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Business Combinations (Tables)

12 Months Ended

Dec. 31, 2019

Business Combinations [Abstract]

Schedule of Assets Acquired and Liabilities Assumed at the Acquisition Date

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

Property and equipment	$	0.1
Identifiable intangible assets:
Noncompete agreements (useful lives of 2 to 3 years)	1.4
Trade names (useful lives of 20 years)	2.3
Certificates of need (useful lives of 20 years)	12.5
Goodwill	23.2
Total assets acquired	39.5
Total liabilities assumed	(0.2		)
Net assets acquired	$	39.3

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):

Accounts receivable	$	10.2
Prepaid expenses and other current assets	1.7
Property and equipment, net	0.7
Identifiable intangible assets:
Noncompete agreements (useful lives of 5 years)	1.0
Trade name (useful life of 6 months)	1.0
Certificates of need (useful lives of 10 years)	34.3
Licenses (useful lives of 10 years)	14.6
Internal-use software (useful lives of 3 years)	0.1
Goodwill	163.9
Other long-term assets	5.0
Total assets acquired	232.5
Liabilities assumed:
Current portion of long-term debt	0.3
Accounts payable	1.2
Accrued payroll	8.1
Other current liabilities	2.0
Long-term operating lease liabilities	3.1
Total liabilities assumed	14.7
Net assets acquired	$	217.8

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 and liabilities assumed at the acquisition date were as follows (in millions):

Identifiable intangible assets:
Noncompete agreements (useful lives of 2 years)	$	0.1
Trade name (useful life of 20 years)	0.4
Goodwill	4.8
Total assets acquired	5.3
Total liabilities assumed	0.2
Net assets acquired	$	5.1

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)	0.2
Certificates of need (useful lives of 10 years)	2.5
Licenses (useful lives of 10 years)	1.5
Goodwill	8.9
Total assets acquired	13.2
Total liabilities assumed	(0.1		)
Net assets acquired	$	13.1

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

Operating lease right-of-use assets	$	0.2
Identifiable intangible assets:
Noncompete agreements (useful lives of 5 years)	0.2
Certificates of need (useful lives of 10 years)	2.0
License (useful life of 10 years)	0.8
Goodwill	10.8
Total assets acquired	14.0
Liabilities assumed:
Current operating lease liabilities	0.1
Accrued payroll	0.1
Long-term lease liabilities	0.1
Total liabilities assumed	0.3
Net assets acquired	$	13.7

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

Cash and cash equivalents	$	1.3
Prepaid expenses and other current assets	0.3
Property and equipment, net	0.6
Identifiable intangible assets:
Noncompete agreements (useful lives of 5 years)	0.5
Trade name (useful life of 1 year)	1.4
Certificates of need (useful lives of 10 years)	16.6
Licenses (useful lives of 10 years)	21.6
Goodwill	96.1
Total assets acquired	138.4
Liabilities assumed:
Accounts payable	1.7
Accrued payroll	4.0
Total liabilities assumed	5.7
Net assets acquired	$	132.7

Schedule of Noncash or Part Noncash Acquisitions

Information regarding the net cash paid for the inpatient rehabilitation acquisitions during 2019 is as follows (in millions):

Fair value of assets acquired	$	0.5
Goodwill	4.8
Fair value of liabilities assumed	(0.2		)
Fair value of noncontrolling interest owned by joint venture partner	(5.1		)
Net cash paid for acquisitions	$	—

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

Fair value of assets acquired	$	3.2
Goodwill	10.8
Fair value of liabilities assumed	(0.3		)
Net cash paid for acquisitions	$	13.7

Information regarding the net cash paid for Camellia is as follows (in millions):

Fair value of assets acquired, net of $1.3 million of cash acquired	$	41.0
Goodwill	96.1
Fair value of liabilities assumed	(5.7		)
Net cash paid for acquisition	$	131.4

Information regarding the net cash paid for Alacare is as follows (in millions):

Fair value of assets acquired	$	68.6
Goodwill	163.9
Fair value of liabilities assumed	(14.7		)
Net cash paid for acquisition	$	217.8

Information regarding the net cash paid for all 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 acquisitions	$	10.9

Information regarding the net cash paid for the home health acquisitions during 2018 is as follows (in millions):

Fair value of assets acquired	$	4.3
Goodwill	8.9
Fair value of liabilities assumed	(0.1		)
Fair value of noncontrolling interest owned by joint venture partner	(0.6		)
Net cash paid for acquisitions	$	12.5

Information regarding the net cash paid for the inpatient rehabilitation acquisitions during 2018 is as follows (in millions):

Fair value of assets acquired	$	16.3
Goodwill	23.2
Fair value of liabilities assumed	(0.2		)
Fair value of noncontrolling interest owned by joint venture partner	(39.3		)
Net cash paid for acquisitions	$	—

Information regarding the net cash paid for home health and hospice 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

Summary of Actual and Pro Forma Results of Operations for Acquisitions

The following table summarizes the results of operations of the above mentioned acquisitions from their respective dates of acquisition included in our consolidated results of operations and the unaudited pro forma results of operations of the combined entity had the date of the acquisitions been January 1, 2018 (in millions):

	Net Operating Revenues				Net (Loss) Income Attributable to Encompass Health
Acquired entities only: Actual from acquisition date to December 31, 2019
Inpatient Rehabilitation	$	4.4			$	(1.3	)
Alacare	58.5				1.6
Home Health and Hospice	6.5				(1.5		)
Combined entity: Supplemental pro forma from 01/01/2019-12/31/2019 (unaudited)	4,674.6				364.3
Combined entity: Supplemental pro forma from 01/01/2018-12/31/2018 (unaudited)	4,415.9				301.8

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, 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 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, 2017 (in millions):

	Net Operating Revenues				Net (Loss) Income Attributable to Encompass Health
Acquired entities only: Actual from acquisition date to December 31, 2018
Inpatient Rehabilitation	$	9.1			$	(1.6	)
Camellia	50.0				(0.9		)
All Other Home Health and Hospice	3.5				(0.3		)
Combined entity: Supplemental pro forma from 01/01/2018-12/31/2018 (unaudited)	4,337.4				300.0
Combined entity: Supplemental pro forma from 01/01/2017-12/31/2017 (unaudited)	4,039.9				289.0

X

- Definition

Tabular disclosure of pro forma results of operations for a material business acquisition or series of individually immaterial business acquisitions that are material in the aggregate.

+ References

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-Publisher FASB
-Name Accounting Standards Codification
-Topic 805
-SubTopic 10
-Section 50
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-Publisher FASB
-Name Accounting Standards Codification
-Topic 805
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- Definition

Tabular disclosure of a material business combination completed during the period, including background, timing, and recognized assets and liabilities. This table does not include leveraged buyouts.

+ References

Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 805
-SubTopic 10
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Tabular disclosure of the amounts recognized as of the acquisition date for each major class of assets acquired and liabilities assumed. May include but not limited to the following: (a) acquired receivables; (b) contingencies recognized at the acquisition date; and (c) the fair value of noncontrolling interests in the acquiree.

+ References

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