$EHC

HEALTHSOUTH CORP

CIK:0000785161|SEC Filings

Condensed Consolidated Statements of Operations - USD ($) shares in Millions, $ in Millions	3 Months Ended		6 Months Ended
	Jun. 30, 2026	Jun. 30, 2025	Jun. 30, 2026	Jun. 30, 2025
Income Statement [Abstract]
Net operating revenues	$ 1,597.4	$ 1,457.7	$ 3,184.0	$ 2,913.1
Operating expenses:
Salaries and benefits	820.3	767.7	1,638.4	1,530.0
Other operating expenses	254.9	213.8	496.8	431.3
Occupancy costs	14.7	14.7	29.9	29.6
Supplies	66.1	63.1	130.4	125.3
General and administrative expenses	62.6	59.4	120.8	111.7
Depreciation and amortization	90.4	79.9	177.7	159.1
Total operating expenses	1,309.0	1,198.6	2,594.0	2,387.0
Loss on early extinguishment of debt	3.2	0.0	3.4	0.0
Interest expense and amortization of debt discounts and fees	32.8	30.4	64.6	62.2
Other income	(9.1)	(6.7)	(27.8)	(9.2)
Equity in net income of nonconsolidated affiliates	(0.1)	(1.4)	(0.5)	(2.3)
Income from continuing operations before income tax expense	261.6	236.8	550.3	475.4
Provision for income tax expense	53.6	51.0	110.0	92.6
Income from continuing operations	208.0	185.8	440.3	382.8
(Loss) income from discontinued operations, net of tax	(0.6)	(0.9)	15.3	(1.4)
Net income	207.4	184.9	455.6	381.4
Less: Net income attributable to noncontrolling interests	(53.5)	(42.8)	(107.2)	(87.8)
Net income attributable to Encompass Health	$ 153.9	$ 142.1	$ 348.4	$ 293.6
Weighted average common shares outstanding:
Basic (in shares)	98.8	100.6	99.0	100.6
Diluted (in shares)	100.0	102.3	100.3	102.2
Basic earnings per share attributable to Encompass Health common shareholders:
Continuing operations (in dollars per share)	$ 1.56	$ 1.42	$ 3.36	$ 2.92
Discontinued operations (in dollars per share)	(0.01)	(0.01)	0.15	(0.01)
Net income (in dollars per share)	1.55	1.41	3.51	2.91
Diluted earnings per share attributable to Encompass Health common shareholders:
Continuing operations (in dollars per share)	1.55	1.40	3.32	2.88
Discontinued operations (in dollars per share)	(0.01)	(0.01)	0.15	(0.01)
Net income (in dollars per share)	$ 1.54	$ 1.39	$ 3.47	$ 2.87
Amounts attributable to Encompass Health common shareholders:
Income from continuing operations	$ 154.5	$ 143.0	$ 333.1	$ 295.0
(Loss) income from discontinued operations, net of tax	(0.6)	(0.9)	15.3	(1.4)
Net income attributable to Encompass Health	$ 153.9	$ 142.1	$ 348.4	$ 293.6

Condensed Consolidated Statements of Cash Flows - USD ($) $ in Millions	6 Months Ended
	Jun. 30, 2026	Jun. 30, 2025
Cash flows from operating activities:
Net income	$ 455.6	$ 381.4
(Income) loss from discontinued operations, net of tax	(15.3)	1.4
Adjustments to reconcile net income to net cash provided by operating activities—
Depreciation and amortization	177.7	159.1
Loss on early extinguishment of debt	3.4	0.0
Stock-based compensation	25.3	23.8
Deferred tax expense	5.4	5.3
Gain on investments	(22.6)	(3.2)
Other, net	6.8	4.3
Change in assets and liabilities, net of acquisitions—
Accounts receivable	(63.4)	(15.7)
Other assets	(28.4)	(16.5)
Accounts payable	20.3	(2.5)
Other liabilities	10.6	23.3
Net cash provided by (used in) operating activities of discontinued operations	20.3	(1.9)
Total adjustments	155.4	176.0
Net cash provided by operating activities	595.7	558.8
Cash flows from investing activities:
Purchases of property, equipment, and intangible assets	(382.7)	(320.0)
Proceeds from sale of restricted investments	59.6	132.0
Purchases of restricted investments	(54.5)	(127.8)
Other, net	(8.1)	(8.1)
Net cash used in investing activities	(385.7)	(323.9)
Cash flows from financing activities:
Proceeds from bond issuance	500.0	0.0
Principal payments on debt, including pre-payments	(411.8)	(10.7)
Borrowings on revolving credit facility	670.0	60.0
Payments on revolving credit facility	(600.0)	(80.0)
Principal payments under finance lease obligations	(12.9)	(11.6)
Debt amendment and issuance costs	(11.8)	0.0
Repurchases of common stock, including fees and expenses	(145.8)	(56.8)
Dividends paid on common stock	(39.2)	(35.1)
Distributions paid to noncontrolling interests of consolidated affiliates	(98.1)	(73.3)
Taxes paid on behalf of employees for shares withheld	(30.9)	(19.9)
Other, net	1.1	6.8
Net cash used in financing activities	(179.4)	(220.6)
Increase in cash, cash equivalents, and restricted cash	30.6	14.3
Cash, cash equivalents, and restricted cash at beginning of period	102.9	123.1
Cash, cash equivalents, and restricted cash at end of period	133.5	137.4
Reconciliation of Cash, Cash Equivalents, and Restricted Cash
Cash and cash equivalents at beginning of period	72.2	85.4
Restricted cash at beginning of period	30.7	37.7
Cash, cash equivalents, and restricted cash at beginning of period	102.9	123.1
Cash and cash equivalents at end of period	107.7	99.1
Restricted cash at end of period	25.8	38.3
Cash, cash equivalents, and restricted cash at end of period	133.5	137.4
Supplemental schedule of noncash operating, investing, and financing activities:
Accrued purchases of property, equipment, and intangible assets	23.2	6.0
Operating lease additions and adjustments	0.2	26.5
Joint venture contributions	$ 9.4	$ 19.5

Condensed Consolidated Balance Sheets - USD ($)
$ in Millions

Jun. 30, 2026

Dec. 31, 2025

Current assets:

Cash and cash equivalents

$ 107.7

$ 72.2

Restricted cash

25.8

30.7

Accounts receivable

687.3

619.2

Other current assets

220.2

183.8

Total current assets

1,041.0

905.9

Property and equipment, net

4,341.7

4,101.6

Operating lease right-of-use assets

198.2

212.6

Goodwill

1,323.5

1,317.6

Intangible assets, net

306.8

308.3

Other long-term assets

246.3

243.7

Total assets

^[1]

7,457.5

7,089.7

Current liabilities:

Current portion of long-term debt

35.9

43.6

Current operating lease liabilities

27.5

26.5

Accounts payable

221.6

178.2

Accrued expenses and other current liabilities

588.4

588.1

Total current liabilities

873.4

836.4

Long-term debt, net of current portion

2,598.1

2,447.2

Long-term operating lease liabilities

180.8

196.6

Deferred income tax liabilities

131.9

126.8

Other long-term liabilities

212.2

206.9

Total liabilities

^[1]

3,996.4

3,813.9

Commitments and contingencies

Redeemable noncontrolling interests

57.9

58.3

Shareholders’ equity:

Encompass Health shareholders’ equity

2,597.7

2,438.2

Noncontrolling interests

805.5

779.3

Total shareholders’ equity

3,403.2

3,217.5

Total liabilities and shareholders' equity

^[1]

$ 7,457.5

$ 7,089.7

[1]

Our consolidated assets as of June 30, 2026 and December 31, 2025 include total assets of variable interest entities of $208.7 million and $203.8 million, respectively, which cannot be used by us to settle the obligations of other entities. Our consolidated liabilities as of June 30, 2026 and December 31, 2025 include total liabilities of the variable interest entities of $46.6 million and $50.5 million, respectively. See Note 2, Variable Interest Entities.