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Condensed Consolidating Financial Information
 3 Months Ended
Mar. 31, 2018
Condensed Financial Information of Parent Company Only 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 2x. 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 2x 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 2017 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 March 31, 2018
 
Encompass Health Corporation
 
Guarantor Subsidiaries
 
Nonguarantor Subsidiaries
 
Eliminating Entries
 
Encompass Health Consolidated
 
(In Millions)
Net operating revenues
$
5.4

 
$
587.0

 
$
486.2

 
$
(32.6
)
 
$
1,046.0

Operating expenses:
 

 
 

 
 

 
 

 
 
Salaries and benefits
13.2

 
279.2

 
283.2

 
(5.4
)
 
570.2

Other operating expenses
8.4

 
83.7

 
61.5

 
(12.4
)
 
141.2

Occupancy costs
0.5

 
23.7

 
9.2

 
(14.8
)
 
18.6

Supplies
—

 
24.4

 
15.5

 
—

 
39.9

General and administrative expenses
39.4

 
—

 
21.7

 
—

 
61.1

Depreciation and amortization
2.0

 
26.1

 
17.8

 
—

 
45.9

Total operating expenses
63.5

 
437.1

 
408.9

 
(32.6
)
 
876.9

Interest expense and amortization of debt discounts and fees
29.8

 
5.2

 
5.7

 
(5.1
)
 
35.6

Other (income) loss
(4.7
)
 
(0.2
)
 
(0.1
)
 
5.1

 
0.1

Equity in net income of nonconsolidated affiliates
—

 
(1.9
)
 
(0.4
)
 
—

 
(2.3
)
Equity in net income of consolidated affiliates
(112.0
)
 
(17.8
)
 
—

 
129.8

 
—

Management fees
(38.4
)
 
28.4

 
10.0

 
—

 
—

Income from continuing operations before income tax (benefit) expense
67.2

 
136.2

 
62.1

 
(129.8
)
 
135.7

Provision for income tax (benefit) expense
(17.1
)
 
36.7

 
10.4

 
—

 
30.0

Income from continuing operations
84.3

 
99.5

 
51.7

 
(129.8
)
 
105.7

Loss from discontinued operations, net of tax
(0.5
)
 
—

 
—

 
—

 
(0.5
)
Net income
83.8

 
99.5

 
51.7

 
(129.8
)
 
105.2

Less: Net income attributable to noncontrolling interests
—

 
—

 
(21.4
)
 
—

 
(21.4
)
Net income attributable to Encompass Health
$
83.8

 
$
99.5

 
$
30.3

 
$
(129.8
)
 
$
83.8

Comprehensive income
$
83.8

 
$
99.5

 
$
51.7

 
$
(129.8
)
 
$
105.2

Comprehensive income attributable to Encompass Health
$
83.8

 
$
99.5

 
$
30.3

 
$
(129.8
)
 
$
83.8

 
Three Months Ended March 31, 2017
 
Encompass Health Corporation
 
Guarantor Subsidiaries
 
Nonguarantor Subsidiaries
 
Eliminating Entries
 
Encompass Health Consolidated
 
(In Millions)
Net operating revenues
$
5.3

 
$
560.7

 
$
422.3

 
$
(31.2
)
 
$
957.1

Operating expenses:
 

 
 

 
 

 
 

 
 
Salaries and benefits
11.2

 
270.3

 
253.9

 
(5.3
)
 
530.1

Other operating expenses
8.2

 
76.9

 
54.6

 
(11.9
)
 
127.8

Occupancy costs
0.5

 
23.3

 
8.1

 
(14.0
)
 
17.9

Supplies
—

 
23.5

 
13.5

 
—

 
37.0

General and administrative expenses
31.6

 
—

 
4.9

 
—

 
36.5

Depreciation and amortization
2.4

 
25.7

 
17.1

 
—

 
45.2

Total operating expenses
53.9

 
419.7

 
352.1

 
(31.2
)
 
794.5

Interest expense and amortization of debt discounts and fees
35.2

 
5.4

 
5.8

 
(5.1
)
 
41.3

Other income
(5.4
)
 
(0.1
)
 
(0.6
)
 
5.1

 
(1.0
)
Equity in net income of nonconsolidated affiliates
—

 
(1.9
)
 
(0.2
)
 
—

 
(2.1
)
Equity in net income of consolidated affiliates
(86.2
)
 
(9.8
)
 
—

 
96.0

 
—

Management fees
(35.9
)
 
27.1

 
8.8

 
—

 
—

Income from continuing operations before income tax (benefit) expense
43.7

 
120.3

 
56.4

 
(96.0
)
 
124.4

Provision for income tax (benefit) expense
(23.4
)
 
48.0

 
15.1

 
—

 
39.7

Income from continuing operations
67.1

 
72.3

 
41.3

 
(96.0
)
 
84.7

Loss from discontinued operations, net of
tax
(0.3
)
 
—

 
—

 
—

 
(0.3
)
Net income
66.8

 
72.3

 
41.3

 
(96.0
)
 
84.4

Less: Net income attributable to noncontrolling interests
—

 
—

 
(17.6
)
 
—

 
(17.6
)
Net income attributable to Encompass Health
$
66.8

 
$
72.3

 
$
23.7

 
$
(96.0
)
 
$
66.8

Comprehensive income
$
67.1

 
$
72.3

 
$
41.3

 
$
(96.0
)
 
$
84.7

Comprehensive income attributable to Encompass Health
$
67.1

 
$
72.3

 
$
23.7

 
$
(96.0
)
 
$
67.1

 
 
 
As of March 31, 2018
 
Encompass Health Corporation
 
Guarantor Subsidiaries
 
Nonguarantor Subsidiaries
 
Eliminating Entries
 
Encompass Health Consolidated
 
(In Millions)
Assets
 
 
 
 
 
 
 
 
 
Current assets:
 
 
 
 
 
 
 
 
 
Cash and cash equivalents
$
69.0

 
$
2.8

 
$
14.6

 
$
—

 
$
86.4

Restricted cash
—

 
—

 
69.4

 
—

 
69.4

Accounts receivable
—

 
276.9

 
186.2

 
—

 
463.1

Other current assets
81.7

 
19.5

 
75.5

 
(87.1
)
 
89.6

Total current assets
150.7

 
299.2

 
345.7

 
(87.1
)
 
708.5

Property and equipment, net
119.0

 
1,003.5

 
431.8

 
—

 
1,554.3

Goodwill
—

 
854.6

 
1,118.5

 
—

 
1,973.1

Intangible assets, net
11.7

 
103.8

 
280.6

 
—

 
396.1

Deferred income tax assets
96.9

 
8.4

 
5.4

 
(42.2
)
 
68.5

Other long-term assets
49.6

 
97.6

 
91.9

 
—

 
239.1

Intercompany notes receivable
463.6

 
—

 
—

 
(463.6
)
 
—

Intercompany receivable and investments in consolidated affiliates
2,860.0

 
413.5

 
—

 
(3,273.5
)
 
—

Total assets
$
3,751.5

 
$
2,780.6

 
$
2,273.9

 
$
(3,866.4
)
 
$
4,939.6

Liabilities and Shareholders’ Equity
 

 
 

 
 

 
 

 


Current liabilities:
 

 
 

 
 

 
 

 


Current portion of long-term debt
$
32.8

 
$
7.6

 
$
9.8

 
$
(17.5
)
 
$
32.7

Accounts payable
12.2

 
44.2

 
26.7

 
—

 
83.1

Accrued expenses and other current liabilities
217.4

 
73.4

 
235.0

 
(69.6
)
 
456.2

Total current liabilities
262.4

 
125.2

 
271.5

 
(87.1
)
 
572.0

Long-term debt, net of current portion
2,261.7

 
240.2

 
42.5

 
—

 
2,544.4

Intercompany notes payable
—

 
—

 
463.6

 
(463.6
)
 
—

Other long-term liabilities
30.4

 
17.6

 
178.3

 
(42.5
)
 
183.8

Intercompany payable
—

 
—

 
99.4

 
(99.4
)
 
—

 
2,554.5

 
383.0

 
1,055.3

 
(692.6
)
 
3,300.2

Commitments and contingencies


 


 


 


 


Redeemable noncontrolling interests
—

 
—

 
198.6

 
—

 
198.6

Shareholders’ equity:
 

 
 

 
 

 
 

 


Encompass Health shareholders’ equity
1,197.0

 
2,397.6

 
776.2

 
(3,173.8
)
 
1,197.0

Noncontrolling interests
—

 
—

 
243.8

 
—

 
243.8

Total shareholders’ equity
1,197.0

 
2,397.6

 
1,020.0

 
(3,173.8
)
 
1,440.8

Total liabilities and shareholders’ equity
$
3,751.5

 
$
2,780.6

 
$
2,273.9

 
$
(3,866.4
)
 
$
4,939.6


 
As of December 31, 2017
 
Encompass Health Corporation
 
Guarantor Subsidiaries
 
Nonguarantor Subsidiaries
 
Eliminating Entries
 
Encompass Health Consolidated
 
(In Millions)
Assets
 
 
 
 
 
 
 
 
 
Current assets:
 
 
 
 
 
 
 
 
 
Cash and cash equivalents
$
34.3

 
$
2.9

 
$
17.2

 
$
—

 
$
54.4

Restricted cash
—

 
—

 
62.4

 
—

 
62.4

Accounts receivable
—

 
285.2

 
186.9

 
—

 
472.1

Other current assets
61.4

 
21.7

 
48.7

 
(18.5
)
 
113.3

Total current assets
95.7

 
309.8

 
315.2

 
(18.5
)
 
702.2

Property and equipment, net
101.8

 
991.5

 
423.8

 
—

 
1,517.1

Goodwill
—

 
854.6

 
1,118.0

 
—

 
1,972.6

Intangible assets, net
11.8

 
105.1

 
286.2

 
—

 
403.1

Deferred income tax assets
97.4

 
8.4

 
—

 
(42.2
)
 
63.6

Other long-term assets
49.2

 
100.5

 
85.4

 
—

 
235.1

Intercompany notes receivable
486.2

 
—

 
—

 
(486.2
)
 
—

Intercompany receivable and investments in consolidated affiliates
2,839.1

 
311.3

 
—

 
(3,150.4
)
 
—

Total assets
$
3,681.2

 
$
2,681.2

 
$
2,228.6

 
$
(3,697.3
)
 
$
4,893.7

Liabilities and Shareholders’ Equity
 

 
 

 
 

 
 

 


Current liabilities:
 

 
 

 
 

 
 

 


Current portion of long-term debt
$
32.8

 
$
7.4

 
$
9.6

 
$
(17.5
)
 
$
32.3

Accounts payable
10.4

 
43.5

 
24.5

 
—

 
78.4

Accrued expenses and other current liabilities
166.8

 
82.0

 
159.0

 
(1.0
)
 
406.8

Total current liabilities
210.0

 
132.9


193.1


(18.5
)
 
517.5

Long-term debt, net of current portion
2,258.5

 
242.2

 
44.7

 
—

 
2,545.4

Intercompany notes payable
—

 
—

 
486.2

 
(486.2
)
 
—

Other long-term liabilities
31.0

 
17.8

 
178.6

 
(42.1
)
 
185.3

Intercompany payable
—

 
—

 
144.8

 
(144.8
)
 
—

 
2,499.5

 
392.9


1,047.4


(691.6
)
 
3,248.2

Commitments and contingencies


 


 


 


 


Redeemable noncontrolling interests
—

 
—

 
220.9

 
—

 
220.9

Shareholders’ equity:
 

 
 

 
 

 
 

 


Encompass Health shareholders’ equity
1,181.7

 
2,288.3

 
717.4

 
(3,005.7
)
 
1,181.7

Noncontrolling interests
—

 
—

 
242.9

 
—

 
242.9

Total shareholders’ equity
1,181.7

 
2,288.3


960.3


(3,005.7
)
 
1,424.6

Total liabilities and shareholders’ equity
$
3,681.2

 
$
2,681.2


$
2,228.6


$
(3,697.3
)
 
$
4,893.7

 
Three Months Ended March 31, 2018
 
Encompass Health Corporation
 
Guarantor Subsidiaries
 
Nonguarantor Subsidiaries
 
Eliminating Entries
 
Encompass Health Consolidated
 
(In Millions)
Net cash provided by operating activities
$
10.5

 
$
112.3

 
$
93.5

 
$
—

 
$
216.3

Cash flows from investing activities:
 

 
 

 
 

 
 

 
 

Purchases of property and equipment
(12.3
)
 
(31.4
)
 
(16.2
)
 
—

 
(59.9
)
Acquisitions of businesses, net of cash acquired
—

 
—

 
(0.6
)
 
—

 
(0.6
)
Proceeds from repayment of intercompany note receivable
22.0

 
—

 
—

 
(22.0
)
 
—

Other, net
(5.1
)
 
(0.1
)
 
5.1

 
—

 
(0.1
)
Net cash provided by (used in) investing activities
4.6

 
(31.5
)

(11.7
)

(22.0
)
 
(60.6
)
Cash flows from financing activities:
 

 
 

 
 

 
 

 


Principal payments on intercompany note payable
—

 
—

 
(22.0
)
 
22.0

 
—

Borrowings on revolving credit facility
95.0

 
—

 
—

 
—

 
95.0

Payments on revolving credit facility
(95.0
)
 
—

 
—

 
—

 
(95.0
)
Dividends paid on common stock
(25.3
)
 
—

 
(0.1
)
 
—

 
(25.4
)
Purchase of equity interests in consolidated affiliates
(65.1
)
 
—

 
—

 
—

 
(65.1
)
Distributions paid to noncontrolling interests of consolidated affiliates
—

 
—

 
(15.4
)
 
—

 
(15.4
)
Other, net
(5.1
)
 
(1.8
)
 
(3.9
)
 
—

 
(10.8
)
Change in intercompany advances
115.1

 
(79.1
)
 
(36.0
)
 
—

 
—

Net cash provided by (used in) financing activities
19.6

 
(80.9
)

(77.4
)

22.0

 
(116.7
)
Increase (decrease) in cash, cash equivalents, and restricted cash
34.7

 
(0.1
)

4.4


—

 
39.0

Cash, cash equivalents, and restricted cash at beginning of period
34.3

 
2.9

 
79.6

 
—

 
116.8

Cash, cash equivalents, and restricted cash at end of period
$
69.0

 
$
2.8


$
84.0


$
—

 
$
155.8

 
 
 
 
 
 
 
 
 
 
Reconciliation of Cash, Cash Equivalents, and Restricted Cash
 
 
 
 
 
 
 
 
 
Cash and cash equivalents at beginning of period
$
34.3

 
$
2.9

 
$
17.2

 
$
—

 
$
54.4

Restricted cash at beginning of period
—

 
—

 
62.4

 
—

 
62.4

Cash, cash equivalents, and restricted cash at beginning of period
$
34.3

 
$
2.9

 
$
79.6

 
$
—

 
$
116.8

 
 
 
 
 
 
 
 
 
 
Cash and cash equivalents at end of period
$
69.0

 
$
2.8

 
$
14.6

 
$
—

 
$
86.4

Restricted cash at end of period
—

 
—

 
69.4

 
—

 
69.4

Cash, cash equivalents, and restricted cash at end of period
$
69.0

 
$
2.8

 
$
84.0

 
$
—

 
$
155.8


 
Three Months Ended March 31, 2017
 
Encompass Health Corporation
 
Guarantor Subsidiaries
 
Nonguarantor Subsidiaries
 
Eliminating Entries
 
Encompass Health Consolidated
 
(In Millions)
Net cash provided by operating activities
$
45.1

 
$
72.1

 
$
63.6

 
$
—

 
$
180.8

Cash flows from investing activities:
 

 
 

 
 

 
 

 
 

Purchases of property and equipment
(5.2
)
 
(12.9
)
 
(23.1
)
 
—

 
(41.2
)
Acquisitions of businesses, net of cash acquired
(10.9
)
 
—

 
(5.5
)
 
—

 
(16.4
)
Proceeds from repayment of intercompany note receivable
7.0

 
—

 
—

 
(7.0
)
 
—

Other, net
(3.8
)
 
8.8

 
3.5

 
—

 
8.5

Net cash used in investing activities
(12.9
)
 
(4.1
)
 
(25.1
)
 
(7.0
)
 
(49.1
)
Cash flows from financing activities:
 

 
 

 
 

 
 

 


Principal payments on intercompany note payable
—

 
—

 
(7.0
)
 
7.0

 
—

Borrowings on revolving credit facility
55.0

 
—

 
—

 
—

 
55.0

Payments on revolving credit facility
(122.0
)
 
—

 
—

 
—

 
(122.0
)
Repurchases of common stock, including fees and expenses
(18.1
)
 
—

 
—

 
—

 
(18.1
)
Dividends paid on common stock
(22.2
)
 
—

 
—

 
—

 
(22.2
)
Proceeds from exercising stock warrants
26.6

 
—

 
—

 
—

 
26.6

Distributions paid to noncontrolling interests of consolidated affiliates
—

 
—

 
(11.5
)
 
—

 
(11.5
)
Other, net
(12.0
)
 
(1.6
)
 
(0.5
)
 
—

 
(14.1
)
Change in intercompany advances
82.3

 
(65.4
)
 
(16.9
)
 
—

 
—

Net cash used in financing activities
(10.4
)
 
(67.0
)
 
(35.9
)
 
7.0

 
(106.3
)
Increase in cash, cash equivalents, and restricted cash
21.8

 
1.0

 
2.6

 
—

 
25.4

Cash, cash equivalents, and restricted cash at beginning of period
20.6

 
1.6

 
79.2

 
—

 
101.4

Cash, cash equivalents, and restricted cash at end of period
$
42.4

 
$
2.6

 
$
81.8

 
$
—

 
$
126.8

 
 
 
 
 
 
 
 
 
 
Reconciliation of Cash, Cash Equivalents, and Restricted Cash
 
 
 
 
 
 
 
 
 
Cash and cash equivalents at beginning of period
$
20.6

 
$
1.6

 
$
18.3

 
$
—

 
$
40.5

Restricted cash at beginning of period
—

 
—

 
60.9

 
—

 
60.9

Cash, cash equivalents, and restricted cash at beginning of period
$
20.6

 
$
1.6

 
$
79.2

 
$
—

 
$
101.4

 
 
 
 
 
 
 
 
 
 
Cash and cash equivalents at end of period
$
42.4

 
$
2.6

 
$
16.2

 
$
—

 
$
61.2

Restricted cash at end of period
—

 
—

 
65.6

 
—

 
65.6

Cash, cash equivalents, and restricted cash at end of period
$
42.4

 
$
2.6

 
$
81.8

 
$
—

 
$
126.8