Encompass Health Corporation【EHC】株式ニュース

Encompass Health reports results for first quarter 2026April 30, 2026 4:20 PM
PR Newswire (US)

Increases full-year guidanceBIRMINGHAM, Ala., April 30, 2026 /PRNewswire/ -- Encompass Health Corporation (NYSE: EHC), the largest owner and operator of inpatient rehabilitation hospitals in the United States, today reported its results of operations for the first quarter ended March 31, 2026.

Summary results

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 share1.77
1.48
0.29
19.6 %Adjusted earnings per share1.60
1.37
0.23
16.8 %Cash flows provided by operating activities313.1
288.6
24.5
8.5 %Adjusted EBITDA348.8
313.6
35.2
11.2 %Adjusted free cash flow193.8
222.4
(28.6)
(12.9) %

(Actual Amounts)

Discharges67,763
64,985

4.3 %   Same-store discharge growth

1.6 %Net patient revenue per discharge$      22,633
$      21,816

3.7 %See attached supplemental information for calculations of non-GAAP measures and reconciliations to their most comparable GAAP measure."We are very pleased with our start to 2026 as first quarter revenue increased 9.0% and Adjusted EBITDA grew 11.2%," said Mark Tarr, President and Chief Executive Officer. "During the quarter, we continued to expand our capacity to treat patients in need of inpatient rehabilitation services, opening a new 49-bed hospital in Irmo, South Carolina, and adding 44 beds across existing facilities. For the full-year 2026, we expect to open eight hospitals with a total of 389 beds and add approximately 175 beds to existing hospitals. Our value proposition and operating strategy continue to be validated and we remain highly optimistic about the long-term prospects of our business."2026 Guidance The Company increased its full-year guidance as follows:
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 $6,470Adjusted EBITDA$1,340 to $1,380
$1,350 to $1,380Adjusted earnings per share from continuing operations
attributable to Encompass Health$5.81 to $6.10
$5.89 to $6.11For considerations regarding the Company's 2026 guidance, see the supplemental information posted on the Company's website at http://investor.encompasshealth.com. See also the "Other information" section below for an explanation of why the Company does not provide guidance for comparable GAAP measures for Adjusted EBITDA and adjusted earnings per share.Earnings conference call and webcastThe Company will host an investor conference call at 10:00 a.m. Eastern Time on Friday, May 1, 2026 to discuss its results for the first quarter of 2026. For reference during the call, the Company will post certain supplemental information at http://investor.encompasshealth.com.The conference call may be accessed by dialing 800 267-6316 and giving the conference ID EHCQ126. International callers should dial 203 518-9783 and give the same conference ID. Please call approximately ten minutes before the start of the call to ensure you are connected. The conference call will also be webcast live and will be available for on-line replay at http://investor.encompasshealth.com by clicking on an available link.About Encompass HealthEncompass Health (NYSE: EHC) is the largest owner and operator of inpatient rehabilitation hospitals in the United States. With a national footprint that includes 174 hospitals in 39 states and Puerto Rico, the Company provides high-quality, compassionate rehabilitative care for patients recovering from a major injury or illness, using advanced technology and innovative treatments to maximize recovery. Encompass Health is recognized as America's Most Awarded Leader in Inpatient Rehabilitation by Newsweek and Statista and is ranked among Fortune's World's Most Admired Companies™1 and Forbes' America's Best Companies. For more information, visit encompasshealth.com, or follow us on our newsroom, X, Instagram and Facebook.

1From Fortune. © 2026 Fortune Media IP Limited. All rights reserved. Fortune® is a registered trademark and Fortune World's Most Admired Companies™ is trademark of Fortune Media IP Limited and are used under license. Fortune and Fortune Media IP Limited are not affiliated with, and do not endorse products or services of, Encompass Health.Other informationThe information in this press release is summarized and should be read in conjunction with the Company's Quarterly Report on Form 10-Q for the quarter ended March 31, 2026 (the "March 2026 Form 10-Q"), when filed, as well as the Company's Current Report on Form 8-K filed on April 30, 2026 (the "Q1 Earnings Form 8-K"), to which this press release is attached as Exhibit 99.1. In addition, the Company will post supplemental information today on its website at http://investor.encompasshealth.com for reference during its May 1, 2026 earnings call.The financial data contained in the press release and supplemental information include non-GAAP financial measures, including the Company's adjusted earnings per share, leverage ratio, Adjusted EBITDA, and adjusted free cash flow. Reconciliations to their most comparable GAAP measure, except with regard to non-GAAP guidance, are included below or in the Q1 Earnings Form 8-K. Readers are encouraged to review the "Note Regarding Presentation of Non-GAAP Financial Measures" included in the Q1 Earnings Form 8-K which provides further explanation and disclosure regarding the Company's use of these non-GAAP financial measures.Excluding net operating revenues, the Company does not provide guidance on a GAAP basis because it is unable to predict, with reasonable certainty, the future impact of items that are deemed to be outside the control of the Company or otherwise not indicative of its ongoing operating performance. Such items include 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 instruments; loss on early extinguishment of debt; adjustments to its income tax provision (such as valuation allowance adjustments and settlements of income tax claims); items related to corporate and facility restructurings; and certain other items the Company believes to be not indicative of its ongoing operations. These items cannot be reasonably predicted and will depend on several factors, including industry and market conditions, and could be material to the Company's results computed in accordance with GAAP.However, the following reasonably estimable GAAP measures for 2026 would be included in a reconciliation for Adjusted EBITDA if the other reconciling GAAP measures could be reasonably predicted:Interest expense and amortization of debt discounts and fees - approximately $125 millionAmortization of debt-related items - approximately $10 millionThe Q1 Earnings Form 8-K and, when filed, the March 2026 Form 10-Q can be found on the Company's website at http://investor.encompasshealth.com and the SEC's website at www.sec.gov.Encompass Health Corporation and SubsidiariesCondensed Consolidated Statements of Operations(Unaudited)

Three Months Ended March 31,
2026
2025
(In Millions, Except Per Share Data)Net operating revenues$ 1,586.6
$ 1,455.4Operating expenses:

Salaries and benefits818.1
762.3Other operating expenses241.9
217.5Occupancy costs15.2
14.9Supplies64.3
62.2General and administrative expenses58.2
52.3Depreciation and amortization87.3
79.2Total operating expenses1,285.0
1,188.4Loss on early extinguishment of debt0.2
—Interest expense and amortization of debt discounts and fees31.8
31.8Other income(18.7)
(2.5)Equity in net income of nonconsolidated affiliates(0.4)
(0.9)Income from continuing operations before income tax expense288.7
238.6Provision for income tax expense56.4
41.6Income from continuing operations232.3
197.0Income (loss) from discontinued operations, net of tax 15.9
(0.5)Net income248.2
196.5Less: 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:

Basic99.2
100.5Diluted100.6
102.1Earnings per common share:

Basic earnings per share attributable to Encompass Health
common shareholders:

Continuing operations$                1.80
$                1.50Discontinued operations0.16
—Net income$                1.96
$                1.50Diluted earnings per share attributable to Encompass Health
common shareholders:

Continuing operations$                1.77
$                1.48Discontinued operations0.16
—Net income$                1.93
$                1.48

Amounts attributable to Encompass Health common
shareholders:

Income from continuing operations$ 178.6
$ 152.0Income (loss) from discontinued operations, net of tax 15.9
(0.5)Net income attributable to Encompass Health$ 194.5
$ 151.5 Encompass Health Corporation and SubsidiariesCondensed Consolidated Balance Sheets(Unaudited)

March 31,
2026
December 31,
2025
(In Millions)Assets

Current assets:

Cash and cash equivalents$            110.5
$ 72.2Restricted cash52.9
30.7Accounts receivable676.0
619.2Other current assets189.7
183.8Total current assets1,029.1
905.9Property and equipment, net4,216.5
4,101.6Operating lease right-of-use assets205.3
212.6Goodwill1,317.6
1,317.6Intangible assets, net300.3
308.3Other long-term assets244.4
243.7Total assets$         7,313.2
$         7,089.7Liabilities and Shareholders' Equity

Current liabilities:

Current portion of long-term debt$ 42.9
$ 43.6Current operating lease liabilities26.9
26.5Accounts payable204.0
178.2Accrued expenses and other current liabilities603.0
588.1Total current liabilities876.8
836.4Long-term debt, net of current portion2,530.9
2,447.2Long-term operating lease liabilities188.7
196.6Deferred income tax liabilities135.1
126.8Other long-term liabilities214.5
206.9Total liabilities3,946.0
3,813.9Commitments and contingencies

Redeemable noncontrolling interests58.8
58.3Shareholders' equity:

Encompass Health shareholders' equity2,521.7
2,438.2Noncontrolling interests786.7
779.3Total shareholders' equity3,308.4
3,217.5Total liabilities and shareholders' equity$         7,313.2
$         7,089.7 Encompass Health Corporation and SubsidiariesCondensed Consolidated Statements of Cash Flows(Unaudited)

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)
0.5Adjustments to reconcile net income to net cash provided by
operating activities—

Depreciation and amortization87.3
79.2Stock-based compensation11.5
9.5Deferred tax expense8.5
8.8(Gain) loss on investments(16.2)
0.1Other, net2.3
2.2Change in assets and liabilities, net of acquisitions—

Accounts receivable(53.2)
(24.7)Other assets(11.6)
0.7Accounts payable(2.0)
(2.1)Other liabilities33.0
18.6Net cash provided by (used in) operating activities of
discontinued operations21.2
(0.7)Total adjustments80.8
91.6Net cash provided by operating activities313.1
288.6Cash flows from investing activities:

Purchases of property, equipment, and intangible assets(162.4)
(163.1)Proceeds from sale of restricted investments42.9
11.0Purchases 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 facility420.0
60.0Payments 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 cash60.5
(0.3)Cash, cash equivalents, and restricted cash at beginning of
period102.9
123.1Cash, cash equivalents, and restricted cash at end of period$               163.4
$               122.8 Encompass Health Corporation and SubsidiariesSupplemental InformationEarnings Per Share

Three Months Ended March 31,
2026
2025
(In Millions, Except Per Share Data)Adjusted EBITDA$               348.8
$               313.6Depreciation 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
192.9Items not indicative of ongoing operating performance:

Loss on early extinguishment of debt(0.2)
—Change in fair market value of marketable securities(0.2)
0.7Gain on sale of Gamma Knife17.5
—Pre-tax income235.0
193.6Income tax expense(56.4)
(41.6)Income from continuing operations (1)$               178.6
$               152.0

Basic shares99.2
100.5Diluted shares100.6
102.1

Basic earnings per share (1)$ 1.80
$ 1.50Diluted earnings per share (1)$ 1.77
$ 1.48

(1)Income from continuing operations attributable to Encompass Health Encompass Health Corporation and SubsidiariesSupplemental InformationAdjusted Earnings Per Share

Three Months Ended March 31,
2026
2025

Earnings per share, as reported$            1.77
$            1.48Adjustments, 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

*Adjusted EPS may not sum due to rounding. Encompass Health Corporation and SubsidiariesSupplemental InformationReconciliation of Net Cash Provided by Operating Activities to Adjusted EBITDA

Three Months Ended March 31,
2026
2025
(In Millions)Net cash provided by operating activities$               313.1
$               288.6Interest expense and amortization of debt discounts and fees31.8
31.8Gain (loss) on investments, excluding impairments16.2
(0.1)Equity in net income of nonconsolidated affiliates0.4
0.9Net 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 expense47.9
32.8Change in assets and liabilities33.8
7.5Cash (provided by) used in operating activities of discontinued
operations(21.2)
0.7Change in fair market value of marketable securities0.2
(0.7)Gain on sale of Gamma Knife(17.5)
—Other0.3
—Adjusted EBITDA$               348.8
$               313.6 Encompass Health Corporation and SubsidiariesSupplemental InformationReconciliation of Income from Continuing Operations Attributable to Encompass Health per Diluted Share to Adjusted Earnings Per Share

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
$         —
$              —
$                —
$         —
$    348.8Depreciation 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 Knife17.5
—
—
—
(17.5)
—Income from continuing operations before income tax
expense235.0
0.2
—
0.2
(17.5)
217.9Provision 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)
$    161.2Diluted earnings per share from continuing operations**$ 1.77
$         —
$ (0.05)
$                —
$    (0.13)
$ 1.60Diluted shares used in calculation100.6

*See reconciliation of net income to Adjusted EBITDA.**Adjusted EPS may not sum across due to rounding. Encompass Health Corporation and SubsidiariesSupplemental InformationReconciliation of Income from Continuing Operations Attributable to Encompass Health per Diluted Share to Adjusted Earnings Per Share

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
$               —
$                —
$    313.6Depreciation 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 securities0.7
—
(0.7)
—Income from continuing operations before income tax expense193.6
—
(0.7)
192.9Provision 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)
$    139.5Diluted earnings per share from continuing operations**$     1.48
$         (0.12)
$ —
$      1.37Diluted shares used in calculation102.1

*See reconciliation of net income to Adjusted EBITDA.**Adjusted EPS may not sum across due to rounding. Encompass Health Corporation and SubsidiariesSupplemental InformationReconciliation of Net Income to Adjusted EBITDA

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)
0.5Net income attributable to noncontrolling interests included in
continuing operations(53.7)
(45.0)Provision for income tax expense56.4
41.6Interest expense and amortization of debt discounts and fees31.8
31.8Depreciation and amortization87.3
79.2Loss on early extinguishment of debt0.2
—Loss on disposal or impairment of assets0.3
0.2Stock-based compensation11.5
9.5Change in fair market value of marketable securities0.2
(0.7)Gain on sale of Gamma Knife(17.5)
—Adjusted EBITDA$           348.8
$           313.6 Encompass Health Corporation and SubsidiariesSupplemental InformationReconciliation of Net Cash Provided by Operating Activities to Adjusted Free Cash Flow

Three Months Ended March 31,
2026
2025
(In Millions)Net cash provided by operating activities$            313.1
$            288.6Impact of discontinued operations(21.2)
0.7Net cash provided by operating activities of continuing operations291.9
289.3Capital 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 liabilities3.5
—Adjusted free cash flow$            193.8
$            222.4For the three months ended March 31, 2026, net cash used in investing activities was $150.1 million and resulted primarily from capital expenditures. Net cash used in financing activities during the three months ended March 31, 2026 was $102.5 million and resulted primarily from repurchases of common stock, distributions paid to noncontrolling interests of consolidated affiliates, and taxes paid on behalf of employees for shares withheld partially offset by net debt borrowings.For the three months ended March 31, 2025, net cash used in investing activities was $158.5 million and resulted primarily from capital expenditures. Net cash used in financing activities during the three months ended March 31, 2025 was $130.4 million and resulted primarily from distributions paid to noncontrolling interests of consolidated affiliates, repurchases of common stock, net debt payments, and cash dividends paid on common stock.Encompass Health Corporation and Subsidiaries
Forward-Looking StatementsStatements contained in this press release and the supplemental information which are not historical facts, such as those relating to the business, strategy, outlook, growth targets and guidance considerations, dividend strategies, effective income tax rates, cost trends, legislative and regulatory developments or their impacts, financial guidance, ability to return value to shareholders, projected capital expenditures, acquisition opportunities, development projects, addressable market size, other balance sheet and cash flow plans, are forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. In addition, Encompass Health, through its senior management, may from time to time make forward-looking public statements concerning the matters described herein. All such estimates, projections, and forward-looking information speak only as of the date hereof, and Encompass Health undertakes no duty to publicly update or revise such forward-looking information, whether as a result of new information, future events, or otherwise. Such forward-looking statements are necessarily estimates based upon current information and involve a number of risks and uncertainties. Actual events or results may differ materially from those anticipated in these forward-looking statements as a result of a variety of factors. While it is impossible to identify all such factors, factors which could cause actual events or results to differ materially from those estimated by Encompass Health include, but are not limited to, possible reductions or other changes in Medicaid, including Medicaid directed and supplemental payment programs and Medicaid waiver programs, which may decrease our revenues and increase our provider tax expenses; infectious disease outbreak, including the speed, depth, geographic reach and duration of its spread, which could decrease our patient volumes and revenues and lead to staffing and supply shortages and associated cost increases; Encompass Health's infectious disease prevention and control efforts; the demand for Encompass Health's services, including based on any downturns in the economy and consumer confidence in patient care; the price of Encompass Health's common stock as it affects Encompass Health's willingness and ability to repurchase shares and the financial and accounting effects of any repurchases; any adverse outcome of various lawsuits, claims, and legal or regulatory proceedings involving Encompass Health, including any matters related to yet undiscovered issues, if any, in acquired operations; Encompass Health's ability to attract and retain key management personnel; potential disruptions, breaches, or other incidents affecting the proper operation, availability, or security of Encompass Health's or its vendors' or partners' information systems, including unauthorized access to or theft of patient, business associate, or other sensitive information or inability to provide patient care because of system unavailability; Encompass Health's ability to successfully complete and integrate de novo developments, acquisitions, investments, and joint ventures consistent with its growth strategy; increases in Medicare audit activity, including increased use of sampling and extrapolation, resulting in additional unpaid reimbursement claims and an increase in the backlog of appealed claims denials; changes, delays in (including in connection with resolution of Medicare payment reviews or appeals), or suspension of reimbursement for Encompass Health's services by governmental or private payors; changes in the regulation of the healthcare industry at either or both of the federal and state levels, including as part of national healthcare reform and deficit reduction and Encompass Health's ability to adapt operations to those changes, including in connection with the CMS inpatient rehabilitation review choice demonstration project; competitive pressures in the healthcare industry and Encompass Health's response thereto; Encompass Health's ability to obtain and retain favorable arrangements with third-party payors; Encompass Health's ability to control costs, particularly labor and employee benefit costs, including group medical expenses; adverse effects resulting from coverage determinations made by Medicare Administrative Contractors regarding its Medicare reimbursement claims and lengthening delays in Encompass Health's ability to recover improperly denied claims through the administrative appeals process on a timely basis, including as part of the review choice demonstration; Encompass Health's ability to adapt to changes in the healthcare delivery system, including value-based purchasing such as the transforming episode accountability model and involvement in coordinated care initiatives or programs that may arise with its referral sources; Encompass Health's ability to attract and retain nurses, therapists, and other healthcare professionals in a highly competitive environment with often severe staffing shortages, which may be worsened by infectious disease outbreaks, and the impact on Encompass Health's labor expenses from potential union activity, staffing shortages, and competitive compensation practices; general conditions in the economy and capital markets, including any instability or uncertainty related to trade war, armed conflict or an act of terrorism, governmental impasse over approval of the United States federal budget, an increase in the debt ceiling, or an international sovereign debt crisis; the increase in the cost of, or the decrease in the availability of, construction materials and necessary supplies, including as a result of tariffs and import restrictions; the increase in the costs of defending and insuring against alleged professional liability claims, and Encompass Health's ability to predict the estimated costs related to such claims; and other factors which may be identified from time to time in Encompass Health's SEC filings and other public announcements, including Encompass Health's Form 10-K for the year ended December 31, 2025 and Form 10-Q for the quarter ended March 31, 2026, when filed.Media Contact
Polly Manuel, 205 969-4532
polly.manuel@encompasshealth.comInvestor Relations Contact
Mark Miller, 205 970-5860
mark.miller@encompasshealth.com

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Original: Encompass Health reports results for first quarter 2026

Encompass Health reports results for fourth quarter 2025 and issues 2026 guidanceFebruary 5, 2026 4:20 PM
PR Newswire (US)

BIRMINGHAM, Ala., Feb. 5, 2026 /PRNewswire/ -- Encompass Health Corporation (NYSE: EHC), the largest owner and operator of inpatient rehabilitation hospitals in the United States, today reported its results of operations for the fourth quarter ended December 31, 2025.

Summary results

Growth
Q4 2025
Q4 2024
Dollars
Percent
(In Millions, Except Per Share Data)Net operating revenue$      1,544.6
$      1,405.0
$     139.6
9.9 %Income from continuing operations attributable to
Encompass Health per diluted share1.42
1.18
0.24
20.3 %Adjusted earnings per share1.46
1.17
0.29
24.8 %Cash flows provided by operating activities346.0
278.8
67.2
24.1 %Adjusted EBITDA335.6
289.6
46.0
15.9 %Adjusted free cash flow235.4
190.5
44.9
23.6 %

(Actual Amounts)

Discharges67,238
63,839

5.3 %   Same-store discharge growth

3.2 %Net patient revenue per discharge$       22,273
$       21,399

4.1 %See attached supplemental information for calculations of non-GAAP measures and reconciliations to their most comparable GAAP measure."Our Q4 performance was very strong, capping a stellar 2025," said President and Chief Executive Officer Mark Tarr. "Our 2025 revenue increased 10.5% and Adjusted EBITDA grew 14.9%. During the year, we significantly increased our capacity, adding a total of 517 inpatient rehabilitation beds via eight new hospitals and the addition of 127 beds to existing hospitals. The need for the services we provide continues to grow as the U.S. population ages. We are uniquely positioned to meet this rising demand."2026 Guidance The Company provided the following guidance for 2026.
2026 Guidance
(In millions, Except Earnings per Share Data)Net operating revenue$6,365 to $6,465Adjusted EBITDA$1,340 to $1,380Adjusted earnings per share from continuing operations
attributable to Encompass Health$5.81 to $6.10For considerations regarding the Company's 2026 guidance, see the supplemental information posted on the Company's website at http://investor.encompasshealth.com. See also the "Other information" section below for an explanation of why the Company does not provide guidance for comparable GAAP measures for Adjusted EBITDA and adjusted earnings per share.Earnings conference call and webcastThe Company will host an investor conference call at 10:00 a.m. Eastern Time on Friday, February 6, 2026 to discuss its results for the fourth quarter of 2025. For reference during the call, the Company will post certain supplemental information at http://investor.encompasshealth.com.The conference call may be accessed by dialing 800 267-6316 and giving the conference ID EHCQ425. International callers should dial 203 518-9783 and give the same conference ID. Please call approximately ten minutes before the start of the call to ensure you are connected. The conference call will also be webcast live and will be available for on-line replay at http://investor.encompasshealth.com by clicking on an available link.About Encompass HealthEncompass Health (NYSE: EHC) is the largest owner and operator of inpatient rehabilitation hospitals in the United States. With a national footprint that includes 173 hospitals in 39 states and Puerto Rico, the Company provides high-quality, compassionate rehabilitative care for patients recovering from a major injury or illness, using advanced technology and innovative treatments to maximize recovery. Encompass Health is recognized as America's Most Awarded Leader in Inpatient Rehabilitation by Newsweek and Statista and is ranked among Fortune's World's Most Admired Companies™1 and Forbes' America's Best Companies. For more information, visit encompasshealth.com, or follow us on our newsroom, X, Instagram and Facebook.

1 From Fortune. © 2026 Fortune Media IP Limited. All rights reserved. Fortune® is a registered trademark and Fortune World's Most Admired Companies™ is trademark of Fortune Media IP Limited and are used under license. Fortune and Fortune Media IP Limited are not affiliated with, and do not endorse products or services of, Encompass Health.Other informationThe information in this press release is summarized and should be read in conjunction with the Company's Annual Report on Form 10-K for the year ended December 31, 2025 (the "2025 Form 10-K"), when filed, as well as the Company's Current Report on Form 8-K filed on February 5, 2026 (the "Q4 Earnings Form 8-K"), to which this press release is attached as Exhibit 99.1. In addition, the Company will post supplemental information today on its website at http://investor.encompasshealth.com for reference during its February 6, 2026 earnings call.The financial data contained in the press release and supplemental information include non-GAAP financial measures, including the Company's adjusted earnings per share, leverage ratio, Adjusted EBITDA, and adjusted free cash flow. Reconciliations to their most comparable GAAP measure, except with regard to non-GAAP guidance, are included below or in the Q4 Earnings Form 8-K. Readers are encouraged to review the "Note Regarding Presentation of Non-GAAP Financial Measures" included in the Q4 Earnings Form 8-K which provides further explanation and disclosure regarding the Company's use of these non-GAAP financial measures.Excluding net operating revenues, the Company does not provide guidance on a GAAP basis because it is unable to predict, with reasonable certainty, the future impact of items that are deemed to be outside the control of the Company or otherwise not indicative of its ongoing operating performance. Such items include 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 instruments; loss on early extinguishment of debt; adjustments to its income tax provision (such as valuation allowance adjustments and settlements of income tax claims); items related to corporate and facility restructurings; and certain other items the Company believes to be not indicative of its ongoing operations. These items cannot be reasonably predicted and will depend on several factors, including industry and market conditions, and could be material to the Company's results computed in accordance with GAAP.However, the following reasonably estimable GAAP measures for 2026 would be included in a reconciliation for Adjusted EBITDA if the other reconciling GAAP measures could be reasonably predicted:Interest expense and amortization of debt discounts and fees - approximately $120 millionAmortization of debt-related items - approximately $10 millionThe Q4 Earnings Form 8-K and, when filed, the 2025 Form 10-K can be found on the Company's website at http://investor.encompasshealth.com and the SEC's website at www.sec.gov.Encompass Health Corporation and SubsidiariesCondensed Consolidated Statements of Operations(Unaudited)

For the Three
Months Ended
December 31,
For the Year Ended
December 31,
2025
2024
2025
2024
(In Millions, Except Per Share Data)Net operating revenues$ 1,544.6
$ 1,405.0
$ 5,935.2
$ 5,373.2Operating expenses:

Salaries and benefits801.1
756.8
3,115.9
2,901.0Other operating expenses226.3
206.4
888.7
802.6Occupancy costs14.5
14.7
59.0
57.3Supplies64.5
62.3
254.4
239.0General and administrative expenses68.4
54.5
236.2
209.2Depreciation and amortization86.4
78.0
327.9
299.6Total operating expenses1,261.2
1,172.7
4,882.1
4,508.7Loss on early extinguishment of debt—
0.2
—
0.6Interest expense and amortization of debt discounts and
fees30.2
33.0
123.2
137.4Other income(3.7)
(2.1)
(18.8)
(20.1)Equity in net income of nonconsolidated affiliates(0.8)
(0.2)
(4.3)
(3.0)Income from continuing operations before income tax
expense257.7
201.4
953.0
749.6Provision for income tax expense55.4
37.6
192.9
150.2Income from continuing operations202.3
163.8
760.1
599.4Income (loss) from discontinued operations, net of tax 0.8
0.4
(1.0)
(2.8)Net income203.1
164.2
759.1
596.6Less: Net income attributable to noncontrolling interests(57.0)
(43.3)
(192.9)
(140.9)Net income attributable to Encompass Health$     146.1
$     120.9
$     566.2
$     455.7

Weighted average common shares outstanding:

Basic100.2
100.0
100.5
99.9Diluted102.0
102.3
102.2
102.2Earnings per common share:

Basic earnings per share attributable to Encompass
Health common shareholders:

Continuing operations$       1.44
$       1.20
$       5.63
$       4.56Discontinued operations0.01
—
(0.01)
(0.03)Net income$       1.45
$       1.20
$       5.62
$       4.53Diluted earnings per share attributable to Encompass
Health common shareholders:

Continuing operations$       1.42
$       1.18
$       5.55
$       4.49Discontinued operations0.01
—
(0.01)
(0.03)Net income$       1.43
$       1.18
$       5.54
$       4.46

Amounts attributable to Encompass Health common
shareholders:

Income from continuing operations$     145.3
$     120.5
$     567.2
$     458.5Income (loss) from discontinued operations, net of tax 0.8
0.4
(1.0)
(2.8)Net income attributable to Encompass Health$     146.1
$     120.9
$     566.2
$     455.7 Encompass Health Corporation and SubsidiariesCondensed Consolidated Balance Sheets(Unaudited)

As of December 31,
2025
2024
(In Millions)Assets

Current assets:

Cash and cash equivalents$                72.2
$                85.4Restricted cash30.7
37.7Accounts receivable619.2
598.8Prepaid expenses53.9
42.3Other current assets129.9
122.7Total current assets905.9
886.9Property and equipment, net4,101.6
3,643.1Operating lease right-of-use assets212.6
203.7Goodwill1,317.6
1,284.0Intangible assets, net308.3
297.8Other long-term assets243.7
219.2Total assets$           7,089.7
$           6,534.7Liabilities and Shareholders' Equity

Current liabilities:

Current portion of long-term debt$                43.6
$              138.6Current operating lease liabilities26.5
26.3Accounts payable178.2
171.0Accrued payroll243.7
227.9Accrued distributions54.8
31.4Other current liabilities289.6
245.8Total current liabilities836.4
841.0Long-term debt, net of current portion2,447.2
2,359.2Long-term operating lease liabilities196.6
189.7Self-insured risks153.1
138.6Deferred income tax liabilities126.8
105.2Other long-term liabilities53.8
51.8Total liabilities3,813.9
3,685.5Commitments and contingencies

Redeemable noncontrolling interests58.3
56.5Shareholders' equity:

Encompass Health shareholders' equity2,438.2
2,067.0Noncontrolling interests779.3
725.7Total shareholders' equity3,217.5
2,792.7Total liabilities and shareholders' equity$           7,089.7
$           6,534.7 Encompass Health Corporation and SubsidiariesCondensed Consolidated Statements of Cash Flows(Unaudited)

For the Year Ended
December 31,
2025
2024
(In Millions)Cash flows from operating activities:

Net income$            759.1
$            596.6Loss from discontinued operations, net of tax1.0
2.8Adjustments to reconcile net income to net cash provided by operating
activities—

Depreciation and amortization327.9
299.6Amortization of debt-related items9.6
9.7Equity in net income of nonconsolidated affiliates(4.3)
(3.0)Distributions from nonconsolidated affiliates4.1
4.0Stock-based compensation56.5
48.3Deferred tax expense22.3
10.7Other, net(3.5)
15.3Change in assets and liabilities, net of acquisitions—

Accounts receivable(15.2)
3.0Prepaid expenses and other assets(31.2)
(57.3)Accounts payable(22.6)
3.0Accrued payroll15.9
20.4Other liabilities57.4
52.8Net cash used in operating activities of discontinued operations(1.4)
(3.1)Total adjustments415.5
403.4Net cash provided by operating activities1,175.6
1,002.8Cash flows from investing activities:

Purchases of property, equipment, and intangible assets(736.4)
(642.5)Proceeds from sale of restricted investments172.8
18.9Purchases of restricted investments(184.4)
(22.5)Other, net(16.6)
(7.2)Net cash used in investing activities(764.6)
(653.3)Cash flows from financing activities:

Principal payments on debt, including pre-payments(115.1)
(255.2)Principal borrowings on notes—
15.0Borrowings on revolving credit facility220.0
80.0Payments on revolving credit facility(110.0)
(60.0)Principal payments under finance lease obligations(23.9)
(21.8)Repurchases of common stock, including fees and expenses(158.0)
(31.1)Dividends paid on common stock(71.1)
(62.8)Distributions paid to noncontrolling interests of consolidated affiliates(152.1)
(125.0)Taxes paid on behalf of employees for shares withheld(20.0)
(12.1)Contributions from noncontrolling interests of consolidated affiliates1.8
140.4Other, net(2.8)
2.0Net cash used in financing activities(431.2)
(330.6)(Decrease) increase in cash, cash equivalents, and restricted cash(20.2)
18.9Cash, cash equivalents, and restricted cash at beginning of period123.1
104.2Cash, cash equivalents, and restricted cash at end of period$            102.9
$            123.1 Encompass Health Corporation and SubsidiariesSupplemental InformationEarnings Per Share

Q4
Year Ended
2025
2024
2025
2024
(In Millions, Except Per Share Data)Adjusted EBITDA$     335.6
$     289.6
$ 1,267.9
$ 1,103.7Depreciation and amortization(86.4)
(78.0)
(327.9)
(299.6)Interest expense and amortization of debt discounts
and fees(30.2)
(33.0)
(123.2)
(137.4)Stock-based compensation(18.4)
(12.5)
(56.5)
(48.3)Loss on disposal or impairment of assets(0.3)
(6.1)
(2.7)
(17.4)
200.3
160.0
757.6
601.0Items not indicative of ongoing operating performance:

Loss on early extinguishment of debt—
(0.2)
—
(0.6)Change in fair market value of marketable securities0.4
(1.7)
2.5
1.0Asset impairment impact on noncontrolling interests—
—
—
7.3Pre-tax income200.7
158.1
760.1
608.7Income tax expense(55.4)
(37.6)
(192.9)
(150.2)Income from continuing operations (1)$     145.3
$     120.5
$     567.2
$     458.5

Basic shares100.2
100.0
100.5
99.9Diluted shares102.0
102.3
102.2
102.2

Basic earnings per share (1)$       1.44
$       1.20
$       5.63
$       4.56Diluted earnings per share (1)$       1.42
$       1.18
$       5.55
$       4.49

(1) Income from continuing operations attributable to Encompass Health Encompass Health Corporation and SubsidiariesSupplemental InformationAdjusted Earnings Per Share

Q4
Year Ended
2025
2024
2025
2024

Earnings per share, as reported$      1.42
$    1.18
$      5.55
$      4.49Adjustments, net of tax:

Asset impairment impact—
—
—
0.02Income tax adjustments0.04
(0.03)
(0.08)
(0.08)Change in fair market value of marketable securities—
0.01
(0.02)
(0.01)Adjusted earnings per share*$      1.46
$    1.17
$      5.45
$      4.43

*Adjusted EPS may not sum due to rounding. Encompass Health Corporation and SubsidiariesSupplemental InformationReconciliation of Net Cash Provided by Operating Activities to Adjusted EBITDA

Q4
Year Ended
2025
2024
2025
2024
(In Millions)Net cash provided by operating activities$     346.0
$     278.8
$ 1,175.6
$ 1,002.8Interest expense and amortization of debt discounts and
fees30.2
33.0
123.2
137.4(Loss) gain on sale of investments, excluding impairments(0.3)
(3.1)
5.9
2.7Equity in net income of nonconsolidated affiliates0.8
0.2
4.3
3.0Net income attributable to noncontrolling interests in
continuing operations(57.0)
(43.3)
(192.9)
(140.9)Amortization of debt-related items(2.4)
(2.4)
(9.6)
(9.7)Distributions from nonconsolidated affiliates(2.7)
(0.9)
(4.1)
(4.0)Current portion of income tax expense36.3
29.0
170.6
139.5Change in assets and liabilities(13.9)
(2.8)
(4.3)
(21.9)Cash (provided by) used in operating activities of
discontinued operations(1.1)
(0.6)
1.4
3.1Asset impairment impact on noncontrolling interests—
—
—
(7.3)Change in fair market value of marketable securities(0.4)
1.7
(2.5)
(1.0)Other0.1
—
0.3
—Adjusted EBITDA$     335.6
$     289.6
$ 1,267.9
$ 1,103.7 Encompass Health Corporation and SubsidiariesSupplemental InformationReconciliation of Income from Continuing Operations Attributable to Encompass Health per Diluted Share to Adjusted Earnings Per Share

For the Three Months Ended December 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*$    335.6
$                —
$                   —
$     335.6Depreciation and amortization(86.4)
—
—
(86.4)Interest expense and amortization of debt discounts and fees(30.2)
—
—
(30.2)Stock-based compensation(18.4)
—
—
(18.4)Loss on disposal or impairment of assets(0.3)
—
—
(0.3)Change in fair market value of marketable securities0.4
—
(0.4)
—Income from continuing operations before income tax expense200.7
—
(0.4)
200.3Provision for income tax expense(55.4)
3.9
—
(51.5)Income from continuing operations attributable to Encompass Health$    145.3
$             3.9
$ (0.4)
$     148.8Diluted earnings per share from continuing operations**$      1.42
$           0.04
$                   —
$       1.46Diluted shares used in calculation102.0

*See reconciliation of net income to Adjusted EBITDA.**Adjusted EPS may not sum across due to rounding. Encompass Health Corporation and SubsidiariesSupplemental InformationReconciliation of Income from Continuing Operations Attributable to Encompass Health per Diluted Share to Adjusted Earnings Per Share

For the Three Months Ended December 31, 2024

Adjustments

As
Reported
Loss on
Early
Exting.
of Debt
Income Tax
Adjustments
Change in Fair
Market Value
of Marketable
Securities
As
Adjusted
(In Millions, Except Per Share Amounts)Adjusted EBITDA*$    289.6
$        —
$ —
$ —
$     289.6Depreciation and amortization(78.0)
—
—
—
(78.0)Interest expense and amortization of debt discounts and fees(33.0)
—
—
—
(33.0)Stock-based compensation(12.5)
—
—
—
(12.5)Loss on disposal or impairment of assets(6.1)
—
—
—
(6.1)Loss on early extinguishment of debt(0.2)
0.2
—
—
—Change in fair market value of marketable securities(1.7)
—
—
1.7
—Income from continuing operations before income tax expense158.1
0.2
—
1.7
160.0Provision for income tax expense(37.6)
(0.1)
(2.6)
(0.4)
(40.7)Income from continuing operations attributable to Encompass
Health$    120.5
$ 0.1
$             (2.6)
$                1.3
$     119.3 Diluted earnings per share from continuing operations**$      1.18
$ —
$           (0.03)
$              0.01
$       1.17 Diluted shares used in calculation102.3

*See reconciliation of net income to Adjusted EBITDA.**Adjusted EPS may not sum across due to rounding. Encompass Health Corporation and SubsidiariesSupplemental InformationReconciliation of Income from Continuing Operations Attributable to Encompass Health per Diluted Share to Adjusted Earnings Per Share

For the Year Ended December 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*$ 1,267.9
$ —
$ —
$ 1,267.9Depreciation and amortization(327.9)
—
—
(327.9)Interest expense and amortization of debt discounts and fees(123.2)
—
—
(123.2)Stock-based compensation(56.5)
—
—
(56.5)Loss on disposal or impairment of assets(2.7)
—
—
(2.7)Change in fair market value of marketable securities2.5
—
(2.5)
—Income from continuing operations before income tax expense760.1
—
(2.5)
757.6Provision for income tax expense(192.9)
(7.9)
0.6
(200.2)Income from continuing operations attributable to Encompass Health$    567.2
$           (7.9)
$               (1.9)
$     557.4Diluted earnings per share from continuing operations**$      5.55
$         (0.08)
$             (0.02)
$       5.45Diluted shares used in calculation102.2

*See reconciliation of net income to Adjusted EBITDA.**Adjusted EPS may not sum across due to rounding. Encompass Health Corporation and SubsidiariesSupplemental InformationReconciliation of Income from Continuing Operations Attributable to Encompass Health per Diluted Share to Adjusted Earnings Per Share

For the Year Ended December 31, 2024

Adjustments

As
Reported
Asset
Impairment
Impact
Loss on
Early
Exting.
of Debt
Income Tax
Adjustments
Change in Fair
Market Value
of Marketable
Securities
As
Adjusted
(In Millions, Except Per Share Amounts)Adjusted EBITDA*$ 1,103.7
$ —
$       —
$ —
$ —
$ 1,103.7Depreciation and amortization(299.6)
—
—
—
—
(299.6)Interest expense and amortization of debt discounts and fees(137.4)
—
—
—
—
(137.4)Stock-based compensation(48.3)
—
—
—
—
(48.3)Loss on disposal or impairment of assets(17.4)
10.4
—
—
—
(7.0)Loss on early extinguishment of debt(0.6)
—
0.6
—
—
—Change in fair market value of marketable securities1.0
—
—
—
(1.0)
—Asset impairment impact on noncontrolling interests7.3
(7.3)
—
—
—
—Income from continuing operations before income tax
expense608.7
3.1
0.6
—
(1.0)
611.4Provision for income tax expense(150.2)
(1.3)
(0.2)
(7.7)
0.3
(159.1)Income from continuing operations attributable to
Encompass Health$    458.5
$           1.8
$     0.4
$             (7.7)
$              (0.7)
$     452.3 Diluted earnings per share from continuing operations**$      4.49
$         0.02
$ —
$           (0.08)
$            (0.01)
$       4.43 Diluted shares used in calculation102.2

*See reconciliation of net income to Adjusted EBITDA.**Adjusted EPS may not sum across due to rounding. Encompass Health Corporation and SubsidiariesSupplemental InformationReconciliation of Net Income to Adjusted EBITDA

Q4
Year Ended
2025
2024
2025
2024
(In Millions)Net income$     203.1
$    164.2
$    759.1
$     596.6(Income) loss from discontinued operations, net of tax,
attributable to Encompass Health(0.8)
(0.4)
1.0
2.8Net income attributable to noncontrolling interests included
in continuing operations(57.0)
(43.3)
(192.9)
(140.9)Provision for income tax expense55.4
37.6
192.9
150.2Interest expense and amortization of debt discounts and
fees30.2
33.0
123.2
137.4Depreciation and amortization86.4
78.0
327.9
299.6Loss on early extinguishment of debt—
0.2
—
0.6Loss on disposal or impairment of assets0.3
6.1
2.7
17.4Stock-based compensation18.4
12.5
56.5
48.3Asset impairment impact on noncontrolling interests—
—
—
(7.3)Change in fair market value of marketable securities(0.4)
1.7
(2.5)
(1.0)Adjusted EBITDA$     335.6
$    289.6
$ 1,267.9
$ 1,103.7 Encompass Health Corporation and SubsidiariesSupplemental InformationReconciliation of Net Cash Provided by Operating Activities to Adjusted Free Cash Flow

Q4
Year Ended
2025
2024
2025
2024
(In Millions)Net cash provided by operating activities$     346.0
$     278.8
$ 1,175.6
$ 1,002.8Impact of discontinued operations(1.1)
(0.6)
1.4
3.1Net cash provided by operating activities of continuing
operations344.9
278.2
1,177.0
1,005.9Capital expenditures for maintenance(69.0)
(50.8)
(209.5)
(184.6)Distributions paid to noncontrolling interests of
consolidated affiliates(42.7)
(39.5)
(152.1)
(125.0)Items not indicative of ongoing operating performance:

Transaction costs and related liabilities2.2
2.6
2.5
(6.0)Adjusted free cash flow$     235.4
$     190.5
$     817.9
$     690.3For the three months ended December 31, 2025, net cash used in investing activities was $239.4 million and resulted primarily from capital expenditures. Net cash used in financing activities during the three months ended December 31, 2025 was $97.4 million and resulted primarily from repurchases of common stock, distributions paid to noncontrolling interests of consolidated affiliates and cash dividends paid on common stock partially offset by net principal borrowings on debt.For the three months ended December 31, 2024, net cash used in investing activities was $203.7 million and resulted primarily from capital expenditures. Net cash used in financing activities during the three months ended December 31, 2024 was $150.9 million and resulted primarily from net debt payments, distributions paid to noncontrolling interests of consolidated affiliates, cash dividends paid on common stock, and repurchases of common stock partially offset by contributions from noncontrolling interests of consolidated affiliates.For the year ended December 31, 2025, net cash used in investing activities was $764.6 million and resulted primarily from capital expenditures. Net cash used in financing activities during the year ended December 31, 2025 was $431.2 million and resulted primarily from repurchases of common stock, distributions paid to noncontrolling interests of consolidated affiliates, cash dividends paid on common stock and net debt payments.For the year ended December 31, 2024, net cash used in investing activities was $653.3 million and resulted primarily from capital expenditures. Net cash used in financing activities during the year ended December 31, 2024 was $330.6 million and resulted primarily from net debt payments, distributions paid to noncontrolling interests of consolidated affiliates, cash dividends paid on common stock, and repurchases of common stock partially offset by contributions from noncontrolling interests of consolidated affiliates.Encompass Health Corporation and Subsidiaries
Forward-Looking StatementsStatements contained in this press release and the supplemental information which are not historical facts, such as those relating to the business, strategy, outlook, growth targets and guidance considerations, dividend strategies, effective income tax rates, cost trends, legislative and regulatory developments or their impacts, financial guidance, ability to return value to shareholders, projected capital expenditures, acquisition opportunities, development projects, addressable market size, other balance sheet and cash flow plans, are forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. In addition, Encompass Health, through its senior management, may from time to time make forward-looking public statements concerning the matters described herein. All such estimates, projections, and forward-looking information speak only as of the date hereof, and Encompass Health undertakes no duty to publicly update or revise such forward-looking information, whether as a result of new information, future events, or otherwise. Such forward-looking statements are necessarily estimates based upon current information and involve a number of risks and uncertainties. Actual events or results may differ materially from those anticipated in these forward-looking statements as a result of a variety of factors. While it is impossible to identify all such factors, factors which could cause actual events or results to differ materially from those estimated by Encompass Health include, but are not limited to, infectious disease outbreak, including the speed, depth, geographic reach and duration of its spread, which could decrease our patient volumes and revenues and lead to staffing and supply shortages and associated cost increases; Encompass Health's infectious disease prevention and control efforts; the demand for Encompass Health's services, including based on any downturns in the economy and consumer confidence in patient care; the price of Encompass Health's common stock as it affects Encompass Health's willingness and ability to repurchase shares and the financial and accounting effects of any repurchases; any adverse outcome of various lawsuits, claims, and legal or regulatory proceedings involving Encompass Health, including any matters related to yet undiscovered issues, if any, in acquired operations; Encompass Health's ability to attract and retain key management personnel; potential disruptions, breaches, or other incidents affecting the proper operation, availability, or security of Encompass Health's or its vendors' or partners' information systems, including unauthorized access to or theft of patient, business associate, or other sensitive information or inability to provide patient care because of system unavailability; Encompass Health's ability to successfully complete and integrate de novo developments, acquisitions, investments, and joint ventures consistent with its growth strategy; increases in Medicare audit activity, including increased use of sampling and extrapolation, resulting in additional unpaid reimbursement claims and an increase in the backlog of appealed claims denials; changes, delays in (including in connection with resolution of Medicare payment reviews or appeals), or suspension of reimbursement for Encompass Health's services by governmental or private payors; changes in the regulation of the healthcare industry at either or both of the federal and state levels, including as part of national healthcare reform and deficit reduction and Encompass Health's ability to adapt operations to those changes, including in connection with the CMS inpatient rehabilitation review choice demonstration project; competitive pressures in the healthcare industry and Encompass Health's response thereto; Encompass Health's ability to obtain and retain favorable arrangements with third-party payors; Encompass Health's ability to control costs, particularly labor and employee benefit costs, including group medical expenses; adverse effects resulting from coverage determinations made by Medicare Administrative Contractors regarding its Medicare reimbursement claims and lengthening delays in Encompass Health's ability to recover improperly denied claims through the administrative appeals process on a timely basis, including as part of the review choice demonstration; Encompass Health's ability to adapt to changes in the healthcare delivery system, including value-based purchasing such as the transforming episode accountability model and involvement in coordinated care initiatives or programs that may arise with its referral sources; Encompass Health's ability to attract and retain nurses, therapists, and other healthcare professionals in a highly competitive environment with often severe staffing shortages, which may be worsened by infectious disease outbreaks, and the impact on Encompass Health's labor expenses from potential union activity, staffing shortages, and competitive compensation practices; general conditions in the economy and capital markets, including any instability or uncertainty related to trade war, armed conflict or an act of terrorism, governmental impasse over approval of the United States federal budget, an increase in the debt ceiling, or an international sovereign debt crisis; the increase in the cost of, or the decrease in the availability of, construction materials and necessary supplies, including as a result of tariffs and import restrictions; the increase in the costs of defending and insuring against alleged professional liability claims, and Encompass Health's ability to predict the estimated costs related to such claims; and other factors which may be identified from time to time in Encompass Health's SEC filings and other public announcements, including Encompass Health's Form 10-K for the year ended December 31, 2025, when filed.Media Contact
Polly Manuel, 205 969-4532
polly.manuel@encompasshealth.comInvestor Relations Contact
Mark Miller, 205 970-5860
mark.miller@encompasshealth.com

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Original: Encompass Health reports results for fourth quarter 2025 and issues 2026 guidance