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Business Combinations (Tables)

12 Months Ended

Dec. 31, 2017

Dec. 31, 2016

Dec. 31, 2015

Schedule of Assets Acquired and Liabilities Assumed at the Acquisition Date

The fair value of the assets acquired at the acquisition date were as follows (in millions):



Property and equipment	$	0.1
Identifiable intangible assets:
Noncompete agreements (useful lives of 2 to 3 years)	0.6
Trade name (useful life of 20 years)	0.5
Certificate of need (useful life of 20 years)	9.8
Goodwill	24.0
Total assets acquired	$	35.0

The fair value of the assets acquired and liabilities assumed at the acquisition date were as follows (in millions):



Total current assets	$	0.1
Identifiable intangible asset:
Noncompete agreements (useful lives of 5 years)	0.8
Trade name (useful life of 1 year)	0.1
Certificates of need (useful lives of 10 years)	1.8
Licenses (useful lives of 10 years)	4.0
Goodwill	21.4
Total assets acquired	28.2
Total liabilities assumed	(0.3		)
Net assets acquired	$	27.9

The fair value of the assets acquired at the acquisition date were as follows (in millions):



Property and equipment	$	5.3
Identifiable intangible assets:
Noncompete agreements (useful lives of 1 to 3 years)	0.4
Trade names (useful lives of 20 years)	1.0
Goodwill	9.4
Total assets acquired	$	16.1

The fair value of the assets acquired and liabilities assumed at the acquisition date were as follows (in millions):



Identifiable intangible asset:
Noncompete agreements (useful lives of 5 years)	$	1.1
Trade names (useful lives of 1 year)	0.7
Certificate of needs (useful lives of 10 years)	1.9
Licenses (useful lives of 10 years)	3.4
Goodwill	41.4
Total assets acquired	48.5
Total liabilities assumed	(0.4		)
Net assets acquired	$	48.1

The fair value of the assets acquired and liabilities assumed at the acquisition dates for the other inpatient rehabilitation transactions completed in 2015 were as follows (in millions):



Total current assets	$	10.1
Property and equipment	42.7
Identifiable intangible assets:
Noncompete agreements (useful lives of 2 to 3 years)	0.1
Trade names (useful lives of 20 years)	0.8
Certificates of need (useful lives of 20 years)	8.8
Licenses (useful lives of 20 years)	0.2
Goodwill	0.7
Total assets acquired	63.4
Total liabilities assumed	(2.7		)
Net assets acquired	$	60.7

The fair value of the assets acquired and liabilities assumed at the acquisition date for CareSouth were as follows (in millions):



Cash and cash equivalents	$	0.4
Accounts receivable	10.5
Prepaid expenses and other current assets	2.0
Property and equipment	0.7
Identifiable intangible assets:
Noncompete agreements (useful lives of 3 years)	0.8
Trade name (useful life of 5 years)	2.8
Certificates of need (useful lives of 10 years)	15.6
Licenses (useful lives of 10 years)	13.0
Internal-use software	0.4
Goodwill	143.3
Investment in nonconsolidated subsidiaries	2.2
Total assets acquired	191.7
Liabilities assumed:
Current portion of long-term debt	0.1
Accounts payable	2.7
Accrued payroll	2.4
Other current liabilities	2.8
Long-term debt, net of current portion	0.2
Deferred tax liabilties	9.5
Total liabilities assumed	17.7
Noncontrolling interests	4.3
Net assets acquired	$	169.7

The fair value of the assets acquired and liabilities assumed at the acquisition dates for the other home health and hospice transactions completed in 2015 were as follows (in millions):



Property and equipment	$	0.1
Identifiable intangible assets:
Noncompete agreements (useful lives of 2 to 5 years)	1.3
Trade names (useful lives of 1 year)	0.5
Certificates of need (useful lives of 10 years)	4.9
Licenses (useful lives of 10 years)	3.6
Goodwill	20.3
Total assets acquired	30.7
Total liabilities assumed	(0.2		)
Net assets acquired	$	30.5

The fair value of the assets acquired and liabilities assumed at the acquisition date for Reliant were as follows (in millions):



Cash and cash equivalents	$	42.6
Accounts receivable	25.7
Prepaid expenses and other current assets	2.8
Property and equipment	220.6
Identifiable intangible assets:
Noncompete agreements (useful lives of 1 to 2 years)	9.7
Trade names (useful lives of 20 years)	8.9
Certificates of need (useful lives of 20 years)	36.6
Licenses (useful lives of 20 years)	11.4
Goodwill	642.6
Other long-term assets	0.9
Total assets acquired	1,001.8
Liabilities assumed:
Current portion of long-term debt	4.1
Accounts payable	1.7
Accrued payroll	3.7
Other current liabilities	10.8
Long-term debt, net of current portion	205.8
Deferred tax liabilities	3.9
Total liabilities assumed	230.0
Noncontrolling interests	0.4
Net assets acquired	$	771.4

Schedule of Noncash or Part Noncash Acquisitions

Information regarding the net cash paid for the inpatient rehabilitation acquisitions during 2017 is as follows (in millions):



Fair value of assets acquired	$	11.0
Goodwill	24.0
Fair value of noncontrolling interest owned by joint venture partner	(24.1		)
Net cash paid for acquisition	$	10.9

Information regarding the net cash paid for the home health acquisitions during 2017 is as follows (in millions):



Fair value of assets acquired	$	6.8
Goodwill	21.4
Fair value of liabilities assumed	(0.3		)
Net cash paid for acquisitions	$	27.9

Information regarding the net cash paid for all inpatient rehabilitation acquisitions during 2016 is as follows (in millions):



Fair value of assets acquired	$	6.7
Goodwill	9.4
Fair value of noncontrolling interest owned by joint venture partner	(16.1		)
Net cash paid for acquisition	$	—

Information regarding the net cash paid for home health and hospice acquisitions during 2016 is as follows (in millions):



Fair value of assets acquired	$	7.1
Goodwill	41.4
Fair value of liabilities assumed	(0.4		)
Net cash paid for acquisitions	$	48.1

Information regarding the net cash paid for the acquisition of Reliant is as follows (in millions):



Fair value of assets acquired, net of $42.6 million of cash acquired	$	316.6
Goodwill	642.6
Fair value of liabilities assumed	(230.0		)
Noncontrolling interests	(0.4		)
Net cash paid for acquisition	$	728.8

Information regarding the net cash paid for other inpatient rehabilitation acquisitions during 2015 is as follows (in millions):



Fair value of assets acquired	$	62.8
Goodwill	0.7
Fair value of liabilities assumed	(2.7		)
Fair value of noncontrolling interest owned by joint venture partner	(4.2		)
Net cash paid for acquisitions	$	56.6

Information regarding the net cash paid for the acquisition of CareSouth is as follows (in millions):



Fair value of assets acquired, net of $0.4 million of cash acquired	$	48.0
Goodwill	143.3
Fair value of liabilities assumed	(17.7		)
Fair value of noncontrolling interest owned by joint venture partner	(4.3		)
Net cash paid for acquisitions	$	169.3

Information regarding the net cash paid for the other home health and hospice acquisitions during 2015 is as follows (in millions):



Fair value of assets acquired	$	10.4
Goodwill	20.3
Fair value of liabilities assumed	(0.2		)
Net cash paid for acquisitions	$	30.5

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, 2016 (in millions):



	Net Operating Revenues		Net (Loss) Income Attributable to Encompass Health
Acquired entities only: Actual from acquisition date to December 31, 2017	$	32.9	$	(6.3	)
Combined entity: Supplemental pro forma from 01/01/2017-12/31/2017 (unaudited)	3,996.1		260.3
Combined entity: Supplemental pro forma from 01/01/2016-12/31/2016 (unaudited)	3,771.5		254.8

The following table summarizes the results of operations of the above mentioned inpatient rehabilitation hospitals and home health and hospice agencies 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, 2015 (in millions):



	Net Operating Revenues		Net (Loss) Income Attributable to Encompass Health
Acquired entities only: Actual from acquisition date to December 31, 2016	$	27.4	$	(2.2	)
Combined entity: Supplemental pro forma from 1/01/2016-12/31/2016 (unaudited)	3,745.6		252.2
Combined entity: Supplemental pro forma from 1/01/2015-12/31/2015 (unaudited)	3,217.1		187.3

The following table summarizes the results of operations of the above mentioned transactions 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, 2014 (in millions):



	Net Operating Revenues		Net Income Attributable to Encompass Health
Acquired entities only: Actual from acquisition date to December 31, 2015:
Reliant	$	63.7	$	11.2
All Other Inpatient	54.7		1.7
CareSouth	19.2		2.5
All Other Home Health and Hospice	17.8		1.2
Combined entity: Supplemental pro forma from 1/01/2015-12/31/2015 (unaudited)	3,479.9		234.0
Combined entity: Supplemental pro forma from 1/01/2014-12/31/2014 (unaudited)	2,851.0		276.9