Condensed Consolidating Financial Information (Tables)

9 Months Ended

Sep. 30, 2018

Condensed Financial Information Disclosure [Abstract]

Condensed Consolidating Statement of Operations

	Three Months Ended September 30, 2018
	Encompass Health Corporation			Guarantor Subsidiaries			Nonguarantor Subsidiaries			Eliminating Entries			Encompass Health Consolidated
	(In Millions)
Net operating revenues	$	4.8		$	574.5		$	520.6		$	(32.3	)	$	1,067.6
Operating expenses:
Salaries and benefits	11.3			278.2			308.2			(5.4		)	592.3
Other operating expenses	9.9			80.3			64.7			(12.0		)	142.9
Occupancy costs	0.5			23.9			10.1			(14.9		)	19.6
Supplies	—			22.7			15.9			—			38.6
General and administrative expenses	38.8			—			11.1			—			49.9
Depreciation and amortization	4.4			26.6			20.2			—			51.2
Total operating expenses	64.9			431.7			430.2			(32.3		)	894.5
Interest expense and amortization of debt discounts and fees	31.6			5.1			7.4			(6.8		)	37.3
Other income	(6.9		)	(0.3		)	(1.3		)	6.8			(1.7		)
Equity in net income of nonconsolidated affiliates	—			(1.9		)	(0.2		)	—			(2.1		)
Equity in net income of consolidated affiliates	(117.7		)	(15.0		)	—			132.7			—
Management fees	(37.9		)	28.0			9.9			—			—
Income from continuing operations before income tax (benefit) expense	70.8			126.9			74.6			(132.7		)	139.6
Provision for income tax (benefit) expense	(17.9		)	34.2			13.9			—			30.2
Income from continuing operations	88.7			92.7			60.7			(132.7		)	109.4
Loss from discontinued operations, net of tax	(0.1		)	—			—			—			(0.1		)
Net income	88.6			92.7			60.7			(132.7		)	109.3
Less: Net income attributable to noncontrolling interests	—			—			(20.7		)	—			(20.7		)
Net income attributable to Encompass Health	$	88.6		$	92.7		$	40.0		$	(132.7	)	$	88.6
Comprehensive income	$	88.6		$	92.7		$	60.7		$	(132.7	)	$	109.3
Comprehensive income attributable to Encompass Health	$	88.6		$	92.7		$	40.0		$	(132.7	)	$	88.6

	Three Months Ended September 30, 2017
	Encompass Health Corporation			Guarantor Subsidiaries			Nonguarantor Subsidiaries			Eliminating Entries			Encompass Health Consolidated
	(In Millions)
Net operating revenues	$	5.3		$	547.5		$	460.2		$	(31.4	)	$	981.6
Operating expenses:
Salaries and benefits	9.1			266.4			271.9			(5.3		)	542.1
Other operating expenses	8.0			83.6			56.8			(12.2		)	136.2
Occupancy costs	0.4			23.4			8.7			(13.9		)	18.6
Supplies	—			22.4			14.1			—			36.5
General and administrative expenses	35.6			—			4.1			—			39.7
Depreciation and amortization	2.0			25.8			18.4			—			46.2
Total operating expenses	55.1			421.6			374.0			(31.4		)	819.3
Loss on early extinguishment of debt	0.3			—			—			—			0.3
Interest expense and amortization of debt discounts and fees	30.8			5.3			6.3			(5.6		)	36.8
Other income	(5.7		)	(0.1		)	(0.8		)	5.6			(1.0		)
Equity in net income of nonconsolidated affiliates	—			(1.9		)	(0.2		)	—			(2.1		)
Equity in net income of consolidated affiliates	(85.0		)	(11.8		)	—			96.8			—
Management fees	(35.8		)	26.4			9.4			—			—
Income from continuing operations before income tax (benefit) expense	45.6			108.0			71.5			(96.8		)	128.3
Provision for income tax (benefit) expense	(20.4		)	43.1			20.4			—			43.1
Income from continuing operations	66.0			64.9			51.1			(96.8		)	85.2
Loss from discontinued operations, net of tax	(0.1		)	—			—			—			(0.1		)
Net income	65.9			64.9			51.1			(96.8		)	85.1
Less: Net income attributable to noncontrolling interests	—			—			(19.2		)	—			(19.2		)
Net income attributable to Encompass Health	$	65.9		$	64.9		$	31.9		$	(96.8	)	$	65.9
Comprehensive income	$	65.9		$	64.9		$	51.1		$	(96.8	)	$	85.1
Comprehensive income attributable to Encompass Health	$	65.9		$	64.9		$	31.9		$	(96.8	)	$	65.9

	Nine Months Ended September 30, 2018
	Encompass Health Corporation			Guarantor Subsidiaries			Nonguarantor Subsidiaries			Eliminating Entries			Encompass Health Consolidated
	(In Millions)
Net operating revenues	$	15.9		$	1,743.0		$	1,520.5		$	(98.1	)	$	3,181.3
Operating expenses:
Salaries and benefits	33.9			835.1			887.9			(16.2		)	1,740.7
Other operating expenses	27.6			253.8			189.5			(37.4		)	433.5
Occupancy costs	1.5			71.5			29.2			(44.5		)	57.7
Supplies	—			70.6			47.2			—			117.8
General and administrative expenses	119.4			—			46.5			—			165.9
Depreciation and amortization	9.9			79.4			57.5			—			146.8
Total operating expenses	192.3			1,310.4			1,257.8			(98.1		)	2,662.4
Interest expense and amortization of debt discounts and fees	93.3			15.5			20.3			(18.5		)	110.6
Other income	(17.8		)	(0.8		)	(2.8		)	18.5			(2.9		)
Equity in net income of nonconsolidated affiliates	—			(5.5		)	(0.9		)	—			(6.4		)
Equity in net income of consolidated affiliates	(347.1		)	(50.4		)	—			397.5			—
Management fees	(114.8		)	84.5			30.3			—			—
Income from continuing operations before income tax (benefit) expense	210.0			389.3			215.8			(397.5		)	417.6
Provision for income tax (benefit) expense	(54.6		)	104.9			39.2			—			89.5
Income from continuing operations	264.6			284.4			176.6			(397.5		)	328.1
Loss from discontinued operations, net of tax	(0.4		)	—			—			—			(0.4		)
Net income	264.2			284.4			176.6			(397.5		)	327.7
Less: Net income attributable to noncontrolling interests	—			—			(63.5		)	—			(63.5		)
Net income attributable to Encompass Health	$	264.2		$	284.4		$	113.1		$	(397.5	)	$	264.2
Comprehensive income	$	264.2		$	284.4		$	176.6		$	(397.5	)	$	327.7
Comprehensive income attributable to Encompass Health	$	264.2		$	284.4		$	113.1		$	(397.5	)	$	264.2

	Nine Months Ended September 30, 2017
	Encompass Health Corporation			Guarantor Subsidiaries			Nonguarantor Subsidiaries			Eliminating Entries			Encompass Health Consolidated
	(In Millions)
Net operating revenues	$	15.9		$	1,666.6		$	1,316.9		$	(94.3	)	$	2,905.1
Operating expenses:
Salaries and benefits	29.1			803.7			783.0			(15.8		)	1,600.0
Other operating expenses	23.8			239.5			166.3			(36.3		)	393.3
Occupancy costs	1.4			70.0			25.6			(42.2		)	54.8
Supplies	—			69.4			41.2			—			110.6
General and administrative expenses	104.7			—			23.9			—			128.6
Depreciation and amortization	6.7			77.3			53.2			—			137.2
Total operating expenses	165.7			1,259.9			1,093.2			(94.3		)	2,424.5
Loss on early extinguishment of debt	10.7			—			—			—			10.7
Interest expense and amortization of debt discounts and fees	100.5			15.9			18.1			(16.0		)	118.5
Other income	(16.5		)	(0.2		)	(2.2		)	16.0			(2.9		)
Equity in net income of nonconsolidated affiliates	—			(5.6		)	(0.6		)	—			(6.2		)
Equity in net income of consolidated affiliates	(256.4		)	(29.3		)	—			285.7			—
Management fees	(107.8		)	80.7			27.1			—			—
Income from continuing operations before income tax (benefit) expense	119.7			345.2			181.3			(285.7		)	360.5
Provision for income tax (benefit) expense	(76.2		)	137.7			49.9			—			111.4
Income from continuing operations	195.9			207.5			131.4			(285.7		)	249.1
Loss from discontinued operations, net of tax	(0.2		)	—			—			—			(0.2		)
Net income	195.7			207.5			131.4			(285.7		)	248.9
Less: Net income attributable to noncontrolling interests	—			—			(53.2		)	—			(53.2		)
Net income attributable to Encompass Health	$	195.7		$	207.5		$	78.2		$	(285.7	)	$	195.7
Comprehensive income	$	196.0		$	207.5		$	131.4		$	(285.7	)	$	249.2
Comprehensive income attributable to Encompass Health	$	196.0		$	207.5		$	78.2		$	(285.7	)	$	196.0

Condensed Consolidating Balance Sheet

	As of September 30, 2018
	Encompass Health Corporation		Guarantor Subsidiaries		Nonguarantor Subsidiaries		Eliminating Entries			Encompass Health Consolidated
	(In Millions)
Assets
Current assets:
Cash and cash equivalents	$	42.0	$	4.4	$	10.5	$	—		$	56.9
Restricted cash	—		—		62.1		—			62.1
Accounts receivable	0.5		266.0		191.5		—			458.0
Other current assets	43.3		17.9		40.9		(41.1		)	61.0
Total current assets	85.8		288.3		305.0		(41.1		)	638.0
Property and equipment, net	116.8		1,023.9		450.3		—			1,591.0
Goodwill	—		854.6		1,226.5		—			2,081.1
Intangible assets, net	22.4		98.1		322.7		—			443.2
Deferred income tax assets	113.9		8.5		—		(39.8		)	82.6
Other long-term assets	51.9		102.8		141.3		—			296.0
Intercompany notes receivable	551.3		—		—		(551.3		)	—
Intercompany receivable and investments in consolidated affiliates	2,856.8		411.0		—		(3,267.8		)	—
Total assets	$	3,798.9	$	2,787.2	$	2,445.8	$	(3,900.0	)	$	5,131.9
Liabilities and Shareholders’ Equity
Current liabilities:
Current portion of long-term debt	$	34.9	$	7.3	$	12.4	$	(17.5	)	$	37.1
Accounts payable	6.5		49.1		30.4		—			86.0
Accrued expenses and other current liabilities	176.8		75.6		257.7		(23.6		)	486.5
Total current liabilities	218.2		132.0		300.5		(41.1		)	609.6
Long-term debt, net of current portion	2,226.9		236.7		40.3		—			2,503.9
Intercompany notes payable	—		—		551.3		(551.3		)	—
Other long-term liabilities	35.3		17.2		185.5		(39.8		)	198.2
Intercompany payable	—		—		59.7		(59.7		)	—
	2,480.4		385.9		1,137.3		(691.9		)	3,311.7
Commitments and contingencies
Redeemable noncontrolling interests	—		—		236.5		—			236.5
Shareholders’ equity:
Encompass Health shareholders’ equity	1,318.5		2,401.3		806.8		(3,208.1		)	1,318.5
Noncontrolling interests	—		—		265.2		—			265.2
Total shareholders’ equity	1,318.5		2,401.3		1,072.0		(3,208.1		)	1,583.7
Total liabilities and shareholders’ equity	$	3,798.9	$	2,787.2	$	2,445.8	$	(3,900.0	)	$	5,131.9

	As of December 31, 2017
	Encompass Health Corporation		Guarantor Subsidiaries		Nonguarantor Subsidiaries		Eliminating Entries			Encompass Health Consolidated
	(In Millions)
Assets
Current assets:
Cash and cash equivalents	$	34.3	$	2.9	$	17.2	$	—		$	54.4
Restricted cash	—		—		62.4		—			62.4
Accounts receivable	—		285.2		186.9		—			472.1
Other current assets	61.4		21.7		48.7		(18.5		)	113.3
Total current assets	95.7		309.8		315.2		(18.5		)	702.2
Property and equipment, net	101.8		991.5		423.8		—			1,517.1
Goodwill	—		854.6		1,118.0		—			1,972.6
Intangible assets, net	11.8		105.1		286.2		—			403.1
Deferred income tax assets	97.4		8.4		—		(42.2		)	63.6
Other long-term assets	49.2		100.5		85.4		—			235.1
Intercompany notes receivable	486.2		—		—		(486.2		)	—
Intercompany receivable and investments in consolidated affiliates	2,839.1		311.3		—		(3,150.4		)	—
Total assets	$	3,681.2	$	2,681.2	$	2,228.6	$	(3,697.3	)	$	4,893.7
Liabilities and Shareholders’ Equity
Current liabilities:
Current portion of long-term debt	$	32.8	$	7.4	$	9.6	$	(17.5	)	$	32.3
Accounts payable	10.4		43.5		24.5		—			78.4
Accrued expenses and other current liabilities	166.8		82.0		159.0		(1.0		)	406.8
Total current liabilities	210.0		132.9		193.1		(18.5		)	517.5
Long-term debt, net of current portion	2,258.5		242.2		44.7		—			2,545.4
Intercompany notes payable	—		—		486.2		(486.2		)	—
Other long-term liabilities	31.0		17.8		178.6		(42.1		)	185.3
Intercompany payable	—		—		144.8		(144.8		)	—
	2,499.5		392.9		1,047.4		(691.6		)	3,248.2
Commitments and contingencies
Redeemable noncontrolling interests	—		—		220.9		—			220.9
Shareholders’ equity:
Encompass Health shareholders’ equity	1,181.7		2,288.3		717.4		(3,005.7		)	1,181.7
Noncontrolling interests	—		—		242.9		—			242.9
Total shareholders’ equity	1,181.7		2,288.3		960.3		(3,005.7		)	1,424.6
Total liabilities and shareholders’ equity	$	3,681.2	$	2,681.2	$	2,228.6	$	(3,697.3	)	$	4,893.7

Condensed Consolidating Statement of Cash Flows

	Nine Months Ended September 30, 2018
	Encompass Health Corporation			Guarantor Subsidiaries			Nonguarantor Subsidiaries			Eliminating Entries			Encompass Health Consolidated
	(In Millions)
Net cash (used in) provided by operating activities	$	(16.4	)	$	334.8		$	265.6		$	—		$	584.0
Cash flows from investing activities:
Purchases of property and equipment	(23.3		)	(97.7		)	(50.5		)	—			(171.5		)
Additions to capitalized software costs	(12.1		)	—			(1.1		)	—			(13.2		)
Acquisitions of businesses, net of cash acquired	(129.7		)	—			(6.1		)	—			(135.8		)
Proceeds from repayment of intercompany note receivable	70.0			—			—			(70.0		)	—
Other, net	(6.8		)	2.9			(1.9		)	—			(5.8		)
Net cash used in investing activities	(101.9		)	(94.8		)	(59.6		)	(70.0		)	(326.3		)
Cash flows from financing activities:
Principal payments on debt, including pre-payments	(13.8		)	—			(2.3		)	—			(16.1		)
Principal payments on intercompany note payable	—			—			(70.0		)	70.0			—
Borrowings on revolving credit facility	285.0			—			—			—			285.0
Payments on revolving credit facility	(315.0		)	—			—			—			(315.0		)
Dividends paid on common stock	(74.3		)	—			(0.1		)	—			(74.4		)
Purchase of equity interests in consolidated affiliates	(65.1		)	—			—			—			(65.1		)
Distributions paid to noncontrolling interests of consolidated affiliates	—			—			(56.5		)	—			(56.5		)
Taxes paid on behalf of employees for shares withheld	(7.4		)	—			(0.9		)	—			(8.3		)
Other, net	3.1			(5.6		)	(0.6		)	—			(3.1		)
Change in intercompany advances	313.5			(232.9		)	(80.6		)	—			—
Net cash provided by (used in) financing activities	126.0			(238.5		)	(211.0		)	70.0			(253.5		)
Increase (decrease) in cash, cash equivalents, and restricted cash	7.7			1.5			(5.0		)	—			4.2
Cash, cash equivalents, and restricted cash at beginning of period	34.3			2.9			79.6			—			116.8
Cash, cash equivalents, and restricted cash at end of period	$	42.0		$	4.4		$	74.6		$	—		$	121.0
Reconciliation of Cash, Cash Equivalents, and Restricted Cash
Cash and cash equivalents at beginning of period	$	34.3		$	2.9		$	17.2		$	—		$	54.4
Restricted cash at beginning of period	—			—			62.4			—			62.4
Cash, cash equivalents, and restricted cash at beginning of period	$	34.3		$	2.9		$	79.6		$	—		$	116.8
Cash and cash equivalents at end of period	$	42.0		$	4.4		$	10.5		$	—		$	56.9
Restricted cash at end of period	—			—			62.1			—			62.1
Restricted cash included in other long-term assets at end of period	—			—			2.0			—			2.0
Cash, cash equivalents, and restricted cash at end of period	$	42.0		$	4.4		$	74.6		$	—		$	121.0
Supplemental schedule of noncash financing activity:
Intercompany note activity	$	(135.8	)	$	—		$	135.8		$	—		$	—

	Nine Months Ended September 30, 2017
	Encompass Health Corporation			Guarantor Subsidiaries			Nonguarantor Subsidiaries			Eliminating Entries			Encompass Health Consolidated
	(In Millions)
Net cash provided by operating activities	$	42.3		$	261.5		$	203.1		$	—		$	506.9
Cash flows from investing activities:
Purchases of property and equipment	(23.5		)	(67.7		)	(64.5		)	—			(155.7		)
Additions to capitalized software costs	(12.1		)	(0.2		)	(2.3		)	—			(14.6		)
Acquisitions of businesses, net of cash acquired	(10.9		)	—			(25.7		)	—			(36.6		)
Proceeds from repayment of intercompany note receivable	33.0			—			—			(33.0		)	—
Other, net	(2.7		)	11.7			(1.4		)	—			7.6
Net cash used in investing activities	(16.2		)	(56.2		)	(93.9		)	(33.0		)	(199.3		)
Cash flows from financing activities:
Principal payments on debt, including pre-payments	(123.1		)	—			(2.3		)	—			(125.4		)
Principal payments on intercompany note payable	—			—			(33.0		)	33.0			—
Borrowings on revolving credit facility	241.3			—			—			—			241.3
Payments on revolving credit facility	(255.3		)	—			—			—			(255.3		)
Repurchases of common stock, including fees and expenses	(38.1		)	—			—			—			(38.1		)
Dividends paid on common stock	(67.0		)	—			—			—			(67.0		)
Proceeds from exercising stock warrants	26.6			—			—			—			26.6
Distributions paid to noncontrolling interests of consolidated affiliates	—			—			(38.3		)	—			(38.3		)
Taxes paid on behalf of employees for shares withheld	(19.5		)	—			(0.3		)	—			(19.8		)
Other, net	(2.6		)	(5.0		)	13.0			—			5.4
Change in intercompany advances	237.4			(198.6		)	(38.8		)	—			—
Net cash used in financing activities	(0.3		)	(203.6		)	(99.7		)	33.0			(270.6		)
Increase in cash, cash equivalents, and restricted cash	25.8			1.7			9.5			—			37.0
Cash, cash equivalents, and restricted cash at beginning of period	20.6			1.6			79.2			—			101.4
Cash, cash equivalents, and restricted cash at end of period	$	46.4		$	3.3		$	88.7		$	—		$	138.4
Reconciliation of Cash, Cash Equivalents, and Restricted Cash
Cash and cash equivalents at beginning of period	$	20.6		$	1.6		$	18.3		$	—		$	40.5
Restricted cash at beginning of period	—			—			60.9			—			60.9
Cash, cash equivalents, and restricted cash at beginning of period	$	20.6		$	1.6		$	79.2		$	—		$	101.4
Cash and cash equivalents at end of period	$	46.4		$	3.3		$	17.9		$	—		$	67.6
Restricted cash at end of period	—			—			70.8			—			70.8
Cash, cash equivalents, and restricted cash at end of period	$	46.4		$	3.3		$	88.7		$	—		$	138.4
Supplemental schedule of noncash financing activity:
Conversion of convertible debt	$	319.4		$	—		$	—		$	—		$	319.4