Company: EHC
Filing Date: 2025-10-31
Form Type: 10-Q
Source: 0000785161-25-000115
Chunk: 20

Company: Encompass Health Corp
Filing Date: 2025-10-31
Form: 10-Q
Item: Part I, Item 2
Chunk 20
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31

Summarized financial information is presented below for Encompass Health, the parent company, and the subsidiary guarantors on a combined basis after elimination of intercompany transactions and balances among Encompass Health and the subsidiary guarantors and does not include investments in and equity in the earnings of non-guarantor subsidiaries.

Nine Months Ended September 30, 2025(In Millions)Net operating revenues$2,737.8 Intercompany revenues generated from non-guarantor subsidiaries82.1 Total net operating revenues$2,819.9 Operating expenses$2,364.2 Intercompany expenses incurred in transactions with non-guarantor subsidiaries31.3 Total operating expenses$2,395.5 Income from continuing operations$255.9 Net income$254.1 Net income attributable to Encompass Health$254.1 

As of September 30, 2025As ofDecember 31, 2024(In Millions)Total current assets$590.7 $609.5 Property and equipment, net$2,655.2 $2,393.6 Goodwill893.2 893.2 Intercompany receivable due from non-guarantor subsidiaries79.1 47.4 Other noncurrent assets509.5 490.9 Total noncurrent assets$4,137.0 $3,825.1 Total current liabilities$577.3 $677.3 Long-term debt, net of current portion$2,328.8 $2,273.3 Other noncurrent liabilities343.8 336.1 Total noncurrent liabilities$2,672.6 $2,609.4 

Adjusted EBITDA

Management believes Adjusted EBITDA as defined in our credit agreement is a measure of our ability to service our debt and our ability to make capital expenditures. We reconcile Adjusted EBITDA to Net cash provided by operating activities and to Net income.

We use Adjusted EBITDA on a consolidated basis as a liquidity measure. We believe this financial measure on a consolidated basis is important in analyzing our liquidity because it is the key component of certain material covenants contained within our credit agreement, which is discussed in more detail in Note 9, Long-term Debt, to the consolidated financial statements accompanying the 2024 Form 10‑K. These covenants are material terms of the credit agreement. Noncompliance with these financial covenants