Company: EHC
Filing Date: 2025-05-01
Form Type: 10-Q
Source: 0000785161-25-000021
Chunk: 58

Company: Encompass Health Corp
Filing Date: 2025-05-01
Form: 10-Q
Item: Part I, Item 1
Chunk 58
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5 compared to the same period of 2024 primarily due to higher volumes.

Depreciation and Amortization

Depreciation and amortization increased during the three months ended March 31, 2025 compared to the same period of 2024 due to our capital investments. See “Executive Overview” section of this item for information related to our development activity. We expect Depreciation and amortization to increase going forward as a result of our recent and ongoing capital investments.

Income from Continuing Operations Before Income Tax Expense

Our pre-tax income from continuing operations increased during the three months ended March 31, 2025 compared to the same period of 2024 primarily due to the increase in Net operating revenues as discussed above.

22

Provision for Income Tax Expense

Our Provision for income tax expense increased during the three months ended March 31, 2025 compared to the same period of 2024 primarily due to higher Income from continuing operations before income tax expense.

We currently estimate our cash payments for income taxes to be approximately $160 million to $180 million, net of refunds, for 2025. These payments are expected to primarily result from federal and state income tax expenses based on estimates of taxable income for 2025.

In certain jurisdictions, we do not expect to generate sufficient income to use all of the available state net operating losses and foreign tax credits prior to their expiration. This determination is based on our evaluation of all available evidence in these jurisdictions including results of operations during the preceding three years, our forecast of future earnings, and prudent tax planning strategies. It is possible we may be required to increase or decrease our valuation allowance at some future time if our forecast of future earnings varies from actual results on a consolidated basis or in the applicable tax jurisdiction, if the timing of future tax deductions differs from our expectations, or pursuant to changes in state and foreign tax laws and rates.

See Note 7, Income Taxes, to the condensed consolidated financial statements included in Part I, Item 1, Financial Statements (Unaudited), of this report and Note 15, Income Taxes, to the consolidated financial statements accompanying the 2024 Form 10‑K.

Net Income Attributable to Noncontrolling Interests

The increase in Net income attributable to noncontrolling interests during the three months ended March 31, 2025 compared to the same period of 2024 resulted from increased profitability from certain existing joint venture hospitals. Net income attributable to noncontrolling interests during the three months ended March 31