lease liabilities 8.1 16.2 Total finance lease cost 16.0 32.0 Short-term and variable lease cost 0.1 0.4 Sublease income (0.7 ) (1.5 ) Total lease cost $ 33.7 $ 66.7 Supplemental condensed consolidated balance sheet information related to leases is as follows (in millions): Classification As of June 30, 2019 Assets Operating lease Operating lease right-of-use assets $ 284.4 Finance lease (1) Property and equipment, net 337.3 Total leased assets $ 621.7 Liabilities Current liabilities: Operating lease Current operating lease liabilities $ 45.2 Finance lease Current portion of long-term debt 18.5 Noncurrent liabilities: Operating lease Long-term operating lease liabilities 245.8 Finance lease Long-term debt, net of current portion 376.7 Total leased liabilities $ 686.2 (1) Finance lease assets are recorded net of accumulated amortization of $94.8 million as of June 30, 2019 . As of June 30, 2019 Weighted Average Remaining Lease Term Operating lease 8.8 years Finance lease 13.3 years Weighted Average Discount Rate Operating lease 6.2 % Finance lease 8.2 % Maturities of lease liabilities as of June 30, 2019 are as follows (in millions): Operating Leases Finance Leases July 1 through December 31, 2019 $ 29.9 $ 25.0 2020 60.8 49.9 2021 53.3 48.1 2022 43.1 56.7 2023 37.7 43.5 2024 31.7 58.1 2025 and Thereafter 136.3 391.6 Total lease payments 392.8 672.9 Less: Interest portion (101.8 ) (277.7 ) Total lease liabilities $ 291.0 $ 395.2 Future minimum lease payments at December 31, 2018, for those leases having an initial or remaining noncancelable lease term in excess of one year, are as follows (in millions): Year Ending December 31, Operating Leases Capital Lease Obligations 2019 $ 71.4 $ 36.2 2020 65.8 32.3 2021 54.3 30.3 2022 41.0 28.7 2023 35.3 28.0 2024 and Thereafter 148.2 299.7 $ 416.0 455.2 Less: Interest portion (191.4 ) Obligations under capital leases $ 263.8 Supplemental cash flow information related to our leases is as follows (in millions): Six Months Ended June 30, 2019 Cash paid for amounts included in the measurement of lease liabilities: Operating cash flows from operating leases $ 37.4 Operating cash flows from finance leases 16.4 Financing cash flows from finance leases 9.3 Right-of-use assets obtained in exchange for lease obligations: Operating leases $ 20.1 Finance leases 7.1 |
Investments in and Advances to
Investments in and Advances to Nonconsolidated Affiliates | 6 Months Ended |
Jun. 30, 2019 | |
Investments in and Advances to Affiliates, Schedule of Investments [Abstract] | |
Investments in and Advances to Nonconsolidated Affiliates | Investments in and Advances to Nonconsolidated Affiliates As of June 30, 2019 and December 31, 2018 , we had $13.9 million and $12.2 million , respectively, of investments in and advances to nonconsolidated affiliates included in Other long-term assets in our condensed consolidated balance sheets. Investments in and advances to nonconsolidated affiliates represent our investments in six partially owned subsidiaries, of which five are general or limited partnerships, limited liability companies, or joint ventures in which Encompass Health or one of its subsidiaries is a general or limited partner, managing member, member, or venturer, as applicable. We do not control these affiliates but have the ability to exercise significant influence over the operating and financial policies of certain of these affiliates. Our ownership percentages in these affiliates range from approximately 8% to 60% . We account for these investments using the cost and equity methods of accounting. The following summarizes the combined results of operations of our equity method affiliates (on a 100% basis, in millions): Three Months Ended June 30, Six Months Ended June 30, 2019 2018 2019 2018 Net operating revenues $ 10.5 $ 10.5 $ 22.1 $ 21.5 Operating expenses (6.8 ) (5.6 ) (13.5 ) (13.2 ) Income from continuing operations, net of tax 3.7 4.9 8.6 8.3 Net income 3.7 4.9 8.6 8.3 As a result of negotiations with our partner to amend the joint venture agreement related to Yuma Rehabilitation Hospital, the accounting for this hospital will change from the equity method of accounting to a consolidated entity effective July 1, 2019. We will account for this change in control as a business combination and consolidate this entity using the acquisition method. As a result of our consolidation of this hospital and the remeasurement of our previously held equity interest at fair value, we estimate an approximate $20 million gain as part of Other income in the third quarter of 2019. |
Long-term Debt
Long-term Debt | 6 Months Ended |
Jun. 30, 2019 | |
Debt Disclosure [Abstract] | |
Long-term Debt | Long-term Debt Our long-term debt outstanding consists of the following (in millions): June 30, 2019 December 31, 2018 Credit Agreement— Advances under revolving credit facility $ 335.0 $ 30.0 Term loan facilities 272.8 280.1 Bonds payable— 5.125% Senior Notes due 2023 297.0 296.6 5.75% Senior Notes due 2024 1,095.5 1,194.7 5.75% Senior Notes due 2025 345.3 345.0 Other notes payable 16.9 104.2 Finance lease obligations 395.2 263.8 2,757.7 2,514.4 Less: Current portion (38.1 ) (35.8 ) Long-term debt, net of current portion $ 2,719.6 $ 2,478.6 As a result of adopting ASC 842 on January 1, 2019, notes payable of approximately $83 million related to sale/leaseback transactions involving real estate became finance lease obligations. See Note 1 , Basis of Presentation , “Recent Accounting Pronouncements,” for additional information on ASC 842. In May 2019, we gave notice for redemption of $100 million of the outstanding principal amount of our existing 5.75% Senior Notes due 2024 (the “2024 Notes”). In June 2019, we completed this redemption using cash on hand and capacity under our revolving credit facility. Pursuant to the terms of the 2024 Notes, this optional redemption was made at a price of 101.917% , which resulted in a total cash outlay of approximately $102 million . As a result of this redemption, we recorded a $2.3 million Loss on early extinguishment of debt in the second quarter of 2019. Additionally, Long-term debt, net of current portion as of June 30, 2019, included amounts drawn under our revolving credit facility primarily to help fund the acquisition of Alacare on July 1, 2019, as discussed in Note 2, Business Combinations . For additional information regarding our indebtedness, see Note 9, Long-term Debt, to the consolidated financial statements accompanying the 2018 Form 10‑K . |
Redeemable Noncontrolling Inter
Redeemable Noncontrolling Interests | 6 Months Ended |
Jun. 30, 2019 | |
Noncontrolling Interest [Abstract] | |
Redeemable Noncontrolling Interests | Redeemable Noncontrolling Interests The following is a summary of the activity related to our Redeemable noncontrolling interests during the six months ended June 30, 2019 and 2018 (in millions): Six Months Ended June 30, 2019 2018 Balance at beginning of period $ 261.7 $ 220.9 Net income attributable to noncontrolling interests 6.4 6.5 Distributions declared (4.8 ) (4.6 ) Reclassification to noncontrolling interests (11.2 ) — Purchase of redeemable noncontrolling interests — (65.1 ) Change in fair value 100.7 66.2 Balance at end of period $ 352.8 $ 223.9 The following table reconciles the net income attributable to nonredeemable Noncontrolling interests , as recorded in the shareholders’ equity section of the condensed consolidated balance sheets, and the net income attributable to Redeemable noncontrolling interests , as recorded in the mezzanine section of the condensed consolidated balance sheets, to the Net income attributable to noncontrolling interests presented in the condensed consolidated statements of comprehensive income for the three and six months ended June 30, 2019 and 2018 (in millions): Three Months Ended June 30, Six Months Ended June 30, 2019 2018 2019 2018 Net income attributable to nonredeemable noncontrolling interests $ 17.3 $ 17.7 $ 36.2 $ 36.3 Net income attributable to redeemable noncontrolling interests 2.4 3.7 6.4 6.5 Net income attributable to noncontrolling interests $ 19.7 $ 21.4 $ 42.6 $ 42.8 On December 31, 2014, we acquired 83.3% of our home health and hospice business when we purchased EHHI Holdings, Inc. (“EHHI”). In the acquisition, we acquired all of the issued and outstanding equity interests of EHHI, other than equity interests contributed to Encompass Health Home Health Holdings, Inc. (“Holdings”), a subsidiary of Encompass Health and an indirect parent of EHHI, by certain sellers in exchange for shares of common stock of Holdings. Those sellers were members of EHHI management, and they contributed a portion of their shares of common stock of EHHI, valued at approximately $64 million on the acquisition date, in exchange for approximately 16.7% of the outstanding shares of common stock of Holdings. At any time after December 31, 2017, each management investor has the right (but not the obligation) to have his or her shares of Holdings stock repurchased by Encompass Health for a cash purchase price per share equal to the fair value. Specifically, up to one-third of each management investor’s shares of Holdings stock may be sold prior to December 31, 2018; two-thirds of each management investor’s shares of Holdings stock may be sold prior to December 31, 2019; and all of each management investor’s shares of Holdings stock may be sold thereafter. At any time after December 31, 2019, Encompass Health will have the right (but not the obligation) to repurchase all or any portion of the shares of Holdings stock owned by one or more management investors for a cash purchase price per share equal to the fair value. In February 2018, each management investor exercised the right to sell one-third of his or her shares of Holdings stock to Encompass Health, representing approximately 5.6% of the outstanding shares of the common stock of Holdings. On February 21, 2018, Encompass Health settled the acquisition of those shares upon payment of approximately $65 million in cash. As of June 30, 2019 , the value of the outstanding shares of Holdings owned by management investors was approximately $326 million . In July 2019, we received additional exercise notices, representing approximately 5.6% of the outstanding shares of the common stock of Holdings. Encompass Health expects to settle the acquisition of those shares upon payment of approximately $163 million in cash during the third quarter of 2019. See also Note 8 , Fair Value Measurements . |
Fair Value Measurements
Fair Value Measurements | 6 Months Ended |
Jun. 30, 2019 | |
Fair Value Disclosures [Abstract] | |
Fair Value Measurements | Fair Value Measurements Our financial assets and liabilities that are measured at fair value on a recurring basis are as follows (in millions): Fair Value Measurements at Reporting Date Using As of June 30, 2019 Fair Value Quoted Prices in Active Markets for Identical Assets (Level 1) Significant Other Observable Inputs (Level 2) Significant Unobservable Inputs (Level 3) Valuation Technique (1) Other long-term assets: Restricted marketable securities $ 64.4 $ 6.7 $ 57.7 $ — M Redeemable noncontrolling interests 352.8 — — 352.8 I As of December 31, 2018 Other long-term assets: Restricted marketable securities $ 62.0 $ 6.4 $ 55.6 $ — M Redeemable noncontrolling interests 261.7 — — 261.7 I (1) The three valuation techniques are: market approach (M), cost approach (C), and income approach (I). The fair values of our financial assets and liabilities are determined as follows: • Restricted marketable securities - The fair values of our restricted marketable securities are determined based on quoted market prices in active markets or quoted prices, dealer quotations, or alternative pricing sources supported by observable inputs in markets that are not considered to be active. • Redeemable noncontrolling interests - The fair value of the Redeemable noncontrolling interests related to our home health segment is determined using the product of a twelve-month adjusted EBITDA measure and a specified median market price multiple based on a basket of public home health companies and transactions, after adding cash and deducting indebtedness that includes the outstanding principal balance under any intercompany notes. To determine the fair value of the Redeemable noncontrolling interests in our joint venture hospitals, we use the applicable hospitals’ projected operating results and cash flows discounted using a rate that reflects market participant assumptions for the applicable facilities. The projected operating results use management’s best estimates of economic and market conditions over the forecasted periods including assumptions for pricing and volume, operating expenses, and capital expenditures. See also Note 7 , Redeemable Noncontrolling Interests . In addition to assets and liabilities recorded at fair value on a recurring basis, we are also required to record assets and liabilities at fair value on a nonrecurring basis. Generally, assets are recorded at fair value on a nonrecurring basis as a result of impairment charges or similar adjustments made to the carrying value of the applicable assets. During the three and six months ended June 30, 2019 and June 30, 2018 , we did not record any gains or losses related to our nonfinancial assets and liabilities that are recognized or disclosed at fair value in the financial statements on a nonrecurring basis as part of our continuing operations. As discussed in Note 1, Summary of Significant Accounting Policies , “Fair Value Measurements,” to the consolidated financial statements accompanying the 2018 Form 10‑K , the carrying value equals fair value for our financial instruments that are not included in the table below and are classified as current in our condensed consolidated balance sheets. The carrying amounts and estimated fair values for all of our other financial instruments are presented in the following table (in millions): As of June 30, 2019 As of December 31, 2018 Carrying Amount Estimated Fair Value Carrying Amount Estimated Fair Value Long-term debt: Advances under revolving credit facility $ 335.0 $ 335.0 $ 30.0 $ 30.0 Term loan facilities 272.8 273.8 280.1 281.3 5.125% Senior Notes due 2023 297.0 305.3 296.6 298.5 5.75% Senior Notes due 2024 1,095.5 1,120.1 1,194.7 1,200.0 5.75% Senior Notes due 2025 345.3 364.9 345.0 339.5 Other notes payable 16.9 16.9 104.2 104.2 Financial commitments: Letters of credit — 39.1 — 37.4 Fair values for our long-term debt and financial commitments are determined using inputs, including quoted prices in nonactive markets, that are observable either directly or indirectly, or Level 2 inputs within the fair value hierarchy. See Note 1, Summary of Significant Accounting Policies , “Fair Value Measurements,” to the consolidated financial statements accompanying the 2018 Form 10‑K . |
Share-Based Payments
Share-Based Payments | 6 Months Ended |
Jun. 30, 2019 | |
Share-based Payment Arrangement [Abstract] | |
Share-Based Payments | Share-Based Payments In February and May 2019 , we issued a total of 0.5 million restricted stock awards to members of our management team and our board of directors. Approximately 0.2 million of these awards contain only a service condition, while the remainder contain both a service and a performance condition. For the awards that include a performance condition, the number of shares that will ultimately be granted to employees may vary based on the Company’s performance during the applicable two year performance measurement period. Additionally, in February 2019 , we granted 0.1 million stock options to members of our management team. The fair value of these awards and options was determined using the policies described in Note 1, Summary of Significant Accounting Policies , and Note 13, Share-Based Payments , to the consolidated financial statements accompanying the 2018 Form 10‑K . In conjunction with the EHHI acquisition discussed in Note 7 , Redeemable Noncontrolling Interests , we granted stock appreciation rights (“SARs”) based on Holdings common stock to certain members of EHHI management at closing. Half of the SARs vested on December 31, 2018 with the remainder vesting on December 31, 2019. Upon exercise, each SAR must be settled for cash in the amount by which the per share fair value of Holdings’ common stock on the exercise date exceeds the per share fair value on the grant date. In February 2019, members of the management team exercised a portion of their vested SARs for approximately $13 million in cash. As of June 30, 2019 , the fair value of the SARs was approximately $123 million , all of which is included in Accrued expenses and other current liabilities in the condensed consolidated balance sheet. In July 2019, we received notices to exercise the remainder of the vested SARs for approximately $55 million in cash. We expect to make that payment during the third quarter of 2019. For additional information, see Note 13, Share-Based Payments , to the consolidated financial statements accompanying the 2018 Form 10‑K |
Income Taxes
Income Taxes | 6 Months Ended |
Jun. 30, 2019 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Income Taxes Our Provision for income tax expense of $23.5 million and $54.3 million for the three and six months ended June 30, 2019 , respectively, primarily resulted from the application of our estimated effective blended federal and state income tax rate, tax benefits resulting from share-based compensation windfalls and the deductibility of the settlement payment discussed in Note 12, Contingencies and Other Commitments . Our Provision for income tax expense of $29.3 million and $59.3 million for the three and six months ended June 30, 2018, respectively, primarily resulted from the application of our estimated effective blended federal and state income tax rate. We have state net operating losses (“NOLs”) of $62.8 million that expire in various amounts at varying times through 2031. The $42.6 million of net deferred tax assets included in the accompanying condensed consolidated balance sheet as of June 30, 2019 reflects management’s assessment it is more likely than not we will be able to generate sufficient future taxable income to utilize those deferred tax assets based on our current estimates and assumptions. As of June 30, 2019 , we maintained a valuation allowance of $34.3 million due to uncertainties regarding our ability to utilize a portion of our state NOLs and other credits before they expire. The amount of the valuation allowance has been determined for each tax jurisdiction based on the weight of all available evidence including management’s estimates of taxable income for each jurisdiction in which we operate over the periods in which the related deferred tax assets will be recoverable. It is possible we may be required to increase or decrease our valuation allowance at some future time if our forecast of future earnings varies from actual results on a consolidated basis or in the applicable state tax jurisdictions, if the timing of future tax deductions differs from our expectations, or pursuant to changes in state tax laws and rates. During the third quarter of 2016, we filed a non-automatic tax accounting method change related to billings denied under pre-payment claims reviews conducted by certain of our Medicare Administrative Contractors. In March 2017, the IRS approved our request resulting in additional cash tax benefits of approximately $51.3 million through December 31, 2017. These benefits are expected to reverse as pre-payment claims denials are settled and collected. This change did not have a material impact on our effective tax rate. The 2017 Tax Cuts and Jobs Act (the “Tax Act”) included revisions to Internal Revenue Code §451 that may eliminate this deferral of revenue for tax purposes. We are currently evaluating this provision of the Tax Act and its future impact on the method change we received in March 2017. Total remaining gross unrecognized tax benefits were $0.6 million and $0.9 million as of June 30, 2019 and December 31, 2018 , respectively, all of which would affect our effective tax rate if recognized. Our continuing practice is to recognize interest and penalties related to income tax matters in income tax expense. Interest recorded as part of our income tax provision during the three and six months ended June 30, 2019 and 2018 was not material. Accrued interest income related to income taxes as of June 30, 2019 and December 31, 2018 was not material. In December 2016, we signed an agreement with the IRS to participate in their Compliance Assurance Process (“CAP”) for the 2017 tax year. CAP is a program in which we and the IRS endeavor to agree on the treatment of significant tax positions prior to the filing of our federal income tax returns. We renewed this agreement in January 2018 for the 2018 tax year and in December 2018 for the 2019 tax year. As a result of these agreements, the IRS is currently examining the 2018 and 2019 tax years. In July 2019, the IRS issued a no-change Letter effectively closing our 2017 tax year audit. The statute of limitations has expired or we have settled federal income tax examinations with the IRS for all tax years through 2017. Our state income tax returns are also periodically examined by various regulatory taxing authorities. We are currently under audit by one state for tax years ranging from 2013 through 2015. For the tax years that remain open under the applicable statutes of limitation, amounts related to unrecognized tax benefits have been considered by management in its estimate of our potential net recovery of prior years’ income taxes. Based on discussions with taxing authorities, we anticipate that approximately $0.2 million of our unrecognized tax benefits will be released within the next 12 months. |
Earnings per Common Share
Earnings per Common Share | 6 Months Ended |
Jun. 30, 2019 | |
Earnings Per Share [Abstract] | |
Earnings per Common Share | Earnings per Common Share The following table sets forth the computation of basic and diluted earnings per common share (in millions, except per share amounts): Three Months Ended June 30, Six Months Ended June 30, 2019 2018 2019 2018 Basic: Numerator: Income from continuing operations $ 111.0 $ 113.0 $ 236.7 $ 218.7 Less: Net income attributable to noncontrolling interests included in continuing operations (19.7 ) (21.4 ) (42.6 ) (42.8 ) Less: Income allocated to participating securities (0.3 ) (0.3 ) (0.7 ) (0.6 ) Income from continuing operations attributable to Encompass Health common shareholders 91.0 91.3 193.4 175.3 (Loss) income from discontinued operations, net of tax, attributable to Encompass Health common shareholders (0.1 ) 0.2 (0.6 ) (0.3 ) Net income attributable to Encompass Health common shareholders $ 90.9 $ 91.5 $ 192.8 $ 175.0 Denominator: Basic weighted average common shares outstanding 98.0 97.9 98.2 97.9 Basic earnings per share attributable to Encompass Health common shareholders: Continuing operations $ 0.93 $ 0.93 $ 1.97 $ 1.79 Discontinued operations — — (0.01 ) — Net income $ 0.93 $ 0.93 $ 1.96 $ 1.79 Diluted: Numerator: Income from continuing operations $ 111.0 $ 113.0 $ 236.7 $ 218.7 Less: Net income attributable to noncontrolling interests included in continuing operations (19.7 ) (21.4 ) (42.6 ) (42.8 ) Income from continuing operations attributable to Encompass Health common shareholders 91.3 91.6 194.1 175.9 (Loss) income from discontinued operations, net of tax, attributable to Encompass Health common shareholders (0.1 ) 0.2 (0.6 ) (0.3 ) Net income attributable to Encompass Health common shareholders $ 91.2 $ 91.8 $ 193.5 $ 175.6 Denominator: Diluted weighted average common shares outstanding 99.3 99.6 99.5 99.6 Diluted earnings per share attributable to Encompass Health common shareholders: Continuing operations $ 0.92 $ 0.92 $ 1.95 $ 1.76 Discontinued operations — — (0.01 ) — Net income $ 0.92 $ 0.92 $ 1.94 $ 1.76 The following table sets forth the reconciliation between basic weighted average common shares outstanding and diluted weighted average common shares outstanding (in millions): Three Months Ended June 30, Six Months Ended June 30, 2019 2018 2019 2018 Basic weighted average common shares outstanding 98.0 97.9 98.2 97.9 Restricted stock awards, dilutive stock options, and restricted stock units 1.3 1.7 1.3 1.7 Diluted weighted average common shares outstanding 99.3 99.6 99.5 99.6 In October 2018, February 2019, and May 2019, our board of directors declared cash dividends of $0.27 per share that were paid in January 2019, April 2019, and July 2019, respectively. On July 23, 2019, our board of directors approved an increase in our quarterly dividend and declared a cash dividend of $0.28 per share, payable on October 15, 2019 to stockholders of record on October 1, 2019. As of June 30, 2019 and December 31, 2018 , accrued common stock dividends of $27.8 million and $28.4 million , respectively, were included in Accrued expenses and other current liabilities in our condensed consolidated balance sheets. Future dividend payments are subject to declaration by our board of directors. See Note 16, Earnings per Common Share , to the consolidated financial statements accompanying the 2018 Form 10‑K |
Contingencies and Other Commitm
Contingencies and Other Commitments | 6 Months Ended |
Jun. 30, 2019 | |
Commitments and Contingencies Disclosure [Abstract] | |
Contingencies and Other Commitments | Contingencies and Other Commitments We operate in a highly regulated industry in which healthcare providers are routinely subject to litigation. As a result, various lawsuits, claims, and legal and regulatory proceedings have been and can be expected to be instituted or asserted against us. The resolution of any such lawsuits, claims, or legal and regulatory proceedings could materially and adversely affect our financial position, results of operations, and cash flows in a given period. Nichols Litigation— We were named as a defendant in a lawsuit filed March 28, 2003 by several individual stockholders in the Circuit Court of Jefferson County, Alabama, captioned Nichols v. HealthSouth Corp . The plaintiffs allege that we, some of our former officers, and our former investment bank engaged in a scheme to overstate and misrepresent our earnings and financial position. The plaintiffs are seeking compensatory and punitive damages. This case was stayed in the circuit court on August 8, 2005. The plaintiffs filed an amended complaint on November 9, 2010 to which we responded with a motion to dismiss filed on December 22, 2010. During a hearing on February 24, 2012, plaintiffs’ counsel indicated his intent to dismiss certain claims against us. Instead, on March 9, 2012, the plaintiffs amended their complaint to include additional securities fraud claims against Encompass Health and add several former officers to the lawsuit. On September 12, 2012, the plaintiffs further amended their complaint to request certification as a class action. One of the former officers named as a defendant has repeatedly attempted to remove the case to federal district court, most recently on December 11, 2012. We filed our latest motion to remand the case back to state court on January 10, 2013. On September 27, 2013, the federal court remanded the case back to state court. On November 25, 2014, the plaintiffs filed another amended complaint to assert new allegations relating to the time period of 1997 to 2002. On December 10, 2014, we filed a motion to dismiss on the grounds the plaintiffs lack standing because their claims were derivative in nature, and the claims were time-barred by the statute of limitations. On May 26, 2016, the court granted our motion to dismiss. The plaintiffs appealed the dismissal of the case to the Supreme Court of Alabama on June 28, 2016. On March 23, 2018, the Alabama Supreme Court reversed the trial court’s dismissal, holding that the plaintiffs’ claims were not derivative or time-barred, and remanded the case for further proceedings. On April 6, 2018, we filed an application for rehearing with the Alabama Supreme Court. On March 22, 2019, the Alabama Supreme Court denied our application for rehearing and remanded the case to the trial court for further proceedings. In July 2019, we entered into settlement agreements with all but one plaintiff and paid those settling plaintiffs an aggregate amount of cash less than $0.1 million . We intend to vigorously defend ourselves in this case against the sole remaining plaintiff. Based on the stage of litigation, review of the current facts and circumstances as we understand them, the nature of the underlying claim, the results of the proceedings to date, and the nature and scope of the defense we continue to mount, we do not believe an adverse judgment or settlement is probable in this matter, and it is also not possible to estimate an amount of loss, if any, or range of possible loss that might result from an adverse judgment or settlement of this case. Other Litigation— One of our hospital subsidiaries was named as a defendant in a lawsuit filed August 12, 2013 by an individual in the Circuit Court of Etowah County, Alabama, captioned Honts v. HealthSouth Rehabilitation Hospital of Gadsden, LLC. The plaintiff alleged that her mother, who died more than three months after being discharged from our hospital, received an unprescribed opiate medication at the hospital. We deny the patient received any such medication, accounted for all the opiates at the hospital and argued the plaintiff established no causal liability between the actions of our staff and her mother’s death. The plaintiff sought recovery for punitive damages. On May 18, 2016, the jury in this case returned a verdict in favor of the plaintiff for $20.0 million . On June 17, 2016, we filed a renewed motion for judgment as a matter of law or, in the alternative, a motion for new trial or, in the further alternative, a motion seeking reduction of the damages awarded (collectively, the “post-judgment motions”). The trial court denied the post-judgment motions. We appealed the verdict as well as the rulings on the post-judgment motions to the Supreme Court of Alabama on October 12, 2016. On September 28, 2018, the Alabama Supreme Court reversed the trial court’s judgment and remanded the case for a new trial. On October 12, 2018, the plaintiff filed an application for rehearing with the Alabama Supreme Court, and we filed a brief in opposition to the rehearing application on October 25, 2018. As a result of the Alabama Supreme Court’s reversal, we reduced the associated liability below our insurance retention level of $6.0 million , and no longer maintained an insurance receivable in our condensed consolidated balance sheet because we believed the liability did not exceed that retention level. As of December 31, 2018, we maintained a liability included in Accrued expenses and other current liabilities in our consolidated balance sheet in connection with this matter. On February 27, 2019, we entered into a settlement with the plaintiff for an amount less than the remaining liability reserved and not material to us. Governmental Inquiries and Investigations— On March 4, 2013, we received document subpoenas from an office of the United States Department of Health and Human Services Office of Inspector General (the “HHS-OIG”) addressed to four of our hospitals. Those subpoenas also requested complete copies of medical records for 100 patients treated at each of those hospitals between September 2008 and June 2012. The investigation is being conducted by the United States Department of Justice (the “DOJ”). On April 24, 2014, we received document subpoenas relating to an additional seven of our hospitals. The new subpoenas reference substantially similar investigation subject matter as the original subpoenas and request materials from the period January 2008 through December 2013. Two of the four hospitals addressed in the original set of subpoenas have received supplemental subpoenas to cover this new time period. The most recent subpoenas did not include requests for specific patient files. However, in February 2015, the DOJ requested the voluntary production of the medical records of an additional 70 patients, some of whom were treated in hospitals not subject to the subpoenas, and we provided these records. We cooperated fully with DOJ in connection with this investigation. All of the subpoenas were in connection with an investigation of alleged improper or fraudulent claims submitted to Medicare and Medicaid and request documents and materials relating to practices, procedures, protocols and policies, of certain pre- and post-admissions activities at these hospitals including, among other things, marketing functions, pre-admission screening, post-admission physician evaluations, patient assessment instruments, individualized patient plans of care, and compliance with the Medicare 60% rule. Under the Medicare rule commonly referred to as the “ 60% rule,” an inpatient rehabilitation hospital must treat 60% or more of its patients from at least one of a specified list of medical conditions in order to be reimbursed at the inpatient rehabilitation hospital payment rates, rather than at the lower acute care hospital payment rates. Based on discussions with the government during the fourth quarter of 2018 as well as the burdens and distractions associated with continuing the investigation and the likely costs of future litigation, we estimated a settlement value of $48 million and accrued a loss contingency in that amount which was included in Accrued expenses and other current liabilities in our consolidated balance sheet for the year ended December 31, 2018. Following further discussions, we entered into an agreement effective as of June 21, 2019 to settle the DOJ investigation, together with related qui tam or “whistleblower” lawsuits, for a payment of $48 million , $46.4 million of which was paid during the second quarter of 2019. In return for the settlement payment, the qui tam plaintiffs dismissed with prejudice their pending claims, and the DOJ provided Encompass Health and all its subsidiaries with a release from civil liability. Other Matters— The False Claims Act allows private citizens, called “relators,” to institute civil proceedings on behalf of the United States alleging violations of the False Claims Act. These lawsuits, also known as “whistleblower” or “ qui tam ” actions, can involve significant monetary damages, fines, attorneys’ fees and the award of bounties to the relators who successfully prosecute or bring these suits to the government. Qui tam cases are sealed at the time of filing, which means knowledge of the information contained in the complaint typically is limited to the relator, the federal government, and the presiding court. The defendant in a qui tam action may remain unaware of the existence of a sealed complaint for years. While the complaint is under seal, the government reviews the merits of the case and may conduct a broad investigation and seek discovery from the defendant and other parties before deciding whether to intervene in the case and take the lead on litigating the claims. The court lifts the seal when the government makes its decision on whether to intervene. If the government decides not to intervene, the relator may elect to continue to pursue the lawsuit individually on behalf of the government. It is possible that qui tam lawsuits have been filed against us, which suits remain under seal, or that we are unaware of such filings or precluded by existing law or court order from discussing or disclosing the filing of such suits. We may be subject to liability under one or more undisclosed qui tam cases brought pursuant to the False Claims Act. It is our obligation as a participant in Medicare and other federal healthcare programs to routinely conduct audits and reviews of the accuracy of our billing systems and other regulatory compliance matters. As a result of these reviews, we have made, and will continue to make, disclosures to the HHS-OIG and CMS relating to amounts we suspect represent over-payments from these programs, whether due to inaccurate billing or otherwise. Some of these disclosures have resulted in, or may result in, Encompass Health refunding amounts to Medicare or other federal healthcare programs. |
Segment Reporting
Segment Reporting | 6 Months Ended |
Jun. 30, 2019 | |
Segment Reporting [Abstract] | |
Segment Reporting | Segment Reporting Our internal financial reporting and management structure is focused on the major types of services provided by Encompass Health. We manage our operations using two operating segments which are also our reportable segments: (1) inpatient rehabilitation and (2) home health and hospice. These reportable operating segments are consistent with information used by our chief executive officer, who is our chief operating decision maker, to assess performance and allocate resources. The following is a brief description of our reportable segments: • Inpatient Rehabilitation - Our national network of inpatient rehabilitation hospitals stretches across 32 states and Puerto Rico, with a concentration of hospitals in the eastern half of the United States and Texas. As of June 30, 2019 , we operate 131 inpatient rehabilitation hospitals, including one hospital that operates as a joint venture which we account for using the equity method of accounting. We are the sole owner of 85 of these hospitals. We retain 50.0% to 97.5% ownership in the remaining 46 jointly owned hospitals. In addition, we manage five inpatient rehabilitation units through management contracts. We provide specialized rehabilitative treatment on both an inpatient and outpatient basis. Our inpatient rehabilitation hospitals provide a higher level of rehabilitative care to patients who are recovering from conditions such as stroke and other neurological disorders, cardiac and pulmonary conditions, brain and spinal cord injuries, complex orthopedic conditions, and amputations. • Home Health and Hospice - As of June 30, 2019 , we provide home health services in 222 locations and hospice services in 59 locations across 31 states with concentrations in the Southeast and Texas. In addition, two of these agencies operate as joint ventures which we account for using the equity method of accounting. We are the sole owner of 273 of these locations. We retain 50.0% to 81.0% ownership in the remaining eight jointly owned locations. Our home health services include a comprehensive range of Medicare-certified home nursing services to adult patients in need of care. These services include, among others, skilled nursing, physical, occupational, and speech therapy, medical social work, and home health aide services. Our hospice services include in-home services to terminally ill patients and their families to address patients’ physical needs, including pain control and symptom management, and to provide emotional and spiritual support. The accounting policies of our reportable segments are the same as those described in Note 1, Basis of Presentation , “Leases” to these condensed consolidated financial statements and Note 1, Summary of Significant Accounting Policies , to the consolidated financial statements accompanying the 2018 Form 10‑K . All revenues for our services are generated through external customers. See Note 1 , Basis of Presentation , “Net Operating Revenues,” for the disaggregation of our revenues. No corporate overhead is allocated to either of our reportable segments. Our chief operating decision maker evaluates the performance of our segments and allocates resources to them based on adjusted earnings before interest, taxes, depreciation, and amortization (“Segment Adjusted EBITDA”). Selected financial information for our reportable segments is as follows (in millions): Inpatient Rehabilitation Home Health and Hospice Three Months Ended June 30, Six Months Ended June 30, Three Months Ended June 30, Six Months Ended June 30, 2019 2018 2019 2018 2019 2018 2019 2018 Net operating revenues $ 873.9 $ 834.6 $ 1,744.0 $ 1,674.9 $ 261.1 $ 233.1 $ 515.0 $ 438.8 Operating expenses: Inpatient rehabilitation: Salaries and benefits 443.6 416.5 888.6 840.7 — — — — Other operating expenses 127.2 126.9 254.8 249.8 — — — — Supplies 36.7 34.7 72.3 70.6 — — — — Occupancy costs 16.3 16.0 32.1 31.5 — — — — Home health and hospice: Cost of services sold (excluding depreciation and amortization) — — — — 119.9 109.1 236.4 207.7 Support and overhead costs — — — — 89.7 80.8 178.5 152.8 623.8 594.1 1,247.8 1,192.6 209.6 189.9 414.9 360.5 Other income (1.9 ) (1.2 ) (4.7 ) (1.7 ) — (0.5 ) — (0.5 ) Equity in net income of nonconsolidated affiliates (1.4 ) (1.6 ) (3.5 ) (3.6 ) (0.4 ) (0.4 ) (0.8 ) (0.7 ) Noncontrolling interests 19.5 19.8 40.5 40.3 2.8 2.5 5.5 4.4 Segment Adjusted EBITDA $ 233.9 $ 223.5 $ 463.9 $ 447.3 $ 49.1 $ 41.6 $ 95.4 $ 75.1 Capital expenditures $ 92.0 $ 54.4 $ 162.4 $ 116.6 $ 3.5 $ 4.3 $ 8.0 $ 6.0 Inpatient Rehabilitation Home Health and Hospice Encompass Health Consolidated As of June 30, 2019 Total assets $ 4,457.5 $ 1,388.1 $ 5,812.1 Investments in and advances to nonconsolidated affiliates 8.6 5.3 13.9 As of December 31, 2018 Total assets $ 3,900.9 $ 1,314.6 $ 5,175.0 Investments in and advances to nonconsolidated affiliates 9.5 2.7 12.2 Segment reconciliations (in millions): Three Months Ended June 30, Six Months Ended June 30, 2019 2018 2019 2018 Total segment Adjusted EBITDA $ 283.0 $ 265.1 $ 559.3 $ 522.4 General and administrative expenses (77.1 ) (54.9 ) (130.5 ) (116.0 ) Depreciation and amortization (52.7 ) (49.7 ) (105.2 ) (95.6 ) Loss on disposal of assets (1.3 ) (2.4 ) (2.4 ) (3.2 ) Loss on early extinguishment of debt (2.3 ) — (2.3 ) — Interest expense and amortization of debt discounts and fees (37.7 ) (37.7 ) (74.9 ) (73.3 ) Net income attributable to noncontrolling interests 19.7 21.4 42.6 42.8 SARs mark-to-market impact on noncontrolling interests 2.6 0.9 3.4 1.9 Change in fair market value of equity securities 0.3 (0.4 ) 1.2 (1.0 ) Payroll taxes on SARs exercise — — (0.2 ) — Income from continuing operations before income tax expense $ 134.5 $ 142.3 $ 291.0 $ 278.0 June 30, 2019 December 31, 2018 Total assets for reportable segments $ 5,845.6 $ 5,215.5 Reclassification of deferred income tax liabilities to net deferred income tax assets (33.5 ) (40.5 ) Total consolidated assets $ 5,812.1 $ 5,175.0 Additional detail regarding the revenues of our operating segments by service line follows (in millions): Three Months Ended June 30, Six Months Ended June 30, 2019 2018 2019 2018 Inpatient rehabilitation: Inpatient $ 851.8 $ 809.6 $ 1,699.4 $ 1,626.7 Outpatient and other 22.1 25.0 44.6 48.2 Total inpatient rehabilitation 873.9 834.6 1,744.0 1,674.9 Home health and hospice: Home health 222.7 204.8 442.2 390.1 Hospice 38.4 28.3 72.8 48.7 Total home health and hospice 261.1 233.1 515.0 438.8 Total net operating revenues $ 1,135.0 $ 1,067.7 $ 2,259.0 $ 2,113.7 |
Condensed Consolidating Financi
Condensed Consolidating Financial Information | 6 Months Ended |
Jun. 30, 2019 | |
Condensed Financial Information Disclosure [Abstract] | |
Condensed Consolidating Financial Information | Condensed Consolidating Financial Information The accompanying condensed consolidating financial information has been prepared and presented pursuant to SEC Regulation S-X, Rule 3-10, “Financial Statements of Guarantors and Issuers of Guaranteed Securities Registered or Being Registered.” Each of the subsidiary guarantors is 100% owned by Encompass Health, and all guarantees are full and unconditional and joint and several, subject to certain customary conditions for release. Encompass Health’s investments in its consolidated subsidiaries, as well as guarantor subsidiaries’ investments in nonguarantor subsidiaries and nonguarantor subsidiaries’ investments in guarantor subsidiaries, are presented under the equity method of accounting with the related investment presented within the line items Intercompany receivable and investments in consolidated affiliates and Intercompany payable in the accompanying condensed consolidating balance sheets. The terms of our credit agreement allow us to declare and pay cash dividends on our common stock so long as: (1) we are not in default under our credit agreement and (2) our senior secured leverage ratio (as defined in our credit agreement) remains less than or equal to 2 x. The terms of our senior note indenture allow us to declare and pay cash dividends on our common stock so long as (1) we are not in default, (2) the consolidated coverage ratio (as defined in the indenture) exceeds 2 x or we are otherwise allowed under the indenture to incur debt, and (3) we have capacity under the indenture’s restricted payments covenant to declare and pay dividends. See Note 9, Long-term Debt , to the consolidated financial statements accompanying the 2018 Form 10‑K . Periodically, certain wholly owned subsidiaries of Encompass Health make dividends or distributions of available cash and/or intercompany receivable balances to their parents. In addition, Encompass Health makes contributions to certain wholly owned subsidiaries. When made, these dividends, distributions, and contributions impact the Intercompany receivable and investments in consolidated affiliates , Intercompany payable , and Encompass Health shareholders’ equity line items in the accompanying condensed consolidating balance sheet but have no impact on the consolidated financial statements of Encompass Health Corporation. Three Months Ended June 30, 2019 Encompass Health Corporation Guarantor Subsidiaries Nonguarantor Subsidiaries Eliminating Entries Encompass Health Consolidated (In Millions) Net operating revenues $ 5.5 $ 606.7 $ 556.8 $ (34.0 ) $ 1,135.0 Operating expenses: Salaries and benefits 14.4 290.3 323.4 (5.2 ) 622.9 Other operating expenses 11.5 85.2 65.9 (12.8 ) 149.8 Occupancy costs 0.5 25.0 10.8 (16.0 ) 20.3 Supplies — 24.5 17.2 — 41.7 General and administrative expenses 39.4 — 37.7 — 77.1 Depreciation and amortization 4.9 26.1 21.7 — 52.7 Total operating expenses 70.7 451.1 476.7 (34.0 ) 964.5 Loss on early extinguishment of debt 2.3 — — — 2.3 Interest expense and amortization of debt discounts and fees 30.6 6.2 7.6 (6.7 ) 37.7 Other income (6.7 ) (0.3 ) (1.9 ) 6.7 (2.2 ) Equity in net income of nonconsolidated affiliates — (1.3 ) (0.5 ) — (1.8 ) Equity in net income of consolidated affiliates (117.6 ) (16.6 ) — 134.2 — Management fees (40.4 ) 29.5 10.9 — — Income from continuing operations before income tax (benefit) expense 66.6 138.1 64.0 (134.2 ) 134.5 Provision for income tax (benefit) expense (24.7 ) 37.1 11.1 — 23.5 Income from continuing operations 91.3 101.0 52.9 (134.2 ) 111.0 Loss from discontinued operations, net of tax (0.1 ) — — — (0.1 ) Net and comprehensive income 91.2 101.0 52.9 (134.2 ) 110.9 Less: Net and comprehensive income attributable to noncontrolling interests — — (19.7 ) — (19.7 ) Net and comprehensive income attributable to Encompass Health $ 91.2 $ 101.0 $ 33.2 $ (134.2 ) $ 91.2 Three Months Ended June 30, 2018 Encompass Health Corporation Guarantor Subsidiaries Nonguarantor Subsidiaries Eliminating Entries Encompass Health Consolidated (In Millions) Net operating revenues $ 5.7 $ 588.1 $ 507.1 $ (33.2 ) $ 1,067.7 Operating expenses: Salaries and benefits 9.4 280.9 293.3 (5.4 ) 578.2 Other operating expenses 9.3 90.8 62.3 (13.0 ) 149.4 Occupancy costs 0.5 24.0 9.8 (14.8 ) 19.5 Supplies — 23.8 15.5 — 39.3 General and administrative expenses 41.2 — 13.7 — 54.9 Depreciation and amortization 3.5 27.3 18.9 — 49.7 Total operating expenses 63.9 446.8 413.5 (33.2 ) 891.0 Interest expense and amortization of debt discounts and fees 31.9 5.7 6.7 (6.6 ) 37.7 Other income (6.2 ) (0.3 ) (1.4 ) 6.6 (1.3 ) Equity in net income of nonconsolidated affiliates — (1.6 ) (0.4 ) — (2.0 ) Equity in net income of consolidated affiliates (117.5 ) (17.2 ) — 134.7 — Management fees (38.5 ) 28.4 10.1 — — Income from continuing operations before income tax (benefit) expense 72.1 126.3 78.6 (134.7 ) 142.3 Provision for income tax (benefit) expense (19.5 ) 34.0 14.8 — 29.3 Income from continuing operations 91.6 92.3 63.8 (134.7 ) 113.0 Income from discontinued operations, net of tax 0.2 — — — 0.2 Net and comprehensive income 91.8 92.3 63.8 (134.7 ) 113.2 Less: Net and comprehensive income attributable to noncontrolling interests — — (21.4 ) — (21.4 ) Net and comprehensive income attributable to Encompass Health $ 91.8 $ 92.3 $ 42.4 $ (134.7 ) $ 91.8 Six Months Ended June 30, 2019 Encompass Health Corporation Guarantor Subsidiaries Nonguarantor Subsidiaries Eliminating Entries Encompass Health Consolidated (In Millions) Net operating revenues $ 10.6 $ 1,213.2 $ 1,102.8 $ (67.6 ) $ 2,259.0 Operating expenses: Salaries and benefits 30.3 579.2 644.5 (10.3 ) 1,243.7 Other operating expenses 21.8 169.9 133.5 (25.3 ) 299.9 Occupancy costs 1.0 49.9 21.0 (32.0 ) 39.9 Supplies — 48.5 33.3 — 81.8 General and administrative expenses 79.3 — 51.2 — 130.5 Depreciation and amortization 9.9 52.4 42.9 — 105.2 Total operating expenses 142.3 899.9 926.4 (67.6 ) 1,901.0 Loss on early extinguishment of debt 2.3 — — — 2.3 Interest expense and amortization of debt discounts and fees 60.7 12.4 15.3 (13.5 ) 74.9 Other income (14.4 ) (0.6 ) (4.4 ) 13.5 (5.9 ) Equity in net income of nonconsolidated affiliates — (3.3 ) (1.0 ) — (4.3 ) Equity in net income of consolidated affiliates (247.8 ) (33.6 ) — 281.4 — Management fees (80.2 ) 59.0 21.2 — — Income from continuing operations before income tax (benefit) expense 147.7 279.4 145.3 (281.4 ) 291.0 Provision for income tax (benefit) expense (46.4 ) 74.9 25.8 — 54.3 Income from continuing operations 194.1 204.5 119.5 (281.4 ) 236.7 Loss from discontinued operations, net of tax (0.6 ) — — — (0.6 ) Net and comprehensive income 193.5 204.5 119.5 (281.4 ) 236.1 Less: Net and comprehensive income attributable to noncontrolling interests — — (42.6 ) — (42.6 ) Net and comprehensive income attributable to Encompass Health $ 193.5 $ 204.5 $ 76.9 $ (281.4 ) $ 193.5 Six Months Ended June 30, 2018 Encompass Health Corporation Guarantor Subsidiaries Nonguarantor Subsidiaries Eliminating Entries Encompass Health Consolidated (In Millions) Net operating revenues $ 11.1 $ 1,182.8 $ 985.6 $ (65.8 ) $ 2,113.7 Operating expenses: Salaries and benefits 22.6 563.3 573.3 (10.8 ) 1,148.4 Other operating expenses 17.7 175.4 122.9 (25.4 ) 290.6 Occupancy costs 1.0 47.7 19.0 (29.6 ) 38.1 Supplies — 48.5 30.7 — 79.2 General and administrative expenses 80.6 — 35.4 — 116.0 Depreciation and amortization 5.5 53.9 36.2 — 95.6 Total operating expenses 127.4 888.8 817.5 (65.8 ) 1,767.9 Interest expense and amortization of debt discounts and fees 61.7 11.4 11.9 (11.7 ) 73.3 Other income (10.9 ) (0.5 ) (1.5 ) 11.7 (1.2 ) Equity in net income of nonconsolidated affiliates — (3.4 ) (0.9 ) — (4.3 ) Equity in net income of consolidated affiliates (229.8 ) (33.7 ) — 263.5 — Management fees (76.9 ) 57.2 19.7 — — Income from continuing operations before income tax (benefit) expense 139.6 263.0 138.9 (263.5 ) 278.0 Provision for income tax (benefit) expense (36.3 ) 70.9 24.7 — 59.3 Income from continuing operations 175.9 192.1 114.2 (263.5 ) 218.7 Loss from discontinued operations, net of tax (0.3 ) — — — (0.3 ) Net and comprehensive income 175.6 192.1 114.2 (263.5 ) 218.4 Less: Net and comprehensive income attributable to noncontrolling interests — — (42.8 ) — (42.8 ) Net and comprehensive income attributable to Encompass Health $ 175.6 $ 192.1 $ 71.4 $ (263.5 ) $ 175.6 As of June 30, 2019 Encompass Health Corporation Guarantor Subsidiaries Nonguarantor Subsidiaries Eliminating Entries Encompass Health Consolidated (In Millions) Assets Current assets: Cash and cash equivalents $ 193.6 $ 3.6 $ 24.5 $ — $ 221.7 Restricted cash — — 56.8 — 56.8 Accounts receivable — 282.0 214.0 — 496.0 Other current assets 64.0 31.4 54.9 (79.9 ) 70.4 Total current assets 257.6 317.0 350.2 (79.9 ) 844.9 Property and equipment, net 124.7 1,115.5 547.9 — 1,788.1 Operating lease right-of-use assets 14.6 176.7 120.8 (27.7 ) 284.4 Goodwill — 912.2 1,199.4 — 2,111.6 Intangible assets, net 19.8 108.0 315.8 — 443.6 Deferred income tax assets 39.4 28.9 — (25.7 ) 42.6 Other long-term assets 51.4 91.5 154.0 — 296.9 Intercompany notes receivable 530.2 — — (530.2 ) — Intercompany receivable and investments in consolidated affiliates 2,922.9 673.9 — (3,596.8 ) — Total assets $ 3,960.6 $ 3,423.7 $ 2,688.1 $ (4,260.3 ) $ 5,812.1 Liabilities and Shareholders’ Equity Current liabilities: Current portion of long-term debt $ 35.9 $ 7.8 $ 11.9 $ (17.5 ) $ 38.1 Current operating lease liabilities 2.5 24.8 25.1 (7.2 ) 45.2 Accounts payable 7.8 52.3 35.5 — 95.6 Accrued expenses and other current liabilities 200.8 91.5 344.1 (62.4 ) 574.0 Total current liabilities 247.0 176.4 416.6 (87.1 ) 752.9 Long-term debt, net of current portion 2,381.2 286.7 51.7 — 2,719.6 Long-term operating lease liabilities 12.3 155.2 98.8 (20.5 ) 245.8 Intercompany notes payable — — 530.2 (530.2 ) — Other long-term liabilities 44.2 10.8 127.9 (25.7 ) 157.2 Intercompany payable — — 52.6 (52.6 ) — 2,684.7 629.1 1,277.8 (716.1 ) 3,875.5 Commitments and contingencies Redeemable noncontrolling interests — — 352.8 — 352.8 Shareholders’ equity: Encompass Health shareholders’ equity 1,275.9 2,794.6 749.6 (3,544.2 ) 1,275.9 Noncontrolling interests — — 307.9 — 307.9 Total shareholders’ equity 1,275.9 2,794.6 1,057.5 (3,544.2 ) 1,583.8 Total liabilities and shareholders’ equity $ 3,960.6 $ 3,423.7 $ 2,688.1 $ (4,260.3 ) $ 5,812.1 As of December 31, 2018 Encompass Health Corporation Guarantor Subsidiaries Nonguarantor Subsidiaries Eliminating Entries Encompass Health Consolidated (In Millions) Assets Current assets: Cash and cash equivalents $ 41.5 $ 3.0 $ 24.7 $ — $ 69.2 Restricted cash — — 59.0 — 59.0 Accounts receivable — 270.7 197.0 — 467.7 Other current assets 36.3 17.6 31.1 (18.8 ) 66.2 Total current assets 77.8 291.3 311.8 (18.8 ) 662.1 Property and equipment, net 123.9 1,041.5 469.4 — 1,634.8 Goodwill — 912.2 1,188.6 — 2,100.8 Intangible assets, net 21.4 96.5 325.5 — 443.4 Deferred income tax assets 47.9 28.9 — (33.9 ) 42.9 Other long-term assets 47.9 100.4 142.7 — 291.0 Intercompany notes receivable 535.3 — — (535.3 ) — Intercompany receivable and investments in consolidated affiliates 2,904.4 457.6 — (3,362.0 ) — Total assets $ 3,758.6 $ 2,928.4 $ 2,438.0 $ (3,950.0 ) $ 5,175.0 Liabilities and Shareholders’ Equity Current liabilities: Current portion of long-term debt $ 35.0 $ 7.6 $ 10.7 $ (17.5 ) $ 35.8 Accounts payable 8.9 46.4 34.7 — 90.0 Accrued expenses and other current liabilities 211.8 76.4 259.8 (1.3 ) 546.7 Total current liabilities 255.7 130.4 305.2 (18.8 ) 672.5 Long-term debt, net of current portion 2,188.7 262.1 27.8 — 2,478.6 Intercompany notes payable — — 535.3 (535.3 ) — Other long-term liabilities 37.5 17.1 184.4 (33.8 ) 205.2 Intercompany payable — — 53.1 (53.1 ) — 2,481.9 409.6 1,105.8 (641.0 ) 3,356.3 Commitments and contingencies Redeemable noncontrolling interests — — 261.7 — 261.7 Shareholders’ equity: Encompass Health shareholders’ equity 1,276.7 2,518.8 790.2 (3,309.0 ) 1,276.7 Noncontrolling interests — — 280.3 — 280.3 Total shareholders’ equity 1,276.7 2,518.8 1,070.5 (3,309.0 ) 1,557.0 Total liabilities and shareholders’ equity $ 3,758.6 $ 2,928.4 $ 2,438.0 $ (3,950.0 ) $ 5,175.0 Six Months Ended June 30, 2019 Encompass Health Corporation Guarantor Subsidiaries Nonguarantor Subsidiaries Eliminating Entries Encompass Health Consolidated (In Millions) Net cash (used in) provided by operating activities $ (38.2 ) $ 203.8 $ 139.7 $ — $ 305.3 Cash flows from investing activities: Purchases of property and equipment (13.6 ) (69.9 ) (72.3 ) — (155.8 ) Additions to capitalized software costs (3.2 ) (0.3 ) (3.1 ) — (6.6 ) Acquisitions of businesses, net of cash acquired — — (13.7 ) — (13.7 ) Funding of intercompany note receivable (8.0 ) — — 8.0 — Proceeds from repayment of intercompany note receivable 22.0 — — (22.0 ) — Other, net (4.8 ) (7.9 ) (2.8 ) — (15.5 ) Net cash used in investing activities (7.6 ) (78.1 ) (91.9 ) (14.0 ) (191.6 ) Cash flows from financing activities: Principal payments on debt, including pre-payments (110.6 ) — (1.5 ) — (112.1 ) Principal borrowings on intercompany note payable — — 8.0 (8.0 ) — Principal payments on intercompany note payable — — (22.0 ) 22.0 — Borrowings on revolving credit facility 400.0 — — — 400.0 Payments on revolving credit facility (95.0 ) — — — (95.0 ) Principal payments under finance lease obligations (0.3 ) (4.0 ) (5.0 ) — (9.3 ) Repurchases of common stock, including fees and expenses (43.8 ) — — — (43.8 ) Dividends paid on common stock (54.8 ) — (0.1 ) — (54.9 ) Distributions paid to noncontrolling interests of consolidated affiliates — — (36.5 ) — (36.5 ) Taxes paid on behalf of employees for shares withheld (14.9 ) — (1.2 ) — (16.1 ) Other, net (0.6 ) — 8.8 — 8.2 Change in intercompany advances 117.9 (121.1 ) 3.2 — — Net cash provided by (used in) financing activities 197.9 (125.1 ) (46.3 ) 14.0 40.5 Increase in cash, cash equivalents, and restricted cash 152.1 0.6 1.5 — 154.2 Cash, cash equivalents, and restricted cash at beginning of period 41.5 3.0 89.0 — 133.5 Cash, cash equivalents, and restricted cash at end of period $ 193.6 $ 3.6 $ 90.5 $ — $ 287.7 Reconciliation of Cash, Cash Equivalents, and Restricted Cash Cash and cash equivalents at beginning of period $ 41.5 $ 3.0 $ 24.7 $ — $ 69.2 Restricted cash at beginning of period — — 59.0 — 59.0 Restricted cash included in other long term assets at beginning of period — — 5.3 — 5.3 Cash, cash equivalents, and restricted cash at beginning of period $ 41.5 $ 3.0 $ 89.0 $ — $ 133.5 Cash and cash equivalents at end of period $ 193.6 $ 3.6 $ 24.5 $ — $ 221.7 Restricted cash at end of period — — 56.8 — 56.8 Restricted cash included in other long-term assets at end of period — — 9.2 — 9.2 Cash, cash equivalents, and restricted cash at end of period $ 193.6 $ 3.6 $ 90.5 $ — $ 287.7 Six Months Ended June 30, 2018 Encompass Health Corporation Guarantor Subsidiaries Nonguarantor Subsidiaries Eliminating Entries Encompass Health Consolidated (In Millions) Net cash (used in) provided by operating activities $ (14.2 ) $ 222.5 $ 177.2 $ — $ 385.5 Cash flows from investing activities: Purchases of property and equipment (18.0 ) (60.9 ) (29.9 ) — (108.8 ) Additions to capitalized software costs (8.7 ) — (1.0 ) — (9.7 ) Acquisitions of businesses, net of cash acquired (129.7 ) — (6.1 ) — (135.8 ) Proceeds from repayment of intercompany note receivable 30.0 — — (30.0 ) — Other, net (5.2 ) (0.1 ) (1.4 ) — (6.7 ) Net cash used in investing activities (131.6 ) (61.0 ) (38.4 ) (30.0 ) (261.0 ) Cash flows from financing activities: Principal payments on debt, including pre-payments (7.6 ) — (1.5 ) — (9.1 ) Principal payments on intercompany note payable — — (30.0 ) 30.0 — Borrowings on revolving credit facility 245.0 — — — 245.0 Payments on revolving credit facility (190.0 ) — — — (190.0 ) Principal payments under finance lease obligations — (4.1 ) (4.3 ) — (8.4 ) Dividends paid on common stock (49.8 ) — (0.1 ) — (49.9 ) Purchase of equity interests in consolidated affiliates (65.1 ) — — — (65.1 ) Distributions paid to noncontrolling interests of consolidated affiliates — — (35.2 ) — (35.2 ) Taxes paid on behalf of employees for shares withheld (7.4 ) — (0.9 ) — (8.3 ) Other, net 0.5 — 4.0 — 4.5 Change in intercompany advances 220.1 (156.5 ) (63.6 ) — — Net cash provided by (used in) financing activities 145.7 (160.6 ) (131.6 ) 30.0 (116.5 ) (Decrease) increase in cash, cash equivalents, and restricted cash (0.1 ) 0.9 7.2 — 8.0 Cash, cash equivalents, and restricted cash at beginning of period 34.3 3.0 79.5 — 116.8 Cash, cash equivalents, and restricted cash at end of period $ 34.2 $ 3.9 $ 86.7 $ — $ 124.8 Reconciliation of Cash, Cash Equivalents, and Restricted Cash Cash and cash equivalents at beginning of period $ 34.3 $ 3.0 $ 17.1 $ — $ 54.4 Restricted cash at beginning of period — — 62.4 — 62.4 Cash, cash equivalents, and restricted cash at beginning of period $ 34.3 $ 3.0 $ 79.5 $ — $ 116.8 Cash and cash equivalents at end of period $ 34.2 $ 3.9 $ 20.9 $ — $ 59.0 Restricted cash at end of period — — 65.8 — 65.8 Cash, cash equivalents, and restricted cash at end of period $ 34.2 $ 3.9 $ 86.7 $ — $ 124.8 Supplemental schedule of noncash financing activity: Intercompany note activity $ (134.2 ) $ — $ 134.2 $ — $ — |
Basis of Presentation (Policies
Basis of Presentation (Policies) | 6 Months Ended |
Jun. 30, 2019 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Net Operating Revenues | Net Operating Revenues — Our Net operating revenues disaggregated by payor source and segment are as follows (in millions): Inpatient Rehabilitation Home Health and Hospice Consolidated Three Months Ended June 30, Three Months Ended June 30, Three Months Ended June 30, 2019 2018 2019 2018 2019 2018 Medicare $ 629.0 $ 607.1 $ 221.1 $ 199.2 $ 850.1 $ 806.3 Medicare Advantage 97.0 78.7 26.7 21.8 123.7 100.5 Managed care 86.5 86.6 8.0 8.7 94.5 95.3 Medicaid 27.1 26.8 4.6 2.7 31.7 29.5 Other third-party payors 10.5 12.7 — — 10.5 12.7 Workers’ compensation 6.5 6.8 0.3 0.2 6.8 7.0 Patients 5.6 4.4 0.1 0.3 5.7 4.7 Other income 11.7 11.5 0.3 0.2 12.0 11.7 Total $ 873.9 $ 834.6 $ 261.1 $ 233.1 $ 1,135.0 $ 1,067.7 Inpatient Rehabilitation Home Health and Hospice Consolidated Six Months Ended June 30, Six Months Ended June 30, Six Months Ended June 30, 2019 2018 2019 2018 2019 2018 Medicare $ 1,268.4 $ 1,231.6 $ 436.1 $ 376.1 $ 1,704.5 $ 1,607.7 Medicare Advantage 181.5 151.2 52.2 41.8 233.7 193.0 Managed care 170.1 171.6 16.3 16.3 186.4 187.9 Medicaid 53.4 51.5 8.9 3.2 62.3 54.7 Other third-party payors 20.5 24.7 — — 20.5 24.7 Workers’ compensation 14.7 14.2 0.4 0.3 15.1 14.5 Patients 11.7 8.8 0.5 0.7 12.2 9.5 Other income 23.7 21.3 0.6 0.4 24.3 21.7 Total $ 1,744.0 $ 1,674.9 $ 515.0 $ 438.8 $ 2,259.0 $ 2,113.7 See Note 1, Summary of Significant Accounting Policies , to the consolidated financial statements accompanying the 2018 Form 10-K for our policy related to Net operating revenues . |
Leases | Leases— We determine if an arrangement is a lease or contains a lease at inception and perform an analysis to determine whether the lease is an operating lease or a finance lease. We measure right-of-use assets and lease liabilities at the lease commencement date based on the present value of the remaining lease payments. As most of our leases do not provide a readily determinable implicit rate, we estimate an incremental borrowing rate based on the credit quality of the Company and by comparing interest rates available in the market for similar borrowings, and adjusting this amount based on the impact of collateral over the term of each lease. We use this rate to discount the remaining lease payments in measuring the right-of-use asset and lease liability. We use the implicit rate when readily determinable. We recognize lease expense for operating leases on a straight-line basis over the lease term. For our finance leases, we recognize amortization expense from the amortization of the right-of-use asset and interest expense on the related lease liability. Certain of our lease agreements contain annual escalation clauses based on changes in the Consumer Price Index. The changes to the Consumer Price Index, as compared to our initial estimate at the lease commencement date, are treated as variable lease payments and recognized in the period in which the obligation for those payments was incurred. We do not account for lease and nonlease components separately for purposes of establishing right-of-use assets and lease liabilities. |
Recent Accounting Pronouncements | Recently Adopted Accounting Pronouncements — In February 2016, the FASB issued ASU 2016-02, “Leases (Topic 842),” and has subsequently issued supplemental and/or clarifying ASUs (collectively “ASC 842”), in order to increase transparency and comparability by recognizing lease assets and liabilities on the balance sheet and disclosing key information about leasing arrangements. We adopted ASC 842 using the modified retrospective approach and applied the transition provisions with an effective date as of January 1, 2019 for leases that existed on that date. Prior period results continue to be presented under ASC 840 based on the accounting originally in effect for such periods. ASC 842 provides optional practical expedients in transition. We elected the ‘package of practical expedients,’ which permits us to not reassess under ASC 842 our prior conclusions about lease identification, lease classification and initial direct costs, and the practical expedient to not reassess certain land easements. We did not elect the use-of-hindsight practical expedient during the transition to ASC 842. The adoption of ASC 842 resulted in the addition of approximately $349 million in assets and $347 million in liabilities to our condensed consolidated balance sheet as of January 1, 2019, with the remaining $2 million being recorded as an adjustment to Capital in excess of par value . The adoption of ASC 842 also resulted in increased disclosure, including qualitative and quantitative disclosures about the nature, amount, timing and uncertainty of cash flows arising from leases. See the “Leases” section of this note and Note 4, Leases , and Note 6, Long-term Debt , for additional information about our leases. Recent Accounting Pronouncements Not Yet Adopted — In June 2016, the FASB issued ASU 2016-13, “Financial Instruments – Credit Losses (Topic 326),” which provides guidance for accounting for credit losses on financial instruments. The new guidance introduces an approach based on expected losses to estimate credit losses on certain types of financial instruments and modifies the impairment model for available-for-sale debt securities. The new guidance is effective for us beginning January 1, 2020, including interim periods within that reporting period. Early adoption is permitted beginning January 1, 2019. We continue to review the requirements of this standard and any potential impact it may have on our condensed consolidated financial statements. In August 2018, the FASB issued ASU 2018-15, “Intangibles—Goodwill and Other—Internal-Use Software (Subtopic 350-40): Customer’s Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That Is a Service Contract.” The update helps entities evaluate the accounting for fees paid by a customer in a cloud computing arrangement (hosting arrangement), by providing guidance in determining when the arrangement includes a software license. It requires entities to account for such costs consistent with the guidance on capitalizing costs associated with developing or obtaining internal-use software. The new guidance is effective for us beginning January 1, 2020, including interim periods within that reporting period. Early adoption is permitted. We continue to review the requirements of this standard and any potential impact it may have on our condensed consolidated financial statements. We do not believe any other recently issued, but not yet effective, accounting standards will have a material effect on our condensed consolidated financial position, results of operations, or cash flows. |
Basis of Presentation (Tables)
Basis of Presentation (Tables) | 6 Months Ended |
Jun. 30, 2019 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Concentration of Net Operating Revenues by Payor | Our Net operating revenues disaggregated by payor source and segment are as follows (in millions): Inpatient Rehabilitation Home Health and Hospice Consolidated Three Months Ended June 30, Three Months Ended June 30, Three Months Ended June 30, 2019 2018 2019 2018 2019 2018 Medicare $ 629.0 $ 607.1 $ 221.1 $ 199.2 $ 850.1 $ 806.3 Medicare Advantage 97.0 78.7 26.7 21.8 123.7 100.5 Managed care 86.5 86.6 8.0 8.7 94.5 95.3 Medicaid 27.1 26.8 4.6 2.7 31.7 29.5 Other third-party payors 10.5 12.7 — — 10.5 12.7 Workers’ compensation 6.5 6.8 0.3 0.2 6.8 7.0 Patients 5.6 4.4 0.1 0.3 5.7 4.7 Other income 11.7 11.5 0.3 0.2 12.0 11.7 Total $ 873.9 $ 834.6 $ 261.1 $ 233.1 $ 1,135.0 $ 1,067.7 Inpatient Rehabilitation Home Health and Hospice Consolidated Six Months Ended June 30, Six Months Ended June 30, Six Months Ended June 30, 2019 2018 2019 2018 2019 2018 Medicare $ 1,268.4 $ 1,231.6 $ 436.1 $ 376.1 $ 1,704.5 $ 1,607.7 Medicare Advantage 181.5 151.2 52.2 41.8 233.7 193.0 Managed care 170.1 171.6 16.3 16.3 186.4 187.9 Medicaid 53.4 51.5 8.9 3.2 62.3 54.7 Other third-party payors 20.5 24.7 — — 20.5 24.7 Workers’ compensation 14.7 14.2 0.4 0.3 15.1 14.5 Patients 11.7 8.8 0.5 0.7 12.2 9.5 Other income 23.7 21.3 0.6 0.4 24.3 21.7 Total $ 1,744.0 $ 1,674.9 $ 515.0 $ 438.8 $ 2,259.0 $ 2,113.7 |
Revision of Previously Issued Financial Statements [Table Text Block] | For additional information on this revision, see Note 1, Summary of Significant Accounting Policies , “Revision of Previously Issued Financial Statements” to the consolidated financial statements accompanying the 2018 Form 10-K. For the Six Months Ended June 30, 2018 As Reported Adjustment As Revised (In Millions) Fair value adjustments to redeemable noncontrolling interests $ (58.2 ) $ (8.1 ) $ (66.3 ) Capital in excess of par value 2,698.0 (52.1 ) 2,645.9 Accumulated deficit (1,016.7 ) 14.8 (1,001.9 ) Total shareholders’ equity 1,501.3 (37.3 ) 1,464.0 |
Business Combinations (Tables)
Business Combinations (Tables) | 6 Months Ended |
Jun. 30, 2019 | |
Business Combinations [Abstract] | |
Schedule of Assets Acquired and Liabilities Assumed at the Acquisition Date | The fair value of the assets acquired and liabilities assumed at the acquisition date were as follows (in millions): Identifiable intangible assets: Noncompete agreements (useful lives of 5 years) $ 0.2 Certificates of need (useful lives of 10 years) 2.0 License (useful life of 10 years) 0.8 Goodwill 10.8 Other assets acquired 0.2 Total assets acquired 14.0 Liabilities assumed: Accrued payroll (0.1 ) Other current liabilities (0.1 ) Other long-term liabilities (0.1 ) Total liabilities assumed (0.3 ) Net assets acquired $ 13.7 |
Schedule of Noncash or Part Noncash Acquisitions | Information regarding the net cash paid for the other home health and hospice acquisitions during each period presented is as follows (in millions): Three Months Ended June 30, Six Months Ended June 30, 2019 2018 2019 2018 Fair value of assets acquired $ — $ 41.9 $ 3.2 $ 42.0 Goodwill — 101.6 10.8 102.1 Fair value of liabilities assumed — (8.3 ) (0.3 ) (8.3 ) Net cash paid for acquisitions $ — $ 135.2 $ 13.7 $ 135.8 |
Summary of Actual and Pro Forma Results of Operations for Acquisitions | The following table summarizes the results of operations of the above mentioned acquisitions from their respective dates of acquisition included in our consolidated results of operations and the unaudited pro forma results of operations of the combined entity had the date of the acquisitions been January 1, 2018 (in millions): Net Operating Revenues Net Income Attributable to Encompass Health Acquired entities only: Actual from acquisition date to June 30, 2019 Home Health and Hospice $ 3.2 $ (0.6 ) Combined entity: Supplemental pro forma from 04/01/2019-06/30/2019 1,135.0 91.2 Combined entity: Supplemental pro forma from 04/01/2018-06/30/2018 1,071.1 92.4 Combined entity: Supplemental pro forma from 01/01/2019-06/30/2019 2,261.0 193.7 Combined entity: Supplemental pro forma from 01/01/2018-06/30/2018 2,119.5 176.4 |
Variable Interest Entities (Tab
Variable Interest Entities (Tables) | 6 Months Ended |
Jun. 30, 2019 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Schedule of carrying amounts and classifications of VIE's assets and liabilities | The carrying amounts and classifications of the consolidated VIEs’ assets and liabilities, which are included in our consolidated balance sheet, are as follows (in millions): June 30, 2019 December 31, 2018 Assets Current assets: Cash and cash equivalents $ 0.9 $ 0.3 Accounts receivable 29.6 31.0 Other current assets 6.7 4.9 Total current assets 37.2 36.2 Property and equipment, net 121.9 111.5 Operating lease right-of-use assets 6.8 — Goodwill 15.9 15.9 Intangible assets, net 3.7 4.3 Other long-term assets 30.9 29.6 Total assets $ 216.4 $ 197.5 Liabilities Current liabilities: Current portion of long-term debt $ 0.8 $ 0.6 Current operating lease liabilities 1.4 — Accounts payable 7.3 5.2 Accrued expenses and other current liabilities 30.0 45.0 Total current liabilities 39.5 50.8 Long-term debt, net of current portion 10.9 — Long-term operating lease liabilities 5.4 — Total liabilities $ 55.8 $ 50.8 |
Leases (Tables)
Leases (Tables) | 6 Months Ended |
Jun. 30, 2019 | |
Leases [Abstract] | |
Components of Lease Costs | The components of lease costs are as follows (in millions): Three Months Ended June 30, 2019 Six Months Ended June 30, 2019 Operating lease cost $ 18.3 $ 35.8 Finance lease cost: Amortization of right-of-use assets 7.9 15.8 Interest on lease liabilities 8.1 16.2 Total finance lease cost 16.0 32.0 Short-term and variable lease cost 0.1 0.4 Sublease income (0.7 ) (1.5 ) Total lease cost $ 33.7 $ 66.7 |
Schedule of Supplemental Balance Sheet Information Related to Leases [Table Text Block] | Supplemental condensed consolidated balance sheet information related to leases is as follows (in millions): Classification As of June 30, 2019 Assets Operating lease Operating lease right-of-use assets $ 284.4 Finance lease (1) Property and equipment, net 337.3 Total leased assets $ 621.7 Liabilities Current liabilities: Operating lease Current operating lease liabilities $ 45.2 Finance lease Current portion of long-term debt 18.5 Noncurrent liabilities: Operating lease Long-term operating lease liabilities 245.8 Finance lease Long-term debt, net of current portion 376.7 Total leased liabilities $ 686.2 (1) Finance lease assets are recorded net of accumulated amortization of $94.8 million as of June 30, 2019 . |
Schedule of Weighted Average Remaining Lease Term and Discount Rate [Table Text Block] | As of June 30, 2019 Weighted Average Remaining Lease Term Operating lease 8.8 years Finance lease 13.3 years Weighted Average Discount Rate Operating lease 6.2 % Finance lease 8.2 % |
Maturities of Finance Lease Liabilities [Table Text Block] | Maturities of lease liabilities as of June 30, 2019 are as follows (in millions): Operating Leases Finance Leases July 1 through December 31, 2019 $ 29.9 $ 25.0 2020 60.8 49.9 2021 53.3 48.1 2022 43.1 56.7 2023 37.7 43.5 2024 31.7 58.1 2025 and Thereafter 136.3 391.6 Total lease payments 392.8 672.9 Less: Interest portion (101.8 ) (277.7 ) Total lease liabilities $ 291.0 $ 395.2 |
Maturities of Operating Lease Liabilities [Table Text Block] | Maturities of lease liabilities as of June 30, 2019 are as follows (in millions): Operating Leases Finance Leases July 1 through December 31, 2019 $ 29.9 $ 25.0 2020 60.8 49.9 2021 53.3 48.1 2022 43.1 56.7 2023 37.7 43.5 2024 31.7 58.1 2025 and Thereafter 136.3 391.6 Total lease payments 392.8 672.9 Less: Interest portion (101.8 ) (277.7 ) Total lease liabilities $ 291.0 $ 395.2 |
Schedule of Future Minimum Rental Payments for Operating Leases [Table Text Block] | Future minimum lease payments at December 31, 2018, for those leases having an initial or remaining noncancelable lease term in excess of one year, are as follows (in millions): Year Ending December 31, Operating Leases Capital Lease Obligations 2019 $ 71.4 $ 36.2 2020 65.8 32.3 2021 54.3 30.3 2022 41.0 28.7 2023 35.3 28.0 2024 and Thereafter 148.2 299.7 $ 416.0 455.2 Less: Interest portion (191.4 ) Obligations under capital leases $ 263.8 |
Supplemental Cash Flow Information [Table Text Block] | Supplemental cash flow information related to our leases is as follows (in millions): Six Months Ended June 30, 2019 Cash paid for amounts included in the measurement of lease liabilities: Operating cash flows from operating leases $ 37.4 Operating cash flows from finance leases 16.4 Financing cash flows from finance leases 9.3 Right-of-use assets obtained in exchange for lease obligations: Operating leases $ 20.1 Finance leases 7.1 |
Investments in and Advances t_2
Investments in and Advances to Nonconsolidated Affiliates (Tables) | 6 Months Ended |
Jun. 30, 2019 | |
Investments in and Advances to Affiliates, Schedule of Investments [Abstract] | |
Schedule of Combined Results of Operations of Equity Method Affiliates | The following summarizes the combined results of operations of our equity method affiliates (on a 100% basis, in millions): Three Months Ended June 30, Six Months Ended June 30, 2019 2018 2019 2018 Net operating revenues $ 10.5 $ 10.5 $ 22.1 $ 21.5 Operating expenses (6.8 ) (5.6 ) (13.5 ) (13.2 ) Income from continuing operations, net of tax 3.7 4.9 8.6 8.3 Net income 3.7 4.9 8.6 8.3 |
Long-term Debt (Tables)
Long-term Debt (Tables) | 6 Months Ended |
Jun. 30, 2019 | |
Debt Disclosure [Abstract] | |
Schedule of Outstanding Long-term Debt | Our long-term debt outstanding consists of the following (in millions): June 30, 2019 December 31, 2018 Credit Agreement— Advances under revolving credit facility $ 335.0 $ 30.0 Term loan facilities 272.8 280.1 Bonds payable— 5.125% Senior Notes due 2023 297.0 296.6 5.75% Senior Notes due 2024 1,095.5 1,194.7 5.75% Senior Notes due 2025 345.3 345.0 Other notes payable 16.9 104.2 Finance lease obligations 395.2 263.8 2,757.7 2,514.4 Less: Current portion (38.1 ) (35.8 ) Long-term debt, net of current portion $ 2,719.6 $ 2,478.6 |
Redeemable Noncontrolling Int_2
Redeemable Noncontrolling Interests (Tables) | 6 Months Ended |
Jun. 30, 2019 | |
Noncontrolling Interest [Abstract] | |
Redeemable Noncontrolling Interest | The following is a summary of the activity related to our Redeemable noncontrolling interests during the six months ended June 30, 2019 and 2018 (in millions): Six Months Ended June 30, 2019 2018 Balance at beginning of period $ 261.7 $ 220.9 Net income attributable to noncontrolling interests 6.4 6.5 Distributions declared (4.8 ) (4.6 ) Reclassification to noncontrolling interests (11.2 ) — Purchase of redeemable noncontrolling interests — (65.1 ) Change in fair value 100.7 66.2 Balance at end of period $ 352.8 $ 223.9 |
Reconciliation of Noncontrolling Interests | The following table reconciles the net income attributable to nonredeemable Noncontrolling interests , as recorded in the shareholders’ equity section of the condensed consolidated balance sheets, and the net income attributable to Redeemable noncontrolling interests , as recorded in the mezzanine section of the condensed consolidated balance sheets, to the Net income attributable to noncontrolling interests presented in the condensed consolidated statements of comprehensive income for the three and six months ended June 30, 2019 and 2018 (in millions): Three Months Ended June 30, Six Months Ended June 30, 2019 2018 2019 2018 Net income attributable to nonredeemable noncontrolling interests $ 17.3 $ 17.7 $ 36.2 $ 36.3 Net income attributable to redeemable noncontrolling interests 2.4 3.7 6.4 6.5 Net income attributable to noncontrolling interests $ 19.7 $ 21.4 $ 42.6 $ 42.8 |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 6 Months Ended |
Jun. 30, 2019 | |
Fair Value Disclosures [Abstract] | |
Schedule of Fair Value, Assets and Liabilities Measured on a Recurring Basis | Our financial assets and liabilities that are measured at fair value on a recurring basis are as follows (in millions): Fair Value Measurements at Reporting Date Using As of June 30, 2019 Fair Value Quoted Prices in Active Markets for Identical Assets (Level 1) Significant Other Observable Inputs (Level 2) Significant Unobservable Inputs (Level 3) Valuation Technique (1) Other long-term assets: Restricted marketable securities $ 64.4 $ 6.7 $ 57.7 $ — M Redeemable noncontrolling interests 352.8 — — 352.8 I As of December 31, 2018 Other long-term assets: Restricted marketable securities $ 62.0 $ 6.4 $ 55.6 $ — M Redeemable noncontrolling interests 261.7 — — 261.7 I (1) The three valuation techniques are: market approach (M), cost approach (C), and income approach (I). |
Schedule of Carrying Amounts and Estimated Fair Values, Financial Instruments | The carrying amounts and estimated fair values for all of our other financial instruments are presented in the following table (in millions): As of June 30, 2019 As of December 31, 2018 Carrying Amount Estimated Fair Value Carrying Amount Estimated Fair Value Long-term debt: Advances under revolving credit facility $ 335.0 $ 335.0 $ 30.0 $ 30.0 Term loan facilities 272.8 273.8 280.1 281.3 5.125% Senior Notes due 2023 297.0 305.3 296.6 298.5 5.75% Senior Notes due 2024 1,095.5 1,120.1 1,194.7 1,200.0 5.75% Senior Notes due 2025 345.3 364.9 345.0 339.5 Other notes payable 16.9 16.9 104.2 104.2 Financial commitments: Letters of credit — 39.1 — 37.4 |
Earnings per Common Share (Tabl
Earnings per Common Share (Tables) | 6 Months Ended |
Jun. 30, 2019 | |
Earnings Per Share [Abstract] | |
Computation of Basic and Diluted Earnings Per Common Share | The following table sets forth the computation of basic and diluted earnings per common share (in millions, except per share amounts): Three Months Ended June 30, Six Months Ended June 30, 2019 2018 2019 2018 Basic: Numerator: Income from continuing operations $ 111.0 $ 113.0 $ 236.7 $ 218.7 Less: Net income attributable to noncontrolling interests included in continuing operations (19.7 ) (21.4 ) (42.6 ) (42.8 ) Less: Income allocated to participating securities (0.3 ) (0.3 ) (0.7 ) (0.6 ) Income from continuing operations attributable to Encompass Health common shareholders 91.0 91.3 193.4 175.3 (Loss) income from discontinued operations, net of tax, attributable to Encompass Health common shareholders (0.1 ) 0.2 (0.6 ) (0.3 ) Net income attributable to Encompass Health common shareholders $ 90.9 $ 91.5 $ 192.8 $ 175.0 Denominator: Basic weighted average common shares outstanding 98.0 97.9 98.2 97.9 Basic earnings per share attributable to Encompass Health common shareholders: Continuing operations $ 0.93 $ 0.93 $ 1.97 $ 1.79 Discontinued operations — — (0.01 ) — Net income $ 0.93 $ 0.93 $ 1.96 $ 1.79 Diluted: Numerator: Income from continuing operations $ 111.0 $ 113.0 $ 236.7 $ 218.7 Less: Net income attributable to noncontrolling interests included in continuing operations (19.7 ) (21.4 ) (42.6 ) (42.8 ) Income from continuing operations attributable to Encompass Health common shareholders 91.3 91.6 194.1 175.9 (Loss) income from discontinued operations, net of tax, attributable to Encompass Health common shareholders (0.1 ) 0.2 (0.6 ) (0.3 ) Net income attributable to Encompass Health common shareholders $ 91.2 $ 91.8 $ 193.5 $ 175.6 Denominator: Diluted weighted average common shares outstanding 99.3 99.6 99.5 99.6 Diluted earnings per share attributable to Encompass Health common shareholders: Continuing operations $ 0.92 $ 0.92 $ 1.95 $ 1.76 Discontinued operations — — (0.01 ) — Net income $ 0.92 $ 0.92 $ 1.94 $ 1.76 |
Reconciliation of Weighted Average Number of Shares Outstanding | The following table sets forth the reconciliation between basic weighted average common shares outstanding and diluted weighted average common shares outstanding (in millions): Three Months Ended June 30, Six Months Ended June 30, 2019 2018 2019 2018 Basic weighted average common shares outstanding 98.0 97.9 98.2 97.9 Restricted stock awards, dilutive stock options, and restricted stock units 1.3 1.7 1.3 1.7 Diluted weighted average common shares outstanding 99.3 99.6 99.5 99.6 |
Segment Reporting (Tables)
Segment Reporting (Tables) | 6 Months Ended |
Jun. 30, 2019 | |
Segment Reporting [Abstract] | |
Schedule of Segment Reporting Information, by Segment | Selected financial information for our reportable segments is as follows (in millions): Inpatient Rehabilitation Home Health and Hospice Three Months Ended June 30, Six Months Ended June 30, Three Months Ended June 30, Six Months Ended June 30, 2019 2018 2019 2018 2019 2018 2019 2018 Net operating revenues $ 873.9 $ 834.6 $ 1,744.0 $ 1,674.9 $ 261.1 $ 233.1 $ 515.0 $ 438.8 Operating expenses: Inpatient rehabilitation: Salaries and benefits 443.6 416.5 888.6 840.7 — — — — Other operating expenses 127.2 126.9 254.8 249.8 — — — — Supplies 36.7 34.7 72.3 70.6 — — — — Occupancy costs 16.3 16.0 32.1 31.5 — — — — Home health and hospice: Cost of services sold (excluding depreciation and amortization) — — — — 119.9 109.1 236.4 207.7 Support and overhead costs — — — — 89.7 80.8 178.5 152.8 623.8 594.1 1,247.8 1,192.6 209.6 189.9 414.9 360.5 Other income (1.9 ) (1.2 ) (4.7 ) (1.7 ) — (0.5 ) — (0.5 ) Equity in net income of nonconsolidated affiliates (1.4 ) (1.6 ) (3.5 ) (3.6 ) (0.4 ) (0.4 ) (0.8 ) (0.7 ) Noncontrolling interests 19.5 19.8 40.5 40.3 2.8 2.5 5.5 4.4 Segment Adjusted EBITDA $ 233.9 $ 223.5 $ 463.9 $ 447.3 $ 49.1 $ 41.6 $ 95.4 $ 75.1 Capital expenditures $ 92.0 $ 54.4 $ 162.4 $ 116.6 $ 3.5 $ 4.3 $ 8.0 $ 6.0 |
Reconciliation of Assets from Segment to Consolidated | June 30, 2019 December 31, 2018 Total assets for reportable segments $ 5,845.6 $ 5,215.5 Reclassification of deferred income tax liabilities to net deferred income tax assets (33.5 ) (40.5 ) Total consolidated assets $ 5,812.1 $ 5,175.0 Inpatient Rehabilitation Home Health and Hospice Encompass Health Consolidated As of June 30, 2019 Total assets $ 4,457.5 $ 1,388.1 $ 5,812.1 Investments in and advances to nonconsolidated affiliates 8.6 5.3 13.9 As of December 31, 2018 Total assets $ 3,900.9 $ 1,314.6 $ 5,175.0 Investments in and advances to nonconsolidated affiliates 9.5 2.7 12.2 |
Reconciliation of Segment Adjusted EBITDA to Income from Continuing Operations Before Income Tax Expense | Segment reconciliations (in millions): Three Months Ended June 30, Six Months Ended June 30, 2019 2018 2019 2018 Total segment Adjusted EBITDA $ 283.0 $ 265.1 $ 559.3 $ 522.4 General and administrative expenses (77.1 ) (54.9 ) (130.5 ) (116.0 ) Depreciation and amortization (52.7 ) (49.7 ) (105.2 ) (95.6 ) Loss on disposal of assets (1.3 ) (2.4 ) (2.4 ) (3.2 ) Loss on early extinguishment of debt (2.3 ) — (2.3 ) — Interest expense and amortization of debt discounts and fees (37.7 ) (37.7 ) (74.9 ) (73.3 ) Net income attributable to noncontrolling interests 19.7 21.4 42.6 42.8 SARs mark-to-market impact on noncontrolling interests 2.6 0.9 3.4 1.9 Change in fair market value of equity securities 0.3 (0.4 ) 1.2 (1.0 ) Payroll taxes on SARs exercise — — (0.2 ) — Income from continuing operations before income tax expense $ 134.5 $ 142.3 $ 291.0 $ 278.0 |
Reconciliation of Revenue from Segments to Consolidated | Additional detail regarding the revenues of our operating segments by service line follows (in millions): Three Months Ended June 30, Six Months Ended June 30, 2019 2018 2019 2018 Inpatient rehabilitation: Inpatient $ 851.8 $ 809.6 $ 1,699.4 $ 1,626.7 Outpatient and other 22.1 25.0 44.6 48.2 Total inpatient rehabilitation 873.9 834.6 1,744.0 1,674.9 Home health and hospice: Home health 222.7 204.8 442.2 390.1 Hospice 38.4 28.3 72.8 48.7 Total home health and hospice 261.1 233.1 515.0 438.8 Total net operating revenues $ 1,135.0 $ 1,067.7 $ 2,259.0 $ 2,113.7 |
Condensed Consolidating Finan_2
Condensed Consolidating Financial Information (Tables) | 6 Months Ended |
Jun. 30, 2019 | |
Condensed Financial Information Disclosure [Abstract] | |
Condensed Consolidating Statement of Comprehensive Income | Three Months Ended June 30, 2019 Encompass Health Corporation Guarantor Subsidiaries Nonguarantor Subsidiaries Eliminating Entries Encompass Health Consolidated (In Millions) Net operating revenues $ 5.5 $ 606.7 $ 556.8 $ (34.0 ) $ 1,135.0 Operating expenses: Salaries and benefits 14.4 290.3 323.4 (5.2 ) 622.9 Other operating expenses 11.5 85.2 65.9 (12.8 ) 149.8 Occupancy costs 0.5 25.0 10.8 (16.0 ) 20.3 Supplies — 24.5 17.2 — 41.7 General and administrative expenses 39.4 — 37.7 — 77.1 Depreciation and amortization 4.9 26.1 21.7 — 52.7 Total operating expenses 70.7 451.1 476.7 (34.0 ) 964.5 Loss on early extinguishment of debt 2.3 — — — 2.3 Interest expense and amortization of debt discounts and fees 30.6 6.2 7.6 (6.7 ) 37.7 Other income (6.7 ) (0.3 ) (1.9 ) 6.7 (2.2 ) Equity in net income of nonconsolidated affiliates — (1.3 ) (0.5 ) — (1.8 ) Equity in net income of consolidated affiliates (117.6 ) (16.6 ) — 134.2 — Management fees (40.4 ) 29.5 10.9 — — Income from continuing operations before income tax (benefit) expense 66.6 138.1 64.0 (134.2 ) 134.5 Provision for income tax (benefit) expense (24.7 ) 37.1 11.1 — 23.5 Income from continuing operations 91.3 101.0 52.9 (134.2 ) 111.0 Loss from discontinued operations, net of tax (0.1 ) — — — (0.1 ) Net and comprehensive income 91.2 101.0 52.9 (134.2 ) 110.9 Less: Net and comprehensive income attributable to noncontrolling interests — — (19.7 ) — (19.7 ) Net and comprehensive income attributable to Encompass Health $ 91.2 $ 101.0 $ 33.2 $ (134.2 ) $ 91.2 Three Months Ended June 30, 2018 Encompass Health Corporation Guarantor Subsidiaries Nonguarantor Subsidiaries Eliminating Entries Encompass Health Consolidated (In Millions) Net operating revenues $ 5.7 $ 588.1 $ 507.1 $ (33.2 ) $ 1,067.7 Operating expenses: Salaries and benefits 9.4 280.9 293.3 (5.4 ) 578.2 Other operating expenses 9.3 90.8 62.3 (13.0 ) 149.4 Occupancy costs 0.5 24.0 9.8 (14.8 ) 19.5 Supplies — 23.8 15.5 — 39.3 General and administrative expenses 41.2 — 13.7 — 54.9 Depreciation and amortization 3.5 27.3 18.9 — 49.7 Total operating expenses 63.9 446.8 413.5 (33.2 ) 891.0 Interest expense and amortization of debt discounts and fees 31.9 5.7 6.7 (6.6 ) 37.7 Other income (6.2 ) (0.3 ) (1.4 ) 6.6 (1.3 ) Equity in net income of nonconsolidated affiliates — (1.6 ) (0.4 ) — (2.0 ) Equity in net income of consolidated affiliates (117.5 ) (17.2 ) — 134.7 — Management fees (38.5 ) 28.4 10.1 — — Income from continuing operations before income tax (benefit) expense 72.1 126.3 78.6 (134.7 ) 142.3 Provision for income tax (benefit) expense (19.5 ) 34.0 14.8 — 29.3 Income from continuing operations 91.6 92.3 63.8 (134.7 ) 113.0 Income from discontinued operations, net of tax 0.2 — — — 0.2 Net and comprehensive income 91.8 92.3 63.8 (134.7 ) 113.2 Less: Net and comprehensive income attributable to noncontrolling interests — — (21.4 ) — (21.4 ) Net and comprehensive income attributable to Encompass Health $ 91.8 $ 92.3 $ 42.4 $ (134.7 ) $ 91.8 Six Months Ended June 30, 2019 Encompass Health Corporation Guarantor Subsidiaries Nonguarantor Subsidiaries Eliminating Entries Encompass Health Consolidated (In Millions) Net operating revenues $ 10.6 $ 1,213.2 $ 1,102.8 $ (67.6 ) $ 2,259.0 Operating expenses: Salaries and benefits 30.3 579.2 644.5 (10.3 ) 1,243.7 Other operating expenses 21.8 169.9 133.5 (25.3 ) 299.9 Occupancy costs 1.0 49.9 21.0 (32.0 ) 39.9 Supplies — 48.5 33.3 — 81.8 General and administrative expenses 79.3 — 51.2 — 130.5 Depreciation and amortization 9.9 52.4 42.9 — 105.2 Total operating expenses 142.3 899.9 926.4 (67.6 ) 1,901.0 Loss on early extinguishment of debt 2.3 — — — 2.3 Interest expense and amortization of debt discounts and fees 60.7 12.4 15.3 (13.5 ) 74.9 Other income (14.4 ) (0.6 ) (4.4 ) 13.5 (5.9 ) Equity in net income of nonconsolidated affiliates — (3.3 ) (1.0 ) — (4.3 ) Equity in net income of consolidated affiliates (247.8 ) (33.6 ) — 281.4 — Management fees (80.2 ) 59.0 21.2 — — Income from continuing operations before income tax (benefit) expense 147.7 279.4 145.3 (281.4 ) 291.0 Provision for income tax (benefit) expense (46.4 ) 74.9 25.8 — 54.3 Income from continuing operations 194.1 204.5 119.5 (281.4 ) 236.7 Loss from discontinued operations, net of tax (0.6 ) — — — (0.6 ) Net and comprehensive income 193.5 204.5 119.5 (281.4 ) 236.1 Less: Net and comprehensive income attributable to noncontrolling interests — — (42.6 ) — (42.6 ) Net and comprehensive income attributable to Encompass Health $ 193.5 $ 204.5 $ 76.9 $ (281.4 ) $ 193.5 Six Months Ended June 30, 2018 Encompass Health Corporation Guarantor Subsidiaries Nonguarantor Subsidiaries Eliminating Entries Encompass Health Consolidated (In Millions) Net operating revenues $ 11.1 $ 1,182.8 $ 985.6 $ (65.8 ) $ 2,113.7 Operating expenses: Salaries and benefits 22.6 563.3 573.3 (10.8 ) 1,148.4 Other operating expenses 17.7 175.4 122.9 (25.4 ) 290.6 Occupancy costs 1.0 47.7 19.0 (29.6 ) 38.1 Supplies — 48.5 30.7 — 79.2 General and administrative expenses 80.6 — 35.4 — 116.0 Depreciation and amortization 5.5 53.9 36.2 — 95.6 Total operating expenses 127.4 888.8 817.5 (65.8 ) 1,767.9 Interest expense and amortization of debt discounts and fees 61.7 11.4 11.9 (11.7 ) 73.3 Other income (10.9 ) (0.5 ) (1.5 ) 11.7 (1.2 ) Equity in net income of nonconsolidated affiliates — (3.4 ) (0.9 ) — (4.3 ) Equity in net income of consolidated affiliates (229.8 ) (33.7 ) — 263.5 — Management fees (76.9 ) 57.2 19.7 — — Income from continuing operations before income tax (benefit) expense 139.6 263.0 138.9 (263.5 ) 278.0 Provision for income tax (benefit) expense (36.3 ) 70.9 24.7 — 59.3 Income from continuing operations 175.9 192.1 114.2 (263.5 ) 218.7 Loss from discontinued operations, net of tax (0.3 ) — — — (0.3 ) Net and comprehensive income 175.6 192.1 114.2 (263.5 ) 218.4 Less: Net and comprehensive income attributable to noncontrolling interests — — (42.8 ) — (42.8 ) Net and comprehensive income attributable to Encompass Health $ 175.6 $ 192.1 $ 71.4 $ (263.5 ) $ 175.6 |
Condensed Consolidating Balance Sheet | As of June 30, 2019 Encompass Health Corporation Guarantor Subsidiaries Nonguarantor Subsidiaries Eliminating Entries Encompass Health Consolidated (In Millions) Assets Current assets: Cash and cash equivalents $ 193.6 $ 3.6 $ 24.5 $ — $ 221.7 Restricted cash — — 56.8 — 56.8 Accounts receivable — 282.0 214.0 — 496.0 Other current assets 64.0 31.4 54.9 (79.9 ) 70.4 Total current assets 257.6 317.0 350.2 (79.9 ) 844.9 Property and equipment, net 124.7 1,115.5 547.9 — 1,788.1 Operating lease right-of-use assets 14.6 176.7 120.8 (27.7 ) 284.4 Goodwill — 912.2 1,199.4 — 2,111.6 Intangible assets, net 19.8 108.0 315.8 — 443.6 Deferred income tax assets 39.4 28.9 — (25.7 ) 42.6 Other long-term assets 51.4 91.5 154.0 — 296.9 Intercompany notes receivable 530.2 — — (530.2 ) — Intercompany receivable and investments in consolidated affiliates 2,922.9 673.9 — (3,596.8 ) — Total assets $ 3,960.6 $ 3,423.7 $ 2,688.1 $ (4,260.3 ) $ 5,812.1 Liabilities and Shareholders’ Equity Current liabilities: Current portion of long-term debt $ 35.9 $ 7.8 $ 11.9 $ (17.5 ) $ 38.1 Current operating lease liabilities 2.5 24.8 25.1 (7.2 ) 45.2 Accounts payable 7.8 52.3 35.5 — 95.6 Accrued expenses and other current liabilities 200.8 91.5 344.1 (62.4 ) 574.0 Total current liabilities 247.0 176.4 416.6 (87.1 ) 752.9 Long-term debt, net of current portion 2,381.2 286.7 51.7 — 2,719.6 Long-term operating lease liabilities 12.3 155.2 98.8 (20.5 ) 245.8 Intercompany notes payable — — 530.2 (530.2 ) — Other long-term liabilities 44.2 10.8 127.9 (25.7 ) 157.2 Intercompany payable — — 52.6 (52.6 ) — 2,684.7 629.1 1,277.8 (716.1 ) 3,875.5 Commitments and contingencies Redeemable noncontrolling interests — — 352.8 — 352.8 Shareholders’ equity: Encompass Health shareholders’ equity 1,275.9 2,794.6 749.6 (3,544.2 ) 1,275.9 Noncontrolling interests — — 307.9 — 307.9 Total shareholders’ equity 1,275.9 2,794.6 1,057.5 (3,544.2 ) 1,583.8 Total liabilities and shareholders’ equity $ 3,960.6 $ 3,423.7 $ 2,688.1 $ (4,260.3 ) $ 5,812.1 As of December 31, 2018 Encompass Health Corporation Guarantor Subsidiaries Nonguarantor Subsidiaries Eliminating Entries Encompass Health Consolidated (In Millions) Assets Current assets: Cash and cash equivalents $ 41.5 $ 3.0 $ 24.7 $ — $ 69.2 Restricted cash — — 59.0 — 59.0 Accounts receivable — 270.7 197.0 — 467.7 Other current assets 36.3 17.6 31.1 (18.8 ) 66.2 Total current assets 77.8 291.3 311.8 (18.8 ) 662.1 Property and equipment, net 123.9 1,041.5 469.4 — 1,634.8 Goodwill — 912.2 1,188.6 — 2,100.8 Intangible assets, net 21.4 96.5 325.5 — 443.4 Deferred income tax assets 47.9 28.9 — (33.9 ) 42.9 Other long-term assets 47.9 100.4 142.7 — 291.0 Intercompany notes receivable 535.3 — — (535.3 ) — Intercompany receivable and investments in consolidated affiliates 2,904.4 457.6 — (3,362.0 ) — Total assets $ 3,758.6 $ 2,928.4 $ 2,438.0 $ (3,950.0 ) $ 5,175.0 Liabilities and Shareholders’ Equity Current liabilities: Current portion of long-term debt $ 35.0 $ 7.6 $ 10.7 $ (17.5 ) $ 35.8 Accounts payable 8.9 46.4 34.7 — 90.0 Accrued expenses and other current liabilities 211.8 76.4 259.8 (1.3 ) 546.7 Total current liabilities 255.7 130.4 305.2 (18.8 ) 672.5 Long-term debt, net of current portion 2,188.7 262.1 27.8 — 2,478.6 Intercompany notes payable — — 535.3 (535.3 ) — Other long-term liabilities 37.5 17.1 184.4 (33.8 ) 205.2 Intercompany payable — — 53.1 (53.1 ) — 2,481.9 409.6 1,105.8 (641.0 ) 3,356.3 Commitments and contingencies Redeemable noncontrolling interests — — 261.7 — 261.7 Shareholders’ equity: Encompass Health shareholders’ equity 1,276.7 2,518.8 790.2 (3,309.0 ) 1,276.7 Noncontrolling interests — — 280.3 — 280.3 Total shareholders’ equity 1,276.7 2,518.8 1,070.5 (3,309.0 ) 1,557.0 Total liabilities and shareholders’ equity $ 3,758.6 $ 2,928.4 $ 2,438.0 $ (3,950.0 ) $ 5,175.0 |
Condensed Consolidating Statement of Cash Flows | Six Months Ended June 30, 2019 Encompass Health Corporation Guarantor Subsidiaries Nonguarantor Subsidiaries Eliminating Entries Encompass Health Consolidated (In Millions) Net cash (used in) provided by operating activities $ (38.2 ) $ 203.8 $ 139.7 $ — $ 305.3 Cash flows from investing activities: Purchases of property and equipment (13.6 ) (69.9 ) (72.3 ) — (155.8 ) Additions to capitalized software costs (3.2 ) (0.3 ) (3.1 ) — (6.6 ) Acquisitions of businesses, net of cash acquired — — (13.7 ) — (13.7 ) Funding of intercompany note receivable (8.0 ) — — 8.0 — Proceeds from repayment of intercompany note receivable 22.0 — — (22.0 ) — Other, net (4.8 ) (7.9 ) (2.8 ) — (15.5 ) Net cash used in investing activities (7.6 ) (78.1 ) (91.9 ) (14.0 ) (191.6 ) Cash flows from financing activities: Principal payments on debt, including pre-payments (110.6 ) — (1.5 ) — (112.1 ) Principal borrowings on intercompany note payable — — 8.0 (8.0 ) — Principal payments on intercompany note payable — — (22.0 ) 22.0 — Borrowings on revolving credit facility 400.0 — — — 400.0 Payments on revolving credit facility (95.0 ) — — — (95.0 ) Principal payments under finance lease obligations (0.3 ) (4.0 ) (5.0 ) — (9.3 ) Repurchases of common stock, including fees and expenses (43.8 ) — — — (43.8 ) Dividends paid on common stock (54.8 ) — (0.1 ) — (54.9 ) Distributions paid to noncontrolling interests of consolidated affiliates — — (36.5 ) — (36.5 ) Taxes paid on behalf of employees for shares withheld (14.9 ) — (1.2 ) — (16.1 ) Other, net (0.6 ) — 8.8 — 8.2 Change in intercompany advances 117.9 (121.1 ) 3.2 — — Net cash provided by (used in) financing activities 197.9 (125.1 ) (46.3 ) 14.0 40.5 Increase in cash, cash equivalents, and restricted cash 152.1 0.6 1.5 — 154.2 Cash, cash equivalents, and restricted cash at beginning of period 41.5 3.0 89.0 — 133.5 Cash, cash equivalents, and restricted cash at end of period $ 193.6 $ 3.6 $ 90.5 $ — $ 287.7 Reconciliation of Cash, Cash Equivalents, and Restricted Cash Cash and cash equivalents at beginning of period $ 41.5 $ 3.0 $ 24.7 $ — $ 69.2 Restricted cash at beginning of period — — 59.0 — 59.0 Restricted cash included in other long term assets at beginning of period — — 5.3 — 5.3 Cash, cash equivalents, and restricted cash at beginning of period $ 41.5 $ 3.0 $ 89.0 $ — $ 133.5 Cash and cash equivalents at end of period $ 193.6 $ 3.6 $ 24.5 $ — $ 221.7 Restricted cash at end of period — — 56.8 — 56.8 Restricted cash included in other long-term assets at end of period — — 9.2 — 9.2 Cash, cash equivalents, and restricted cash at end of period $ 193.6 $ 3.6 $ 90.5 $ — $ 287.7 Six Months Ended June 30, 2018 Encompass Health Corporation Guarantor Subsidiaries Nonguarantor Subsidiaries Eliminating Entries Encompass Health Consolidated (In Millions) Net cash (used in) provided by operating activities $ (14.2 ) $ 222.5 $ 177.2 $ — $ 385.5 Cash flows from investing activities: Purchases of property and equipment (18.0 ) (60.9 ) (29.9 ) — (108.8 ) Additions to capitalized software costs (8.7 ) — (1.0 ) — (9.7 ) Acquisitions of businesses, net of cash acquired (129.7 ) — (6.1 ) — (135.8 ) Proceeds from repayment of intercompany note receivable 30.0 — — (30.0 ) — Other, net (5.2 ) (0.1 ) (1.4 ) — (6.7 ) Net cash used in investing activities (131.6 ) (61.0 ) (38.4 ) (30.0 ) (261.0 ) Cash flows from financing activities: Principal payments on debt, including pre-payments (7.6 ) — (1.5 ) — (9.1 ) Principal payments on intercompany note payable — — (30.0 ) 30.0 — Borrowings on revolving credit facility 245.0 — — — 245.0 Payments on revolving credit facility (190.0 ) — — — (190.0 ) Principal payments under finance lease obligations — (4.1 ) (4.3 ) — (8.4 ) Dividends paid on common stock (49.8 ) — (0.1 ) — (49.9 ) Purchase of equity interests in consolidated affiliates (65.1 ) — — — (65.1 ) Distributions paid to noncontrolling interests of consolidated affiliates — — (35.2 ) — (35.2 ) Taxes paid on behalf of employees for shares withheld (7.4 ) — (0.9 ) — (8.3 ) Other, net 0.5 — 4.0 — 4.5 Change in intercompany advances 220.1 (156.5 ) (63.6 ) — — Net cash provided by (used in) financing activities 145.7 (160.6 ) (131.6 ) 30.0 (116.5 ) (Decrease) increase in cash, cash equivalents, and restricted cash (0.1 ) 0.9 7.2 — 8.0 Cash, cash equivalents, and restricted cash at beginning of period 34.3 3.0 79.5 — 116.8 Cash, cash equivalents, and restricted cash at end of period $ 34.2 $ 3.9 $ 86.7 $ — $ 124.8 Reconciliation of Cash, Cash Equivalents, and Restricted Cash Cash and cash equivalents at beginning of period $ 34.3 $ 3.0 $ 17.1 $ — $ 54.4 Restricted cash at beginning of period — — 62.4 — 62.4 Cash, cash equivalents, and restricted cash at beginning of period $ 34.3 $ 3.0 $ 79.5 $ — $ 116.8 Cash and cash equivalents at end of period $ 34.2 $ 3.9 $ 20.9 $ — $ 59.0 Restricted cash at end of period — — 65.8 — 65.8 Cash, cash equivalents, and restricted cash at end of period $ 34.2 $ 3.9 $ 86.7 $ — $ 124.8 Supplemental schedule of noncash financing activity: Intercompany note activity $ (134.2 ) $ — $ 134.2 $ — $ — |
Basis of Presentation - Net Ope
Basis of Presentation - Net Operating Revenues (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2019 | Jun. 30, 2018 | Jun. 30, 2019 | Jun. 30, 2018 | |
Disaggregation of Revenue [Line Items] | ||||
Net operating revenues | $ 1,135 | $ 1,067.7 | $ 2,259 | $ 2,113.7 |
Inpatient Rehabilitation Segment [Member] | ||||
Disaggregation of Revenue [Line Items] | ||||
Net operating revenues | 873.9 | 834.6 | 1,744 | 1,674.9 |
Home Health and Hospice Segment [Member] | ||||
Disaggregation of Revenue [Line Items] | ||||
Net operating revenues | 261.1 | 233.1 | 515 | 438.8 |
Net operating revenues [Member] | Payor Source [Member] | ||||
Disaggregation of Revenue [Line Items] | ||||
Net operating revenues | 1,135 | 1,067.7 | 2,259 | 2,113.7 |
Net operating revenues [Member] | Other income [Member] | Payor Source [Member] | ||||
Disaggregation of Revenue [Line Items] | ||||
Net operating revenues | 12 | 11.7 | 24.3 | 21.7 |
Net operating revenues [Member] | Inpatient Rehabilitation Segment [Member] | Payor Source [Member] | ||||
Disaggregation of Revenue [Line Items] | ||||
Net operating revenues | 873.9 | 834.6 | 1,744 | 1,674.9 |
Net operating revenues [Member] | Inpatient Rehabilitation Segment [Member] | Other income [Member] | Payor Source [Member] | ||||
Disaggregation of Revenue [Line Items] | ||||
Net operating revenues | 11.7 | 11.5 | 23.7 | 21.3 |
Net operating revenues [Member] | Home Health and Hospice Segment [Member] | Payor Source [Member] | ||||
Disaggregation of Revenue [Line Items] | ||||
Net operating revenues | 261.1 | 233.1 | 515 | 438.8 |
Net operating revenues [Member] | Home Health and Hospice Segment [Member] | Other income [Member] | Payor Source [Member] | ||||
Disaggregation of Revenue [Line Items] | ||||
Net operating revenues | 0.3 | 0.2 | 0.6 | 0.4 |
Net operating revenues [Member] | Third-Party Payor [Member] | Medicare [Member] | Payor Source [Member] | ||||
Disaggregation of Revenue [Line Items] | ||||
Net operating revenues | 850.1 | 806.3 | 1,704.5 | 1,607.7 |
Net operating revenues [Member] | Third-Party Payor [Member] | Medicare Advantage [Member] | Payor Source [Member] | ||||
Disaggregation of Revenue [Line Items] | ||||
Net operating revenues | 123.7 | 100.5 | 233.7 | 193 |
Net operating revenues [Member] | Third-Party Payor [Member] | Managed Care [Member] | Payor Source [Member] | ||||
Disaggregation of Revenue [Line Items] | ||||
Net operating revenues | 94.5 | 95.3 | 186.4 | 187.9 |
Net operating revenues [Member] | Third-Party Payor [Member] | Medicaid [Member] | Payor Source [Member] | ||||
Disaggregation of Revenue [Line Items] | ||||
Net operating revenues | 31.7 | 29.5 | 62.3 | 54.7 |
Net operating revenues [Member] | Third-Party Payor [Member] | Other third-party payors [Member] | Payor Source [Member] | ||||
Disaggregation of Revenue [Line Items] | ||||
Net operating revenues | 10.5 | 12.7 | 20.5 | 24.7 |
Net operating revenues [Member] | Third-Party Payor [Member] | Workers' compensation [Member] | Payor Source [Member] | ||||
Disaggregation of Revenue [Line Items] | ||||
Net operating revenues | 6.8 | 7 | 15.1 | 14.5 |
Net operating revenues [Member] | Third-Party Payor [Member] | Inpatient Rehabilitation Segment [Member] | Medicare [Member] | Payor Source [Member] | ||||
Disaggregation of Revenue [Line Items] | ||||
Net operating revenues | 629 | 607.1 | 1,268.4 | 1,231.6 |
Net operating revenues [Member] | Third-Party Payor [Member] | Inpatient Rehabilitation Segment [Member] | Medicare Advantage [Member] | Payor Source [Member] | ||||
Disaggregation of Revenue [Line Items] | ||||
Net operating revenues | 97 | 78.7 | 181.5 | 151.2 |
Net operating revenues [Member] | Third-Party Payor [Member] | Inpatient Rehabilitation Segment [Member] | Managed Care [Member] | Payor Source [Member] | ||||
Disaggregation of Revenue [Line Items] | ||||
Net operating revenues | 86.5 | 86.6 | 170.1 | 171.6 |
Net operating revenues [Member] | Third-Party Payor [Member] | Inpatient Rehabilitation Segment [Member] | Medicaid [Member] | Payor Source [Member] | ||||
Disaggregation of Revenue [Line Items] | ||||
Net operating revenues | 27.1 | 26.8 | 53.4 | 51.5 |
Net operating revenues [Member] | Third-Party Payor [Member] | Inpatient Rehabilitation Segment [Member] | Other third-party payors [Member] | Payor Source [Member] | ||||
Disaggregation of Revenue [Line Items] | ||||
Net operating revenues | 10.5 | 12.7 | 20.5 | 24.7 |
Net operating revenues [Member] | Third-Party Payor [Member] | Inpatient Rehabilitation Segment [Member] | Workers' compensation [Member] | Payor Source [Member] | ||||
Disaggregation of Revenue [Line Items] | ||||
Net operating revenues | 6.5 | 6.8 | 14.7 | 14.2 |
Net operating revenues [Member] | Third-Party Payor [Member] | Home Health and Hospice Segment [Member] | Medicare [Member] | Payor Source [Member] | ||||
Disaggregation of Revenue [Line Items] | ||||
Net operating revenues | 221.1 | 199.2 | 436.1 | 376.1 |
Net operating revenues [Member] | Third-Party Payor [Member] | Home Health and Hospice Segment [Member] | Medicare Advantage [Member] | Payor Source [Member] | ||||
Disaggregation of Revenue [Line Items] | ||||
Net operating revenues | 26.7 | 21.8 | 52.2 | 41.8 |
Net operating revenues [Member] | Third-Party Payor [Member] | Home Health and Hospice Segment [Member] | Managed Care [Member] | Payor Source [Member] | ||||
Disaggregation of Revenue [Line Items] | ||||
Net operating revenues | 8 | 8.7 | 16.3 | 16.3 |
Net operating revenues [Member] | Third-Party Payor [Member] | Home Health and Hospice Segment [Member] | Medicaid [Member] | Payor Source [Member] | ||||
Disaggregation of Revenue [Line Items] | ||||
Net operating revenues | 4.6 | 2.7 | 8.9 | 3.2 |
Net operating revenues [Member] | Third-Party Payor [Member] | Home Health and Hospice Segment [Member] | Other third-party payors [Member] | Payor Source [Member] | ||||
Disaggregation of Revenue [Line Items] | ||||
Net operating revenues | 0 | 0 | 0 | 0 |
Net operating revenues [Member] | Third-Party Payor [Member] | Home Health and Hospice Segment [Member] | Workers' compensation [Member] | Payor Source [Member] | ||||
Disaggregation of Revenue [Line Items] | ||||
Net operating revenues | 0.3 | 0.2 | 0.4 | 0.3 |
Net operating revenues [Member] | Self-Pay [Member] | Patients [Member] | Payor Source [Member] | ||||
Disaggregation of Revenue [Line Items] | ||||
Net operating revenues | 5.7 | 4.7 | 12.2 | 9.5 |
Net operating revenues [Member] | Self-Pay [Member] | Inpatient Rehabilitation Segment [Member] | Patients [Member] | Payor Source [Member] | ||||
Disaggregation of Revenue [Line Items] | ||||
Net operating revenues | 5.6 | 4.4 | 11.7 | 8.8 |
Net operating revenues [Member] | Self-Pay [Member] | Home Health and Hospice Segment [Member] | Patients [Member] | Payor Source [Member] | ||||
Disaggregation of Revenue [Line Items] | ||||
Net operating revenues | $ 0.1 | $ 0.3 | $ 0.5 | $ 0.7 |
Basis of Presentation Basis of
Basis of Presentation Basis of Presentation - Revision of Previously Issued Financial Statements (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||||||
Jun. 30, 2019 | Jun. 30, 2018 | Jun. 30, 2019 | Jun. 30, 2018 | Mar. 31, 2019 | Dec. 31, 2018 | Mar. 31, 2018 | Dec. 31, 2017 | |
Error Corrections and Prior Period Adjustments Restatement [Line Items] | ||||||||
Change in fair value | $ (80.4) | $ (24.1) | $ (100.7) | $ (66.3) | ||||
Stockholders' Equity, Including Portion Attributable to Noncontrolling Interest | 1,583.8 | 1,464 | 1,583.8 | 1,464 | $ 1,616.5 | $ 1,557 | $ 1,409.9 | $ 1,395.4 |
Capital in Excess of Par Value | ||||||||
Error Corrections and Prior Period Adjustments Restatement [Line Items] | ||||||||
Change in fair value | (80.4) | (24.1) | (100.7) | (66.3) | ||||
Stockholders' Equity, Including Portion Attributable to Noncontrolling Interest | 2,455.6 | 2,645.9 | 2,455.6 | 2,645.9 | 2,551.3 | 2,588.7 | 2,685.9 | 2,747.4 |
Accumulated Deficit | ||||||||
Error Corrections and Prior Period Adjustments Restatement [Line Items] | ||||||||
Stockholders' Equity, Including Portion Attributable to Noncontrolling Interest | $ (691.7) | (1,001.9) | $ (691.7) | (1,001.9) | $ (782.9) | $ (885.2) | $ (1,093.7) | $ (1,176.2) |
As Reported [Member] | ||||||||
Error Corrections and Prior Period Adjustments Restatement [Line Items] | ||||||||
Change in fair value | (58.2) | |||||||
Stockholders' Equity, Including Portion Attributable to Noncontrolling Interest | 1,501.3 | 1,501.3 | ||||||
As Reported [Member] | Capital in Excess of Par Value | ||||||||
Error Corrections and Prior Period Adjustments Restatement [Line Items] | ||||||||
Stockholders' Equity, Including Portion Attributable to Noncontrolling Interest | 2,698 | 2,698 | ||||||
As Reported [Member] | Accumulated Deficit | ||||||||
Error Corrections and Prior Period Adjustments Restatement [Line Items] | ||||||||
Stockholders' Equity, Including Portion Attributable to Noncontrolling Interest | (1,016.7) | (1,016.7) | ||||||
Adjustment [Member] | ||||||||
Error Corrections and Prior Period Adjustments Restatement [Line Items] | ||||||||
Change in fair value | (8.1) | |||||||
Stockholders' Equity, Including Portion Attributable to Noncontrolling Interest | (37.3) | (37.3) | ||||||
Adjustment [Member] | Capital in Excess of Par Value | ||||||||
Error Corrections and Prior Period Adjustments Restatement [Line Items] | ||||||||
Stockholders' Equity, Including Portion Attributable to Noncontrolling Interest | (52.1) | (52.1) | ||||||
Adjustment [Member] | Accumulated Deficit | ||||||||
Error Corrections and Prior Period Adjustments Restatement [Line Items] | ||||||||
Stockholders' Equity, Including Portion Attributable to Noncontrolling Interest | $ 14.8 | $ 14.8 |
Basis of Presentation Basis o_2
Basis of Presentation Basis of Presentation - Textual (Details) $ in Millions | Jun. 30, 2019USD ($)state | Mar. 31, 2019USD ($) | Jan. 01, 2019USD ($) | Dec. 31, 2018USD ($) | Jun. 30, 2018USD ($) | Mar. 31, 2018USD ($) | Dec. 31, 2017USD ($) | |
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||||||
Number of states in which entity operates | state | 37 | |||||||
Total assets | $ 5,812.1 | [1] | $ 5,175 | |||||
Liabilities | 3,875.5 | 3,356.3 | ||||||
Capital in excess of par value | 1,583.8 | $ 1,616.5 | 1,557 | $ 1,464 | $ 1,409.9 | $ 1,395.4 | ||
Adoption of ASC 842 [Member] | ||||||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||||||
Total assets | $ 349 | |||||||
Liabilities | $ 347 | |||||||
Capital in Excess of Par Value | ||||||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||||||
Capital in excess of par value | 2,455.6 | $ 2,551.3 | $ 2,588.7 | $ 2,645.9 | $ 2,685.9 | $ 2,747.4 | ||
Capital in Excess of Par Value | Adoption of ASC 842 [Member] | ||||||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||||||
Capital in excess of par value | $ 2 | |||||||
[1] | Our consolidated assets as of June 30, 2019 and December 31, 2018 include total assets of variable interest entities of $216.4 million and $197.5 million , respectively, which cannot be used by us to settle the obligations of other entities. Our consolidated liabilities as of June 30, 2019 and December 31, 2018 include total liabilities of the variable interest entities of $55.8 million and $50.8 million , respectively. See Note 3 , Variable Interest Entities . |
Business Combinations - Textual
Business Combinations - Textual (Details) - Home Health and Hospice Segment [Member] $ in Millions | Jul. 01, 2019USD ($)location | Mar. 01, 2019USD ($)location |
Tidewater and Care Resource Group [Member] | ||
Business Acquisition [Line Items] | ||
Business Acquisition, Goodwill, Expected Tax Deductible Amount | $ | $ 10.8 | |
Noncompete agreements [Member] | Tidewater and Care Resource Group [Member] | ||
Business Acquisition [Line Items] | ||
Acquired Finite-lived Intangible Assets, Weighted Average Useful Life | 5 years | |
Certificates of need [Member] | Tidewater and Care Resource Group [Member] | ||
Business Acquisition [Line Items] | ||
Acquired Finite-lived Intangible Assets, Weighted Average Useful Life | 10 years | |
License [Member] | Tidewater and Care Resource Group [Member] | ||
Business Acquisition [Line Items] | ||
Acquired Finite-lived Intangible Assets, Weighted Average Useful Life | 10 years | |
Home health [Member] | Care Resource Group [Member] | ||
Business Acquisition [Line Items] | ||
Number of Locations of an Acquired Entity | location | 2 | |
Subsequent Event [Member] | Alacare [Member] | ||
Business Acquisition [Line Items] | ||
Payments to Acquire Businesses, Gross | $ | $ 217.5 | |
Number of Locations of an Acquired Entity | location | 23 |
Business Combinations - Fair Va
Business Combinations - Fair Value of Assets and Liabilities Assumed (Details) - USD ($) $ in Millions | Jun. 30, 2019 | Mar. 01, 2019 | Dec. 31, 2018 |
Business Acquisition [Line Items] | |||
Goodwill | $ 2,111.6 | $ 2,100.8 | |
Home Health and Hospice Segment [Member] | Certificates of need [Member] | |||
Business Acquisition [Line Items] | |||
Identifiable intangible assets | $ 2 | ||
Home Health and Hospice Segment [Member] | Tidewater and Care Resource Group [Member] | |||
Business Acquisition [Line Items] | |||
Goodwill | 10.8 | ||
Other assets acquired | 0.2 | ||
Total assets acquired | 14 | ||
Accrued payroll | (0.1) | ||
Other current liabilities | (0.1) | ||
Other long-term liabilities | (0.1) | ||
Total liabilities assumed | (0.3) | ||
Net assets acquired | 13.7 | ||
Home Health and Hospice Segment [Member] | Tidewater and Care Resource Group [Member] | Noncompete agreements [Member] | |||
Business Acquisition [Line Items] | |||
Identifiable intangible assets | 0.2 | ||
Home Health and Hospice Segment [Member] | Tidewater and Care Resource Group [Member] | License [Member] | |||
Business Acquisition [Line Items] | |||
Identifiable intangible assets | $ 0.8 |
Business Combinations - Net Cas
Business Combinations - Net Cash Paid for Acquisitions (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2019 | Jun. 30, 2018 | Jun. 30, 2019 | Jun. 30, 2018 | |
Business Acquisition [Line Items] | ||||
Net cash paid for acquisition | $ 13.7 | $ 135.8 | ||
Home Health and Hospice Segment [Member] | Tidewater and Care Resource Group [Member] | ||||
Business Acquisition [Line Items] | ||||
Fair value of assets acquired | $ 0 | $ 41.9 | 3.2 | 42 |
Goodwill | 0 | 101.6 | 10.8 | 102.1 |
Fair value of liabilities assumed | 0 | (8.3) | (0.3) | (8.3) |
Net cash paid for acquisition | $ 0 | $ 135.2 | $ 13.7 | $ 135.8 |
Business Combinations - Pro For
Business Combinations - Pro Forma Results of Operation (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2019 | Jun. 30, 2018 | Jun. 30, 2019 | Jun. 30, 2018 | |
Business Acquisition [Line Items] | ||||
Combined entity: Supplemental pro forma, Net Operating Revenues | $ 1,135 | $ 1,071.1 | $ 2,261 | $ 2,119.5 |
Combined entity: Supplemental pro forma, Net Income Attributable to Encompass Health | $ 91.2 | $ 92.4 | 193.7 | $ 176.4 |
Tidewater and Care Resource Group [Member] | Home Health and Hospice Segment [Member] | ||||
Business Acquisition [Line Items] | ||||
Acquired entity only: Actual from acquisition date to March 31, 2019, Net Operating Revenues | 3.2 | |||
Acquired entities only: Actual from acquisition date to March 31, 2019, Net Income Attributable to Encompass Health | $ (0.6) |
Variable Interest Entities - Te
Variable Interest Entities - Textual (Details) - Consolidated Limited Partnership-like Entities [Member] - entity | 6 Months Ended | 12 Months Ended |
Jun. 30, 2019 | Dec. 31, 2018 | |
Variable Interest Entity [Line Items] | ||
Number of consolidated limited partnership-like entities | 8 | 8 |
Minimum [Member] | ||
Variable Interest Entity [Line Items] | ||
Ownership interest in consolidated entities (percent) | 50.00% | |
Maximum [Member] | ||
Variable Interest Entity [Line Items] | ||
Ownership interest in consolidated entities (percent) | 75.00% |
Variable Interest Entities - Ta
Variable Interest Entities - Table 1 (Details) - USD ($) $ in Millions | Jun. 30, 2019 | Dec. 31, 2018 | Jun. 30, 2018 | Dec. 31, 2017 | |
Variable Interest Entity [Line Items] | |||||
Cash and cash equivalents | $ 221.7 | $ 69.2 | $ 59 | $ 54.4 | |
Accounts receivable | 496 | 467.7 | |||
Other current assets | 70.4 | 66.2 | |||
Total current assets | 844.9 | 662.1 | |||
Property and equipment, net | 1,788.1 | 1,634.8 | |||
Operating lease right-of-use assets | 284.4 | 0 | |||
Goodwill | 2,111.6 | 2,100.8 | |||
Intangible assets, net | 443.6 | 443.4 | |||
Other long-term assets | 296.9 | 291 | |||
Total assets | 5,812.1 | [1] | 5,175 | ||
Current portion of long-term debt | 38.1 | 35.8 | |||
Current operating lease liabilities | 45.2 | 0 | |||
Accounts payable | 95.6 | 90 | |||
Total current liabilities | 752.9 | 672.5 | |||
Long-term debt, net of current portion | 2,719.6 | 2,478.6 | |||
Long-term operating lease liabilities | 245.8 | 0 | |||
Total Liabilities | 3,875.5 | 3,356.3 | |||
Consolidated VIEs [Member] | |||||
Variable Interest Entity [Line Items] | |||||
Cash and cash equivalents | 0.9 | 0.3 | |||
Accounts receivable | 29.6 | 31 | |||
Other current assets | 6.7 | 4.9 | |||
Total current assets | 37.2 | 36.2 | |||
Property and equipment, net | 121.9 | 111.5 | |||
Operating lease right-of-use assets | 6.8 | 0 | |||
Goodwill | 15.9 | 15.9 | |||
Intangible assets, net | 3.7 | 4.3 | |||
Other long-term assets | 30.9 | 29.6 | |||
Total assets | 216.4 | 197.5 | |||
Current portion of long-term debt | 0.8 | 0.6 | |||
Current operating lease liabilities | 1.4 | 0 | |||
Accounts payable | 7.3 | 5.2 | |||
Accrued expenses and other current liabilities | 30 | 45 | |||
Total current liabilities | 39.5 | 50.8 | |||
Long-term debt, net of current portion | 10.9 | 0 | |||
Long-term operating lease liabilities | 5.4 | 0 | |||
Total Liabilities | $ 55.8 | $ 50.8 | |||
[1] | Our consolidated assets as of June 30, 2019 and December 31, 2018 include total assets of variable interest entities of $216.4 million and $197.5 million , respectively, which cannot be used by us to settle the obligations of other entities. Our consolidated liabilities as of June 30, 2019 and December 31, 2018 include total liabilities of the variable interest entities of $55.8 million and $50.8 million , respectively. See Note 3 , Variable Interest Entities . |
Leases - Textuals (Details)
Leases - Textuals (Details) $ in Millions | 6 Months Ended |
Jun. 30, 2019USD ($) | |
Lessee, Lease, Description [Line Items] | |
Finance lease right-of-use asset accumulated depreciation | $ 94.8 |
Minimum [Member] | |
Lessee, Lease, Description [Line Items] | |
Operating and finance lease contract term | 1 years |
Maximum [Member] | |
Lessee, Lease, Description [Line Items] | |
Operating and finance lease contract term | 25 years |
Leases - Table 1 (Details)
Leases - Table 1 (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended |
Jun. 30, 2019 | Jun. 30, 2019 | |
Lease, Cost [Abstract] | ||
Operating lease cost | $ 18.3 | $ 35.8 |
Amortization of right-of-use assets | 7.9 | 15.8 |
Interest of lease liabilities | 8.1 | 16.2 |
Total finance lease cost | 16 | 32 |
Short-term and variable lease cost | 0.1 | 0.4 |
Sublease income | (0.7) | (1.5) |
Total lease cost | $ 33.7 | $ 66.7 |
Leases - Table 2 (Details)
Leases - Table 2 (Details) - USD ($) $ in Millions | Jun. 30, 2019 | Dec. 31, 2018 |
Leases [Abstract] | ||
Operating lease right-of-use assets | $ 284.4 | $ 0 |
Finance Lease, Right-of-Use Asset, Statement of Financial Position [Extensible List] | us-gaap:PropertyPlantAndEquipmentNet | |
Finance lease, Property and equipment, net | $ 337.3 | |
Total leased assets | 621.7 | |
Current operating lease liabilities | $ 45.2 | 0 |
Finance Lease, Liability, Current, Statement of Financial Position [Extensible List] | us-gaap:LongTermDebtAndCapitalLeaseObligationsCurrent | |
Finance lease, Current portion of long-term debt | $ 18.5 | |
Long-term operating lease liabilities | $ 245.8 | $ 0 |
Finance Lease, Liability, Noncurrent, Statement of Financial Position [Extensible List] | us-gaap:LongTermDebtAndCapitalLeaseObligations | |
Finance lease, long-term debt, net of current portion | $ 376.7 | |
Total lease liabilities | $ 686.2 |
Leases - Table 3 (Details)
Leases - Table 3 (Details) | Jun. 30, 2019Rate |
Leases [Abstract] | |
Operating Lease, Weighted Average Remaining Lease Term | 8 years 9 months 18 days |
Finance Lease, Weighted Average Remaining Lease Term | 13 years 3 months 18 days |
Operating Lease, Weighted Average Discount Rate, Percent | 6.20% |
Finance Lease, Weighted Average Discount Rate, Percent | 8.20% |
Leases - Table 4 (Details)
Leases - Table 4 (Details) $ in Millions | Jun. 30, 2019USD ($) |
Leases [Abstract] | |
Operating Leases - July 1 through December 31, 2019 | $ 29.9 |
Finance Leases - July 1 through December 31, 2019 | 25 |
Operating Leases - 2020 | 60.8 |
Finance Leases - 2020 | 49.9 |
Operating Leases - 2021 | 53.3 |
Finance Leases - 2021 | 48.1 |
Operating Leases - 2022 | 43.1 |
Finance Leases - 2022 | 56.7 |
Operating Leases - 2023 | 37.7 |
Finance Leases - 2023 | 43.5 |
Operating Leases - 2024 | 31.7 |
Finance Leases - 2024 | 58.1 |
Operating Leases - 2025 and Thereafter | 136.3 |
Finance Lease - 2025 and Thereafter | 391.6 |
Operating Leases - Total lease payments | 392.8 |
Finance Leases - Total lease payments | 672.9 |
Less: Operating Lease, Interest Portion | (101.8) |
Less: Finance Lease, Interest Portion | (277.7) |
Total Operating Lease Liabilities | 291 |
Total Finance Lease Liabilities | $ 395.2 |
Leases - Table 5 (Details)
Leases - Table 5 (Details) $ in Millions | Dec. 31, 2018USD ($) |
Leases [Abstract] | |
Operating Leases, Future Minimum Payments Due, Next Twelve Months | $ 71.4 |
Capital Leases, Future Minimum Payments Due, Next Twelve Months | 36.2 |
Operating Leases, Future Minimum Payments, Due in Two Years | 65.8 |
Capital Leases, Future Minimum Payments Due in Two Years | 32.3 |
Operating Leases, Future Minimum Payments, Due in Three Years | 54.3 |
Capital Leases, Future Minimum Payments Due in Three Years | 30.3 |
Operating Leases, Future Minimum Payments, Due in Four Years | 41 |
Capital Leases, Future Minimum Payments Due in Four Years | 28.7 |
Operating Leases, Future Minimum Payments, Due in Five Years | 35.3 |
Capital Leases, Future Minimum Payments Due in Five Years | 28 |
Operating Leases, Future Minimum Payments, Due Thereafter | 148.2 |
Capital Leases, Future Minimum Payments Due Thereafter | 299.7 |
Operating Leases, Future Minimum Payments Due | 416 |
Capital Leases, Future Minimum Payments Due | 455.2 |
Capital Leases, Future Minimum Payments, Interest Included in Payments | (191.4) |
Capital Leases, Future Minimum Payments, Present Value of Net Minimum Payments | $ 263.8 |
Leases - Table 6 (Details)
Leases - Table 6 (Details) - USD ($) $ in Millions | 6 Months Ended | |
Jun. 30, 2019 | Jun. 30, 2018 | |
Leases [Abstract] | ||
Operating cash flows from operating leases | $ 37.4 | |
Operating cash flows from finance leases | 16.4 | |
Financing cash flows from finance leases | 9.3 | $ 8.4 |
Right-of-Use Asset Obtained in Exchange for Operating Lease Liability | 20.1 | |
Right-of-Use Asset Obtained in Exchange for Finance Lease Liability | $ 7.1 |
Investments in and Advances t_3
Investments in and Advances to Nonconsolidated Affiliates - Textual (Details) $ in Millions | 3 Months Ended | 6 Months Ended | |
Sep. 30, 2019USD ($) | Jun. 30, 2019USD ($)entity | Dec. 31, 2018USD ($) | |
Investments In and Advances to Nonconsolidated Affiliates (Textual) [Abstract] | |||
Investments in and advances to nonconsolidated affiliates | $ | $ 13.9 | $ 12.2 | |
Number of partially owned subsidiaries | entity | 6 | ||
Number of partially owned general or limited partnerships, limited liability companies of joint ventures | entity | 5 | ||
Document Period End Date | Jun. 30, 2019 | ||
Minimum [Member] | |||
Investments In and Advances to Nonconsolidated Affiliates (Textual) [Abstract] | |||
Ownership interest in affiliates (percent) | 8.00% | ||
Maximum [Member] | |||
Investments In and Advances to Nonconsolidated Affiliates (Textual) [Abstract] | |||
Ownership interest in affiliates (percent) | 60.00% | ||
Subsequent Event [Member] | Forecast [Member] | |||
Investments In and Advances to Nonconsolidated Affiliates (Textual) [Abstract] | |||
Remeasurement gain | $ | $ 20 |
Investments In and Advances t_4
Investments In and Advances to Nonconsolidated Affiliates - Table 1 (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2019 | Jun. 30, 2018 | Jun. 30, 2019 | Jun. 30, 2018 | |
Investments in and Advances to Affiliates, Schedule of Investments [Abstract] | ||||
Document Period End Date | Jun. 30, 2019 | |||
Net operating revenues | $ 10.5 | $ 10.5 | $ 22.1 | $ 21.5 |
Operating expenses | (6.8) | (5.6) | (13.5) | (13.2) |
Income from continuing operations, net of tax | 3.7 | 4.9 | 8.6 | 8.3 |
Net income | $ 3.7 | $ 4.9 | $ 8.6 | $ 8.3 |
Long-term Debt - Table 1 (Detai
Long-term Debt - Table 1 (Details) - USD ($) $ in Millions | Jun. 30, 2019 | Dec. 31, 2018 |
Schedule of Outstanding Long-term Debt | ||
Finance lease obligations | $ 395.2 | |
Capital lease obligations | $ 263.8 | |
Total debt and finance lease obligations | 2,757.7 | 2,514.4 |
Less: Current portion | (38.1) | (35.8) |
Long-term debt, net of current portion | 2,719.6 | 2,478.6 |
Term Loan Facilities [Member] | Term Loan Facilities [Member] | ||
Schedule of Outstanding Long-term Debt | ||
Total debt | $ 272.8 | $ 280.1 |
Senior Notes [Member] | 5.125% Senior Notes Due 2023 [Member] | ||
Schedule of Outstanding Long-term Debt | ||
Debt instrument interest rate (percent) | 5.125% | 5.125% |
Total debt | $ 297 | $ 296.6 |
Senior Notes [Member] | 5.75% Senior Notes Due 2024 [Member] | ||
Schedule of Outstanding Long-term Debt | ||
Debt instrument interest rate (percent) | 5.75% | 5.75% |
Total debt | $ 1,095.5 | $ 1,194.7 |
Senior Notes [Member] | 5.75% Senior Notes Due 2025 [Member] | ||
Schedule of Outstanding Long-term Debt | ||
Debt instrument interest rate (percent) | 5.75% | 5.75% |
Total debt | $ 345.3 | $ 345 |
Other Notes Payable [Member] | ||
Schedule of Outstanding Long-term Debt | ||
Total debt | 16.9 | 104.2 |
Revolving Credit Facility [Member] | ||
Schedule of Outstanding Long-term Debt | ||
Total debt | $ 335 | $ 30 |
Long-term Debt - Textual (Detai
Long-term Debt - Textual (Details) - USD ($) $ in Millions | Jun. 07, 2019 | May 06, 2019 | Jun. 30, 2019 | Jun. 30, 2018 | Jun. 30, 2019 | Jun. 30, 2018 | Jan. 01, 2019 |
Debt Instrument [Line Items] | |||||||
Finance lease obligations | $ 395.2 | $ 395.2 | |||||
Loss on early extinguishment of debt | $ (2.3) | $ 0 | $ (2.3) | $ 0 | |||
5.75% Senior Notes Due 2024 [Member] | Senior Notes [Member] | |||||||
Debt Instrument [Line Items] | |||||||
Redemption price percentage | 101.917% | ||||||
Total cash outlay | $ 102 | ||||||
Loss on early extinguishment of debt | $ 2.3 | ||||||
Senior Notes [Member] | 5.75% Senior Notes Due 2024 [Member] | |||||||
Debt Instrument [Line Items] | |||||||
Redemption amount | $ 100 | ||||||
Adoption of ASC 842 [Member] | |||||||
Debt Instrument [Line Items] | |||||||
Finance lease obligations | $ 83 |
Redeemable Noncontrolling Int_3
Redeemable Noncontrolling Interests - Table 1 (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2019 | Jun. 30, 2018 | Jun. 30, 2019 | Jun. 30, 2018 | |
Redeemable Noncontrolling Interest [Line Items] | ||||
Balance at beginning of period | $ 261.7 | |||
Net income attributable to noncontrolling interests | $ 2.4 | $ 3.7 | 6.4 | $ 6.5 |
Distributions declared | (17.3) | (19.1) | (32.6) | (36.8) |
Reclassification to noncontrolling interests | 11.2 | 0 | ||
Change in fair value | (80.4) | (24.1) | (100.7) | (66.3) |
Balance at end of period | 352.8 | 352.8 | ||
Redeemable Noncontrolling Interest [Member] | ||||
Redeemable Noncontrolling Interest [Line Items] | ||||
Balance at beginning of period | 261.7 | 220.9 | ||
Net income attributable to noncontrolling interests | 6.4 | 6.5 | ||
Distributions declared | (4.8) | (4.6) | ||
Purchase of redeemable noncontrolling interests | 0 | (65.1) | ||
Change in fair value | 100.7 | 66.2 | ||
Balance at end of period | $ 352.8 | $ 223.9 | $ 352.8 | $ 223.9 |
Redeemable Noncontrolling Int_4
Redeemable Noncontrolling Interests - Table 2 (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2019 | Jun. 30, 2018 | Jun. 30, 2019 | Jun. 30, 2018 | |
Noncontrolling Interest [Abstract] | ||||
Net income attributable to nonredeemable noncontrolling interests | $ 17.3 | $ 17.7 | $ 36.2 | $ 36.3 |
Net income attributable to redeemable noncontrolling interests | 2.4 | 3.7 | 6.4 | 6.5 |
Net income attributable to noncontrolling interests | $ 19.7 | $ 21.4 | $ 42.6 | $ 42.8 |
Redeemable Noncontrolling Int_5
Redeemable Noncontrolling Interests Redeemable Noncontrolling Interests - Textuals (Details) - USD ($) $ in Millions | Jul. 23, 2019 | Feb. 21, 2018 | Sep. 30, 2019 | Jun. 30, 2019 | Jun. 30, 2018 | Dec. 31, 2018 | Dec. 31, 2014 |
Noncontrolling Interest [Line Items] | |||||||
Document Period End Date | Jun. 30, 2019 | ||||||
Redeemable noncontrolling interests | $ 352.8 | $ 261.7 | |||||
Noncontrolling Interest, Decrease from Redemptions or Purchase of Interests | 5.60% | ||||||
Purchase of redeemable noncontrolling interests | $ 65 | 0 | $ 65.1 | ||||
EHHI [Member] | |||||||
Noncontrolling Interest [Line Items] | |||||||
Outstanding common stock of Holdings, Fair Value | $ 326 | ||||||
EHHI [Member] | Home Health and Hospice Segment [Member] | |||||||
Noncontrolling Interest [Line Items] | |||||||
Redeemable noncontrolling interests | $ 64 | ||||||
Subsidiary's common stock held by subsidiary 's management, Percent | 16.70% | ||||||
Subsequent Event [Member] | |||||||
Noncontrolling Interest [Line Items] | |||||||
Noncontrolling Interest, Decrease from Redemptions or Purchase of Interests | 5.60% | ||||||
Purchase of redeemable noncontrolling interests | $ 163 |
Fair Value Measurements - Table
Fair Value Measurements - Table 1 (Details) - Fair Value, Recurring [Member] - USD ($) $ in Millions | Jun. 30, 2019 | Dec. 31, 2018 |
Valuation, Market Approach [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring Basis [Abstract] | ||
Restricted marketable securities | $ 64.4 | $ 62 |
Valuation, Market Approach [Member] | Quoted Prices in Active Markets for Identical Assets (Level 1) [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring Basis [Abstract] | ||
Restricted marketable securities | 6.7 | 6.4 |
Valuation, Market Approach [Member] | Significant Other Observable Inputs (Level 2) [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring Basis [Abstract] | ||
Restricted marketable securities | 57.7 | 55.6 |
Valuation, Market Approach [Member] | Significant Unobservable Inputs (Level 3) [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring Basis [Abstract] | ||
Restricted marketable securities | 0 | 0 |
Valuation, Income Approach [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring Basis [Abstract] | ||
Redeemable noncontrolling interests | 352.8 | 261.7 |
Valuation, Income Approach [Member] | Quoted Prices in Active Markets for Identical Assets (Level 1) [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring Basis [Abstract] | ||
Redeemable noncontrolling interests | 0 | 0 |
Valuation, Income Approach [Member] | Significant Other Observable Inputs (Level 2) [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring Basis [Abstract] | ||
Redeemable noncontrolling interests | 0 | 0 |
Valuation, Income Approach [Member] | Significant Unobservable Inputs (Level 3) [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring Basis [Abstract] | ||
Redeemable noncontrolling interests | $ 352.8 | $ 261.7 |
Fair Value Measurements - Textu
Fair Value Measurements - Textuals (Details) - USD ($) | 3 Months Ended | ||
Jun. 30, 2019 | Jun. 30, 2018 | Dec. 31, 2018 | |
Fair Value, Nonrecurring [Member] | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Gains or losses related to non-financial assets and liabilities | $ 0 | $ 0 | |
Senior Notes [Member] | 5.125% Senior Notes Due 2023 [Member] | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Debt instrument interest rate (percent) | 5.125% | 5.125% | |
Senior Notes [Member] | 5.75% Senior Notes Due 2024 [Member] | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Debt instrument interest rate (percent) | 5.75% | 5.75% | |
Senior Notes [Member] | 5.75% Senior Notes Due 2025 [Member] | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Debt instrument interest rate (percent) | 5.75% | 5.75% |
Fair Value Measurements - Tab_2
Fair Value Measurements - Table 2 (Details) - USD ($) $ in Millions | Jun. 30, 2019 | Dec. 31, 2018 |
Revolving Credit Facility [Member] | Carrying Amount [Member] | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Carrying amounts and estimated fair values of financial instruments | $ 335 | $ 30 |
Revolving Credit Facility [Member] | Estimated Fair Value [Member] | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Carrying amounts and estimated fair values of financial instruments | 335 | 30 |
Letters of Credit [Member] | Carrying Amount [Member] | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Carrying amounts and estimated fair values of financial instruments | 0 | 0 |
Letters of Credit [Member] | Estimated Fair Value [Member] | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Carrying amounts and estimated fair values of financial instruments | 39.1 | 37.4 |
Term Loan Facilities [Member] | Term Loan Facilities [Member] | Carrying Amount [Member] | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Carrying amounts and estimated fair values of financial instruments | 272.8 | 280.1 |
Term Loan Facilities [Member] | Term Loan Facilities [Member] | Estimated Fair Value [Member] | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Carrying amounts and estimated fair values of financial instruments | $ 273.8 | $ 281.3 |
Senior Notes [Member] | 5.125% Senior Notes Due 2023 [Member] | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Debt instrument interest rate (percent) | 5.125% | 5.125% |
Senior Notes [Member] | 5.125% Senior Notes Due 2023 [Member] | Carrying Amount [Member] | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Carrying amounts and estimated fair values of financial instruments | $ 297 | $ 296.6 |
Senior Notes [Member] | 5.125% Senior Notes Due 2023 [Member] | Estimated Fair Value [Member] | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Carrying amounts and estimated fair values of financial instruments | $ 305.3 | $ 298.5 |
Senior Notes [Member] | 5.75% Senior Notes Due 2024 [Member] | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Debt instrument interest rate (percent) | 5.75% | 5.75% |
Senior Notes [Member] | 5.75% Senior Notes Due 2024 [Member] | Carrying Amount [Member] | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Carrying amounts and estimated fair values of financial instruments | $ 1,095.5 | $ 1,194.7 |
Senior Notes [Member] | 5.75% Senior Notes Due 2024 [Member] | Estimated Fair Value [Member] | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Carrying amounts and estimated fair values of financial instruments | $ 1,120.1 | $ 1,200 |
Senior Notes [Member] | 5.75% Senior Notes Due 2025 [Member] | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Debt instrument interest rate (percent) | 5.75% | 5.75% |
Senior Notes [Member] | 5.75% Senior Notes Due 2025 [Member] | Carrying Amount [Member] | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Carrying amounts and estimated fair values of financial instruments | $ 345.3 | $ 345 |
Senior Notes [Member] | 5.75% Senior Notes Due 2025 [Member] | Estimated Fair Value [Member] | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Carrying amounts and estimated fair values of financial instruments | 364.9 | 339.5 |
Other Notes Payable [Member] | Carrying Amount [Member] | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Carrying amounts and estimated fair values of financial instruments | 16.9 | 104.2 |
Other Notes Payable [Member] | Estimated Fair Value [Member] | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Carrying amounts and estimated fair values of financial instruments | $ 16.9 | $ 104.2 |
Share-Based Payments Textual (D
Share-Based Payments Textual (Details) - USD ($) shares in Millions, $ in Millions | Jul. 17, 2019 | Feb. 28, 2019 | May 31, 2019 | Jun. 30, 2019 |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Cash paid for SARs exercised | $ 13 | |||
Document Period End Date | Jun. 30, 2019 | |||
Restricted Stock [Member] | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Restricted stock awards issued (shares) | 0.5 | |||
Restricted Stock [Member] | Service Condition [Member] | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Restricted stock awards issued (shares) | 0.2 | |||
Restricted Stock [Member] | Service and Performance Condition [Member] | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Performance measurement period | 2 years | |||
Stock Options [Member] | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Stock options granted (shares) | 0.1 | |||
Stock Appreciation Rights (SARs) [Member] | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Fair value of SARs | $ 123 | |||
Subsequent Event [Member] | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Cash paid for SARs exercised | $ 55 |
Income Taxes - Textual (Details
Income Taxes - Textual (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | 12 Months Ended | |||
Jun. 30, 2019 | Jun. 30, 2018 | Jun. 30, 2019 | Jun. 30, 2018 | Dec. 31, 2017 | Dec. 31, 2018 | |
Income Tax Contingency [Line Items] | ||||||
Provision for income tax expense | $ 23.5 | $ 29.3 | $ 54.3 | $ 59.3 | ||
Document Period End Date | Jun. 30, 2019 | |||||
Net deferred tax assets | 42.6 | $ 42.6 | ||||
Valuation allowance | 34.3 | 34.3 | ||||
Additional tax benefits due to approval of accounting method change | $ 51.3 | |||||
Gross unrecognized tax benefits | 0.6 | 0.6 | $ 0.9 | |||
Unrecognized tax benefits which would affect our effective tax rate if recognized | 0.6 | 0.6 | $ 0.9 | |||
Amount of decrease in unrecognized tax benefit to be released | 0.2 | 0.2 | ||||
State and Local Jurisdiction [Member] | ||||||
Income Tax Contingency [Line Items] | ||||||
Operating Loss Carryforwards | $ 62.8 | $ 62.8 |
Earnings per Common Share - Tab
Earnings per Common Share - Table 1 (Details) - USD ($) $ / shares in Units, shares in Millions, $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2019 | Jun. 30, 2018 | Jun. 30, 2019 | Jun. 30, 2018 | |
Basic Numerator: | ||||
Income from continuing operations | $ 111 | $ 113 | $ 236.7 | $ 218.7 |
Less: Net income attributable to noncontrolling interests included in continuing operations | (19.7) | (21.4) | (42.6) | (42.8) |
Less: Income allocated to participating securities | (0.3) | (0.3) | (0.7) | (0.6) |
Income from continuing operations attributable to Encompass Health common shareholders | 91 | 91.3 | 193.4 | 175.3 |
(Loss) income from discontinued operations, net of tax | (0.1) | 0.2 | (0.6) | (0.3) |
Net income attributable to Encompass Health common shareholders | $ 90.9 | $ 91.5 | $ 192.8 | $ 175 |
Basic Denominator: | ||||
Basic weighted average common shares outstanding (shares) | 98 | 97.9 | 98.2 | 97.9 |
Basic earnings per share attributable to Encompass Health common shareholders: | ||||
Continuing operations (in dollars per share) | $ 0.93 | $ 0.93 | $ 1.97 | $ 1.79 |
Discontinued operations (in dollars per share) | 0 | 0 | (0.01) | 0 |
Net Income (in dollars per share) | $ 0.93 | $ 0.93 | $ 1.96 | $ 1.79 |
Diluted Numerator | ||||
Income from continuing operations | $ 111 | $ 113 | $ 236.7 | $ 218.7 |
Less: Net income attributable to noncontrolling interests included in continuing operations | (19.7) | (21.4) | (42.6) | (42.8) |
Income from continuing operations attributable to Encompass Health common shareholders | 91.3 | 91.6 | 194.1 | 175.9 |
(Loss) income from discontinued operations, net of tax | (0.1) | 0.2 | (0.6) | (0.3) |
Net income attributable to Encompass Health common shareholders | $ 91.2 | $ 91.8 | $ 193.5 | $ 175.6 |
Diluted Denominator | ||||
Diluted weighted average common shares outstanding (shares) | 99.3 | 99.6 | 99.5 | 99.6 |
Diluted earnings per share attributable to Encompass Health common shareholders: | ||||
Continuing operations (in dollars per share) | $ 0.92 | $ 0.92 | $ 1.95 | $ 1.76 |
Discontinued operations (in dollars per share) | 0 | 0 | (0.01) | 0 |
Net income (in dollars per share) | $ 0.92 | $ 0.92 | $ 1.94 | $ 1.76 |
Earnings per Common Share - T_2
Earnings per Common Share - Table 2 (Details) - shares shares in Millions | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2019 | Jun. 30, 2018 | Jun. 30, 2019 | Jun. 30, 2018 | |
Earnings Per Share [Abstract] | ||||
Basic weighted average common shares outstanding (shares) | 98 | 97.9 | 98.2 | 97.9 |
Restricted stock awards, dilutive stock options, restricted stock units, and common stock warrants (shares) | 1.3 | 1.7 | 1.3 | 1.7 |
Diluted weighted average common shares outstanding (shares) | 99.3 | 99.6 | 99.5 | 99.6 |
Earnings per Common Share - Tex
Earnings per Common Share - Textual (Details) - USD ($) $ / shares in Units, $ in Millions | Jul. 23, 2019 | Jul. 15, 2019 | May 03, 2019 | Apr. 15, 2019 | Feb. 21, 2019 | Jan. 15, 2019 | Oct. 26, 2018 | Jun. 30, 2019 | Jun. 30, 2018 | Jun. 30, 2019 | Jun. 30, 2018 | Dec. 31, 2018 |
Earnings Per Share, Diluted, by Common Class, Including Two Class Method [Line Items] | ||||||||||||
Cash dividends per common share, Declared (in dollars per share) | $ 0.27 | $ 0.25 | $ 0.54 | $ 0.50 | ||||||||
Common Stock | ||||||||||||
Earnings Per Share, Diluted, by Common Class, Including Two Class Method [Line Items] | ||||||||||||
Cash dividends per common share, Declared (in dollars per share) | $ 0.27 | $ 0.27 | $ 0.27 | |||||||||
Cash dividends per common share, Paid (in dollars per share) | $ 0.27 | $ 0.27 | ||||||||||
Common stock dividends accrued | $ 27.8 | $ 27.8 | $ 28.4 | |||||||||
Subsequent Event [Member] | Common Stock | ||||||||||||
Earnings Per Share, Diluted, by Common Class, Including Two Class Method [Line Items] | ||||||||||||
Cash dividends per common share, Declared (in dollars per share) | $ 0.28 | |||||||||||
Cash dividends per common share, Paid (in dollars per share) | $ 0.27 |
Contingencies and Other Commi_2
Contingencies and Other Commitments (Details) $ in Millions | Jun. 21, 2019USD ($) | May 18, 2016USD ($) | Jul. 31, 2019USD ($) | Dec. 31, 2018USD ($) | Jun. 30, 2019 | Feb. 28, 2015patient | Apr. 24, 2014facilities | Aug. 12, 2013facilities | Mar. 04, 2013facilitiespatient |
Pending Litigation [Member] | Honts lawsuit [Member] | |||||||||
Loss Contingencies [Line Items] | |||||||||
Number of hospitals involved in lawsuit | facilities | 1 | ||||||||
Punitive damages awarded in favor of plaintiff | $ 20 | ||||||||
Portion of liability that would be covered through captive insurance subsidiary | $ 6 | ||||||||
Pending Litigation [Member] | HHS-OIG Investigation [Member] | |||||||||
Loss Contingencies [Line Items] | |||||||||
Number of hospitals that received subpoenas | facilities | 7 | 4 | |||||||
Number of patient medical records requested for each hospital in subpoenas | patient | 100 | ||||||||
Number of hospitals that received supplemental subpoenas | facilities | 2 | ||||||||
Number of additional patient medical records requested | patient | 70 | ||||||||
Compliance threshold under Health Care Act (percent) | 60.00% | ||||||||
Loss Contingency Accrual | $ 48 | ||||||||
Settled Litigation [Member] | HHS-OIG Investigation [Member] | |||||||||
Loss Contingencies [Line Items] | |||||||||
Litigation Settlement, Amount Awarded to Other Party | $ 48 | ||||||||
Loss Contingency Accrual, Payments | $ 46.4 | ||||||||
Maximum [Member] | Subsequent Event [Member] | Settled Litigation [Member] | Nichols Litigation [Member] | |||||||||
Loss Contingencies [Line Items] | |||||||||
Loss Contingency Accrual, Payments | $ 0.1 |
Segment Reporting - Textuals (D
Segment Reporting - Textuals (Details) | 6 Months Ended |
Jun. 30, 2019locationstatefacilitiessegment | |
Segment Reporting Information [Line Items] | |
Number of operating segments | segment | 2 |
Number of states in which entity operates | state | 37 |
Inpatient Rehabilitation Segment [Member] | |
Segment Reporting Information [Line Items] | |
Number of states in which entity operates | state | 32 |
Number of inpatient rehabilitation hospitals operated | 131 |
Number of hospitals or agencies operated as a joint venture | 1 |
Number of solely owned inpatient rehabilitation hospitals | 85 |
Number of inpatient rehabilitation units under management contracts | 5 |
Number of jointly owned inpatient rehabilitation hospitals | 46 |
Home Health and Hospice Segment [Member] | |
Segment Reporting Information [Line Items] | |
Number of states in which entity operates | state | 31 |
Number of hospitals or agencies operated as a joint venture | 2 |
Number of solely owned hospital based home health and hospice locations | location | 273 |
Number of home health locations | location | 222 |
Number of hospice locations | location | 59 |
Number of jointly owned hospital based home health and hospice locations | location | 8 |
Minimum [Member] | Inpatient Rehabilitation Segment [Member] | |
Segment Reporting Information [Line Items] | |
Joint venture ownership percentage | 50.00% |
Minimum [Member] | Home Health and Hospice Segment [Member] | |
Segment Reporting Information [Line Items] | |
Joint venture ownership percentage | 50.00% |
Maximum [Member] | Inpatient Rehabilitation Segment [Member] | |
Segment Reporting Information [Line Items] | |
Joint venture ownership percentage | 97.50% |
Maximum [Member] | Home Health and Hospice Segment [Member] | |
Segment Reporting Information [Line Items] | |
Joint venture ownership percentage | 81.00% |
Segment Reporting - Table 1 (De
Segment Reporting - Table 1 (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2019 | Jun. 30, 2018 | Jun. 30, 2019 | Jun. 30, 2018 | |
Segment Reporting Information [Line Items] | ||||
Net operating revenues | $ 1,135 | $ 1,067.7 | $ 2,259 | $ 2,113.7 |
Costs and Expenses [Abstract] | ||||
Salaries and benefits | 622.9 | 578.2 | 1,243.7 | 1,148.4 |
Other operating expenses | 149.8 | 149.4 | 299.9 | 290.6 |
Supplies | 41.7 | 39.3 | 81.8 | 79.2 |
Occupancy costs | 20.3 | 19.5 | 39.9 | 38.1 |
Total operating expenses | 964.5 | 891 | 1,901 | 1,767.9 |
Other income | (2.2) | (1.3) | (5.9) | (1.2) |
Equity in net income of nonconsolidated affiliates | (1.8) | (2) | (4.3) | (4.3) |
Net income attributable to noncontrolling interests | 19.7 | 21.4 | 42.6 | 42.8 |
Inpatient Rehabilitation Segment [Member] | ||||
Segment Reporting Information [Line Items] | ||||
Net operating revenues | 873.9 | 834.6 | 1,744 | 1,674.9 |
Costs and Expenses [Abstract] | ||||
Salaries and benefits | 443.6 | 416.5 | 888.6 | 840.7 |
Other operating expenses | 127.2 | 126.9 | 254.8 | 249.8 |
Supplies | 36.7 | 34.7 | 72.3 | 70.6 |
Occupancy costs | 16.3 | 16 | 32.1 | 31.5 |
Total operating expenses | 623.8 | 594.1 | 1,247.8 | 1,192.6 |
Other income | (1.9) | (1.2) | (4.7) | (1.7) |
Equity in net income of nonconsolidated affiliates | (1.4) | (1.6) | (3.5) | (3.6) |
Net income attributable to noncontrolling interests | 19.5 | 19.8 | 40.5 | 40.3 |
Segment Adjusted EBITDA | 233.9 | 223.5 | 463.9 | 447.3 |
Capital Expenditures | 92 | 54.4 | 162.4 | 116.6 |
Home Health and Hospice Segment [Member] | ||||
Segment Reporting Information [Line Items] | ||||
Net operating revenues | 261.1 | 233.1 | 515 | 438.8 |
Costs and Expenses [Abstract] | ||||
Cost of services sold (excluding depreciation and amortization) | 119.9 | 109.1 | 236.4 | 207.7 |
Support and overhead costs | 89.7 | 80.8 | 178.5 | 152.8 |
Total operating expenses | 209.6 | 189.9 | 414.9 | 360.5 |
Other income | 0 | (0.5) | 0 | (0.5) |
Equity in net income of nonconsolidated affiliates | (0.4) | (0.4) | (0.8) | (0.7) |
Net income attributable to noncontrolling interests | 2.8 | 2.5 | 5.5 | 4.4 |
Segment Adjusted EBITDA | 49.1 | 41.6 | 95.4 | 75.1 |
Capital Expenditures | $ 3.5 | $ 4.3 | $ 8 | $ 6 |
Segment Reporting - Table 2 (De
Segment Reporting - Table 2 (Details) - USD ($) $ in Millions | Jun. 30, 2019 | Dec. 31, 2018 | |
Segment Reporting, Asset Reconciling Item [Line Items] | |||
Total assets | $ 5,812.1 | [1] | $ 5,175 |
Investments in and advances to nonconsolidated affiliates | 13.9 | 12.2 | |
Inpatient Rehabilitation Segment [Member] | |||
Segment Reporting, Asset Reconciling Item [Line Items] | |||
Total assets | 4,457.5 | 3,900.9 | |
Investments in and advances to nonconsolidated affiliates | 8.6 | 9.5 | |
Home Health and Hospice Segment [Member] | |||
Segment Reporting, Asset Reconciling Item [Line Items] | |||
Total assets | 1,388.1 | 1,314.6 | |
Investments in and advances to nonconsolidated affiliates | $ 5.3 | $ 2.7 | |
[1] | Our consolidated assets as of June 30, 2019 and December 31, 2018 include total assets of variable interest entities of $216.4 million and $197.5 million , respectively, which cannot be used by us to settle the obligations of other entities. Our consolidated liabilities as of June 30, 2019 and December 31, 2018 include total liabilities of the variable interest entities of $55.8 million and $50.8 million , respectively. See Note 3 , Variable Interest Entities . |
Segment Reporting - Table 3 (De
Segment Reporting - Table 3 (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2019 | Jun. 30, 2018 | Jun. 30, 2019 | Jun. 30, 2018 | |
Segment Reporting, Reconciling Item for Operating Profit (Loss) from Segment to Consolidated [Line Items] | ||||
General and administrative expenses | $ (77.1) | $ (54.9) | $ (130.5) | $ (116) |
Depreciation and amortization | (52.7) | (49.7) | (105.2) | (95.6) |
Loss on early extinguishment of debt | (2.3) | 0 | (2.3) | 0 |
Net income attributable to noncontrolling interests | 19.7 | 21.4 | 42.6 | 42.8 |
Income from continuing operations before income tax expense | 134.5 | 142.3 | 291 | 278 |
Operating Segments [Member] | ||||
Segment Reporting, Reconciling Item for Operating Profit (Loss) from Segment to Consolidated [Line Items] | ||||
Total segment Adjusted EBITDA | 283 | 265.1 | 559.3 | 522.4 |
Segment Reconciling Items [Member] | ||||
Segment Reporting, Reconciling Item for Operating Profit (Loss) from Segment to Consolidated [Line Items] | ||||
General and administrative expenses | (77.1) | (54.9) | (130.5) | (116) |
Depreciation and amortization | (52.7) | (49.7) | (105.2) | (95.6) |
Loss on disposal of assets | (1.3) | (2.4) | (2.4) | (3.2) |
Loss on early extinguishment of debt | (2.3) | 0 | (2.3) | 0 |
Interest expense and amortization of debt discounts and fees | (37.7) | (37.7) | (74.9) | (73.3) |
Net income attributable to noncontrolling interests | 19.7 | 21.4 | 42.6 | 42.8 |
SARs mark-to-market impact on noncontrolling interests | 2.6 | 0.9 | 3.4 | 1.9 |
Change in fair market value of equity securities | 0.3 | (0.4) | 1.2 | (1) |
Payroll taxes on SARs exercise | $ 0 | $ 0 | $ (0.2) | $ 0 |
Segment Reporting - Table 4 (De
Segment Reporting - Table 4 (Details) - USD ($) $ in Millions | 6 Months Ended | 12 Months Ended | |
Jun. 30, 2019 | Dec. 31, 2018 | ||
Segment Reporting, Asset Reconciling Item [Line Items] | |||
Total assets for reportable segments | $ 5,812.1 | [1] | $ 5,175 |
Reclassification of noncurrent deferred income tax liabilities to net noncurrent deferred income tax assets | (33.5) | (40.5) | |
Total assets | 5,812.1 | [1] | 5,175 |
Operating Segments [Member] | |||
Segment Reporting, Asset Reconciling Item [Line Items] | |||
Total assets for reportable segments | 5,845.6 | 5,215.5 | |
Total assets | $ 5,845.6 | $ 5,215.5 | |
[1] | Our consolidated assets as of June 30, 2019 and December 31, 2018 include total assets of variable interest entities of $216.4 million and $197.5 million , respectively, which cannot be used by us to settle the obligations of other entities. Our consolidated liabilities as of June 30, 2019 and December 31, 2018 include total liabilities of the variable interest entities of $55.8 million and $50.8 million , respectively. See Note 3 , Variable Interest Entities . |
Segment Reporting - Table 5 (De
Segment Reporting - Table 5 (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2019 | Jun. 30, 2018 | Jun. 30, 2019 | Jun. 30, 2018 | |
Segment Reporting, Revenue Reconciling Item [Line Items] | ||||
Net operating revenues | $ 1,135 | $ 1,067.7 | $ 2,259 | $ 2,113.7 |
Inpatient Rehabilitation Segment [Member] | ||||
Segment Reporting, Revenue Reconciling Item [Line Items] | ||||
Net operating revenues | 873.9 | 834.6 | 1,744 | 1,674.9 |
Inpatient Rehabilitation Segment [Member] | Inpatient [Member] | ||||
Segment Reporting, Revenue Reconciling Item [Line Items] | ||||
Net operating revenues | 851.8 | 809.6 | 1,699.4 | 1,626.7 |
Inpatient Rehabilitation Segment [Member] | Outpatient and other [Member] | ||||
Segment Reporting, Revenue Reconciling Item [Line Items] | ||||
Net operating revenues | 22.1 | 25 | 44.6 | 48.2 |
Home Health and Hospice Segment [Member] | ||||
Segment Reporting, Revenue Reconciling Item [Line Items] | ||||
Net operating revenues | 261.1 | 233.1 | 515 | 438.8 |
Home Health and Hospice Segment [Member] | Home health [Member] | ||||
Segment Reporting, Revenue Reconciling Item [Line Items] | ||||
Net operating revenues | 222.7 | 204.8 | 442.2 | 390.1 |
Home Health and Hospice Segment [Member] | Hospice [Member] | ||||
Segment Reporting, Revenue Reconciling Item [Line Items] | ||||
Net operating revenues | $ 38.4 | $ 28.3 | $ 72.8 | $ 48.7 |
Condensed Consolidating Finan_3
Condensed Consolidating Financial Information - Narrative (Details) | Jun. 30, 2019 |
Condensed Financial Information Disclosure [Abstract] | |
Senior secured leverage ratio maximum | 2 |
Consolidated coverage ratio minimum | 2 |
Condensed Consolidating Finan_4
Condensed Consolidating Financial Information - Income Statement Tables (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2019 | Jun. 30, 2018 | Jun. 30, 2019 | Jun. 30, 2018 | |
Condensed Consolidating Statements of Operations | ||||
Net operating revenues | $ 1,135 | $ 1,067.7 | $ 2,259 | $ 2,113.7 |
Operating expenses: | ||||
Salaries and benefits | 622.9 | 578.2 | 1,243.7 | 1,148.4 |
Other operating expenses | 149.8 | 149.4 | 299.9 | 290.6 |
Occupancy costs | 20.3 | 19.5 | 39.9 | 38.1 |
Supplies | 41.7 | 39.3 | 81.8 | 79.2 |
General and administrative expenses | 77.1 | 54.9 | 130.5 | 116 |
Depreciation and amortization | 52.7 | 49.7 | 105.2 | 95.6 |
Total operating expenses | 964.5 | 891 | 1,901 | 1,767.9 |
Loss on early extinguishment of debt | 2.3 | 0 | 2.3 | 0 |
Interest expense and amortization of debt discounts and fees | 37.7 | 37.7 | 74.9 | 73.3 |
Other income | (2.2) | (1.3) | (5.9) | (1.2) |
Equity in net income of nonconsolidated affiliates | (1.8) | (2) | (4.3) | (4.3) |
Equity in net income of consolidated affiliates | 0 | 0 | 0 | 0 |
Management fees | 0 | 0 | 0 | 0 |
Income from continuing operations before income tax expense | 134.5 | 142.3 | 291 | 278 |
Provision for income tax (benefit) expense | 23.5 | 29.3 | 54.3 | 59.3 |
Income from continuing operations | 111 | 113 | 236.7 | 218.7 |
(Loss) income from discontinued operations, net of tax | (0.1) | 0.2 | (0.6) | (0.3) |
Net and comprehensive income | 110.9 | 113.2 | 236.1 | 218.4 |
Less: Net and comprehensive income attributable to noncontrolling interests | (19.7) | (21.4) | (42.6) | (42.8) |
Net and comprehensive income attributable to Encompass Health | 91.2 | 91.8 | 193.5 | 175.6 |
Encompass Health Corporation [Member] | ||||
Condensed Consolidating Statements of Operations | ||||
Net operating revenues | 5.5 | 5.7 | 10.6 | 11.1 |
Operating expenses: | ||||
Salaries and benefits | 14.4 | 9.4 | 30.3 | 22.6 |
Other operating expenses | 11.5 | 9.3 | 21.8 | 17.7 |
Occupancy costs | 0.5 | 0.5 | 1 | 1 |
Supplies | 0 | 0 | 0 | 0 |
General and administrative expenses | 39.4 | 41.2 | 79.3 | 80.6 |
Depreciation and amortization | 4.9 | 3.5 | 9.9 | 5.5 |
Total operating expenses | 70.7 | 63.9 | 142.3 | 127.4 |
Loss on early extinguishment of debt | 2.3 | 2.3 | ||
Interest expense and amortization of debt discounts and fees | 30.6 | 31.9 | 60.7 | 61.7 |
Other income | (6.7) | (6.2) | (14.4) | (10.9) |
Equity in net income of nonconsolidated affiliates | 0 | 0 | 0 | 0 |
Equity in net income of consolidated affiliates | (117.6) | (117.5) | (247.8) | (229.8) |
Management fees | (40.4) | (38.5) | (80.2) | (76.9) |
Income from continuing operations before income tax expense | 66.6 | 72.1 | 147.7 | 139.6 |
Provision for income tax (benefit) expense | (24.7) | (19.5) | (46.4) | (36.3) |
Income from continuing operations | 91.3 | 91.6 | 194.1 | 175.9 |
(Loss) income from discontinued operations, net of tax | (0.1) | 0.2 | (0.6) | (0.3) |
Net and comprehensive income | 91.2 | 91.8 | 193.5 | 175.6 |
Less: Net and comprehensive income attributable to noncontrolling interests | 0 | 0 | 0 | 0 |
Net and comprehensive income attributable to Encompass Health | 91.2 | 91.8 | 193.5 | 175.6 |
Guarantor Subsidiaries [Member] | ||||
Condensed Consolidating Statements of Operations | ||||
Net operating revenues | 606.7 | 588.1 | 1,213.2 | 1,182.8 |
Operating expenses: | ||||
Salaries and benefits | 290.3 | 280.9 | 579.2 | 563.3 |
Other operating expenses | 85.2 | 90.8 | 169.9 | 175.4 |
Occupancy costs | 25 | 24 | 49.9 | 47.7 |
Supplies | 24.5 | 23.8 | 48.5 | 48.5 |
General and administrative expenses | 0 | 0 | 0 | 0 |
Depreciation and amortization | 26.1 | 27.3 | 52.4 | 53.9 |
Total operating expenses | 451.1 | 446.8 | 899.9 | 888.8 |
Loss on early extinguishment of debt | 0 | 0 | ||
Interest expense and amortization of debt discounts and fees | 6.2 | 5.7 | 12.4 | 11.4 |
Other income | (0.3) | (0.3) | (0.6) | (0.5) |
Equity in net income of nonconsolidated affiliates | (1.3) | (1.6) | (3.3) | (3.4) |
Equity in net income of consolidated affiliates | (16.6) | (17.2) | (33.6) | (33.7) |
Management fees | 29.5 | 28.4 | 59 | 57.2 |
Income from continuing operations before income tax expense | 138.1 | 126.3 | 279.4 | 263 |
Provision for income tax (benefit) expense | 37.1 | 34 | 74.9 | 70.9 |
Income from continuing operations | 101 | 92.3 | 204.5 | 192.1 |
(Loss) income from discontinued operations, net of tax | 0 | 0 | 0 | 0 |
Net and comprehensive income | 101 | 92.3 | 204.5 | 192.1 |
Less: Net and comprehensive income attributable to noncontrolling interests | 0 | 0 | 0 | 0 |
Net and comprehensive income attributable to Encompass Health | 101 | 92.3 | 204.5 | 192.1 |
Nonguarantor Subsidiaries [Member] | ||||
Condensed Consolidating Statements of Operations | ||||
Net operating revenues | 556.8 | 507.1 | 1,102.8 | 985.6 |
Operating expenses: | ||||
Salaries and benefits | 323.4 | 293.3 | 644.5 | 573.3 |
Other operating expenses | 65.9 | 62.3 | 133.5 | 122.9 |
Occupancy costs | 10.8 | 9.8 | 21 | 19 |
Supplies | 17.2 | 15.5 | 33.3 | 30.7 |
General and administrative expenses | 37.7 | 13.7 | 51.2 | 35.4 |
Depreciation and amortization | 21.7 | 18.9 | 42.9 | 36.2 |
Total operating expenses | 476.7 | 413.5 | 926.4 | 817.5 |
Loss on early extinguishment of debt | 0 | 0 | ||
Interest expense and amortization of debt discounts and fees | 7.6 | 6.7 | 15.3 | 11.9 |
Other income | (1.9) | (1.4) | (4.4) | (1.5) |
Equity in net income of nonconsolidated affiliates | (0.5) | (0.4) | (1) | (0.9) |
Equity in net income of consolidated affiliates | 0 | 0 | 0 | 0 |
Management fees | 10.9 | 10.1 | 21.2 | 19.7 |
Income from continuing operations before income tax expense | 64 | 78.6 | 145.3 | 138.9 |
Provision for income tax (benefit) expense | 11.1 | 14.8 | 25.8 | 24.7 |
Income from continuing operations | 52.9 | 63.8 | 119.5 | 114.2 |
(Loss) income from discontinued operations, net of tax | 0 | 0 | 0 | 0 |
Net and comprehensive income | 52.9 | 63.8 | 119.5 | 114.2 |
Less: Net and comprehensive income attributable to noncontrolling interests | (19.7) | (21.4) | (42.6) | (42.8) |
Net and comprehensive income attributable to Encompass Health | 33.2 | 42.4 | 76.9 | 71.4 |
Consolidation, Eliminations [Member] | ||||
Condensed Consolidating Statements of Operations | ||||
Net operating revenues | (34) | (33.2) | (67.6) | (65.8) |
Operating expenses: | ||||
Salaries and benefits | (5.2) | (5.4) | (10.3) | (10.8) |
Other operating expenses | (12.8) | (13) | (25.3) | (25.4) |
Occupancy costs | (16) | (14.8) | (32) | (29.6) |
Supplies | 0 | 0 | 0 | 0 |
General and administrative expenses | 0 | 0 | 0 | 0 |
Depreciation and amortization | 0 | 0 | 0 | 0 |
Total operating expenses | (34) | (33.2) | (67.6) | (65.8) |
Loss on early extinguishment of debt | 0 | 0 | ||
Interest expense and amortization of debt discounts and fees | (6.7) | (6.6) | (13.5) | (11.7) |
Other income | 6.7 | 6.6 | 13.5 | 11.7 |
Equity in net income of nonconsolidated affiliates | 0 | 0 | 0 | 0 |
Equity in net income of consolidated affiliates | 134.2 | 134.7 | 281.4 | 263.5 |
Management fees | 0 | 0 | 0 | 0 |
Income from continuing operations before income tax expense | (134.2) | (134.7) | (281.4) | (263.5) |
Provision for income tax (benefit) expense | 0 | 0 | 0 | 0 |
Income from continuing operations | (134.2) | (134.7) | (281.4) | (263.5) |
(Loss) income from discontinued operations, net of tax | 0 | 0 | 0 | 0 |
Net and comprehensive income | (134.2) | (134.7) | (281.4) | (263.5) |
Less: Net and comprehensive income attributable to noncontrolling interests | 0 | 0 | 0 | 0 |
Net and comprehensive income attributable to Encompass Health | $ (134.2) | $ (134.7) | $ (281.4) | $ (263.5) |
Condensed Consolidating Finan_5
Condensed Consolidating Financial Information - Balance Sheet Tables (Details) - USD ($) $ in Millions | Jun. 30, 2019 | Mar. 31, 2019 | Dec. 31, 2018 | Jun. 30, 2018 | Mar. 31, 2018 | Dec. 31, 2017 | |
Current assets: | |||||||
Cash and cash equivalents | $ 221.7 | $ 69.2 | $ 59 | $ 54.4 | |||
Restricted cash | 56.8 | 59 | 65.8 | 62.4 | |||
Accounts receivable | 496 | 467.7 | |||||
Other current assets | 70.4 | 66.2 | |||||
Total current assets | 844.9 | 662.1 | |||||
Property and equipment, net | 1,788.1 | 1,634.8 | |||||
Operating lease right-of-use assets | 284.4 | 0 | |||||
Goodwill | 2,111.6 | 2,100.8 | |||||
Intangible assets, net | 443.6 | 443.4 | |||||
Deferred income tax assets | 42.6 | 42.9 | |||||
Other long-term assets | 296.9 | 291 | |||||
Intercompany notes receivable | 0 | 0 | |||||
Intercompany receivable and investments in consolidated affiliates | 0 | 0 | |||||
Total assets | 5,812.1 | [1] | 5,175 | ||||
Current liabilities: | |||||||
Current portion of long-term debt | 38.1 | 35.8 | |||||
Current operating lease liabilities | 45.2 | 0 | |||||
Accounts payable | 95.6 | 90 | |||||
Accrued expenses and other current liabilities | 574 | 546.7 | |||||
Total current liabilities | 752.9 | 672.5 | |||||
Long-term debt, net of current portion | 2,719.6 | 2,478.6 | |||||
Long-term operating lease liabilities | 245.8 | 0 | |||||
Intercompany notes payable | 0 | 0 | |||||
Other long-term liabilities | 157.2 | 205.2 | |||||
Intercompany payable | 0 | 0 | |||||
Total Liabilities | 3,875.5 | 3,356.3 | |||||
Commitments and contingencies | |||||||
Redeemable noncontrolling interests | 352.8 | 261.7 | |||||
Shareholders' equity: | |||||||
Encompass Health shareholders’ equity | 1,275.9 | 1,276.7 | |||||
Noncontrolling interests | 307.9 | 280.3 | |||||
Total shareholders’ equity | 1,583.8 | $ 1,616.5 | 1,557 | 1,464 | $ 1,409.9 | 1,395.4 | |
Total liabilities and shareholders' equity | 5,812.1 | [1] | 5,175 | ||||
Encompass Health Corporation [Member] | |||||||
Current assets: | |||||||
Cash and cash equivalents | 193.6 | 41.5 | 34.2 | 34.3 | |||
Restricted cash | 0 | 0 | 0 | 0 | |||
Accounts receivable | 0 | 0 | |||||
Other current assets | 64 | 36.3 | |||||
Total current assets | 257.6 | 77.8 | |||||
Property and equipment, net | 124.7 | 123.9 | |||||
Operating lease right-of-use assets | 14.6 | ||||||
Goodwill | 0 | 0 | |||||
Intangible assets, net | 19.8 | 21.4 | |||||
Deferred income tax assets | 39.4 | 47.9 | |||||
Other long-term assets | 51.4 | 47.9 | |||||
Intercompany notes receivable | 530.2 | 535.3 | |||||
Intercompany receivable and investments in consolidated affiliates | 2,922.9 | 2,904.4 | |||||
Total assets | 3,960.6 | 3,758.6 | |||||
Current liabilities: | |||||||
Current portion of long-term debt | 35.9 | 35 | |||||
Current operating lease liabilities | 2.5 | ||||||
Accounts payable | 7.8 | 8.9 | |||||
Accrued expenses and other current liabilities | 200.8 | 211.8 | |||||
Total current liabilities | 247 | 255.7 | |||||
Long-term debt, net of current portion | 2,381.2 | 2,188.7 | |||||
Long-term operating lease liabilities | 12.3 | ||||||
Intercompany notes payable | 0 | 0 | |||||
Other long-term liabilities | 44.2 | 37.5 | |||||
Intercompany payable | 0 | 0 | |||||
Total Liabilities | 2,684.7 | 2,481.9 | |||||
Redeemable noncontrolling interests | 0 | 0 | |||||
Shareholders' equity: | |||||||
Encompass Health shareholders’ equity | 1,275.9 | 1,276.7 | |||||
Noncontrolling interests | 0 | 0 | |||||
Total shareholders’ equity | 1,275.9 | 1,276.7 | |||||
Total liabilities and shareholders' equity | 3,960.6 | 3,758.6 | |||||
Guarantor Subsidiaries [Member] | |||||||
Current assets: | |||||||
Cash and cash equivalents | 3.6 | 3 | 3.9 | 3 | |||
Restricted cash | 0 | 0 | 0 | 0 | |||
Accounts receivable | 282 | 270.7 | |||||
Other current assets | 31.4 | 17.6 | |||||
Total current assets | 317 | 291.3 | |||||
Property and equipment, net | 1,115.5 | 1,041.5 | |||||
Operating lease right-of-use assets | 176.7 | ||||||
Goodwill | 912.2 | 912.2 | |||||
Intangible assets, net | 108 | 96.5 | |||||
Deferred income tax assets | 28.9 | 28.9 | |||||
Other long-term assets | 91.5 | 100.4 | |||||
Intercompany notes receivable | 0 | 0 | |||||
Intercompany receivable and investments in consolidated affiliates | 673.9 | 457.6 | |||||
Total assets | 3,423.7 | 2,928.4 | |||||
Current liabilities: | |||||||
Current portion of long-term debt | 7.8 | 7.6 | |||||
Current operating lease liabilities | 24.8 | ||||||
Accounts payable | 52.3 | 46.4 | |||||
Accrued expenses and other current liabilities | 91.5 | 76.4 | |||||
Total current liabilities | 176.4 | 130.4 | |||||
Long-term debt, net of current portion | 286.7 | 262.1 | |||||
Long-term operating lease liabilities | 155.2 | ||||||
Intercompany notes payable | 0 | 0 | |||||
Other long-term liabilities | 10.8 | 17.1 | |||||
Intercompany payable | 0 | 0 | |||||
Total Liabilities | 629.1 | 409.6 | |||||
Redeemable noncontrolling interests | 0 | 0 | |||||
Shareholders' equity: | |||||||
Encompass Health shareholders’ equity | 2,794.6 | 2,518.8 | |||||
Noncontrolling interests | 0 | 0 | |||||
Total shareholders’ equity | 2,794.6 | 2,518.8 | |||||
Total liabilities and shareholders' equity | 3,423.7 | 2,928.4 | |||||
Nonguarantor Subsidiaries [Member] | |||||||
Current assets: | |||||||
Cash and cash equivalents | 24.5 | 24.7 | 20.9 | 17.1 | |||
Restricted cash | 56.8 | 59 | 65.8 | 62.4 | |||
Accounts receivable | 214 | 197 | |||||
Other current assets | 54.9 | 31.1 | |||||
Total current assets | 350.2 | 311.8 | |||||
Property and equipment, net | 547.9 | 469.4 | |||||
Operating lease right-of-use assets | 120.8 | ||||||
Goodwill | 1,199.4 | 1,188.6 | |||||
Intangible assets, net | 315.8 | 325.5 | |||||
Deferred income tax assets | 0 | 0 | |||||
Other long-term assets | 154 | 142.7 | |||||
Intercompany notes receivable | 0 | 0 | |||||
Intercompany receivable and investments in consolidated affiliates | 0 | 0 | |||||
Total assets | 2,688.1 | 2,438 | |||||
Current liabilities: | |||||||
Current portion of long-term debt | 11.9 | 10.7 | |||||
Current operating lease liabilities | 25.1 | ||||||
Accounts payable | 35.5 | 34.7 | |||||
Accrued expenses and other current liabilities | 344.1 | 259.8 | |||||
Total current liabilities | 416.6 | 305.2 | |||||
Long-term debt, net of current portion | 51.7 | 27.8 | |||||
Long-term operating lease liabilities | 98.8 | ||||||
Intercompany notes payable | 530.2 | 535.3 | |||||
Other long-term liabilities | 127.9 | 184.4 | |||||
Intercompany payable | 52.6 | 53.1 | |||||
Total Liabilities | 1,277.8 | 1,105.8 | |||||
Redeemable noncontrolling interests | 352.8 | 261.7 | |||||
Shareholders' equity: | |||||||
Encompass Health shareholders’ equity | 749.6 | 790.2 | |||||
Noncontrolling interests | 307.9 | 280.3 | |||||
Total shareholders’ equity | 1,057.5 | 1,070.5 | |||||
Total liabilities and shareholders' equity | 2,688.1 | 2,438 | |||||
Consolidation, Eliminations [Member] | |||||||
Current assets: | |||||||
Cash and cash equivalents | 0 | 0 | 0 | 0 | |||
Restricted cash | 0 | 0 | $ 0 | $ 0 | |||
Accounts receivable | 0 | 0 | |||||
Other current assets | (79.9) | (18.8) | |||||
Total current assets | (79.9) | (18.8) | |||||
Property and equipment, net | 0 | 0 | |||||
Operating lease right-of-use assets | (27.7) | ||||||
Goodwill | 0 | 0 | |||||
Intangible assets, net | 0 | 0 | |||||
Deferred income tax assets | (25.7) | (33.9) | |||||
Other long-term assets | 0 | 0 | |||||
Intercompany notes receivable | (530.2) | (535.3) | |||||
Intercompany receivable and investments in consolidated affiliates | (3,596.8) | (3,362) | |||||
Total assets | (4,260.3) | (3,950) | |||||
Current liabilities: | |||||||
Current portion of long-term debt | (17.5) | (17.5) | |||||
Current operating lease liabilities | (7.2) | ||||||
Accounts payable | 0 | 0 | |||||
Accrued expenses and other current liabilities | (62.4) | (1.3) | |||||
Total current liabilities | (87.1) | (18.8) | |||||
Long-term debt, net of current portion | 0 | 0 | |||||
Long-term operating lease liabilities | (20.5) | ||||||
Intercompany notes payable | (530.2) | (535.3) | |||||
Other long-term liabilities | (25.7) | (33.8) | |||||
Intercompany payable | (52.6) | (53.1) | |||||
Total Liabilities | (716.1) | (641) | |||||
Redeemable noncontrolling interests | 0 | 0 | |||||
Shareholders' equity: | |||||||
Encompass Health shareholders’ equity | (3,544.2) | (3,309) | |||||
Noncontrolling interests | 0 | 0 | |||||
Total shareholders’ equity | (3,544.2) | (3,309) | |||||
Total liabilities and shareholders' equity | $ (4,260.3) | $ (3,950) | |||||
[1] | Our consolidated assets as of June 30, 2019 and December 31, 2018 include total assets of variable interest entities of $216.4 million and $197.5 million , respectively, which cannot be used by us to settle the obligations of other entities. Our consolidated liabilities as of June 30, 2019 and December 31, 2018 include total liabilities of the variable interest entities of $55.8 million and $50.8 million , respectively. See Note 3 , Variable Interest Entities . |
Condensed Consolidating Finan_6
Condensed Consolidating Financial Information - Cash Flow Statement Tables (Details) - USD ($) $ in Millions | Feb. 21, 2018 | Jun. 30, 2019 | Jun. 30, 2018 |
Condensed Financial Statements, Captions [Line Items] | |||
Increase (Decrease) in Due to Related Parties | $ 0 | ||
Condensed Consolidating Statements of Cash Flows | |||
Net cash provided by operating activities | $ 305.3 | 385.5 | |
Cash flows from investing activities: | |||
Purchases of property and equipment | (155.8) | (108.8) | |
Additions to capitalized software costs | (6.6) | (9.7) | |
Acquisitions of businesses, net of cash acquired | (13.7) | (135.8) | |
Funding of intercompany note receivable | 0 | ||
Proceeds from repayment of intercompany notes receivable | 0 | 0 | |
Other, net | (15.5) | (6.7) | |
Net cash used in investing activities | (191.6) | (261) | |
Cash flows from financing activities: | |||
Principal payments on debt, including pre-payments | (112.1) | (9.1) | |
Principal borrowings on intercompany note payable | 0 | ||
Principal payments on intercompany note payable | 0 | 0 | |
Borrowings on revolving credit facility | 400 | 245 | |
Payments on revolving credit facility | (95) | (190) | |
Principal payments under finance lease obligations | (9.3) | (8.4) | |
Repurchases of common stock, including fees and expenses | (43.8) | 0 | |
Dividends paid on common stock | (54.9) | (49.9) | |
Purchase of equity interests in consolidated affiliates | $ (65) | 0 | (65.1) |
Distributions paid to noncontrolling interests of consolidated affiliates | (36.5) | (35.2) | |
Taxes paid on behalf of employees for shares withheld | (16.1) | (8.3) | |
Other, net | 8.2 | 4.5 | |
Change in intercompany advances | 0 | 0 | |
Net cash provided by (used in) financing activities | 40.5 | (116.5) | |
(Decrease) increase in cash, cash equivalents, and restricted cash | 154.2 | 8 | |
Cash, cash equivalents, and restricted cash at beginning of period | 133.5 | 116.8 | |
Cash, cash equivalents, and restricted cash at end of period | 287.7 | 124.8 | |
Reconciliation of Cash, Cash Equivalents, and Restricted Cash | |||
Cash and cash equivalents at beginning of period | 69.2 | 54.4 | |
Restricted cash at beginning of period | 59 | 62.4 | |
Restricted cash included in other long-term assets at beginning of period | 5.3 | 0 | |
Cash, cash equivalents, and restricted cash at beginning of period | 133.5 | 116.8 | |
Cash and cash equivalents at end of period | 221.7 | 59 | |
Restricted cash at end of period | 56.8 | 65.8 | |
Restricted cash included in other long-term assets at end of period | 9.2 | 0 | |
Cash, cash equivalents, and restricted cash at end of period | 287.7 | 124.8 | |
Encompass Health Corporation [Member] | |||
Condensed Financial Statements, Captions [Line Items] | |||
Increase (Decrease) in Due to Related Parties | (134.2) | ||
Condensed Consolidating Statements of Cash Flows | |||
Net cash provided by operating activities | (38.2) | (14.2) | |
Cash flows from investing activities: | |||
Purchases of property and equipment | (13.6) | (18) | |
Additions to capitalized software costs | (3.2) | (8.7) | |
Acquisitions of businesses, net of cash acquired | 0 | (129.7) | |
Funding of intercompany note receivable | (8) | ||
Proceeds from repayment of intercompany notes receivable | 22 | 30 | |
Other, net | (4.8) | (5.2) | |
Net cash used in investing activities | (7.6) | (131.6) | |
Cash flows from financing activities: | |||
Principal payments on debt, including pre-payments | (110.6) | (7.6) | |
Principal borrowings on intercompany note payable | 0 | ||
Principal payments on intercompany note payable | 0 | 0 | |
Borrowings on revolving credit facility | 400 | 245 | |
Payments on revolving credit facility | (95) | (190) | |
Principal payments under finance lease obligations | (0.3) | 0 | |
Repurchases of common stock, including fees and expenses | (43.8) | ||
Dividends paid on common stock | (54.8) | (49.8) | |
Purchase of equity interests in consolidated affiliates | (65.1) | ||
Distributions paid to noncontrolling interests of consolidated affiliates | 0 | 0 | |
Taxes paid on behalf of employees for shares withheld | (14.9) | (7.4) | |
Other, net | (0.6) | 0.5 | |
Change in intercompany advances | 117.9 | 220.1 | |
Net cash provided by (used in) financing activities | 197.9 | 145.7 | |
(Decrease) increase in cash, cash equivalents, and restricted cash | 152.1 | (0.1) | |
Cash, cash equivalents, and restricted cash at beginning of period | 41.5 | 34.3 | |
Cash, cash equivalents, and restricted cash at end of period | 193.6 | 34.2 | |
Reconciliation of Cash, Cash Equivalents, and Restricted Cash | |||
Cash and cash equivalents at beginning of period | 41.5 | 34.3 | |
Restricted cash at beginning of period | 0 | 0 | |
Restricted cash included in other long-term assets at beginning of period | 0 | ||
Cash, cash equivalents, and restricted cash at beginning of period | 41.5 | 34.3 | |
Cash and cash equivalents at end of period | 193.6 | 34.2 | |
Restricted cash at end of period | 0 | 0 | |
Restricted cash included in other long-term assets at end of period | 0 | ||
Cash, cash equivalents, and restricted cash at end of period | 193.6 | 34.2 | |
Guarantor Subsidiaries [Member] | |||
Condensed Financial Statements, Captions [Line Items] | |||
Increase (Decrease) in Due to Related Parties | 0 | ||
Condensed Consolidating Statements of Cash Flows | |||
Net cash provided by operating activities | 203.8 | 222.5 | |
Cash flows from investing activities: | |||
Purchases of property and equipment | (69.9) | (60.9) | |
Additions to capitalized software costs | (0.3) | 0 | |
Acquisitions of businesses, net of cash acquired | 0 | 0 | |
Proceeds from repayment of intercompany notes receivable | 0 | 0 | |
Other, net | (7.9) | (0.1) | |
Net cash used in investing activities | (78.1) | (61) | |
Cash flows from financing activities: | |||
Principal payments on debt, including pre-payments | 0 | 0 | |
Principal borrowings on intercompany note payable | 0 | ||
Principal payments on intercompany note payable | 0 | 0 | |
Borrowings on revolving credit facility | 0 | 0 | |
Payments on revolving credit facility | 0 | 0 | |
Principal payments under finance lease obligations | (4) | (4.1) | |
Repurchases of common stock, including fees and expenses | 0 | ||
Dividends paid on common stock | 0 | 0 | |
Purchase of equity interests in consolidated affiliates | 0 | ||
Distributions paid to noncontrolling interests of consolidated affiliates | 0 | 0 | |
Taxes paid on behalf of employees for shares withheld | 0 | 0 | |
Other, net | 0 | 0 | |
Change in intercompany advances | (121.1) | (156.5) | |
Net cash provided by (used in) financing activities | (125.1) | (160.6) | |
(Decrease) increase in cash, cash equivalents, and restricted cash | 0.6 | 0.9 | |
Cash, cash equivalents, and restricted cash at beginning of period | 3 | 3 | |
Cash, cash equivalents, and restricted cash at end of period | 3.6 | 3.9 | |
Reconciliation of Cash, Cash Equivalents, and Restricted Cash | |||
Cash and cash equivalents at beginning of period | 3 | 3 | |
Restricted cash at beginning of period | 0 | 0 | |
Restricted cash included in other long-term assets at beginning of period | 0 | ||
Cash, cash equivalents, and restricted cash at beginning of period | 3 | 3 | |
Cash and cash equivalents at end of period | 3.6 | 3.9 | |
Restricted cash at end of period | 0 | 0 | |
Restricted cash included in other long-term assets at end of period | 0 | ||
Cash, cash equivalents, and restricted cash at end of period | 3.6 | 3.9 | |
Nonguarantor Subsidiaries [Member] | |||
Condensed Financial Statements, Captions [Line Items] | |||
Increase (Decrease) in Due to Related Parties | 134.2 | ||
Condensed Consolidating Statements of Cash Flows | |||
Net cash provided by operating activities | 139.7 | 177.2 | |
Cash flows from investing activities: | |||
Purchases of property and equipment | (72.3) | (29.9) | |
Additions to capitalized software costs | (3.1) | (1) | |
Acquisitions of businesses, net of cash acquired | (13.7) | (6.1) | |
Proceeds from repayment of intercompany notes receivable | 0 | 0 | |
Other, net | (2.8) | (1.4) | |
Net cash used in investing activities | (91.9) | (38.4) | |
Cash flows from financing activities: | |||
Principal payments on debt, including pre-payments | (1.5) | (1.5) | |
Principal borrowings on intercompany note payable | 8 | ||
Principal payments on intercompany note payable | (22) | (30) | |
Borrowings on revolving credit facility | 0 | 0 | |
Payments on revolving credit facility | 0 | 0 | |
Principal payments under finance lease obligations | (5) | (4.3) | |
Repurchases of common stock, including fees and expenses | 0 | ||
Dividends paid on common stock | (0.1) | (0.1) | |
Purchase of equity interests in consolidated affiliates | 0 | ||
Distributions paid to noncontrolling interests of consolidated affiliates | (36.5) | (35.2) | |
Taxes paid on behalf of employees for shares withheld | (1.2) | (0.9) | |
Other, net | 8.8 | 4 | |
Change in intercompany advances | 3.2 | (63.6) | |
Net cash provided by (used in) financing activities | (46.3) | (131.6) | |
(Decrease) increase in cash, cash equivalents, and restricted cash | 1.5 | 7.2 | |
Cash, cash equivalents, and restricted cash at beginning of period | 89 | 79.5 | |
Cash, cash equivalents, and restricted cash at end of period | 90.5 | 86.7 | |
Reconciliation of Cash, Cash Equivalents, and Restricted Cash | |||
Cash and cash equivalents at beginning of period | 24.7 | 17.1 | |
Restricted cash at beginning of period | 59 | 62.4 | |
Restricted cash included in other long-term assets at beginning of period | 5.3 | ||
Cash, cash equivalents, and restricted cash at beginning of period | 89 | 79.5 | |
Cash and cash equivalents at end of period | 24.5 | 20.9 | |
Restricted cash at end of period | 56.8 | 65.8 | |
Restricted cash included in other long-term assets at end of period | 9.2 | ||
Cash, cash equivalents, and restricted cash at end of period | 90.5 | 86.7 | |
Consolidation, Eliminations [Member] | |||
Condensed Financial Statements, Captions [Line Items] | |||
Increase (Decrease) in Due to Related Parties | 0 | ||
Condensed Consolidating Statements of Cash Flows | |||
Net cash provided by operating activities | 0 | 0 | |
Cash flows from investing activities: | |||
Purchases of property and equipment | 0 | 0 | |
Additions to capitalized software costs | 0 | 0 | |
Acquisitions of businesses, net of cash acquired | 0 | 0 | |
Funding of intercompany note receivable | 8 | ||
Proceeds from repayment of intercompany notes receivable | (22) | (30) | |
Other, net | 0 | 0 | |
Net cash used in investing activities | (14) | (30) | |
Cash flows from financing activities: | |||
Principal payments on debt, including pre-payments | 0 | 0 | |
Principal borrowings on intercompany note payable | (8) | ||
Principal payments on intercompany note payable | 22 | 30 | |
Borrowings on revolving credit facility | 0 | 0 | |
Payments on revolving credit facility | 0 | 0 | |
Principal payments under finance lease obligations | 0 | 0 | |
Repurchases of common stock, including fees and expenses | 0 | ||
Dividends paid on common stock | 0 | 0 | |
Purchase of equity interests in consolidated affiliates | 0 | ||
Distributions paid to noncontrolling interests of consolidated affiliates | 0 | 0 | |
Taxes paid on behalf of employees for shares withheld | 0 | 0 | |
Other, net | 0 | 0 | |
Change in intercompany advances | 0 | 0 | |
Net cash provided by (used in) financing activities | 14 | 30 | |
(Decrease) increase in cash, cash equivalents, and restricted cash | 0 | 0 | |
Cash, cash equivalents, and restricted cash at beginning of period | 0 | 0 | |
Cash, cash equivalents, and restricted cash at end of period | 0 | 0 | |
Reconciliation of Cash, Cash Equivalents, and Restricted Cash | |||
Cash and cash equivalents at beginning of period | 0 | 0 | |
Restricted cash at beginning of period | 0 | 0 | |
Restricted cash included in other long-term assets at beginning of period | 0 | ||
Cash, cash equivalents, and restricted cash at beginning of period | 0 | 0 | |
Cash and cash equivalents at end of period | 0 | 0 | |
Restricted cash at end of period | 0 | 0 | |
Restricted cash included in other long-term assets at end of period | 0 | ||
Cash, cash equivalents, and restricted cash at end of period | $ 0 | $ 0 |