Company: EHC
Filing Date: 2025-05-01
Form Type: 10-Q
Source: 0000785161-25-000021
Chunk: 40

Company: Encompass Health Corp
Filing Date: 2025-05-01
Form: 10-Q
Item: Part I, Item 1
Chunk 40
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 evaluating the requirements of this standard and any potential impact it may have on our condensed consolidated financial statements.We do not believe any other recently issued, but not yet effective, accounting standards will have a material effect on our condensed consolidated financial position, results of operations, or cash flows.

7

Encompass Health Corporation and SubsidiariesNotes to Condensed Consolidated Financial Statements

2.Variable Interest Entities

As of March 31, 2025 and December 31, 2024, we consolidated eight limited partnership-like entities that are variable interest entities (“VIEs”) and of which we are the primary beneficiary. Our ownership percentages in these entities range from 50.0% to 75.0% as of March 31, 2025. Through partnership and management agreements with or governing each of these entities, we manage all of these entities and handle all day-to-day operating decisions. Accordingly, we have the decision-making power over the activities that most significantly impact the economic performance of our VIEs and an obligation to absorb losses or receive benefits from the VIE that could potentially be significant to the VIE. These decisions and significant activities include, but are not limited to, marketing efforts, oversight of patient admissions, medical training, nurse and therapist scheduling, provision of healthcare services, billing, collections, and creation and maintenance of medical records. The terms of the agreements governing each of our VIEs prohibit us from using the assets of each VIE to satisfy the obligations of other entities.The carrying amounts and classifications of the consolidated VIEs’ assets and liabilities, which are included in our condensed consolidated balance sheets, are as follows (in millions):March 31, 2025December 31, 2024Assets Current assets: Cash and cash equivalents$0.2 $0.4 Accounts receivable35.4 34.5 Other current assets10.7 9.6 Total current assets46.3 44.5 Property and equipment, net134.1 135.7 Operating lease right-of-use assets1.3 1.3 Goodwill15.9 15.9 Intangible assets, net1.0 1.0 Other long-term assets9.6 9.7 Total assets$208.2 $208.1 LiabilitiesCurrent liabilities:Current portion of long-term debt$1.0 $1.0 Accounts payable6.9 6.2 Accrued expenses and