Company: EHC
Filing Date: 2025-05-01
Form Type: 10-Q
Source: 0000785161-25-000021
Chunk: 54

Company: Encompass Health Corp
Filing Date: 2025-05-01
Form: 10-Q
Item: Part I, Item 1
Chunk 54
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, our operations have been affected and may in the future be affected by staffing shortages. In recent years, staffing shortages and competition have resulted in increased labor costs, including significant sign-on and shift bonuses, and increased use of contract labor. See Item 1A, Risk Factors, of the 2024 Form 10‑K for further discussion of competition for staffing, shortages of qualified personnel, and other factors that may increase our labor costs and constrain our ability to take new patients.

We remain confident in the prospects of our business based on the increasing demands for the services we provide to an aging population. This confidence is further supported by our strong financial foundation and the substantial investments we have made in our business. We have a proven track record of working through difficult operating environments, and we believe in our ability to overcome current and future challenges.

19

Results of Operations

Payor Mix

We derived consolidated Net operating revenues from the following payor sources:

Three Months Ended March 31, 20252024Medicare67.0 %64.9 %Medicare Advantage16.5 %17.0 %Managed care10.0 %10.9 %Medicaid2.9 %3.4 %Other third-party payors0.6 %0.7 %Workers’ compensation0.4 %0.5 %Patients0.2 %0.3 %Other income2.4 %2.3 %Total100.0 %100.0 %

For additional information regarding our payors, see the “Sources of Revenues” section of Item 1, Business, of the 2024 Form 10‑K.

Our Results

Our consolidated results of operations were as follows:

 Three Months Ended March 31,Percentage Change 202520242025 vs. 2024 (In Millions, Except Percentage Change)Net operating revenues$1,455.4 $1,316.0 10.6 %Operating expenses:   Salaries and benefits762.3 711.6 7.1 %Other operating expenses217.5 203.9 6.7 %Occupancy costs14.9 14.0 6.4 %Supplies62.2 58.5 6.3 %General and administrative expenses52.3 50.2 4.2 %Depreciation and amortization79.2 70.3 12.