Company: EHC
Filing Date: 2025-05-01
Form Type: 10-Q
Source: 0000785161-25-000021
Chunk: 12

Company: Encompass Health Corp
Filing Date: 2025-05-01
Form: 10-Q
Item: Part I, Item 2
Chunk 12
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 repayments or incurrence of debt and (2) investments, acquisitions, mergers, amalgamations, consolidations and other operational changes to the extent such items or effects are not yet reflected in our trailing four-quarter financial statements. Our interest coverage ratio is defined in our credit agreement as the ratio of Adjusted EBITDA to consolidated interest expense, excluding the amortization of financing fees, for the trailing four quarters. As of March 31, 2025, the maximum leverage ratio requirement per our credit agreement was 4.50x and the minimum interest coverage ratio requirement was 3.0x, and we were in compliance with these covenants. Based on Adjusted EBITDA for the trailing four quarters and the interest rate in effect under our credit agreement during the three-month period ended March 31, 2025, if we had drawn on the first day and maintained the maximum amount of outstanding draws under our revolving credit facility for that entire period, we would still be in compliance with the maximum leverage ratio and minimum interest coverage ratio requirements.

We do not face near-term refinancing risk, as the amounts outstanding under our credit agreement do not mature until 2027, and except for approximately $100 million of our 2025 Notes, our bonds all mature in 2028 and beyond. See Note 3, Long-term Debt, to the accompanying condensed consolidated financial statements, for additional information related to our debt. Also, see the “Contractual Obligations” section below for information related to our contractual obligations as of March 31, 2025.

For a discussion of risks and uncertainties facing us see Item 1A, Risk Factors, under Part II, Other Information, of this report and Item 1A, Risk Factors, of the 2024 Form 10‑K.

Sources and Uses of Cash 

The following table shows the cash flows provided by or used in operating, investing, and financing activities (in millions):

 Three Months Ended March 31, 20252024Net cash provided by operating activities$288.6 $238.8 Net cash used in investing activities(158.5)(129.7)Net cash used in financing activities(130.4)(40.6)(Decrease) increase in cash, cash equivalents, and restricted cash$(0.3)$68.5 

Operating activities. The increase in Net cash provided by operating activities for the three months ended March 31, 2025 compared to the same period of 2024