附錄99.1
| 媒體聯絡方式 | 2024年10月28日 | ||||
| Polly Manuel, 205 969-4532 | |||||
| polly.manuel@encompasshealth.com | |||||
| 投資人關係聯繫 | |||||
| Mark Miller, 205 970-5860 | |||||
| mark.miller@encompasshealth.com | |||||
Encompass Health公佈2024年第三季度業績報告
增加全年指引
阿拉巴馬伯明翰 - encompass health corporation（紐交所: EHC）是美國最大的住院康復醫院擁有者和營運商，今天報告截至2024年9月30日第三季度運營業績。
總結結果
| 成長 | |||||||||||||||||||||||
| Q3 2024 | Q3 2023 | 美元 | 百分比 | ||||||||||||||||||||
| (以百萬為單位，除每股數據外) | |||||||||||||||||||||||
| 營業收入淨額 | $ | 1,351.0 | $ | 1,206.9 | $ | 144.1 | 11.9 | % | |||||||||||||||
歸屬於Encompass Health的繼續營運收入每股稀釋後 | 1.07 | 0.85 | 0.22 | 25.9 | % | ||||||||||||||||||
| 調整後每股盈利（基本）($) | 1.03 | 0.86 | 0.17 | 19.8 | % | ||||||||||||||||||
營業活動產生的現金流入主要取決於我們資產佔有率、租金 | 267.8 | 215.2 | 52.6 | 24.4 | % | ||||||||||||||||||
| 調整後的稅前利潤減除折舊及攤銷後的費用 | 269.3 | 237.5 | 31.8 | 13.4 | % | ||||||||||||||||||
| 自由現金流 | 189.7 | 149.3 | 40.4 | 27.1 | % | ||||||||||||||||||
| （實際金額） | |||||||||||||||||||||||
| 出院 | 62,715 | 57,665 | 8.8 | % | |||||||||||||||||||
| 同店出院增長 | 6.8 | % | |||||||||||||||||||||
| 每次出院的淨患者營業收入 | $ | 20,987 | $ | 20,472 | 2.5 | % | |||||||||||||||||
請參閱附加的補充信息，以了解非通用會計原則衡量標準的計算和與對應的最可比通用會計原則衡量標準的和解。
•營業收入增長11.9%，主要是由於出院量增長了8.8%，包括同店增長6.8%。每次出院的凈收入增長了2.5%。
•營運活動產生的現金流增加了24.4％，達到26780萬美元，主要是由於凈利潤增加，部分抵銷了較高的現金納稅款。
•調整後的EBITDA增加了13.4%，主要來自於營業收入增加。
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「我們對第三季的表現感到非常滿意，強勁的出院增長促使營業收入增加11.9％，調整後的EBITDA增加13.4％，」Encompass Health總裁兼首席執行官Mark Tarr表示。
「我們的團隊在颶風海倫和米爾頓帶來的極具挑戰性條件下表現卓越，優先考慮病人安全和業務連續性。我們感謝我們的員工，因為他們的韌性和奉獻，為病人提供最優質的護理。」
2024年度指引
公司將全年指引提高如下：
| 2024年全年指引 | |||||||||||
| 之前的指引 | 更新的指引 | ||||||||||
| （單位：百萬美元，除每股數據外） | |||||||||||
| 營業收入淨額 | $5,275 到 $5,350 | $5,325 到 $5,375 | |||||||||
| 調整後的稅前利潤減除折舊及攤銷後的費用 | 1,040 到 1,075 美元 | 1,070 到 1,090 美元 | |||||||||
| 調整後每股盈利來自Encompass Health的持續營運 | 3.97 到 4.22 美元 | 4.19 到 4.33 美元 | |||||||||
有關公司2024年預測的考量，請查看公司網站 http://investor.encompasshealth.com 上張貼的補充資訊。另請參見下方的“其他資訊”部分，了解公司為何不提供調整後EBITDA和調整後每股收益的可比GAAP指標預測。
業績發佈會和網絡研討會
公司將於2024年10月29日星期二上午10:00（東部時間）舉行投資者電話會議，討論2024年第三季度的業績。為了方便通話期間參考，公司將在http://investor.encompasshealth.com上發布特定補充信息。
參加會議看漲者，請撥打800 343-4849並提供EHCQ324會議ID。國際撥打者應撥打203 518-9848並提供相同的會議ID。請於開始控制項前約十分鐘撥打，以確保您已連線。 會議也將進行網路直播，並將透過在 http://investor.encompasshealth.com 點擊可用連結來進行在線重播。
關於encompass health
Encompass Health（紐交所：EHC）是美國最大的住院康復醫院的所有者和運營商。公司的國家布局包括38個州和波多黎各的165家醫院，為從重傷或嚴重疾病中康復的患者提供高質量、充滿愛心的康復護理，並利用先進科技和創新治療方法來最大程度地提升康復效果。Encompass Health被評為《財富》世界上最受矚目的公司之一和《貝克醫院評論》醫療保健業最佳工作場所150強。欲瞭解更多信息，請訪問encompasshealth.com或在我們的新聞中心、Twitter、Instagram和Facebook關注我們。
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其他資訊
此新聞稿中的信息已被總結，應與公司截至2024年9月30日的第10-Q表格（“2024年9月第10-Q表格”）一起閱讀，以及公司於2024年10月28日提交的第8-k表格（“Q3業績第8-K表格”），本新聞稿作為附件附錄在其中。此外，該公司將於今天在其網站http://investor.encompasshealth.com上發布補充資訊，以供參考，在2024年10月29日業績會期間。
新聞稿和附加資訊中包含非依據通用會計原則的財務數據，包括公司的調整每股收益、槓桿比率、調整後淨額利息、調整後自由現金流等財務指標。除非是關於非依據通用會計原則的指引，否則將它們與最相近的通用會計原則的措施進行調和，並列於Q3季度盈利表8-k中。建議讀者查看Q3季度盈利表8-k中包含的“關於非依據通用會計原則財務指標呈現的注意事項”，以便進一步瞭解和披露有關公司使用這些非依據通用會計原則財務指標的說明。
公司在除去凈營運收入的情況下，並不根據GAAP提供指引，因為它無法合理確定那些被認為不在公司控制範圍內或其他方面不代表其持續營運表現的項目將對未來產生何種影響。這些項目包括政府、集體訴訟和相關和解；專業費用—會計、稅務和法律；按市價調整的股權增值權；與對沖工具相關的收益或虧損；償還債務早期損失；對其所得稅條款進行的調整（如估值撤銷調整和所得稅索賠的和解）；與企業和設施重組有關的項目；以及公司認為不代表其持續營運的某些其他項目。這些項目無法合理預測，並將取決於多種因素，包括行業和市場條件，可能對公司根據GAAP計算的結果產生重大影響。
然而，如果其他調整GAAP措施能夠合理預測，則2024年以下合理可估計的GAAP措施將包括在調整後的EBITDA對帳中。
•利息費用和折價及費用攤銷 - 約14000萬美元
•債務相關項目的攤銷 - 約1000萬美元
Q3盈利8-k表格和，當提交後，2024年9月份的10-Q表格可在公司網站http://investor.encompasshealth.com和SEC網站www.sec.gov找到。
3 | ||||||||
Encompass Health Corporation and Subsidiaries
Condensed Consolidated Statements of Comprehensive Income
(Unaudited)
| Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||||||||
| 2024 | 2023 | 2024 | 2023 | ||||||||||||||||||||
| (In Millions, Except Per Share Data) | |||||||||||||||||||||||
| Net operating revenues | $ | 1,351.0 | $ | 1,206.9 | $ | 3,968.2 | $ | 3,554.4 | |||||||||||||||
| Operating expenses: | |||||||||||||||||||||||
| Salaries and benefits | 732.1 | 658.6 | 2,144.2 | 1,923.8 | |||||||||||||||||||
| Other operating expenses | 202.4 | 183.7 | 596.2 | 534.3 | |||||||||||||||||||
| Occupancy costs | 14.4 | 14.2 | 42.6 | 42.3 | |||||||||||||||||||
| Supplies | 60.6 | 53.9 | 176.7 | 159.7 | |||||||||||||||||||
| General and administrative expenses | 54.0 | 49.8 | 154.7 | 148.6 | |||||||||||||||||||
| Depreciation and amortization | 78.4 | 67.3 | 221.6 | 203.8 | |||||||||||||||||||
| Total operating expenses | 1,141.9 | 1,027.5 | 3,336.0 | 3,012.5 | |||||||||||||||||||
| Loss on early extinguishment of debt | 0.4 | — | 0.4 | — | |||||||||||||||||||
| Interest expense and amortization of debt discounts and fees | 34.9 | 35.9 | 104.4 | 108.6 | |||||||||||||||||||
| Other income | (9.3) | (0.5) | (18.0) | (6.8) | |||||||||||||||||||
| Equity in net income of nonconsolidated affiliates | (0.7) | (1.0) | (2.8) | (2.3) | |||||||||||||||||||
| Income from continuing operations before income tax expense | 183.8 | 145.0 | 548.2 | 442.4 | |||||||||||||||||||
| Provision for income tax expense | 36.0 | 30.3 | 112.6 | 95.0 | |||||||||||||||||||
| Income from continuing operations | 147.8 | 114.7 | 435.6 | 347.4 | |||||||||||||||||||
| Loss from discontinued operations, net of tax | (0.7) | (1.3) | (3.2) | (3.5) | |||||||||||||||||||
| Net and comprehensive income | 147.1 | 113.4 | 432.4 | 343.9 | |||||||||||||||||||
| Less: Net and comprehensive income attributable to noncontrolling interests | (38.9) | (28.1) | (97.6) | (79.5) | |||||||||||||||||||
| Net and comprehensive income attributable to Encompass Health | $ | 108.2 | $ | 85.3 | $ | 334.8 | $ | 264.4 | |||||||||||||||
| Weighted average common shares outstanding: | |||||||||||||||||||||||
| Basic | 99.9 | 99.5 | 99.9 | 99.5 | |||||||||||||||||||
| Diluted | 102.1 | 101.4 | 102.2 | 101.1 | |||||||||||||||||||
Earnings per common share: | |||||||||||||||||||||||
Basic earnings per share attributable to Encompass Health common shareholders: | |||||||||||||||||||||||
Continuing operations | $ | 1.09 | $ | 0.86 | $ | 3.36 | $ | 2.68 | |||||||||||||||
Discontinued operations | (0.01) | (0.01) | (0.03) | (0.04) | |||||||||||||||||||
Net income | $ | 1.08 | $ | 0.85 | $ | 3.33 | $ | 2.64 | |||||||||||||||
Diluted earnings per share attributable to Encompass Health common shareholders: | |||||||||||||||||||||||
Continuing operations | $ | 1.07 | $ | 0.85 | $ | 3.31 | $ | 2.65 | |||||||||||||||
Discontinued operations | (0.01) | (0.01) | (0.03) | (0.03) | |||||||||||||||||||
Net income | $ | 1.06 | $ | 0.84 | $ | 3.28 | $ | 2.62 | |||||||||||||||
| Amounts attributable to Encompass Health common shareholders: | |||||||||||||||||||||||
| Income from continuing operations | $ | 108.9 | $ | 86.6 | $ | 338.0 | $ | 267.9 | |||||||||||||||
| Loss from discontinued operations, net of tax | (0.7) | (1.3) | (3.2) | (3.5) | |||||||||||||||||||
| Net income attributable to Encompass Health | $ | 108.2 | $ | 85.3 | $ | 334.8 | $ | 264.4 | |||||||||||||||
4 | ||||||||
Encompass Health Corporation and Subsidiaries
Condensed Consolidated Balance Sheets
(Unaudited)
| September 30, 2024 | December 31, 2023 | ||||||||||
| (In Millions) | |||||||||||
| Assets | |||||||||||
| Current assets: | |||||||||||
| Cash and cash equivalents | $ | 147.8 | $ | 69.1 | |||||||
| Restricted cash | 51.1 | 35.1 | |||||||||
| Accounts receivable | 576.4 | 611.6 | |||||||||
| Other current assets | 158.6 | 126.0 | |||||||||
| Total current assets | 933.9 | 841.8 | |||||||||
| Property and equipment, net | 3,523.7 | 3,301.0 | |||||||||
| Operating lease right-of-use assets | 209.7 | 208.5 | |||||||||
| Goodwill | 1,284.0 | 1,281.3 | |||||||||
| Intangible assets, net | 296.2 | 278.2 | |||||||||
| Other long-term assets | 210.9 | 191.6 | |||||||||
| Total assets | $ | 6,458.4 | $ | 6,102.4 | |||||||
| Liabilities and Shareholders’ Equity | |||||||||||
| Current liabilities: | |||||||||||
| Current portion of long-term debt | $ | 233.0 | $ | 24.8 | |||||||
| Current operating lease liabilities | 26.5 | 24.1 | |||||||||
| Accounts payable | 170.3 | 170.0 | |||||||||
| Accrued expenses and other current liabilities | 467.6 | 437.5 | |||||||||
| Total current liabilities | 897.4 | 656.4 | |||||||||
| Long-term debt, net of current portion | 2,344.5 | 2,687.8 | |||||||||
| Long-term operating lease liabilities | 195.5 | 196.1 | |||||||||
| Deferred income tax liabilities | 97.1 | 87.0 | |||||||||
| Other long-term liabilities | 198.3 | 177.9 | |||||||||
| Total liabilities | 3,732.8 | 3,805.2 | |||||||||
| Commitments and contingencies | |||||||||||
| Redeemable noncontrolling interests | 56.5 | 42.0 | |||||||||
| Shareholders’ equity: | |||||||||||
| Encompass Health shareholders’ equity | 1,959.8 | 1,647.5 | |||||||||
| Noncontrolling interests | 709.3 | 607.7 | |||||||||
| Total shareholders’ equity | 2,669.1 | 2,255.2 | |||||||||
| Total liabilities and shareholders’ equity | $ | 6,458.4 | $ | 6,102.4 | |||||||
5 | ||||||||
Encompass Health Corporation and Subsidiaries
Condensed Consolidated Statements of Cash Flows
(Unaudited)
| Nine Months Ended September 30, | |||||||||||
| 2024 | 2023 | ||||||||||
| (In Millions) | |||||||||||
| Cash flows from operating activities: | |||||||||||
| Net income | $ | 432.4 | $ | 343.9 | |||||||
| Loss from discontinued operations, net of tax | 3.2 | 3.5 | |||||||||
| Adjustments to reconcile net income to net cash provided by operating activities— | |||||||||||
| Depreciation and amortization | 221.6 | 203.8 | |||||||||
| Stock-based compensation | 35.8 | 37.2 | |||||||||
| Deferred tax expense (benefit) | 2.1 | (2.9) | |||||||||
| Other, net | 13.5 | 10.0 | |||||||||
| Change in assets and liabilities, net of acquisitions— | |||||||||||
| Accounts receivable | 29.1 | 20.7 | |||||||||
| Other assets | (43.3) | (4.1) | |||||||||
| Accounts payable | 1.4 | (0.2) | |||||||||
| Accrued payroll | (2.6) | 24.1 | |||||||||
| Accrued interest payable | (19.2) | (19.1) | |||||||||
| Other liabilities | 53.7 | 37.5 | |||||||||
| Net cash used in operating activities of discontinued operations | (3.7) | (4.6) | |||||||||
| Total adjustments | 288.4 | 302.4 | |||||||||
| Net cash provided by operating activities | 724.0 | 649.8 | |||||||||
| Cash flows from investing activities: | |||||||||||
| Purchases of property, equipment, and intangible assets | (443.8) | (371.4) | |||||||||
| Purchase of restricted investments | (20.0) | (21.1) | |||||||||
| Proceeds from sale of restricted investments | 17.9 | 7.0 | |||||||||
| Other, net | (3.7) | (9.2) | |||||||||
| Net cash used in investing activities | (449.6) | (394.7) | |||||||||
| Cash flows from financing activities: | |||||||||||
| Principal borrowings on notes | 15.0 | 20.0 | |||||||||
| Principal payments on debt, including pre-payments | (153.4) | (6.3) | |||||||||
| Borrowings on revolving credit facility | 50.0 | 60.0 | |||||||||
| Payments on revolving credit facility | (50.0) | (115.0) | |||||||||
| Principal payments under finance lease obligations | (16.2) | (35.9) | |||||||||
| Taxes paid on behalf of employees for shares withheld | (12.1) | (8.1) | |||||||||
| Contributions from noncontrolling interests of consolidated affiliates | 139.7 | 54.7 | |||||||||
| Dividends paid on common stock | (45.8) | (45.5) | |||||||||
| Distributions paid to noncontrolling interests of consolidated affiliates | (85.5) | (91.9) | |||||||||
| Repurchases of common stock, including fees and expenses | (23.6) | — | |||||||||
| Other, net | 2.2 | 0.7 | |||||||||
| Net cash used in financing activities | (179.7) | (167.3) | |||||||||
| Increase in cash, cash equivalents, and restricted cash | 94.7 | 87.8 | |||||||||
| Cash, cash equivalents, and restricted cash at beginning of period | 104.2 | 53.4 | |||||||||
| Cash, cash equivalents, and restricted cash at end of period | $ | 198.9 | $ | 141.2 | |||||||
6 | ||||||||
Encompass Health Corporation and Subsidiaries
Condensed Consolidated Statements of Cash Flows (Continued)
(Unaudited)
| Nine Months Ended September 30, | |||||||||||
| 2024 | 2023 | ||||||||||
| (In Millions) | |||||||||||
| Reconciliation of Cash, Cash Equivalents, and Restricted Cash | |||||||||||
| Cash and cash equivalents at beginning of period | $ | 69.1 | $ | 21.8 | |||||||
Restricted cash at beginning of period | 35.1 | 31.6 | |||||||||
Cash, cash equivalents, and restricted cash at beginning of period | $ | 104.2 | $ | 53.4 | |||||||
Cash and cash equivalents at end of period | $ | 147.8 | $ | 99.7 | |||||||
Restricted cash at end of period | 51.1 | 41.5 | |||||||||
Cash, cash equivalents, and restricted cash at end of period | $ | 198.9 | $ | 141.2 | |||||||
7 | ||||||||
Encompass Health Corporation and Subsidiaries
Supplemental Information
Earnings Per Share
| Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||||||||
| 2024 | 2023 | 2024 | 2023 | ||||||||||||||||||||
| (In Millions, Except Per Share Data) | |||||||||||||||||||||||
| Adjusted EBITDA | $ | 269.3 | $ | 237.5 | $ | 814.1 | $ | 716.1 | |||||||||||||||
Depreciation and amortization | (78.4) | (67.3) | (221.6) | (203.8) | |||||||||||||||||||
Interest expense and amortization of debt discounts and fees | (34.9) | (35.9) | (104.4) | (108.6) | |||||||||||||||||||
| Stock-based compensation | (12.9) | (13.7) | (35.8) | (37.2) | |||||||||||||||||||
| Loss on disposal or impairment of assets | (0.6) | (2.2) | (11.3) | (3.7) | |||||||||||||||||||
| 142.5 | 118.4 | 441.0 | 362.8 | ||||||||||||||||||||
| Items not indicative of ongoing operating performance: | |||||||||||||||||||||||
| Loss on early extinguishment of debt | (0.4) | — | (0.4) | — | |||||||||||||||||||
| State regulatory change impact on noncontrolling interests | — | — | — | 2.2 | |||||||||||||||||||
Change in fair market value of equity securities | 2.8 | (1.5) | 2.7 | (2.1) | |||||||||||||||||||
| Asset impairment impact on noncontrolling interests | — | — | 7.3 | — | |||||||||||||||||||
| Pre-tax income | 144.9 | 116.9 | 450.6 | 362.9 | |||||||||||||||||||
Income tax expense | (36.0) | (30.3) | (112.6) | (95.0) | |||||||||||||||||||
Income from continuing operations (1) | $ | 108.9 | $ | 86.6 | $ | 338.0 | $ | 267.9 | |||||||||||||||
| Basic shares | 99.9 | 99.5 | 99.9 | 99.5 | |||||||||||||||||||
| Diluted shares | 102.1 | 101.4 | 102.2 | 101.1 | |||||||||||||||||||
Basic earnings per share (1) | $ | 1.09 | $ | 0.86 | $ | 3.36 | $ | 2.68 | |||||||||||||||
Diluted earnings per share (1) | $ | 1.07 | $ | 0.85 | $ | 3.31 | $ | 2.65 | |||||||||||||||
(1)Income from continuing operations attributable to Encompass Health
8 | ||||||||
Encompass Health Corporation and Subsidiaries
Supplemental Information
Adjusted Earnings Per Share
| Q3 | 9 Months | ||||||||||||||||||||||
| 2024 | 2023 | 2024 | 2023 | ||||||||||||||||||||
| Earnings per share, as reported | $ | 1.07 | $ | 0.85 | $ | 3.31 | $ | 2.65 | |||||||||||||||
| Adjustments, net of tax: | |||||||||||||||||||||||
| Asset impairment impact | — | — | 0.02 | — | |||||||||||||||||||
Income tax adjustments | (0.02) | — | (0.05) | — | |||||||||||||||||||
| State regulatory change impact | — | — | — | 0.03 | |||||||||||||||||||
Change in fair market value of equity securities | (0.02) | 0.01 | (0.02) | 0.02 | |||||||||||||||||||
Adjusted earnings per share* | $ | 1.03 | $ | 0.86 | $ | 3.26 | $ | 2.69 | |||||||||||||||
* Adjusted EPS may not sum due to rounding.
9 | ||||||||
Encompass Health Corporation and Subsidiaries
Supplemental Information
Reconciliation of Net Cash Provided by Operating Activities to Adjusted EBITDA
| Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||||||||
| 2024 | 2023 | 2024 | 2023 | ||||||||||||||||||||
| (In Millions) | |||||||||||||||||||||||
Net cash provided by operating activities | $ | 267.8 | $ | 215.2 | $ | 724.0 | $ | 649.8 | |||||||||||||||
Interest expense and amortization of debt discounts and fees | 34.9 | 35.9 | 104.4 | 108.6 | |||||||||||||||||||
| Gain (loss) on sale of investments, excluding impairments | 4.6 | (2.7) | 5.8 | (0.9) | |||||||||||||||||||
Equity in net income of nonconsolidated affiliates | 0.7 | 1.0 | 2.8 | 2.3 | |||||||||||||||||||
Net income attributable to noncontrolling interests in continuing operations | (38.9) | (28.1) | (97.6) | (79.5) | |||||||||||||||||||
Amortization of debt-related items | (2.4) | (2.4) | (7.3) | (7.1) | |||||||||||||||||||
Distributions from nonconsolidated affiliates | (1.1) | (0.4) | (3.1) | (0.6) | |||||||||||||||||||
| Current portion of income tax expense | 38.1 | 33.5 | 110.5 | 97.9 | |||||||||||||||||||
| Change in assets and liabilities | (32.5) | (17.5) | (19.1) | (58.9) | |||||||||||||||||||
| Cash used in operating activities of discontinued operations | 1.0 | 1.7 | 3.7 | 4.6 | |||||||||||||||||||
| State regulatory change impact on noncontrolling interests | — | — | — | (2.2) | |||||||||||||||||||
| Asset impairment impact on noncontrolling interests | — | — | (7.3) | — | |||||||||||||||||||
| Change in fair market value of equity securities | (2.8) | 1.5 | (2.7) | 2.1 | |||||||||||||||||||
| Other | (0.1) | (0.2) | — | — | |||||||||||||||||||
| Adjusted EBITDA | $ | 269.3 | $ | 237.5 | $ | 814.1 | $ | 716.1 | |||||||||||||||
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Supplemental Information
Reconciliation of Income from Continuing Operations Attributable to Encompass Health per Diluted Share to Adjusted Earnings Per Share
| For the Three Months Ended September 30, 2024 | |||||||||||||||||||||||||||||
| Adjustments | |||||||||||||||||||||||||||||
| As Reported | Loss on Early Extinguishment of Debt | Income Tax Adjustments | Change in Fair Market Value of Equity Securities | As Adjusted | |||||||||||||||||||||||||
| (In Millions, Except Per Share Amounts) | |||||||||||||||||||||||||||||
| Adjusted EBITDA* | $ | 269.3 | $ | — | $ | — | $ | — | $ | 269.3 | |||||||||||||||||||
| Depreciation and amortization | (78.4) | — | — | — | (78.4) | ||||||||||||||||||||||||
Interest expense and amortization of debt discounts and fees | (34.9) | — | — | — | (34.9) | ||||||||||||||||||||||||
| Stock-based compensation | (12.9) | — | — | — | (12.9) | ||||||||||||||||||||||||
| Loss on disposal or impairment of assets | (0.6) | — | — | — | (0.6) | ||||||||||||||||||||||||
| Loss on early extinguishment of debt | (0.4) | 0.4 | — | — | — | ||||||||||||||||||||||||
Change in fair market value of equity securities | 2.8 | — | — | (2.8) | — | ||||||||||||||||||||||||
Income from continuing operations before income tax expense | 144.9 | 0.4 | — | (2.8) | 142.5 | ||||||||||||||||||||||||
| Provision for income tax expense | (36.0) | (0.1) | (2.1) | 0.7 | (37.5) | ||||||||||||||||||||||||
Income from continuing operations attributable to Encompass Health | $ | 108.9 | $ | 0.3 | $ | (2.1) | $ | (2.1) | $ | 105.0 | |||||||||||||||||||
| Diluted earnings per share from continuing operations** | $ | 1.07 | $ | — | $ | (0.02) | $ | (0.02) | $ | 1.03 | |||||||||||||||||||
| Diluted shares used in calculation | 102.1 | ||||||||||||||||||||||||||||
* Reconciliation to GAAP provided on page 10
** Adjusted EPS may not sum across due to rounding.
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Encompass Health Corporation and Subsidiaries
Supplemental Information
Reconciliation of Income from Continuing Operations Attributable to Encompass Health per Diluted Share to Adjusted Earnings Per Share
| 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 | ||||||||||||||||||||||
* Reconciliation to GAAP provided on page 10
** Adjusted EPS may not sum across due to rounding.
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Encompass Health Corporation and Subsidiaries
Supplemental Information
Reconciliation of Income from Continuing Operations Attributable to Encompass Health per Diluted Share to Adjusted Earnings Per Share
| For the Nine Months Ended September 30, 2024 | |||||||||||||||||||||||||||||||||||
| Adjustments | |||||||||||||||||||||||||||||||||||
| As Reported | Asset Impairment Impact | Loss on Early Extinguishment of Debt | Income Tax Adjustments | Change in Fair Market Value of Equity Securities | As Adjusted | ||||||||||||||||||||||||||||||
| (In Millions, Except Per Share Amounts) | |||||||||||||||||||||||||||||||||||
| Adjusted EBITDA* | $ | 814.1 | $ | — | $ | — | $ | — | $ | — | $ | 814.1 | |||||||||||||||||||||||
| Depreciation and amortization | (221.6) | — | — | — | — | (221.6) | |||||||||||||||||||||||||||||
Interest expense and amortization of debt discounts and fees | (104.4) | — | — | — | — | (104.4) | |||||||||||||||||||||||||||||
| Stock-based compensation | (35.8) | — | — | — | — | (35.8) | |||||||||||||||||||||||||||||
| Loss on disposal or impairment of assets | (11.3) | 10.4 | — | — | — | (0.9) | |||||||||||||||||||||||||||||
| Loss on early extinguishment of debt | (0.4) | — | 0.4 | — | — | — | |||||||||||||||||||||||||||||
Change in fair market value of equity securities | 2.7 | — | — | — | (2.7) | — | |||||||||||||||||||||||||||||
| Asset impairment impact on noncontrolling interests | 7.3 | (7.3) | — | — | — | — | |||||||||||||||||||||||||||||
Income from continuing operations before income tax expense | 450.6 | 3.1 | 0.4 | — | (2.7) | 451.4 | |||||||||||||||||||||||||||||
| Provision for income tax expense | (112.6) | (1.3) | (0.1) | (5.1) | 0.7 | (118.4) | |||||||||||||||||||||||||||||
Income from continuing operations attributable to Encompass Health | $ | 338.0 | $ | 1.8 | $ | 0.3 | $ | (5.1) | $ | (2.0) | $ | 333.0 | |||||||||||||||||||||||
| Diluted earnings per share from continuing operations** | $ | 3.31 | $ | 0.02 | $ | — | $ | (0.05) | $ | (0.02) | $ | 3.26 | |||||||||||||||||||||||
| Diluted shares used in calculation | 102.2 | ||||||||||||||||||||||||||||||||||
* Reconciliation to GAAP provided on page 10
** Adjusted EPS may not sum across due to rounding.
13 | ||||||||
Encompass Health Corporation and Subsidiaries
Supplemental Information
Reconciliation of Income from Continuing Operations Attributable to Encompass Health per Diluted Share to Adjusted Earnings Per Share
| 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 | ||||||||||||||||||||||||||||
* Reconciliation to GAAP provided on page 10
** Adjusted EPS may not sum across due to rounding.
14 | ||||||||
Encompass Health Corporation and Subsidiaries
Supplemental Information
Reconciliation of Net Income to Adjusted EBITDA
| Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||||||||
| 2024 | 2023 | 2024 | 2023 | ||||||||||||||||||||
| (In Millions) | |||||||||||||||||||||||
| Net income | $ | 147.1 | $ | 113.4 | $ | 432.4 | $ | 343.9 | |||||||||||||||
| Loss from discontinued operations, net of tax, attributable to Encompass Health | 0.7 | 1.3 | 3.2 | 3.5 | |||||||||||||||||||
| Net income attributable to noncontrolling interests included in continuing operations | (38.9) | (28.1) | (97.6) | (79.5) | |||||||||||||||||||
| Provision for income tax expense | 36.0 | 30.3 | 112.6 | 95.0 | |||||||||||||||||||
Interest expense and amortization of debt discounts and fees | 34.9 | 35.9 | 104.4 | 108.6 | |||||||||||||||||||
| Depreciation and amortization | 78.4 | 67.3 | 221.6 | 203.8 | |||||||||||||||||||
| Loss on early extinguishment of debt | 0.4 | — | 0.4 | — | |||||||||||||||||||
| Loss on disposal or impairment of assets | 0.6 | 2.2 | 11.3 | 3.7 | |||||||||||||||||||
| Stock-based compensation | 12.9 | 13.7 | 35.8 | 37.2 | |||||||||||||||||||
| State regulatory change impact on noncontrolling interests | — | — | — | (2.2) | |||||||||||||||||||
| Change in fair market value of equity securities | (2.8) | 1.5 | (2.7) | 2.1 | |||||||||||||||||||
| Asset impairment impact on noncontrolling interests | — | — | (7.3) | — | |||||||||||||||||||
| Adjusted EBITDA | $ | 269.3 | $ | 237.5 | $ | 814.1 | $ | 716.1 | |||||||||||||||
15 | ||||||||
Encompass Health Corporation and Subsidiaries
Supplemental Information
Reconciliation of Net Cash Provided by Operating Activities to Adjusted Free Cash Flow
| Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||||||||
| 2024 | 2023 | 2024 | 2023 | ||||||||||||||||||||
| (In Millions) | |||||||||||||||||||||||
| Net cash provided by operating activities | $ | 267.8 | $ | 215.2 | $ | 724.0 | $ | 649.8 | |||||||||||||||
| Impact of discontinued operations | 1.0 | 1.7 | 3.7 | 4.6 | |||||||||||||||||||
Net cash provided by operating activities of continuing operations | 268.8 | 216.9 | 727.7 | 654.4 | |||||||||||||||||||
| Capital expenditures for maintenance | (46.2) | (35.3) | (133.8) | (129.8) | |||||||||||||||||||
Distributions paid to noncontrolling interests of consolidated affiliates | (33.0) | (32.5) | (85.5) | (91.9) | |||||||||||||||||||
| Items not indicative of ongoing operating performance: | |||||||||||||||||||||||
| Transaction costs and related liabilities | 0.1 | 0.2 | (8.6) | (0.5) | |||||||||||||||||||
| Adjusted free cash flow | $ | 189.7 | $ | 149.3 | $ | 499.8 | $ | 432.2 | |||||||||||||||
For the three months ended September 30, 2024, net cash used in investing activities was $161.5 million and resulted primarily from capital expenditures. Net cash used in financing activities during the three months ended September 30, 2024 was $89.5 million and resulted primarily from net debt payments, distributions paid to noncontrolling interests of consolidated affiliates, cash dividends paid on common stock, and repurchases of common stock partially offset by contributions from noncontrolling interests of consolidated affiliates.
For the three months ended September 30, 2023, net cash used in investing activities was $162.2 million and resulted primarily from capital expenditures. Net cash used in financing activities during the three months ended September 30, 2023 was $65.8 million and resulted primarily from net debt payments, distributions paid to noncontrolling interests of consolidated affiliates, and cash dividends paid on common stock partially offset by contributions from noncontrolling interests of consolidated affiliates.
For the nine months ended September 30, 2024, net cash used in investing activities was $449.6 million and resulted primarily from capital expenditures. Net cash used in financing activities during the nine months ended September 30, 2024 was $179.7 million and resulted primarily from net debt payments, distributions paid to noncontrolling interests of consolidated affiliates, cash dividends paid on common stock, and repurchases of common stock partially offset by contributions from noncontrolling interests of consolidated affiliates.
For the nine months ended September 30, 2023, net cash used in investing activities was $394.7 million and resulted primarily from capital expenditures. Net cash used in financing activities during the nine months ended September 30, 2023 was $167.3 million and resulted primarily from net debt payments, distributions paid to noncontrolling interests of consolidated affiliates, and cash dividends paid on common stock partially offset by contributions from noncontrolling interests of consolidated affiliates.
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Encompass Health Corporation and Subsidiaries
Forward-Looking Statements
Statements contained in this press release and the supplemental information which are not historical facts, such as those relating to the business, strategy, outlook, growth targets and guidance considerations, dividend strategies, effective income tax rates, cost trends, legislative and regulatory developments or their impacts, financial guidance, ability to return value to shareholders, projected capital expenditures, acquisition opportunities, development projects, addressable market size, other balance sheet and cash flow plans, are forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. In addition, Encompass Health, through its senior management, may from time to time make forward-looking public statements concerning the matters described herein. All such estimates, projections, and forward-looking information speak only as of the date hereof, and Encompass Health undertakes no duty to publicly update or revise such forward-looking information, whether as a result of new information, future events, or otherwise. Such forward-looking statements are necessarily estimates based upon current information and involve a number of risks and uncertainties. Actual events or results may differ materially from those anticipated in these forward-looking statements as a result of a variety of factors. While it is impossible to identify all such factors, factors which could cause actual events or results to differ materially from those estimated by Encompass Health include, but are not limited to, an infectious disease outbreak, including the speed, depth, geographic reach and duration of its spread, which could decrease our patient volumes and revenues and lead to staffing and supply shortages and associated cost increases; Encompass Health's infectious disease prevention and control efforts; the demand for Encompass Health’s services, including based on any downturns in the economy, consumer confidence, or the capital markets; the price of Encompass Health's common stock as it affects Encompass Health's willingness and ability to repurchase shares and the financial and accounting effects of any repurchases; any adverse outcome of various lawsuits, claims, and legal or regulatory proceedings involving Encompass Health, including any matters related to yet undiscovered issues, if any, in acquired operations; Encompass Health's ability to attract and retain key management personnel; any adverse effects on Encompass Health's stock price resulting from the integration of acquired operations; potential disruptions, breaches, or other incidents affecting the proper operation, availability, or security of Encompass Health's or its vendors' or partners’ information systems, including unauthorized access to or theft of patient, business associate, or other sensitive information or inability to provide patient care because of system unavailability as well as unforeseen issues, if any, related to integration of acquired systems; the ability to successfully integrate acquired operations, including realization of anticipated tax benefits, revenues, and cost savings, minimizing the negative impact on margins arising from the changes in staffing and other operating practices, and avoidance of unforeseen exposure to liabilities; Encompass Health's ability to successfully complete and integrate de novo developments, acquisitions, investments, and joint ventures consistent with its growth strategy; Encompass Health’s ability to realize construction cost savings from prefabrication of hospitals; increases in Medicare audit activity, including increased use of sampling and extrapolation, resulting in additional unpaid reimbursement claims and an increase in the backlog of appealed claims denials; changes, delays in (including in connection with resolution of Medicare payment reviews or appeals), or suspension of reimbursement for Encompass Health's services by governmental or private payors; changes in the regulation of the healthcare industry at either or both of the federal and state levels, including as part of national healthcare reform and deficit reduction and Encompass Health's ability to adapt operations to those changes, including in connection with the CMS inpatient rehabilitation review choice demonstration project; competitive pressures in the healthcare industry and Encompass Health's response thereto; Encompass Health's ability to obtain and retain favorable arrangements with third-party payors; Encompass Health's ability to control costs, particularly labor and employee benefit costs, including group medical expenses; adverse effects resulting from coverage determinations made by Medicare Administrative Contractors regarding its Medicare reimbursement claims and lengthening delays in Encompass Health's ability to recover improperly denied claims through the administrative appeals process on a timely basis; Encompass Health's ability to adapt to changes in the healthcare delivery system, including value-based purchasing and involvement in coordinated care initiatives or programs that may arise with its referral sources; Encompass Health's ability to attract and retain nurses, therapists, and other healthcare professionals in a highly competitive environment with often severe staffing shortages, which may be worsened by infectious disease outbreaks, and the impact on Encompass Health's labor expenses from potential union activity, staffing shortages, and competitive compensation practices; general conditions in the economy and capital markets, including any
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Encompass Health Corporation and Subsidiaries
Forward-Looking Statements
instability or uncertainty related to armed conflict or an act of terrorism, governmental impasse over approval of the United States federal budget, an increase in the debt ceiling, or an international sovereign debt crisis; the increase in the cost of, or the decrease in the availability of, necessary supplies, such as personal protective equipment; the increase in the costs of defending and insuring against alleged professional liability claims, and Encompass Health's ability to predict the estimated costs related to such claims; and other factors which may be identified from time to time in Encompass Health's SEC filings and other public announcements, including Encompass Health's Form 10‑K for the year ended December 31, 2023 and Form 10-Q for the quarters ended March 31, 2024, June 30, 2024, and September 30, 2024, when filed.
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