QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
(State or Other Jurisdiction of Incorporation or Organization) | (I.R.S. Employer Identification No.) | ||||
Title of each class | Trading Symbol(s) | Name of each exchange on which registered | ||||||
☒ | Accelerated filer | ☐ | Non-Accelerated filer | ☐ | |||||||||||||
Smaller reporting company | Emerging growth company |
Page | ||||||||
Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||||||||
2020 | 2019 | 2020 | 2019 | ||||||||||||||||||||
(In Millions, Except Per Share Data) | |||||||||||||||||||||||
Net operating revenues | $ | $ | $ | $ | |||||||||||||||||||
Operating expenses: | |||||||||||||||||||||||
Salaries and benefits | |||||||||||||||||||||||
Other operating expenses | |||||||||||||||||||||||
Occupancy costs | |||||||||||||||||||||||
Supplies | |||||||||||||||||||||||
General and administrative expenses | |||||||||||||||||||||||
Depreciation and amortization | |||||||||||||||||||||||
Government, class action, and related settlements | |||||||||||||||||||||||
Total operating expenses | |||||||||||||||||||||||
Loss on early extinguishment of debt | |||||||||||||||||||||||
Interest expense and amortization of debt discounts and fees | |||||||||||||||||||||||
Other income | ( | ( | ( | ( | |||||||||||||||||||
Equity in net income of nonconsolidated affiliates | ( | ( | ( | ( | |||||||||||||||||||
Income from continuing operations before income tax expense | |||||||||||||||||||||||
Provision for income tax expense | |||||||||||||||||||||||
Income from continuing operations | |||||||||||||||||||||||
Loss from discontinued operations, net of tax | ( | ||||||||||||||||||||||
Net and comprehensive income | |||||||||||||||||||||||
Less: Net and comprehensive income attributable to noncontrolling interests | ( | ( | ( | ( | |||||||||||||||||||
Net and comprehensive income attributable to Encompass Health | $ | $ | $ | $ | |||||||||||||||||||
Weighted average common shares outstanding: | |||||||||||||||||||||||
Basic | |||||||||||||||||||||||
Diluted | |||||||||||||||||||||||
Earnings per common share: | |||||||||||||||||||||||
Basic earnings per share attributable to Encompass Health common shareholders: | |||||||||||||||||||||||
Continuing operations | $ | $ | $ | $ | |||||||||||||||||||
Discontinued operations | ( | ||||||||||||||||||||||
Net income | $ | $ | $ | $ | |||||||||||||||||||
Diluted earnings per share attributable to Encompass Health common shareholders: | |||||||||||||||||||||||
Continuing operations | $ | $ | $ | $ | |||||||||||||||||||
Discontinued operations | ( | ||||||||||||||||||||||
Net income | $ | $ | $ | $ | |||||||||||||||||||
Amounts attributable to Encompass Health common shareholders: | |||||||||||||||||||||||
Income from continuing operations | $ | $ | $ | $ | |||||||||||||||||||
Loss from discontinued operations, net of tax | ( | ||||||||||||||||||||||
Net income attributable to Encompass Health | $ | $ | $ | $ |
September 30, 2020 | December 31, 2019 | ||||||||||
(In Millions) | |||||||||||
Assets | |||||||||||
Current assets: | |||||||||||
Cash and cash equivalents | $ | $ | |||||||||
Restricted cash | |||||||||||
Accounts receivable | |||||||||||
Other current assets | |||||||||||
Total current assets | |||||||||||
Property and equipment, net | |||||||||||
Operating lease right-of-use assets | |||||||||||
Goodwill | |||||||||||
Intangible assets, net | |||||||||||
Deferred income tax assets | |||||||||||
Other long-term assets | |||||||||||
Total assets(1) | $ | $ | |||||||||
Liabilities and Shareholders’ Equity | |||||||||||
Current liabilities: | |||||||||||
Current portion of long-term debt | $ | $ | |||||||||
Current operating lease liabilities | |||||||||||
Accounts payable | |||||||||||
Accrued expenses and other current liabilities | |||||||||||
Total current liabilities | |||||||||||
Long-term debt, net of current portion | |||||||||||
Long-term operating lease liabilities | |||||||||||
Other long-term liabilities | |||||||||||
Commitments and contingencies | |||||||||||
Redeemable noncontrolling interests | |||||||||||
Shareholders’ equity: | |||||||||||
Encompass Health shareholders’ equity | |||||||||||
Noncontrolling interests | |||||||||||
Total shareholders’ equity | |||||||||||
Total liabilities(1) and shareholders’ equity | $ | $ |
Three Months Ended September 30, 2020 | |||||||||||||||||||||||||||||||||||||||||
(In Millions) | |||||||||||||||||||||||||||||||||||||||||
Encompass Health Common Shareholders | |||||||||||||||||||||||||||||||||||||||||
Number of Common Shares Outstanding | Common Stock | Capital in Excess of Par Value | Accumulated Deficit | Treasury Stock | Noncontrolling Interests | Total | |||||||||||||||||||||||||||||||||||
Balance at beginning of period | $ | $ | $ | ( | $ | ( | $ | $ | |||||||||||||||||||||||||||||||||
Net income | — | — | — | — | |||||||||||||||||||||||||||||||||||||
Dividends declared ($ | — | — | ( | — | — | — | ( | ||||||||||||||||||||||||||||||||||
Stock-based compensation | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||
Distributions declared | — | — | — | — | — | ( | ( | ||||||||||||||||||||||||||||||||||
Capital contributions from consolidated affiliates | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||
Other | — | — | — | ( | |||||||||||||||||||||||||||||||||||||
Balance at end of period | $ | $ | $ | ( | $ | ( | $ | $ |
Three Months Ended September 30, 2019 | |||||||||||||||||||||||||||||||||||||||||
(In Millions) | |||||||||||||||||||||||||||||||||||||||||
Encompass Health Common Shareholders | |||||||||||||||||||||||||||||||||||||||||
Number of Common Shares Outstanding | Common Stock | Capital in Excess of Par Value | Accumulated Deficit | Treasury Stock | Noncontrolling Interests | Total | |||||||||||||||||||||||||||||||||||
Balance at beginning of period | $ | $ | $ | ( | $ | ( | $ | $ | |||||||||||||||||||||||||||||||||
Net income | — | — | — | — | |||||||||||||||||||||||||||||||||||||
Receipt of treasury stock | — | — | — | — | ( | — | ( | ||||||||||||||||||||||||||||||||||
Dividends declared ($ | — | — | ( | — | — | — | ( | ||||||||||||||||||||||||||||||||||
Stock-based compensation | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||
Distributions declared | — | — | — | — | — | ( | ( | ||||||||||||||||||||||||||||||||||
Capital contributions from consolidated affiliates | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||
Fair value adjustments to redeemable noncontrolling interests | — | — | ( | — | — | — | ( | ||||||||||||||||||||||||||||||||||
Consolidation of Yuma Rehabilitation Hospital | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||
Repurchases of common stock in open market | ( | — | — | — | ( | — | ( | ||||||||||||||||||||||||||||||||||
Other | — | — | ( | ||||||||||||||||||||||||||||||||||||||
Balance at end of period | $ | $ | $ | ( | $ | ( | $ | $ |
Nine Months Ended September 30, 2020 | |||||||||||||||||||||||||||||||||||||||||
(In Millions) | |||||||||||||||||||||||||||||||||||||||||
Encompass Health Common Shareholders | |||||||||||||||||||||||||||||||||||||||||
Number of Common Shares Outstanding | Common Stock | Capital in Excess of Par Value | Accumulated Deficit | Treasury Stock | Noncontrolling Interests | Total | |||||||||||||||||||||||||||||||||||
Balance at beginning of period | $ | $ | $ | ( | $ | ( | $ | $ | |||||||||||||||||||||||||||||||||
Net income | — | — | — | — | |||||||||||||||||||||||||||||||||||||
Receipt of treasury stock | ( | — | — | — | ( | — | ( | ||||||||||||||||||||||||||||||||||
Dividends declared ($ | — | — | ( | — | — | — | ( | ||||||||||||||||||||||||||||||||||
Exchange of Holdings shares | — | — | — | ||||||||||||||||||||||||||||||||||||||
Stock-based compensation | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||
Distributions declared | — | — | — | — | — | ( | ( | ||||||||||||||||||||||||||||||||||
Capital contributions from consolidated affiliates | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||
Repurchases of common stock in open market | ( | — | — | — | ( | — | ( | ||||||||||||||||||||||||||||||||||
Other | — | — | ( | ( | |||||||||||||||||||||||||||||||||||||
Balance at end of period | $ | $ | $ | ( | $ | ( | $ | $ |
Nine Months Ended September 30, 2019 | |||||||||||||||||||||||||||||||||||||||||
(In Millions) | |||||||||||||||||||||||||||||||||||||||||
Encompass Health Common Shareholders | |||||||||||||||||||||||||||||||||||||||||
Number of Common Shares Outstanding | Common Stock | Capital in Excess of Par Value | Accumulated Deficit | Treasury Stock | Noncontrolling Interests | Total | |||||||||||||||||||||||||||||||||||
Balance at beginning of period | $ | $ | $ | ( | $ | ( | $ | $ | |||||||||||||||||||||||||||||||||
Net income | — | — | — | — | |||||||||||||||||||||||||||||||||||||
Receipt of treasury stock | ( | — | — | — | ( | — | ( | ||||||||||||||||||||||||||||||||||
Dividends declared ($ | — | — | ( | — | — | — | ( | ||||||||||||||||||||||||||||||||||
Stock-based compensation | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||
Distributions declared | — | — | — | — | — | ( | ( | ||||||||||||||||||||||||||||||||||
Capital contributions from consolidated affiliates | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||
Fair value adjustments to redeemable noncontrolling interests | — | — | ( | — | — | — | ( | ||||||||||||||||||||||||||||||||||
Consolidation of Yuma Rehabilitation Hospital | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||
Repurchases of common stock through the open market | ( | — | — | — | ( | — | ( | ||||||||||||||||||||||||||||||||||
Other | — | — | ( | ||||||||||||||||||||||||||||||||||||||
Balance at end of period | $ | $ | $ | ( | $ | ( | $ | $ |
Nine Months Ended September 30, | |||||||||||
2020 | 2019 | ||||||||||
(In Millions) | |||||||||||
Cash flows from operating activities: | |||||||||||
Net income | $ | $ | |||||||||
Loss from discontinued operations, net of tax | |||||||||||
Adjustments to reconcile net income to net cash provided by operating activities— | |||||||||||
Depreciation and amortization | |||||||||||
Loss on early extinguishment of debt | |||||||||||
Stock-based compensation | |||||||||||
Deferred tax (benefit) expense | ( | ||||||||||
Gain on consolidation of Yuma Rehabilitation Hospital | ( | ||||||||||
Other, net | |||||||||||
Change in assets and liabilities, net of acquisitions— | |||||||||||
Accounts receivable | ( | ( | |||||||||
Other assets | ( | ||||||||||
Accounts payable | ( | ||||||||||
Accrued payroll | ( | ||||||||||
Accrued interest payable | ( | ||||||||||
Other liabilities | ( | ( | |||||||||
Net cash used in operating activities of discontinued operations | ( | ( | |||||||||
Total adjustments | |||||||||||
Net cash provided by operating activities | |||||||||||
Cash flows from investing activities: | |||||||||||
Acquisitions of businesses, net of cash acquired | ( | ( | |||||||||
Purchases of property and equipment | ( | ( | |||||||||
Additions to capitalized software costs | ( | ( | |||||||||
Other, net | ( | ( | |||||||||
Net cash used in investing activities | ( | ( | |||||||||
Nine Months Ended September 30, | |||||||||||
2020 | 2019 | ||||||||||
(In Millions) | |||||||||||
Cash flows from financing activities: | |||||||||||
Proceeds from bond issuance | |||||||||||
Principal payments on debt, including pre-payments | ( | ( | |||||||||
Borrowings on revolving credit facility | |||||||||||
Payments on revolving credit facility | ( | ( | |||||||||
Principal payments under finance lease obligations | ( | ( | |||||||||
Debt issuance costs | ( | ( | |||||||||
Taxes paid on behalf of employees for shares withheld | ( | ( | |||||||||
Dividends paid on common stock | ( | ( | |||||||||
Distributions paid to noncontrolling interests of consolidated affiliates | ( | ( | |||||||||
Repurchases of common stock, including fees and expenses | ( | ( | |||||||||
Purchase of equity interests in consolidated affiliates | ( | ( | |||||||||
Other, net | |||||||||||
Net cash provided by financing activities | |||||||||||
Increase in cash, cash equivalents, and restricted cash | |||||||||||
Cash, cash equivalents, and restricted cash at beginning of period | |||||||||||
Cash, cash equivalents, and restricted cash at end of period | $ | $ | |||||||||
Reconciliation of Cash, Cash Equivalents, and Restricted Cash | |||||||||||
Cash and cash equivalents at beginning of period | $ | $ | |||||||||
Restricted cash at beginning of period | |||||||||||
Restricted cash included in other long-term assets at beginning of period | |||||||||||
Cash, cash equivalents, and restricted cash at beginning of period | $ | $ | |||||||||
Cash and cash equivalents at end of period | $ | $ | |||||||||
Restricted cash at end of period | |||||||||||
Restricted cash included in other long-term assets at end of period | |||||||||||
Cash, cash equivalents, and restricted cash at end of period | $ | $ | |||||||||
Supplemental schedule of noncash financing activity: | |||||||||||
Adoption of ASC 842 | $ | $ |
Inpatient Rehabilitation | Home Health and Hospice | Consolidated | |||||||||||||||||||||||||||||||||
Three Months Ended September 30, | Three Months Ended September 30, | Three Months Ended September 30, | |||||||||||||||||||||||||||||||||
2020 | 2019 | 2020 | 2019 | 2020 | 2019 | ||||||||||||||||||||||||||||||
Medicare | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||
Medicare Advantage | |||||||||||||||||||||||||||||||||||
Managed care | |||||||||||||||||||||||||||||||||||
Medicaid | |||||||||||||||||||||||||||||||||||
Other third-party payors | |||||||||||||||||||||||||||||||||||
Workers’ compensation | |||||||||||||||||||||||||||||||||||
Patients | |||||||||||||||||||||||||||||||||||
Other income | |||||||||||||||||||||||||||||||||||
Total | $ | $ | $ | $ | $ | $ |
Inpatient Rehabilitation | Home Health and Hospice | Consolidated | |||||||||||||||||||||||||||||||||
Nine Months Ended September 30, | Nine Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||||||||||||||||||||||
2020 | 2019 | 2020 | 2019 | 2020 | 2019 | ||||||||||||||||||||||||||||||
Medicare | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||
Medicare Advantage | |||||||||||||||||||||||||||||||||||
Managed care | |||||||||||||||||||||||||||||||||||
Medicaid | |||||||||||||||||||||||||||||||||||
Other third-party payors | |||||||||||||||||||||||||||||||||||
Workers’ compensation | |||||||||||||||||||||||||||||||||||
Patients | |||||||||||||||||||||||||||||||||||
Other income | |||||||||||||||||||||||||||||||||||
Total | $ | $ | $ | $ | $ | $ |
Property and equipment, net | $ | ||||
Identifiable intangible assets: | |||||
Noncompete agreements (useful lives of | |||||
Trade name (useful life of | |||||
Goodwill | |||||
Total assets acquired | $ | ||||
Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||||||||
2020 | 2019 | 2020 | 2019 | ||||||||||||||||||||
Fair value of assets acquired | $ | $ | $ | $ | |||||||||||||||||||
Goodwill | |||||||||||||||||||||||
Fair value of liabilities assumed | ( | ( | |||||||||||||||||||||
Fair value of noncontrolling interest owned by joint venture partner | ( | ( | ( | ||||||||||||||||||||
Net cash paid for acquisitions | $ | $ | $ | $ |
Identifiable intangible assets: | |||||
Licenses (useful lives of | $ | ||||
Goodwill | |||||
Total assets acquired | $ | ||||
Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||||||||
2020 | 2019 | 2020 | 2019 | ||||||||||||||||||||
Fair value of assets acquired | $ | $ | $ | $ | |||||||||||||||||||
Goodwill | |||||||||||||||||||||||
Fair value of liabilities assumed | ( | ( | |||||||||||||||||||||
Net cash paid for acquisitions | $ | $ | $ | $ |
Net Operating Revenues | Net Income Attributable to Encompass Health | ||||||||||
Acquired entities only: Actual from acquisition date to September 30, 2020 | |||||||||||
Inpatient Rehabilitation | $ | $ | |||||||||
Home Health and Hospice | |||||||||||
Combined entity: Supplemental pro forma from 07/01/2020-09/30/2020 | |||||||||||
Combined entity: Supplemental pro forma from 07/01/2019-09/30/2019 | |||||||||||
Combined entity: Supplemental pro forma from 01/01/2020-09/30/2020 | |||||||||||
Combined entity: Supplemental pro forma from 01/01/2019-09/30/2019 |
September 30, 2020 | December 31, 2019 | ||||||||||
Assets | |||||||||||
Current assets: | |||||||||||
Cash and cash equivalents | $ | $ | |||||||||
Accounts receivable | |||||||||||
Other current assets | |||||||||||
Total current assets | |||||||||||
Property and equipment, net | |||||||||||
Operating lease right-of-use assets | |||||||||||
Goodwill | |||||||||||
Intangible assets, net | |||||||||||
Other long-term assets | |||||||||||
Total assets | $ | $ | |||||||||
Liabilities | |||||||||||
Current liabilities: | |||||||||||
Current portion of long-term debt | $ | $ | |||||||||
Current operating lease liabilities | |||||||||||
Accounts payable | |||||||||||
Accrued expenses and other current liabilities | |||||||||||
Total current liabilities | |||||||||||
Long-term debt, net of current portion | |||||||||||
Long-term operating lease liabilities | |||||||||||
Other long-term liabilities | |||||||||||
Total liabilities | $ | $ |
September 30, 2020 | December 31, 2019 | ||||||||||
Credit Agreement— | |||||||||||
Advances under revolving credit facility | $ | $ | |||||||||
Term loan facilities | |||||||||||
Bonds payable— | |||||||||||
Other notes payable | |||||||||||
Finance lease obligations | |||||||||||
Less: Current portion | ( | ( | |||||||||
Long-term debt, net of current portion | $ | $ |
Fiscal Quarters Ending | Interest Coverage Ratio | ||||
December 31, 2019 and March 31, 2020 | |||||
June 30, 2020, September 30, 2020, December 31, 2020, March 31, 2021, June 30, 2021, September 30, 2021 and December 31, 2021 | |||||
March 31, 2022 and thereafter |
Fiscal Quarters Ending | Leverage Ratio | ||||
December 31, 2019 and March 31, 2020 | |||||
June 30, 2020 | |||||
September 30, 2020 | |||||
December 31, 2020 | |||||
March 31, 2021 | |||||
June 30, 2021 | |||||
September 30, 2021 | |||||
December 31, 2021 | |||||
March 31, 2022 and thereafter |
Nine Months Ended September 30, | |||||||||||
2020 | 2019 | ||||||||||
Balance at beginning of period | $ | $ | |||||||||
Net income attributable to noncontrolling interests | |||||||||||
Distributions declared | ( | ( | |||||||||
Contribution to joint venture | |||||||||||
Reclassification to noncontrolling interests | ( | ||||||||||
Purchase of redeemable noncontrolling interests | ( | ( | |||||||||
Exchange transaction | ( | ||||||||||
Change in fair value | |||||||||||
Balance at end of period | $ | $ |
Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||||||||
2020 | 2019 | 2020 | 2019 | ||||||||||||||||||||
Net income attributable to nonredeemable noncontrolling interests | $ | $ | $ | $ | |||||||||||||||||||
Net income attributable to redeemable noncontrolling interests | |||||||||||||||||||||||
Net income attributable to noncontrolling interests | $ | $ | $ | $ |
Fair Value Measurements at Reporting Date Using | |||||||||||||||||||||||||||||
As of September 30, 2020 | Fair Value | Quoted Prices in Active Markets for Identical Assets (Level 1) | Significant Other Observable Inputs (Level 2) | Significant Unobservable Inputs (Level 3) | Valuation Technique (1) | ||||||||||||||||||||||||
Other long-term assets: | |||||||||||||||||||||||||||||
Equity securities | $ | $ | $ | $ | M | ||||||||||||||||||||||||
Debt securities | M | ||||||||||||||||||||||||||||
Redeemable noncontrolling interests | I | ||||||||||||||||||||||||||||
As of December 31, 2019 | |||||||||||||||||||||||||||||
Other long-term assets: | |||||||||||||||||||||||||||||
Equity securities | $ | $ | $ | $ | M | ||||||||||||||||||||||||
Debt securities | M | ||||||||||||||||||||||||||||
Redeemable noncontrolling interests | I |
As of September 30, 2020 | As of December 31, 2019 | ||||||||||||||||||||||
Carrying Amount | Estimated Fair Value | Carrying Amount | Estimated Fair Value | ||||||||||||||||||||
Long-term debt: | |||||||||||||||||||||||
Advances under revolving credit facility | $ | $ | $ | $ | |||||||||||||||||||
Term loan facilities | |||||||||||||||||||||||
Other notes payable | |||||||||||||||||||||||
Financial commitments: | |||||||||||||||||||||||
Letters of credit |
Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||||||||
2020 | 2019 | 2020 | 2019 | ||||||||||||||||||||
Basic: | |||||||||||||||||||||||
Numerator: | |||||||||||||||||||||||
Income from continuing operations | $ | $ | $ | $ | |||||||||||||||||||
Less: Net income attributable to noncontrolling interests included in continuing operations | ( | ( | ( | ( | |||||||||||||||||||
Less: Income allocated to participating securities | ( | ( | ( | ( | |||||||||||||||||||
Income from continuing operations attributable to Encompass Health common shareholders | |||||||||||||||||||||||
Loss from discontinued operations, net of tax, attributable to Encompass Health common shareholders | ( | ||||||||||||||||||||||
Net income attributable to Encompass Health common shareholders | $ | $ | $ | $ | |||||||||||||||||||
Denominator: | |||||||||||||||||||||||
Basic weighted average common shares outstanding | |||||||||||||||||||||||
Basic earnings per share attributable to Encompass Health common shareholders: | |||||||||||||||||||||||
Continuing operations | $ | $ | $ | $ | |||||||||||||||||||
Discontinued operations | ( | ||||||||||||||||||||||
Net income | $ | $ | $ | $ | |||||||||||||||||||
Diluted: | |||||||||||||||||||||||
Numerator: | |||||||||||||||||||||||
Income from continuing operations | $ | $ | $ | $ | |||||||||||||||||||
Less: Net income attributable to noncontrolling interests included in continuing operations | ( | ( | ( | ( | |||||||||||||||||||
Income from continuing operations attributable to Encompass Health common shareholders | |||||||||||||||||||||||
Loss from discontinued operations, net of tax, attributable to Encompass Health common shareholders | ( | ||||||||||||||||||||||
Net income attributable to Encompass Health common shareholders | $ | $ | $ | $ | |||||||||||||||||||
Denominator: | |||||||||||||||||||||||
Diluted weighted average common shares outstanding | |||||||||||||||||||||||
Diluted earnings per share attributable to Encompass Health common shareholders: | |||||||||||||||||||||||
Continuing operations | $ | $ | $ | $ | |||||||||||||||||||
Discontinued operations | ( | ||||||||||||||||||||||
Net income | $ | $ | $ | $ |
Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||||||||
2020 | 2019 | 2020 | 2019 | ||||||||||||||||||||
Basic weighted average common shares outstanding | |||||||||||||||||||||||
Restricted stock awards, dilutive stock options, and restricted stock units | |||||||||||||||||||||||
Diluted weighted average common shares outstanding |
Inpatient Rehabilitation | Home Health and Hospice | ||||||||||||||||||||||||||||||||||||||||||||||
Three Months Ended September 30, | Nine Months Ended September 30, | Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||||||||||||||||||||||||||||||
2020 | 2019 | 2020 | 2019 | 2020 | 2019 | 2020 | 2019 | ||||||||||||||||||||||||||||||||||||||||
Net operating revenues | $ | $ | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||||||||||||
Operating expenses: | |||||||||||||||||||||||||||||||||||||||||||||||
Inpatient rehabilitation: | |||||||||||||||||||||||||||||||||||||||||||||||
Salaries and benefits | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||||
Other operating expenses | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||||
Supplies | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||||
Occupancy costs | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||||
Home health and hospice: | |||||||||||||||||||||||||||||||||||||||||||||||
Cost of services sold (excluding depreciation and amortization) | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||||
Support and overhead costs | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||||
Other income | ( | ( | ( | ( | |||||||||||||||||||||||||||||||||||||||||||
Equity in net income of nonconsolidated affiliates | ( | ( | ( | ( | ( | ( | ( | ( | |||||||||||||||||||||||||||||||||||||||
Noncontrolling interests | |||||||||||||||||||||||||||||||||||||||||||||||
Segment Adjusted EBITDA | $ | $ | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||||||||||||
Capital expenditures | $ | $ | $ | $ | $ | $ | $ | $ |
Inpatient Rehabilitation | Home Health and Hospice | Encompass Health Consolidated | |||||||||||||||
As of September 30, 2020 | |||||||||||||||||
Total assets | $ | $ | $ | ||||||||||||||
Investments in and advances to nonconsolidated affiliates | |||||||||||||||||
As of December 31, 2019 | |||||||||||||||||
Total assets | $ | $ | $ | ||||||||||||||
Investments in and advances to nonconsolidated affiliates |
Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||||||||
2020 | 2019 | 2020 | 2019 | ||||||||||||||||||||
Total Segment Adjusted EBITDA | $ | $ | $ | $ | |||||||||||||||||||
General and administrative expenses | ( | ( | ( | ( | |||||||||||||||||||
Depreciation and amortization | ( | ( | ( | ( | |||||||||||||||||||
Loss on disposal or impairment of assets | ( | ( | ( | ( | |||||||||||||||||||
Government, class action, and related settlements | ( | ||||||||||||||||||||||
Loss on early extinguishment of debt | ( | ||||||||||||||||||||||
Interest expense and amortization of debt discounts and fees | ( | ( | ( | ( | |||||||||||||||||||
Net income attributable to noncontrolling interests | |||||||||||||||||||||||
SARs mark-to-market impact on noncontrolling interests | |||||||||||||||||||||||
Change in fair market value of equity securities | |||||||||||||||||||||||
Gain on consolidation of joint venture formerly accounted for under the equity method of accounting | |||||||||||||||||||||||
Payroll taxes on SARs exercise | ( | ( | ( | ||||||||||||||||||||
Income from continuing operations before income tax expense | $ | $ | $ | $ |
September 30, 2020 | December 31, 2019 | ||||||||||
Total assets for reportable segments | $ | $ | |||||||||
Reclassification of deferred income tax liabilities to net deferred income tax assets | ( | ( | |||||||||
Total consolidated assets | $ | $ |
Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||||||||
2020 | 2019 | 2020 | 2019 | ||||||||||||||||||||
Inpatient rehabilitation: | |||||||||||||||||||||||
Inpatient | $ | $ | $ | $ | |||||||||||||||||||
Outpatient and other | |||||||||||||||||||||||
Total inpatient rehabilitation | |||||||||||||||||||||||
Home health and hospice: | |||||||||||||||||||||||
Home health | |||||||||||||||||||||||
Hospice | |||||||||||||||||||||||
Total home health and hospice | |||||||||||||||||||||||
Total net operating revenues | $ | $ | $ | $ |
Number of New Beds | |||||||||||
2020(1) | 2021(1) | 2022(1) | |||||||||
De novos: | |||||||||||
Toledo, Ohio | 40 | — | — | ||||||||
Cumming, Georgia | — | 50 | — | ||||||||
North Tampa, Florida | — | 50 | — | ||||||||
Stockbridge, Georgia | — | 50 | — | ||||||||
Greenville, South Carolina | — | 40 | — | ||||||||
Pensacola, Florida | — | 40 | — | ||||||||
Shreveport, Louisiana | — | 40 | — | ||||||||
Waco, Texas | — | 40 | — | ||||||||
Libertyville, Illinois | — | — | 60 | ||||||||
St. Augustine, Florida | — | — | 40 | ||||||||
Lakeland, Florida | — | — | 50 | ||||||||
Clermont, Florida | — | — | 50 | ||||||||
Naples, Florida | — | — | 50 | ||||||||
Cape Coral, Florida | — | — | 40 | ||||||||
Jacksonville, Florida | — | — | 50 | ||||||||
Joint ventures: | |||||||||||
San Angelo, Texas | — | 40 | — | ||||||||
Knoxville, Tennessee | — | — | 73 |
ü | Staying current with the Centers for Disease Control and Prevention’s (the “CDC”) guidance on testing and the use of PPE, which is frequently updated | ||||
ü | Limiting visitors in our hospitals | ||||
ü | Screening everyone entering our hospitals and self-screening all home health and hospice employees | ||||
ü | Performing pre-visit telephone calls to assess risk factors within the home, including patient and caregiver health status | ||||
ü | Following social distancing recommendations in our therapy gyms and performing therapy in patient rooms, if needed | ||||
ü | Suspended most of the hospital-based outpatient services (we have resumed these services at some locations) | ||||
ü | Implemented work-at-home policies for home office and certain field personnel | ||||
ü | Halted all non-essential travel |
ü | secured secondary sources of PPE and other medical supplies, at times paying premium prices; | ||||
ü | aligned staffing with patient demand; | ||||
ü | amended our senior credit facility in April 2020 (primarily provided covenant relief due to disruptions from the COVID-19 pandemic); | ||||
ü | issued an additional $300 million of our 4.50% Senior Notes due 2028 (the “2028 Notes”) and an additional $300 million of our 4.75% Senior Notes due 2030 (the “2030 Notes”) in May 2020; | ||||
ü | issued $400 million of 4.625% Senior Notes due 2031 (the “2031 Notes”) in October 2020; | ||||
ü | issued notice for redemption of all $700 million in outstanding principal amount of the 5.75% Senior Notes due 2024 (the “2024 Notes”) that will settle on November 1, 2020; | ||||
ü | developed plans for reducing capital expenditures; and | ||||
ü | not purchased any shares under our authorized share repurchase program since mid-March. |
Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||||||||
2020 | 2019 | 2020 | 2019 | ||||||||||||||||||||
Medicare | 69.9 | % | 75.3 | % | 69.8 | % | 75.3 | % | |||||||||||||||
Medicare Advantage | 14.5 | % | 10.3 | % | 14.8 | % | 10.3 | % | |||||||||||||||
Managed care | 9.2 | % | 8.4 | % | 9.0 | % | 8.3 | % | |||||||||||||||
Medicaid | 3.6 | % | 2.8 | % | 3.4 | % | 2.8 | % | |||||||||||||||
Other third-party payors | 0.9 | % | 1.0 | % | 0.9 | % | 1.0 | % | |||||||||||||||
Workers’ compensation | 0.4 | % | 0.6 | % | 0.5 | % | 0.7 | % | |||||||||||||||
Patients | 0.5 | % | 0.5 | % | 0.5 | % | 0.5 | % | |||||||||||||||
Other income | 1.0 | % | 1.1 | % | 1.1 | % | 1.1 | % | |||||||||||||||
Total | 100.0 | % | 100.0 | % | 100.0 | % | 100.0 | % |
Three Months Ended September 30, | Percentage Change | Nine Months Ended September 30, | Percentage Change | ||||||||||||||||||||||||||||||||
2020 | 2019 | 2020 vs. 2019 | 2020 | 2019 | 2020 vs. 2019 | ||||||||||||||||||||||||||||||
(In Millions, Except Percentage Change) | |||||||||||||||||||||||||||||||||||
Net operating revenues | $ | 1,173.9 | $ | 1,161.6 | 1.1 | % | $ | 3,430.0 | $ | 3,420.6 | 0.3 | % | |||||||||||||||||||||||
Operating expenses: | |||||||||||||||||||||||||||||||||||
Salaries and benefits | 664.9 | 660.8 | 0.6 | % | 1,995.9 | 1,904.5 | 4.8 | % | |||||||||||||||||||||||||||
Other operating expenses | 163.4 | 156.6 | 4.3 | % | 471.3 | 456.5 | 3.2 | % | |||||||||||||||||||||||||||
Occupancy costs | 20.3 | 21.8 | (6.9) | % | 60.8 | 61.7 | (1.5) | % | |||||||||||||||||||||||||||
Supplies | 52.5 | 42.9 | 22.4 | % | 148.8 | 124.7 | 19.3 | % | |||||||||||||||||||||||||||
General and administrative expenses | 39.1 | 52.5 | (25.5) | % | 117.7 | 183.0 | (35.7) | % | |||||||||||||||||||||||||||
Depreciation and amortization | 61.2 | 55.1 | 11.1 | % | 180.7 | 160.3 | 12.7 | % | |||||||||||||||||||||||||||
Government, class action, and related settlements | — | — | — | % | 2.8 | — | N/A | ||||||||||||||||||||||||||||
Total operating expenses | 1,001.4 | 989.7 | 1.2 | % | 2,978.0 | 2,890.7 | 3.0 | % | |||||||||||||||||||||||||||
Loss on early extinguishment of debt | — | — | — | % | — | 2.3 | (100.0) | % | |||||||||||||||||||||||||||
Interest expense and amortization of debt discounts and fees | 49.0 | 40.3 | 21.6 | % | 138.0 | 115.2 | 19.8 | % | |||||||||||||||||||||||||||
Other income | (2.5) | (21.0) | (88.1) | % | (6.4) | (26.9) | (76.2) | % | |||||||||||||||||||||||||||
Equity in net income of nonconsolidated affiliates | (1.0) | (1.2) | (16.7) | % | (2.5) | (5.5) | (54.5) | % | |||||||||||||||||||||||||||
Income from continuing operations before income tax expense | 127.0 | 153.8 | (17.4) | % | 322.9 | 444.8 | (27.4) | % | |||||||||||||||||||||||||||
Provision for income tax expense | 26.9 | 34.3 | (21.6) | % | 65.8 | 88.6 | (25.7) | % | |||||||||||||||||||||||||||
Income from continuing operations | 100.1 | 119.5 | (16.2) | % | 257.1 | 356.2 | (27.8) | % | |||||||||||||||||||||||||||
Loss from discontinued operations, net of tax | — | — | — | % | — | (0.6) | (100.0) | % | |||||||||||||||||||||||||||
Net income | 100.1 | 119.5 | (16.2) | % | 257.1 | 355.6 | (27.7) | % | |||||||||||||||||||||||||||
Less: Net income attributable to noncontrolling interests | (22.4) | (21.9) | 2.3 | % | (58.9) | (64.5) | (8.7) | % | |||||||||||||||||||||||||||
Net income attributable to Encompass Health | $ | 77.7 | $ | 97.6 | (20.4) | % | $ | 198.2 | $ | 291.1 | (31.9) | % |
Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||||||||
2020 | 2019 | 2020 | 2019 | ||||||||||||||||||||
Operating expenses: | |||||||||||||||||||||||
Salaries and benefits | 56.6 | % | 56.9 | % | 58.2 | % | 55.7 | % | |||||||||||||||
Other operating expenses | 13.9 | % | 13.5 | % | 13.7 | % | 13.3 | % | |||||||||||||||
Occupancy costs | 1.7 | % | 1.9 | % | 1.8 | % | 1.8 | % | |||||||||||||||
Supplies | 4.5 | % | 3.7 | % | 4.3 | % | 3.6 | % | |||||||||||||||
General and administrative expenses | 3.3 | % | 4.5 | % | 3.4 | % | 5.3 | % | |||||||||||||||
Depreciation and amortization | 5.2 | % | 4.7 | % | 5.3 | % | 4.7 | % | |||||||||||||||
Government, class action, and related settlements | — | % | — | % | 0.1 | % | — | % | |||||||||||||||
Total operating expenses | 85.3 | % | 85.2 | % | 86.8 | % | 84.5 | % |
Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||||||||
2020 | 2019 | 2020 | 2019 | ||||||||||||||||||||
Medicare | 65.8 | % | 71.5 | % | 66.0 | % | 72.4 | % | |||||||||||||||
Medicare Advantage | 15.7 | % | 10.9 | % | 15.9 | % | 10.6 | % | |||||||||||||||
Managed care | 10.7 | % | 10.0 | % | 10.4 | % | 9.8 | % | |||||||||||||||
Medicaid | 4.3 | % | 3.2 | % | 3.9 | % | 3.1 | % | |||||||||||||||
Other third-party payors | 1.2 | % | 1.4 | % | 1.2 | % | 1.2 | % | |||||||||||||||
Workers’ compensation | 0.5 | % | 0.8 | % | 0.6 | % | 0.8 | % | |||||||||||||||
Patients | 0.6 | % | 0.7 | % | 0.6 | % | 0.7 | % | |||||||||||||||
Other income | 1.2 | % | 1.5 | % | 1.4 | % | 1.4 | % | |||||||||||||||
Total | 100.0 | % | 100.0 | % | 100.0 | % | 100.0 | % |
Three Months Ended September 30, | Percentage Change | Nine Months Ended September 30, | Percentage Change | ||||||||||||||||||||||||||||||||
2020 | 2019 | 2020 vs. 2019 | 2020 | 2019 | 2020 vs. 2019 | ||||||||||||||||||||||||||||||
(In Millions, Except Percentage Change) | |||||||||||||||||||||||||||||||||||
Net operating revenues: | |||||||||||||||||||||||||||||||||||
Inpatient | $ | 883.2 | $ | 850.6 | 3.8 | % | $ | 2,581.2 | $ | 2,550.0 | 1.2 | % | |||||||||||||||||||||||
Outpatient and other | 16.2 | 21.7 | (25.3) | % | 51.9 | 66.3 | (21.7) | % | |||||||||||||||||||||||||||
Inpatient rehabilitation segment revenues | 899.4 | 872.3 | 3.1 | % | 2,633.1 | 2,616.3 | 0.6 | % | |||||||||||||||||||||||||||
Operating expenses: | |||||||||||||||||||||||||||||||||||
Salaries and benefits | 475.0 | 459.1 | 3.5 | % | 1,408.7 | 1,347.7 | 4.5 | % | |||||||||||||||||||||||||||
Other operating expenses | 135.5 | 131.3 | 3.2 | % | 394.5 | 386.1 | 2.2 | % | |||||||||||||||||||||||||||
Supplies | 45.3 | 37.0 | 22.4 | % | 126.9 | 109.3 | 16.1 | % | |||||||||||||||||||||||||||
Occupancy costs | 15.3 | 17.0 | (10.0) | % | 46.0 | 49.1 | (6.3) | % | |||||||||||||||||||||||||||
Other income | (2.1) | (1.8) | 16.7 | % | (3.9) | (6.5) | (40.0) | % | |||||||||||||||||||||||||||
Equity in net income of nonconsolidated affiliates | (0.9) | (1.0) | (10.0) | % | (2.1) | (4.5) | (53.3) | % | |||||||||||||||||||||||||||
Noncontrolling interests | 22.1 | 20.1 | 10.0 | % | 58.0 | 60.6 | (4.3) | % | |||||||||||||||||||||||||||
Segment Adjusted EBITDA | $ | 209.2 | $ | 210.6 | (0.7) | % | $ | 605.0 | $ | 674.5 | (10.3) | % | |||||||||||||||||||||||
(Actual Amounts) | |||||||||||||||||||||||||||||||||||
Discharges | 45,962 | 46,669 | (1.5) | % | 135,394 | 138,957 | (2.6) | % | |||||||||||||||||||||||||||
Net patient revenue per discharge | $ | 19,216 | $ | 18,226 | 5.4 | % | $ | 19,064 | $ | 18,351 | 3.9 | % | |||||||||||||||||||||||
Outpatient visits | 51,968 | 86,395 | (39.8) | % | 137,471 | 292,989 | (53.1) | % | |||||||||||||||||||||||||||
Average length of stay (days) | 13.0 | 12.6 | 3.2 | % | 13.0 | 12.6 | 3.2 | % | |||||||||||||||||||||||||||
Occupancy % | 68.8 | % | 69.2 | % | (0.6) | % | 67.8 | % | 69.6 | % | (2.6) | % | |||||||||||||||||||||||
# of licensed beds | 9,437 | 9,219 | 2.4 | % | 9,437 | 9,219 | 2.4 | % | |||||||||||||||||||||||||||
Full-time equivalents* | 22,147 | 22,037 | 0.5 | % | 21,758 | 21,651 | 0.5 | % | |||||||||||||||||||||||||||
Employees per occupied bed | 3.44 | 3.48 | (1.1) | % | 3.42 | 3.41 | 0.3 | % |
Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||||||||
2020 | 2019 | 2020 | 2019 | ||||||||||||||||||||
Operating expenses: | |||||||||||||||||||||||
Salaries and benefits | 52.8 | % | 52.6 | % | 53.5 | % | 51.5 | % | |||||||||||||||
Other operating expenses | 15.1 | % | 15.1 | % | 15.0 | % | 14.8 | % | |||||||||||||||
Supplies | 5.0 | % | 4.2 | % | 4.8 | % | 4.2 | % | |||||||||||||||
Occupancy costs | 1.7 | % | 1.9 | % | 1.7 | % | 1.9 | % | |||||||||||||||
Total operating expenses | 74.6 | % | 73.9 | % | 75.0 | % | 72.3 | % |
Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||||||||
2020 | 2019 | 2020 | 2019 | ||||||||||||||||||||
Medicare | 83.3 | % | 85.8 | % | 82.6 | % | 85.1 | % | |||||||||||||||
Medicare Advantage | 10.8 | % | 8.7 | % | 11.1 | % | 9.6 | % | |||||||||||||||
Managed care | 4.5 | % | 3.6 | % | 4.5 | % | 3.3 | % | |||||||||||||||
Medicaid | 1.2 | % | 1.7 | % | 1.5 | % | 1.7 | % | |||||||||||||||
Workers’ compensation | 0.1 | % | 0.1 | % | 0.1 | % | 0.1 | % | |||||||||||||||
Patients | 0.1 | % | — | % | 0.1 | % | 0.1 | % | |||||||||||||||
Other income | — | % | 0.1 | % | 0.1 | % | 0.1 | % | |||||||||||||||
Total | 100.0 | % | 100.0 | % | 100.0 | % | 100.0 | % |
Three Months Ended September 30, | Percentage Change | Nine Months Ended September 30, | Percentage Change | ||||||||||||||||||||||||||||||||
2020 | 2019 | 2020 vs. 2019 | 2020 | 2019 | 2020 vs. 2019 | ||||||||||||||||||||||||||||||
(In Millions, Except Percentage Change) | |||||||||||||||||||||||||||||||||||
Net operating revenues: | |||||||||||||||||||||||||||||||||||
Home health | $ | 223.3 | $ | 238.9 | (6.5) | % | $ | 649.9 | $ | 681.1 | (4.6) | % | |||||||||||||||||||||||
Hospice | 51.2 | 50.4 | 1.6 | % | 147.0 | 123.2 | 19.3 | % | |||||||||||||||||||||||||||
Home health and hospice segment revenues | 274.5 | 289.3 | (5.1) | % | 796.9 | 804.3 | (0.9) | % | |||||||||||||||||||||||||||
Operating expenses: | |||||||||||||||||||||||||||||||||||
Cost of services sold (excluding depreciation and amortization) | 121.8 | 136.4 | (10.7) | % | 389.4 | 372.8 | 4.5 | % | |||||||||||||||||||||||||||
Support and overhead costs | 100.7 | 99.6 | 1.1 | % | 299.2 | 278.1 | 7.6 | % | |||||||||||||||||||||||||||
Equity in net income of nonconsolidated affiliates | (0.1) | (0.2) | (50.0) | % | (0.4) | (1.0) | (60.0) | % | |||||||||||||||||||||||||||
Noncontrolling interests | 0.3 | 2.7 | (88.9) | % | 0.9 | 8.2 | (89.0) | % | |||||||||||||||||||||||||||
Segment Adjusted EBITDA | $ | 51.8 | $ | 50.8 | 2.0 | % | $ | 107.8 | $ | 146.2 | (26.3) | % | |||||||||||||||||||||||
(Actual Amounts) | |||||||||||||||||||||||||||||||||||
Home health: | |||||||||||||||||||||||||||||||||||
Admissions | 40,765 | 42,174 | (3.3) | % | 118,082 | 117,946 | 0.1 | % | |||||||||||||||||||||||||||
Recertifications | 29,830 | 30,213 | (1.3) | % | 84,711 | 86,624 | (2.2) | % | |||||||||||||||||||||||||||
Episodes | 68,261 | 72,016 | (5.2) | % | 197,067 | 202,523 | (2.7) | % | |||||||||||||||||||||||||||
Revenue per episode | $ | 2,910 | $ | 2,980 | (2.3) | % | $ | 2,913 | $ | 2,997 | (2.8) | % | |||||||||||||||||||||||
Episodic visits per episode | 16.4 | 17.3 | (5.2) | % | 16.7 | 17.3 | (3.5) | % | |||||||||||||||||||||||||||
Total visits | 1,300,866 | 1,425,323 | (8.7) | % | 3,857,642 | 4,059,295 | (5.0) | % | |||||||||||||||||||||||||||
Cost per visit | $ | 75 | $ | 78 | (3.8) | % | $ | 81 | $ | 76 | 6.6 | % | |||||||||||||||||||||||
Hospice: | |||||||||||||||||||||||||||||||||||
Admissions | 3,354 | 2,884 | 16.3 | % | 9,530 | 7,586 | 25.6 | % | |||||||||||||||||||||||||||
Patient days | 346,019 | 353,549 | (2.1) | % | 1,017,071 | 852,072 | 19.4 | % | |||||||||||||||||||||||||||
Average daily census | 3,761 | 3,843 | (2.1) | % | 3,712 | 3,121 | 18.9 | % | |||||||||||||||||||||||||||
Revenue per day | $ | 148 | $ | 142 | 4.2 | % | $ | 144 | $ | 145 | (0.7) | % |
Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||||||||
2020 | 2019 | 2020 | 2019 | ||||||||||||||||||||
Operating expenses: | |||||||||||||||||||||||
Cost of services sold (excluding depreciation and amortization) | 44.4 | % | 47.1 | % | 48.9 | % | 46.4 | % | |||||||||||||||
Support and overhead costs | 36.7 | % | 34.4 | % | 37.5 | % | 34.6 | % | |||||||||||||||
Total operating expenses | 81.1 | % | 81.6 | % | 86.4 | % | 80.9 | % |
Nine Months Ended September 30, | |||||||||||
2020 | 2019 | ||||||||||
Net cash provided by operating activities | $ | 425.0 | $ | 419.7 | |||||||
Net cash used in investing activities | (264.8) | (511.7) | |||||||||
Net cash provided by financing activities | 208.3 | 472.3 | |||||||||
Increase in cash, cash equivalents, and restricted cash | $ | 368.5 | $ | 380.3 |
Total | October 1 through December 31, 2020 | 2021 - 2022 | 2023 - 2024 | 2025 and thereafter | |||||||||||||||||||||||||
Long-term debt obligations: | |||||||||||||||||||||||||||||
Long-term debt, excluding revolving credit facility and finance lease obligations (a) | $ | 3,204.1 | $ | 3.6 | $ | 41.5 | $ | 1,237.5 | $ | 1,921.5 | |||||||||||||||||||
Interest on long-term debt (b) | 855.7 | 33.7 | 268.6 | 234.5 | 318.9 | ||||||||||||||||||||||||
Finance lease obligations (c) | 606.6 | 12.5 | 97.8 | 90.5 | 405.8 | ||||||||||||||||||||||||
Operating lease obligations (d) | 365.8 | 13.4 | 114.4 | 83.1 | 154.9 | ||||||||||||||||||||||||
Purchase obligations (e) | 119.6 | 17.6 | 73.1 | 22.4 | 6.5 | ||||||||||||||||||||||||
Other long-term liabilities (f)(g) | 3.3 | 0.1 | 0.5 | 0.4 | 2.3 | ||||||||||||||||||||||||
Total | $ | 5,155.1 | $ | 80.9 | $ | 595.9 | $ | 1,668.4 | $ | 2,809.9 |
Nine Months Ended September 30, 2020 | ||||||||
(In Millions) | ||||||||
Net operating revenues | $ | 2,527.6 | ||||||
Intercompany revenues generated from non-guarantor subsidiaries | 14.3 | |||||||
Total net operating revenues | $ | 2,541.9 | ||||||
Operating expenses | $ | 2,237.1 | ||||||
Intercompany expenses incurred in transactions with non-guarantor subsidiaries | 23.0 | |||||||
Total operating expenses | $ | 2,260.1 | ||||||
Income from continuing operations | $ | 116.2 | ||||||
Net income | $ | 116.2 | ||||||
Net income attributable to Encompass Health | $ | 115.8 |
As of September 30, 2020 | As of December 31, 2019 | ||||||||||
(In Millions) | |||||||||||
Total current assets | $ | 948.2 | $ | 556.7 | |||||||
Property and equipment, net | $ | 1,491.3 | $ | 1,385.9 | |||||||
Goodwill | 1,973.6 | 1,972.7 | |||||||||
Intercompany receivable due from non-guarantor subsidiaries | 155.9 | 118.4 | |||||||||
Other noncurrent assets | 750.0 | 790.7 | |||||||||
Total noncurrent assets | $ | 4,370.8 | $ | 4,267.7 | |||||||
Total current liabilities | $ | 554.0 | $ | 604.4 | |||||||
Long-term debt, net of current portion | $ | 3,500.9 | $ | 2,981.7 | |||||||
Other noncurrent liabilities | 287.1 | 253.5 | |||||||||
Total noncurrent liabilities | $ | 3,788.0 | $ | 3,235.2 | |||||||
Redeemable noncontrolling interests | $ | — | $ | 208.2 |
Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||||||||
2020 | 2019 | 2020 | 2019 | ||||||||||||||||||||
Net income | $ | 100.1 | $ | 119.5 | $ | 257.1 | $ | 355.6 | |||||||||||||||
Loss from discontinued operations, net of tax, attributable to Encompass Health | — | — | — | 0.6 | |||||||||||||||||||
Net income attributable to noncontrolling interests | (22.4) | (21.9) | (58.9) | (64.5) | |||||||||||||||||||
Provision for income tax expense | 26.9 | 34.3 | 65.8 | 88.6 | |||||||||||||||||||
Interest expense and amortization of debt discounts and fees | 49.0 | 40.3 | 138.0 | 115.2 | |||||||||||||||||||
Government, class action, and related settlements | — | — | 2.8 | — | |||||||||||||||||||
Loss on disposal or impairment of assets | 7.5 | 0.9 | 10.6 | 3.3 | |||||||||||||||||||
Depreciation and amortization | 61.2 | 55.1 | 180.7 | 160.3 | |||||||||||||||||||
Loss on early extinguishment of debt | — | — | — | 2.3 | |||||||||||||||||||
Stock-based compensation expense | 8.3 | 21.7 | 25.3 | 87.0 | |||||||||||||||||||
Transaction costs | — | 1.0 | — | 2.0 | |||||||||||||||||||
Gain on consolidation of joint venture formerly accounted for under the equity method of accounting | — | (19.2) | (2.2) | (19.2) | |||||||||||||||||||
SARs mark-to-market impact on noncontrolling interests | — | (0.9) | — | (4.3) | |||||||||||||||||||
Change in fair market value of equity securities | (0.4) | — | (0.3) | (1.2) | |||||||||||||||||||
Payroll taxes on SARs exercise | — | 0.8 | 1.5 | 1.0 | |||||||||||||||||||
Adjusted EBITDA | $ | 230.2 | $ | 231.6 | $ | 620.4 | $ | 726.7 |
Nine Months Ended September 30, | |||||||||||
2020 | 2019 | ||||||||||
Net cash provided by operating activities | $ | 425.0 | $ | 419.7 | |||||||
Interest expense and amortization of debt discounts and fees | 138.0 | 115.2 | |||||||||
Equity in net income of nonconsolidated affiliates | 2.5 | 5.5 | |||||||||
Net income attributable to noncontrolling interests in continuing operations | (58.9) | (64.5) | |||||||||
Amortization of debt-related items | (5.1) | (3.1) | |||||||||
Distributions from nonconsolidated affiliates | (2.8) | (4.8) | |||||||||
Current portion of income tax expense | 71.5 | 67.8 | |||||||||
Change in assets and liabilities | 47.7 | 185.4 | |||||||||
Cash used in operating activities of discontinued operations | 0.2 | 4.6 | |||||||||
Transaction costs | — | 2.0 | |||||||||
SARs mark-to-market impact on noncontrolling interests | — | (4.3) | |||||||||
Change in fair market value of equity securities | (0.3) | (1.2) | |||||||||
Payroll taxes on SARs exercise | 1.5 | 1.0 | |||||||||
Other | 1.1 | 3.4 | |||||||||
Adjusted EBITDA | $ | 620.4 | $ | 726.7 |
Period | Total Number of Shares (or Units) Purchased(1) | Average Price Paid per Share (or Unit) ($) | Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs | Maximum Number (or Approximate Dollar Value) of Shares That May Yet Be Purchased Under the Plans or Programs(2) | ||||||||||||||||||||||
July 1 through July 31, 2020 | 1,070 | $ | 63.47 | — | $ | 199,253,887 | ||||||||||||||||||||
August 1 through August 31, 2020 | — | — | — | 199,253,887 | ||||||||||||||||||||||
September 1 through September 30, 2020 | — | — | — | 199,253,887 | ||||||||||||||||||||||
Total | 1,070 | 63.47 | — |
ENCOMPASS HEALTH CORPORATION | ||||||||
By: | /s/ Douglas E. Coltharp | |||||||
Douglas E. Coltharp | ||||||||
Executive Vice President and Chief Financial Officer | ||||||||
Date: | November 2, 2020 |
No. | Description | |||||||||||||
Tenth Supplemental Indenture, dated as of October 5, 2020, among Encompass Health Corporation, the guarantors party thereto and Wells Fargo Bank, National Association, as trustee, relating to the 4.625% Notes due 2031 (incorporated by reference to Exhibit 4.2 to the Encompass Health’s Current Report on Form 8-K filed on October 5, 2020). | ||||||||||||||
101 | Sections of the Encompass Health Corporation Quarterly Report on Form 10-Q for the quarter ended September 30, 2020, formatted in XBRL (eXtensible Business Reporting Language), submitted in the following files: | |||||||||||||
101.INS | XBRL Instance Document (the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document) | |||||||||||||
101.SCH | XBRL Taxonomy Extension Schema Document | |||||||||||||
101.CAL | XBRL Taxonomy Extension Calculation Linkbase Document | |||||||||||||
101.DEF | XBRL Taxonomy Extension Definition Linkbase Document | |||||||||||||
101.LAB | XBRL Taxonomy Extension Label Linkbase Document | |||||||||||||
101.PRE | XBRL Taxonomy Extension Presentation Linkbase Document | |||||||||||||
104 | Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101) |
ENCOMPASS HEALTH CORPORATION | ||
By: _____________________________________ | ||
Date: ___________________________________ | ||
EXECUTIVE | ||
Name: ________________________________ | ||
Date: ___________________________________ | ||
Name: _______________________________ | ||
1.Amount Payable: ____________________ | ||
2. Months: ___________________________ | ||
A&B Home Health Solutions, LLC | ||
Abba Home Health, L.P. | ||
Advanced Homecare Holdings, Inc. | ||
Advanced Homecare Management, Inc. | ||
AHM Action Home Health, LP | ||
AHM Texas GP, LLC | ||
AHM Texas LP, Inc. | ||
Apex Hospice LLC | ||
Best Home Care LP | ||
Camellia Home Health of Alabama, LLC | ||
Camellia Home Health of East Tennessee, LLC | ||
Camellia Home Health of the Gulf Coast, LLC | ||
Camellia Hospice of Central Mississippi, LLC | ||
Camellia Hospice of East Louisiana, LLC | ||
Camellia Hospice of Louisiana, LLC | ||
Camellia Hospice of North Mississippi, LLC | ||
Camellia Hospice of Northeast Alabama LLC | ||
Camellia Hospice of Northeast Mississippi, LLC | ||
Camellia Hospice of South Alabama, LLC | ||
Camellia Hospice of Southwest Mississippi, LLC | ||
Camellia Hospice of the Gulf Coast, LLC | ||
Camellia Medical Systems, Inc. | ||
CareServices of the Treasure Coast, LLC | ||
CareSouth Health System, Inc. | ||
CareSouth HHA Holdings of Columbus, LLC | ||
CareSouth HHA Holdings of Dothan, LLC | ||
CareSouth HHA Holdings of Gainesville, LLC | ||
CareSouth HHA Holdings of Greensboro, LLC | ||
CareSouth HHA Holdings of Lexington, LLC | ||
CareSouth HHA Holdings of North Florida, LLC | ||
CareSouth HHA Holdings of Panama City, LLC | ||
CareSouth HHA Holdings of Richmond, LLC | ||
CareSouth HHA Holdings of South Carolina, LLC | ||
CareSouth HHA Holdings of Tallahassee, LLC | ||
CareSouth HHA Holdings of the Bay Area, LLC | ||
CareSouth HHA Holdings of Valley, LLC | ||
CareSouth HHA Holdings of Virginia, LLC | ||
CareSouth HHA Holdings of Washington, LLC | ||
CareSouth HHA Holdings of Western Carolina, LLC | ||
CareSouth HHA Holdings of Winchester, LLC | ||
CareSouth HHA Holdings, LLC | ||
CareSouth Hospice, LLC | ||
Continental Home Care, LLC | ||
Continental Medical Systems, LLC |
Continental Rehabilitation Hospital of Arizona, Inc. | ||
CS Health & Wellness, LLC | ||
Day-By-Day Staff Relief, LLC | ||
DOSIK, INC. | ||
DRC Health Systems, L.P. | ||
EHHI Holdings, Inc. | ||
Encompass Health Acquisition Holdings, LLC | ||
Encompass Health Acquisition Holdings Subsidiary, LLC | ||
Encompass Health Alabama Real Estate, LLC | ||
Encompass Health Arizona Real Estate, LLC | ||
Encompass Health Arkansas Real Estate, LLC | ||
Encompass Health Boise Holdings, LLC | ||
Encompass Health Bryan Holdings, LLC | ||
Encompass Health C Corp Sub Holdings, Inc. | ||
Encompass Health California Real Estate, LLC | ||
Encompass Health Central Arkansas Holdings, Inc. | ||
Encompass Health Colorado Real Estate, LLC | ||
Encompass Health Deaconess Holdings, LLC | ||
Encompass Health Fairlawn Holdings, LLC | ||
Encompass Health GKBJH Holdings, LLC | ||
Encompass Health Gulfport Holdings, LLC | ||
Encompass Health Home Health Corporation | ||
Encompass Health Home Health Holdings, Inc. | ||
Encompass Health Home Health of Alabama, LLC | ||
Encompass Health Home Health of Birmingham, LLC | ||
Encompass Health Home Health of Central Virginia, LLC | ||
Encompass Health Home Health of Florida, LLC | ||
Encompass Health Home Health of Kentucky, LLC | ||
Encompass Health Home Health of New England, LLC | ||
Encompass Health Home Health of Ohio, LLC | ||
Encompass Health Hospice of Alabama, LLC | ||
Encompass Health Hospice of Pennsylvania, LLC | ||
Encompass Health Hospice of the Midwest, LLC | ||
Encompass Health Hospice of the Southwest, LLC | ||
Encompass Health Iowa Real Estate, LLC | ||
Encompass Health Johnson City Holdings, LLC | ||
Encompass Health Joint Ventures Holdings, LLC | ||
Encompass Health Jonesboro Holdings, Inc. | ||
Encompass Health Kansas Real Estate, LLC | ||
Encompass Health Kentucky Real Estate, LLC | ||
Encompass Health Littleton Holdings, LLC | ||
Encompass Health Lubbock Holdings, LLC | ||
Encompass Health Martin County Holdings, LLC | ||
Encompass Health Maryland Real Estate, LLC | ||
Encompass Health Massachusetts Real Estate, LLC | ||
Encompass Health Midland Odessa Holdings, LLC | ||
Encompass Health Myrtle Beach Holdings, LLC | ||
Encompass Health Nevada Real Estate, LLC | ||
Encompass Health New Mexico Real Estate, LLC |
Encompass Health Ohio Real Estate, LLC | ||
Encompass Health Owned Hospitals Holdings, LLC | ||
Encompass Health Pennsylvania Real Estate, LLC | ||
Encompass Health Properties, LLC | ||
Encompass Health Real Estate, LLC | ||
Encompass Health Rehabilitation Hospital of Abilene, LLC | ||
Encompass Health Rehabilitation Hospital of Albuquerque, LLC | ||
Encompass Health Rehabilitation Hospital of Altamonte Springs, LLC | ||
Encompass Health Rehabilitation Hospital of Arlington, LLC | ||
Encompass Health Rehabilitation Hospital of Austin, LLC | ||
Encompass Health Rehabilitation Hospital of Bakersfield, LLC | ||
Encompass Health Rehabilitation Hospital of Bluffton, LLC | ||
Encompass Health Rehabilitation Hospital of Braintree, LLC | ||
Encompass Health Rehabilitation Hospital of Cardinal Hill, LLC | ||
Encompass Health Rehabilitation Hospital of Charleston, LLC | ||
Encompass Health Rehabilitation Hospital of Cincinnati, LLC | ||
Encompass Health Rehabilitation Hospital of City View, Inc. | ||
Encompass Health Rehabilitation Hospital of Colorado Springs, Inc. | ||
Encompass Health Rehabilitation Hospital of Columbia, Inc. | ||
Encompass Health Rehabilitation Hospital of Concord, Inc. | ||
Encompass Health Rehabilitation Hospital of Cypress, LLC | ||
Encompass Health Rehabilitation Hospital of Dallas, LLC | ||
Encompass Health Rehabilitation Hospital of Desert Canyon, LLC | ||
Encompass Health Rehabilitation Hospital of Dothan, Inc. | ||
Encompass Health Rehabilitation Hospital of East Valley, LLC | ||
Encompass Health Rehabilitation Hospital of Erie, LLC | ||
Encompass Health Rehabilitation Hospital of Florence, Inc. | ||
Encompass Health Rehabilitation Hospital of Fort Smith, LLC | ||
Encompass Health Rehabilitation Hospital of Franklin, LLC | ||
Encompass Health Rehabilitation Hospital of Fredericksburg, LLC | ||
Encompass Health Rehabilitation Hospital of Gadsden, LLC | ||
Encompass Health Rehabilitation Hospital of Harmarville, LLC | ||
Encompass Health Rehabilitation Hospital of Henderson, LLC | ||
Encompass Health Rehabilitation Hospital of Humble, LLC | ||
Encompass Health Rehabilitation Hospital of Katy, LLC | ||
Encompass Health Rehabilitation Hospital of Kingsport, LLC | ||
Encompass Health Rehabilitation Hospital of Lakeview, LLC | ||
Encompass Health Rehabilitation Hospital of Largo, LLC | ||
Encompass Health Rehabilitation Hospital of Las Vegas, LLC | ||
Encompass Health Rehabilitation Hospital of Littleton, LLC | ||
Encompass Health Rehabilitation Hospital of Manati, Inc. | ||
Encompass Health Rehabilitation Hospital of Mechanicsburg, LLC | ||
Encompass Health Rehabilitation Hospital of Miami, LLC | ||
Encompass Health Rehabilitation Hospital of Middletown, LLC | ||
Encompass Health Rehabilitation Hospital of Modesto, LLC | ||
Encompass Health Rehabilitation Hospital of Montgomery, Inc. | ||
Encompass Health Rehabilitation Hospital of Murrieta, LLC | ||
Encompass Health Rehabilitation Hospital of New England, LLC | ||
Encompass Health Rehabilitation Hospital of Newnan, LLC |
Encompass Health Rehabilitation Hospital of Nittany Valley, Inc. | ||
Encompass Health Rehabilitation Hospital of Northern Kentucky, LLC | ||
Encompass Health Rehabilitation Hospital of Northern Virginia, LLC | ||
Encompass Health Rehabilitation Hospital of Northwest Tucson, L.P. | ||
Encompass Health Rehabilitation Hospital of Ocala, LLC | ||
Encompass Health Rehabilitation Hospital of Panama City, Inc. | ||
Encompass Health Rehabilitation Hospital of Pearland, LLC | ||
Encompass Health Rehabilitation Hospital of Petersburg, LLC | ||
Encompass Health Rehabilitation Hospital of Plano, LLC | ||
Encompass Health Rehabilitation Hospital of Reading, LLC | ||
Encompass Health Rehabilitation Hospital of Richardson, LLC | ||
Encompass Health Rehabilitation Hospital of Round Rock, LLC | ||
Encompass Health Rehabilitation Hospital of San Antonio, Inc. | ||
Encompass Health Rehabilitation Hospital of San Juan, Inc. | ||
Encompass Health Rehabilitation Hospital of Sarasota, LLC | ||
Encompass Health Rehabilitation Hospital of Scottsdale, LLC | ||
Encompass Health Rehabilitation Hospital of Shelby County, LLC | ||
Encompass Health Rehabilitation Hospital of Spring Hill, Inc. | ||
Encompass Health Rehabilitation Hospital of Sugar Land, LLC | ||
Encompass Health Rehabilitation Hospital of Sunrise, LLC | ||
Encompass Health Rehabilitation Hospital of Tallahassee, LLC | ||
Encompass Health Rehabilitation Hospital of Texarkana, Inc. | ||
Encompass Health Rehabilitation Hospital of the Mid-Cities, LLC | ||
Encompass Health Rehabilitation Hospital of The Woodlands, Inc. | ||
Encompass Health Rehabilitation Hospital of Toms River, LLC | ||
Encompass Health Rehabilitation Hospital of Treasure Coast, Inc. | ||
Encompass Health Rehabilitation Hospital of Tustin, L.P. | ||
Encompass Health Rehabilitation Hospital of Utah, LLC | ||
Encompass Health Rehabilitation Hospital of Vineland, LLC | ||
Encompass Health Rehabilitation Hospital of Western Massachusetts, LLC | ||
Encompass Health Rehabilitation Hospital of York, LLC | ||
Encompass Health Rehabilitation Hospital The Vintage, LLC | ||
Encompass Health Rehabilitation Hospital Vision Park, LLC | ||
Encompass Health Rehabilitation Institute of Tucson, LLC | ||
Encompass Health Savannah Holdings, LLC | ||
Encompass Health Sea Pines Holdings, LLC | ||
Encompass Health Sewickley Holdings, LLC | ||
Encompass Health South Carolina Real Estate, LLC | ||
Encompass Health South Dakota Real Estate, LLC | ||
Encompass Health Support Companies, LLC | ||
Encompass Health Texas Real Estate, LLC | ||
Encompass Health Tucson Holdings, LLC | ||
Encompass Health Tulsa Holdings, LLC | ||
Encompass Health Tyler Holdings, Inc. | ||
Encompass Health Utah Real Estate, LLC | ||
Encompass Health ValleyofTheSun Rehabilitation Hospital, LLC | ||
Encompass Health Virginia Real Estate, LLC | ||
Encompass Health Walton Rehabilitation Hospital, LLC | ||
Encompass Health West Tennessee Holdings, LLC |
Encompass Health West Virginia Real Estate, LLC | ||
Encompass Health Westerville Holdings, LLC | ||
Encompass Health Winston-Salem Holdings, LLC | ||
Encompass Health Yuma Holdings, Inc. | ||
Encompass Home Health of Austin, LLC | ||
Encompass Home Health of Colorado, LLC | ||
Encompass Home Health of DFW, LLC | ||
Encompass Home Health of East Texas, LLC | ||
Encompass Home Health of New England, LLC | ||
Encompass Home Health of the Mid Atlantic, LLC | ||
Encompass Home Health of the Midwest, LLC | ||
Encompass Home Health of the Southeast, LLC | ||
Encompass Home Health of the West, LLC | ||
Encompass Hospice of the West, LLC | ||
Encompass of Fort Worth, LP | ||
Encompass of West Texas, LP | ||
EXCELLA ASSOCIATES, L.L.C. | ||
EXCELLA HEALTHCARE, INC. | ||
EXCELLA HOME HEALTH AGENCY, LLC | ||
EXCELLA HOMECARE, INC. | ||
Guardian Home Care, Inc. | ||
Hallmark Homecare, L.P. | ||
HealthCare Innovations of Oklahoma, L.L.C. | ||
HEALTHCARE INNOVATIONS OF WESTERN OKLAHOMA, LLC | ||
HealthCare Innovations-Travertine Health Services, L.L.C. | ||
HealthSouth Rehabilitation Hospital of Austin, Inc. | ||
HealthSouth Rehabilitation Hospital of Fort Worth, LLC | ||
Home Health Care of Bogalusa, Inc. | ||
Home Health Care Systems, Inc. | ||
Hospice Care of Mississippi, LLC | ||
Idaho Homecare Holdings, Inc. | ||
Orion Homecare, LLC | ||
Preferred Home Health, L.P. | ||
Print Promotions Group, LLC | ||
Rebound, LLC | ||
Rehabilitation Hospital Corporation of America, LLC | ||
Rehabilitation Hospital of North Alabama, LLC | ||
Rehabilitation Hospital of Plano, LLC | ||
Reliant Blocker Corp. | ||
Saad Healthcare of St. Clair County LLC | ||
Texas Senior Care, L.P. | ||
TH of San Antonio LLC | ||
WellCare, Inc. | ||
Wellmark Healthcare Services of El Paso, Inc. | ||
West Mississippi Home Health Services, Inc. | ||
Western Neuro Care, Inc. |
Date: | November 2, 2020 | |||||||||||||
By: | /s/ MARK J. TARR | |||||||||||||
Mark J. Tarr | ||||||||||||||
President and Chief Executive Officer | ||||||||||||||
Date: | November 2, 2020 | |||||||||||||
By: | /s/ DOUGLAS E. COLTHARP | |||||||||||||
Douglas E. Coltharp | ||||||||||||||
Executive Vice President and | ||||||||||||||
Chief Financial Officer |
Date: | November 2, 2020 | |||||||||||||
By: | /s/ MARK J. TARR | |||||||||||||
Mark J. Tarr | ||||||||||||||
President and Chief Executive Officer | ||||||||||||||
Date: | November 2, 2020 | |||||||||||||
By: | /s/ DOUGLAS E. COLTHARP | |||||||||||||
Douglas E. Coltharp | ||||||||||||||
Executive Vice President and | ||||||||||||||
Chief Financial Officer |
Condensed Consolidated Balance Sheets (Unaudited) - USD ($) $ in Millions |
Sep. 30, 2020 |
Dec. 31, 2019 |
||
---|---|---|---|---|
Current assets: | ||||
Cash and cash equivalents | $ 450.0 | $ 94.8 | ||
Restricted cash | 57.2 | 57.4 | ||
Accounts receivable | 593.3 | 506.1 | ||
Other current assets | 73.9 | 97.5 | ||
Total current assets | 1,174.4 | 755.8 | ||
Property and equipment, net | 2,094.9 | 1,959.3 | ||
Operating lease right-of-use assets | 267.2 | 276.5 | ||
Goodwill | 2,318.7 | 2,305.2 | ||
Intangible assets, net | 441.9 | 476.3 | ||
Deferred income tax assets | 7.5 | 2.9 | ||
Other long-term assets | 305.9 | 304.7 | ||
Total assets | [1] | 6,610.5 | 6,080.7 | |
Current liabilities: | ||||
Current portion of long-term debt | 37.0 | 39.3 | ||
Current operating lease liabilities | 47.1 | 40.4 | ||
Accounts payable | 119.6 | 94.6 | ||
Accrued expenses and other current liabilities | 478.8 | 546.7 | ||
Total current liabilities | 682.5 | 721.0 | ||
Long-term debt, net of current portion | 3,539.4 | 3,023.3 | ||
Long-term operating lease liabilities | 228.9 | 243.8 | ||
Other long-term liabilities | 230.0 | 159.9 | ||
Total liabilities | 4,680.8 | 4,148.0 | ||
Commitments and contingencies | ||||
Redeemable noncontrolling interests | 34.0 | 239.6 | ||
Shareholders’ equity: | ||||
Encompass Health shareholders’ equity | 1,520.8 | 1,352.2 | ||
Noncontrolling interests | 374.9 | 340.9 | ||
Total shareholders’ equity | 1,895.7 | 1,693.1 | ||
Total liabilities and shareholders' equity | [1] | $ 6,610.5 | $ 6,080.7 | |
|
Condensed Consolidated Balance Sheets (Unaudited) (Parenthetical) - USD ($) $ in Millions |
Sep. 30, 2020 |
Dec. 31, 2019 |
||
---|---|---|---|---|
Assets | [1] | $ 6,610.5 | $ 6,080.7 | |
Liabilities | 4,680.8 | 4,148.0 | ||
VIE | ||||
Assets | 222.0 | 215.0 | ||
Liabilities | $ 44.6 | $ 41.1 | ||
|
Condensed Consolidated Statements of Shareholders' Equity (Unaudited) (Parenthetical) - $ / shares |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Sep. 30, 2020 |
Sep. 30, 2019 |
Sep. 30, 2020 |
Sep. 30, 2019 |
|
Statement of Stockholders' Equity [Abstract] | ||||
Dividends declared on common stock (in dollars per share) | $ 0.28 | $ 0.28 | $ 0.84 | $ 0.82 |
Basis of Presentation |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Organization, Consolidation and Presentation of Financial Statements [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Basis of Presentation | Basis of Presentation Encompass Health Corporation, incorporated in Delaware in 1984, including its subsidiaries, is one of the nation’s largest providers of post-acute healthcare services, offering both facility-based and home-based patient services in 39 states and Puerto Rico through its network of inpatient rehabilitation hospitals, home health agencies, and hospice agencies. We manage our operations and disclose financial information using two reportable segments: (1) inpatient rehabilitation and (2) home health and hospice. See also Note 11, Segment Reporting. The accompanying unaudited condensed consolidated financial statements of Encompass Health Corporation and Subsidiaries should be read in conjunction with the consolidated financial statements and accompanying notes contained in Encompass Health’s Annual Report on Form 10-K filed with the United States Securities and Exchange Commission on February 27, 2020 (the “2019 Form 10‑K”). The unaudited condensed consolidated financial statements have been prepared in accordance with the rules and regulations of the SEC applicable to interim financial information. Certain information and note disclosures included in financial statements prepared in accordance with generally accepted accounting principles in the United States of America have been omitted in these interim statements, as allowed by such SEC rules and regulations. The condensed consolidated balance sheet as of December 31, 2019 has been derived from audited financial statements, but it does not include all disclosures required by GAAP. However, we believe the disclosures are adequate to make the information presented not misleading. The unaudited results of operations for the interim periods shown in these financial statements are not necessarily indicative of operating results for the entire year. In our opinion, the accompanying condensed consolidated financial statements recognize all adjustments of a normal recurring nature considered necessary to fairly state the financial position, results of operations, and cash flows for each interim period presented. Consolidation— As a result of an amendment to the joint venture agreement related to Yuma Rehabilitation Hospital, the accounting for this hospital changed from the equity method of accounting to a consolidated entity effective July 1, 2019. The amendment revised certain participatory rights held by our joint venture partner resulting in Encompass Health gaining control of this entity from an accounting perspective. We accounted for this change in control as a business combination and consolidated this entity using the acquisition method. The consolidation of Yuma Rehabilitation Hospital did not have a material impact on our financial position, results of operations, or cash flows. As a result of our consolidation of this hospital and the remeasurement of our previously held equity interest at fair value, Goodwill increased by $24.9 million and we recorded a $19.2 million gain as part of Other income during the three and nine months ended September 30, 2019. Net Operating Revenues— Our Net operating revenues disaggregated by payor source and segment are as follows (in millions):
Medicare Administrative Contractors, under programs known as “widespread probes”, have conducted pre-payment claim reviews of our Medicare billings and in some cases denied payment for certain diagnosis codes. We dispute or “appeal” most of these denials, and for claims we choose to take to administrative law judge (“ALJ”) hearings, we have historically experienced a success rate of 70%. This historical success rate is a component of our estimate of transaction price utilized in determining Net operating revenues. The Medicare appeals adjudication process is administered by the Office of Medicare Hearings and Appeals (“OMHA”) and has been subject to significant delay resulting in a backlog of claims awaiting adjudication. Beginning in March 2020, OMHA increased the frequency of hearings and the number of claims set at each hearing, which we believe adds to the substantive and procedural deficiencies in the appeals process. If current OHMA practices continue, an increased number of unfavorable ALJ decisions could have a negative effect on our long-term ALJ success rate. We are exploring various remedies to counter such negative effects. We believe it is too early to determine what impact, if any, these recent changes in the appeals process will have on our historical success rate or Net operating revenues. See Note 1, Summary of Significant Accounting Policies, to the consolidated financial statements accompanying the 2019 Form 10-K for our policy related to Net operating revenues. Risks and Uncertainties— The novel coronavirus disease 2019 (“COVID-19”) pandemic has caused a disruption to our nation’s healthcare system. Such disruption includes reductions in the availability of personal protective equipment (“PPE”) to prevent spread of the disease during patient treatment and increases in the cost of PPE. Elective procedures were postponed by physicians and acute-care hospitals and limited by governmental order to preserve capacity for the expected volume of COVID-19 patients and reduce the risk of the spread of COVID-19. Initially, these postponements and limitations were widespread. Now, they are more market or state specific and driven by the extent of the pandemic in those areas. Beginning in mid-March and continuing into the second and third quarters, we experienced decreased volumes in both segments which we believe resulted from a number of conditions related to the COVID-19 pandemic including: lower acute-care hospital censuses due to the deferral of elective surgeries and shelter-in-place orders, restrictive visitation policies in place at acute-care hospitals that severely limit access to patients and caregivers by our clinical rehabilitation liaisons and care transition coordinators, lock downs of assisted living facilities that prevent our home care and hospice clinicians and other care providers from visiting patients, and heightened anxiety among patients and their family members regarding the risk of exposure to COVID-19 during acute-care and post-acute care treatment. In the home health and hospice segment, we also experienced decreases in visits per episode and institutional referrals because of the COVID-19 pandemic, both of which negatively impacted pricing for home health. In March and April 2020, the federal government began to undertake numerous legislative and regulatory initiatives designed to provide relief to the healthcare industry during the COVID-19 pandemic. A specific initiative impacting us is the Coronavirus Aid, Relief, and Economic Security Act of 2020 (the “CARES Act”) which temporarily suspends the automatic 2% reduction of Medicare program payments known as “sequestration” for the period of May 1 through December 31, 2020 and authorizes the cash distribution of relief funds from the United States Department of Health and Human Services (“HHS”) to healthcare providers in response to the COVID-19 pandemic. On April 10, 2020, HHS began distributing CARES Act relief funds, for which we did not apply, to various of our bank accounts. We refused the CARES Act relief funds, and our banks returned all the funds to HHS. We intend to refuse any additional CARES Act relief funds distributed in the future. Additionally, the CARES Act and a series of waivers and guidance issued by the Centers for Medicare and Medicaid Services (“CMS”) suspend various Medicare patient coverage criteria and documentation and care requirements in an effort to provide regulatory relief until the public health emergency for the COVID-19 pandemic has ended. For inpatient rehabilitation, the regulatory relief includes the temporary suspension of the requirement that patients must be able to tolerate a minimum of three hours of therapy per day for five days per week, waiver of certain of the requirements that at least 60% of a facility’s patients must have a diagnosis from at least 1 of 13 specified medical conditions, and waiver of the requirement for a physician to conduct and document a post-admission evaluation (as part of the Notice of Final Rulemaking for Fiscal Year 2021 for inpatient rehabilitation facilities under the inpatient rehabilitation facility prospective payment system, CMS removed the post-admission evaluation requirement from the inpatient rehabilitation coverage criteria effective October 1, 2020). In addition, the requirement of physician face-to-face visits at least three days a week may be fulfilled using telehealth. For home health, the relief includes the allowance of nurse practitioners and physician assistants under certain conditions to certify, establish and periodically review the plan of care, as well as supervise the provision of items and services for beneficiaries under the Medicare home health benefit and expands the use of telehealth. Additionally, CMS expanded the definition of “homebound” to include patients needing skilled services who are homebound due solely to their COVID-19 diagnosis or patients susceptible to contract COVID-19. For hospice, the relief includes the temporary waiver of the requirement to use volunteers and to conduct a nurse visit every two weeks to evaluate aides, as well as the expanded use of telehealth for routine services and patient recertification. As discussed in Note 4, Long-term Debt, in April 2020, we amended our credit agreement primarily to provide covenant relief due to business disruptions from the COVID-19 pandemic. The amendment included, among other things, the carve-out of the COVID-19 pandemic from the definition of material adverse effect for 364 days and modifications to the interest coverage and leverage ratios under the agreement. The foregoing and other disruptions to our business as a result of the COVID-19 pandemic have had and are likely to continue to have an adverse effect on our business and could have a material adverse effect on our business, results of operations, financial condition and cash flows.Recently Adopted Accounting Pronouncements— In June 2016, the FASB issued ASU 2016-13, “Financial Instruments – Credit Losses (Topic 326),” which provides guidance for accounting for credit losses on financial instruments. The new guidance introduces an approach based on expected losses to estimate credit losses on certain types of financial instruments and modifies the impairment model for available-for-sale debt securities. The new guidance was effective for us beginning January 1, 2020. The adoption of this guidance resulted in an immaterial change to our condensed consolidated financial statements. In August 2018, the FASB issued ASU 2018-15, “Intangibles—Goodwill and Other—Internal-Use Software (Subtopic 350-40): Customer’s Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That Is a Service Contract.” The update helps entities evaluate the accounting for fees paid by a customer in a cloud computing arrangement (hosting arrangement), by providing guidance in determining when the arrangement includes a software license. It requires entities to account for such costs consistent with the guidance on capitalizing costs associated with developing or obtaining internal-use software. The new guidance was effective for us beginning January 1, 2020. The adoption of this guidance did not have a material impact to our condensed consolidated financial statements. In March 2020, the Securities and Exchange Commission adopted final rules that amend the financial disclosure requirements in Rule 3-10 of Regulation S-X for guarantors of registered debt securities and subsidiary issuers. The new rules are effective January 4, 2021, but early adoption is permitted. The new rules permit alternative disclosures of summarized financial information, rather than our previous footnote presentation of condensed consolidating financial statements. The new rules also permit the summarized financial information and related disclosures to be presented outside of the condensed consolidated financial statements and accompanying notes. We elected to early adopt the new rules effective July 1, 2020. The summarized financial information and related disclosures are presented in Item 2, Management’s Discussion and Analysis of Financial Condition and Results of Operations, of this report. Recent Accounting Pronouncements Not Yet Adopted— In December 2019, the FASB issued ASU 2019-12, “Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes.” The standard removes certain exceptions to the general principles of ASC 740 and simplifies other areas such as accounting for outside basis differences of equity method investments. Either prospective or retrospective transition of this standard is dependent upon the specific amendments. The new guidance is effective for us beginning January 1, 2021, including interim periods within that reporting period. Early adoption is permitted. We continue to review the requirements of this standard and any potential impact it may have on our condensed consolidated financial statements. We do not believe any other recently issued, but not yet effective, accounting standards will have a material effect on our condensed consolidated financial position, results of operations, or cash flows.
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Business Combinations |
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Business Combinations [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Business Combinations | Business Combinations Inpatient Rehabilitation During the nine months ended September 30, 2020, we completed the following inpatient rehabilitation acquisitions, none of which were individually material to our financial position, results of operations, or cash flows. Each acquisition was made to enhance our position and ability to provide inpatient rehabilitation services to patients in the applicable geographic areas. •In January 2020, we acquired 68% of the operations of a 13-bed inpatient rehabilitation unit in Denver, Colorado through a joint venture with Portercare Adventist Health System. The acquisition was funded through a contribution of our existing 40-bed inpatient rehabilitation hospital in Littleton, Colorado and through contributions of funds which were utilized by the consolidated joint venture to build a 20-bed expansion to the Littleton hospital. •In May 2020, we acquired 51% of the operations of a 45-bed inpatient rehabilitation unit in Dayton, Ohio through a joint venture with Premier Health Partners. The acquisition was funded through contributions of funds which were utilized by the consolidated joint venture to build a 60-bed de novo inpatient rehabilitation hospital. We accounted for these transactions under the acquisition method of accounting and reported the results of operations of the acquired hospitals from its respective date of acquisition. Assets acquired were recorded at their estimated fair values as of the acquisition date. Estimated fair values were based on various valuation methodologies including: an income approach using primarily discounted cash flow techniques for the noncompete intangible assets and an income approach utilizing the relief from royalty method for the trade name intangible asset. The aforementioned income methods utilize management’s estimates of future operating results and cash flows discounted using a weighted-average cost of capital that reflects market participant assumptions. The excess of the fair value of the consideration conveyed over the fair value of the assets acquired was recorded as goodwill. The goodwill reflects our expectations of our ability to gain access to and penetrate the acquired hospital’s historical patient base and the benefits of being able to leverage operational efficiencies with favorable growth opportunities based on positive demographic trends in this market. None of the goodwill recorded as a result from these transactions is deductible for federal income tax purposes. The fair value of the assets acquired at the acquisition date were as follows (in millions):
Information regarding the net cash paid for the inpatient rehabilitation acquisitions during each period presented is as follows (in millions):
Home Health and Hospice In March 2020, we acquired the assets of Generation Solutions of Lynchburg, LLC in Lynchburg, Virginia. This acquisition was made to enhance our position and ability to provide post-acute healthcare services to patients in Central Virginia. The acquisition was funded using cash on hand and was immaterial to our financial position, results of operations, and cash flows. We accounted for this transaction under the acquisition method of accounting and reported the results of operations of the acquired location from the date of acquisition. Assets acquired were recorded at their estimated fair values as of the acquisition date. The fair values of identifiable intangible assets were based on valuations using an income approach. The income approach is based on management’s estimates of future operating results and cash flows discounted using a weighted-average cost of capital that reflects market participant assumptions. The excess of the fair value of the consideration conveyed over the fair value of the net assets acquired was recorded as goodwill. The goodwill reflects our expectations of our ability to utilize the acquired location’s mobile workforce and established relationships within the community and the benefits of being able to leverage operational efficiencies with favorable growth opportunities based on positive demographic trends in this market. All of the goodwill recorded as a result of this transaction is deductible for federal income tax purposes. The fair value of the assets acquired at the acquisition date were as follows (in millions):
Information regarding the net cash paid for the home health and hospice acquisitions during each period presented is as follows (in millions):
Pro Forma Results of Operations 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, 2019 (in millions):
The information presented above is for illustrative purposes only and is not necessarily indicative of results that would have been achieved if the acquisitions had occurred as of the beginning of our 2019 reporting period. See Note 2, Business Combinations, to the consolidated financial statements accompanying the 2019 Form 10‑K for information regarding acquisitions completed in 2019.
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Variable Interest Entities |
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Organization, Consolidation and Presentation of Financial Statements [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Variable Interest Entities | Variable Interest Entities As of September 30, 2020 and December 31, 2019, we consolidated nine and eight, respectively, limited partnership-like entities that are variable interest entities (“VIEs”) and of which we are the primary beneficiary. Our ownership percentages in these entities range from 50.0% to 75.0% as of September 30, 2020. Through partnership and management agreements with or governing each of these entities, we manage all of these entities and handle all day-to-day operating decisions. Accordingly, we have the decision making power over the activities that most significantly impact the economic performance of our VIEs and an obligation to absorb losses or receive benefits from the VIE that could potentially be significant to the VIE. These decisions and significant activities include, but are not limited to, marketing efforts, oversight of patient admissions, medical training, nurse and therapist scheduling, provision of healthcare services, billing, collections, and creation and maintenance of medical records. The terms of the agreements governing each of our VIEs prohibit us from using the assets of each VIE to satisfy the obligations of other entities. The carrying amounts and classifications of the consolidated VIEs’ assets and liabilities, which are included in our consolidated balance sheet, are as follows (in millions):
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Long-term Debt |
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Debt Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Long-term Debt | Long-term Debt Our long-term debt outstanding consists of the following (in millions):
In April 2020, we amended our existing credit agreement. The following are the changes made to the material provisions of the credit agreement: 1.Amendment of the financial covenants to update the applicable interest coverage ratio and leverage ratio included in that covenant. The revised applicable ratios are set forth below.
2.Amendment of the definition of “Material Adverse Effect” to carve out the direct and indirect impacts of COVID-19 and the related legislative, regulatory and executive actions on us from that definition for a period of 364 days; and 3.Amendment of the investment limitation covenant and the restricted payment limitation covenant, to add to each a leverage ratio condition (not in excess of 4.50x) to the provisions allowing unlimited investments and restricted payments in the event certain conditions are met including a senior secured leverage ratio (not in excess of 2:00x) and the existence of no events of default in addition to the new leverage ratio condition. All other material terms of the existing credit agreement remain the same and are described in Note 10, Long-term Debt, to the consolidated financial statements accompanying the 2019 Form 10‑K. In May 2020, we issued an additional $300 million of our existing 4.50% Senior Notes due 2028 at a price of 99.0% of the principal amount and an additional $300 million of our existing 4.75% Senior Notes due 2030 at a price of 98.5% of the principal amount, which resulted in approximately $583 million in net proceeds. We used a portion of the net proceeds from this borrowing, together with cash on hand, to repay borrowings under our revolving credit facility. In October 2020, we issued $400 million aggregate principal amount of 4.625% Senior Notes due 2031 (the “2031 Notes”) at par. The 2031 Notes mature on April 1, 2031 and bear interest at a per annum rate of 4.625%. Interest is payable semiannually in arrears on April 1 and October 1 of each year. In October 2020, we issued notice for redemption of all $700 million in outstanding principal amount of the 5.75% Senior Notes due 2024 (the “2024 Notes”). Pursuant to the terms of the 2024 Notes, this full redemption will settle on November 1, 2020 and will be made at a price of par. We plan to use the net proceeds from the 2031 Notes offering together with cash on hand to fund the redemption. We expect to record an approximate $2 million Loss on early extinguishment of debt in the fourth quarter of 2020.
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Redeemable Noncontrolling Interests |
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Noncontrolling Interest [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Redeemable Noncontrolling Interests | Redeemable Noncontrolling Interests The following is a summary of the activity related to our Redeemable noncontrolling interests during the nine months ended September 30, 2020 and 2019 (in millions):
The following table reconciles the net income attributable to nonredeemable Noncontrolling interests, as recorded in the shareholders’ equity section of the condensed consolidated balance sheets, and the net income attributable to Redeemable noncontrolling interests, as recorded in the mezzanine section of the condensed consolidated balance sheets, to the Net and comprehensive income attributable to noncontrolling interests presented in the condensed consolidated statements of comprehensive income for the three and nine months ended September 30, 2020 and 2019 (in millions):
On December 31, 2014, we acquired 83.3% of our home health and hospice business when we purchased EHHI Holdings, Inc. (“EHHI”). In the acquisition, we acquired all of the issued and outstanding equity interests of EHHI, other than equity interests contributed to Encompass Health Home Health Holdings, Inc. (“Holdings”), a subsidiary of Encompass Health and an indirect parent of EHHI, by certain sellers in exchange for shares of common stock of Holdings. Those sellers were members of EHHI management, and they contributed a portion of their shares of common stock of EHHI, valued at approximately $64 million on the acquisition date, in exchange for approximately 16.7% of the outstanding shares of common stock of Holdings. At any time after December 31, 2017, each management investor had the right (but not the obligation) to have his or her shares of Holdings stock repurchased by Encompass Health for a cash purchase price per share equal to the fair value. In February 2018, each management investor exercised the right to sell one-third of his or her shares of Holdings stock to Encompass Health, representing approximately 5.6% of the outstanding shares of the common stock of Holdings. On February 21, 2018, Encompass Health settled the acquisition of those shares upon payment of approximately $65 million in cash. In July 2019, we received additional exercise notices, representing approximately 5.6% of the outstanding shares of the common stock of Holdings. In September 2019, Encompass Health settled the acquisition of those shares upon payment of approximately $163 million in cash. In January 2020, we received additional exercise notices, representing approximately 4.3% of the outstanding shares of the common stock of Holdings. On February 18, 2020, Encompass Health settled the acquisition of those shares upon payment of approximately $162 million in cash. Upon settlement of these exercises, approximately $46 million of the shares of Holdings held by two management investors remained outstanding. On February 20, 2020, Encompass Health entered into exchange agreements (each, an “Exchange Agreement”) with these two management investors, pursuant to which they had the right to exchange all of the remaining shares of Holdings held by them for shares of common stock of Encompass Health (the “EHC Shares”). Each of the Exchange Agreements provided that the management investor must deliver a written exchange notice (an “Exchange Notice”) to Encompass Health in order to exchange his or her remaining shares of Holdings for EHC Shares. Each Exchange Agreement further provided that the number of EHC Shares to be delivered to the management investor was to be determined by dividing the fair value of the shares of Holdings held by the management investor on the date of the Exchange Agreement by the last reported sales price of Encompass Health’s common stock on the New York Stock Exchange (the “NYSE”) on the date of delivery of the Exchange Notice. On February 20, 2020, Encompass Health received an Exchange Notice from each of the management investors. Based on the last sales price of Encompass Health’s common stock on the NYSE on February 20, 2020, Encompass Health delivered an aggregate 560,957 EHC Shares to the management investors. The total number of EHC Shares issued pursuant to the exchange agreements on March 6, 2020 represented less than 0.6% of the outstanding shares of Encompass Health common stock. Encompass Health issued the EHC Shares from its treasury shares. Encompass Health now owns 100% of Holdings and EHHI. See also Note 6, Fair Value Measurements.
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Fair Value Measurements |
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Fair Value Disclosures [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Fair Value Measurements | Fair Value Measurements Our financial assets and liabilities that are measured at fair value on a recurring basis are as follows (in millions):
(1) The three valuation techniques are: market approach (M), cost approach (C), and income approach (I). The decrease in Redeemable noncontrolling interests from December 31, 2019 to September 30, 2020 primarily resulted from the final purchase of equity interests in Holdings from management investors discussed in Note 5, Redeemable Noncontrolling Interests. The fair values of our financial assets and liabilities are determined as follows: •Equity and Debt securities - The fair values of our equity and debt securities are determined based on quoted market prices in active markets or quoted prices, dealer quotations, or alternative pricing sources supported by observable inputs in markets that are not considered to be active. •Redeemable noncontrolling interests - The fair value of the Redeemable noncontrolling interests related to our home health segment was determined using the product of a twelve-month adjusted EBITDA measure and a specified median market price multiple based on a basket of public home health companies and transactions, after adding cash and deducting indebtedness that included the outstanding principal balance under any intercompany notes. To determine the fair value of the Redeemable noncontrolling interests in our joint venture hospitals, we use the applicable hospitals’ projected operating results and cash flows discounted using a rate that reflects market participant assumptions for the applicable facilities. The projected operating results use management’s best estimates of economic and market conditions over the forecasted periods including assumptions for pricing and volume, operating expenses, and capital expenditures. In addition, there are assets and liabilities that are not required to be measured at fair value on a recurring basis. However, these assets may be recorded at fair value as a result of impairment charges or other adjustments made to the carrying value of the applicable assets. During the three and nine months ended September 30, 2020, we did not record any material gains or losses related to these assets. As a result of our consolidation of Yuma Rehabilitation Hospital and the remeasurement of our previously held equity interest at fair value, we recorded a $19.2 million gain as part of Other income during the three and nine months ended September 30, 2019. We determined the fair value of our previously held equity interest using the income approach valuation technique. The income approach included the use of the hospital's projected operating results and cash flows discounted using a rate that reflects market participant assumptions for the hospital. The projected operating results use management's best estimates of economic and market conditions over the forecasted period including assumptions for pricing and volume, operating expenses, and capital expenditures. As discussed in Note 1, Summary of Significant Accounting Policies, “Fair Value Measurements,” to the consolidated financial statements accompanying the 2019 Form 10‑K, the carrying value equals fair value for our financial instruments that are not included in the table below and are classified as current in our condensed consolidated balance sheets. The carrying amounts and estimated fair values for all of our other financial instruments are presented in the following table (in millions):
Fair values for our long-term debt and financial commitments are determined using inputs, including quoted prices in nonactive markets, that are observable either directly or indirectly, or Level 2 inputs within the fair value hierarchy. See Note 1, Summary of Significant Accounting Policies, “Fair Value Measurements,” to the consolidated financial statements accompanying the 2019 Form 10‑K.
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Share-Based Payments |
9 Months Ended |
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Sep. 30, 2020 | |
Share-based Payment Arrangement [Abstract] | |
Share-Based Payments | Share-Based Payments During the nine months ended September 30, 2020, we issued a total of 0.4 million restricted stock awards to members of our management team and our board of directors. Approximately 0.2 million of these awards contain only a service condition, while the remainder contain both a service and a performance condition. For the awards that include a performance condition, the number of shares that will ultimately be granted to employees may vary based on the Company’s performance during the applicable two year performance measurement period. Additionally, we granted 0.1 million stock options to members of our management team. The fair value of these awards and options was determined using the policies described in Note 1, Summary of Significant Accounting Policies, and Note 14, Share-Based Payments, to the consolidated financial statements accompanying the 2019 Form 10‑K. In conjunction with the EHHI acquisition discussed in Note 5, Redeemable Noncontrolling Interests, we granted stock appreciation rights (“SARs”) based on Holdings common stock to certain members of EHHI management at closing. Half of the SARs vested on December 31, 2018 and the remainder vested on December 31, 2019. Upon exercise, each SAR must be settled for cash in the amount by which the per share fair value of Holdings’ common stock on the exercise date exceeds the per share fair value on the grant date. As of December 31, 2019, the fair value of the remaining 115,545 SARs was approximately $101 million, all of which was included in Accrued expenses and other current liabilities in the condensed consolidated balance sheet. In January 2020, members of the management team exercised the remaining SARs, and in February 2020, we settled those awards upon payment of approximately $101 million in cash. For additional information, see Note 14, Share-Based Payments, to the consolidated financial statements accompanying the 2019 Form 10‑K.
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Income Taxes |
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Sep. 30, 2020 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Income TaxesOur Provision for income tax expense of $26.9 million and $34.3 million for the three months ended September 30, 2020 and 2019, respectively, primarily resulted from the application of our estimated effective blended federal and state income tax rate. Our Provision for income tax expense of $65.8 million for the nine months ended September 30, 2020 primarily resulted from the application of our estimated effective blended federal and state income tax rate offset by tax benefits resulting from share-based compensation windfalls. Our Provision for income tax expense of $88.6 million for the nine months ended September 30, 2019 primarily resulted from the application of our estimated effective blended federal and state income tax rate, tax benefits resulting from share-based compensation windfalls and the deductibility of the June 2019 settlement discussed in Note 18, Contingencies and Other Commitments, to the consolidated financial statements accompanying the 2019 Form 10‑K. |
Earnings per Common Share |
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Earnings Per Share [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Earnings per Common Share | Earnings per Common Share The following table sets forth the computation of basic and diluted earnings per common share (in millions, except per share amounts):
The following table sets forth the reconciliation between basic weighted average common shares outstanding and diluted weighted average common shares outstanding (in millions):
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Contingencies and Other Commitments |
9 Months Ended |
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Sep. 30, 2020 | |
Commitments and Contingencies Disclosure [Abstract] | |
Contingencies and Other Commitments | Contingencies and Other Commitments We operate in a highly regulated industry in which healthcare providers are routinely subject to litigation. As a result, various lawsuits, claims, and legal and regulatory proceedings have been and can be expected to be instituted or asserted against us. The resolution of any such lawsuits, claims, or legal and regulatory proceedings could materially and adversely affect our financial position, results of operations, and cash flows in a given period. Nichols Litigation— We were named as a defendant in a lawsuit filed March 28, 2003 by several individual stockholders in the Circuit Court of Jefferson County, Alabama, captioned Nichols v. HealthSouth Corp. In July 2019, we entered into settlement agreements with all but one plaintiff and paid those settling plaintiffs an aggregate amount of cash less than $0.1 million. The remaining plaintiff alleges that we, some of our former officers, and our former investment bank engaged in a scheme to overstate and misrepresent our earnings and financial position. The plaintiff is seeking compensatory and punitive damages. This case was stayed in the circuit court on August 8, 2005. However, the complaint has been amended from time to time, including to request certification as a class action. Additionally, one of the former officers named as a defendant has repeatedly attempted to remove the case to federal district court. We filed our latest motion to remand the case back to state court on January 10, 2013. On September 27, 2013, the federal court remanded the case back to state court. On December 10, 2014, we filed a motion to dismiss on the grounds the plaintiffs lacked standing because their claims were derivative in nature, and the claims were time-barred by the statute of limitations. On May 26, 2016, the trial court granted our motion to dismiss. On appeal, the Supreme Court of Alabama reversed the trial court’s dismissal on March 23, 2018. On April 6, 2018, we filed an application for rehearing with the Alabama Supreme Court. On March 22, 2019, the Alabama Supreme Court denied our application for rehearing and remanded the case to the trial court for further proceedings. The court has not yet set a date for the trial to begin. We intend to vigorously defend ourselves in this case against the sole remaining plaintiff. Based on the stage of litigation, review of the current facts and circumstances as we understand them, the nature of the underlying claim, the results of the proceedings to date, and the nature and scope of the defense we continue to mount, we do not believe an adverse judgment or settlement is probable in this matter, and it is also not possible to estimate an amount of loss, if any, or range of possible loss that might result from an adverse judgment or settlement of this case. Other Matters— The False Claims Act allows private citizens, called “relators,” to institute civil proceedings on behalf of the United States alleging violations of the False Claims Act. These lawsuits, also known as “whistleblower” or “qui tam” actions, can involve significant monetary damages, fines, attorneys’ fees and the award of bounties to the relators who successfully prosecute or bring these suits to the government. Qui tam cases are sealed at the time of filing, which means knowledge of the information contained in the complaint typically is limited to the relator, the federal government, and the presiding court. The defendant in a qui tam action may remain unaware of the existence of a sealed complaint for years. While the complaint is under seal, the government reviews the merits of the case and may conduct a broad investigation and seek discovery from the defendant and other parties before deciding whether to intervene in the case and take the lead on litigating the claims. The court lifts the seal when the government makes its decision on whether to intervene. If the government decides not to intervene, the relator may elect to continue to pursue the lawsuit individually on behalf of the government. It is possible that qui tam lawsuits have been filed against us, which suits remain under seal, or that we are unaware of such filings or precluded by existing law or court order from discussing or disclosing the filing of such suits. We may be subject to liability under one or more undisclosed qui tam cases brought pursuant to the False Claims Act. It is our obligation as a participant in Medicare and other federal healthcare programs to routinely conduct audits and reviews of the accuracy of our billing systems and other regulatory compliance matters. As a result of these reviews, we have made, and will continue to make, disclosures to the United States Department of Health and Human Services Office of Inspector General and CMS relating to amounts we suspect represent over-payments from these programs, whether due to inaccurate billing or otherwise. Some of these disclosures have resulted in, or may result in, Encompass Health refunding amounts to Medicare or other federal healthcare programs.
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Segment Reporting |
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Segment Reporting [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Segment Reporting | Segment Reporting Our internal financial reporting and management structure is focused on the major types of services provided by Encompass Health. We manage our operations using two operating segments which are also our reportable segments: (1) inpatient rehabilitation and (2) home health and hospice. These reportable operating segments are consistent with information used by our chief executive officer, who is our chief operating decision maker, to assess performance and allocate resources. The following is a brief description of our reportable segments: •Inpatient Rehabilitation - Our national network of inpatient rehabilitation hospitals stretches across 36 states and Puerto Rico, with a concentration of hospitals in the eastern half of the United States and Texas. As of September 30, 2020, we operate 136 inpatient rehabilitation hospitals. We are the sole owner of 87 of these hospitals. We retain 50.0% to 97.5% ownership in the remaining 49 jointly owned hospitals. In addition, we manage three inpatient rehabilitation units through management contracts. We provide specialized rehabilitative treatment on both an inpatient and outpatient basis. Our inpatient rehabilitation hospitals provide a higher level of rehabilitative care to patients who are recovering from conditions such as stroke and other neurological disorders, cardiac and pulmonary conditions, brain and spinal cord injuries, complex orthopedic conditions, and amputations. •Home Health and Hospice - As of September 30, 2020, we provide home health services in 242 locations and hospice services in 83 locations across 31 states with concentrations in the Southeast and Texas. In addition, one of these home health agencies operates as a joint venture which we account for using the equity method of accounting. We are the sole owner of 317 of these locations. We retain 50.0% to 81.0% ownership in the remaining eight jointly owned locations. Our home health services include a comprehensive range of Medicare-certified home nursing services to adult patients in need of care. These services include, among others, skilled nursing, physical, occupational, and speech therapy, medical social work, and home health aide services. Our hospice services include in-home services to terminally ill patients and their families to address patients’ physical needs, including pain control and symptom management, and to provide emotional and spiritual support. The accounting policies of our reportable segments are the same as those described in Note 1, Summary of Significant Accounting Policies, to the consolidated financial statements accompanying the 2019 Form 10‑K. All revenues for our services are generated through external customers. See Note 1, Basis of Presentation, “Net Operating Revenues,” for the disaggregation of our revenues. No corporate overhead is allocated to either of our reportable segments. Our chief operating decision maker evaluates the performance of our segments and allocates resources to them based on adjusted earnings before interest, taxes, depreciation, and amortization (“Segment Adjusted EBITDA”). Selected financial information for our reportable segments is as follows (in millions):
Segment reconciliations (in millions):
Additional detail regarding the revenues of our operating segments by service line follows (in millions):
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Basis of Presentation (Policies) |
9 Months Ended |
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Sep. 30, 2020 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Recently Adopted Accounting Pronouncements and Recent Accounting Pronouncements Not Yet Adopted | Recently Adopted Accounting Pronouncements— In June 2016, the FASB issued ASU 2016-13, “Financial Instruments – Credit Losses (Topic 326),” which provides guidance for accounting for credit losses on financial instruments. The new guidance introduces an approach based on expected losses to estimate credit losses on certain types of financial instruments and modifies the impairment model for available-for-sale debt securities. The new guidance was effective for us beginning January 1, 2020. The adoption of this guidance resulted in an immaterial change to our condensed consolidated financial statements. In August 2018, the FASB issued ASU 2018-15, “Intangibles—Goodwill and Other—Internal-Use Software (Subtopic 350-40): Customer’s Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That Is a Service Contract.” The update helps entities evaluate the accounting for fees paid by a customer in a cloud computing arrangement (hosting arrangement), by providing guidance in determining when the arrangement includes a software license. It requires entities to account for such costs consistent with the guidance on capitalizing costs associated with developing or obtaining internal-use software. The new guidance was effective for us beginning January 1, 2020. The adoption of this guidance did not have a material impact to our condensed consolidated financial statements. In March 2020, the Securities and Exchange Commission adopted final rules that amend the financial disclosure requirements in Rule 3-10 of Regulation S-X for guarantors of registered debt securities and subsidiary issuers. The new rules are effective January 4, 2021, but early adoption is permitted. The new rules permit alternative disclosures of summarized financial information, rather than our previous footnote presentation of condensed consolidating financial statements. The new rules also permit the summarized financial information and related disclosures to be presented outside of the condensed consolidated financial statements and accompanying notes. We elected to early adopt the new rules effective July 1, 2020. The summarized financial information and related disclosures are presented in Item 2, Management’s Discussion and Analysis of Financial Condition and Results of Operations, of this report. Recent Accounting Pronouncements Not Yet Adopted— In December 2019, the FASB issued ASU 2019-12, “Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes.” The standard removes certain exceptions to the general principles of ASC 740 and simplifies other areas such as accounting for outside basis differences of equity method investments. Either prospective or retrospective transition of this standard is dependent upon the specific amendments. The new guidance is effective for us beginning January 1, 2021, including interim periods within that reporting period. Early adoption is permitted. We continue to review the requirements of this standard and any potential impact it may have on our condensed consolidated financial statements. We do not believe any other recently issued, but not yet effective, accounting standards will have a material effect on our condensed consolidated financial position, results of operations, or cash flows.
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Basis of Presentation (Tables) |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Sep. 30, 2020 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Concentration of Net Operating Revenues by Payor | Our Net operating revenues disaggregated by payor source and segment are as follows (in millions):
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Business Combinations (Tables) |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Sep. 30, 2020 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Business Combinations [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Assets Acquired and Liabilities Assumed at the Acquisition Date | The fair value of the assets acquired at the acquisition date were as follows (in millions):
The fair value of the assets acquired at the acquisition date were as follows (in millions):
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Schedule of Noncash or Part Noncash Acquisitions | Information regarding the net cash paid for the inpatient rehabilitation acquisitions during each period presented is as follows (in millions):
Information regarding the net cash paid for the home health and hospice acquisitions during each period presented is as follows (in millions):
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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, 2019 (in millions):
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Variable Interest Entities (Tables) |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Sep. 30, 2020 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Carrying Amounts and Classifications of VIE's Assets and Liabilities | The carrying amounts and classifications of the consolidated VIEs’ assets and liabilities, which are included in our consolidated balance sheet, are as follows (in millions):
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Long-term Debt (Tables) |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Sep. 30, 2020 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Debt Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Outstanding Long-term Debt | Our long-term debt outstanding consists of the following (in millions):
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Schedule of Financial Covenants |
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Redeemable Noncontrolling Interests (Tables) |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Sep. 30, 2020 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Noncontrolling Interest [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Redeemable Noncontrolling Interests Activity | The following is a summary of the activity related to our Redeemable noncontrolling interests during the nine months ended September 30, 2020 and 2019 (in millions):
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Reconciliation of Noncontrolling Interests | The following table reconciles the net income attributable to nonredeemable Noncontrolling interests, as recorded in the shareholders’ equity section of the condensed consolidated balance sheets, and the net income attributable to Redeemable noncontrolling interests, as recorded in the mezzanine section of the condensed consolidated balance sheets, to the Net and comprehensive income attributable to noncontrolling interests presented in the condensed consolidated statements of comprehensive income for the three and nine months ended September 30, 2020 and 2019 (in millions):
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Fair Value Measurements (Tables) |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Sep. 30, 2020 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Fair Value Disclosures [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Fair Value, Assets and Liabilities Measured on a Recurring Basis | Our financial assets and liabilities that are measured at fair value on a recurring basis are as follows (in millions):
(1) The three valuation techniques are: market approach (M), cost approach (C), and income approach (I).
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Schedule of Carrying Amounts and Estimated Fair Values, Financial Instruments | The carrying amounts and estimated fair values for all of our other financial instruments are presented in the following table (in millions):
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Earnings per Common Share (Tables) |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Earnings Per Share [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Computation of Basic and Diluted Earnings Per Common Share | The following table sets forth the computation of basic and diluted earnings per common share (in millions, except per share amounts):
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Reconciliation of Weighted Average Number of Shares Outstanding | The following table sets forth the reconciliation between basic weighted average common shares outstanding and diluted weighted average common shares outstanding (in millions):
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Segment Reporting (Tables) |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Sep. 30, 2020 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Segment Reporting [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Segment Reporting Information, by Segment | Selected financial information for our reportable segments is as follows (in millions):
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Reconciliation of Assets from Segment to Consolidated |
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Reconciliation of Segment Adjusted EBITDA to Income from Continuing Operations Before Income Tax Expense | Segment reconciliations (in millions):
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Reconciliation of Revenue from Segments to Consolidated | Additional detail regarding the revenues of our operating segments by service line follows (in millions):
|
Basis of Presentation - Textual (Details) $ in Millions |
3 Months Ended | 9 Months Ended | |
---|---|---|---|
Sep. 30, 2019
USD ($)
|
Sep. 30, 2020
USD ($)
segment
state
|
Sep. 30, 2019
USD ($)
|
|
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |||
Number of states in which entity operates | state | 39 | ||
Number of operating segments | segment | 2 | ||
Goodwill increase | $ 24.9 | $ 24.9 | |
Gain on consolidation of joint venture formerly accounted for under the equity method of accounting | $ 19.2 | $ 0.0 | $ 19.2 |
Collection success rate of denied payments (percent) | 70.00% |
Business Combinations - Textual (Details) - Inpatient Rehabilitation |
Sep. 30, 2020
USD ($)
|
May 31, 2020
bed
|
Jan. 31, 2020
bed
|
---|---|---|---|
Portercare Adventist and Premier Health Partners | |||
Business Acquisition [Line Items] | |||
Goodwill expected to be tax-deductible amount | $ | $ 0 | ||
Corporate Joint Venture | Portercare Adventist | |||
Business Acquisition [Line Items] | |||
Business acquisition percentage of voting interests acquired | 68.00% | ||
Number of beds acquired | 13 | ||
Number of beds contributed | 40 | ||
Number of beds expanded | 20 | ||
Corporate Joint Venture | Premier Health Partners | |||
Business Acquisition [Line Items] | |||
Business acquisition percentage of voting interests acquired | 51.00% | ||
Number of beds acquired | 45 | ||
Number of de novo beds | 60 |
Business Combinations - Net Cash Paid for Acquisitions (Details) - USD ($) $ in Millions |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Sep. 30, 2020 |
Sep. 30, 2019 |
Sep. 30, 2020 |
Sep. 30, 2019 |
|
Business Acquisition [Line Items] | ||||
Net cash paid for acquisitions | $ 1.1 | $ 231.2 | ||
Inpatient Rehabilitation | Portercare Adventist and Premier Health Partners | ||||
Business Acquisition [Line Items] | ||||
Fair value of assets acquired | $ 0.0 | $ 0.5 | 1.7 | 0.5 |
Goodwill | 0.0 | 4.8 | 9.2 | 4.8 |
Fair value of liabilities assumed | 0.0 | (0.2) | 0.0 | (0.2) |
Fair value of noncontrolling interest owned by joint venture partner | 0.0 | (5.1) | (10.9) | (5.1) |
Net cash paid for acquisitions | 0.0 | 0.0 | 0.0 | 0.0 |
Home Health and Hospice | Generation Solutions of Lynchburg | ||||
Business Acquisition [Line Items] | ||||
Fair value of assets acquired | 0.0 | 68.6 | 0.1 | 71.8 |
Goodwill | 0.0 | 163.9 | 1.0 | 174.7 |
Fair value of liabilities assumed | 0.0 | (15.0) | 0.0 | (15.3) |
Net cash paid for acquisitions | $ 0.0 | $ 217.5 | $ 1.1 | $ 231.2 |
Variable Interest Entities - Textual (Details) - VIE - entity |
9 Months Ended | 12 Months Ended |
---|---|---|
Sep. 30, 2020 |
Dec. 31, 2019 |
|
Variable Interest Entity [Line Items] | ||
Number of consolidated limited partnership-like entities | 9 | 8 |
Minimum | ||
Variable Interest Entity [Line Items] | ||
Ownership interest in consolidated entities (percent) | 50.00% | |
Maximum | ||
Variable Interest Entity [Line Items] | ||
Ownership interest in consolidated entities (percent) | 75.00% |
Variable Interest Entities - Schedule of Carrying Amounts and Classifications of VIE's Assets and Liabilities (Details) - USD ($) $ in Millions |
Sep. 30, 2020 |
Dec. 31, 2019 |
Sep. 30, 2019 |
Dec. 31, 2018 |
||
---|---|---|---|---|---|---|
Current assets: | ||||||
Cash and cash equivalents | $ 450.0 | $ 94.8 | $ 422.0 | $ 69.2 | ||
Accounts receivable | 593.3 | 506.1 | ||||
Other current assets | 73.9 | 97.5 | ||||
Total current assets | 1,174.4 | 755.8 | ||||
Property and equipment, net | 2,094.9 | 1,959.3 | ||||
Operating lease right-of-use assets | 267.2 | 276.5 | ||||
Goodwill | 2,318.7 | 2,305.2 | ||||
Intangible assets, net | 441.9 | 476.3 | ||||
Other long-term assets | 305.9 | 304.7 | ||||
Total assets | [1] | 6,610.5 | 6,080.7 | |||
Current liabilities: | ||||||
Current portion of long-term debt | 37.0 | 39.3 | ||||
Current operating lease liabilities | 47.1 | 40.4 | ||||
Accounts payable | 119.6 | 94.6 | ||||
Accrued expenses and other current liabilities | 478.8 | 546.7 | ||||
Total current liabilities | 682.5 | 721.0 | ||||
Long-term debt, net of current portion | 3,539.4 | 3,023.3 | ||||
Long-term operating lease liabilities | 228.9 | 243.8 | ||||
Other long-term liabilities | 230.0 | 159.9 | ||||
Total liabilities | 4,680.8 | 4,148.0 | ||||
VIE | ||||||
Current assets: | ||||||
Cash and cash equivalents | 0.0 | 0.2 | ||||
Accounts receivable | 33.6 | 29.3 | ||||
Other current assets | 7.5 | 6.4 | ||||
Total current assets | 41.1 | 35.9 | ||||
Property and equipment, net | 121.9 | 122.6 | ||||
Operating lease right-of-use assets | 5.1 | 6.0 | ||||
Goodwill | 19.2 | 15.9 | ||||
Intangible assets, net | 3.7 | 3.3 | ||||
Other long-term assets | 31.0 | 31.3 | ||||
Total assets | 222.0 | 215.0 | ||||
Current liabilities: | ||||||
Current portion of long-term debt | 0.9 | 0.8 | ||||
Current operating lease liabilities | 1.5 | 1.4 | ||||
Accounts payable | 7.4 | 6.7 | ||||
Accrued expenses and other current liabilities | 18.2 | 17.0 | ||||
Total current liabilities | 28.0 | 25.9 | ||||
Long-term debt, net of current portion | 9.8 | 10.5 | ||||
Long-term operating lease liabilities | 3.7 | 4.7 | ||||
Other long-term liabilities | 3.1 | 0.0 | ||||
Total liabilities | $ 44.6 | $ 41.1 | ||||
|
Long-term Debt - Financial Covenants (Details) |
6 Months Ended | 9 Months Ended | 21 Months Ended | |||||||
---|---|---|---|---|---|---|---|---|---|---|
Mar. 31, 2020 |
Dec. 31, 2022 |
Dec. 31, 2021 |
Mar. 31, 2022 |
Sep. 30, 2021 |
Jun. 30, 2021 |
Mar. 31, 2021 |
Dec. 31, 2020 |
Sep. 30, 2020 |
Jun. 30, 2020 |
|
Debt Instrument [Line Items] | ||||||||||
Interest Coverage Ratio | 3.00 | |||||||||
Leverage Ratio | 4.50 | 5.50 | 4.75 | |||||||
Forecast | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Interest Coverage Ratio | 3.00 | 2.00 | ||||||||
Leverage Ratio | 5.00 | 4.25 | 5.50 | 6.00 | 6.50 | 6.50 |
Redeemable Noncontrolling Interests - Reconciliation of Noncontrolling Interests (Details) - USD ($) $ in Millions |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Sep. 30, 2020 |
Sep. 30, 2019 |
Sep. 30, 2020 |
Sep. 30, 2019 |
|
Noncontrolling Interest [Abstract] | ||||
Net income attributable to nonredeemable noncontrolling interests | $ 20.2 | $ 18.2 | $ 53.2 | $ 54.4 |
Net income attributable to redeemable noncontrolling interests | 2.2 | 3.7 | 5.7 | 10.1 |
Net income attributable to noncontrolling interests | $ 22.4 | $ 21.9 | $ 58.9 | $ 64.5 |
Fair Value Measurements - Textual (Details) - USD ($) $ in Millions |
3 Months Ended | 9 Months Ended |
---|---|---|
Sep. 30, 2019 |
Sep. 30, 2019 |
|
Nonrecurring | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Gains or losses related to non-financial assets and liabilities | $ 19.2 | $ 19.2 |
Share-Based Payments (Details) - USD ($) $ in Millions |
1 Months Ended | 9 Months Ended | |
---|---|---|---|
Feb. 29, 2020 |
Sep. 30, 2020 |
Dec. 31, 2019 |
|
Restricted Stock | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Restricted stock awards issued (shares) | 400,000 | ||
Restricted Stock | Service Condition | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Restricted stock awards issued (shares) | 200,000 | ||
Restricted Stock | Service and Performance Condition | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Performance measurement period | 2 years | ||
Stock Options | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Stock options granted (shares) | 100,000 | ||
SARs | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
SARs outstanding (shares) | 115,545 | ||
Fair value of SARs | $ 101 | ||
Cash used to settle award | $ 101 |
Income Taxes (Details) - USD ($) $ in Millions |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Sep. 30, 2020 |
Sep. 30, 2019 |
Sep. 30, 2020 |
Sep. 30, 2019 |
|
Income Tax Disclosure [Abstract] | ||||
Provision for income tax expense | $ 26.9 | $ 34.3 | $ 65.8 | $ 88.6 |
Earnings per Common Share - Reconciliation of Weighted Average Number of Shares Outstanding (Details) - shares shares in Millions |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Sep. 30, 2020 |
Sep. 30, 2019 |
Sep. 30, 2020 |
Sep. 30, 2019 |
|
Earnings Per Share [Abstract] | ||||
Basic weighted average common shares outstanding (shares) | 98.7 | 97.8 | 98.5 | 98.1 |
Restricted stock awards, dilutive stock options, and restricted stock units (shares) | 1.2 | 1.6 | 1.2 | 1.4 |
Diluted weighted average common shares outstanding (shares) | 99.9 | 99.4 | 99.7 | 99.5 |
Contingencies and Other Commitments (Details) $ in Millions |
1 Months Ended |
---|---|
Jul. 31, 2019
USD ($)
| |
Maximum | Settled Litigation | Nichols Litigation | |
Loss Contingencies [Line Items] | |
Cash payment for litigation settlement | $ 0.1 |
Segment Reporting - Segment Reporting Information, Reconciliation of Net Operating Revenues to Segment Adjusted EBITDA (Details) - USD ($) $ in Millions |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Sep. 30, 2020 |
Sep. 30, 2019 |
Sep. 30, 2020 |
Sep. 30, 2019 |
|
Segment Reporting Information [Line Items] | ||||
Net operating revenues | $ 1,173.9 | $ 1,161.6 | $ 3,430.0 | $ 3,420.6 |
Operating expenses: | ||||
Salaries and benefits | 664.9 | 660.8 | 1,995.9 | 1,904.5 |
Other operating expenses | 163.4 | 156.6 | 471.3 | 456.5 |
Supplies | 52.5 | 42.9 | 148.8 | 124.7 |
Occupancy costs | 20.3 | 21.8 | 60.8 | 61.7 |
Total operating expenses | 1,001.4 | 989.7 | 2,978.0 | 2,890.7 |
Other income | (2.5) | (21.0) | (6.4) | (26.9) |
Equity in net income of nonconsolidated affiliates | (1.0) | (1.2) | (2.5) | (5.5) |
Noncontrolling interests | 22.4 | 21.9 | 58.9 | 64.5 |
Inpatient Rehabilitation | ||||
Segment Reporting Information [Line Items] | ||||
Net operating revenues | 899.4 | 872.3 | 2,633.1 | 2,616.3 |
Operating expenses: | ||||
Salaries and benefits | 475.0 | 459.1 | 1,408.7 | 1,347.7 |
Other operating expenses | 135.5 | 131.3 | 394.5 | 386.1 |
Supplies | 45.3 | 37.0 | 126.9 | 109.3 |
Occupancy costs | 15.3 | 17.0 | 46.0 | 49.1 |
Total operating expenses | 671.1 | 644.4 | 1,976.1 | 1,892.2 |
Other income | (2.1) | (1.8) | (3.9) | (6.5) |
Equity in net income of nonconsolidated affiliates | (0.9) | (1.0) | (2.1) | (4.5) |
Noncontrolling interests | 22.1 | 20.1 | 58.0 | 60.6 |
Segment Adjusted EBITDA | 209.2 | 210.6 | 605.0 | 674.5 |
Capital expenditures | 90.4 | 103.6 | 262.6 | 266.0 |
Home Health and Hospice | ||||
Segment Reporting Information [Line Items] | ||||
Net operating revenues | 274.5 | 289.3 | 796.9 | 804.3 |
Operating expenses: | ||||
Cost of services sold (excluding depreciation and amortization) | 121.8 | 136.4 | 389.4 | 372.8 |
Support and overhead costs | 100.7 | 99.6 | 299.2 | 278.1 |
Total operating expenses | 222.5 | 236.0 | 688.6 | 650.9 |
Other income | 0.0 | 0.0 | 0.0 | 0.0 |
Equity in net income of nonconsolidated affiliates | (0.1) | (0.2) | (0.4) | (1.0) |
Noncontrolling interests | 0.3 | 2.7 | 0.9 | 8.2 |
Segment Adjusted EBITDA | 51.8 | 50.8 | 107.8 | 146.2 |
Capital expenditures | $ 0.5 | $ 3.1 | $ 2.6 | $ 11.1 |
Segment Reporting - Segment Reporting Information, Total Assets and Investments In and Advances to Nonconsolidated Affiliates (Details) - USD ($) $ in Millions |
Sep. 30, 2020 |
Dec. 31, 2019 |
||
---|---|---|---|---|
Segment Reporting, Asset Reconciling Item [Line Items] | ||||
Total assets | [1] | $ 6,610.5 | $ 6,080.7 | |
Investments in and advances to nonconsolidated affiliates | 5.6 | 7.4 | ||
Inpatient Rehabilitation | ||||
Segment Reporting, Asset Reconciling Item [Line Items] | ||||
Total assets | 5,058.9 | 4,501.4 | ||
Investments in and advances to nonconsolidated affiliates | 1.7 | 2.0 | ||
Home Health and Hospice | ||||
Segment Reporting, Asset Reconciling Item [Line Items] | ||||
Total assets | 1,611.9 | 1,612.8 | ||
Investments in and advances to nonconsolidated affiliates | $ 3.9 | $ 5.4 | ||
|
Segment Reporting - Reconciliation of Assets from Segment to Consolidated (Details) - USD ($) $ in Millions |
9 Months Ended | 12 Months Ended | ||
---|---|---|---|---|
Sep. 30, 2020 |
Dec. 31, 2019 |
|||
Segment Reporting, Asset Reconciling Item [Line Items] | ||||
Total assets | [1] | $ 6,610.5 | $ 6,080.7 | |
Operating Segments | ||||
Segment Reporting, Asset Reconciling Item [Line Items] | ||||
Total assets | 6,670.8 | 6,114.2 | ||
Segment Reconciling Items | ||||
Segment Reporting, Asset Reconciling Item [Line Items] | ||||
Reclassification of deferred income tax liabilities to net deferred income tax assets | $ (60.3) | $ (33.5) | ||
|
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