Condensed Consolidating Financial Information (Tables)

3 Months Ended

Mar. 31, 2020

Condensed Financial Information Disclosure [Abstract]

Condensed Consolidating Statement of Income



	Three Months Ended March 31, 2020
	Encompass Health Corporation			Guarantor Subsidiaries			Non-guarantor Subsidiaries			Holdings			Eliminating Entries			Encompass Health Consolidated
	(In Millions)
Net operating revenues	$	4.6		$	622.5		$	323.3		$	266.8		$	(35.2	)	$	1,182.0
Operating expenses:
Salaries and benefits	16.7			309.8			164.2			193.3			(4.9		)	679.1
Other operating expenses	9.6			86.9			52.0			24.1			(13.0		)	159.6
Occupancy costs	0.6			25.4			6.7			4.8			(17.3		)	20.2
Supplies	—			26.5			13.2			6.0			—			45.7
General and administrative expenses	34.7			—			—			0.9			—			35.6
Depreciation and amortization	5.3			28.7			15.0			9.8			—			58.8
Government, class action, and related settlements	2.8			—			—			—			—			2.8
Total operating expenses	69.7			477.3			251.1			238.9			(35.2		)	1,001.8
Interest expense and amortization of debt discounts and fees	35.8			6.3			1.4			4.9			(5.2		)	43.2
Other (income) expense	(2.3		)	(0.4		)	1.6			(2.2		)	5.2			1.9
Equity in net income of nonconsolidated affiliates	—			(0.5		)	(0.1		)	(0.2		)	—			(0.8		)
Equity in net income of consolidated affiliates	(122.2		)	(17.8		)	—			—			140.0			—
Management fees	(42.0		)	30.2			11.8			—			—			—
Income from continuing operations before income tax (benefit) expense	65.6			127.4			57.5			25.4			(140.0		)	135.9
Provision for income tax (benefit) expense	(21.5		)	33.0			9.1			6.5			—			27.1
Income from continuing operations	87.1			94.4			48.4			18.9			(140.0		)	108.8
Loss from discontinued operations, net of tax	(0.1		)	—			—			—			—			(0.1		)
Net and comprehensive income	87.0			94.4			48.4			18.9			(140.0		)	108.7
Less: Net and comprehensive income attributable to noncontrolling interests	—			—			(21.2		)	(0.5		)	—			(21.7		)
Net and comprehensive income attributable to Encompass Health	$	87.0		$	94.4		$	27.2		$	18.4		$	(140.0	)	$	87.0



	Three Months Ended March 31, 2019
	Encompass Health Corporation			Guarantor Subsidiaries			Non-guarantor Subsidiaries			Holdings			Eliminating Entries			Encompass Health Consolidated
	(In Millions)
Net operating revenues	$	5.1		$	606.5		$	296.5		$	249.5		$	(33.6	)	$	1,124.0
Operating expenses:
Salaries and benefits	15.9			288.9			148.0			173.1			(5.1		)	620.8
Other operating expenses	10.3			84.7			46.8			20.8			(12.5		)	150.1
Occupancy costs	0.5			24.9			6.5			3.7			(16.0		)	19.6
Supplies	—			24.0			11.6			4.5			—			40.1
General and administrative expenses	39.9			—			—			13.5			—			53.4
Depreciation and amortization	5.0			26.3			13.1			8.1			—			52.5
Total operating expenses	71.6			448.8			226.0			223.7			(33.6		)	936.5
Interest expense and amortization of debt discounts and fees	30.1			6.2			1.3			6.4			(6.8		)	37.2
Other income	(7.7		)	(0.3		)	(2.5		)	—			6.8			(3.7		)
Equity in net income of nonconsolidated affiliates	—			(2.0		)	(0.1		)	(0.4		)	—			(2.5		)
Equity in net income of consolidated affiliates	(130.2		)	(17.1		)	—			—			147.3			—
Management fees	(39.8		)	29.5			10.3			—			—			—
Income from continuing operations before income tax (benefit) expense	81.1			141.4			61.5			19.8			(147.3		)	156.5
Provision for income tax (benefit) expense	(21.7		)	37.8			10.2			4.5			—			30.8
Income from continuing operations	102.8			103.6			51.3			15.3			(147.3		)	125.7
Loss from discontinued operations, net of tax	(0.5		)	—			—			—			—			(0.5		)
Net and comprehensive income	102.3			103.6			51.3			15.3			(147.3		)	125.2
Less: Net and comprehensive income attributable to noncontrolling interests	—			—			(21.2		)	(1.7		)	—			(22.9		)
Net and comprehensive income attributable to Encompass Health	$	102.3		$	103.6		$	30.1		$	13.6		$	(147.3	)	$	102.3

Condensed Consolidating Statement of Comprehensive Income



	Three Months Ended March 31, 2020
	Encompass Health Corporation			Guarantor Subsidiaries			Non-guarantor Subsidiaries			Holdings			Eliminating Entries			Encompass Health Consolidated
	(In Millions)
Net operating revenues	$	4.6		$	622.5		$	323.3		$	266.8		$	(35.2	)	$	1,182.0
Operating expenses:
Salaries and benefits	16.7			309.8			164.2			193.3			(4.9		)	679.1
Other operating expenses	9.6			86.9			52.0			24.1			(13.0		)	159.6
Occupancy costs	0.6			25.4			6.7			4.8			(17.3		)	20.2
Supplies	—			26.5			13.2			6.0			—			45.7
General and administrative expenses	34.7			—			—			0.9			—			35.6
Depreciation and amortization	5.3			28.7			15.0			9.8			—			58.8
Government, class action, and related settlements	2.8			—			—			—			—			2.8
Total operating expenses	69.7			477.3			251.1			238.9			(35.2		)	1,001.8
Interest expense and amortization of debt discounts and fees	35.8			6.3			1.4			4.9			(5.2		)	43.2
Other (income) expense	(2.3		)	(0.4		)	1.6			(2.2		)	5.2			1.9
Equity in net income of nonconsolidated affiliates	—			(0.5		)	(0.1		)	(0.2		)	—			(0.8		)
Equity in net income of consolidated affiliates	(122.2		)	(17.8		)	—			—			140.0			—
Management fees	(42.0		)	30.2			11.8			—			—			—
Income from continuing operations before income tax (benefit) expense	65.6			127.4			57.5			25.4			(140.0		)	135.9
Provision for income tax (benefit) expense	(21.5		)	33.0			9.1			6.5			—			27.1
Income from continuing operations	87.1			94.4			48.4			18.9			(140.0		)	108.8
Loss from discontinued operations, net of tax	(0.1		)	—			—			—			—			(0.1		)
Net and comprehensive income	87.0			94.4			48.4			18.9			(140.0		)	108.7
Less: Net and comprehensive income attributable to noncontrolling interests	—			—			(21.2		)	(0.5		)	—			(21.7		)
Net and comprehensive income attributable to Encompass Health	$	87.0		$	94.4		$	27.2		$	18.4		$	(140.0	)	$	87.0



	Three Months Ended March 31, 2019
	Encompass Health Corporation			Guarantor Subsidiaries			Non-guarantor Subsidiaries			Holdings			Eliminating Entries			Encompass Health Consolidated
	(In Millions)
Net operating revenues	$	5.1		$	606.5		$	296.5		$	249.5		$	(33.6	)	$	1,124.0
Operating expenses:
Salaries and benefits	15.9			288.9			148.0			173.1			(5.1		)	620.8
Other operating expenses	10.3			84.7			46.8			20.8			(12.5		)	150.1
Occupancy costs	0.5			24.9			6.5			3.7			(16.0		)	19.6
Supplies	—			24.0			11.6			4.5			—			40.1
General and administrative expenses	39.9			—			—			13.5			—			53.4
Depreciation and amortization	5.0			26.3			13.1			8.1			—			52.5
Total operating expenses	71.6			448.8			226.0			223.7			(33.6		)	936.5
Interest expense and amortization of debt discounts and fees	30.1			6.2			1.3			6.4			(6.8		)	37.2
Other income	(7.7		)	(0.3		)	(2.5		)	—			6.8			(3.7		)
Equity in net income of nonconsolidated affiliates	—			(2.0		)	(0.1		)	(0.4		)	—			(2.5		)
Equity in net income of consolidated affiliates	(130.2		)	(17.1		)	—			—			147.3			—
Management fees	(39.8		)	29.5			10.3			—			—			—
Income from continuing operations before income tax (benefit) expense	81.1			141.4			61.5			19.8			(147.3		)	156.5
Provision for income tax (benefit) expense	(21.7		)	37.8			10.2			4.5			—			30.8
Income from continuing operations	102.8			103.6			51.3			15.3			(147.3		)	125.7
Loss from discontinued operations, net of tax	(0.5		)	—			—			—			—			(0.5		)
Net and comprehensive income	102.3			103.6			51.3			15.3			(147.3		)	125.2
Less: Net and comprehensive income attributable to noncontrolling interests	—			—			(21.2		)	(1.7		)	—			(22.9		)
Net and comprehensive income attributable to Encompass Health	$	102.3		$	103.6		$	30.1		$	13.6		$	(147.3	)	$	102.3

Condensed Consolidating Balance Sheet



	As of March 31, 2020
	Encompass Health Corporation		Guarantor Subsidiaries		Non-guarantor Subsidiaries		Holdings		Eliminating Entries			Encompass Health Consolidated
	(In Millions)
Assets
Current assets:
Cash and cash equivalents	$	79.0	$	3.7	$	7.8	$	14.4	$	—		$	104.9
Restricted cash	—		—		56.7		—		—			56.7
Accounts receivable	—		270.8		131.6		141.0		—			543.4
Other current assets	79.8		34.7		45.1		7.2		(87.3		)	79.5
Total current assets	158.8		309.2		241.2		162.6		(87.3		)	784.5
Property and equipment, net	138.5		1,268.0		567.4		29.4		—			2,003.3
Operating lease right-of-use assets	9.7		158.0		80.1		43.2		(23.1		)	267.9
Goodwill	—		912.2		329.0		1,070.9		—			2,312.1
Intangible assets, net	15.8		98.9		64.8		285.2		—			464.7
Deferred income tax assets	52.6		11.1		0.1		—		(62.3		)	1.5
Other long-term assets	51.7		86.8		152.9		12.3		—			303.7
Intercompany receivable and investments in consolidated affiliates	4,245.7		657.6		—		7.5		(4,910.8		)	—
Total assets	$	4,672.8	$	3,501.8	$	1,435.5	$	1,611.1	$	(5,083.5	)	$	6,137.7
Liabilities and Shareholders’ Equity
Current liabilities:
Current portion of long-term debt	$	17.0	$	10.8	$	3.9	$	8.5	$	—		$	40.2
Current operating lease liabilities	1.4		19.2		14.2		13.6		(7.6		)	40.8
Accounts payable	12.5		57.2		25.0		3.3		—			98.0
Accrued expenses and other current liabilities	171.5		110.4		134.0		78.6		(87.3		)	407.2
Total current liabilities	202.4		197.6		177.1		104.0		(94.9		)	586.2
Long-term debt, net of current portion	2,973.0		302.5		40.6		5.8		—			3,321.9
Long-term operating lease liabilities	8.6		143.5		69.1		29.6		(15.7		)	235.1
Other long-term liabilities	44.9		12.0		105.0		63.6		(62.2		)	163.3
Intercompany payable	—		—		66.0		—		(66.0		)	—
	3,228.9		655.6		457.8		203.0		(238.8		)	4,306.5
Commitments and contingencies
Redeemable noncontrolling interests	—		—		34.0		—		—			34.0
Shareholders’ equity:
Encompass Health shareholders’ equity	1,443.9		2,846.2		590.4		1,408.1		(4,844.7		)	1,443.9
Noncontrolling interests	—		—		353.3		—		—			353.3
Total shareholders’ equity	1,443.9		2,846.2		943.7		1,408.1		(4,844.7		)	1,797.2
Total liabilities and shareholders’ equity	$	4,672.8	$	3,501.8	$	1,435.5	$	1,611.1	$	(5,083.5	)	$	6,137.7



	As of December 31, 2019
	Encompass Health Corporation		Guarantor Subsidiaries		Non-guarantor Subsidiaries		Holdings		Eliminating Entries			Encompass Health Consolidated
	(In Millions)
Assets
Current assets:
Cash and cash equivalents	$	53.7	$	5.2	$	6.0	$	29.9	$	—		$	94.8
Restricted cash	—		—		57.4		—		—			57.4
Accounts receivable	—		280.4		125.6		100.1		—			506.1
Other current assets	64.3		35.4		9.3		7.8		(19.3		)	97.5
Total current assets	118.0		321.0		198.3		137.8		(19.3		)	755.8
Property and equipment, net	133.4		1,246.0		551.2		28.7		—			1,959.3
Operating lease right-of-use assets	10.1		171.5		86.5		43.7		(35.3		)	276.5
Goodwill	—		912.2		323.0		1,070.0		—			2,305.2
Intangible assets, net	17.7		101.7		65.3		291.6		—			476.3
Deferred income tax assets	27.2		11.1		0.1		—		(35.5		)	2.9
Other long-term assets	53.6		85.4		151.6		14.1		—			304.7
Intercompany notes receivable	737.8		—		—		—		(737.8		)	—
Intercompany receivable and investments in consolidated affiliates	3,155.4		523.6		—		—		(3,679.0		)	—
Total assets	$	4,253.2	$	3,372.5	$	1,376.0	$	1,585.9	$	(4,506.9	)	$	6,080.7
Liabilities and Shareholders’ Equity
Current liabilities:
Current portion of long-term debt	$	17.0	$	10.4	$	3.8	$	8.1	$	—		$	39.3
Current operating lease liabilities	1.3		21.9		16.0		12.1		(10.9		)	40.4
Accounts payable	9.8		56.5		24.3		4.0		—			94.6
Accrued expenses and other current liabilities	147.4		108.7		109.2		200.7		(19.3		)	546.7
Total current liabilities	175.5		197.5		153.3		224.9		(30.2		)	721.0
Long-term debt, net of current portion	2,670.6		305.4		41.6		5.7		—			3,023.3
Long-term operating lease liabilities	9.0		153.9		73.6		31.9		(24.6		)	243.8
Intercompany notes payable	—		—		—		737.8		(737.8		)	—
Other long-term liabilities	45.9		12.2		100.3		37.0		(35.5		)	159.9
Intercompany payable	—		—		66.0		4.4		(70.4		)	—
	2,901.0		669.0		434.8		1,041.7		(898.5		)	4,148.0
Commitments and contingencies
Redeemable noncontrolling interests	—		—		31.4		208.2		—			239.6
Shareholders’ equity:
Encompass Health shareholders’ equity	1,352.2		2,703.5		568.9		336.0		(3,608.4		)	1,352.2
Noncontrolling interests	—		—		340.9		—		—			340.9
Total shareholders’ equity	1,352.2		2,703.5		909.8		336.0		(3,608.4		)	1,693.1
Total liabilities and shareholders’ equity	$	4,253.2	$	3,372.5	$	1,376.0	$	1,585.9	$	(4,506.9	)	$	6,080.7

Condensed Consolidating Statement of Cash Flows



	Three Months Ended March 31, 2020
	Encompass Health Corporation			Guarantor Subsidiaries			Non-guarantor Subsidiaries			Holdings			Eliminating Entries			Encompass Health Consolidated
	(In Millions)
Net cash (used in) provided by operating activities	$	(31.2	)	$	117.7		$	56.8		$	(114.0	)	$	—		$	29.3
Cash flows from investing activities:
Purchases of property and equipment	(9.3		)	(49.5		)	(23.4		)	(1.3		)	—			(83.5		)
Acquisitions of businesses, net of cash acquired	—			—			—			(1.1		)	—			(1.1		)
Funding of intercompany note receivable	(15.0		)	—			—			—			15.0			—
Other, net	(2.8		)	0.7			3.9			(0.2		)	—			1.6
Net cash used in investing activities	(27.1		)	(48.8		)	(19.5		)	(2.6		)	15.0			(83.0		)
Cash flows from financing activities:
Principal borrowings on intercompany note payable	—			—			—			15.0			(15.0		)	—
Borrowings on revolving credit facility	330.0			—			—			—			—			330.0
Payments on revolving credit facility	(25.0		)	—			—			—			—			(25.0		)
Dividends paid on common stock	(28.9		)	—			—			(0.1		)	—			(29.0		)
Purchase of equity interests in consolidated affiliates	(162.3		)	—			—			—			—			(162.3		)
Distributions paid to noncontrolling interests of consolidated affiliates	—			—			(19.1		)	—			—			(19.1		)
Taxes paid on behalf of employees for shares withheld	(14.6		)	—			—			(1.0		)	—			(15.6		)
Other, net	(8.5		)	(2.5		)	5.0			(1.9		)	—			(7.9		)
Change in intercompany advances	(7.1		)	(67.9		)	(14.1		)	89.1			—			—
Net cash provided by (used in) financing activities	83.6			(70.4		)	(28.2		)	101.1			(15.0		)	71.1
Increase (decrease) in cash, cash equivalents, and restricted cash	25.3			(1.5		)	9.1			(15.5		)	—			17.4
Cash, cash equivalents, and restricted cash at beginning of period	53.7			5.2			70.8			29.9			—			159.6
Cash, cash equivalents, and restricted cash at end of period	$	79.0		$	3.7		$	79.9		$	14.4		$	—		$	177.0

Reconciliation of Cash, Cash Equivalents, and Restricted Cash
Cash and cash equivalents at beginning of period	$	53.7		$	5.2		$	6.0		$	29.9		$	—		$	94.8
Restricted cash at beginning of period	—			—			57.4			—			—			57.4
Restricted cash included in other long term assets at beginning of period	—			—			7.4			—			—			7.4
Cash, cash equivalents, and restricted cash at beginning of period	$	53.7		$	5.2		$	70.8		$	29.9		$	—		$	159.6

Cash and cash equivalents at end of period	$	79.0		$	3.7		$	7.8		$	14.4		$	—		$	104.9
Restricted cash at end of period	—			—			56.7			—			—			56.7
Restricted cash included in other long-term assets at end of period	—			—			15.4			—			—			15.4
Cash, cash equivalents, and restricted cash at end of period	$	79.0		$	3.7		$	79.9		$	14.4		$	—		$	177.0

Supplemental schedule of noncash financing activity:
Capital contribution of intercompany note	$	853.0		$	—		$	—		(853.0		)	$	—		$	—



	Three Months Ended March 31, 2019
	Encompass Health Corporation			Guarantor Subsidiaries			Non-guarantor Subsidiaries			Holdings			Eliminating Entries			Encompass Health Consolidated
	(In Millions)
Net cash provided by operating activities	$	18.6		$	89.6		$	42.4		$	9.3		$	—		$	159.9
Cash flows from investing activities:
Purchases of property and equipment	(6.8		)	(32.5		)	(29.4		)	(3.6		)	—			(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		)	(0.7		)	(0.7		)	—			(5.5		)
Net cash used in investing activities	(13.8		)	(32.6		)	(30.1		)	(18.0		)	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		)	5.6			(1.8		)	—			(13.0		)
Change in intercompany advances	51.0			(54.4		)	2.1			1.3			—			—
Net cash used in financing activities	(11.6		)	(56.5		)	(11.8		)	1.2			(3.0		)	(81.7		)
(Decrease) increase in cash, cash equivalents, and restricted cash	(6.8		)	0.5			0.5			(7.5		)	—			(13.3		)
Cash, cash equivalents, and restricted cash at beginning of period	41.5			3.0			69.4			19.6			—			133.5
Cash, cash equivalents, and restricted cash at end of period	$	34.7		$	3.5		$	69.9		$	12.1		$	—		$	120.2

Reconciliation of Cash, Cash Equivalents, and Restricted Cash
Cash and cash equivalents at beginning of period	$	41.5		$	3.0		$	5.1		$	19.6		$	—		$	69.2
Restricted cash at beginning of period	—			—			59.0			—			—			59.0
Long term restricted cash at beginning of period	—			—			5.3			—			—			5.3
Cash, cash equivalents, and restricted cash at beginning of period	$	41.5		$	3.0		$	69.4		$	19.6		$	—		$	133.5

Cash and cash equivalents at end of period	$	34.7		$	3.5		$	5.8		$	12.1		$	—		$	56.1
Restricted cash at end of period	—			—			59.0			—			—			59.0
Long term restricted cash at end of period	—			—			5.1			—			—			5.1
Cash, cash equivalents, and restricted cash at end of period	$	34.7		$	3.5		$	69.9		$	12.1		$	—		$	120.2