(Commission File Number) | (IRS Employer Identification No.) | ||||
Written communication pursuant to Rule 425 under the Securities Act (17 CFR 230.425) | |||||
Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) | |||||
Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) | |||||
Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
Title of each class | Trading Symbol(s) | Name of each exchange on which registered | ||||||
Exhibit Number | Description | |||||||
104 | Cover Page Interactive Data File - the cover page iXBRL tags are embedded within the Inline XBRL document |
ENCOMPASS HEALTH CORPORATION | ||||||||
By: | /S/ DOUGLAS E. COLTHARP | |||||||
Name: | Douglas E. Coltharp | |||||||
Title: | Executive Vice President and Chief Financial Officer |
Media Contact | October 26, 2023 | ||||
Danielle Hall, 205 970-5912 | |||||
danielle.hall@encompasshealth.com | |||||
Investor Relations Contact | |||||
Mark Miller, 205 970-5860 | |||||
mark.miller@encompasshealth.com |
Growth | |||||||||||||||||||||||
Q3 2023 | Q3 2022 | Dollars | Percent | ||||||||||||||||||||
(In Millions, Except Per Share Data) | |||||||||||||||||||||||
Net operating revenue | $ | 1,206.9 | $ | 1,089.5 | $ | 117.4 | 10.8 | % | |||||||||||||||
Income from continuing operations attributable to Encompass Health per diluted share | 0.85 | 0.63 | 0.22 | 34.9 | % | ||||||||||||||||||
Adjusted earnings per share | 0.86 | 0.67 | 0.19 | 28.4 | % | ||||||||||||||||||
Cash flows provided by operating activities | 215.2 | 70.1 | 145.1 | 207.0 | % | ||||||||||||||||||
Adjusted EBITDA | 237.5 | 195.3 | 42.2 | 21.6 | % | ||||||||||||||||||
Adjusted free cash flow | 149.3 | 26.6 | 122.7 | 461.3 | % | ||||||||||||||||||
(Actual Amounts) | |||||||||||||||||||||||
Discharges | 57,665 | 53,743 | 7.3 | % | |||||||||||||||||||
Same-store discharge growth | 4.3 | % | |||||||||||||||||||||
Net patient revenue per discharge | $ | 20,472 | $ | 19,809 | 3.3 | % |
1 |
Full-Year 2023 Guidance | |||||||||||
Previous Guidance | Updated Guidance | ||||||||||
(In Millions, Except Per Share Data) | |||||||||||
Net operating revenue | $4,750 to $4,810 | $4,770 to $4,800 | |||||||||
Adjusted EBITDA | $920 to $950 | $940 to $955 | |||||||||
Adjusted earnings per share from continuing operations attributable to Encompass Health | $3.31 to $3.53 | $3.41 to $3.52 |
2 |
3 |
Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||||||||
2023 | 2022 | 2023 | 2022 | ||||||||||||||||||||
(In Millions, Except Per Share Data) | |||||||||||||||||||||||
Net operating revenues | $ | 1,206.9 | $ | 1,089.5 | $ | 3,554.4 | $ | 3,211.3 | |||||||||||||||
Operating expenses: | |||||||||||||||||||||||
Salaries and benefits | 658.6 | 605.6 | 1,923.8 | 1,778.9 | |||||||||||||||||||
Other operating expenses | 183.7 | 172.0 | 534.3 | 500.3 | |||||||||||||||||||
Occupancy costs | 14.2 | 12.4 | 42.3 | 41.6 | |||||||||||||||||||
Supplies | 53.9 | 51.1 | 159.7 | 148.2 | |||||||||||||||||||
General and administrative expenses | 49.8 | 37.9 | 148.6 | 111.5 | |||||||||||||||||||
Depreciation and amortization | 67.3 | 62.1 | 203.8 | 180.3 | |||||||||||||||||||
Total operating expenses | 1,027.5 | 941.1 | 3,012.5 | 2,760.8 | |||||||||||||||||||
Loss on early extinguishment of debt | — | — | — | 1.4 | |||||||||||||||||||
Interest expense and amortization of debt discounts and fees | 35.9 | 38.2 | 108.6 | 138.2 | |||||||||||||||||||
Other (income) expense | (0.5) | 3.6 | (6.8) | 13.6 | |||||||||||||||||||
Equity in net income of nonconsolidated affiliates | (1.0) | (0.7) | (2.3) | (2.6) | |||||||||||||||||||
Income from continuing operations before income tax expense | 145.0 | 107.3 | 442.4 | 299.9 | |||||||||||||||||||
Provision for income tax expense | 30.3 | 21.8 | 95.0 | 68.2 | |||||||||||||||||||
Income from continuing operations | 114.7 | 85.5 | 347.4 | 231.7 | |||||||||||||||||||
(Loss) income from discontinued operations, net of tax | (1.3) | (18.5) | (3.5) | 16.7 | |||||||||||||||||||
Net and comprehensive income | 113.4 | 67.0 | 343.9 | 248.4 | |||||||||||||||||||
Less: Net income attributable to noncontrolling interests included in continuing operations | (28.1) | (21.6) | (79.5) | (65.5) | |||||||||||||||||||
Less: Net income attributable to noncontrolling interests included in discontinued operations | — | — | — | (1.3) | |||||||||||||||||||
Less: Net and comprehensive income attributable to noncontrolling interests | (28.1) | (21.6) | (79.5) | (66.8) | |||||||||||||||||||
Net and comprehensive income attributable to Encompass Health | $ | 85.3 | $ | 45.4 | $ | 264.4 | $ | 181.6 | |||||||||||||||
Weighted average common shares outstanding: | |||||||||||||||||||||||
Basic | 99.5 | 99.2 | 99.5 | 99.2 | |||||||||||||||||||
Diluted | 101.4 | 100.5 | 101.1 | 100.3 | |||||||||||||||||||
Earnings per common share: | |||||||||||||||||||||||
Basic earnings per share attributable to Encompass Health common shareholders: | |||||||||||||||||||||||
Continuing operations | $ | 0.86 | $ | 0.64 | $ | 2.68 | $ | 1.67 | |||||||||||||||
Discontinued operations | (0.01) | (0.19) | (0.04) | 0.15 | |||||||||||||||||||
Net income | $ | 0.85 | $ | 0.45 | $ | 2.64 | $ | 1.82 | |||||||||||||||
Diluted earnings per share attributable to Encompass Health common shareholders: | |||||||||||||||||||||||
Continuing operations | $ | 0.85 | $ | 0.63 | $ | 2.65 | $ | 1.66 | |||||||||||||||
Discontinued operations | (0.01) | (0.18) | (0.03) | 0.15 | |||||||||||||||||||
Net income | $ | 0.84 | $ | 0.45 | $ | 2.62 | $ | 1.81 | |||||||||||||||
Amounts attributable to Encompass Health common shareholders: | |||||||||||||||||||||||
Income from continuing operations | $ | 86.6 | $ | 63.9 | $ | 267.9 | $ | 166.2 | |||||||||||||||
(Loss) income from discontinued operations, net of tax | (1.3) | (18.5) | (3.5) | 15.4 | |||||||||||||||||||
Net income attributable to Encompass Health | $ | 85.3 | $ | 45.4 | $ | 264.4 | $ | 181.6 |
4 |
September 30, 2023 | December 31, 2022 | ||||||||||
(In Millions) | |||||||||||
Assets | |||||||||||
Current assets: | |||||||||||
Cash and cash equivalents | $ | 99.7 | $ | 21.8 | |||||||
Restricted cash | 41.5 | 31.6 | |||||||||
Accounts receivable | 535.9 | 536.8 | |||||||||
Other current assets | 136.6 | 127.0 | |||||||||
Total current assets | 813.7 | 717.2 | |||||||||
Property and equipment, net | 3,186.3 | 2,939.2 | |||||||||
Operating lease right-of-use assets | 196.8 | 212.5 | |||||||||
Goodwill | 1,281.3 | 1,263.2 | |||||||||
Intangible assets, net | 276.4 | 282.3 | |||||||||
Other long-term assets | 209.8 | 222.1 | |||||||||
Total assets | $ | 5,964.3 | $ | 5,636.5 | |||||||
Liabilities and Shareholders’ Equity | |||||||||||
Current liabilities: | |||||||||||
Current portion of long-term debt | $ | 23.9 | $ | 25.2 | |||||||
Current operating lease liabilities | 24.9 | 25.6 | |||||||||
Accounts payable | 165.4 | 132.9 | |||||||||
Accrued expenses and other current liabilities | 425.0 | 392.2 | |||||||||
Total current liabilities | 639.2 | 575.9 | |||||||||
Long-term debt, net of current portion | 2,692.7 | 2,741.8 | |||||||||
Long-term operating lease liabilities | 183.9 | 199.7 | |||||||||
Deferred income tax liabilities | 80.4 | 83.0 | |||||||||
Other long-term liabilities | 178.9 | 174.2 | |||||||||
3,775.1 | 3,774.6 | ||||||||||
Commitments and contingencies | |||||||||||
Redeemable noncontrolling interests | 41.5 | 35.6 | |||||||||
Shareholders’ equity: | |||||||||||
Encompass Health shareholders’ equity | 1,560.4 | 1,310.3 | |||||||||
Noncontrolling interests | 587.3 | 516.0 | |||||||||
Total shareholders’ equity | 2,147.7 | 1,826.3 | |||||||||
Total liabilities and shareholders’ equity | $ | 5,964.3 | $ | 5,636.5 |
5 |
Nine Months Ended September 30, | |||||||||||
2023 | 2022 | ||||||||||
(In Millions) | |||||||||||
Cash flows from operating activities: | |||||||||||
Net income | $ | 343.9 | $ | 248.4 | |||||||
Loss (income) from discontinued operations, net of tax | 3.5 | (16.7) | |||||||||
Adjustments to reconcile net income to net cash provided by operating activities— | |||||||||||
Depreciation and amortization | 203.8 | 180.3 | |||||||||
Loss on early extinguishment of debt | — | 1.4 | |||||||||
Equity in net income of nonconsolidated affiliates | (2.3) | (2.6) | |||||||||
Distributions from nonconsolidated affiliates | 0.6 | 3.7 | |||||||||
Stock-based compensation | 37.2 | 21.1 | |||||||||
Deferred tax benefit | (2.9) | (7.7) | |||||||||
Realized loss on sale of investments | 0.9 | 16.5 | |||||||||
Other, net | 10.8 | 9.7 | |||||||||
Change in assets and liabilities, net of acquisitions— | |||||||||||
Accounts receivable | 20.7 | 22.4 | |||||||||
Other assets | (4.1) | 5.0 | |||||||||
Accounts payable | (0.2) | (0.3) | |||||||||
Accrued payroll | 24.1 | (9.3) | |||||||||
Accrued interest payable | (19.1) | (20.7) | |||||||||
Other liabilities | 37.5 | 26.4 | |||||||||
Net cash (used in) provided by operating activities of discontinued operations | (4.6) | 56.0 | |||||||||
Total adjustments | 302.4 | 301.9 | |||||||||
Net cash provided by operating activities | 649.8 | 533.6 | |||||||||
Cash flows from investing activities: | |||||||||||
Purchases of property and equipment | (360.5) | (374.9) | |||||||||
Purchase of restricted investments | (21.1) | (25.1) | |||||||||
Other, net | (13.1) | (17.0) | |||||||||
Net cash used in investing activities of discontinued operations | — | (3.6) | |||||||||
Net cash used in investing activities | (394.7) | (420.6) | |||||||||
6 |
Nine Months Ended September 30, | |||||||||||
2023 | 2022 | ||||||||||
(In Millions) | |||||||||||
Cash flows from financing activities: | |||||||||||
Principal borrowings on notes | 20.0 | — | |||||||||
Principal payments on debt, including pre-payments | (6.3) | (345.3) | |||||||||
Borrowings on revolving credit facility | 60.0 | 180.0 | |||||||||
Payments on revolving credit facility | (115.0) | (340.0) | |||||||||
Principal payments under finance lease obligations | (35.9) | (14.3) | |||||||||
Debt amendment costs | (0.1) | (21.6) | |||||||||
Taxes paid on behalf of employees for shares withheld | (8.1) | (7.2) | |||||||||
Contributions from noncontrolling interests of consolidated affiliates | 54.7 | 55.1 | |||||||||
Dividends paid on common stock | (45.5) | (84.1) | |||||||||
Distributions paid to noncontrolling interests of consolidated affiliates | (91.9) | (68.2) | |||||||||
Other, net | 0.8 | 0.3 | |||||||||
Net cash provided by financing activities of discontinued operations | — | 516.1 | |||||||||
Net cash used in financing activities | (167.3) | (129.2) | |||||||||
Increase (decrease) in cash, cash equivalents, and restricted cash | 87.8 | (16.2) | |||||||||
Cash, cash equivalents, and restricted cash at beginning of period | 53.4 | 120.3 | |||||||||
Cash, cash equivalents, and restricted cash at end of period | $ | 141.2 | $ | 104.1 | |||||||
Reconciliation of Cash, Cash Equivalents, and Restricted Cash | |||||||||||
Cash and cash equivalents at beginning of period | $ | 21.8 | $ | 49.4 | |||||||
Restricted cash at beginning of period | 31.6 | 62.5 | |||||||||
Restricted cash included in other long-term assets at beginning of period | — | 0.4 | |||||||||
Cash, cash equivalents, and restricted cash in discontinued operations at beginning of period | — | 8.0 | |||||||||
Cash, cash equivalents, and restricted cash at beginning of period | $ | 53.4 | $ | 120.3 | |||||||
Cash and cash equivalents at end of period | $ | 99.7 | $ | 59.8 | |||||||
Restricted cash at end of period | 41.5 | 44.3 | |||||||||
Cash, cash equivalents, and restricted cash at end of period | $ | 141.2 | $ | 104.1 |
7 |
Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||||||||
2023 | 2022 | 2023 | 2022 | ||||||||||||||||||||
(In Millions, Except Per Share Data) | |||||||||||||||||||||||
Adjusted EBITDA | $ | 237.5 | $ | 195.3 | $ | 716.1 | $ | 586.6 | |||||||||||||||
Depreciation and amortization | (67.3) | (62.1) | (203.8) | (180.3) | |||||||||||||||||||
Interest expense and amortization of debt discounts and fees | (35.9) | (38.2) | (108.6) | (138.2) | |||||||||||||||||||
Stock-based compensation | (13.7) | (7.3) | (37.2) | (21.1) | |||||||||||||||||||
(Loss) gain on disposal or impairment of assets | (2.2) | 1.1 | (3.7) | (2.4) | |||||||||||||||||||
118.4 | 88.8 | 362.8 | 244.6 | ||||||||||||||||||||
Items not indicative of ongoing operating performance: | |||||||||||||||||||||||
Loss on early extinguishment of debt | — | — | — | (1.4) | |||||||||||||||||||
State regulatory change impact on noncontrolling interests | — | — | 2.2 | — | |||||||||||||||||||
Change in fair market value of equity securities | (1.5) | (3.1) | (2.1) | (8.8) | |||||||||||||||||||
Pre-tax income | 116.9 | 85.7 | 362.9 | 234.4 | |||||||||||||||||||
Income tax expense | (30.3) | (21.8) | (95.0) | (68.2) | |||||||||||||||||||
Income from continuing operations (1) | $ | 86.6 | $ | 63.9 | $ | 267.9 | $ | 166.2 | |||||||||||||||
Basic shares | 99.5 | 99.2 | 99.5 | 99.2 | |||||||||||||||||||
Diluted shares | 101.4 | 100.5 | 101.1 | 100.3 | |||||||||||||||||||
Basic earnings per share (1) | $ | 0.86 | $ | 0.64 | $ | 2.68 | $ | 1.67 | |||||||||||||||
Diluted earnings per share (1) | $ | 0.85 | $ | 0.63 | $ | 2.65 | $ | 1.66 |
8 |
Q3 | 9 Months | ||||||||||||||||||||||
2023 | 2022 | 2023 | 2022 | ||||||||||||||||||||
Earnings per share, as reported | $ | 0.85 | $ | 0.63 | $ | 2.65 | $ | 1.66 | |||||||||||||||
Adjustments, net of tax: | |||||||||||||||||||||||
Bondholder consent fees associated with Enhabit distribution | — | — | — | 0.15 | |||||||||||||||||||
Income tax adjustments | — | 0.01 | — | 0.08 | |||||||||||||||||||
State regulatory change impact | — | — | 0.03 | — | |||||||||||||||||||
Loss on early extinguishment of debt | — | — | — | 0.01 | |||||||||||||||||||
Change in fair market value of equity securities | 0.01 | 0.02 | 0.02 | 0.06 | |||||||||||||||||||
Adjusted earnings per share* | $ | 0.86 | $ | 0.67 | $ | 2.69 | $ | 1.97 |
9 |
Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||||||||
2023 | 2022 | 2023 | 2022 | ||||||||||||||||||||
(In Millions) | |||||||||||||||||||||||
Net cash provided by operating activities | $ | 215.2 | $ | 70.1 | $ | 649.8 | $ | 533.6 | |||||||||||||||
Interest expense and amortization of debt discounts and fees | 35.9 | 38.2 | 108.6 | 138.2 | |||||||||||||||||||
Loss on sale of investments, excluding impairments | (2.7) | (4.6) | (0.9) | (16.5) | |||||||||||||||||||
Equity in net income of nonconsolidated affiliates | 1.0 | 0.7 | 2.3 | 2.6 | |||||||||||||||||||
Net income attributable to noncontrolling interests in continuing operations | (28.1) | (21.6) | (79.5) | (65.5) | |||||||||||||||||||
Amortization of debt-related items | (2.4) | (2.6) | (7.1) | (7.4) | |||||||||||||||||||
Distributions from nonconsolidated affiliates | (0.4) | (0.8) | (0.6) | (3.7) | |||||||||||||||||||
Current portion of income tax expense | 33.5 | 23.0 | 97.9 | 75.9 | |||||||||||||||||||
Change in assets and liabilities | (17.5) | 69.9 | (58.9) | (23.5) | |||||||||||||||||||
Cash used in (provided by) operating activities of discontinued operations | 1.7 | 19.9 | 4.6 | (56.0) | |||||||||||||||||||
State regulatory change impact on noncontrolling interests | — | — | (2.2) | — | |||||||||||||||||||
Change in fair market value of equity securities | 1.5 | 3.1 | 2.1 | 8.8 | |||||||||||||||||||
Other | (0.2) | — | — | 0.1 | |||||||||||||||||||
Adjusted EBITDA | $ | 237.5 | $ | 195.3 | $ | 716.1 | $ | 586.6 |
10 |
For the Three Months Ended September 30, 2023 | |||||||||||||||||||||||
Adjustments | |||||||||||||||||||||||
As Reported | Income Tax Adjustments | Change in Fair Market Value of Equity Securities | As Adjusted | ||||||||||||||||||||
(In Millions, Except Per Share Amounts) | |||||||||||||||||||||||
Adjusted EBITDA* | $ | 237.5 | $ | — | $ | — | $ | 237.5 | |||||||||||||||
Depreciation and amortization | (67.3) | — | — | (67.3) | |||||||||||||||||||
Interest expense and amortization of debt discounts and fees | (35.9) | — | — | (35.9) | |||||||||||||||||||
Stock-based compensation | (13.7) | — | — | (13.7) | |||||||||||||||||||
Loss on disposal or impairment of assets | (2.2) | — | — | (2.2) | |||||||||||||||||||
Change in fair market value of equity securities | (1.5) | — | 1.5 | — | |||||||||||||||||||
Income from continuing operations before income tax expense | 116.9 | — | 1.5 | 118.4 | |||||||||||||||||||
Provision for income tax expense | (30.3) | (0.5) | (0.3) | (31.1) | |||||||||||||||||||
Income from continuing operations attributable to Encompass Health | $ | 86.6 | $ | (0.5) | $ | 1.2 | $ | 87.3 | |||||||||||||||
Diluted earnings per share from continuing operations** | $ | 0.85 | $ | — | $ | 0.01 | $ | 0.86 | |||||||||||||||
Diluted shares used in calculation | 101.4 |
11 |
For the Three Months Ended September 30, 2022 | |||||||||||||||||||||||
Adjustments | |||||||||||||||||||||||
As Reported | Income Tax Adjustments | Change in Fair Market Value of Equity Securities | As Adjusted | ||||||||||||||||||||
(In Millions, Except Per Share Amounts) | |||||||||||||||||||||||
Adjusted EBITDA* | $ | 195.3 | $ | — | $ | — | $ | 195.3 | |||||||||||||||
Depreciation and amortization | (62.1) | — | — | (62.1) | |||||||||||||||||||
Interest expense and amortization of debt discounts and fees | (38.2) | — | — | (38.2) | |||||||||||||||||||
Stock-based compensation | (7.3) | — | — | (7.3) | |||||||||||||||||||
Gain on disposal or impairment of assets | 1.1 | — | — | 1.1 | |||||||||||||||||||
Change in fair market value of equity securities | (3.1) | — | 3.1 | — | |||||||||||||||||||
Income from continuing operations before income tax expense | 85.7 | — | 3.1 | 88.8 | |||||||||||||||||||
Provision for income tax expense | (21.8) | 1.3 | (0.8) | (21.3) | |||||||||||||||||||
Income from continuing operations attributable to Encompass Health | $ | 63.9 | $ | 1.3 | $ | 2.3 | $ | 67.5 | |||||||||||||||
Diluted earnings per share from continuing operations** | $ | 0.63 | $ | 0.01 | $ | 0.02 | $ | 0.67 | |||||||||||||||
Diluted shares used in calculation | 100.5 |
12 |
For the Nine Months Ended September 30, 2023 | |||||||||||||||||||||||||||||
Adjustments | |||||||||||||||||||||||||||||
As Reported | State Regulatory Change Impact | Income Tax Adjustments | Change in Fair Market Value of Equity Securities | As Adjusted | |||||||||||||||||||||||||
(In Millions, Except Per Share Amounts) | |||||||||||||||||||||||||||||
Adjusted EBITDA* | $ | 716.1 | $ | — | $ | — | $ | — | $ | 716.1 | |||||||||||||||||||
Depreciation and amortization | (203.8) | 6.1 | — | — | (197.7) | ||||||||||||||||||||||||
Interest expense and amortization of debt discounts and fees | (108.6) | — | — | — | (108.6) | ||||||||||||||||||||||||
Stock-based compensation | (37.2) | — | — | — | (37.2) | ||||||||||||||||||||||||
Loss on disposal or impairment of assets | (3.7) | — | — | — | (3.7) | ||||||||||||||||||||||||
State regulatory change impact on noncontrolling interests | 2.2 | (2.2) | — | — | — | ||||||||||||||||||||||||
Change in fair market value of equity securities | (2.1) | — | — | 2.1 | — | ||||||||||||||||||||||||
Income from continuing operations before income tax expense | 362.9 | 3.9 | — | 2.1 | 368.9 | ||||||||||||||||||||||||
Provision for income tax expense | (95.0) | (1.0) | (0.1) | (0.5) | (96.6) | ||||||||||||||||||||||||
Income from continuing operations attributable to Encompass Health | $ | 267.9 | $ | 2.9 | $ | (0.1) | $ | 1.6 | $ | 272.3 | |||||||||||||||||||
Diluted earnings per share from continuing operations** | $ | 2.65 | $ | 0.03 | $ | — | $ | 0.02 | $ | 2.69 | |||||||||||||||||||
Diluted shares used in calculation | 101.1 |
13 |
For the Nine Months Ended September 30, 2022 | |||||||||||||||||||||||||||||||||||
Adjustments | |||||||||||||||||||||||||||||||||||
As Reported | Loss on Early Exting. of Debt | Income Tax Adjustments | Bondholder Consent Fees Associated with Enhabit Distribution | Change in Fair Market Value of Equity Securities | As Adjusted | ||||||||||||||||||||||||||||||
(In Millions, Except Per Share Amounts) | |||||||||||||||||||||||||||||||||||
Adjusted EBITDA* | $ | 586.6 | $ | — | $ | — | $ | — | $ | — | $ | 586.6 | |||||||||||||||||||||||
Depreciation and amortization | (180.3) | — | — | — | — | (180.3) | |||||||||||||||||||||||||||||
Interest expense and amortization of debt discounts and fees | (138.2) | — | — | 20.5 | — | (117.7) | |||||||||||||||||||||||||||||
Stock-based compensation | (21.1) | — | — | — | — | (21.1) | |||||||||||||||||||||||||||||
Loss on disposal or impairment of assets | (2.4) | — | — | — | — | (2.4) | |||||||||||||||||||||||||||||
Loss on early extinguishment of debt | (1.4) | 1.4 | — | — | — | — | |||||||||||||||||||||||||||||
Change in fair market value of equity securities | (8.8) | — | — | — | 8.8 | — | |||||||||||||||||||||||||||||
Income from continuing operations before income tax expense | 234.4 | 1.4 | — | 20.5 | 8.8 | 265.1 | |||||||||||||||||||||||||||||
Provision for income tax expense | (68.2) | (0.4) | 8.5 | (5.3) | (2.3) | (67.7) | |||||||||||||||||||||||||||||
Income from continuing operations attributable to Encompass Health | $ | 166.2 | $ | 1.0 | $ | 8.5 | $ | 15.2 | $ | 6.5 | $ | 197.4 | |||||||||||||||||||||||
Diluted earnings per share from continuing operations** | $ | 1.66 | $ | 0.01 | $ | 0.08 | $ | 0.15 | $ | 0.06 | $ | 1.97 | |||||||||||||||||||||||
Diluted shares used in calculation | 100.3 |
14 |
Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||||||||
2023 | 2022 | 2023 | 2022 | ||||||||||||||||||||
(In Millions) | |||||||||||||||||||||||
Net income | $ | 113.4 | $ | 67.0 | $ | 343.9 | $ | 248.4 | |||||||||||||||
Loss (income) from discontinued operations, net of tax, attributable to Encompass Health | 1.3 | 18.5 | 3.5 | (16.7) | |||||||||||||||||||
Net income attributable to noncontrolling interests included in continuing operations | (28.1) | (21.6) | (79.5) | (65.5) | |||||||||||||||||||
Provision for income tax expense | 30.3 | 21.8 | 95.0 | 68.2 | |||||||||||||||||||
Interest expense and amortization of debt discounts and fees | 35.9 | 38.2 | 108.6 | 138.2 | |||||||||||||||||||
Depreciation and amortization | 67.3 | 62.1 | 203.8 | 180.3 | |||||||||||||||||||
Loss on early extinguishment of debt | — | — | — | 1.4 | |||||||||||||||||||
Loss (gain) on disposal or impairment of assets | 2.2 | (1.1) | 3.7 | 2.4 | |||||||||||||||||||
Stock-based compensation | 13.7 | 7.3 | 37.2 | 21.1 | |||||||||||||||||||
State regulatory change impact on noncontrolling interests | — | — | (2.2) | — | |||||||||||||||||||
Change in fair market value of equity securities | 1.5 | 3.1 | 2.1 | 8.8 | |||||||||||||||||||
Adjusted EBITDA | $ | 237.5 | $ | 195.3 | $ | 716.1 | $ | 586.6 |
15 |
Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||||||||
2023 | 2022 | 2023 | 2022 | ||||||||||||||||||||
(In Millions) | |||||||||||||||||||||||
Net cash provided by operating activities | $ | 215.2 | $ | 70.1 | $ | 649.8 | $ | 533.6 | |||||||||||||||
Impact of discontinued operations | 1.7 | 19.9 | 4.6 | (56.0) | |||||||||||||||||||
Net cash provided by operating activities of continuing operations | 216.9 | 90.0 | 654.4 | 477.6 | |||||||||||||||||||
Capital expenditures for maintenance | (35.3) | (56.2) | (129.8) | (127.6) | |||||||||||||||||||
Distributions paid to noncontrolling interests of consolidated affiliates | (32.5) | (22.3) | (91.9) | (68.2) | |||||||||||||||||||
Items not indicative of ongoing operating performance: | |||||||||||||||||||||||
Transaction costs and related liabilities | 0.2 | 15.1 | (0.5) | 12.3 | |||||||||||||||||||
Adjusted free cash flow | $ | 149.3 | $ | 26.6 | $ | 432.2 | $ | 294.1 |
16 |
17 |
18 |
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