XML 20 R9.htm IDEA: XBRL DOCUMENT
v3.23.3

Spin Off of Home Health and Hospice Business | 9 Months Ended
--- | ---
Sep. 30, 2023
Discontinued Operations and Disposal Groups [Abstract] |
Spin Off of Home Health and Hospice Business | Spin Off of Home Health and Hospice Business On July 1, 2022, we completed the previously announced separation of our home health and hospice business through the distribution (the “Spin Off”) of all of the outstanding shares of common stock, par value $0.01 per share, of Enhabit, Inc. (“Enhabit”) to the stockholders of record of Encompass Health as of the close of business on June 24, 2022 (the “Record Date”). The Spin Off was effective at 12:01 a.m., Eastern Time, on July 1, 2022. The Spin Off was structured as a pro rata distribution of one share of Enhabit common stock for every two shares of Encompass Health common stock held of record as of the Record Date. No fractional shares were distributed. A cash payment was made in lieu of any fractional shares. As a result of the Spin Off, Enhabit is now an independent public company and its common stock is listed under the symbol “EHAB” on the New York Stock Exchange. In accordance with applicable accounting guidance, the historical results of Enhabit have been presented as discontinued operations and, as such, have been excluded from continuing operations for the three and nine months ended September 30, 2022. Our presentation of discontinued operations excludes any allocation of general corporate and overhead costs as well as interest expense. Prior to July 1, 2022, we operated under two reporting segments. We now operate under a single reporting segment. In anticipation of the Spin Off, Enhabit transferred the “Encompass” trade name (net book value of $104.2 million) to us during the second quarter of 2022. In connection with the Spin Off, on June 30, 2022, we entered into several agreements with Enhabit that govern the relationship of the parties following the Spin Off, including a Separation and Distribution Agreement, a Transition Services Agreement, a Tax Matters Agreement and an Employee Matters Agreement. We will provide transition services to Enhabit predominately consisting of certain finance, information technology, human resources, employee benefits and other administrative services for a period of up to two years after the Spin Off. For the three and nine months ended September 30, 2023, income related to these transition services was $0.7 million and $2.6 million, respectively. For the three and nine months ended September 30, 2022, income related to these transition services was $1.1 million. These amounts were reflected as reductions to General and administrative expenses in our condensed consolidated statements of comprehensive income. The following table presents the results of operations of Enhabit as discontinued operations (in millions):
|  |  | Three Months Ended September 30, 2022 |  |  |  | Nine Months Ended September 30, 2022
Net operating revenue |  |  | $ | — |  |  |  |  | $ | 542.3 |
Operating expenses: |  |  |  |  |  |  |
Salaries and benefits |  |  | — |  |  |  |  | 376.4 |
Other operating expenses |  |  | — |  |  |  |  | 47.6 |
Occupancy costs |  |  | — |  |  |  |  | 11.0 |
Supplies |  |  | — |  |  |  |  | 11.7 |
General and administrative expenses |  |  | 19.8 |  |  |  |  | 54.8 |
Depreciation and amortization |  |  | — |  |  |  |  | 16.7 |
Total operating expenses |  |  | 19.8 |  |  |  |  | 518.2 |
Interest expense and amortization of debt discounts and fees |  |  | — |  |  |  |  | 0.1 |
(Loss) income from discontinued operations before income taxes |  |  | (19.8) |  |  |  |  | 24.0 |
Provision for income tax (benefit) expense |  |  | (1.3) |  |  |  |  | 7.3 |
(Loss) income from discontinued operations, net of tax |  |  | (18.5) |  |  |  |  | 16.7 |
Less: Net income attributable to noncontrolling interests included in discontinued operations |  |  | — |  |  |  |  | (1.3) |
Net (loss) income attributable to Encompass Health included in discontinued operations |  |  | $ | (18.5) |  |  |  |  | $ | 15.4 |
Transaction costs of $19.8 million and $52.3 million incurred during the three and nine months ended September 30, 2022, respectively, are included in general and administrative expenses in the table above and in (Loss) income from discontinued operations, net of tax, in the condensed consolidated statements of comprehensive income. These charges primarily relate to third-party advisory, consulting, legal and professional services, that are associated with the Spin Off. See Note 2, Spin Off of Home Health and Hospice Business, to the consolidated financial statements accompanying the 2022 Form 10‑K for additional information.

X
- References No definition available. + Details
Name: | us-gaap_DiscontinuedOperationsAndDisposalGroupsAbstract
Namespace Prefix: | us-gaap_
Data Type: | xbrli:stringItemType
Balance Type: | na
Period Type: | duration

X
- Definition The entire disclosure related to a disposal group. Includes, but is not limited to, a discontinued operation, disposal classified as held-for-sale or disposed of by means other than sale or disposal of an individually significant component. + References Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef -Topic 205 -SubTopic 20 -Name Accounting Standards Codification -Publisher FASB -URI https://asc.fasb.org//205-20/tableOfContent Reference 2: http://fasb.org/us-gaap/role/ref/legacyRef -Topic 360 -Name Accounting Standards Codification -Publisher FASB -URI https://asc.fasb.org//360/tableOfContent + Details
Name: | us-gaap_DisposalGroupsIncludingDiscontinuedOperationsDisclosureTextBlock
Namespace Prefix: | us-gaap_
Data Type: | dtr-types:textBlockItemType
Balance Type: | na
Period Type: | duration