| (Commission File Number) | (IRS Employer Identification No.) | ||||
Written communication pursuant to Rule 425 under the Securities Act (17 CFR 230.425) | |||||
| Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) | |||||
Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) | |||||
Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) | |||||
| Title of each class | Trading Symbol(s) | Name of each exchange on which registered | ||||||
| Exhibit Number | Description | |||||||
| 104 | Cover Page Interactive Data File - the cover page iXBRL tags are embedded within the Inline XBRL document | |||||||
| ENCOMPASS HEALTH CORPORATION | ||||||||
| By: | /S/ DOUGLAS E. COLTHARP | |||||||
| Name: | Douglas E. Coltharp | |||||||
| Title: | Executive Vice President and Chief Financial Officer | |||||||

| Media Contact | April 30, 2026 | ||||
| Polly Manuel, 205 969-4532 | |||||
| polly.manuel@encompasshealth.com | |||||
| Investor Relations Contact | |||||
| Mark Miller, 205 970-5860 | |||||
| mark.miller@encompasshealth.com | |||||
| Growth | |||||||||||||||||||||||
| Q1 2026 | Q1 2025 | Dollars | Percent | ||||||||||||||||||||
| (In Millions, Except Per Share Data) | |||||||||||||||||||||||
| Net operating revenue | $ | 1,586.6 | $ | 1,455.4 | $ | 131.2 | 9.0 | % | |||||||||||||||
Income from continuing operations attributable to Encompass Health per diluted share | 1.77 | 1.48 | 0.29 | 19.6 | % | ||||||||||||||||||
| Adjusted earnings per share | 1.60 | 1.37 | 0.23 | 16.8 | % | ||||||||||||||||||
Cash flows provided by operating activities | 313.1 | 288.6 | 24.5 | 8.5 | % | ||||||||||||||||||
| Adjusted EBITDA | 348.8 | 313.6 | 35.2 | 11.2 | % | ||||||||||||||||||
| Adjusted free cash flow | 193.8 | 222.4 | (28.6) | (12.9) | % | ||||||||||||||||||
| (Actual Amounts) | |||||||||||||||||||||||
| Discharges | 67,763 | 64,985 | 4.3 | % | |||||||||||||||||||
| Same-store discharge growth | 1.6 | % | |||||||||||||||||||||
| Net patient revenue per discharge | $ | 22,633 | $ | 21,816 | 3.7 | % | |||||||||||||||||
1 | ||||||||
| Full-Year 2026 Guidance | |||||||||||
| Previous Guidance | Updated Guidance | ||||||||||
| (In Millions, Except Per Share Data) | |||||||||||
| Net operating revenue | $6,365 to $6,465 | $6,375 to $6,470 | |||||||||
| Adjusted EBITDA | $1,340 to $1,380 | $1,350 to $1,380 | |||||||||
| Adjusted earnings per share from continuing operations attributable to Encompass Health | $5.81 to $6.10 | $5.89 to $6.11 | |||||||||
2 | ||||||||
3 | ||||||||
| Three Months Ended March 31, | |||||||||||
| 2026 | 2025 | ||||||||||
| (In Millions, Except Per Share Data) | |||||||||||
| Net operating revenues | $ | 1,586.6 | $ | 1,455.4 | |||||||
| Operating expenses: | |||||||||||
| Salaries and benefits | 818.1 | 762.3 | |||||||||
| Other operating expenses | 241.9 | 217.5 | |||||||||
| Occupancy costs | 15.2 | 14.9 | |||||||||
| Supplies | 64.3 | 62.2 | |||||||||
| General and administrative expenses | 58.2 | 52.3 | |||||||||
| Depreciation and amortization | 87.3 | 79.2 | |||||||||
| Total operating expenses | 1,285.0 | 1,188.4 | |||||||||
| Loss on early extinguishment of debt | 0.2 | — | |||||||||
| Interest expense and amortization of debt discounts and fees | 31.8 | 31.8 | |||||||||
| Other income | (18.7) | (2.5) | |||||||||
| Equity in net income of nonconsolidated affiliates | (0.4) | (0.9) | |||||||||
| Income from continuing operations before income tax expense | 288.7 | 238.6 | |||||||||
| Provision for income tax expense | 56.4 | 41.6 | |||||||||
| Income from continuing operations | 232.3 | 197.0 | |||||||||
| Income (loss) from discontinued operations, net of tax | 15.9 | (0.5) | |||||||||
| Net income | 248.2 | 196.5 | |||||||||
| Less: Net income attributable to noncontrolling interests | (53.7) | (45.0) | |||||||||
| Net income attributable to Encompass Health | $ | 194.5 | $ | 151.5 | |||||||
| Weighted average common shares outstanding: | |||||||||||
| Basic | 99.2 | 100.5 | |||||||||
| Diluted | 100.6 | 102.1 | |||||||||
Earnings per common share: | |||||||||||
Basic earnings per share attributable to Encompass Health common shareholders: | |||||||||||
Continuing operations | $ | 1.80 | $ | 1.50 | |||||||
Discontinued operations | 0.16 | — | |||||||||
Net income | $ | 1.96 | $ | 1.50 | |||||||
Diluted earnings per share attributable to Encompass Health common shareholders: | |||||||||||
Continuing operations | $ | 1.77 | $ | 1.48 | |||||||
Discontinued operations | 0.16 | — | |||||||||
Net income | $ | 1.93 | $ | 1.48 | |||||||
| Amounts attributable to Encompass Health common shareholders: | |||||||||||
| Income from continuing operations | $ | 178.6 | $ | 152.0 | |||||||
| Income (loss) from discontinued operations, net of tax | 15.9 | (0.5) | |||||||||
| Net income attributable to Encompass Health | $ | 194.5 | $ | 151.5 | |||||||
4 | ||||||||
| March 31, 2026 | December 31, 2025 | ||||||||||
| (In Millions) | |||||||||||
| Assets | |||||||||||
| Current assets: | |||||||||||
| Cash and cash equivalents | $ | 110.5 | $ | 72.2 | |||||||
| Restricted cash | 52.9 | 30.7 | |||||||||
| Accounts receivable | 676.0 | 619.2 | |||||||||
| Other current assets | 189.7 | 183.8 | |||||||||
| Total current assets | 1,029.1 | 905.9 | |||||||||
| Property and equipment, net | 4,216.5 | 4,101.6 | |||||||||
| Operating lease right-of-use assets | 205.3 | 212.6 | |||||||||
| Goodwill | 1,317.6 | 1,317.6 | |||||||||
| Intangible assets, net | 300.3 | 308.3 | |||||||||
| Other long-term assets | 244.4 | 243.7 | |||||||||
| Total assets | $ | 7,313.2 | $ | 7,089.7 | |||||||
| Liabilities and Shareholders’ Equity | |||||||||||
| Current liabilities: | |||||||||||
| Current portion of long-term debt | $ | 42.9 | $ | 43.6 | |||||||
| Current operating lease liabilities | 26.9 | 26.5 | |||||||||
| Accounts payable | 204.0 | 178.2 | |||||||||
| Accrued expenses and other current liabilities | 603.0 | 588.1 | |||||||||
| Total current liabilities | 876.8 | 836.4 | |||||||||
| Long-term debt, net of current portion | 2,530.9 | 2,447.2 | |||||||||
| Long-term operating lease liabilities | 188.7 | 196.6 | |||||||||
| Deferred income tax liabilities | 135.1 | 126.8 | |||||||||
| Other long-term liabilities | 214.5 | 206.9 | |||||||||
| Total liabilities | 3,946.0 | 3,813.9 | |||||||||
| Commitments and contingencies | |||||||||||
| Redeemable noncontrolling interests | 58.8 | 58.3 | |||||||||
| Shareholders’ equity: | |||||||||||
| Encompass Health shareholders’ equity | 2,521.7 | 2,438.2 | |||||||||
| Noncontrolling interests | 786.7 | 779.3 | |||||||||
| Total shareholders’ equity | 3,308.4 | 3,217.5 | |||||||||
| Total liabilities and shareholders’ equity | $ | 7,313.2 | $ | 7,089.7 | |||||||
5 | ||||||||
| Three Months Ended March 31, | |||||||||||
| 2026 | 2025 | ||||||||||
| (In Millions) | |||||||||||
| Cash flows from operating activities: | |||||||||||
| Net income | $ | 248.2 | $ | 196.5 | |||||||
| (Income) loss from discontinued operations, net of tax | (15.9) | 0.5 | |||||||||
| Adjustments to reconcile net income to net cash provided by operating activities— | |||||||||||
| Depreciation and amortization | 87.3 | 79.2 | |||||||||
| Stock-based compensation | 11.5 | 9.5 | |||||||||
| Deferred tax expense | 8.5 | 8.8 | |||||||||
| (Gain) loss on investments | (16.2) | 0.1 | |||||||||
| Other, net | 2.3 | 2.2 | |||||||||
| Change in assets and liabilities, net of acquisitions— | |||||||||||
| Accounts receivable | (53.2) | (24.7) | |||||||||
| Other assets | (11.6) | 0.7 | |||||||||
| Accounts payable | (2.0) | (2.1) | |||||||||
| Other liabilities | 33.0 | 18.6 | |||||||||
| Net cash provided by (used in) operating activities of discontinued operations | 21.2 | (0.7) | |||||||||
| Total adjustments | 80.8 | 91.6 | |||||||||
| Net cash provided by operating activities | 313.1 | 288.6 | |||||||||
| Cash flows from investing activities: | |||||||||||
| Purchases of property, equipment, and intangible assets | (162.4) | (163.1) | |||||||||
| Proceeds from sale of restricted investments | 42.9 | 11.0 | |||||||||
| Purchases of restricted investments | (26.4) | (2.3) | |||||||||
| Other, net | (4.2) | (4.1) | |||||||||
| Net cash used in investing activities | (150.1) | (158.5) | |||||||||
| Cash flows from financing activities: | |||||||||||
| Borrowings on revolving credit facility | 420.0 | 60.0 | |||||||||
| Payments on revolving credit facility | (330.0) | (80.0) | |||||||||
| Repurchases of common stock, including fees and expenses | (71.6) | (32.1) | |||||||||
| Dividends paid on common stock | (20.3) | (18.0) | |||||||||
| Distributions paid to noncontrolling interests of consolidated affiliates | (57.8) | (32.9) | |||||||||
| Taxes paid on behalf of employees for shares withheld | (30.9) | (19.8) | |||||||||
| Other, net | (11.9) | (7.6) | |||||||||
| Net cash used in financing activities | (102.5) | (130.4) | |||||||||
| Increase (decrease) in cash, cash equivalents, and restriced cash | 60.5 | (0.3) | |||||||||
| Cash, cash equivalents, and restricted cash at beginning of period | 102.9 | 123.1 | |||||||||
| Cash, cash equivalents, and restricted cash at end of period | $ | 163.4 | $ | 122.8 | |||||||
6 | ||||||||
| Three Months Ended March 31, | |||||||||||
| 2026 | 2025 | ||||||||||
| (In Millions, Except Per Share Data) | |||||||||||
| Adjusted EBITDA | $ | 348.8 | $ | 313.6 | |||||||
Depreciation and amortization | (87.3) | (79.2) | |||||||||
Interest expense and amortization of debt discounts and fees | (31.8) | (31.8) | |||||||||
| Stock-based compensation | (11.5) | (9.5) | |||||||||
| Loss on disposal or impairment of assets | (0.3) | (0.2) | |||||||||
| 217.9 | 192.9 | ||||||||||
| Items not indicative of ongoing operating performance: | |||||||||||
| Loss on early extinguishment of debt | (0.2) | — | |||||||||
| Change in fair market value of marketable securities | (0.2) | 0.7 | |||||||||
| Gain on sale of Gamma Knife | 17.5 | — | |||||||||
| Pre-tax income | 235.0 | 193.6 | |||||||||
Income tax expense | (56.4) | (41.6) | |||||||||
Income from continuing operations (1) | $ | 178.6 | $ | 152.0 | |||||||
| Basic shares | 99.2 | 100.5 | |||||||||
| Diluted shares | 100.6 | 102.1 | |||||||||
Basic earnings per share (1) | $ | 1.80 | $ | 1.50 | |||||||
Diluted earnings per share (1) | $ | 1.77 | $ | 1.48 | |||||||
7 | ||||||||
| Three Months Ended March 31, | |||||||||||
| 2026 | 2025 | ||||||||||
| Earnings per share, as reported | $ | 1.77 | $ | 1.48 | |||||||
| Adjustments, net of tax: | |||||||||||
Income tax adjustments | (0.05) | (0.12) | |||||||||
| Gain on sale of Gamma Knife | (0.13) | — | |||||||||
Adjusted earnings per share* | $ | 1.60 | $ | 1.37 | |||||||
8 | ||||||||
| Three Months Ended March 31, | |||||||||||
| 2026 | 2025 | ||||||||||
| (In Millions) | |||||||||||
Net cash provided by operating activities | $ | 313.1 | $ | 288.6 | |||||||
Interest expense and amortization of debt discounts and fees | 31.8 | 31.8 | |||||||||
| Gain (loss) on investments, excluding impairments | 16.2 | (0.1) | |||||||||
Equity in net income of nonconsolidated affiliates | 0.4 | 0.9 | |||||||||
Net income attributable to noncontrolling interests in continuing operations | (53.7) | (45.0) | |||||||||
Amortization of debt-related items | (2.4) | (2.4) | |||||||||
Distributions from nonconsolidated affiliates | (0.1) | (0.5) | |||||||||
| Current portion of income tax expense | 47.9 | 32.8 | |||||||||
| Change in assets and liabilities | 33.8 | 7.5 | |||||||||
| Cash (provided by) used in operating activities of discontinued operations | (21.2) | 0.7 | |||||||||
| Change in fair market value of marketable securities | 0.2 | (0.7) | |||||||||
| Gain on sale of Gamma Knife | (17.5) | — | |||||||||
| Other | 0.3 | — | |||||||||
| Adjusted EBITDA | $ | 348.8 | $ | 313.6 | |||||||
9 | ||||||||
| For the Three Months Ended March 31, 2026 | |||||||||||||||||||||||||||||||||||
| Adjustments | |||||||||||||||||||||||||||||||||||
| As Reported | Loss on Early Exting. of Debt | Income Tax Adjustments | Change in Fair Market Value of Marketable Securities | Gain on Sale of Gamma Knife | As Adjusted | ||||||||||||||||||||||||||||||
| (In Millions, Except Per Share Amounts) | |||||||||||||||||||||||||||||||||||
| Adjusted EBITDA* | $ | 348.8 | $ | — | $ | — | $ | — | $ | — | $ | 348.8 | |||||||||||||||||||||||
| Depreciation and amortization | (87.3) | — | — | — | — | (87.3) | |||||||||||||||||||||||||||||
Interest expense and amortization of debt discounts and fees | (31.8) | — | — | — | — | (31.8) | |||||||||||||||||||||||||||||
| Stock-based compensation | (11.5) | — | — | — | — | (11.5) | |||||||||||||||||||||||||||||
| Loss on disposal or impairment of assets | (0.3) | — | — | — | — | (0.3) | |||||||||||||||||||||||||||||
| Loss on early extinguishment of debt | (0.2) | 0.2 | — | — | — | — | |||||||||||||||||||||||||||||
| Change in fair market value of marketable securities | (0.2) | — | — | 0.2 | — | — | |||||||||||||||||||||||||||||
| Gain on sale of Gamma Knife | 17.5 | — | — | — | (17.5) | — | |||||||||||||||||||||||||||||
Income from continuing operations before income tax expense | 235.0 | 0.2 | — | 0.2 | (17.5) | 217.9 | |||||||||||||||||||||||||||||
| Provision for income tax expense | (56.4) | (0.1) | (4.7) | — | 4.5 | (56.7) | |||||||||||||||||||||||||||||
Income from continuing operations attributable to Encompass Health | $ | 178.6 | $ | 0.1 | $ | (4.7) | $ | 0.2 | $ | (13.0) | $ | 161.2 | |||||||||||||||||||||||
| Diluted earnings per share from continuing operations** | $ | 1.77 | $ | — | $ | (0.05) | $ | — | $ | (0.13) | $ | 1.60 | |||||||||||||||||||||||
| Diluted shares used in calculation | 100.6 | ||||||||||||||||||||||||||||||||||
10 | ||||||||
| For the Three Months Ended March 31, 2025 | |||||||||||||||||||||||
| Adjustments | |||||||||||||||||||||||
| As Reported | Income Tax Adjustments | Change in Fair Market Value of Marketable Securities | As Adjusted | ||||||||||||||||||||
| (In Millions, Except Per Share Amounts) | |||||||||||||||||||||||
| Adjusted EBITDA* | $ | 313.6 | $ | — | $ | — | $ | 313.6 | |||||||||||||||
| Depreciation and amortization | (79.2) | — | — | (79.2) | |||||||||||||||||||
Interest expense and amortization of debt discounts and fees | (31.8) | — | — | (31.8) | |||||||||||||||||||
| Stock-based compensation | (9.5) | — | — | (9.5) | |||||||||||||||||||
| Loss on disposal or impairment of assets | (0.2) | — | — | (0.2) | |||||||||||||||||||
| Change in fair market value of marketable securities | 0.7 | — | (0.7) | — | |||||||||||||||||||
Income from continuing operations before income tax expense | 193.6 | — | (0.7) | 192.9 | |||||||||||||||||||
| Provision for income tax expense | (41.6) | (12.0) | 0.2 | (53.4) | |||||||||||||||||||
Income from continuing operations attributable to Encompass Health | $ | 152.0 | $ | (12.0) | $ | (0.5) | $ | 139.5 | |||||||||||||||
Diluted earnings per share from continuing operations** | $ | 1.48 | $ | (0.12) | $ | — | $ | 1.37 | |||||||||||||||
Diluted shares used in calculation | 102.1 | ||||||||||||||||||||||
11 | ||||||||
| Three Months Ended March 31, | |||||||||||
| 2026 | 2025 | ||||||||||
| (In Millions) | |||||||||||
| Net income | $ | 248.2 | $ | 196.5 | |||||||
| (Income) loss from discontinued operations, net of tax, attributable to Encompass Health | (15.9) | 0.5 | |||||||||
| Net income attributable to noncontrolling interests included in continuing operations | (53.7) | (45.0) | |||||||||
| Provision for income tax expense | 56.4 | 41.6 | |||||||||
Interest expense and amortization of debt discounts and fees | 31.8 | 31.8 | |||||||||
| Depreciation and amortization | 87.3 | 79.2 | |||||||||
| Loss on early extinguishment of debt | 0.2 | — | |||||||||
| Loss on disposal or impairment of assets | 0.3 | 0.2 | |||||||||
| Stock-based compensation | 11.5 | 9.5 | |||||||||
| Change in fair market value of marketable securities | 0.2 | (0.7) | |||||||||
| Gain on sale of Gamma Knife | (17.5) | — | |||||||||
| Adjusted EBITDA | $ | 348.8 | $ | 313.6 | |||||||
12 | ||||||||
| Three Months Ended March 31, | |||||||||||
| 2026 | 2025 | ||||||||||
| (In Millions) | |||||||||||
| Net cash provided by operating activities | $ | 313.1 | $ | 288.6 | |||||||
| Impact of discontinued operations | (21.2) | 0.7 | |||||||||
| Net cash provided by operating activities of continuing operations | 291.9 | 289.3 | |||||||||
| Capital expenditures for maintenance | (43.8) | (34.0) | |||||||||
Distributions paid to noncontrolling interests of consolidated affiliates | (57.8) | (32.9) | |||||||||
| Items not indicative of ongoing operating performance: | |||||||||||
| Transaction costs and related liabilities | 3.5 | — | |||||||||
| Adjusted free cash flow | $ | 193.8 | $ | 222.4 | |||||||
13 | ||||||||
14 | ||||||||
15 | ||||||||