Company: EHC
Filing Date: 2025-02-28
Form Type: 10-K
Source: 0000785161-25-000009
Chunk: 49

Company: Encompass Health Corp
Filing Date: 2025-02-28
Form: 10-K
Item: Item 16
Chunk 49
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4, approximately 66% of our consolidated Property and equipment, net held by Encompass Health Corporation and its guarantor subsidiaries was pledged to the lenders under our credit agreement. See Note 9, Long-term Debt, for additional information on our credit agreement.Depreciation expense was $245.1 million, $215.7 million, and $187.3 million for the years ended December 31, 2024, 2023 and 2022, respectively. Interest capitalized was $15.2 million, $13.5 million, and $10.5 million for the years ended December 31, 2024, 2023 and 2022, respectively.

7.Leases:

We lease real estate, vehicles, and equipment under operating and finance leases with non-cancelable terms generally expiring at various dates through 2039. Our operating and finance leases generally have 1- to 25-year terms, with one or more renewal options, primarily relating to our real estate leases, with terms to be determined at the time of renewal. The exercise of such lease renewal options is at our sole discretion, and to the extent we are reasonably certain we will exercise a renewal option, the years related to that option are included in our determination of the lease term for purposes of classifying and measuring a given lease. Certain leases also include options to purchase the leased property.The components of lease costs are as follows (in millions):For the Year Ended December 31,202420232022Operating lease cost $41.7 $40.9 $38.7 Finance lease cost:Amortization of right-of-use assets25.7 25.7 27.5 Interest on lease liabilities24.7 26.2 29.0 Total finance lease cost50.4 51.9 56.5 Short-term and variable lease cost2.3 2.9 5.2 Sublease income(3.1)(3.3)(2.9)Total lease cost$91.3 $92.4 $97.5 

F-26

Encompass Health Corporation and SubsidiariesNotes to Consolidated Financial Statements

Supplemental consolidated balance sheet information related to leases is as follows (in millions):As of December 31,Classification20242023AssetsOperating leaseOperating lease right-of-use assets$203.7 $208.5 Finance lease (1)Property and equipment, net221.5 247.