Slide 1: 2026 First Quarter Earnings Call
2026 First Quarter Earnings Call May 1, 2026 Supplemental information
Slide 2: Forward-looking statements
Forward-looking statements The information contained in this presentation includes certain assumptions, estimates, projections and other forward- looking statements that reflect Encompass Health’s current outlook, views and plans with respect to future events, including the business outlook, guidanc
Slide 3: Table of contents
Table of contents Summary ................................................................................................................................................................................ 4 Revenue .......................................................................................
Slide 4: Q1 2026 Summary
Q1 2026 Summary Q1 ($ in millions, except per share data) 2026 2025 %△ Encompass Health Net operating revenue $ 1,586.6 $ 1,455.4 9.0 % Adjusted EBITDA $ 348.8 $ 313.6 11.2 % Adjusted EPS $ 1.60 $ 1.37 16.8 % Adjusted free cash flow $ 193.8 $ 222.4 (12.9)% Key takeaways u Capacity additions Opened
Slide 5: Revenue
Revenue Q1 Q1 % Change* ($ in millions) 2026 2025 Net operating revenue: Inpatient $ 1,533.7 $ 1,417.7 8.2% Other(1) 52.9 37.7 40.3% Total revenue $ 1,586.6 $ 1,455.4 9.0% (Actual Amounts) Discharges 67,763 64,985 4.3% New-store discharge growth 2.7% Same-store discharge growth 1.6% Net patient reve
Slide 6: Adjusted EBITDA
Adjusted EBITDA(3) Q1 % of Q1 % of ($ in millions) 2026 Revenue 2025 Revenue Net operating revenue $ 1,586.6 $ 1,455.4 Operating expenses: Salaries and benefits (818.1) 51.6 % (762.3) 52.4 % Other operating expenses(a) (241.6) 15.2 % (217.3) 14.9 % Supplies (64.3) 4.1 % (62.2) 4.3 % Occupancy costs
Slide 7: Earnings per share - as reported
Earnings per share - as reported Q1 ($ in millions, except per share data) 2026 2025 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 impair
Slide 8: Adjusted earnings per share
Adjusted earnings per share(5) Q1 2026 2025 Diluted earnings per share, as reported $ 1.77 $ 1.48 Adjustments, net of tax: Income tax adjustments(6) (0.05) (0.12) Gain on sale(4) (0.13) — Adjusted earnings per share* $ 1.60 $ 1.37 u Adjusted earnings per share removes from GAAP earnings per share th
Slide 9: Adjusted free cash flow
Adjusted free cash flow(7) ($ in millions) $35.2 $(31.2) $(22.8) $(9.8) $222.4 $193.8 Adjusted free cash flow 3 Adjusted Working capital C ash tax payments, net of Maintenance capital Adjusted free cash flow 3 mos. 2025 EBITDA and other refunds expenditures mos. 2026 Reconciliations to GAAP provided
Slide 10: 2026 Guidance
2026 Guidance (as of April 30, 2026) Previous Guidance Updated Guidance ($ in millions, except per share data) Net Operating Revenue $6,365 to $6,465 $6,375 to $6,470 Adjusted EBITDA(3) $1,340 to $1,380 $1,350 to $1,380 Adjusted earnings per share from continuing operations attributable $5.81 to $6.
Slide 11: 2026 Guidance considerations
2026 Guidance considerations (as of April 30, 2026) u Pricing Medicare pricing increase of approximately 3.0% for Q1-Q3; approximately 2.4% for Q4 Managed Care pricing increase of 2.0% to 3.0% Bad debt reserves of 2.0% to 2.5% of revenue u Labor SWB per FTE increase of 3.0% to 3.5% u Capacit
Slide 12: Adjusted free cash flow assumptions
Adjusted free cash flow(7) assumptions (as of April 30, 2026) 3 Months Certain cash flow items 2025 2026 2026 ($ in millions) Actuals Assumptions Actuals Cash interest payments (net of amortization of debt $29.4 $113.6 $110 to $120 discounts and fees) Cash payments for income $23.3 $124.0 $160 to $1
Slide 13: Uses of free cash flow
Uses of free cash flow (as of April 30, 2026) 3 Months 2026 2025 2026 ($ in millions) Actuals Actuals Assumptions Capacity expansions $117.5 $526.4 $675 to $725 Growth Replacement IRFs 1.1 0.5 20 to 30 $118.6 $526.9 $695 to $755 Debt Reduction (increase) in total debt(9) ($83.0) $7.0 TBD reduction D
Slide 14: Appendix
Appendix
Slide 15: Encompass Health
Encompass Health Largest owner and operator of rehabilitation hospitals Company profile as of 03/31/26 174 Rehabilitation hospitals “IRFs” 66 are joint ventures 18 IRFs under development** Rehabilitation hospitals “IRFs” 39 States and De novos under development* Puerto Rico Key statistics - trailing
Slide 16: Growth targets, fundamentals and value drivers
Growth targets, fundamentals and value drivers u 2023 - 2027 Growth targets 6 to 10 de novos per year 80 to 120 bed additions per year 6% to 8% discharge CAGR u Large, under penetrated, and growing inpatient rehabilitation market Large addressable market indicated by low conversion rate of p
Slide 17: Multiple modalities for capacity expansion
Multiple modalities for capacity expansion - beginning 2026 De novos Bed additions Small format hospitals (6-10 hospitals per year) (150-200 beds per year) (1-4 hospitals per year) Freestanding hospitals Addresses high First opening to occur in (inclusive of remote occupancy levels at 2027 and
Slide 18: Development activity
Development activity Inpatient Rehabilitation Hospitals opened or under development 18 Joint Expected Number of beds venture open date 2026 2027 De novos IRF development projects Irmo, SC 49 — announced and underway** Concordville, PA 2Q26 50 — Loganville, GA ü 2Q26 40 — 1Q 2026 Norristown, PA 3Q26
Slide 19: RCD and TEAM
RCD and TEAM Review Choice Demonstration (“RCD”) RCD is a five-year demonstration project initiated by the Centers for Medicare & Medicaid Services (“CMS”) providing either pre-claim or post-payment claim review to demonstrate compliance with Medicare IRF rules. This demonstration is only applicable
Slide 20: Debt maturity profile - face value
Debt maturity profile - face value As of March 31, 2026* ($ in millions) $726 Available $220 Drawn + Callable Callable $54 reserved for LCs at par at 101.583 Revolver Callable beginning capacity April 2026 $800 $800 Senior Notes Senior Notes 4.5% 4.75% $400 Senior Notes 4.625% 2026 2027 2028 2029 20
Slide 21: Debt schedule
Debt schedule Change in March 31, December 31, Debt vs. ($ in millions) 2026 2025 YE 2025 Advances under $1 billion revolving credit facility $ 220.0 $ 130.0 $ 90.0 Bonds Payable: 4.50% Senior Notes due 2028 792.9 792.0 0.9 4.75% Senior Notes due 2030 787.7 787.0 0.7 4.625% Senior Notes due 2031 393
Slide 22: 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) Fort Myers, F
Slide 23: Payment sources
Payment sources (percent of revenues) Q1 Full Year 2026 2025 2025 Medicare 65.5 % 67.0 % 65.4 % Medicare Advantage 16.2 % 16.5 % 16.4 % Managed care 10.6 % 10.0 % 10.7 % Medicaid 2.9 % 2.9 % 3.1 % Other third-party payors 0.7 % 0.6 % 0.7 % Workers’ compensation 0.5 % 0.4 % 0.5 % Patients 0.4 % 0.2 %
Slide 24: Operational metrics
Operational metrics Q1 Q4 Q3 Q2 Q1 Full Year 2026 2025 2025 2025 2025 2025 Net operating revenues: (In Millions) Inpatient $ 1,533.7 $ 1,497.6 $ 1,427.3 $ 1,413.7 $ 1,417.7 $ 5,756.3 Other 52.9 47.0 50.2 44.0 37.7 178.9 Net operating revenues $ 1,586.6 $ 1,544.6 $ 1,477.5 $ 1,457.7 $ 1,455.4 $ 5,935
Slide 25: Share information
Share information Weighted Average for the Period Q1 Full Year (in millions) 2026 2025 2025 2024 2023 Basic shares outstanding 99.2 100.5 100.5 99.9 99.5 Restricted stock awards, dilutive stock options, and restricted stock units 1.4 1.6 1.7 2.3 1.8 Diluted shares outstanding 100.6 102.1 102.2 102.2
Slide 26: Net cash provided by operating activities reconciled to Adjusted EBITDA
Net cash provided by operating activities reconciled to Adjusted EBITDA(3) Q1 Full Year ($ in millions) 2026 2025 2025 Net cash provided by operating activities $ 313.1 $ 288.6 $ 1,175.6 Interest expense and amortization of debt discounts and fees 31.8 31.8 123.2 Gain (loss) on investments, excludin
Slide 27: Reconciliation of net income to Adjusted EBITDA
Reconciliation of net income to Adjusted EBITDA(3) Q1 Full Year ($ in millions) 2026 2025 2025 Net income $ 248.2 $ 196.5 $ 759.1 (Income) loss from discontinued operations, net of tax, attributable to Encompass Health (15.9) 0.5 1.0 Net income attributable to noncontrolling interests included in co
Slide 28: Reconciliation of net cash provided by operating activities to adjusted free cash flow
Reconciliation of net cash provided by operating activities to adjusted free cash flow(7) Q1 Full Year ($ in millions) 2026 2025 2025 Net cash provided by operating activities $ 313.1 $ 288.6 $ 1,175.6 Impact of discontinued operations (21.2) 0.7 1.4 Net cash provided by operating activities of cont
Slide 29: Adjusted EPS - Q1 2026
Adjusted EPS(5) - Q1 2026 For the Three Months Ended March 31, 2026 Adjustments Loss on Change in Fair Early Market Value of As Exting. Income Tax Marketable Gain on As Reported of Debt Adjustments(6) Securities Sale(4) Adjusted ($ in millions, except per share amounts) Adjusted EBITDA $ 348.8 $ — $
Slide 30: Adjusted EPS - Q1 2025
Adjusted EPS(5) - Q1 2025 For the Three Months Ended March 31, 2025 Adjustments Change in Fair Market Value of As Income Tax Marketable As Reported Adjustments(6) Securities Adjusted ($ in millions, except per share amounts) Adjusted EBITDA $ 313.6 $ — $ — $ 313.6 Depreciation and amortization (79.2
Slide 31: Adjusted EPS - 2025
Adjusted EPS(5) - 2025 For the Year Ended December 31, 2025 Adjustments Change in Fair Market Value of As Income Tax Marketable As Reported Adjustments(6) Securities Adjusted ($ in millions, except per share amounts) Adjusted EBITDA $1,267.9 $ — $ — $1,267.9 Depreciation and amortization (327.9) — —
Slide 32: 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 33: End notes (continued)
End notes (continued) (8) The increase in our assumption for cash taxes compared to our prior assumption (provided February 5, 2026) is primarily driven by (i) gains recognized on the sale of our 50% membership interest in the Gamma Knife Center at Barnes-Jewish Hospital, LLC to our existing joint v