Cover Page
Cover Page - shares | 3 Months Ended | |
Mar. 31, 2021 | Apr. 22, 2021 | |
Cover [Abstract] | ||
Document Type | 10-Q | |
Document Quarterly Report | true | |
Document Period End Date | Mar. 31, 2021 | |
Document Transition Report | false | |
Entity File Number | 001-10315 | |
Entity Registrant Name | Encompass Health Corporation | |
Entity Incorporation, State or Country Code | DE | |
Entity Tax Identification Number | 63-0860407 | |
Entity Address, Address Line One | 9001 Liberty Parkway | |
Entity Address, City or Town | Birmingham | |
Entity Address, State or Province | AL | |
Entity Address, Postal Zip Code | 35242 | |
City Area Code | 205 | |
Local Phone Number | 967-7116 | |
Title of 12(b) Security | Common Stock, par value $0.01 per share | |
Trading Symbol | EHC | |
Security Exchange Name | NYSE | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Large Accelerated Filer | |
Entity Small Business | false | |
Entity Emerging Growth Company | false | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding | 99,542,410 | |
Entity Central Index Key | 0000785161 | |
Current Fiscal Year End Date | --12-31 | |
Document Fiscal Year Focus | 2021 | |
Document Fiscal Period Focus | Q1 | |
Amendment Flag | false |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Comprehensive Income (Unaudited) - USD ($) shares in Millions, $ in Millions | 3 Months Ended | |
Mar. 31, 2021 | Mar. 31, 2020 | |
Statement Of Comprehensive Income And Income Statement [Abstract] | ||
Net operating revenues | $ 1,230.4 | $ 1,182 |
Operating expenses: | ||
Salaries and benefits | 687.2 | 679.1 |
Other operating expenses | 162.3 | 159.6 |
Occupancy costs | 20.2 | 20.2 |
Supplies | 51.9 | 45.7 |
General and administrative expenses | 38.6 | 35.6 |
Depreciation and amortization | 62.5 | 58.8 |
Government, class action, and related settlements | 0 | 2.8 |
Total operating expenses | 1,022.7 | 1,001.8 |
Interest expense and amortization of debt discounts and fees | 42.8 | 43.2 |
Other (income) expense | (1.4) | 1.9 |
Equity in net income of nonconsolidated affiliates | (1) | (0.8) |
Income from continuing operations before income tax expense | 167.3 | 135.9 |
Provision for income tax expense | 34.5 | 27.1 |
Income from continuing operations | 132.8 | 108.8 |
Loss from discontinued operations, net of tax | 0 | (0.1) |
Net income | 132.8 | 108.7 |
Comprehensive income | 132.8 | 108.7 |
Less: Net income attributable to noncontrolling interests | (25.5) | (21.7) |
Less: Comprehensive income attributable to noncontrolling interests | (25.5) | (21.7) |
Net income attributable to Encompass Health | 107.3 | 87 |
Comprehensive income attributable to Encompass Health | $ 107.3 | $ 87 |
Weighted average common shares outstanding: | ||
Basic (in shares) | 99 | 98.2 |
Diluted (in shares) | 100.2 | 99.6 |
Basic earnings per share attributable to Encompass Health common shareholders: | ||
Continuing operations (in dollars per share) | $ 1.08 | $ 0.88 |
Discontinued operations (in dollars per share) | 0 | 0 |
Net income (in dollars per share) | 1.08 | 0.88 |
Diluted earnings per share attributable to Encompass Health common shareholders: | ||
Continuing operations (in dollars per share) | 1.07 | 0.87 |
Discontinued operations (in dollars per share) | 0 | 0 |
Net income (in dollars per share) | $ 1.07 | $ 0.87 |
Amounts attributable to Encompass Health common shareholders: | ||
Income from continuing operations | $ 107.3 | $ 87.1 |
Loss from discontinued operations, net of tax | 0 | (0.1) |
Net income attributable to Encompass Health | $ 107.3 | $ 87 |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets (Unaudited) - USD ($) $ in Millions | Mar. 31, 2021 | Dec. 31, 2020 | |
Current assets: | |||
Cash and cash equivalents | $ 223.9 | $ 224 | |
Restricted cash | 62.2 | 65.4 | |
Accounts receivable | 633.6 | 572.8 | |
Other current assets | 81.4 | 86.4 | |
Total current assets | 1,001.1 | 948.6 | |
Property and equipment, net | 2,280.5 | 2,206.6 | |
Operating lease right-of-use assets | 248.3 | 245.7 | |
Goodwill | 2,318.7 | 2,318.7 | |
Intangible assets, net | 419.2 | 431.3 | |
Other long-term assets | 274.4 | 295 | |
Total assets | [1] | 6,542.2 | 6,445.9 |
Current liabilities: | |||
Current portion of long-term debt | 137.2 | 38.3 | |
Current operating lease liabilities | 44.2 | 44.8 | |
Accounts payable | 122.8 | 115 | |
Accrued expenses and other current liabilities | 508 | 519.2 | |
Total current liabilities | 812.2 | 717.3 | |
Long-term debt, net of current portion | 3,160 | 3,250.6 | |
Long-term operating lease liabilities | 214.2 | 209.6 | |
Deferred income tax liabilities | 60.6 | 51.8 | |
Other long-term liabilities | 220.5 | 215 | |
Total liabilities | 4,467.5 | 4,444.3 | |
Commitments and contingencies | |||
Redeemable noncontrolling interests | 31.7 | 31.6 | |
Shareholders’ equity: | |||
Encompass Health shareholders’ equity | 1,655.1 | 1,588 | |
Noncontrolling interests | 387.9 | 382 | |
Total shareholders’ equity | 2,043 | 1,970 | |
Total liabilities and shareholders' equity | [1] | $ 6,542.2 | $ 6,445.9 |
[1] | Our consolidated assets as of March 31, 2021 and December 31, 2020 include total assets of variable interest entities of $219.2 million and $221.2 million, respectively, which cannot be used by us to settle the obligations of other entities. Our consolidated liabilities as of March 31, 2021 and December 31, 2020 include total liabilities of the variable interest entities of $44.6 million and $46.8 million, respectively. See Note 3, Variable Interest Entities. |
Condensed Consolidated Balanc_2
Condensed Consolidated Balance Sheets (Unaudited) (Parenthetical) - USD ($) $ in Millions | Mar. 31, 2021 | Dec. 31, 2020 | |
Assets | [1] | $ 6,542.2 | $ 6,445.9 |
Liabilities | 4,467.5 | 4,444.3 | |
VIE | |||
Assets | 219.2 | 221.2 | |
Liabilities | $ 44.6 | $ 46.8 | |
[1] | Our consolidated assets as of March 31, 2021 and December 31, 2020 include total assets of variable interest entities of $219.2 million and $221.2 million, respectively, which cannot be used by us to settle the obligations of other entities. Our consolidated liabilities as of March 31, 2021 and December 31, 2020 include total liabilities of the variable interest entities of $44.6 million and $46.8 million, respectively. See Note 3, Variable Interest Entities. |
Condensed Consolidated Statem_2
Condensed Consolidated Statements of Shareholders' Equity (Unaudited) - USD ($) shares in Millions, $ in Millions | Total | Common Stock | Capital in Excess of Par Value | Accumulated Deficit | Treasury Stock | Noncontrolling Interests |
Balance at beginning of period (shares) at Dec. 31, 2019 | 98.6 | |||||
Balance at beginning of period at Dec. 31, 2019 | $ 1,693.1 | $ 1.1 | $ 2,369.9 | $ (526.5) | $ (492.3) | $ 340.9 |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Net income | 106.7 | 87 | 19.7 | |||
Receipt of treasury stock (shares) | (0.2) | |||||
Receipt of treasury stock | (15.6) | (15.6) | ||||
Dividends declared | (27.9) | (27.9) | ||||
Exchange of Holdings shares (shares) | 0.6 | |||||
Exchange of Holdings shares | 46.3 | 27.1 | 19.2 | |||
Stock-based compensation | 7.1 | 7.1 | ||||
Distributions declared | (15.5) | (15.5) | ||||
Capital contributions from consolidated affiliates | 5.8 | 5.8 | ||||
Repurchases of common stock in open market (shares) | (0.1) | |||||
Repurchases of common stock in open market | (4.9) | (4.9) | ||||
Other (shares) | 0.5 | |||||
Other | 2.1 | 0 | (0.3) | 2.4 | ||
Balance at end of period (shares) at Mar. 31, 2020 | 99.4 | |||||
Balance at end of period at Mar. 31, 2020 | 1,797.2 | $ 1.1 | 2,376.2 | (439.5) | (493.9) | 353.3 |
Balance at beginning of period (shares) at Dec. 31, 2020 | 99.4 | |||||
Balance at beginning of period at Dec. 31, 2020 | 1,970 | $ 1.1 | 2,326.6 | (242.3) | (497.4) | 382 |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Net income | 130.4 | 107.3 | 23.1 | |||
Receipt of treasury stock (shares) | (0.2) | |||||
Receipt of treasury stock | (15.6) | (15.6) | ||||
Dividends declared | (27.8) | (27.8) | ||||
Stock-based compensation | 2.8 | 2.8 | ||||
Distributions declared | (22.4) | (22.4) | ||||
Capital contributions from consolidated affiliates | 5.8 | 5.8 | ||||
Other (shares) | 0.4 | |||||
Other | (0.2) | 1.1 | (0.7) | (0.6) | ||
Balance at end of period (shares) at Mar. 31, 2021 | 99.6 | |||||
Balance at end of period at Mar. 31, 2021 | $ 2,043 | $ 1.1 | $ 2,302.7 | $ (135) | $ (513.7) | $ 387.9 |
Condensed Consolidated Statem_3
Condensed Consolidated Statements of Shareholders' Equity (Unaudited) (Parenthetical) - $ / shares | 3 Months Ended | |
Mar. 31, 2021 | Mar. 31, 2020 | |
Statement of Stockholders' Equity [Abstract] | ||
Dividends declared on common stock (in dollars per share) | $ 0.28 | $ 0.28 |
Condensed Consolidated Statem_4
Condensed Consolidated Statements of Cash Flows (Unaudited) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2021 | Mar. 31, 2020 | |
Cash flows from operating activities: | ||
Net income | $ 132.8 | $ 108.7 |
Loss from discontinued operations, net of tax | 0 | 0.1 |
Adjustments to reconcile net income to net cash provided by operating activities— | ||
Depreciation and amortization | 62.5 | 58.8 |
Stock-based compensation | 2.8 | 7.1 |
Deferred tax expense | 8.7 | 1.4 |
Other, net | 2 | 7.7 |
Change in assets and liabilities, net of acquisitions— | ||
Accounts receivable | (55.1) | (36.6) |
Other assets | 1.3 | 15.8 |
Accrued payroll | 5.7 | (24) |
Other liabilities | (2.2) | (109.6) |
Net cash used in operating activities of discontinued operations | 0 | (0.1) |
Total adjustments | 25.7 | (79.5) |
Net cash provided by operating activities | 158.5 | 29.3 |
Cash flows from investing activities: | ||
Acquisitions of businesses, net of cash acquired | 0 | (1.1) |
Purchases of property and equipment | (98.8) | (83.5) |
Other, net | 3.2 | 1.6 |
Net cash used in investing activities | (95.6) | (83) |
Cash flows from financing activities: | ||
Borrowings on revolving credit facility | 0 | 330 |
Payments on revolving credit facility | 0 | (25) |
Taxes paid on behalf of employees for shares withheld | (15.6) | (15.6) |
Dividends paid on common stock | (29.1) | (29) |
Distributions paid to noncontrolling interests of consolidated affiliates | (27.8) | (19.1) |
Purchase of equity interests in consolidated affiliates | 0 | (162.3) |
Other, net | (5) | (7.9) |
Net cash (used in) provided by financing activities | (77.5) | 71.1 |
(Decrease) increase in cash, cash equivalents, and restricted cash | (14.6) | 17.4 |
Cash, cash equivalents, and restricted cash at beginning of period | 310.9 | 159.6 |
Cash, cash equivalents, and restricted cash at end of period | 296.3 | 177 |
Reconciliation of Cash, Cash Equivalents, and Restricted Cash | ||
Cash and cash equivalents at beginning of period | 224 | 94.8 |
Restricted cash at beginning of period | 65.4 | 57.4 |
Restricted cash included in other long-term assets at beginning of period | 21.5 | 7.4 |
Cash, cash equivalents, and restricted cash at beginning of period | 310.9 | 159.6 |
Cash and cash equivalents at end of period | 223.9 | 104.9 |
Restricted cash at end of period | 62.2 | 56.7 |
Restricted cash included in other long-term assets at end of period | 10.2 | 15.4 |
Cash, cash equivalents, and restricted cash at end of period | $ 296.3 | $ 177 |
Basis of Presentation
Basis of Presentation | 3 Months Ended |
Mar. 31, 2021 | |
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 a leading provider of post-acute healthcare services, offering both facility-based and home-based patient services in 39 states and Puerto Rico through its network of inpatient rehabilitation hospitals, home health agencies, and hospice agencies. We manage our operations and disclose financial information using two reportable segments: (1) inpatient rehabilitation and (2) home health and hospice. See also Note 11, Segment Reporting . The accompanying unaudited condensed consolidated financial statements of Encompass Health Corporation and Subsidiaries should be read in conjunction with the consolidated financial statements and accompanying notes contained in Encompass Health’s Annual Report on Form 10-K filed with the United States Securities and Exchange Commission on February 26, 2021 (the “2020 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, 2020 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 March 31, Three Months Ended March 31, Three Months Ended March 31, 2021 2020 2021 2020 2021 2020 Medicare $ 614.5 $ 641.9 $ 223.9 $ 226.2 $ 838.4 $ 868.1 Medicare Advantage 158.4 111.5 28.0 29.4 186.4 140.9 Managed care 112.2 90.2 14.3 12.1 126.5 102.3 Medicaid 39.0 30.7 3.8 4.2 42.8 34.9 Other third-party payors 12.1 11.0 — — 12.1 11.0 Workers’ compensation 5.7 6.9 0.1 0.3 5.8 7.2 Patients 4.9 5.5 0.2 0.4 5.1 5.9 Other income 13.1 11.5 0.2 0.2 13.3 11.7 Total $ 959.9 $ 909.2 $ 270.5 $ 272.8 $ 1,230.4 $ 1,182.0 See Note 1, Summary of Significant Accounting Policies , to the consolidated financial statements accompanying the 2020 Form 10-K for our policy related to Net operating revenues . Recently Adopted Accounting Pronouncements — In December 2019, the FASB issued ASU 2019-12, “Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes.” The standard removes certain exceptions to the general principles of ASC 740 and simplifies other areas such as accounting for outside basis differences of equity method investments. Either prospective or retrospective transition of this standard is dependent upon the specific amendments. The new guidance was effective for us beginning January 1, 2021. The adoption of this guidance did not have a material impact to 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. |
Business Combinations
Business Combinations | 3 Months Ended |
Mar. 31, 2021 | |
Business Combinations [Abstract] | |
Business Combinations | Business Combinations Home Health and Hospice In April 2021, we announced we entered into a definitive agreement to purchase the home health and hospice assets of Frontier Home Health and Hospice in Alaska, Colorado, Montana, Washington, and Wyoming for a cash purchase price of $95 million. At closing, 9 home health and 11 hospice locations will become part of our national network of home health and hospice locations. This transaction, which is subject to customary closing conditions and regulatory approvals, is expected to close in the second quarter of 2021. We expect to fund this transaction with cash on hand and borrowings under our revolving credit facility. |
Variable Interest Entities
Variable Interest Entities | 3 Months Ended |
Mar. 31, 2021 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Variable Interest Entities | Variable Interest Entities As of March 31, 2021 and December 31, 2020, we consolidated nine limited partnership-like entities that are variable interest entities (“VIEs”) and of which we are the primary beneficiary. Our ownership percentages in these entities range from 50.0% to 75.0% as of March 31, 2021. Through partnership and management agreements with or governing each of these entities, we manage all of these entities and handle all day-to-day operating decisions. Accordingly, we have the decision making power over the activities that most significantly impact the economic performance of our VIEs and an obligation to absorb losses or receive benefits from the VIE that could potentially be significant to the VIE. These decisions and significant activities include, but are not limited to, marketing efforts, oversight of patient admissions, medical training, nurse and therapist scheduling, provision of healthcare services, billing, collections, and creation and maintenance of medical records. The terms of the agreements governing each of our VIEs prohibit us from using the assets of each VIE to satisfy the obligations of other entities. The carrying amounts and classifications of the consolidated VIEs’ assets and liabilities, which are included in our condensed consolidated balance sheet, are as follows (in millions): March 31, 2021 December 31, 2020 Assets Current assets: Cash and cash equivalents $ 0.5 $ 0.1 Accounts receivable 33.7 33.1 Other current assets 8.5 8.6 Total current assets 42.7 41.8 Property and equipment, net 118.7 121.1 Operating lease right-of-use assets 4.4 4.7 Goodwill 19.2 19.2 Intangible assets, net 3.1 3.3 Other long-term assets 31.1 31.1 Total assets $ 219.2 $ 221.2 Liabilities Current liabilities: Current portion of long-term debt $ 0.9 $ 0.9 Current operating lease liabilities 1.5 1.5 Accounts payable 5.9 6.1 Accrued expenses and other current liabilities 21.7 23.0 Total current liabilities 30.0 31.5 Long-term debt, net of current portion 9.4 9.6 Long-term operating lease liabilities 2.9 3.3 Other long-term liabilities 2.3 2.4 Total liabilities $ 44.6 $ 46.8 |
Long-term Debt
Long-term Debt | 3 Months Ended |
Mar. 31, 2021 | |
Debt Disclosure [Abstract] | |
Long-term Debt | Long-term Debt Our long-term debt outstanding consists of the following (in millions): March 31, 2021 December 31, 2020 Credit Agreement— Term loan facilities $ 248.3 $ 251.6 Bonds payable— 5.125% Senior Notes due 2023 298.3 298.1 5.75% Senior Notes due 2025 346.5 346.3 4.50% Senior Notes due 2028 785.5 785.0 4.75% Senior Notes due 2030 783.5 783.2 4.625% Senior Notes due 2031 393.3 393.2 Other notes payable 39.7 39.8 Finance lease obligations 402.1 391.7 3,297.2 3,288.9 Less: Current portion (137.2) (38.3) Long-term debt, net of current portion $ 3,160.0 $ 3,250.6 In March 2021, we issued notice for redemption of $100 million in outstanding principal amount of the 5.125% Senior Notes due 2023 (the “2023 Notes”). We completed this redemption on April 5, 2021 using cash on hand and capacity under our revolving credit facility. Pursuant to the terms of the 2023 Notes, this optional redemption was made at a price of par. As a result of this redemption, we have classified approximately $100 million of the 2023 Notes as current in our accompanying March 31, 2021 condensed consolidated balance sheet, and we expect to record an approximate $0.6 million loss on early extinguishment of debt in the second quarter of 2021. |
Redeemable Noncontrolling Inter
Redeemable Noncontrolling Interests | 3 Months Ended |
Mar. 31, 2021 | |
Noncontrolling Interest [Abstract] | |
Redeemable Noncontrolling Interests | Redeemable Noncontrolling Interests The following is a summary of the activity related to our Redeemable noncontrolling interests (in millions): Three Months Ended March 31, 2021 2020 Balance at beginning of period $ 31.6 $ 239.6 Net income attributable to noncontrolling interests 2.4 2.0 Distributions declared (2.3) (2.1) Contribution to joint venture — 3.1 Purchase of redeemable noncontrolling interests — (162.3) Exchange transaction — (46.3) Balance at end of period $ 31.7 $ 34.0 The following table reconciles the net income attributable to nonredeemable Noncontrolling interests , as recorded in the shareholders’ equity section of the condensed consolidated balance sheets, and the net income attributable to Redeemable noncontrolling interests , as recorded in the mezzanine section of the condensed consolidated balance sheets, to the Net and comprehensive income attributable to noncontrolling interests presented in the condensed consolidated statements of comprehensive income (in millions): Three Months Ended March 31, 2021 2020 Net income attributable to nonredeemable noncontrolling interests $ 23.1 $ 19.7 Net income attributable to redeemable noncontrolling interests 2.4 2.0 Net income attributable to noncontrolling interests $ 25.5 $ 21.7 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 had 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. In January 2020, we received exercise notices, representing approximately 4.3% of the outstanding shares of the common stock of Holdings. On February 18, 2020, Encompass Health settled the acquisition of those shares upon payment of approximately $162 million in cash. Upon settlement of these exercises, approximately $46 million of the shares of Holdings held by two management investors remained outstanding. On February 20, 2020, Encompass Health entered into exchange agreements (each, an “Exchange Agreement”) with these two management investors, pursuant to which they had the right to exchange all of the remaining shares of Holdings held by them for shares of common stock of Encompass Health (the “EHC Shares”). Each of the Exchange Agreements provided that the management investor must deliver a written exchange notice (an “Exchange Notice”) to Encompass Health in order to exchange his or her remaining shares of Holdings for EHC Shares. Each Exchange Agreement further provided that the number of EHC Shares to be delivered to the management investor was to be determined by dividing the fair value of the shares of Holdings held by the management investor on the date of the Exchange Agreement by the last reported sales price of Encompass Health’s common stock on the New York Stock Exchange (the “NYSE”) on the date of delivery of the Exchange Notice. On February 20, 2020, Encompass Health received an Exchange Notice from each of the management investors. Based on the last sales price of Encompass Health’s common stock on the NYSE on February 20, 2020, Encompass Health delivered an aggregate 560,957 EHC Shares to the management investors. The total number of EHC Shares issued pursuant to the exchange agreements on March 6, 2020 represented less than 0.6% of the outstanding shares of Encompass Health common stock. Encompass Health issued the EHC Shares from its treasury shares. Encompass Health now owns 100% of Holdings and EHHI. See also Note 6, Fair Value Measurements . |
Fair Value Measurements
Fair Value Measurements | 3 Months Ended |
Mar. 31, 2021 | |
Fair Value Disclosures [Abstract] | |
Fair Value Measurements | Fair Value Measurements Our financial assets and liabilities that are measured at fair value on a recurring basis are as follows (in millions): Fair Value Measurements at Reporting Date Using As of March 31, 2021 Fair Value Quoted Prices in Active Markets for Identical Assets Significant Other Observable Inputs Significant Unobservable Inputs Valuation Technique (1) Other long-term assets: Equity securities $ 73.1 $ — $ 73.1 $ — M Redeemable noncontrolling interests 31.7 — — 31.7 I As of December 31, 2020 Other long-term assets: Equity securities $ 72.6 $ — $ 72.6 $ — M Redeemable noncontrolling interests 31.6 — — 31.6 I (1) The three valuation techniques are: market approach (M), cost approach (C), and income approach (I). There are assets and liabilities that are not required to be measured at fair value on a recurring basis. However, these assets may be recorded at fair value as a result of impairment charges or other adjustments made to the carrying value of the applicable assets. During the three months ended March 31, 2021 and March 31, 2020, we did not record any material gains or losses related to these assets. As discussed in Note 1, Summary of Significant Accounting Policies , “Fair Value Measurements,” to the consolidated financial statements accompanying the 2020 Form 10‑K, the carrying value equals fair value for our financial instruments that are not included in the table below and are classified as current in our condensed consolidated balance sheets. The carrying amounts and estimated fair values for all of our other financial instruments are presented in the following table (in millions): As of March 31, 2021 As of December 31, 2020 Carrying Amount Estimated Fair Value Carrying Amount Estimated Fair Value Long-term debt: Term loan facilities $ 248.3 $ 249.8 $ 251.6 $ 253.1 5.125% Senior Notes due 2023 298.3 300.8 298.1 302.6 5.75% Senior Notes due 2025 346.5 361.6 346.3 361.4 4.50% Senior Notes due 2028 785.5 820.2 785.0 840.0 4.75% Senior Notes due 2030 783.5 824.0 783.2 856.0 4.625% Senior Notes due 2031 393.3 415.0 393.2 424.9 Other notes payable 39.7 39.7 39.8 39.8 Financial commitments: Letters of credit — 37.7 — 36.7 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 2020 Form 10‑K. |
Share-Based Payments
Share-Based Payments | 3 Months Ended |
Mar. 31, 2021 | |
Share-based Payment Arrangement [Abstract] | |
Share-Based Payments | Share-Based Payments During the three months ended March 31, 2021, 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, we granted 0.1 million stock options to members of our management team. The fair value of these awards and options was determined using the policies described in Note 1, Summary of Significant Accounting Policies , and Note 14, Share-Based Payments , to the consolidated financial statements accompanying the 2020 Form 10‑K. In conjunction with the EHHI acquisition discussed in Note 5, Redeemable Noncontrolling Interests , we granted stock appreciation rights (“SARs”) based on Holdings common stock to certain members of EHHI management at closing. In January 2020, members of the management team exercised the remaining SARs, and in February 2020, we settled those awards upon payment of approximately $101 million in cash. For additional information, see Note 14, Share-Based Payments |
Income Taxes
Income Taxes | 3 Months Ended |
Mar. 31, 2021 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Income Taxes Our Provision for income tax expense of $34.5 million and $27.1 million for the three months ended March 31, 2021 and 2020, respectively, primarily resulted from the application of our estimated effective blended federal and state income tax rate offset by tax benefits resulting from share-based compensation windfalls. |
Earnings per Common Share
Earnings per Common Share | 3 Months Ended |
Mar. 31, 2021 | |
Earnings Per Share [Abstract] | |
Earnings per Common Share | Earnings per Common Share The following table sets forth the computation of basic and diluted earnings per common share (in millions, except per share amounts): Three Months Ended March 31, 2021 2020 Basic: Numerator: Income from continuing operations $ 132.8 $ 108.8 Less: Net income attributable to noncontrolling interests included in continuing operations (25.5) (21.7) Less: Income allocated to participating securities (0.5) (0.3) Income from continuing operations attributable to Encompass Health common shareholders 106.8 86.8 Loss from discontinued operations, net of tax, attributable to Encompass Health common shareholders — (0.1) Net income attributable to Encompass Health common shareholders $ 106.8 $ 86.7 Denominator: Basic weighted average common shares outstanding 99.0 98.2 Basic earnings per share attributable to Encompass Health common shareholders: Continuing operations $ 1.08 $ 0.88 Discontinued operations — — Net income $ 1.08 $ 0.88 Diluted: Numerator: Income from continuing operations $ 132.8 $ 108.8 Less: Net income attributable to noncontrolling interests included in continuing operations (25.5) (21.7) Income from continuing operations attributable to Encompass Health common shareholders 107.3 87.1 Loss from discontinued operations, net of tax, attributable to Encompass Health common shareholders — (0.1) Net income attributable to Encompass Health common shareholders $ 107.3 $ 87.0 Denominator: Diluted weighted average common shares outstanding 100.2 99.6 Diluted earnings per share attributable to Encompass Health common shareholders: Continuing operations $ 1.07 $ 0.87 Discontinued operations — — Net income $ 1.07 $ 0.87 The following table sets forth the reconciliation between basic weighted average common shares outstanding and diluted weighted average common shares outstanding (in millions): Three Months Ended March 31, 2021 2020 Basic weighted average common shares outstanding 99.0 98.2 Restricted stock awards, dilutive stock options, and restricted stock units 1.2 1.4 Diluted weighted average common shares outstanding 100.2 99.6 See Note 17, Earnings per Common Share |
Contingencies and Other Commitm
Contingencies and Other Commitments | 3 Months Ended |
Mar. 31, 2021 | |
Commitments and Contingencies Disclosure [Abstract] | |
Contingencies and Other Commitments | Contingencies and Other Commitments We operate in a highly regulated industry in which healthcare providers are routinely subject to litigation. As a result, various lawsuits, claims, and legal and regulatory proceedings have been and can be expected to be instituted or asserted against us. The resolution of any such lawsuits, claims, or legal and regulatory proceedings could materially and adversely affect our financial position, results of operations, and cash flows in a given period. Nichols Litigation— We were named as a defendant in a lawsuit filed March 28, 2003 by several individual stockholders in the Circuit Court of Jefferson County, Alabama, captioned Nichols v. HealthSouth Corp . In July 2019, we entered into settlement agreements with all but one plaintiff and paid those settling plaintiffs an aggregate amount of cash less than $0.1 million. The remaining plaintiff alleges that we, some of our former officers, and our former investment bank engaged in a scheme to overstate and misrepresent our earnings and financial position. The plaintiff is seeking compensatory and punitive damages. This case was stayed in the circuit court on August 8, 2005. However, the complaint has been amended from time to time, including to request certification as a class action. Additionally, one of the former officers named as a defendant has repeatedly attempted to remove the case to federal district court. We filed our latest motion to remand the case back to state court on January 10, 2013. On September 27, 2013, the federal court remanded the case back to state court. On December 10, 2014, we filed a motion to dismiss on the grounds the plaintiffs lacked standing because their claims were derivative in nature, and the claims were time-barred by the statute of limitations. On May 26, 2016, the trial court granted our motion to dismiss. On appeal, the Supreme Court of Alabama reversed the trial court’s dismissal on March 23, 2018. On April 6, 2018, we filed an application for rehearing with the Alabama Supreme Court. On March 22, 2019, the Alabama Supreme Court denied our application for rehearing and remanded the case to the trial court for further proceedings. The court has not yet set a date for the trial to begin. On March 2, 2020, we filed a motion for summary judgment, which the trial court denied on June 17, 2020. On March 12, 2021 the Alabama Supreme Court directed the trial court to vacate its order that served as the basis for the denial of our motion for summary judgement. On April 7, 2021, we filed a renewed motion for summary judgment, the hearing for which has been scheduled on May 13, 2021. 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 Matters— The False Claims Act allows private citizens, called “relators,” to institute civil proceedings on behalf of the United States alleging violations of the False Claims Act. These lawsuits, also known as “whistleblower” or “ qui tam ” actions, can involve significant monetary damages, fines, attorneys’ fees and the award of bounties to the relators who successfully prosecute or bring these suits to the government. Qui tam cases are sealed at the time of filing, which means knowledge of the information contained in the complaint typically is limited to the relator, the federal government, and the presiding court. The defendant in a qui tam action may remain unaware of the existence of a sealed complaint for years. While the complaint is under seal, the government reviews the merits of the case and may conduct a broad investigation and seek discovery from the defendant and other parties before deciding whether to intervene in the case and take the lead on litigating the claims. The court lifts the seal when the government makes its decision on whether to intervene. If the government decides not to intervene, the relator may elect to continue to pursue the lawsuit individually on behalf of the government. It is possible that qui tam lawsuits have been filed against us, which suits remain under seal, or that we are unaware of such filings or precluded by existing law or court order from discussing or disclosing the filing of such suits. We may be subject to liability under one or more undisclosed qui tam cases brought pursuant to the False Claims Act. It is our obligation as a participant in Medicare and other federal healthcare programs to routinely conduct audits and reviews of the accuracy of our billing systems and other regulatory compliance matters. As a result of these reviews, we have made, and will continue to make, disclosures to the United States Department of Health and Human Services Office of Inspector General and the Centers for Medicare & Medicaid Services relating to amounts we suspect represent over-payments from these programs, whether due to inaccurate billing or otherwise. Some of these disclosures have resulted in, or may result in, Encompass Health refunding amounts to Medicare or other federal healthcare programs. |
Segment Reporting
Segment Reporting | 3 Months Ended |
Mar. 31, 2021 | |
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 35 states and Puerto Rico, with a concentration of hospitals in the eastern half of the United States and Texas. As of March 31, 2021, we operate 138 inpatient rehabilitation hospitals. We are the sole owner of 86 of these hospitals. We retain 50.0% to 97.5% ownership in the remaining 52 jointly owned hospitals. In addition, we manage four inpatient rehabilitation units through management contracts. We provide specialized rehabilitative treatment on both an inpatient and outpatient basis. Our inpatient rehabilitation hospitals provide a higher level of rehabilitative care to patients who are recovering from conditions such as stroke and other neurological disorders, cardiac and pulmonary conditions, brain and spinal cord injuries, complex orthopedic conditions, and amputations. • Home Health and Hospice - As of March 31, 2021, we provide home health services in 241 locations and hospice services in 82 locations across 31 states with concentrations in the southern half of the United States. In addition, one of these home health agencies operates as a joint venture which we account for using the equity method of accounting. We are the sole owner of 317 of these locations. We retain 50.0% to 81.0% ownership in the remaining six jointly owned locations. Our home health services include a comprehensive range of Medicare-certified home nursing services to adult patients in need of care. These services include, among others, skilled nursing, physical, occupational, and speech therapy, medical social work, and home health aide services. Our hospice services include in-home services to terminally ill patients and their families to address patients’ physical needs, including pain control and symptom management, and to provide emotional and spiritual support. The accounting policies of our reportable segments are the same as those described in Note 1, Summary of Significant Accounting Policies , to the consolidated financial statements accompanying the 2020 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 March 31, Three Months Ended March 31, 2021 2020 2021 2020 Net operating revenues $ 959.9 $ 909.2 $ 270.5 $ 272.8 Operating expenses: Inpatient rehabilitation: Salaries and benefits 501.9 482.3 — — Other operating expenses 140.0 134.7 — — Supplies 45.2 39.6 — — Occupancy costs 15.1 15.3 — — Home health and hospice: Cost of service (excluding depreciation and amortization) — — 118.1 130.9 Support and overhead costs — — 101.4 100.2 702.2 671.9 219.5 231.1 Other (income) expense (1.5) 1.6 — — Equity in net income of nonconsolidated affiliates (0.8) (0.6) (0.2) (0.2) Noncontrolling interests 25.1 20.8 0.4 0.9 Segment Adjusted EBITDA $ 234.9 $ 215.5 $ 50.8 $ 41.0 Capital expenditures $ 99.8 $ 83.3 $ 0.9 $ 1.5 Segment reconciliations (in millions): Three Months Ended March 31, 2021 2020 Total Segment Adjusted EBITDA $ 285.7 $ 256.5 General and administrative expenses (38.6) (35.6) Depreciation and amortization (62.5) (58.8) Gain (loss) on disposal or impairment of assets 0.1 (0.1) Government, class action, and related settlements — (2.8) Interest expense and amortization of debt discounts and fees (42.8) (43.2) Net income attributable to noncontrolling interests 25.5 21.7 Change in fair market value of equity securities (0.1) (2.5) Gain on consolidation of joint venture formerly accounted for under the equity method of accounting — 2.2 Payroll taxes on SARs exercise — (1.5) Income from continuing operations before income tax expense $ 167.3 $ 135.9 Additional detail regarding the revenues of our operating segments by service line follows (in millions): Three Months Ended March 31, 2021 2020 Inpatient rehabilitation: Inpatient $ 942.3 $ 890.0 Outpatient and other 17.6 19.2 Total inpatient rehabilitation 959.9 909.2 Home health and hospice: Home health 219.9 224.8 Hospice 50.6 48.0 Total home health and hospice 270.5 272.8 Total net operating revenues $ 1,230.4 $ 1,182.0 |
Basis of Presentation (Policies
Basis of Presentation (Policies) | 3 Months Ended |
Mar. 31, 2021 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Recently Adopted Accounting Pronouncements | Recently Adopted Accounting Pronouncements — In December 2019, the FASB issued ASU 2019-12, “Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes.” The standard removes certain exceptions to the general principles of ASC 740 and simplifies other areas such as accounting for outside basis differences of equity method investments. Either prospective or retrospective transition of this standard is dependent upon the specific amendments. The new guidance was effective for us beginning January 1, 2021. The adoption of this guidance did not have a material impact to our condensed consolidated financial statements. We do not believe any other recently issued, but not yet effective, accounting standards will have a material effect on our condensed consolidated financial position, results of operations, or cash flows. |
Basis of Presentation (Tables)
Basis of Presentation (Tables) | 3 Months Ended |
Mar. 31, 2021 | |
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 March 31, Three Months Ended March 31, Three Months Ended March 31, 2021 2020 2021 2020 2021 2020 Medicare $ 614.5 $ 641.9 $ 223.9 $ 226.2 $ 838.4 $ 868.1 Medicare Advantage 158.4 111.5 28.0 29.4 186.4 140.9 Managed care 112.2 90.2 14.3 12.1 126.5 102.3 Medicaid 39.0 30.7 3.8 4.2 42.8 34.9 Other third-party payors 12.1 11.0 — — 12.1 11.0 Workers’ compensation 5.7 6.9 0.1 0.3 5.8 7.2 Patients 4.9 5.5 0.2 0.4 5.1 5.9 Other income 13.1 11.5 0.2 0.2 13.3 11.7 Total $ 959.9 $ 909.2 $ 270.5 $ 272.8 $ 1,230.4 $ 1,182.0 |
Variable Interest Entities (Tab
Variable Interest Entities (Tables) | 3 Months Ended |
Mar. 31, 2021 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Schedule of Carrying Amounts and Classifications of VIE's Assets and Liabilities | The carrying amounts and classifications of the consolidated VIEs’ assets and liabilities, which are included in our condensed consolidated balance sheet, are as follows (in millions): March 31, 2021 December 31, 2020 Assets Current assets: Cash and cash equivalents $ 0.5 $ 0.1 Accounts receivable 33.7 33.1 Other current assets 8.5 8.6 Total current assets 42.7 41.8 Property and equipment, net 118.7 121.1 Operating lease right-of-use assets 4.4 4.7 Goodwill 19.2 19.2 Intangible assets, net 3.1 3.3 Other long-term assets 31.1 31.1 Total assets $ 219.2 $ 221.2 Liabilities Current liabilities: Current portion of long-term debt $ 0.9 $ 0.9 Current operating lease liabilities 1.5 1.5 Accounts payable 5.9 6.1 Accrued expenses and other current liabilities 21.7 23.0 Total current liabilities 30.0 31.5 Long-term debt, net of current portion 9.4 9.6 Long-term operating lease liabilities 2.9 3.3 Other long-term liabilities 2.3 2.4 Total liabilities $ 44.6 $ 46.8 |
Long-term Debt (Tables)
Long-term Debt (Tables) | 3 Months Ended |
Mar. 31, 2021 | |
Debt Disclosure [Abstract] | |
Schedule of Outstanding Long-term Debt | Our long-term debt outstanding consists of the following (in millions): March 31, 2021 December 31, 2020 Credit Agreement— Term loan facilities $ 248.3 $ 251.6 Bonds payable— 5.125% Senior Notes due 2023 298.3 298.1 5.75% Senior Notes due 2025 346.5 346.3 4.50% Senior Notes due 2028 785.5 785.0 4.75% Senior Notes due 2030 783.5 783.2 4.625% Senior Notes due 2031 393.3 393.2 Other notes payable 39.7 39.8 Finance lease obligations 402.1 391.7 3,297.2 3,288.9 Less: Current portion (137.2) (38.3) Long-term debt, net of current portion $ 3,160.0 $ 3,250.6 |
Redeemable Noncontrolling Int_2
Redeemable Noncontrolling Interests (Tables) | 3 Months Ended |
Mar. 31, 2021 | |
Noncontrolling Interest [Abstract] | |
Redeemable Noncontrolling Interests Activity | The following is a summary of the activity related to our Redeemable noncontrolling interests (in millions): Three Months Ended March 31, 2021 2020 Balance at beginning of period $ 31.6 $ 239.6 Net income attributable to noncontrolling interests 2.4 2.0 Distributions declared (2.3) (2.1) Contribution to joint venture — 3.1 Purchase of redeemable noncontrolling interests — (162.3) Exchange transaction — (46.3) Balance at end of period $ 31.7 $ 34.0 |
Reconciliation of Noncontrolling Interests | The following table reconciles the net income attributable to nonredeemable Noncontrolling interests , as recorded in the shareholders’ equity section of the condensed consolidated balance sheets, and the net income attributable to Redeemable noncontrolling interests , as recorded in the mezzanine section of the condensed consolidated balance sheets, to the Net and comprehensive income attributable to noncontrolling interests presented in the condensed consolidated statements of comprehensive income (in millions): Three Months Ended March 31, 2021 2020 Net income attributable to nonredeemable noncontrolling interests $ 23.1 $ 19.7 Net income attributable to redeemable noncontrolling interests 2.4 2.0 Net income attributable to noncontrolling interests $ 25.5 $ 21.7 |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 3 Months Ended |
Mar. 31, 2021 | |
Fair Value Disclosures [Abstract] | |
Schedule of Fair Value, Assets and Liabilities Measured on a Recurring Basis | Our financial assets and liabilities that are measured at fair value on a recurring basis are as follows (in millions): Fair Value Measurements at Reporting Date Using As of March 31, 2021 Fair Value Quoted Prices in Active Markets for Identical Assets Significant Other Observable Inputs Significant Unobservable Inputs Valuation Technique (1) Other long-term assets: Equity securities $ 73.1 $ — $ 73.1 $ — M Redeemable noncontrolling interests 31.7 — — 31.7 I As of December 31, 2020 Other long-term assets: Equity securities $ 72.6 $ — $ 72.6 $ — M Redeemable noncontrolling interests 31.6 — — 31.6 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 March 31, 2021 As of December 31, 2020 Carrying Amount Estimated Fair Value Carrying Amount Estimated Fair Value Long-term debt: Term loan facilities $ 248.3 $ 249.8 $ 251.6 $ 253.1 5.125% Senior Notes due 2023 298.3 300.8 298.1 302.6 5.75% Senior Notes due 2025 346.5 361.6 346.3 361.4 4.50% Senior Notes due 2028 785.5 820.2 785.0 840.0 4.75% Senior Notes due 2030 783.5 824.0 783.2 856.0 4.625% Senior Notes due 2031 393.3 415.0 393.2 424.9 Other notes payable 39.7 39.7 39.8 39.8 Financial commitments: Letters of credit — 37.7 — 36.7 |
Earnings per Common Share (Tabl
Earnings per Common Share (Tables) | 3 Months Ended |
Mar. 31, 2021 | |
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 March 31, 2021 2020 Basic: Numerator: Income from continuing operations $ 132.8 $ 108.8 Less: Net income attributable to noncontrolling interests included in continuing operations (25.5) (21.7) Less: Income allocated to participating securities (0.5) (0.3) Income from continuing operations attributable to Encompass Health common shareholders 106.8 86.8 Loss from discontinued operations, net of tax, attributable to Encompass Health common shareholders — (0.1) Net income attributable to Encompass Health common shareholders $ 106.8 $ 86.7 Denominator: Basic weighted average common shares outstanding 99.0 98.2 Basic earnings per share attributable to Encompass Health common shareholders: Continuing operations $ 1.08 $ 0.88 Discontinued operations — — Net income $ 1.08 $ 0.88 Diluted: Numerator: Income from continuing operations $ 132.8 $ 108.8 Less: Net income attributable to noncontrolling interests included in continuing operations (25.5) (21.7) Income from continuing operations attributable to Encompass Health common shareholders 107.3 87.1 Loss from discontinued operations, net of tax, attributable to Encompass Health common shareholders — (0.1) Net income attributable to Encompass Health common shareholders $ 107.3 $ 87.0 Denominator: Diluted weighted average common shares outstanding 100.2 99.6 Diluted earnings per share attributable to Encompass Health common shareholders: Continuing operations $ 1.07 $ 0.87 Discontinued operations — — Net income $ 1.07 $ 0.87 |
Reconciliation of Weighted Average Number of Shares Outstanding | The following table sets forth the reconciliation between basic weighted average common shares outstanding and diluted weighted average common shares outstanding (in millions): Three Months Ended March 31, 2021 2020 Basic weighted average common shares outstanding 99.0 98.2 Restricted stock awards, dilutive stock options, and restricted stock units 1.2 1.4 Diluted weighted average common shares outstanding 100.2 99.6 |
Segment Reporting (Tables)
Segment Reporting (Tables) | 3 Months Ended |
Mar. 31, 2021 | |
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 March 31, Three Months Ended March 31, 2021 2020 2021 2020 Net operating revenues $ 959.9 $ 909.2 $ 270.5 $ 272.8 Operating expenses: Inpatient rehabilitation: Salaries and benefits 501.9 482.3 — — Other operating expenses 140.0 134.7 — — Supplies 45.2 39.6 — — Occupancy costs 15.1 15.3 — — Home health and hospice: Cost of service (excluding depreciation and amortization) — — 118.1 130.9 Support and overhead costs — — 101.4 100.2 702.2 671.9 219.5 231.1 Other (income) expense (1.5) 1.6 — — Equity in net income of nonconsolidated affiliates (0.8) (0.6) (0.2) (0.2) Noncontrolling interests 25.1 20.8 0.4 0.9 Segment Adjusted EBITDA $ 234.9 $ 215.5 $ 50.8 $ 41.0 Capital expenditures $ 99.8 $ 83.3 $ 0.9 $ 1.5 |
Reconciliation of Segment Adjusted EBITDA to Income from Continuing Operations Before Income Tax Expense | Segment reconciliations (in millions): Three Months Ended March 31, 2021 2020 Total Segment Adjusted EBITDA $ 285.7 $ 256.5 General and administrative expenses (38.6) (35.6) Depreciation and amortization (62.5) (58.8) Gain (loss) on disposal or impairment of assets 0.1 (0.1) Government, class action, and related settlements — (2.8) Interest expense and amortization of debt discounts and fees (42.8) (43.2) Net income attributable to noncontrolling interests 25.5 21.7 Change in fair market value of equity securities (0.1) (2.5) Gain on consolidation of joint venture formerly accounted for under the equity method of accounting — 2.2 Payroll taxes on SARs exercise — (1.5) Income from continuing operations before income tax expense $ 167.3 $ 135.9 |
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 March 31, 2021 2020 Inpatient rehabilitation: Inpatient $ 942.3 $ 890.0 Outpatient and other 17.6 19.2 Total inpatient rehabilitation 959.9 909.2 Home health and hospice: Home health 219.9 224.8 Hospice 50.6 48.0 Total home health and hospice 270.5 272.8 Total net operating revenues $ 1,230.4 $ 1,182.0 |
Basis of Presentation - Textual
Basis of Presentation - Textual (Details) | 3 Months Ended |
Mar. 31, 2021statesegment | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Number of states in which entity operates | state | 39 |
Number of operating segments | segment | 2 |
Basis of Presentation - Net Ope
Basis of Presentation - Net Operating Revenues (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2021 | Mar. 31, 2020 | |
Disaggregation of Revenue [Line Items] | ||
Net operating revenues | $ 1,230.4 | $ 1,182 |
Inpatient Rehabilitation | ||
Disaggregation of Revenue [Line Items] | ||
Net operating revenues | 959.9 | 909.2 |
Home Health and Hospice | ||
Disaggregation of Revenue [Line Items] | ||
Net operating revenues | 270.5 | 272.8 |
Medicare | ||
Disaggregation of Revenue [Line Items] | ||
Net operating revenues | 838.4 | 868.1 |
Medicare | Inpatient Rehabilitation | ||
Disaggregation of Revenue [Line Items] | ||
Net operating revenues | 614.5 | 641.9 |
Medicare | Home Health and Hospice | ||
Disaggregation of Revenue [Line Items] | ||
Net operating revenues | 223.9 | 226.2 |
Medicare Advantage | ||
Disaggregation of Revenue [Line Items] | ||
Net operating revenues | 186.4 | 140.9 |
Medicare Advantage | Inpatient Rehabilitation | ||
Disaggregation of Revenue [Line Items] | ||
Net operating revenues | 158.4 | 111.5 |
Medicare Advantage | Home Health and Hospice | ||
Disaggregation of Revenue [Line Items] | ||
Net operating revenues | 28 | 29.4 |
Managed care | ||
Disaggregation of Revenue [Line Items] | ||
Net operating revenues | 126.5 | 102.3 |
Managed care | Inpatient Rehabilitation | ||
Disaggregation of Revenue [Line Items] | ||
Net operating revenues | 112.2 | 90.2 |
Managed care | Home Health and Hospice | ||
Disaggregation of Revenue [Line Items] | ||
Net operating revenues | 14.3 | 12.1 |
Medicaid | ||
Disaggregation of Revenue [Line Items] | ||
Net operating revenues | 42.8 | 34.9 |
Medicaid | Inpatient Rehabilitation | ||
Disaggregation of Revenue [Line Items] | ||
Net operating revenues | 39 | 30.7 |
Medicaid | Home Health and Hospice | ||
Disaggregation of Revenue [Line Items] | ||
Net operating revenues | 3.8 | 4.2 |
Other third-party payors | ||
Disaggregation of Revenue [Line Items] | ||
Net operating revenues | 12.1 | 11 |
Other third-party payors | Inpatient Rehabilitation | ||
Disaggregation of Revenue [Line Items] | ||
Net operating revenues | 12.1 | 11 |
Other third-party payors | Home Health and Hospice | ||
Disaggregation of Revenue [Line Items] | ||
Net operating revenues | 0 | 0 |
Workers’ compensation | ||
Disaggregation of Revenue [Line Items] | ||
Net operating revenues | 5.8 | 7.2 |
Workers’ compensation | Inpatient Rehabilitation | ||
Disaggregation of Revenue [Line Items] | ||
Net operating revenues | 5.7 | 6.9 |
Workers’ compensation | Home Health and Hospice | ||
Disaggregation of Revenue [Line Items] | ||
Net operating revenues | 0.1 | 0.3 |
Patients | ||
Disaggregation of Revenue [Line Items] | ||
Net operating revenues | 5.1 | 5.9 |
Patients | Inpatient Rehabilitation | ||
Disaggregation of Revenue [Line Items] | ||
Net operating revenues | 4.9 | 5.5 |
Patients | Home Health and Hospice | ||
Disaggregation of Revenue [Line Items] | ||
Net operating revenues | 0.2 | 0.4 |
Other income | ||
Disaggregation of Revenue [Line Items] | ||
Net operating revenues | 13.3 | 11.7 |
Other income | Inpatient Rehabilitation | ||
Disaggregation of Revenue [Line Items] | ||
Net operating revenues | 13.1 | 11.5 |
Other income | Home Health and Hospice | ||
Disaggregation of Revenue [Line Items] | ||
Net operating revenues | $ 0.2 | $ 0.2 |
Business Combinations - Textual
Business Combinations - Textual (Details) - Home Health and Hospice - Subsequent Event $ in Millions | 1 Months Ended |
Apr. 30, 2021USD ($)location | |
Business Acquisition [Line Items] | |
Payments to acquire businesses, gross | $ | $ 95 |
Home health | |
Business Acquisition [Line Items] | |
Number of locations | 9 |
Hospice | |
Business Acquisition [Line Items] | |
Number of locations | 11 |
Variable Interest Entities - Te
Variable Interest Entities - Textual (Details) - VIE - entity | 3 Months Ended | 12 Months Ended |
Mar. 31, 2021 | Dec. 31, 2020 | |
Variable Interest Entity [Line Items] | ||
Number of consolidated limited partnership-like entities | 9 | 9 |
Minimum | ||
Variable Interest Entity [Line Items] | ||
Ownership interest in consolidated entities (percent) | 50.00% | |
Maximum | ||
Variable Interest Entity [Line Items] | ||
Ownership interest in consolidated entities (percent) | 75.00% |
Variable Interest Entities - Sc
Variable Interest Entities - Schedule of Carrying Amounts and Classifications of VIE's Assets and Liabilities (Details) - USD ($) $ in Millions | Mar. 31, 2021 | Dec. 31, 2020 | Mar. 31, 2020 | Dec. 31, 2019 | |
Current assets: | |||||
Cash and cash equivalents | $ 223.9 | $ 224 | $ 104.9 | $ 94.8 | |
Accounts receivable | 633.6 | 572.8 | |||
Other current assets | 81.4 | 86.4 | |||
Total current assets | 1,001.1 | 948.6 | |||
Property and equipment, net | 2,280.5 | 2,206.6 | |||
Operating lease right-of-use assets | 248.3 | 245.7 | |||
Goodwill | 2,318.7 | 2,318.7 | |||
Intangible assets, net | 419.2 | 431.3 | |||
Other long-term assets | 274.4 | 295 | |||
Total assets | [1] | 6,542.2 | 6,445.9 | ||
Current liabilities: | |||||
Current portion of long-term debt | 137.2 | 38.3 | |||
Current operating lease liabilities | 44.2 | 44.8 | |||
Accounts payable | 122.8 | 115 | |||
Accrued expenses and other current liabilities | 508 | 519.2 | |||
Total current liabilities | 812.2 | 717.3 | |||
Long-term debt, net of current portion | 3,160 | 3,250.6 | |||
Long-term operating lease liabilities | 214.2 | 209.6 | |||
Other long-term liabilities | 220.5 | 215 | |||
Total liabilities | 4,467.5 | 4,444.3 | |||
VIE | |||||
Current assets: | |||||
Cash and cash equivalents | 0.5 | 0.1 | |||
Accounts receivable | 33.7 | 33.1 | |||
Other current assets | 8.5 | 8.6 | |||
Total current assets | 42.7 | 41.8 | |||
Property and equipment, net | 118.7 | 121.1 | |||
Operating lease right-of-use assets | 4.4 | 4.7 | |||
Goodwill | 19.2 | 19.2 | |||
Intangible assets, net | 3.1 | 3.3 | |||
Other long-term assets | 31.1 | 31.1 | |||
Total assets | 219.2 | 221.2 | |||
Current liabilities: | |||||
Current portion of long-term debt | 0.9 | 0.9 | |||
Current operating lease liabilities | 1.5 | 1.5 | |||
Accounts payable | 5.9 | 6.1 | |||
Accrued expenses and other current liabilities | 21.7 | 23 | |||
Total current liabilities | 30 | 31.5 | |||
Long-term debt, net of current portion | 9.4 | 9.6 | |||
Long-term operating lease liabilities | 2.9 | 3.3 | |||
Other long-term liabilities | 2.3 | 2.4 | |||
Total liabilities | $ 44.6 | $ 46.8 | |||
[1] | Our consolidated assets as of March 31, 2021 and December 31, 2020 include total assets of variable interest entities of $219.2 million and $221.2 million, respectively, which cannot be used by us to settle the obligations of other entities. Our consolidated liabilities as of March 31, 2021 and December 31, 2020 include total liabilities of the variable interest entities of $44.6 million and $46.8 million, respectively. See Note 3, Variable Interest Entities. |
Long-term Debt - Long-term Debt
Long-term Debt - Long-term Debt Outstanding (Details) - USD ($) $ in Millions | Mar. 31, 2021 | Dec. 31, 2020 |
Schedule of Outstanding Long-term Debt | ||
Finance lease obligations | $ 402.1 | $ 391.7 |
Total debt and finance lease obligations | 3,297.2 | 3,288.9 |
Less: Current portion | (137.2) | (38.3) |
Long-term debt, net of current portion | 3,160 | 3,250.6 |
Term loan facilities | Term loan facilities | ||
Schedule of Outstanding Long-term Debt | ||
Total debt | $ 248.3 | $ 251.6 |
Senior Notes | 5.125% Senior Notes due 2023 | ||
Schedule of Outstanding Long-term Debt | ||
Debt instrument interest rate (percent) | 5.125% | 5.125% |
Total debt | $ 298.3 | $ 298.1 |
Senior Notes | 5.75% Senior Notes due 2025 | ||
Schedule of Outstanding Long-term Debt | ||
Debt instrument interest rate (percent) | 5.75% | 5.75% |
Total debt | $ 346.5 | $ 346.3 |
Senior Notes | 4.50% Senior Notes due 2028 | ||
Schedule of Outstanding Long-term Debt | ||
Debt instrument interest rate (percent) | 4.50% | 4.50% |
Total debt | $ 785.5 | $ 785 |
Senior Notes | 4.75% Senior Notes due 2030 | ||
Schedule of Outstanding Long-term Debt | ||
Debt instrument interest rate (percent) | 4.75% | 4.75% |
Total debt | $ 783.5 | $ 783.2 |
Senior Notes | 4.625% Senior Notes due 2031 | ||
Schedule of Outstanding Long-term Debt | ||
Debt instrument interest rate (percent) | 4.625% | 4.625% |
Total debt | $ 393.3 | $ 393.2 |
Other notes payable | ||
Schedule of Outstanding Long-term Debt | ||
Total debt | $ 39.7 | $ 39.8 |
Long-term Debt - Textual (Detai
Long-term Debt - Textual (Details) - Senior Notes - 5.125% Senior Notes due 2023 - USD ($) $ in Millions | 3 Months Ended | ||
Jun. 30, 2021 | Mar. 31, 2021 | Dec. 31, 2020 | |
Debt Instrument [Line Items] | |||
Redemption amount | $ 100 | ||
Debt instrument interest rate (percent) | 5.125% | 5.125% | |
Long-term debt | $ 100 | ||
Forecast | |||
Debt Instrument [Line Items] | |||
Loss on early extinguishment of debt | $ 0.6 |
Redeemable Noncontrolling Int_3
Redeemable Noncontrolling Interests - Redeemable Noncontrolling Interests Activity (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2021 | Mar. 31, 2020 | |
Redeemable Noncontrolling Interest, Equity, Carrying Amount [Roll Forward] | ||
Balance at beginning of period | $ 31.6 | |
Net income attributable to noncontrolling interests | 2.4 | $ 2 |
Distributions declared | (22.4) | (15.5) |
Balance at end of period | 31.7 | |
Redeemable Noncontrolling Interest | ||
Redeemable Noncontrolling Interest, Equity, Carrying Amount [Roll Forward] | ||
Balance at beginning of period | 31.6 | 239.6 |
Net income attributable to noncontrolling interests | 2.4 | 2 |
Distributions declared | (2.3) | (2.1) |
Contribution to joint venture | 0 | 3.1 |
Purchase of redeemable noncontrolling interests | 0 | (162.3) |
Exchange transaction | 0 | (46.3) |
Balance at end of period | $ 31.7 | $ 34 |
Redeemable Noncontrolling Int_4
Redeemable Noncontrolling Interests - Reconciliation of Noncontrolling Interests (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2021 | Mar. 31, 2020 | |
Noncontrolling Interest [Abstract] | ||
Net income attributable to nonredeemable noncontrolling interests | $ 23.1 | $ 19.7 |
Net income attributable to redeemable noncontrolling interests | 2.4 | 2 |
Net income attributable to noncontrolling interests | $ 25.5 | $ 21.7 |
Redeemable Noncontrolling Int_5
Redeemable Noncontrolling Interests - Textual (Details) - USD ($) $ in Millions | Feb. 18, 2020 | Jan. 31, 2020 | Mar. 31, 2021 | Dec. 31, 2020 | Mar. 06, 2020 | Feb. 20, 2020 | Dec. 31, 2014 |
Noncontrolling Interest [Line Items] | |||||||
Redeemable noncontrolling interests | $ 31.7 | $ 31.6 | |||||
Percentage of shares exercised by investor | 4.30% | ||||||
Purchase of redeemable noncontrolling interests | $ 162 | ||||||
Temporary equity, shares issued (shares) | 560,957 | ||||||
Temporary equity, shares to management investors exchange agreements percentages | 0.60% | ||||||
Holdings And EHHI | |||||||
Noncontrolling Interest [Line Items] | |||||||
Ownership percentage | 100.00% | ||||||
EHHI | |||||||
Noncontrolling Interest [Line Items] | |||||||
Outstanding common stock of Holdings, fair value | $ 46 | ||||||
EHHI | Home Health and Hospice | |||||||
Noncontrolling Interest [Line Items] | |||||||
Redeemable noncontrolling interest, equity, acquired percent | 83.30% | ||||||
Redeemable noncontrolling interests | $ 64 | ||||||
Subsidiary's common stock held by subsidiary 's management, percent | 16.70% |
Fair Value Measurements - Sched
Fair Value Measurements - Schedule of Fair Value, Assets and Liabilities Measured on a Recurring Basis (Details) - Recurring - USD ($) $ in Millions | Mar. 31, 2021 | Dec. 31, 2020 |
Fair Value, Assets and Liabilities Measured on Recurring Basis [Abstract] | ||
Equity securities | $ 73.1 | $ 72.6 |
Redeemable noncontrolling interests | 31.7 | 31.6 |
Fair Value, Inputs, Level 1 | ||
Fair Value, Assets and Liabilities Measured on Recurring Basis [Abstract] | ||
Equity securities | 0 | 0 |
Redeemable noncontrolling interests | 0 | 0 |
Fair Value, Inputs, Level 2 | ||
Fair Value, Assets and Liabilities Measured on Recurring Basis [Abstract] | ||
Equity securities | 73.1 | 72.6 |
Redeemable noncontrolling interests | 0 | 0 |
Fair Value, Inputs, Level 3 | ||
Fair Value, Assets and Liabilities Measured on Recurring Basis [Abstract] | ||
Equity securities | 0 | 0 |
Redeemable noncontrolling interests | $ 31.7 | $ 31.6 |
Fair Value Measurements - Sch_2
Fair Value Measurements - Schedule of Carrying Amounts and Estimated Fair Values, Financial Instruments (Details) - USD ($) $ in Millions | Mar. 31, 2021 | Dec. 31, 2020 |
Term loan facilities | Term loan facilities | Carrying Amount | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Carrying amounts and estimated fair values of financial instruments | $ 248.3 | $ 251.6 |
Term loan facilities | Term loan facilities | Estimated Fair Value | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Carrying amounts and estimated fair values of financial instruments | $ 249.8 | $ 253.1 |
Senior Notes | 5.125% Senior Notes due 2023 | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Debt instrument interest rate (percent) | 5.125% | 5.125% |
Senior Notes | 5.125% Senior Notes due 2023 | Carrying Amount | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Carrying amounts and estimated fair values of financial instruments | $ 298.3 | $ 298.1 |
Senior Notes | 5.125% Senior Notes due 2023 | Estimated Fair Value | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Carrying amounts and estimated fair values of financial instruments | $ 300.8 | $ 302.6 |
Senior Notes | 5.75% Senior Notes due 2025 | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Debt instrument interest rate (percent) | 5.75% | 5.75% |
Senior Notes | 5.75% Senior Notes due 2025 | Carrying Amount | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Carrying amounts and estimated fair values of financial instruments | $ 346.5 | $ 346.3 |
Senior Notes | 5.75% Senior Notes due 2025 | Estimated Fair Value | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Carrying amounts and estimated fair values of financial instruments | $ 361.6 | $ 361.4 |
Senior Notes | 4.50% Senior Notes due 2028 | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Debt instrument interest rate (percent) | 4.50% | 4.50% |
Senior Notes | 4.50% Senior Notes due 2028 | Carrying Amount | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Carrying amounts and estimated fair values of financial instruments | $ 785.5 | $ 785 |
Senior Notes | 4.50% Senior Notes due 2028 | Estimated Fair Value | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Carrying amounts and estimated fair values of financial instruments | $ 820.2 | $ 840 |
Senior Notes | 4.75% Senior Notes due 2030 | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Debt instrument interest rate (percent) | 4.75% | 4.75% |
Senior Notes | 4.75% Senior Notes due 2030 | Carrying Amount | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Carrying amounts and estimated fair values of financial instruments | $ 783.5 | $ 783.2 |
Senior Notes | 4.75% Senior Notes due 2030 | Estimated Fair Value | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Carrying amounts and estimated fair values of financial instruments | $ 824 | $ 856 |
Senior Notes | 4.625% Senior Notes due 2031 | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Debt instrument interest rate (percent) | 4.625% | 4.625% |
Senior Notes | 4.625% Senior Notes due 2031 | Carrying Amount | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Carrying amounts and estimated fair values of financial instruments | $ 393.3 | $ 393.2 |
Senior Notes | 4.625% Senior Notes due 2031 | Estimated Fair Value | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Carrying amounts and estimated fair values of financial instruments | 415 | 424.9 |
Other notes payable | Carrying Amount | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Carrying amounts and estimated fair values of financial instruments | 39.7 | 39.8 |
Other notes payable | Estimated Fair Value | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Carrying amounts and estimated fair values of financial instruments | 39.7 | 39.8 |
Letters of credit | Carrying Amount | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Carrying amounts and estimated fair values of financial instruments | 0 | 0 |
Letters of credit | Estimated Fair Value | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Carrying amounts and estimated fair values of financial instruments | $ 37.7 | $ 36.7 |
Share-Based Payments (Details)
Share-Based Payments (Details) - USD ($) shares in Millions, $ in Millions | 1 Months Ended | 3 Months Ended |
Feb. 29, 2020 | Mar. 31, 2021 | |
Restricted Stock | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Restricted stock awards issued (shares) | 0.5 | |
Restricted Stock | Service Condition | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Restricted stock awards issued (shares) | 0.2 | |
Restricted Stock | Service and Performance Condition | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Performance measurement period | 2 years | |
Stock Options | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Stock options granted (shares) | 0.1 | |
SARs | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Cash used to settle award | $ 101 |
Income Taxes (Details)
Income Taxes (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2021 | Mar. 31, 2020 | |
Income Tax Disclosure [Abstract] | ||
Provision for income tax expense | $ 34.5 | $ 27.1 |
Earnings per Common Share - Com
Earnings per Common Share - Computation of Basic and Diluted Earnings Per Common Share (Details) - USD ($) $ / shares in Units, shares in Millions, $ in Millions | 3 Months Ended | |
Mar. 31, 2021 | Mar. 31, 2020 | |
Basic Numerator: | ||
Income from continuing operations | $ 132.8 | $ 108.8 |
Less: Net income attributable to noncontrolling interests included in continuing operations | (25.5) | (21.7) |
Less: Income allocated to participating securities | (0.5) | (0.3) |
Income from continuing operations attributable to Encompass Health common shareholders | 106.8 | 86.8 |
Loss from discontinued operations, net of tax, attributable to Encompass Health common shareholders | 0 | (0.1) |
Net income attributable to Encompass Health common shareholders | $ 106.8 | $ 86.7 |
Basic Denominator: | ||
Basic weighted average common shares outstanding (in shares) | 99 | 98.2 |
Basic earnings per share attributable to Encompass Health common shareholders: | ||
Continuing operations (in dollars per share) | $ 1.08 | $ 0.88 |
Discontinued operations (in dollars per share) | 0 | 0 |
Net income (in dollars per share) | $ 1.08 | $ 0.88 |
Diluted Numerator | ||
Income from continuing operations | $ 132.8 | $ 108.8 |
Less: Net income attributable to noncontrolling interests included in continuing operations | (25.5) | (21.7) |
Income from continuing operations attributable to Encompass Health common shareholders | 107.3 | 87.1 |
Loss from discontinued operations, net of tax, attributable to Encompass Health common shareholders | 0 | (0.1) |
Net income attributable to Encompass Health common shareholders | $ 107.3 | $ 87 |
Diluted Denominator | ||
Diluted weighted average common shares outstanding (in shares) | 100.2 | 99.6 |
Diluted earnings per share attributable to Encompass Health common shareholders: | ||
Continuing operations (in dollars per share) | $ 1.07 | $ 0.87 |
Discontinued operations (in dollars per share) | 0 | 0 |
Net income (in dollars per share) | $ 1.07 | $ 0.87 |
Earnings per Common Share - Rec
Earnings per Common Share - Reconciliation of Weighted Average Number of Shares Outstanding (Details) - shares shares in Millions | 3 Months Ended | |
Mar. 31, 2021 | Mar. 31, 2020 | |
Earnings Per Share [Abstract] | ||
Basic weighted average common shares outstanding (in shares) | 99 | 98.2 |
Restricted stock awards, dilutive stock options, and restricted stock units (shares) | 1.2 | 1.4 |
Diluted weighted average common shares outstanding (in shares) | 100.2 | 99.6 |
Contingencies and Other Commi_2
Contingencies and Other Commitments (Details) $ in Millions | 1 Months Ended |
Jul. 31, 2019USD ($) | |
Maximum | Settled Litigation | Nichols Litigation | |
Loss Contingencies [Line Items] | |
Cash payment for litigation settlement | $ 0.1 |
Segment Reporting - Textual (De
Segment Reporting - Textual (Details) | 3 Months Ended |
Mar. 31, 2021statehospitallocationsegment | |
Segment Reporting Information [Line Items] | |
Number of operating segments | segment | 2 |
Number of states in which entity operates | state | 39 |
Inpatient Rehabilitation | |
Segment Reporting Information [Line Items] | |
Number of states in which entity operates | state | 35 |
Number of inpatient rehabilitation hospitals operated | 138 |
Number of solely owned inpatient rehabilitation hospitals | 86 |
Number of jointly owned inpatient rehabilitation hospitals | 52 |
Number of inpatient rehabilitation units under management contracts | 4 |
Inpatient Rehabilitation | Minimum | |
Segment Reporting Information [Line Items] | |
Joint venture ownership percentage | 50.00% |
Inpatient Rehabilitation | Maximum | |
Segment Reporting Information [Line Items] | |
Joint venture ownership percentage | 97.50% |
Home Health and Hospice | |
Segment Reporting Information [Line Items] | |
Number of states in which entity operates | state | 31 |
Number of home health locations | location | 241 |
Number of hospice locations | location | 82 |
Number of hospitals or agencies operated as a joint venture | 1 |
Number of solely owned hospital based home health and hospice locations | location | 317 |
Number of jointly owned hospital based home health and hospice locations | location | 6 |
Home Health and Hospice | Minimum | |
Segment Reporting Information [Line Items] | |
Joint venture ownership percentage | 50.00% |
Home Health and Hospice | Maximum | |
Segment Reporting Information [Line Items] | |
Joint venture ownership percentage | 81.00% |
Segment Reporting - Segment Rep
Segment Reporting - Segment Reporting Information, Reconciliation of Net Operating Revenues to Segment Adjusted EBITDA (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2021 | Mar. 31, 2020 | |
Segment Reporting Information [Line Items] | ||
Net operating revenues | $ 1,230.4 | $ 1,182 |
Operating expenses: | ||
Salaries and benefits | 687.2 | 679.1 |
Other operating expenses | 162.3 | 159.6 |
Supplies | 51.9 | 45.7 |
Occupancy costs | 20.2 | 20.2 |
Total operating expenses | 1,022.7 | 1,001.8 |
Other (income) expense | (1.4) | 1.9 |
Equity in net income of nonconsolidated affiliates | (1) | (0.8) |
Noncontrolling interests | 25.5 | 21.7 |
Inpatient Rehabilitation | ||
Segment Reporting Information [Line Items] | ||
Net operating revenues | 959.9 | 909.2 |
Operating expenses: | ||
Salaries and benefits | 501.9 | 482.3 |
Other operating expenses | 140 | 134.7 |
Supplies | 45.2 | 39.6 |
Occupancy costs | 15.1 | 15.3 |
Cost of service (excluding depreciation and amortization) | 0 | 0 |
Support and overhead costs | 0 | 0 |
Total operating expenses | 702.2 | 671.9 |
Other (income) expense | (1.5) | 1.6 |
Equity in net income of nonconsolidated affiliates | (0.8) | (0.6) |
Noncontrolling interests | 25.1 | 20.8 |
Segment Adjusted EBITDA | 234.9 | 215.5 |
Capital expenditures | 99.8 | 83.3 |
Home Health and Hospice | ||
Segment Reporting Information [Line Items] | ||
Net operating revenues | 270.5 | 272.8 |
Operating expenses: | ||
Salaries and benefits | 0 | 0 |
Other operating expenses | 0 | 0 |
Supplies | 0 | 0 |
Occupancy costs | 0 | 0 |
Cost of service (excluding depreciation and amortization) | 118.1 | 130.9 |
Support and overhead costs | 101.4 | 100.2 |
Total operating expenses | 219.5 | 231.1 |
Other (income) expense | 0 | 0 |
Equity in net income of nonconsolidated affiliates | (0.2) | (0.2) |
Noncontrolling interests | 0.4 | 0.9 |
Segment Adjusted EBITDA | 50.8 | 41 |
Capital expenditures | $ 0.9 | $ 1.5 |
Segment Reporting - Reconciliat
Segment Reporting - Reconciliation of Segment Adjusted EBITDA to Income from Continuing Operations Before Income Tax Expense (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2021 | Mar. 31, 2020 | |
Segment Reporting, Reconciling Item for Operating Profit (Loss) from Segment to Consolidated [Line Items] | ||
General and administrative expenses | $ (38.6) | $ (35.6) |
Depreciation and amortization | (62.5) | (58.8) |
Government, class action, and related settlements | 0 | (2.8) |
Net income attributable to noncontrolling interests | 25.5 | 21.7 |
Income from continuing operations before income tax expense | 167.3 | 135.9 |
Operating Segments | ||
Segment Reporting, Reconciling Item for Operating Profit (Loss) from Segment to Consolidated [Line Items] | ||
Total Segment Adjusted EBITDA | 285.7 | 256.5 |
Segment Reconciling Items | ||
Segment Reporting, Reconciling Item for Operating Profit (Loss) from Segment to Consolidated [Line Items] | ||
General and administrative expenses | (38.6) | (35.6) |
Depreciation and amortization | (62.5) | (58.8) |
Gain (loss) on disposal or impairment of assets | 0.1 | (0.1) |
Government, class action, and related settlements | 0 | (2.8) |
Interest expense and amortization of debt discounts and fees | (42.8) | (43.2) |
Net income attributable to noncontrolling interests | 25.5 | 21.7 |
Change in fair market value of equity securities | (0.1) | (2.5) |
Gain on consolidation of joint venture formerly accounted for under the equity method of accounting | 0 | 2.2 |
Payroll taxes on SARs exercise | $ 0 | $ (1.5) |
Segment Reporting - Reconcili_2
Segment Reporting - Reconciliation of Revenue from Segments to Consolidated (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2021 | Mar. 31, 2020 | |
Segment Reporting, Revenue Reconciling Item [Line Items] | ||
Net operating revenues | $ 1,230.4 | $ 1,182 |
Inpatient Rehabilitation | ||
Segment Reporting, Revenue Reconciling Item [Line Items] | ||
Net operating revenues | 959.9 | 909.2 |
Inpatient Rehabilitation | Inpatient | ||
Segment Reporting, Revenue Reconciling Item [Line Items] | ||
Net operating revenues | 942.3 | 890 |
Inpatient Rehabilitation | Outpatient and other | ||
Segment Reporting, Revenue Reconciling Item [Line Items] | ||
Net operating revenues | 17.6 | 19.2 |
Home Health and Hospice | ||
Segment Reporting, Revenue Reconciling Item [Line Items] | ||
Net operating revenues | 270.5 | 272.8 |
Home Health and Hospice | Home health | ||
Segment Reporting, Revenue Reconciling Item [Line Items] | ||
Net operating revenues | 219.9 | 224.8 |
Home Health and Hospice | Hospice | ||
Segment Reporting, Revenue Reconciling Item [Line Items] | ||
Net operating revenues | $ 50.6 | $ 48 |