Company: EHC
Filing Date: 2025-10-31
Form Type: 10-Q
Source: 0000785161-25-000115
Chunk: 72

Company: Encompass Health Corp
Filing Date: 2025-10-31
Form: 10-Q
Item: Part I, Item 1
Chunk 72
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 2025 compared to the same period of 2024 primarily due to a decline in EPOB and decreases in both contract labor and sign-on and shift bonuses.

Other Operating Expenses

Other operating expenses increased in terms of dollars and as a percent of Net operating revenues during the three and nine months ended September 30, 2025 compared to the same periods of 2024 primarily due to increased provider taxes and higher costs resulting from our development activities.

Other operating expenses during the nine months ended September 30, 2024 also included a $10.4 million impairment charge related to the closure of our joint venture inpatient rehabilitation hospital in Eau Claire, Wisconsin. In January 2024, we received notice that our joint venture partner intended to close its acute-care hospital in which our joint venture inpatient rehabilitation hospital was located. We closed that joint venture hospital in February 2024 and incurred a one-time impairment charge of $10.4 million. The impact to Net income attributable to Encompass Health during the nine months ended September 30, 2024 resulting from the impairment was $1.8 million after reductions for Net income attributable to noncontrolling interests of $7.3 million and the Provision for income tax expense of $1.3 million.

General and Administrative Expenses

General and administrative expenses increased during the three months ended September 30, 2025 compared to the same period of 2024 primarily due to higher contract services and software expenses. General and administrative expenses increased during the nine months ended September 30, 2025 compared to the same period of 2024 primarily due to higher incentive compensation, benefits, and software expenses. General and administrative expenses decreased as a percent of Net operating revenues during the three and nine months ended September 30, 2025 compared to the same periods of 2024 primarily due to higher volumes.

Depreciation and Amortization

Depreciation and amortization increased during the three and nine months ended September 30, 2025 compared to the same periods of 2024 due to our capital investments. See the “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 and nine months ended September 30, 2025 compared to the same periods of 2024 primarily due to the increase in Net operating revenues