Encompass Health Corporation · NYSE:EHC
Encompass Health — Q4 2025 Earnings Presentation
35 slides from Encompass Health's earnings presentation, Feb 6, 2026
Slide 1: 2025 Fourth Quarter Earnings Call
2025 Fourth Quarter Earnings Call February 6, 2026 Supplemental information
Slide 2: Forward-looking statements
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 business outlook, guidance and growth
Slide 3: Table of contents
Table of contents Summary ................................................................................................................................................................................ 4 Revenue .......................................................................................
Slide 4: Summary
Summary Q4 Full Year ($ in millions, except per share data) 2025 2024 %△ 2025 2024 %△ Encompass Health Net operating revenue $ 1,544.6 $ 1,405.0 9.9 % $ 5,935.2 $ 5,373.2 10.5 % Adjusted EBITDA $ 335.6 $ 289.6 15.9 % $ 1,267.9 $ 1,103.7 14.9 % Adjusted EPS $ 1.46 $ 1.17 24.8 % $ 5.45 $ 4.43 23.0 % A
Slide 5: Revenue
Revenue Q4 Q4 % Change* ($ in millions) 2025 2024 Net operating revenue: Inpatient $ 1,497.6 $ 1,366.1 9.6% Other(1) 47.0 38.9 20.8% Total revenue $ 1,544.6 $ 1,405.0 9.9% (Actual Amounts) Discharges 67,238 63,839 5.3% New-store discharge growth 2.1% Same-store discharge growth 3.2% Net patient reve
Slide 6: Adjusted EBITDA
Adjusted EBITDA(3) Q4 % of Q4 % of ($ in millions) 2025 Revenue 2024 Revenue Net operating revenue $ 1,544.6 $ 1,405.0 Operating expenses: Salaries and benefits (801.1) 51.9 % (756.8) 53.9 % Other operating expenses(a) (226.0) 14.6 % (200.3) 14.3 % Supplies (64.5) 4.2 % (62.3) 4.4 % Occupancy costs
Slide 7: Earnings per share - as reported
Earnings per share - as reported Q4 Year Ended ($ in millions, except per share data) 2025 2024 2025 2024 Adjusted EBITDA $ 335.6 $ 289.6 $ 1,267.9 $ 1,103.7 Depreciation 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)
Slide 8: Adjusted earnings per share
Adjusted earnings per share(7) Year Ended Q4 2025 2024 2025 2024 Diluted earnings per share, as reported $ 1.42 $ 1.18 $ 5.55 $ 4.49 Adjustments, net of tax: Asset impairment impact(4) — — — 0.02 Income tax adjustments (8) 0.04 (0.03) (0.08) (0.08) Change in fair market value of marketable securitie
Slide 9: 2025 Adjusted free cash flow
2025 Adjusted free cash flow(9) ($ in millions) $164.2 $39.8 $14.1 $(24.9) $(65.6) $817.9 $690.3 Adjusted free cash Adjusted Working capital Cash interest Cash tax payments, Maintenance capital Adjusted free cash flow FY 2024 EBITDA and other payments net of refunds expenditures flow FY 2025 Reconci
Slide 10: 2026 Guidance
2026 Guidance 2025 Actuals 2026 Guidance ($ in millions, except per share data) Net Operating Revenue $5,935.2 $6,365 to $6,465 Adjusted EBITDA(3) $1,267.9 $1,340 to $1,380 Adjusted earnings per share from continuing operations attributable $5.45 $5.81 to $6.10 to Encompass Health(7) Reconciliations
Slide 11: 2026 Guidance considerations
2026 Guidance considerations u Pricing Medicare pricing increase of approximately 3.0% Managed Care pricing increase of 2.0% to 3.0% Bad debt reserves of 2.0% to 2.5% of revenue u Labor SWB per FTE increase of 3.0% to 3.5% u Capacity additions 8 new hospitals with a total of 389 beds Net
Slide 12: Review Choice Demonstration ("RCD")
Review Choice Demonstration (“RCD”) RCD is a five-year demonstration project initiated by the Centers for Medicare & Medicaid Services (“CMS”) providing either pre-claim or post-payment claim review to demonstrate compliance with Medicare IRF rules. This demonstration is only applicable to Medicare
Slide 13: Transforming Episode Accountability Model ("TEAM")
Transforming Episode Accountability Model (“TEAM”) A CMS 30-day bundled payment initiative for certain acute care hospitals (“ACHs”) covering five surgical episode groups TEAM bundled payment model details EHC discharges within u Medicare FFS population only TEAM parameters u 5-year period from Jan.
Slide 14: Adjusted free cash flow assumptions
Adjusted free cash flow(9) assumptions Certain cash flow items 2026 2025 Actuals ($ in millions) Assumptions Cash interest payments (net of amortization of debt $113.6 $105 to $115 discounts and fees) Cash payments for income $124.0 $150 to $180 taxes, net of refunds Working capital and other $2.9 $
Slide 15: Uses of free cash flow
Uses of free cash flow 2025 2026 ($ in millions) Actuals Assumptions Capacity expansions $526.4 $675 to $725 Growth Replacement IRFs 0.5 20 to 30 $526.9 $695 to $755 Debt Change in total debt(10) $7.0 TBD reduction Dividends on common stock $71.1 ~ $77 Shareholder distributions Common stock repurcha
Slide 16: Appendix
Appendix
Slide 17: Encompass Health
Encompass Health Largest owner and operator of rehabilitation hospitals Company profile as of 12/31/25 173 Rehabilitation hospitals “IRFs” 67 are joint ventures 16 IRFs under development** Rehabilitation hospitals “IRFs” 39 States and De novos under development* Puerto Rico 2025 Key statistics ~263,
Slide 18: Growth targets, fundamentals and value drivers
Growth targets, fundamentals and value drivers u 2023 - 2027 Growth targets 6 to 10 de novos per year 80 to 120 bed additions per year 6% to 8% discharge CAGR u Large, under penetrated, and growing inpatient rehabilitation market Large addressable market indicated by low conversion rate of p
Slide 19: Multiple modalities for capacity expansion
Multiple modalities for capacity expansion - beginning 2026 De novos Bed additions Small format hospitals (6-10 hospitals per year) (150-200 beds per year) (1-4 hospitals per year) Freestanding hospitals Addresses high First opening to occur in (inclusive of remote occupancy levels at 2027 and
Slide 20: Development activity
Development activity Inpatient Rehabilitation Hospitals opened or under development Joint Expected 16 venture open date 2025 2026 2027 De novos* Athens, GA ü 40 — — IRF development projects Fort Myers, FL ü 60 — — Daytona Beach, FL 50 — — announced and underway** Danbury, CT 40 — — St. Petersburg, F
Slide 21: Debt maturity profile - face value
Debt maturity profile - face value As of December 31, 2025* ($ in millions) Callable Callable at par at 101.583 $824 Available Callable beginning April 2026 $130 Drawn + $46 reserved for LCs Revolver capacity $800 $800 Senior Notes Senior Notes 4.5% 4.75% $400 Senior Notes 4.625% 2025 2026 2027 2028
Slide 22: Debt schedule
Debt schedule Change in December 31, December 31, Debt vs. ($ in millions) 2025 2024 YE 2024 Advances under $1 billion revolving credit facility $ 130.0 $ 20.0 $ 110.0 Bonds Payable: 5.75% Senior Notes due 2025 — 99.8 (99.8) 4.50% Senior Notes due 2028 792.0 788.4 3.6 4.75% Senior Notes due 2030 787
Slide 23: New-store/same-store growth
New-store/same-store growth Kissimmee, FL (50 beds) Clermont, FL (50 beds) Atlanta, GA (40 beds) Bowie, MD (60 beds) Louisville, KY (40 beds) St. Petersburg, FL (50 beds) Amarillo, TX (50 beds) Houston, TX Lake Worth, FL (50 beds) Prosper, TX (40 beds) Fitchburg, WI (56 beds) (61 beds) Knoxville, TN
Slide 24: Payment sources
Payment sources (percent of revenues) Q4 Full Year 2025 2024 2025 2024 Medicare 66.5 % 65.6 % 65.4 % 65.1 % Medicare Advantage 15.7 % 16.5 % 16.4 % 16.8 % Managed care 10.4 % 10.5 % 10.7 % 10.8 % Medicaid 3.0 % 3.2 % 3.1 % 3.3 % Other third-party payors 0.7 % 0.8 % 0.7 % 0.8 % Workers’ compensation
Slide 25: Operational metrics
Operational metrics Q4 Q3 Q2 Q1 Q4 Q3 Q2 Q1 Full Year 2025 2025 2025 2025 2024 2024 2024 2024 2025 2024 Net patient revenue- inpatient $ 1,497.6 $ 1,427.3 $ 1,413.7 $ 1,417.7 $ 1,366.1 $ 1,316.2 $ 1,265.5 $ 1,282.7 $ 5,756.3 $ 5,230.5 Net patient revenue- other revenues 47.0 50.2 44.0 37.7 38.9 34.8
Slide 26: Share information
Share information Weighted Average for the Period Q4 Full Year (in millions) 2025 2024 2025 2024 2023 Basic shares outstanding 100.2 100.0 100.5 99.9 99.5 Restricted stock awards, dilutive stock options, and restricted stock units 1.8 2.3 1.7 2.3 1.8 Diluted shares outstanding 102.0 102.3 102.2 102.
Slide 27: Net cash provided by operating activities reconciled to Adjusted EBITDA
Net cash provided by operating activities reconciled to Adjusted EBITDA(3) Q4 Full Year ($ in millions) 2025 2024 2025 2024 Net cash provided by operating activities $ 346.0 $ 278.8 $ 1,175.6 $ 1,002.8 Interest expense and amortization of debt discounts and fees 30.2 33.0 123.2 137.4 (Loss) gain on
Slide 28: Reconciliation of net income to Adjusted EBITDA
Reconciliation of net income to Adjusted EBITDA(3) Q4 Full Year ($ in millions) 2025 2024 2025 2024 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 2.8 Net income attributable to noncontrolling intere
Slide 29: Reconciliation to adjusted free cash flow
Reconciliation of net cash provided by operating activities to adjusted free cash flow(9) Q4 Full Year ($ in millions) 2025 2024 2025 2024 Net cash provided by operating activities $ 346.0 $ 278.8 $ 1,175.6 $ 1,002.8 Impact of discontinued operations (1.1) (0.6) 1.4 3.1 Net cash provided by operatin
Slide 30: Adjusted EPS - Q4 2025
Adjusted EPS(7) - Q4 2025 For the Three Months Ended December 31, 2025 Adjustments Change in Fair Market Value of As Income Tax Marketable As Reported Adjustments(8) Securities Adjusted ($ in millions, except per share amounts) Adjusted EBITDA $ 335.6 $ — $ — $ 335.6 Depreciation and amortization (8
Slide 31: Adjusted EPS - Q4 2024
Adjusted EPS(7) - Q4 2024 For the Three Months Ended December 31, 2024 Adjustments Change in Fair Loss on Market Early Value of As Exting. of Income Tax Marketable As Reported Debt Adjustments(8) Securities Adjusted ($ in millions, except per share amounts) Adjusted EBITDA $ 289.6 $ — $ — $ — $ 289.
Slide 32: Adjusted EPS - 2025
Adjusted EPS(7) - 2025 For the Year Ended December 31, 2025 Adjustments Change in Fair Market Value of As Income Tax Marketable As Reported Adjustments(8) Securities Adjusted ($ in millions, except per share amounts) Adjusted EBITDA $1,267.9 $ — $ — $ 1,267.9 Depreciation and amortization (327.9) —
Slide 33: Adjusted EPS - 2024
Adjusted EPS(7) - 2024 For the Year Ended December 31, 2024 Adjustments Change in Fair Loss on Market Asset Early Value of As Impairment Exting. Income Tax Marketable As Reported Impact of Debt Adjustments(8) Securities Adjusted ($ in millions, except per share amounts) Adjusted EBITDA $1,103.7 $ —
Slide 34: End notes
End notes (1) Historically, we used the term “Outpatient and other” revenue to report revenue related to our outpatient business and other revenue sources. As we have decreased our outpatient business, the associated revenues do not represent the primary source of “Outpatient and other” revenue. As
Slide 35: End notes (continued)
End notes (continued) (9) The 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, distributions to noncontrolling interests, and certain items deemed to be non-indicative