Third Quarter Earnings Call   October 29, 2020 Supplemental information
 Forward-looking statements The information contained in this presentation includes certain estimates, projections and other forward-looking  information that reflect Encompass Health’s current outlook, views and plans with respect to future events, including the  COVID-19 pandemic and its effects, legislative and regulatory developments, strategy, capital expenditures, acquisition  and other development activities, cyber security, dividend strategies, repurchases of securities, effective tax rates,  financial performance, financial assumptions, business model, balance sheet and cash flow plans, market share,  development of new information tools and models, and shareholder value-enhancing transactions. These estimates,  projections and other forward-looking information are based on assumptions the Company believes, as of the date hereof,  are reasonable. Inevitably, there will be differences between such estimates and actual events or results, and those  differences may be material. There can be no assurance any estimates, projections or forward-looking information will be realized. All such estimates, projections and forward-looking information speak only as of the date hereof. Encompass Health  undertakes no duty to publicly update or revise the information contained herein. You are cautioned not to place undue reliance on the estimates, projections and other forward-looking information in this  presentation as they are based on current expectations and general assumptions and are subject to various risks,  uncertainties and other factors, including those set forth in the earnings release attached as Exhibit 99.1 to the Company’s  Form 8-K dated October 28, 2020 (the “Q3 Earnings Release Form 8-K”), the Form 10-K for the year ended December 31,  2019, the Form 10-Q for the quarters ended March 31, 2020, June 30, 2020, and September 30, 2020, when filed, and in  other documents Encompass Health previously filed with the SEC, many of which are beyond Encompass Health’s control,  that may cause actual events or results to differ materially from the views, beliefs and estimates expressed herein. Note regarding presentation of non-GAAP financial measures The following presentation includes certain “non-GAAP financial measures” as defined in Regulation G under the Securities  Exchange Act of 1934, including Adjusted EBITDA, leverage ratios, adjusted earnings per share, and adjusted free cash  flow. Schedules are attached that reconcile the non-GAAP financial measures included in the following presentation to the  most directly comparable financial measures calculated and presented in accordance with Generally Accepted Accounting  Principles in the United States. The Q3 Earnings Release Form 8-K, to which the following presentation is attached as  Exhibit 99.2, provides further explanation and disclosure regarding Encompass Health’s use of non-GAAP financial measures  and should be read in conjunction with this supplemental information.   Encompass Health                                                                                        2
 Table of contents       Q3 2020 summary.................................................................................................... 4-5       Year-over-year volume trends..................................................................................... 6-8       Inpatient rehabilitation segment.................................................................................. 9-10       Home health & hospice segment.................................................................................. 11-12       Consolidated Adjusted EBITDA..................................................................................... 13       Earnings per share................................................................................................... 14-15       Adjusted free cash flow............................................................................................ 16       Guidance and considerations for Q4 2020....................................................................... 17-18       Adjusted free cash flow assumptions............................................................................. 19       Uses of free cash flow.............................................................................................. 20                                              Appendix       Map of locations..................................................................................................... 22       Expansion activity................................................................................................... 23       Clinical collaboration............................................................................................... 24       Personal protective equipment - utilization, cost and inventory............................................ 25       Pre-payment claims denials - inpatient rehabilitation segment............................................. 26       Overview of rollover shares and SARs............................................................................ 27       Debt maturity profile and schedule............................................................................... 28-29       New-store/same-store growth..................................................................................... 30-32       Payment sources (percent of revenues).......................................................................... 33       Inpatient rehabilitation operational and labor metrics........................................................ 34       Home health & hospice operational metrics.................................................................... 35       Share information................................................................................................... 36       Segment operating results......................................................................................... 37-39       Reconciliations to GAAP............................................................................................ 40-48       End notes............................................................................................................. 49-50  Encompass Health                                                                                        3
 Q3 2020 summary                                                 Q3                         9 Months     ($millions)                      2020     2019    Growth       2020     2019    Growth     Encompass Health Consolidated     Net operating revenues         $  1,173.9 $  1,161.6   1.1 % $  3,430.0 $  3,420.6  0.3 %     Adjusted EBITDA                $   230.2 $  231.6     (0.6) % $  620.4 $  726.7    (14.6) %     Inpatient Rehabilitation Segment     Net operating revenues         $   899.4 $  872.3      3.1 % $  2,633.1 $  2,616.3  0.6 %     Adjusted EBITDA                $   209.2 $  210.6     (0.7) % $  605.0 $  674.5    (10.3) %     Home Health and Hospice Segment     Net operating revenues         $   274.5 $  289.3     (5.1) % $  796.9 $  804.3     (0.9) %     Adjusted EBITDA                $    51.8 $   50.8      2.0 % $  107.8 $  146.2     (26.3) %       Major takeaways:     u  Inpatient rehabilitation segment          Discharges decreased 1.5%; same store decreased 2.8%         Net revenue per discharge increase of 5.4%     u  Home health and hospice segment         Home health admissions decreased 3.3%; same store decreased 4.6%         Revenue per episode decrease of 2.3%     u  Consolidated Adjusted EBITDA decreased $1.4 million, or 0.6%.     u  Adjusted EPS of $0.78 per diluted share decreased $0.15 per share, or 16.1% - see pages 14-15.      u  Adjusted free cash flow in Q3 2020 increased 13.2% to $124.1 million; year-to-date adjusted         free cash flow of $366.9 million - see page 16.   Encompass Health                       Reconciliations to GAAP provided on pages 40-48         4
 Q3 2020 summary (continued)   u  Expansion activity (see page 23)     Announced plans to build inpatient rehabilitation hospitals in the following locations:      ü  Knoxville, Tennessee (total of 73 beds at two locations; in joint venture with Covenant Health)      ü  St. Augustine, Florida (40 beds)      ü  Lakeland, Florida (50 beds)      ü  Clermont, Florida (50 beds)      ü  Naples, Florida (50 beds)      ü  Cape Coral, Florida (40 beds)      ü  Jacksonville, Florida (50 beds)     Added 36 beds to existing hospitals (89 beds added year to date) u  Balance sheet - See debt schedule and maturity profile on pages 28-29.     Approximately $964 million available under $1 billion revolving credit facility and $450 million of cash       on balance sheet at quarter end      Leverage ratio of 4.2x at quarter end (net leverage = 3.6x)     Issued $400 million of 4.625% Senior Notes due 2031 in October 2020      ü  Use proceeds plus approximately $300 million of cash on hand to fully redeem $700 million of 5.75%          Senior Notes due 2024 at par on November 1, 2020 u  Shareholder and other distributions     Paid quarterly cash dividend of $0.28 per share in July 2020     Declared a $0.28 per share quarterly cash dividend in July 2020 (paid in October 2020)     Declared a $0.28 per share quarterly cash dividend in October 2020 (to be paid in January 2021)   Encompass Health                                                                               5
 Inpatient Rehabilitation – Patient Census Information      . Beginning in mid-March 2020, patient census was impacted by the COVID-19 pandemic.      8,000     7,000                                       6,910                      6,752                                                6,560                                                                                                    6,572                                6,537                           6,452                                   6,465                    6,409  6,526     6,413    6,000      6,311                                   6,294                    6,390   6,263    6,344           6,331  6,377                                                                        5,465    5,000     4,000     3,000     2,000     1,000          0                     January          February        March           April           May              June            July            August           September                                                                            2019                  2020   Encompass Health                        Patient census presented in this table represents the average daily census for the designated period.                      6
 Home Health - Starts of Episodes                (Includes Starts of Care and Recertifications)    . Beginning in mid-March 2020, starts of episodes were impacted by the COVID-19 pandemic.    . The acquisition of Alacare anniversaried on July 1, 2020.    . Home health starts of episodes decreased sequentially in August 2020 primarily due to the resurgence of COVID-19 cases     and corresponding limitations on elective procedures in certain states.      ü  Florida and Texas represent approximately 40% of our home health revenue.     27,000    24,000                                                                                  25,089                24,471                                                         24,197                                                                                    23,654      23,466     23,475                                  22,980                                                              23,101   21,000  22,562          22,445      22,113 22,125     22,411 22,223   22,630                                                                    21,421                      20,684   18,000                                                  18,316   15,000    12,000     9,000     6,000     3,000        0               January     February   March      April       May        June        July       August     September                                                      2019      2020  Encompass Health                                                                                                  7
 Hospice - Admissions     . Hospice admissions experienced an initial drop in March 2020 but rebounded quickly.     . The acquisition of Alacare anniversaried on July 1, 2020.    1,200                                                                         1,147                  1,145                                                                                    1,116               1,092                                                                                       1,093  1,000                                                      1,035                                                 1,008                         1,001                           979                                                             977                                      915                                                              906    800          810                                 803         789        806                      765                                                                    729     600      400      200        0              January    February    March      April       May         June       July        August     September                                                      2019     2020   Encompass Health                                                                                                  8
 Inpatient rehabilitation segment - revenue                                                              Q3              Q3             Favorable/ ($millions)                                                2020            2019          (Unfavorable) Net operating revenues:  Inpatient                                             $     883.2  $        850.6  3.8%  Outpatient and other                                         16.2            21.7  (25.3%)  Total segment revenue                                 $    899.4  $         872.3  3.1% (Actual Amounts) Discharges                                                  45,962          46,669  (1.5%)                          Same-store discharge growth                                         (2.8%) Net patient revenue per discharge                      $    19,216  $       18,226  5.4% Revenue reserves related to bad debt as a percent of    revenue                                                       1.4 %           1.5 %    (10 basis points)    u  Inpatient revenue growth resulted from favorable pricing partially offset by decreased volumes.       New-store discharge growth of 1.3% resulted from joint ventures in Boise, ID (July 2019) and Coralville,         IA (June 2020) and wholly owned hospitals in Katy, TX (September 2019), Murrieta, CA (February         2020) and Sioux Falls, SD (June 2020).       Growth in net patient revenue per discharge primarily resulted from a higher acuity patient mix and         the temporary suspension of sequestration.   u  The decrease in outpatient and other revenue resulted from the COVID-19 pandemic related suspension       of hospital-based outpatient services in mid-March 2020 and the closure of certain hospital-based       outpatient programs in 2019.   u  Revenue reserves related to bad debt as a percent of revenue decreased to 1.4% as Medicare       Administrative Contractors did not resume targeted probe and educate audits during the third quarter of       2020.   Encompass Health                                                                                        9
 Inpatient rehabilitation segment - Adjusted EBITDA                                                                 Q3                  Q3                                                                       % of                % of      ($millions)                                            2020     Revenue     2019     Revenue     Net operating revenues                               $  899.4  $              872.3      Operating expenses:         Salaries and benefits                              (475.0)   52.8 %      (459.1)    52.6 % u  Expenses as a                                                                                                        percent of revenue        Other operating expenses(a)                          (135.5)   15.1 %      (131.3)    15.1 %    increased primarily                                                                                                        due to the COVID-19        Supplies                                              (45.3)   5.0 %        (37.0)     4.2 %    pandemic.       Occupancy costs                                       (15.3)   1.7 %        (17.0)     1.9 %            Hospital operating expenses                     (196.1)   21.8 %      (185.3)    21.2 %     Other income(b)(c)                                        2.1                   1.8      Equity in nonconsolidated affiliates                      0.9                   1.0      Noncontrolling interests                                (22.1)                (20.1)      Segment Adjusted EBITDA                              $  209.2  $             210.6                                            Percent change       (0.7) %      In arriving at Adjusted EBITDA, the following were excluded: (a) Loss on disposal of assets                           $    7.5  $                0.9  (b) Change in fair market value of equity securities     $   (0.4)  $                —  (c) Gain on consolidation of Yuma(1)                     $      —  $              (19.2)                                                        Reconciliations to GAAP provided on pages 40-48 Encompass Health                                                                                                              10                                                          Refer to pages 49-50 for end notes.
 Home health and hospice segment - revenue                                                     Q3                  Q3               Favorable/     ($millions)                                   2020                2019            (Unfavorable)     Net operating revenues:        Home health revenue                  $          223.3    $          238.9                (6.5) %        Hospice revenue                                  51.2                50.4                 1.6 %        Total segment revenue                $          274.5    $          289.3                (5.1) %     Home Health Metrics (Actual Amounts)     Admissions                                        40,765              42,174                (3.3) %              Same-store admissions growth                                                       (4.6) %     Episodes                                          68,261              72,016                (5.2) %                 Same-store episode growth                                                       (6.2) %     Revenue per episode                     $          2,910    $          2,980                (2.3) %        u  Decreased volumes and pricing resulted in a decline in home health revenue.           New-store admissions growth primarily resulted from one acquired location in Virginia (Q1             2020) and one de novo location in Florida (Q2 2020).           Revenue per episode was negatively impacted by the implementation of the Patient Driven             Groupings Model (PDGM), the effects of which were exacerbated by the COVID-19 pandemic.            ü  The revenue per episode decrease of 2.3% was favorably impacted by the temporary                suspension of sequestration and an increase in new episode starts late in the quarter.       u  Hospice same-store admissions growth of 15.8% yielded a 1.6% increase in hospice revenue.            Hospice revenue growth was impacted by a decrease in length of stay resulting from a change in             patient mix.            ü  The percentage of our referrals from institutional settings increased while the percentage of                referrals from senior living facilities decreased.   Encompass Health                                                                                       11
 Home health and hospice segment -  Adjusted EBITDA                                                         Q3                Q3                  u                                                                % of              % of          All expense ratios in Q3 2020     ($millions)                                       2020    Revenue   2019     Revenue        were impacted by a decrease     Net operating revenues                          $ 274.5  $  289.3                           in revenues primarily related                                                                                                 to the implementation of                                                                                                 PDGM and the COVID-19       Cost of services sold                           (121.8)   44.4 %   (136.4)    47.1 %      pandemic.      Support and overhead costs(a)                   (100.7)   36.7 %    (99.6)    34.4 %   u  Cost of services decreased as                                                                                                 a percent of revenue           Operating expenses                           (222.5)   81.1 %   (236.0)    81.6 %      primarily due to changes in                                                                                                 the clinician compensation     Equity in net income of nonconsolidated affiliates   0.1                0.2                 structure implemented in     Noncontrolling interests(b)                        (0.3)               (2.7)                May 2020.    Segment Adjusted EBITDA                         $  51.8  $  50.8                         u  Support and overhead costs                                                                                                 increased primarily due to                                     Percent change       2.0 %                                  an increase in sales force                                                                                                 full-time equivalents and                                                                                                 increased administrative     In arriving at Adjusted EBITDA, the following were excluded:                                costs associated with the  (a) Payroll taxes on SARs exercise                 $    —  $               0.8                 implementation of PDGM and                                                                                                 the Review Choice  (b) SARs mark-to-market impact on noncontrolling       interests (see page 27)                       $    —  $              (0.9)                Demonstration program.    Encompass Health                                 Reconciliations to GAAP provided on pages 40-48                              12
 Consolidated Adjusted EBITDA                                             Consolidated Adjusted EBITDA                                                    for the quarter of                                                       $230.2 million    u  General and administrative expenses were flat as a percent of consolidated revenue.                                                                      % of Consolidated                    % of Consolidated    ($millions)                                         Q3 2020           Revenue            Q3 2019            Revenue    Inpatient rehabilitation segment Adjusted EBITDA $      209.2  $                              210.6    Home health and hospice segment Adjusted      EBITDA                                                 51.8                                  50.8     General and administrative expenses*                    (30.8)  2.6%                          (29.8)          2.6%    Consolidated Adjusted EBITDA                     $      230.2  $                              231.6                                   Percentage change           (0.6) %                     * General and administrative expenses in the above table exclude stock compensation of $8.3 million and $21.7 million for the third quarter of  Encompass Health    2020 and 2019, respectively, as well as $1.0 million in transition costs for the third quarter of 2019.   13                                                       Reconciliations to GAAP provided on pages 40-48
 Earnings per share - as reported                                                         Q3                 9 Months            u  The decrease in EPS primarily resulted  (In Millions, Except Per Share Data)            2020       2019       2020      2019            from decreased Adjusted EBITDA,  Adjusted EBITDA                               $  230.2   $  231.6   $  620.4   $  726.7         higher depreciation and amortization,    Depreciation and amortization                  (61.2)     (55.1)    (180.7)    (160.3)        higher interest expense, and a gain on    Interest expense and amortization of debt                                                     the consolidation of Yuma      discounts and fees                           (49.0)     (40.3)    (138.0)    (115.2)        Rehabilitation Hospital(1) in Q3 2019,    Stock-based compensation expense                (8.3)     (21.7)     (25.3)     (87.0)        offset by a decrease in stock-based    Loss on disposal or impairment of assets        (7.5)      (0.9)     (10.6)      (3.3)        compensation.                                                  104.2      113.6      265.8     360.9       u  Higher interest expense resulted from  Certain items non-indicative of ongoing    operating performance:                                                                        increased debt, including the funding    Loss on early extinguishment of debt(2)            —          —         —        (2.3)        of the Alacare acquisition on July 1,    Transaction costs                                  —       (1.0)        —        (2.0)        2019 and purchase of the Home Health    Gain on consolidation of former equity                                                        Holdings rollover shares and exercise                     (1)(3)     method location                                  —       19.2        2.2       19.2         of SARs (see page 27).   SARs mark-to-market impact on      noncontrolling interests (see page 27)           —        0.9         —         4.3      u  Stock-based compensation decreased    Change in fair market value of equity                                                         due to the final exercise of the Home      securities                                     0.4          —        0.3        1.2         Health Holdings SARs in Q1 2020 (see    Government, class action, and related      settlements(4)                                   —          —       (2.8)        —          page 27).   Payroll taxes on SARs exercise (see page 27)       —       (0.8)      (1.5)      (1.0)     u  The lower effective tax rate in year- Pre-tax income                                   104.6      131.9      264.0     380.3          to-date 2019 primarily resulted from     Income tax expense                            (26.9)     (34.3)     (65.8)     (88.6)        the deductible portion of  Income from continuing operations*            $   77.7   $   97.6   $  198.2   $  291.7         settlements(4) and windfall tax  Diluted shares (see page 36)                      99.9       99.4       99.7       99.5         benefits related to the vesting of  Diluted earnings per share*                   $  0.78    $  0.98    $  1.99    $  2.94          share-based compensation.                                   * Earnings per share are determined using income from continuing operations attributable to Encompass Health. Encompass Health                                               Refer to pages 49-50 for end notes.                                            14
 Adjusted earnings per share(5)                                                             Q3                  9 Months                                                     2020        2019        2020       2019 Earnings per share, as reported                 $       0.78  $    0.98  $     1.99 $     2.94  Adjustments, net of tax:  Government, class action, and related settlements(4)     —           —        0.02          —   Mark-to-market adjustment for stock compensation     expense (see page 27)                                  —         0.08         —        0.36   Transaction costs                                        —         0.01         —        0.02   Income tax adjustments                                   —           —       (0.05)      (0.13)   Loss on early extinguishment of debt(2)                  —           —          —        0.02   Change in fair market value of equity securities         —           —          —        (0.01)   Gain on consolidation of former equity method     location(1)(3)                                         —        (0.14)     (0.02)      (0.14)   Payroll taxes on SARs exercise                           —         0.01       0.01       0.01  Adjusted earnings per share*                    $       0.78  $    0.93  $     1.96 $     3.05    Adjusted earnings per share removes from the GAAP earnings per share calculation the       impact of items the Company believes are non-indicative of its ongoing operating                                          performance.                    * Adjusted EPS may not sum due to rounding. See complete calculations of adjusted earnings per share on pages 45-48. Encompass Health                                                                              15                                          Refer to pages 49-50 for end notes.
 2020 Adjusted free cash flow(6)                                                              $38.0                                   $78.8                                                                           $(2.4)                                               $(20.8)                    ($106.3)        $379.6                                                                          $366.9       Adjusted free cash Adjusted Working capital Cash interest Cash tax  Maintenance Adjusted free cash     flow 9 Mos. 2019 EBITDA      and other    payments      payments, capital expenditures flow 9 Mos. 2020                                                           net of refunds    u  Adjusted free cash flow was lower in the first nine months of 2020 than the first nine months of 2019       primarily due to a decrease in Adjusted EBITDA and increased cash interest payments partially offset       by a decrease in working capital and lower payments for cash taxes.        Decreased working capital primarily resulted from the timing of and increase in payroll accruals.        ü Accrued payroll increased due to the award of additional PTO to employees during Q2 2020 in           response to the COVID-19 pandemic, as well as the deferral of payroll taxes resulting from           government relief efforts during the COVID-19 pandemic.       Cash payments for taxes decreased due to the overpayment of cash taxes in 2019, lower book         income in 2020, additional bonus depreciation resulting from the CARES Act and the expected         deduction for the exercise of 2020 SARs (see page 27).       Cash interest payments increased primarily due to the funding of the Alacare acquisition and the         purchase of the Home Health Holdings rollover shares and exercise of SARs (see page 27).                                     Reconciliations to GAAP provided on pages 40-48 Encompass Health                                       Refer to pages 49-50 for end notes.                     16
 Guidance for Q4 2020             Q4 2019                             Q4 2020             Actuals                            Guidance     Net operating revenues              Net operating revenues            $1,184.4 million              $1,150 million to $1,220 million     Adjusted EBITDA(7)                  Adjusted EBITDA(7)             $238.2 million                $225 million to $240 million     Adjusted earnings per share         Adjusted earnings per share     from continuing operations          from continuing operations     attributable to Encompass           attributable to Encompass     Health(5)                           Health(5)               $0.85                           $0.79 to $0.90   Encompass Health             Refer to pages 49-50 for end notes.   17
 Q4 2020 Guidance considerations                    Adjusted EBITDA of $238.2 million in Q4 2019 was impacted by:                           (in millions)                          Self-insurance programs reserve adjustments                           $7.0                          Business interruption insurance recovery                               2.5                                    Net impact to Q4 2019 Adjusted EBITDA                       $9.5                                             Inpatient Rehabilitation u   Estimated increase in Medicare pricing of 2.3% (FY21 Medicare IRF Rule effective October 1, 2020) u   Outpatient revenue down 40% from Q4 2019 due to ongoing impact of the COVID-19 pandemic u   Salary increase of ~3%; benefits increase of ~20% (due to the expectation of increased claims activity and Q4 2019 favorable      self-insurance reserve adjustments) u   Continued higher cost and utilization of personal protective equipment u   Revenue reserve related to bad debt of 1.4% to 1.6% of net operating revenues                                           Home Health and Hospice u   Estimated 2% to 3% net Medicare home health pricing decrease related to PDGM u   Estimated hospice pricing increase of 2.4% (FY21 Medicare Hospice Rule effective October 1, 2020) u   Salary increase of ~3%; benefits increase of 5% to 10% u   Continued higher cost and utilization of personal protective equipment u   Administrative costs related to expansion of Review Choice Demonstration program                                                   Consolidated u   Increased interest expense (see page 19) u   Increased depreciation and amortization u   Diluted share count of ~100 million shares     Encompass Health                                                                                                 18
 Adjusted free cash flow(6) assumptions          Certain cash flow items    9 Months       2020          2019              (millions)         2020 Actuals  Assumptions     Actuals        u   Increased cash interest                                                                                   payments expected in                                                                                   2020 due to new                                                                                   borrowings in 2019 to fund      Cash interest payments (net of                                               the acquisition of Alacare      amortization of debt discounts $132.9     $170 to $180    $155.2             and the exercise of the                                                                                   home health rollover      and fees)                                                                    shares and SARs plus 2020                                                                                   borrowings to fund the                                                                                   final tranche of rollover      Cash payments for income                                                     shares and SARs (see page                                      $30.2      $45 to $65     $104.1             27)     taxes, net of refunds                                                                              u   Decreased cash payments                                                                                   for income taxes expected                                                                                   in 2020 due to      Working capital and other      ($17.1)     ($25 to $5)     $22.0             overpayments in 2019,                                                                                   lower book income in                                                                                   2020, additional bonus                                                                                   depreciation resulting                                                                                   from the CARES Act and      Maintenance CAPEX              $107.5     $155 to $165    $167.1             the expected deduction                                                                                   for the exercise of 2020                                                                                   SARs (see page 27)      Adjusted free cash flow        $366.9     $440 to $515    $516.5   Encompass Health            Reconciliations to GAAP provided on pages 40-48; Refer to pages 49-50 for end notes. 19
 Uses of free cash flow                                                           9 Months                                                            2020        2020         2019         ($millions)                                      Actuals   Assumptions    Actuals                      IRF bed expansions                   $33.2     $40 to $50     $39.8                      New IRFs                         - De novos                          97.2     180 to 190     114.2           Growth in              core       - Acquisitions                       —      opportunistic    —            business    - Replacement IRFs and other        27.4      35 to 45      83.1                      Home health and hospice acquisitions                      (includes Alacare in 2019)            1.1       50 to 100     231.5                                                           $158.9   $305 to $385   $468.6              Debt            reduction  Debt (borrowings) redemptions, net  $(513.8)  opportunistic $(548.2)                         Quarterly cash dividend currently                           set at $0.28 per common share                      Cash dividends on common stock        84.3       ~$112        108.7          Shareholder Purchase of Home Health Holdings            and other  rollover shares and exercise of SARs           distributions (see page 27)                      262.9       262.9        231.4                      Common stock repurchases              4.9     opportunistic   45.9                         ~$199 million authorization remaining                              as of September 30, 2020(8)   Encompass Health          See the debt schedule on page 29. Refer to pages 49-50 for end notes. 20
 Appendix
 a leading provider of inpatient rehabilitation  Encompass Health                     and home-based care                                                                                          Market overlap                                                                                   89 of EHC’s IRFs have an                                                                                   EHC home health location                                                                                    within the service area.*                                                                             Portfolio as of September 30, 2020**                                                                              Inpatient rehabilitation hospitals (“IRFs”)                                                                              Home health locations                                                                              Hospice locations                                                                              17 Future IRFs**                                                                           39 States and Puerto Rico  ~42,700 employees    Inpatient rehabilitation - 09/30/20                                       Home health and hospice - 09/30/20      136 IRFs (49 are joint ventures)                                          242 Home health locations       35 States and Puerto Rico              Largest owner and                  83 Hospice locations  ~31,400 Employees                             operator of IRFs                 31 States      23 % of licensed beds†                                                ~11,300 Employees      31 % of Medicare patients served†     4th Largest provider of             Key statistics - trailing 4 quarters     Key statistics - trailing 4 quarters Medicare-certified skilled       ~159,900 Home health admissions ~183,300 Inpatient discharges               home health services           ~12,400 Hospice admissions    ~$3.5 Billion in revenue                                                  ~$1.1 Billion in revenue              * Excluding markets that have home health licensure barriers  ** Future IRFs - Previously announced under development as of September 30, 2020                                                      † Encompass Health                                       Based on 2017 and 2018 data                               22                  Note: One of the 242 home health locations is nonconsolidated. This location is accounted for using the equity method of accounting.
 Expansion activity               Inpatient Rehabilitation Facilities       Certain development projects may be delayed due to                Opened or Under Development              the COVID-19 pandemic.                                     # of New Beds                               2020      2021     2022  Q3 2020 expansion activity highlights:   De novo:                                             u  Announced plans to build inpatient rehabilitation      Murrieta, CA               50        —        —       hospitals in the following locations:     Sioux Falls, SD            40        —        —       ü  Knoxville, Tennessee (total of 73 beds at two   1  Toledo, OH                 40                 —          locations; in joint venture with Covenant Health)  2  Cumming, GA                 —       50        —       ü  St. Augustine, Florida (40 beds)  3  North Tampa, FL             —       50        —       ü  Lakeland, Florida (50 beds)  4  Stockbridge, GA             —       50        —       ü  Clermont, Florida (50 beds)  5  Greenville, SC              —       40        —                                                           ü  Naples, Florida (50 beds)  6  Pensacola, FL               —       40        —  7  Shreveport, LA              —       40        —       ü  Cape Coral, Florida (40 beds)  8  Waco, TX                    —       40        —       ü  Jacksonville, Florida (50 beds)  9  Libertyville, IL            —        —       60    u  Added 36 beds to existing hospitals 10  St. Augustine, FL           —        —       40 11  Lakeland, FL                —        —       50              Home Health and Hospice Locations 12  Clermont, FL                —        —       50                                         # of Locations 13  Naples, FL                  —        —       50    December 31, 2019                         328 14  Cape Coral, FL              —        —       40    Acquisitions                               1 15  Jacksonville, FL            —        —       50    Opening of new locations                   2   Joint ventures:                                      Merging of locations                      (6)     Coralville, IA             40        —        —    September 30, 2020                        325 16  San Angelo, TX              —       40        —                                                                    New states 17  Knoxville, TN               —        —       73             2   Bed expansions, net*        ~120      ~100     ~100                                                                17   Previously announced IRF development                               ~290      ~450     ~513                projects underway                      * Net bed expansions in each year may change due to the timing of certain regulatory approvals and/or construction delays.   Encompass Health  For 2021 and 2022, the currently expected range for bed expansions is 100 to 150.    23
 The Company continues to improve the patient experience and   outcomes through integrated care delivery.                                       Inpatient rehabilitation–home health clinical collaboration  u The lower clinical    collaboration rate for YTD                           (all payors) overlap markets*   2020 was driven by a higher    mix of Medicare Advantage    patients (see page 33).                               Clinical Collaboration Rate     Medicare fee-for-service                                                                                     35.6%      clinical collaboration rate                                      34.0%      increased 50 bps from                                                                      33.3%      43.0% in YTD 2019 to 43.5%                                                    24,560      in YTD 2020.                                         29.5%                                                                        21,547              89    18,765 89     Medicare Advantage                      25.4%       clinical collaboration rate                                             81    17.260      increased 300 bps from                               17,947 76                                                     72                                        71      13.0% in YTD 2019 to 16.0%              13,800      in YTD 2020.               18.5%                        8,555     8,555                                                                                     44,479                                                                                                 37,578 u Clinical collaboration                                  42,950   objectives:                                                         41,858                                              40,637     Improve patient            37,671      experience and outcomes     Reduce total cost of care       across a post-acute       episode                       2015         2016        2017         2018        2019       YTD 2020 u Coordination between our IRFs    and HH teams is resulting in                                                             EHC Home Health    Overlap Markets*   lower discharges to SNFs and          Encompass Health    higher discharges home.                IRF discharges to:                                                            Non-EHC Home                                                             Health                          * Overlap markets have an Encompass Health IRF and an Encompass Health home health location within an   Encompass Health        approximate 30-mile radius, excluding markets that have home health licensure barriers. Overlap 24                          markets are open for 12 months before inclusion in the clinical collaboration rate.
 Personal Protective Equipment (PPE) – Utilization, Cost and Inventory     Increased PPE Utilization  u  due to COVID-19                                                           INPATIENT REHABILITATION    ñ  Utilization of PPE has increased as                 Avg. Monthly Utilization       Avg. Monthly Spend       a result of new infection control                                                                          Months of Current        policies in response to the                                                            Historical    Current*      Historical     Current*      Utilization in        COVID-19 pandemic, including                                                                                   Inventory       mandatory masking for employees        and patients.                              MASKSMASKS   130,000       947,000 $      10,400 $     951,000         3.9                                           RESPIRATORSRESPIRATORS   5,000     59,000 $       2,200 $     211,000         3.0                                                 GOWNSGOWNS   137,500        294,000 $      45,375 $     625,000         4.2                                                **GLOVES     9,500,000    10,597,000 $     350,000 $     658,000          - u  Impact on Pricing                          **GLOVES                                                Total PPE                            $    407,975  $  2,445,000     ñ  As the pandemic spread, our            Total PPE       demand for PPE increased beyond        the capacity of our primary        suppliers. We have diversified        sourcing to secondary vendors,        generally at significantly higher        prices. Average pricing for masks        and gowns have increased 12x and                                       HOME HEALTH AND HOSPICE       6x, respectively, during the        pandemic.                                           Avg. Monthly Utilization       Avg. Monthly Spend                                                                                                                  Months of Current     ñ  We have implemented a multi-tier                    Historical    Current*      Historical     Current*      Utilization in        approach to obtaining necessary                                                                                Inventory       PPE that includes maximizing the        allocated inventory from our               MASKSMASKS   -             154,000        -       $    125,000         3.9       primary suppliers (at a lower        RESPIRATORSRESPIRATORS -          39,000        -       $    147,000         6.5       contractual price) and contracting        with multiple secondary suppliers         GOWNSGOWNS    -              55,000        -       $    141,000         6.2       to source clinically-approved,                                                 **GLOVES     1,735,400     2,964,000 $      58,657  $     96,000         1.0       price-protected products which            GLOVES       are distributed through our                                                 Total PPE                            $     58,657   $    509,000        centralized warehouses.                 Total PPE                                           *April through September 2020   Encompass Health                    ** Purchases made in October are expected to provide 2 to 3 months of glove inventory in Q4. 25
 Pre-payment claims denials - inpatient rehabilitation segment  Background                                                       Encompass Health reserves pre-payment claim denials as a  • For several years prior to 2018, under programs designated as reduction of net operating revenues upon notice from a MAC a    “widespread probes,” certain Medicare Administrative Contractors              claim is under review.   (“MACs”) conducted pre-payment claim reviews and denied payment    for certain diagnosis codes.                                                                                Impact to Income Statement • Encompass Health appeals most denials. On claims it takes to an                                                                                                             Update of    administrative law judge (“ALJ”), Encompass Health historically has             Collections of Revenue  Reserve for    experienced an approximate 70% success rate.                  Period New Denials  Previously Reserve for                                                                                    Denied Claims New Denials  Prior    – MACs identify medical documentation issues as a leading basis for                                       Denials     denials.                                                                             (In Millions)   – Encompass Health’s investment in clinical information systems and Q3 2020 $(0.6)  $(6.3)       $—         $—     its medical services department has further improved its    Q2 2020   (1.5)       (3.5)         —          —     documentation and reduced technical denials.                                                                 Q1 2020    4.2        (5.0)        1.3         — • By statute, ALJ decisions are due within 90 days of a request for                                                                  Q4 2019    3.8        (4.6)        1.1         —   hearing, but appeals are taking years. HHS has implemented rule    changes to address the backlog of appeals, but their effect is Q3 2019   11.3       (6.1)        3.4         —   uncertain.                                                    Q2 2019    3.5        (1.7)        1.1         — • In November 2018, a federal court ordered HHS to reduce the backlog Q1 2019 1.6     (2.5)        0.5         —   in the following increments: a 19% reduction by the end of FY 2019; a Q4 2018 4.6   (3.2)        1.4         —   49% reduction by the end of FY 2020; a 75% reduction by the end of FY Q3 2018 0.7   (1.3)        0.2         —   2021; and elimination of the backlog by the end of FY 2022.   Q2 2018    1.8        (2.8)        0.5         — • After years of delay in processing appeals, ALJs recently increased the Q1 2018 3.1 (6.8)        0.9         —   frequency of hearings and the number of claims set at each hearing. Q4 2017 0.7     (7.8)        0.2         —   Notwithstanding the recent acceleration, Encompass Health still has    over 8,500 claims in the backlog, including claims from up to 10 years        Impact to Balance Sheet   ago.                                                                                    Sept. 30, Dec. 31, Dec. 31,  • Since 2018, CMS has replaced the “widespread probes” with the                             2020     2019     2018   Targeted Probe and Educate (“TPE”) initiative.*                                                 (In Millions) • Effective March 2020, CMS suspended most Medicare fee-for-service Pre-payment claims denials $  135.3 $  155.3 $  158.1    medical reviews during the public health emergency, including TPE Recorded reserves         (40.6)   (46.6)   (47.4)    and current post-payment reviews, allowing reviews for potential                                                                  Net accounts receivable from    fraud. CMS authorized its contractors to resume reviews as of Aug. 3, pre-payment claims denials $  94.7 $  108.7 $  110.7    2020.                     * For more information regarding TPE, see https://www.cms.gov/Research-Statistics-Data-and-Systems/Monitoring-Programs/  Encompass Health   Medicare-FFS-Compliance-Programs/Medical-Review/Targeted-Probe-and-EducateTPE.html            26
 Overview of rollover shares and SARs previously held by   members of the home health and hospice management   team                                                 Background   In connection with the 2014 acquisition of Encompass Home Health and Hospice:  •   Certain members of that management team rolled a portion of their pre-acquisition equity into the       post-acquisition entity (“Home Health Holdings”) resulting in a 16.7% ownership interest (the       “Rollover Shares”).  •   The Company also granted stock appreciation rights (“SARs”) based on the fair value of the common Home Health      stock of Home Health Holdings to certain members of that management team. Half of the SARs          Holdings      vested on Jan. 1, 2019, and the other half vested on Jan. 1, 2020.  •   Home Health Holdings was capitalized with a promissory note to the parent company totaling       approximately $385 million (equal to 5.5x the segment’s 2014 EBITDA). This was done to provide the              Original       opportunity for leveraged returns on the equity, thereby mimicking a private equity transaction                 Rollover       structure.                                                                                                       Shares                                                                                                                       16.7%  •   To the extent Home Health Holdings needed cash (e.g., acquisitions, capex, etc.), such amounts       were added to the principal amount of the original note and subsequent new notes. Cash generated       from the operations of Home Health Holdings has been used to pay interest and a portion of the       principal on the notes.                        Holder – The right (but not the obligation) to sell for cash up to 1/3 of the Rollover Shares to the parent after 1/1/18;  Options                2/3 after 1/1/19; and all outstanding Rollover Shares after 1/1/20                        Company – The right (but not the obligation) to purchase for cash all or any portion of the Rollover Shares after 1/1/20                          Fair value of the Rollover Shares and SARs was determined using the product of Home Health Holdings’ EBITDA for the  Valuation              trailing 12-month period and a median market price multiple based on a basket of public home health companies and                         recent transactions, less the current balance of the intracompany note(s) to the parent.                        In Feb. 2018, July 2019, and Jan. 2020, holders exercised their rights to sell Rollover Shares to EHC. EHC settled the                         exercises upon payment of approximately $65 million, approximately $163 million, and approximately $162 million in                         Q1 2018, Q3 2019 and Q1 2020, respectively. After the approximate $162 million payment was made in February 2020,                         only $46 million of the rollover shares remained outstanding, or approximately 1.2% of Home Health Holdings.                         In Q1 2019 and Q3 2019, holders exercised vested SARs for cash proceeds of approximately $13 million and  Activity               approximately $55 million, respectively. In Q1 2020, holders exercised the remaining SARs for cash proceeds of                         approximately $101 million.                        On Feb. 20, 2020, the Company and each of April Anthony and Luke James agreed to exchange the remaining rollover                         shares (approximately $45 million and $1 million, respectively) for an equal value of shares of EHC. The exchange                         settled in March 2020.  Encompass Health                                                                                                              27
 Debt maturity profile - face value   Pro forma as of September 30, 2020*(9)   ($ in millions)                                                     Callable beginning                              $964                                      Callable beginning                                                       February 2023(10)                           Available                                    February 2025(10)             $0 Drawn +            $36 reserved                                                            Callable beginning               for LCs   Revolver                                                      April 2026(9)                        capacity                                      Callable beginning                                        September 2020                                                                  $800            $800    Callable beginning                                            Senior           Senior       March 2018                                                  Notes           Notes                                                                   4.5%            4.75%                                                                                           $400                  $300                     $350                                            Senior                  Senior           $255   Senior                                           Notes                  Notes           Term     Notes                                           4.625%                 5.125% Revolver Loans    5.75% 2020    2022    2023    2024    2024     2025    2026    2027    2028    2029    2030    2031                                          In October 2020, the Company issued $400 million of 2031                  No significant debt         senior notes; will use proceeds plus $300 million of                maturities prior to 2023   available cash to redeem all $700 million of 2024 senior                                                       notes on November 1, 2020(9).                      * This chart does not include ~$372 million of finance lease obligations or ~$40 million of other notes payable.  Encompass Health              See the debt schedule on page 29; Refer to pages 49-50 for end notes. 28
 Debt schedule                                                          Pro forma                                      Change in                                                        September 30,  September 30,   December 31,       Debt vs.                                                                (9) ($millions)                                               2020             2020           2019           YE 2019  Advances under $1 billion revolving credit facility,   November 2024 - LIBOR +150bps                        $           —  $          —  $         45.0  $          (45.0)   Term loan facility, November 2024 - LIBOR +150bps              254.8          254.8          265.2             (10.4)   Bonds Payable:    5.125% Senior Notes due 2023                                 297.9          297.9          297.3               0.6     5.75% Senior Notes due 2024(2)(9)                                —          697.7          697.3               0.4    5.75% Senior Notes due 2025                                  346.1          346.1          345.6               0.5     4.50% Senior Notes due 2028(10)                              784.6          784.6          491.7             292.9     4.75% Senior Notes due 2030(10)                              782.8          782.8          491.7             291.1     4.625% Senior Notes due 2031(9)                              400.0             —               —                —   Other notes payable                                             40.2           40.2           44.7              (4.5)   Finance lease obligations                                      372.3          372.3          384.1             (11.8)    Long-term debt                                       $     3,278.7  $    3,576.4  $      3,062.6  $          513.8   Debt to Adjusted EBITDA                                         3.8 x          4.2 x           3.2 x  Leverage net of cash on balance sheet                           3.6 x          3.6 x           3.1 x    Encompass Health                   Reconciliations to GAAP provided on pages 40-48; Refer to pages 49-50 for end notes. 29
 New-store/same-store growth                                                Inpatient Rehabilitation                                                                                                             (1)                                 Shelby County, AL (34 beds)                           Yuma, AZ (51 beds)                                    Bluffton, SC (38 beds)                               Boise, ID (40 beds)                                                                                         Katy, TX (40 beds)                                                  Murrells Inlet, SC                                                                                                                  Sioux Falls, SD (40 beds)            15.0    Pearland, TX                      (29 beds)             Lubbock, TX                        (40 beds)                                              (40 beds)                          Coralville, IA (40 beds)             10.0                                         Winston-Salem, NC                                   Murrieta, CA                                                                (68 beds)                                       (50 beds)              5.0              0.0             -5.0            -10.0            -15.0                   Q4 2017    Q1 2018   Q2 2018   Q3 2018   Q4 2018    Q1 2019   Q2 2019   Q3 2019   Q4 2019   Q1 2020    Q2 2020   Q3 2020  Discharges      Q4 2017    Q1 2018   Q2 2018    Q3 2018   Q4 2018    Q1 2019   Q2 2019    Q3 2019   Q4 2019    Q1 2020   Q2 2020    Q3 2020  New store         2.0%       1.9%      1.6%       1.0%      1.7%       1.3%      1.5%       2.4%      2.0%      2.3%       2.1%      1.3%  Same store*       3.9%       4.8%      3.6%       2.0%      1.9%      (0.2)%     2.2%       3.1%      3.2%      2.4%      (12.8)%    (2.8)%  Total by qtr.     5.9%       6.7%      5.2%       3.0%      3.6%       1.1%      3.7%       5.5%      5.2%      4.7%      (10.7)%    (1.5)%  Total by year     4.0%                                      4.6%                                      3.9%  Same-store  year*             1.8%                                      2.8%                                      1.8%  Same-store  year UDS(11)      (0.5)%                                    1.1%                                      1.3%                                  Beginning in mid-March 2020, volume growth was impacted by the COVID-19 pandemic.                                  * Includes consolidated inpatient rehabilitation hospitals classified as same store during each period Encompass Health                                             Refer to pages 49-50 for end notes.                                              30
 New-store/same-store growth                                                Home Health                                                                               Acquired Alacare Home Health & Hospice                                                                                 (23 home health locations in Alabama)               30.0              Acquired Camellia Healthcare                                  in July 2019                             (14 home health locations in 3 states)                                            in May 2018               20.0                 10.0                  0.0                -10.0                -20.0                       Q4 2017   Q1 2018   Q2 2018    Q3 2018   Q4 2018   Q1 2019   Q2 2019    Q3 2019   Q4 2019   Q1 2020    Q2 2020   Q3 2020   Admissions         Q4 2017   Q1 2018   Q2 2018    Q3 2018   Q4 2018    Q1 2019   Q2 2019    Q3 2019   Q4 2019    Q1 2020   Q2 2020    Q3 2020   New store           3.5%       2.5%      5.3%       5.4%      5.3%       5.7%      2.9%      13.0%      12.3%     11.7%      9.4%       1.3%   Same store*         10.1%      7.4%      5.1%       3.8%      5.4%       6.4%      8.3%       9.7%      6.6%       0.2%     (17.3)%    (4.6)%   Total by quarter    13.6%      9.9%      10.4%      9.2%      10.7%     12.1%      11.2%     22.7%      18.9%     11.9%     (7.9)%     (3.3)%   Total by year       17.0%                                     10.0%                                     16.3%   Same-store year*    11.4%                                     5.6%                                      7.7% u     In 2017, the Company acquired or opened 15 home health locations. u     In 2018, the Company acquired or opened 23 home health locations. u     In 2019, the Company acquired or opened 27 home health locations. u     In 2020, the Company acquired or opened two home health locations and consolidated one former equity method location(3).                                   Beginning in mid-March 2020, volume growth was impacted by the COVID-19 pandemic.                                    * Includes consolidated home health agencies classified as same store during each period  Encompass Health                                                                     Refer to pages 49-50 for end notes.                                        31
 New-store/same-store growth                                                Hospice                        Acquired Camellia Healthcare                       (18 hospice locations in 3 states)                           Acquired Alacare Home Health & Hospice             70.0                 in May 2018                                           (23 hospice locations in Alabama)                                                                                                    in July 2019            60.0             50.0             40.0             30.0             20.0             10.0              0.0            -10.0                    Q4 2017   Q1 2018   Q2 2018    Q3 2018   Q4 2018   Q1 2019    Q2 2019   Q3 2019   Q4 2019    Q1 2020   Q2 2020   Q3 2020 Admissions        Q4 2017   Q1 2018    Q2 2018   Q3 2018    Q4 2018   Q1 2019    Q2 2019   Q3 2019    Q4 2019   Q1 2020    Q2 2020   Q3 2020 New store           8.8%      4.4%      26.1%      40.3%     41.2%      35.5%     15.7%      34.6%     31.1%     30.9%      30.6%      0.5% Same store*        27.2%      36.8%     35.2%      21.1%      8.6%      13.7%     13.6%      5.8%      10.1%     (5.3)%      6.7%     15.8% Total by quarter   36.0%      41.2%     61.3%      61.4%     49.8%      49.2%     29.3%      40.4%     41.2%     25.6%      37.3%     16.3% Total by year      45.9%                                     53.5%                                     39.8% Same-store year*   20.9%                                     24.6%                                     12.2%                           u   In 2017, the Company acquired or opened 2 hospice locations.                           u   In 2018, the Company acquired or opened 22 hospice locations.                           u   In 2019, the Company acquired or opened 25 hospice locations.                           u   In 2020, the Company opened one hospice location.   Encompass Health                    * Includes consolidated hospice agencies classified as same store during each period                      32
 Payment sources (percent of revenues)                             Inpatient         Home Health                          Rehabilitation        and Hospice                         Consolidated                             Segment             Segment                                 Q3                   Q3                  Q3                9 Months        Full Year                           2020      2019      2020       2019      2020      2019      2020       2019       2019  Medicare                   65.8 %    71.5 %    83.3 %     85.8 %    69.9 %    75.3 %    69.8 %     75.3 %     75.1 %  Medicare Advantage         15.7 %    10.9 %    10.8 %      8.7 %    14.5 %    10.3 %    14.8 %     10.3 %     10.6 %  Managed care               10.7 %    10.0 %     4.5 %      3.6 %     9.2 %     8.4 %     9.0 %      8.3 %      8.3 %  Medicaid                    4.3 %     3.2 %     1.2 %      1.7 %     3.6 %     2.8 %     3.4 %      2.8 %      2.8 %  Other third-party payors    1.2 %     1.4 %       — %       — %      0.9 %     1.0 %     0.9 %      1.0 %      0.9 %  Workers’ compensation       0.5 %     0.8 %     0.1 %      0.1 %     0.4 %     0.6 %     0.5 %      0.7 %      0.7 %  Patients                    0.6 %     0.7 %     0.1 %       — %      0.5 %     0.5 %     0.5 %      0.5 %      0.5 %  Other income                1.2 %     1.5 %       — %      0.1 %     1.0 %     1.1 %     1.1 %      1.1 %      1.1 %   Total                    100.0 %   100.0 %   100.0 %    100.0 %   100.0 %   100.0 %   100.0 %    100.0 %    100.0 %  Growth in Medicare Advantage as a percent of revenue within the inpatient rehabilitation segment for Q3 and year-to- date 2020 resulted in part from suspension of prior authorization requirements.   Encompass Health                                                                                                 33
 Inpatient rehabilitation operational and labor metrics                                             Q3        Q2       Q1          Q4         Q3         Q2         Q1        Full Year                                          2020      2020     2020       2019        2019       2019       2019        2019                                                                              (In Millions)  Net patient revenue-inpatient         $  883.2  $  808.0  $  890.0  $  873.5  $    850.6  $   851.8  $   847.6  $ 3,423.5    Net patient revenue-outpatient and    other revenues                          16.2      16.5     19.2        23.2        21.7       22.1       22.5        89.5    Net operating revenues                $  899.4  $  824.5  $  909.2  $  896.7  $    872.3  $   873.9  $   870.1  $ 3,513.0                                                                             (Actual Amounts)  Discharges(12)                          45,962    41,682    47,750    47,885      46,669     46,679     45,609    186,842    Net patient revenue per discharge     $ 19,216  $ 19,385  $ 18,639  $  18,242  $  18,226  $  18,248  $  18,584  $  18,323    Outpatient visits                       51,968    15,760    69,743    82,536      86,395    104,566    102,028    375,525    Average length of stay                   13.0      13.2     12.7        12.4        12.6       12.5       12.8        12.6    Occupancy %                               68.8 %    64.5 %   71.3 %      70.0 %      69.2 %     70.6 %     72.3 %      69.5 %  # of licensed beds                      9,437    9,401    9,322        9,249       9,219      9,062      8,941       9,249    Occupied beds                           6,493    6,064    6,647        6,474       6,380      6,398      6,464       6,428    Full-time equivalents (FTEs)(13)        22,147    20,809    22,318    22,096      22,037     21,570     21,345      21,762    Contract labor                            176      116       161         159        187         227        246         205    Total FTE and contract labor            22,323    20,925    22,479    22,255      22,224     21,797     21,591      21,967    EPOB(14)                                 3.44      3.45     3.38        3.44        3.48       3.41       3.34        3.42     Encompass Health                                        Refer to pages 49-50 for end notes.                                   34
 Home health and hospice operational metrics                                     Q3         Q2         Q1           Q4          Q3          Q2          Q1        Full Year                                  2020        2020       2020         2019        2019        2019        2019         2019                                                                          (In Millions) Net home health revenue       $     223.3 $    201.8 $     224.8  $    236.9  $     238.9 $     222.7 $     219.5  $    918.0  Net hospice revenue                  51.2       47.8        48.0         50.8        50.4        38.4        34.4       174.0  Net operating revenues        $     274.5 $    249.6 $     272.8  $    287.7  $     289.3 $     261.1 $     253.9  $   1,092.0  Home Health:                                                          (Actual Amounts) Admissions(15)                     40,765     34,841      42,476      41,781      42,174       37,828      37,944     159,727  Recertifications                   29,830     28,328      26,553      29,460      30,213       28,129      28,282     116,084  Episodes                           68,261     60,154      68,652      73,055      72,016       66,881      63,626     275,578  Average revenue per episode   $     2,910 $    2,920 $     2,909  $    2,901  $     2,980 $     2,959 $     3,057  $    2,972  Episodic visits per episode          16.4       17.4        16.3         16.4        17.3        17.1        17.7         17.1  Total visits                    1,300,866  1,250,546   1,306,230    1,372,326   1,425,323   1,325,362   1,308,610    5,431,621  Cost per visit                $        75 $      89  $        81  $       79  $       78  $       76  $        75  $       77  Hospice: Admissions(16)                      3,354      3,190       2,986       2,866        2,884       2,324       2,378      10,452  Patient days                      346,019   336,507      334,545     345,855     353,549     259,501      239,022    1,197,927  Average daily census                3,761      3,698       3,676       3,759        3,843       2,852       2,656       3,282  Revenue per day               $       148 $     142  $      144   $      147  $      142  $      148  $      144   $      145    Encompass Health                                          Refer to pages 49-50 for end notes.                                 35
 Share information                                                                  Weighted Average for the Period                                                      Q3                9 Months                 Full Year  (In Millions)                                 2020      2019      2020      2019       2019      2018      2017  Basic shares outstanding(17)                   98.7      97.8      98.5      98.1      98.0      97.9      93.7    Convertible senior subordinated notes(17)     —         —         —         —          —         —        4.0   Restricted stock awards, dilutive stock     options, restricted stock units, and common     stock warrants                              1.2       1.6       1.2        1.4       1.4       1.9       1.6  Diluted shares outstanding                     99.9      99.4      99.7      99.5      99.4      99.8      99.3                                                                          End of Period                                                      Q3                9 Months                 Full Year  (In Millions)                                 2020      2019      2020      2019       2019      2018      2017  Basic shares outstanding                       99.4      98.6      99.4      98.6      98.6      98.9      98.3   Encompass Health                             Refer to pages 49-50 for end notes.                                 36
 Segment operating results                                                               Q3 2020                                                Q3 2019                                                        Home                                                    Home                                                       Health and                                             Health and  (In Millions)                               IRF        Hospice     Reclasses   Consolidated        IRF        Hospice     Reclasses   Consolidated Net operating revenues                  $     899.4  $     274.5  $         —  $    1,173.9    $     872.3  $     289.3  $         —  $     1,161.6  Operating Expenses:      Inpatient Rehabilitation:        Salaries and benefits                 (475.0)           —       (189.9)        (664.9)       (459.1)           —       (200.9)        (660.0)         Other operating expenses(a)           (135.5)           —        (20.4)        (155.9)       (131.3)           —        (24.4)        (155.7)         Supplies                               (45.3)           —         (7.2)         (52.5)         (37.0)          —          (5.9)        (42.9)         Occupancy costs                        (15.3)           —         (5.0)         (20.3)         (17.0)          —          (4.8)        (21.8)       Home Health and Hospice:        Cost of services sold (excluding           depreciation and amortization)           —       (121.8)       121.8             —              —       (136.4)       136.4             —         Support and overhead costs(b)              —       (100.7)       100.7             —              —        (99.6)        99.6             —                                               (671.1)      (222.5)           —         (893.6)       (644.4)      (236.0)           —         (880.4)  Other income(c)(d)                              2.1            —            —            2.1           1.8            —            —            1.8  Equity in net income of nonconsolidated    affiliates                                    0.9          0.1            —            1.0           1.0          0.2            —            1.2  Noncontrolling interests(e)                   (22.1)        (0.3)           —          (22.4)         (20.1)        (2.7)          —          (22.8)       Segment Adjusted EBITDA            $     209.2  $      51.8  $         —         261.0    $     210.6  $      50.8  $         —         261.4  General and administrative expenses(f)(g)                                              (30.8)                                                 (29.8)       Adjusted EBITDA                                                           $      230.2                                           $      231.6     In arriving at Adjusted EBITDA, the following were excluded: (a)  Loss on disposal or impairment of  $       7.5  $         —  $         —  $         7.5   $       0.9  $         —  $         —  $         0.9         assets                               (b)  Payroll taxes on SARs exercise     $         —  $         —  $         —  $          —    $         —  $       0.8  $         —  $         0.8  (c)  Change in fair market value of     $      (0.4) $         —  $         —  $        (0.4)  $         —  $         —  $         —  $          —         equity securities (d)  Gain on consolidation of Yuma(1)   $         —  $         —  $         —  $          —    $      (19.2) $        —  $         —  $       (19.2)  (e)  SARs mark-to-market impact on      $         —  $         —  $         —  $          —    $         —  $       (0.9) $        —  $        (0.9)         noncontrolling interests (see page         27) (f)  Stock-based compensation           $         —  $         —  $         —  $         8.3   $         —  $         —  $         —  $        21.7  (g)  Transaction costs                  $         —  $         —  $         —  $          —    $         —  $         —  $         —  $         1.0      Encompass Health                           Reconciliations to GAAP provided on pages 40-48; Refer to pages 49-50 for end notes.               37
 Segment operating results                                                Nine Months Ended September 30, 2020                  Nine Months Ended September 30, 2019                                                         Home                                                  Home                                                       Health and                                             Health and  (In Millions)                                IRF       Hospice     Reclasses   Consolidated        IRF       Hospice      Reclasses   Consolidated Net operating revenues                   $  2,633.1  $     796.9  $         —  $     3,430.0   $   2,616.3 $      804.3 $         —  $     3,420.6  Operating Expenses:      Inpatient Rehabilitation:       Salaries and benefits                (1,408.7)           —       (585.7)      (1,994.4)     (1,347.7)          —        (555.8)      (1,903.5)        Other operating expenses(a)            (394.5)           —        (66.2)        (460.7)       (386.1)          —         (67.1)        (453.2)        Supplies                               (126.9)           —        (21.9)        (148.8)       (109.3)          —         (15.4)        (124.7)        Occupancy costs                         (46.0)           —        (14.8)         (60.8)        (49.1)          —         (12.6)         (61.7)       Home Health and Hospice:       Cost of services sold (excluding          depreciation and amortization)            —        (389.4)      389.4             —             —        (372.8)       372.8             —        Support and overhead costs(b)               —        (299.2)      299.2             —             —        (278.1)       278.1             —                                             (1,976.1)       (688.6)          —       (2,664.7)     (1,892.2)      (650.9)          —        (2,543.1)  Other income(c)(d)                              3.9            —            —            3.9           6.5           —            —            6.5  Equity in net income of nonconsolidated    affiliates                                    2.1          0.4            —            2.5           4.5          1.0           —            5.5  Noncontrolling interests(e)                   (58.0)         (0.9)          —          (58.9)        (60.6)        (8.2)          —           (68.8)       Segment Adjusted EBITDA             $    605.0  $     107.8  $         —         712.8    $    674.5  $     146.2  $         —          820.7  General and administrative expenses(f)(g)                                              (92.4)                                                 (94.0)       Adjusted EBITDA                                                           $      620.4                                          $       726.7    In arriving at Adjusted EBITDA, the following were excluded: (a)  Loss (gain) on disposal or impairment $    9.4  $       1.2  $         —  $        10.6   $       3.4 $       (0.1) $        —  $         3.3        of assets                               (b)  Payroll taxes on SARs exercise      $        —  $       1.5  $         —  $         1.5   $        —  $        1.0 $         —  $         1.0  (c)  Change in fair market value of equity $    (0.3) $        —  $         —  $        (0.3)  $      (1.2) $        —  $         —  $         (1.2)        securities (d)  Gain on consolidation of former     $        —  $       (2.2) $        —  $        (2.2)  $     (19.2) $        —  $         —  $        (19.2)         equity method location(1)(3) (e)  SARs mark-to-market impact on       $        —  $         —  $         —  $          —    $        —  $       (4.3) $        —  $         (4.3)        noncontrolling interests (see p. 27) (f)  Stock-based compensation            $        —  $         —  $         —  $        25.3   $        —  $         —  $         —  $        87.0  (g)  Transaction costs                   $        —  $         —  $         —  $          —    $        —  $         —  $         —  $         2.0     Encompass Health                           Reconciliations to GAAP provided on pages 40-48; Refer to pages 49-50 for end notes.               38
 Segment operating results                                                                                             Year Ended December 31, 2019                                                                                                  Home                                                                                                Health and           (In Millions)                                                                IRF       Hospice      Reclasses   Consolidated          Net operating revenues                                                   $   3,513.0 $    1,092.0 $         —  $     4,605.0           Operating Expenses:               Inpatient Rehabilitation:                 Salaries and benefits                                                (1,813.1)          —        (758.9)      (2,572.0)                  Other operating expenses(a)                                            (521.9)          —         (90.6)       (612.5)                  Supplies                                                               (147.0)          —         (20.9)       (167.9)                  Occupancy costs                                                         (64.8)          —         (17.5)         (82.3)                Home Health and Hospice:                 Cost of services sold (excluding depreciation and amortization)            —        (506.2)       506.2             —                  Support and overhead costs(b)                                              —        (381.7)       381.7             —                                                                                       (2,546.8)      (887.9)          —        (3,434.7)           Other income(c)(d)                                                              10.5           —            —           10.5           Equity in net income of nonconsolidated affiliates                               5.5          1.2           —            6.7           Noncontrolling interests(e)                                                    (82.6)        (9.5)          —           (92.1)                Segment Adjusted EBITDA                                             $    899.6  $     195.8  $         —        1,095.4           General and administrative expenses(f)(g)                                                                             (130.5)                Adjusted EBITDA                                                                                           $       964.9              In arriving at Adjusted EBITDA, the following were excluded:          (a)  Loss (gain) on disposal of assets                                   $      11.2 $       (0.1) $        —  $        11.1           (b)  Payroll taxes on SARs exercise                                      $        —  $        1.0 $         —  $         1.0           (c)  Change in fair market value of equity securities                    $      (0.8) $        —  $         —  $         (0.8)           (d)  Gain on consolidation of Yuma(1)                                    $     (19.2) $        —  $         —  $        (19.2)           (e)  SARs mark-to-market impact on noncontrolling interests (see page 27) $       —  $       (5.0) $        —  $         (5.0)           (f)  Stock-based compensation                                            $        —  $         —  $         —  $       114.4           (g)  Transaction costs                                                   $        —  $         —  $         —  $         2.1    Encompass Health                           Reconciliations to GAAP provided on pages 40-48; Refer to pages 49-50 for end notes.               39
 Reconciliation of net income to Adjusted EBITDA(7)                                                                                           2020                                                             Q1                 Q2                  Q3              9 Months                                                                 Per                 Per                Per                Per  (in millions, except per share data)                  Total    Share      Total    Share     Total    Share     Total    Share Net Income                                          $  108.7            $   48.3           $  100.1           $  257.1  Loss (income) from disc ops, net of tax, attributable to     Encompass Health                                      0.1                (0.1)                 —                  —  Net income attributable to noncontrolling interests     (21.7)             (14.8)             (22.4)              (58.9)  Income from continuing operations attributable to    Encompass Health*                                     87.1  $   0.87      33.4 $   0.34      77.7 $   0.78     198.2  $   1.99  Government, class action, and related settlements        2.8                  —                   —                 2.8  Provision for income tax expense                        27.1                11.8               26.9               65.8  Interest expense and amortization of debt discounts    and fees                                              43.2                45.8               49.0              138.0  Depreciation and amortization                           58.8                60.7               61.2              180.7  Loss on disposal or impairment of assets                 0.1                 3.0                7.5               10.6  Stock-based compensation expense                         7.1                 9.9                8.3               25.3  Gain on consolidation of Treasure Coast(3)               (2.2)                —                   —                (2.2)  Change in fair market value of equity securities         2.5                (2.4)              (0.4)               (0.3)  Payroll taxes on SARs exercise                           1.5                  —                   —                 1.5  Adjusted EBITDA                                     $  228.0            $  162.2           $  230.2           $  620.4   Weighted average common shares outstanding: Basic                                                             98.2               98.7               98.7                98.5  Diluted                                                           99.6               99.9               99.9                99.7                                  * Per share amounts for each period presented are based on diluted weighted-average shares outstanding.  Encompass Health                                       Refer to pages 49-50 for end notes.                                    40
 Reconciliation of net income to Adjusted EBITDA(7)                                                                                            2019                                                 Q1                   Q2                    Q3                    Q4                Full Year                                                     Per                   Per                   Per                  Per                   Per  (in millions, except per share data)     Total     Share       Total     Share       Total     Share      Total      Share      Total     Share Net Income                             $   125.2             $   110.9             $  119.5             $    90.2             $  445.8  Loss from disc ops, net of tax,    attributable to Encompass Health           0.5                   0.1                    —                     —                   0.6  Net income attributable to    noncontrolling interests                 (22.9)                (19.7)                (21.9)               (22.6)                (87.1)  Income from continuing operations    attributable to Encompass Health*        102.8  $    1.04       91.3 $    0.92       97.6  $    0.98       67.6  $    0.68      359.3 $    3.62  Provision for income tax expense            30.8                  23.5                 34.3                  27.3                 115.9  Interest expense and amortization of    debt discounts and fees                   37.2                  37.7                 40.3                  44.5                 159.7  Depreciation and amortization               52.5                  52.7                 55.1                  58.4                 218.7  Loss on early extinguishment of debt           —                   2.3                    —                   5.4                   7.7  Loss on disposal of assets                   1.1                   1.3                   0.9                  7.8                  11.1  Stock-based compensation expense            19.4                  45.9                 21.7                  27.4                 114.4  Transaction costs                            0.6                   0.4                   1.0                  0.1                   2.1  Gain on consolidation of Yuma(1)               —                    —                  (19.2)                   —                 (19.2)  SARs mark-to-market impact on    noncontrolling interests (see page 27)    (0.8)                 (2.6)                 (0.9)                 (0.7)                (5.0)  Change in fair market value of equity    securities                                (0.9)                 (0.3)                   —                   0.4                  (0.8)  Payroll taxes on SARs exercise               0.2                    —                    0.8                    —                   1.0    Adjusted EBITDA                      $   242.9             $   252.2             $  231.6             $   238.2             $  964.9   Weighted average common shares    outstanding: Basic                                                  98.4                 98.0                  97.8                  97.8                 98.0  Diluted                                                99.7                 99.3                  99.4                  99.5                 99.4                                       * Per share amounts for each period presented are based on diluted weighted-average shares outstanding.  Encompass Health                                               Refer to pages 49-50 for end notes.                                            41
 Net cash provided by operating activities reconciled   to Adjusted EBITDA(7)                                                                       Q3                     9 Months             Full Year   (In Millions)                                              2020         2019         2020         2019           2019   Net cash provided by operating activities               $     173.4  $     114.4  $     425.0  $    419.7   $        635.3    Interest expense and amortization of debt discounts and      fees                                                         49.0         40.3        138.0       115.2            159.7    Equity in net income of nonconsolidated affiliates              1.0          1.2          2.5          5.5             6.7    Net income attributable to noncontrolling interests in      continuing operations                                       (22.4)       (21.9)       (58.9)       (64.5)          (87.1)    Amortization of debt-related items                             (2.0)        (1.1)        (5.1)        (3.1)           (4.5)    Distributions from nonconsolidated affiliates                  (0.8)        (0.2)        (2.8)        (4.8)           (6.6)    Current portion of income tax expense                          23.5         14.1         71.5         67.8            75.9    Change in assets and liabilities                                7.2         83.7         47.7       185.4            180.1    Cash used in operating activities of discontinued operations    0.1          0.1          0.2          4.6             4.4    Transaction costs                                                —           1.0           —           2.0             2.1    Payroll taxes on SARs exercise                                   —           0.8          1.5          1.0             1.0    SARs mark-to-market impact on noncontrolling interests      (see page 27)                                                  —          (0.9)          —          (4.3)           (5.0)    Change in fair market value of equity securities               (0.4)          —          (0.3)        (1.2)           (0.8)    Other                                                           1.6          0.1          1.1          3.4             3.7    Adjusted EBITDA                                         $     230.2  $     231.6  $     620.4  $    726.7   $        964.9    Encompass Health                                 Refer to pages 49-50 for end notes.                                          42
 Reconciliation of segment Adjusted EBITDA to income    from continuing operations before income tax expense                                                                     Three Months Ended     Nine Months Ended      Year Ended                                                                       September 30,         September 30,       December 31,                                                                      2020       2019       2020       2019          2019                                                                                             (In Millions)  Total segment Adjusted EBITDA                                     $  261.0   $  261.4   $  712.8   $  820.7   $      1,095.4   General and administrative expenses                                   (39.1)     (52.5)    (117.7)    (183.0)          (247.0)   Depreciation and amortization                                         (61.2)     (55.1)    (180.7)    (160.3)          (218.7)   Loss on disposal or impairment of assets                               (7.5)      (0.9)     (10.6)       (3.3)          (11.1)   Government, class action, and related settlements(4)                     —          —        (2.8)         —               —   Loss on early extinguishment of debt(2)(10)                              —          —           —        (2.3)           (7.7)   Interest expense and amortization of debt discounts and fees          (49.0)     (40.3)    (138.0)    (115.2)          (159.7)   Net income attributable to noncontrolling interests                    22.4       21.9       58.9       64.5             87.1   SARs mark-to-market impact on noncontrolling interests (see page 27)     —         0.9          —        4.3              5.0   Change in fair market value of equity securities                        0.4         —         0.3        1.2              0.8   Gain on consolidation of former equity method location(1)(3)             —        19.2        2.2       19.2             19.2   Payroll taxes on SARs exercise                                           —        (0.8)      (1.5)       (1.0)           (1.0)      Income from continuing operations before income tax expense    $  127.0   $  153.8   $  322.9   $  444.8   $       562.3    Encompass Health                                     Refer to pages 49-50 for end notes.                                      43
 Reconciliation of net cash provided by operating  activities to adjusted free cash flow(6)                                                                        Q3               9 Months         Full Year  (In Millions)                                                  2020      2019      2020      2019        2019  Net cash provided by operating activities                    $  173.4  $  114.4  $  425.0  $  419.7   $     635.3   Impact of discontinued operations                                 0.1       0.1       0.2        4.6          4.4  Net cash provided by operating activities of continuing   operations                                                     173.5     114.5     425.2      424.3        639.7   Capital expenditures for maintenance                            (34.0)    (41.0)   (107.5)    (105.1)      (167.1)  Distributions paid to noncontrolling interests of consolidated   affiliates                                                     (15.4)    (21.1)     (52.9)    (57.6)       (79.8)   Items non-indicative of ongoing operating performance:  Cash paid for SARs exercise (inclusive of payroll taxes)          —       56.2     102.1       69.6         69.6   Transaction costs and related assumed liabilities                 —        1.0         —        2.0          2.1   Cash paid for government, class action, and related settlements   —         —          —       46.4         52.0   Adjusted free cash flow                                      $  124.1  $  109.6  $  366.9  $  379.6   $     516.5   Cash dividends on common stock                               $   27.6  $   26.4  $   84.3  $   81.3   $     108.7    Encompass Health                            Refer to pages 49-50 for end notes.                                  44
 Adjusted EPS(5) - Q3 2020                                                                             For the Three Months Ended September 30, 2020                                                                                              Adjustments                                                                                                    Change in Fair                                                                                                     Market Value                                                                               As      Income Tax      of Equity        As                                                                            Reported   Adjustments     Securities    Adjusted                                                                                 (In Millions, Except Per Share Amounts)   Adjusted EBITDA                                                         $  230.2   $         —   $           —   $  230.2    Depreciation and amortization                                               (61.2)           —               —       (61.2)    Interest expense and amortization of debt discounts and fees                (49.0)           —               —       (49.0)    Stock-based compensation                                                     (8.3)           —               —        (8.3)    Loss on disposal or impairment of assets                                     (7.5)           —               —        (7.5)    Change in fair market value of equity securities                              0.4            —             (0.4)        —        Income from continuing operations before income tax expense             104.6            —             (0.4)    104.2    Provision for income tax expense                                            (26.9)          0.1             0.1      (26.7)        Income from continuing operations attributable to Encompass Health  $   77.7   $       0.1   $         (0.3) $   77.5     Diluted earnings per share from continuing operations*                  $   0.78   $         —   $           —   $   0.78    Diluted shares used in calculation                                          99.9    Encompass Health                            *  Adjusted EPS may not sum across due to rounding.                               45                                                      Refer to pages 49-50 for end notes.
 Adjusted EPS(5) - Q3 2019                                                                 For the Three Months Ended September 30, 2019                                                                                 Adjustments                                                        Mark-to-                                                         Market                                                        Adjustment                                               Payroll                                                         for Stock                                  Gain on     Taxes on                                                As        Comp.      Income Tax    Transaction   Consolidation    SARs        As                                             Reported    Expense     Adjustments       Costs        of Yuma     Exercise   Adjusted                                                                    (In Millions, Except Per Share Amounts) Adjusted EBITDA                            $  231.6   $        —   $         —   $          —  $          —   $      —  $  231.6  Depreciation and amortization                  (55.1)          —             —              —             —          —       (55.1)  Interest expense and amortization of debt    discounts and fees                           (40.3)          —             —              —             —          —       (40.3)  Stock-based compensation                       (21.7)        12.0            —              —             —          —        (9.7)  Loss on disposal of assets                      (0.9)          —             —              —             —          —        (0.9)  Transaction costs                               (1.0)          —             —            1.0             —          —          —  SARs mark-to-market impact on    noncontrolling interests (see page 27)         0.9         (0.9)           —              —             —          —          —  Gain on consolidation of Yuma(1)                19.2           —             —              —          (19.2)        —          —  Payroll taxes on SARs exercise                  (0.8)          —             —              —             —        0.8          —     Income from continuing operations       before income tax expense                 131.9         11.1            —            1.0          (19.2)      0.8      125.6  Provision for income tax expense               (34.3)        (3.0)         (0.2)         (0.2)           5.2       (0.2)     (32.7)     Income from continuing operations       attributable to Encompass Health      $   97.6   $       8.1  $       (0.2) $        0.8  $       (14.0) $    0.6  $    92.9  Diluted earnings per share from continuing    operations*                              $   0.98   $     0.08   $         —   $       0.01  $       (0.14) $   0.01  $    0.93  Diluted shares used in calculation             99.4     Encompass Health                            *  Adjusted EPS may not sum across due to rounding.                               46                                                       Refer to pages 49-50 for end notes.
 Adjusted EPS(5) - YTD 2020                                                                 For the Nine Months Ended September 30, 2020                                                                                  Adjustments                                                                                     Change in                   Payroll                                                         Gov’t, Class                Fair Market     Gain on      Taxes                                                          Action, &                   Value of    Consolidation    on                                                    As       Related     Income Tax      Equity      of Treasure     SARs       As                                               Reported   Settlements  Adjustments    Securities      Coast      Exercise  Adjusted                                                                     (In Millions, Except Per Share Amounts) Adjusted EBITDA                              $  620.4  $         —   $         —   $        —   $          —   $     —   $  620.4  Depreciation and amortization                   (180.7)          —             —            —              —         —      (180.7)  Government, class action and related    settlements                                     (2.8)         2.8            —            —              —         —          —  Interest expense and amortization of debt    discounts and fees                            (138.0)          —             —            —              —         —      (138.0)  Stock-based compensation                         (25.3)          —             —            —              —         —       (25.3)  Loss on disposal or impairment of assets         (10.6)          —             —            —              —         —       (10.6)  Change in fair market value of equity securities   0.3           —             —          (0.3)            —         —          —  Gain on consolidation of Treasure Coast(3)        2.2            —             —            —            (2.2)       —          —  Payroll taxes on SARs exercise                    (1.5)          —             —            —              —        1.5         —     Income from continuing operations       before income tax expense                  264.0           2.8            —          (0.3)          (2.2)      1.5     265.8  Provision for income tax expense                 (65.8)        (0.7)         (4.6)         0.1            0.6      (0.4)     (70.8)     Income from continuing operations       attributable to Encompass Health        $  198.2  $        2.1  $       (4.6) $      (0.2) $        (1.6) $    1.1  $  195.0  Diluted earnings per share from continuing    operations*                                $   1.99  $      0.02   $     (0.05)  $        —   $       (0.02) $  0.01   $   1.96  Diluted shares used in calculation               99.7                                                        *  Adjusted EPS may not sum across due to rounding.   Encompass Health                                                                                                              47                                                              Refer to pages 49-50 for end notes.
 Adjusted EPS(5) - YTD 2019                                                                        For the Nine Months Ended September 30, 2019                                                                                         Adjustments                                                      Mark-to-     Loss                               Change in                                                       Market        on                                   Fair                                                     Adjustment     Early                               Market                     Payroll                                                      for Stock    Exting.                              Value of      Gain on      Taxes                                             As         Comp.        of     Income Tax   Transaction     Equity    Consolidation  on SARs      As                                          Reported     Expense      Debt    Adjustments      Costs     Securities     of Yuma     Exercise   Adjusted                                                                           (In Millions, Except Per Share Amounts) Adjusted EBITDA                         $  726.7   $         —   $    —   $         —   $        —   $       —   $          —   $      —   $  726.7  Depreciation and amortization              (160.3)           —        —             —            —           —              —          —     (160.3)  Loss on early extinguishment of debt         (2.3)           —      2.3             —            —           —              —          —         —  Interest expense and amortization of    debt discounts and fees                  (115.2)           —        —             —            —           —              —          —     (115.2)  Stock-based compensation                    (87.0)         53.0       —             —            —           —              —          —      (34.0)  Loss on disposal of assets                   (3.3)           —        —             —            —           —              —          —       (3.3)  Transaction costs                            (2.0)           —        —             —           2.0          —              —          —         —  SARs mark-to-market impact on    noncontrolling interests (see page 27)      4.3          (4.3)      —             —            —           —              —          —         —  Change in fair market value of equity    securities                                  1.2            —        —             —            —         (1.2)            —          —         —  Gain on consolidation of Yuma(1)             19.2            —        —             —            —           —           (19.2)        —         —  Payroll taxes on SARs exercise               (1.0)           —        —             —            —           —              —        1.0         —      Income from continuing operations       before income tax expense             380.3           48.7     2.3             —           2.0        (1.2)         (19.2)      1.0      413.9  Provision for income tax expense            (88.6)        (13.2)    (0.6)        (12.6)        (0.5)        0.3            5.2       (0.2)   (110.2)      Income from continuing operations       attributable to Encompass Health   $  291.7   $      35.5   $  1.7   $     (12.6)  $       1.5  $     (0.9) $       (14.0) $    0.8   $  303.7  Diluted earnings per share from    continuing operations*                $   2.94   $      0.36   $ 0.02   $     (0.13)  $     0.02   $    (0.01) $       (0.14) $  0.01    $  3.05  Diluted shares used in calculation          99.5                                                          *  Adjusted EPS may not sum across due to rounding.   Encompass Health                                              Refer to pages 49-50 for end notes.                                             48
 End notes  (1) As a result of negotiations with our partner to amend the joint venture agreement related to Yuma Rehabilitation Hospital, the accounting for this hospital changed      from the equity method of accounting to a consolidated entity effective July 1, 2019. We accounted for this change in control as a business combination and      consolidated this entity using the acquisition method. As a result of our consolidation of this hospital and the remeasurement of our previously held equity interest at      fair value, we recorded a $19.2 million gain as part of other income in the third quarter of 2019. (2) In June 2019, the Company redeemed $100 million of its 5.75% Senior Notes due 2024 at a price of 101.917%, which resulted in a total cash outlay of approximately      $102 million. The redemption was funded using cash on hand and funding under the Company’s revolving credit facility. As a result of this redemption, the Company      recorded an approximate $2 million loss on early extinguishment of debt in the second quarter of 2019. In November 2019, the Company redeemed $400 million of      its 5.75% Senior Notes due 2024 at a price of 100.958%, which resulted in a total cash outlay of approximately $404 million. The redemption was funded using a      portion of the proceeds from the Company’s September 2019 public offering of $1 billion of senior unsecured notes (see end note 10). As a result of the redemption,      the Company recorded an approximate $5 million loss on early extinguishment of debt in the fourth quarter of 2019. (3) As a result of an amendment to the joint venture agreement related to our home health location in Treasure Coast, Florida, the accounting for this agency changed      from the equity method of accounting to a consolidated entity effective January 1, 2020. We accounted for this change in control as a business combination and      consolidated this entity using the acquisition method. As a result of our consolidation of this agency and the remeasurement of our previously held equity interest at      fair value, we recorded a $2.2 million gain as part of other income in the first quarter of 2020. (4) As previously disclosed, from 2013 to 2019, the Company cooperated with an investigation of alleged improper or fraudulent Medicare and Medicaid claims. The      investigation, under the direction of DOJ, produced no evidence of fraud, falsity or wrongdoing. However, based on discussions with DOJ, and having considered the      burdens and distractions associated with continuing the investigation and the likely costs of future litigation, the Company estimated a settlement value of $48 million      and accrued a loss contingency in that amount in the fourth quarter of 2018. Following further discussions, the Company entered into an agreement effective as of      June 21, 2019 to settle all claims related to the DOJ investigation, together with related qui tam or “whistleblower” lawsuits, for cash payments totaling $48 million. (5) The Company is providing adjusted earnings per share from continuing operations attributable to Encompass Health (“adjusted earnings per share”), which is a non-     GAAP measure. The Company believes the presentation of adjusted earnings per share provides useful additional information to investors because it provides better      comparability of ongoing operating performance to prior periods given that it excludes the impact of government, class action, and related settlements, professional      fees - accounting, tax, and legal, mark-to-market adjustments for stock appreciation rights, gains or losses related to hedging and equity instruments, loss on early      extinguishment of debt, adjustments to its income tax provision (such as valuation allowance adjustments, settlements of income tax claims and windfall tax      benefits), items related to corporate and facility restructurings, and certain other items deemed to be non-indicative of ongoing operating performance. It is      reasonable to expect that one or more of these excluded items will occur in future periods, but the amounts recognized can vary significantly from period to period      and may not directly relate to the Company's ongoing operating performance. Accordingly, they can complicate comparisons of the Company's results of operations      across periods and comparisons of the Company's results to those of other healthcare companies. Adjusted earnings per share should not be considered as a measure      of financial performance under generally accepted accounting principles in the United States as the items excluded from it are significant components in      understanding and assessing financial performance. Because adjusted earnings per share is not a measurement determined in accordance with GAAP and is thus      susceptible to varying calculations, it may not be comparable as presented to other similarly titled measures of other companies.* (6) Definition of adjusted free cash flow, which is a non-GAAP measure, is net cash provided by operating activities of continuing operations minus capital expenditures      for maintenance, dividends paid on preferred stock, distributions to noncontrolling interests, and certain other items deemed to be non-indicative of ongoing      operating performance. Common stock dividends are not included in the calculation of adjusted free cash flow. Because this measure is not determined in accordance      with GAAP and is susceptible to varying calculations, it may not be comparable to other similarly titled measures presented by other companies. (7) Adjusted EBITDA is a non-GAAP financial measure. The Company’s leverage ratio (total consolidated debt to Adjusted EBITDA for the trailing four quarters) is,      likewise, a non-GAAP measure. Management and some members of the investment community utilize Adjusted EBITDA as a financial measure and the leverage ratio      as a liquidity measure on an ongoing basis. These measures are not recognized in accordance with GAAP and should not be viewed as an alternative to GAAP      measures of performance or liquidity. In evaluating Adjusted EBITDA, the reader should be aware that in the future the Company may incur expenses similar to the      adjustments set forth. (8) On Oct. 28, 2013, the Company announced its board of directors authorized the repurchase of up to $200 million of its common stock. On Feb. 14, 2014, the      Company's board approved an increase in this common stock repurchase authorization from $200 million to $250 million. As of June 30, 2018, the remaining      repurchase authorization was approximately $58 million. On July 24, 2018, the Company's board approved resetting the aggregate common stock repurchase      authorization to $250 million. As of Sept. 30, 2020, the remaining repurchase authorization was approximately $199 million.     Encompass Health                                 * Reconciliations to GAAP provided on pages 40-48                                            49
 End notes, continued  (9) In October 2020, the Company issued $400 million of 4.625% Senior Notes due 2031. The proceeds plus approximately $300 million of cash on hand were used to fully      redeem $700 million of 5.75% Senior Notes due 2024 at par on November 1, 2020. (10) In September 2019, the Company issued $500 million of 4.5% Senior Notes due 2028 and $500 million of 4.75% Senior Notes due 2030. The proceeds were used to      fund the purchase of the home health rollover shares and exercise of SARs in Q3 2019, fund a call of $400 million of 5.75% Senior Notes due 2024 in Q4 2019, and      repay borrowings under the Company’s revolving credit facility. In May 2020, the Company re-opened these notes and issued an additional $300 million of 4.5%      Senior Notes due 2028 and $300 million of 4.75% Senior Notes due 2030. The proceeds were used to repay borrowings under the Company’s revolving credit facility. (11) Data provided by Uniform Data System for Medical Rehabilitation, a division of UB Foundation Activities, Inc., a data gathering and analysis organization for the      rehabilitation industry; represents ~80% of industry, including Encompass Health inpatient rehabilitation sites (12) Represents discharges from 136 consolidated hospitals in Q3 and Q2 2020; 134 consolidated hospitals in Q1 2020; 133 consolidated hospitals in Q4 and Q3 2019; 130      consolidated hospitals in Q2 2019; and 129 consolidated hospitals in Q1 2019 (13) Full-time equivalents included in the table represent Encompass Health employees who participate in or support the operations of our hospitals and include an      estimate of full-time equivalents related to contract labor. (14) Employees per occupied bed, or “EPOB,” is calculated by dividing the number of full-time equivalents, including an estimate of full-time equivalents from the      utilization of contract labor, by the number of occupied beds during each period. The number of occupied beds is determined by multiplying the number of licensed      beds by the Company’s occupancy percentage. (15) Represents home health admissions from 241 consolidated locations in Q3 2020; 244 consolidated locations in Q2 2020 and Q1 2020; 243 consolidated locations in Q4      2019; 243 consolidated locations in Q3 2019; 220 consolidated locations in Q2 2019; and 219 consolidated locations in Q1 2019 (16) Represents hospice admissions from 83 locations in Q3 and Q2 2020, Q1 2020 and Q4 2019; 82 locations in Q3 2019; and 59 locations in Q2 and Q1 2019 (17) In November 2013, the Company closed separate, privately negotiated exchanges in which it issued $320 million of 2.0% Convertible Senior Subordinated Notes due      2043 in exchange for 257,110 shares of its 6.5% Series A Convertible Perpetual Preferred Stock. The Company recorded ~$249 million as debt and ~$71 million as      equity. In May 2017, the Company provided notice of its intent to redeem all $320 million of outstanding convertible notes. In lieu of receiving the redemption      price, the holders had the right to convert their notes into shares of the Company’s common stock at a conversion rate of 27.2221 shares per $1,000 principal      amount of Notes, which rate was increased by a make-whole premium. In the aggregate, holders of $319.4 million in principal elected to convert, which resulted in      the Company issuing 8,895,483 shares of common stock (approximately 8.6 million shares were previously included in the diluted share count). The remaining      $0.6 million of principal was redeemed by cash payment.     Encompass Health                                                                                                                              50