Company: EHC
Filing Date: 2025-10-31
Form Type: 10-Q
Source: 0000785161-25-000115
Chunk: 22

Company: Encompass Health Corp
Filing Date: 2025-10-31
Form: 10-Q
Item: Part I, Item 2
Chunk 22
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 Accordingly, the Adjusted EBITDA calculation presented here includes adjustments for them.

Adjusted EBITDA is not a measure of financial performance under generally accepted accounting principles in the United States of America, and the items excluded from Adjusted EBITDA are significant components in understanding and assessing financial performance. Therefore, Adjusted EBITDA should not be considered a substitute for Net income or cash flows from operating, investing, or financing activities. Because Adjusted EBITDA is not a measurement determined in accordance with GAAP and is thus susceptible to varying calculations, Adjusted EBITDA, as presented, may not be comparable to other similarly titled measures of other companies. Revenues and expenses are measured in accordance with the policies and procedures described in Note 1, Summary of Significant Accounting Policies, to the consolidated financial statements accompanying the 2024 Form 10‑K.

Our Adjusted EBITDA was as follows (in millions):

Reconciliation of Net Cash Provided by Operating Activities to Adjusted EBITDA

 Nine Months Ended September 30, 20252024Net cash provided by operating activities$829.6 $724.0 Interest expense and amortization of debt discounts and fees93.0 104.4 Gain on sale of investments, excluding impairments6.2 5.8 Equity in net income of nonconsolidated affiliates3.5 2.8 Net income attributable to noncontrolling interests in continuing operations(135.9)(97.6)Amortization of debt-related items(7.2)(7.3)Distributions from nonconsolidated affiliates(1.4)(3.1)Current portion of income tax expense134.3 110.5 Change in assets and liabilities9.6 (19.1)Cash used in operating activities of discontinued operations2.5 3.7 Asset impairment impact on noncontrolling interests— (7.3)Change in fair market value of marketable securities(2.1)(2.7)Other0.2 — Adjusted EBITDA$932.3 $814.1 

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Reconciliation of Net Income to Adjusted EBITDA

Three Months Ended September 30,Nine Months Ended September 30, 2025202420252024Net income$174.6 $147.1 $556.0 $432.4 Loss from discontinued operations, net of tax, attributable to Encompass Health0.4