Condensed Consolidating Financial Information (Tables)

3 Months Ended

Mar. 31, 2019

Condensed Financial Information Disclosure [Abstract]

Condensed Consolidating Statement of Comprehensive Income



	Three Months Ended March 31, 2019
	Encompass Health Corporation			Guarantor Subsidiaries			Nonguarantor Subsidiaries			Eliminating Entries			Encompass Health Consolidated
	(In Millions)
Net operating revenues	$	5.1		$	606.5		$	546.0		$	(33.6	)	$	1,124.0
Operating expenses:
Salaries and benefits	15.9			288.9			321.1			(5.1		)	620.8
Other operating expenses	10.3			84.7			67.6			(12.5		)	150.1
Occupancy costs	0.5			24.9			10.2			(16.0		)	19.6
Supplies	—			24.0			16.1			—			40.1
General and administrative expenses	39.9			—			13.5			—			53.4
Depreciation and amortization	5.0			26.3			21.2			—			52.5
Total operating expenses	71.6			448.8			449.7			(33.6		)	936.5
Interest expense and amortization of debt discounts and fees	30.1			6.2			7.7			(6.8		)	37.2
Other income	(7.7		)	(0.3		)	(2.5		)	6.8			(3.7		)
Equity in net income of nonconsolidated affiliates	—			(2.1		)	(0.4		)	—			(2.5		)
Equity in net income of consolidated affiliates	(130.2		)	(17.0		)	—			147.2			—
Management fees	(39.8		)	29.5			10.3			—			—
Income from continuing operations before income tax (benefit) expense	81.1			141.4			81.2			(147.2		)	156.5
Provision for income tax (benefit) expense	(21.7		)	37.8			14.7			—			30.8
Income from continuing operations	102.8			103.6			66.5			(147.2		)	125.7
Loss from discontinued operations, net of tax	(0.5		)	—			—			—			(0.5		)
Net and comprehensive income	102.3			103.6			66.5			(147.2		)	125.2
Less: Net and comprehensive income attributable to noncontrolling interests	—			—			(22.9		)	—			(22.9		)
Net and comprehensive income attributable to Encompass Health	$	102.3		$	103.6		$	43.6		$	(147.2	)	$	102.3



	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		$	594.6		$	478.6		$	(32.6	)	$	1,046.0
Operating expenses:
Salaries and benefits	13.2			282.4			280.0			(5.4		)	570.2
Other operating expenses	8.4			84.6			60.6			(12.4		)	141.2
Occupancy costs	0.5			23.8			9.1			(14.8		)	18.6
Supplies	—			24.7			15.2			—			39.9
General and administrative expenses	39.4			—			21.7			—			61.1
Depreciation and amortization	2.0			26.6			17.3			—			45.9
Total operating expenses	63.5			442.1			403.9			(32.6		)	876.9
Interest expense and amortization of debt discounts and fees	29.8			5.7			5.2			(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	(112.3		)	(16.5		)	—			128.8			—
Management fees	(38.4		)	28.8			9.6			—			—
Income from continuing operations before income tax (benefit) expense	67.5			136.6			60.4			(128.8		)	135.7
Provision for income tax (benefit) expense	(16.8		)	36.8			10.0			—			30.0
Income from continuing operations	84.3			99.8			50.4			(128.8		)	105.7
Loss from discontinued operations, net of tax	(0.5		)	—			—			—			(0.5		)
Net and comprehensive income	83.8			99.8			50.4			(128.8		)	105.2
Less: Net and comprehensive income attributable to noncontrolling interests	—			—			(21.4		)	—			(21.4		)
Net and comprehensive income attributable to Encompass Health	$	83.8		$	99.8		$	29.0		$	(128.8	)	$	83.8

Condensed Consolidating Balance Sheet



	As of March 31, 2019
	Encompass Health Corporation		Guarantor Subsidiaries		Nonguarantor Subsidiaries		Eliminating Entries			Encompass Health Consolidated
	(In Millions)
Assets
Current assets:
Cash and cash equivalents	$	34.7	$	3.5	$	17.9	$	—		$	56.1
Restricted cash	—		—		59.0		—			59.0
Accounts receivable	—		292.5		208.1		—			500.6
Other current assets	69.3		32.2		67.6		(102.1		)	67.0
Total current assets	104.0		328.2		352.6		(102.1		)	682.7
Property and equipment, net	126.0		1,090.6		519.6		—			1,736.2
Operating lease right-of-use assets	15.2		176.6		122.7		(29.6		)	284.9
Goodwill	—		912.2		1,199.4		—			2,111.6
Intangible assets, net	20.5		93.4		321.5		—			435.4
Deferred income tax assets	38.5		28.9		—		(26.9		)	40.5
Other long-term assets	50.7		95.4		146.4		—			292.5
Intercompany notes receivable	540.4		—		—		(540.4		)	—
Intercompany receivable and investments in consolidated affiliates	2,957.6		546.6		—		(3,504.2		)	—
Total assets	$	3,852.9	$	3,271.9	$	2,662.2	$	(4,203.2	)	$	5,583.8
Liabilities and Shareholders’ Equity
Current liabilities:
Current portion of long-term debt	$	35.4	$	8.5	$	10.9	$	(17.5	)	$	37.3
Current operating lease liabilities	2.5		25.6		27.5		(7.3		)	48.3
Accounts payable	9.5		48.7		36.5		—			94.7
Accrued expenses and other current liabilities	262.2		86.4		323.9		(84.6		)	587.9
Total current liabilities	309.6		169.2		398.8		(109.4		)	768.2
Long-term debt, net of current portion	2,176.8		292.1		52.9		—			2,521.8
Long-term operating lease liabilities	12.9		155.0		99.4		(22.3		)	245.0
Intercompany notes payable	—		—		540.4		(540.4		)	—
Other long-term liabilities	39.3		10.8		136.0		(26.8		)	159.3
Intercompany payable	—		—		64.6		(64.6		)	—
	2,538.6		627.1		1,292.1		(763.5		)	3,694.3
Commitments and contingencies
Redeemable noncontrolling interests	—		—		273.0		—			273.0
Shareholders’ equity:
Encompass Health shareholders’ equity	1,314.3		2,644.8		794.9		(3,439.7		)	1,314.3
Noncontrolling interests	—		—		302.2		—			302.2
Total shareholders’ equity	1,314.3		2,644.8		1,097.1		(3,439.7		)	1,616.5
Total liabilities and shareholders’ equity	$	3,852.9	$	3,271.9	$	2,662.2	$	(4,203.2	)	$	5,583.8



	As of December 31, 2018
	Encompass Health Corporation		Guarantor Subsidiaries		Nonguarantor Subsidiaries		Eliminating Entries			Encompass Health Consolidated
	(In Millions)
Assets
Current assets:
Cash and cash equivalents	$	41.5	$	3.0	$	24.7	$	—		$	69.2
Restricted cash	—		—		59.0		—			59.0
Accounts receivable	—		270.7		197.0		—			467.7
Other current assets	36.3		17.6		31.1		(18.8		)	66.2
Total current assets	77.8		291.3		311.8		(18.8		)	662.1
Property and equipment, net	123.9		1,041.5		469.4		—			1,634.8
Goodwill	—		912.2		1,188.6		—			2,100.8
Intangible assets, net	21.4		96.5		325.5		—			443.4
Deferred income tax assets	47.9		28.9		—		(33.9		)	42.9
Other long-term assets	47.9		101.3		141.8		—			291.0
Intercompany notes receivable	535.3		—		—		(535.3		)	—
Intercompany receivable and investments in consolidated affiliates	2,904.4		456.8		—		(3,361.2		)	—
Total assets	$	3,758.6	$	2,928.5	$	2,437.1	$	(3,949.2	)	$	5,175.0
Liabilities and Shareholders’ Equity
Current liabilities:
Current portion of long-term debt	$	35.0	$	7.6	$	10.7	$	(17.5	)	$	35.8
Accounts payable	8.9		46.4		34.7		—			90.0
Accrued expenses and other current liabilities	211.8		76.4		259.8		(1.3		)	546.7
Total current liabilities	255.7		130.4		305.2		(18.8		)	672.5
Long-term debt, net of current portion	2,188.7		262.1		27.8		—			2,478.6
Intercompany notes payable	—		—		535.3		(535.3		)	—
Other long-term liabilities	37.5		17.1		184.4		(33.8		)	205.2
Intercompany payable	—		—		53.3		(53.3		)	—
	2,481.9		409.6		1,106.0		(641.2		)	3,356.3
Commitments and contingencies
Redeemable noncontrolling interests	—		—		261.7		—			261.7
Shareholders’ equity:
Encompass Health shareholders’ equity	1,276.7		2,518.9		789.1		(3,308.0		)	1,276.7
Noncontrolling interests	—		—		280.3		—			280.3
Total shareholders’ equity	1,276.7		2,518.9		1,069.4		(3,308.0		)	1,557.0
Total liabilities and shareholders’ equity	$	3,758.6	$	2,928.5	$	2,437.1	$	(3,949.2	)	$	5,175.0

Condensed Consolidating Statement of Cash Flows



	Three Months Ended March 31, 2019
	Encompass Health Corporation			Guarantor Subsidiaries			Nonguarantor Subsidiaries			Eliminating Entries			Encompass Health Consolidated
	(In Millions)
Net cash provided by operating activities	$	18.6		$	89.6		$	51.7		$	—		$	159.9
Cash flows from investing activities:
Purchases of property and equipment	(6.8		)	(32.5		)	(33.0		)	—			(72.3		)
Acquisitions of businesses, net of cash acquired	—			—			(13.7		)	—			(13.7		)
Funding of intercompany note receivable	(8.0		)	—			—			8.0			—
Proceeds from repayment of intercompany note receivable	5.0			—			—			(5.0		)	—
Other, net	(4.0		)	(0.1		)	(1.4		)	—			(5.5		)
Net cash used in investing activities	(13.8		)	(32.6		)	(48.1		)	3.0			(91.5		)
Cash flows from financing activities:
Principal borrowings on intercompany note payable	—			—			8.0			(8.0		)	—
Principal payments on intercompany note payable	—			—			(5.0		)	5.0			—
Borrowings on revolving credit facility	25.0			—			—			—			25.0
Payments on revolving credit facility	(30.0		)	—			—			—			(30.0		)
Dividends paid on common stock	(28.2		)	—			(0.1		)	—			(28.3		)
Distributions paid to noncontrolling interests of consolidated affiliates	—			—			(19.5		)	—			(19.5		)
Taxes paid on behalf of employees for shares withheld	(14.7		)	—			(1.2		)	—			(15.9		)
Other, net	(14.7		)	(2.1		)	3.8			—			(13.0		)
Change in intercompany advances	51.0			(54.4		)	3.4			—			—
Net cash used in financing activities	(11.6		)	(56.5		)	(10.6		)	(3.0		)	(81.7		)
(Decrease) increase in cash, cash equivalents, and restricted cash	(6.8		)	0.5			(7.0		)	—			(13.3		)
Cash, cash equivalents, and restricted cash at beginning of period	41.5			3.0			89.0			—			133.5
Cash, cash equivalents, and restricted cash at end of period	$	34.7		$	3.5		$	82.0		$	—		$	120.2

Reconciliation of Cash, Cash Equivalents, and Restricted Cash
Cash and cash equivalents at beginning of period	$	41.5		$	3.0		$	24.7		$	—		$	69.2
Restricted cash at beginning of period	—			—			59.0			—			59.0
Restricted cash included in other long term assets at beginning of period	—			—			5.3			—			5.3
Cash, cash equivalents, and restricted cash at beginning of period	$	41.5		$	3.0		$	89.0		$	—		$	133.5

Cash and cash equivalents at end of period	$	34.7		$	3.5		$	17.9		$	—		$	56.1
Restricted cash at end of period	—			—			59.0			—			59.0
Restricted cash included in other long-term assets at end of period	—			—			5.1			—			5.1
Cash, cash equivalents, and restricted cash at end of period	$	34.7		$	3.5		$	82.0		$	—		$	120.2



	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	$	10.2		$	114.3		$	91.8		$	—		$	216.3
Cash flows from investing activities:
Purchases of property and equipment	(12.3		)	(31.5		)	(16.1		)	—			(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			(31.6		)	(11.6		)	(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		)
Taxes paid on behalf of employees for shares withheld	(7.4		)	—			(0.9		)	—			(8.3		)
Other, net	2.3			(2.0		)	(2.8		)	—			(2.5		)
Change in intercompany advances	115.4			(80.7		)	(34.7		)	—			—
Net cash provided by (used in) financing activities	19.9			(82.7		)	(75.9		)	22.0			(116.7		)
Increase in cash, cash equivalents, and restricted cash	34.7			—			4.3			—			39.0
Cash, cash equivalents, and restricted cash at beginning of period	34.3			3.0			79.5			—			116.8
Cash, cash equivalents, and restricted cash at end of period	$	69.0		$	3.0		$	83.8		$	—		$	155.8

Reconciliation of Cash, Cash Equivalents, and Restricted Cash
Cash and cash equivalents at beginning of period	$	34.3		$	3.0		$	17.1		$	—		$	54.4
Restricted cash at beginning of period	—			—			62.4			—			62.4
Cash, cash equivalents, and restricted cash at beginning of period	$	34.3		$	3.0		$	79.5		$	—		$	116.8

Cash and cash equivalents at end of period	$	69.0		$	3.0		$	14.4		$	—		$	86.4
Restricted cash at end of period	—			—			69.4			—			69.4
Cash, cash equivalents, and restricted cash at end of period	$	69.0		$	3.0		$	83.8		$	—		$	155.8