Company: EHC
Filing Date: 2025-08-06
Form Type: 10-Q
Source: 0000785161-25-000052
Chunk: 11

Company: Encompass Health Corp
Filing Date: 2025-08-06
Form: 10-Q
Item: Part I, Item 2
Chunk 11
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imbursement,” of the 2024 Form 10‑K.

Salaries and Benefits

Salaries and benefits increased during the three and six months ended June 30, 2025 compared to the same periods of 2024 primarily due to salary and benefit cost increases for our employees and increased patient volumes, including an increase in the number of full-time equivalents as a result of our development activities. Salaries and benefits decreased as a percent of Net operating revenues during the three and six months ended June 30, 2025 compared to the same periods of 2024 primarily due 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 months ended June 30, 2025 compared to the same period of 2024 primarily due to increased provider taxes and higher costs resulting from our development activities.

Other operating expenses increased during the six months ended June 30, 2025 compared to the same period of 2024 primarily due to increased provider taxes and higher costs resulting from our development activities. Other operating expenses during the six months ended June 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 six months ended June 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. Other operating expenses decreased as a percent of Net operating revenues during the six months ended June 30, 2025 compared to the same period of 2024 primarily due to higher volumes.

General and Administrative Expenses

General and administrative expenses increased in terms of dollars and as a percent of Net operating revenues during the three months ended June 30, 2025 compared to the same period of 2024 primarily due to mark-to-market adjustments on our non-qualified deferred compensation plan and higher incentive compensation, benefits, and salaries. General and administrative expenses increased during the six