Business Combinations (Tables)

9 Months Ended

Sep. 30, 2018

Schedule of Assets Acquired and Liabilities Assumed at the Acquisition Date

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



Cash and cash equivalents	$	1.3
Prepaid expenses and other current assets	0.3
Property and equipment, net	0.6
Identifiable intangible assets:
Noncompete agreements (useful lives of 5 years)	0.5
Trade name (useful life of 1 year)	1.4
Certificates of need (useful lives of 10 years)	16.6
Licenses (useful lives of 10 years)	21.6
Goodwill	97.0
Total assets acquired	139.3
Liabilities assumed:
Accounts payable	4.3
Accrued payroll	4.0
Total liabilities assumed	8.3
Net assets acquired	$	131.0

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



Identifiable intangible assets:
Noncompete agreements (useful lives of 5 years)	$	0.2
Licenses (useful lives of 10 years)	0.8
Goodwill	5.1
Total assets acquired	$	6.1

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



Identifiable intangible assets:
Noncompete agreement (useful life of 3 years)	$	0.6
Trade name (useful life of 20 years)	1.4
Certificate of need (useful life of 20 years)	7.7
Goodwill	6.4
Total assets acquired	$	16.1

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):



	Three Months Ended September 30,						Nine Months Ended September 30,
	2018			2017			2018			2017
Fair value of assets acquired	$	9.7		$	5.4		$	9.7		$	11.0
Goodwill	6.4			9.0			6.4			24.0
Fair value of noncontrolling interest owned by joint venture partner	(16.1		)	(14.4		)	(16.1		)	(24.1		)
Net cash paid for acquisitions	$	—		$	—		$	—		$	10.9

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



	Three Months Ended September 30,					Nine Months Ended September 30,
	2018		2017			2018		2017
Fair value of assets acquired	$	—	$	2.7		$	1.0	$	5.4
Goodwill	—		13.1			5.1		20.5
Fair value of liabilities assumed	—		(0.1		)	—		(0.2		)
Net cash paid for acquisitions	$	—	$	15.7		$	6.1	$	25.7

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



Fair value of assets acquired, net of $1.3 million of cash acquired	$	41.0
Goodwill	97.0
Fair value of liabilities assumed	(8.3		)
Net cash paid for acquisition	$	129.7

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, 2017 (in millions):



	Net Operating Revenues		Net Income Attributable to Encompass Health
Acquired entities only: Actual from acquisition date to September 30, 2018
Inpatient Rehabilitation	$	—	$	(0.9	)
Camellia	31.5		(0.5		)
All Other Home Health and Hospice	1.8		(0.1		)
Combined entity: Supplemental pro forma from 06/01/2018-09/30/2018	1,070.9		89.2
Combined entity: Supplemental pro forma from 06/01/2017-09/30/2017	1,007.5		70.1
Combined entity: Supplemental pro forma from 01/01/2018-09/30/2018	3,221.9		270.7
Combined entity: Supplemental pro forma from 01/01/2017-09/30/2017	2,979.7		207.6