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Encompass Health Corporation (EHC) is the largest owner and operator of inpatient rehabilitation hospitals in the United States. The company specializes in post-acute healthcare services, providing high-quality, cost-effective, and compassionate rehabilitative care for patients recovering from major injuries or illnesses. EHC primarily focuses on inpatient rehabilitation services, with additional offerings in outpatient and other healthcare-related services.
- Inpatient Rehabilitation - Provides specialized rehabilitative treatment on an inpatient basis, focusing on restoring patients' physical and cognitive abilities after significant injuries or illnesses such as strokes, hip fractures, and neurological conditions.
- Outpatient and Other Services - Offers outpatient services and other revenue streams, including provider tax revenues, to complement its core inpatient rehabilitation operations.
| Name | Position | External Roles | Short Bio | |
|---|---|---|---|---|
Douglas E. Coltharp ExecutiveBoard | Executive Vice President and Chief Financial Officer | Member of board of directors at Under Armour, Inc. | Douglas E. Coltharp has been the Executive Vice President and Chief Financial Officer at EHC since May 6, 2010. He previously served as Partner at Arlington Capital Advisors and as CFO at Saks Incorporated, and he currently sits on the board of directors of Under Armour, Inc.. | |
Mark J. Tarr ExecutiveBoard | President and Chief Executive Officer | Board of Directors of Protective Life Corp | Mark J. Tarr has been the President and Chief Executive Officer of Encompass Health Corporation since December 29, 2016. He has previously served in various senior positions at EHC, including Executive Vice President of Operations (from October 1, 2007) and President of the Inpatient Division (from 2004 to 2007). | View Report → |
Andrew L. Price Executive | Chief Accounting Officer | Andrew L. Price is the Chief Accounting Officer at EHC since October 22, 2009. He joined EHC in June 2004 and previously held roles as Senior Vice President of Accounting and Vice President of Operations Accounting. | ||
Edmund M. Fay Executive | Senior Vice President and Treasurer | Edmund M. Fay is the Senior Vice President and Treasurer at Encompass Health Corporation, a role he has held since March 1, 2008. Prior to EHC, he accumulated over 16 years of experience in financial services, holding leadership roles at Regions Financial Corporation, Wachovia Corporation, and J.P. Morgan & Company. | ||
Elissa J. Charbonneau Executive | Chief Medical Officer | Elissa J. Charbonneau, D.O., is the Chief Medical Officer at EHC since July 1, 2015. She previously served as Vice President of Medical Services from January 2015 to June 2015 and as Medical Director of New England Rehabilitation Hospital of Portland from 2001 to 2014. | ||
Patrick Darby Executive | Executive Vice President, General Counsel, and Secretary | Patrick Darby has served as the Executive Vice President, General Counsel, and Secretary at Encompass Health Corporation since February 18, 2016. He has an extensive legal background, including a partnership at Bradley Arant Boult Cummings LLP from 1990 to 2016. | ||
Christopher R. Reidy Board | Audit Committee Chair | Director and Chair of the Technology Committee at Embecta Corp. ; Board Member, Executive Committee Member, Finance and Investment Committee Chair, and Quality Committee Member at Atlantic Health System | Christopher R. Reidy serves as the Audit Committee Chair at EHC since October 1, 2021 while also holding board positions that contribute to financial and governance oversight. He has a rich background in executive roles at BD, ADP, and AT&T, which has fortified his expertise in finance, healthcare, and technology. | |
Edward M. Christie III Board | Director | President and CEO of Spirit Airlines | Edward M. Christie III joined EHC as a director and Audit Committee member on November 27, 2023. Previously, he has served as the President and CEO of Spirit Airlines since January 2019. | |
Greg D. Carmichael Board | Independent Director | Executive Chair of the Board at City National Bank; Chief Executive Officer at Signature Bridge Bank, N.A. | Greg D. Carmichael has served as an independent director at Encompass Health Corporation since January 1, 2020. He also held the role of Chairman of the Board during the period leading up to the 2024 annual meeting, and he currently serves in active external roles such as Executive Chair of the Board at City National Bank and CEO at Signature Bridge Bank, N.A.. | |
Joan E. Herman Board | Director | President and CEO of Herman & Associates, LLC ; Director at Ionis Pharmaceuticals, Inc. ; Board member of Fifth Avenue Private Equity funds ; Board chair of Venice Family Clinic Foundation | Joan E. Herman has been a director at Encompass Health Corporation since January 25, 2013. She brings extensive expertise from her leadership roles, including serving as President and CEO of Herman & Associates, LLC and senior positions at Elevance, Inc. and Phoenix Life Insurance Company. | |
Kevin J. O’Connor Board | Director | Senior Vice President, General Counsel and Corporate Secretary at Lockheed Martin Corporation; Board of Trustees for the University of Connecticut | Kevin J. O’Connor is a board director at Encompass Health Corporation since March 30, 2022. He also currently serves as Senior Vice President, General Counsel and Corporate Secretary at Lockheed Martin Corporation and is a member of the board of trustees for the University of Connecticut. | |
Leslye G. Katz Board | Director | Vice-Chair of the Board of Directors, My Sisters’ Place; Board Member, Grad Bag | Leslye G. Katz has served as a director at EHC since January 25, 2013 and chairs the Nominating/Corporate Governance Committee while also serving on the Audit Committee. She brings extensive financial management experience from previous roles at IMS Health and American Lawyer Media. | |
Nancy M. Schlichting Board | Director | Director at Walgreens Boots Alliance, Inc.; Director at Baxter International Inc. | Nancy M. Schlichting has served as Director of Encompass Health since December 11, 2017. She brings extensive healthcare leadership experience from previous roles at Henry Ford Health System and other leading organizations. | |
Patricia A. Maryland Board | Director | Director at Surgery Partners, Inc. ; Director at Privia Health Group, Inc. | Patricia A. Maryland has been a director at Encompass Health Corporation since January 1, 2020, where she chairs the Compensation and Human Capital Committee and serves on the Compliance and Quality of Care Committee. With 40 years of healthcare administration experience, she previously held executive roles at Ascension Healthcare and served in various leadership positions at major healthcare organizations. | |
Terrance Williams Board | Member of the Board of Directors | President and CEO-elect, TruStage Financial Group, Inc. ; Board Member, Columbus (OH) Regional Airport Authority | Terrance Williams serves on EHC’s Board of Directors and Audit Committee, having joined the audit committee on January 1, 2020. He contributes his expertise in corporate governance to the company. |
- How do you plan to manage the risk of overbedding and sustain quality outcomes in Florida as you accelerate de novo hospital openings and add beds, especially given the state's historical CON restrictions and rapid capacity expansions?
- With 2025 guidance reflecting increased startup and ramp-up costs—including higher Oracle Fusion and NCI expenses—what specific actions are you taking to offset the resulting margin pressures and ensure consistent EBITDA performance?
- You mentioned maintaining a minimum leverage threshold around 2x to avoid inefficiencies; could you elaborate on how deviations from this target might impact your free cash flow deployment strategy, particularly share repurchases?
- Given the continued high growth in group medical prescription drug costs driven by GLP-1 and enhanced cancer therapies, what measures are in place to mitigate these rising expenses without significantly affecting overall margins?
- As you expand your capacity with prefabricated hospitals and traditional construction projects, how are you addressing potential construction cost variability and inflation to maintain predictable CapEx and project timelines?
| Customer | Relationship | Segment | Details |
|---|---|---|---|
Medicare (CMS) | Government payor for healthcare services | All | 65.1% of net operating revenues (FY 2024) ; 55.5% of accounts receivable (as of Dec 31, 2024) |
Notable M&A activity and strategic investments in the past 3 years.
| Company | Year | Details |
|---|---|---|
29-bed Inpatient Rehabilitation Unit (Columbus, GA) | 2023 | Encompass Health acquired 50% of the operations of the unit in Columbus, GA to enhance its inpatient rehabilitation services, recording assets at an estimated fair value of $31.1 million and recognizing $7.4 million in tax-deductible goodwill; various income-based valuation methods were used, and the transaction was recorded under the acquisition accounting method. |
48-bed Inpatient Rehabilitation Unit (Knoxville, TN) | 2023 | Encompass Health acquired 50% of the operations of the Knoxville unit to penetrate its historical patient base and leverage operational efficiencies, recording a total asset valuation of $16.9 million and $2.1 million in tax-deductible goodwill using multiple valuation methodologies under the acquisition method. |
24-bed Inpatient Rehabilitation Unit (Eau Claire, WI) | 2023 | Encompass Health acquired 50% of the operations of the Eau Claire unit, contributed by Hospital Sisters Health System, to further expand its service reach, with the results of operations reported from the acquisition date and a portion of $2.1 million in recorded goodwill. |
22-bed Inpatient Rehabilitation Unit (Moline, IL) | 2022 | Encompass Health acquired 50% of the operations of the Moline unit, contributed by Trinity Medical Center, with assets recorded at estimated fair values and goodwill reflecting strategic growth opportunities, although the recorded goodwill is non-deductible for federal income tax purposes. |
23-bed Inpatient Rehabilitation Unit (Grand Forks, ND) | 2022 | Encompass Health acquired 60% of the operations of the Grand Forks unit through a joint venture with Altru Health System, using the acquisition method to record assets including $0.3 million in noncompete agreements and $10.4 million in goodwill, aligning with its growth strategy. |
Frontier Home Health and Hospice, LLC (Boise, ID) | 2022 | Encompass Health acquired a 50% equity interest in the joint venture with Saint Alphonsus System for $15.9 million to expand its footprint in Boise, Idaho, with acquisition accounting recording identifiable intangible assets, cash, and $28.7 million in goodwill (of which at least $14.4 million is tax-deductible) determined via various valuation methodologies. |
Recent press releases and 8-K filings for EHC.
- Organic growth guidance: The company is targeting a 6%-8% discharge growth CAGR with strong performance over the past 11 quarters—exceeding 6% total discharge growth and 4% same-store growth—as it manages capacity additions and fluctuating quarter‐to‐quarter volumes.
- Expansion initiatives: Encompass Health is advancing its expansion strategy with 7 de novo hospital openings in 2025 and accelerated bed expansion projects, targeting an IRR above 30% on bed expansions and 12%-15% on de novos.
- Operational improvements: The firm achieved a record 78.8% occupancy rate in Q1 and increased the share of private rooms from a historical 40% to 56%, enhancing operational efficiency and patient care.
- Strategic payer mix and capital deployment: There is a continued focus on improving Medicare Advantage contract terms—with significant narrowing of the reimbursement gap—and the company reported running low leverage (around 2.0x) along with executing $32 million in share repurchases in Q1.
- Revenue increased by 10.6% to $1.46 billion and EBITDA grew by 14.9% to $313.6 million, reflecting robust performance .
- Adjusted EPS increased by 22.3% to $1.37, underlining strong profitability .
- Adjusted free cash flow rose 32.7% to $222.4 million, demonstrating operational efficiency .
- The company raised its 2025 guidance to target net operating revenue between $585 million and $5.925 billion, adjusted EBIT between $1.185 billion and $1.220 billion, and EPS between $4.85 and $5.10 .
- Capacity expansion efforts include launching a new 40-bed hospital in Athens, GA and adding 25 beds to existing facilities .
- Executed a significant share repurchase, buying back 333,679 shares for $32.1 million .
- Q1 2025 results showed net operating revenue of $1,455.4 million, a 10.6% increase over Q1 2024; adjusted EBITDA rose by 14.9% and adjusted EPS increased to $1.37, reflecting strong operational performance.
- The company updated its full-year guidance with revenue projected between $5,850 and $5,925 million, and adjusted EBITDA guidance raised to $1,185 to $1,220 million.
- The release provides media contact details, with Polly Manuel reachable at 205-969-4532 for further inquiries.
- Patient outcomes remain a key focus, with management highlighting that 84% of patients return home at discharge and emphasizing strong clinical programs for stroke and neurological conditions.
- Guidance indicates a 3.5% increase in salaries, wages, and benefits per FTE, aided by effective control over premium labor expenses.
- The company authorized a $500 million share repurchase program and plans to allocate excess free cash flow toward both increased buybacks and modest dividend hikes to manage leverage near 2x.
- Growth plans include opening 8 new hospitals (with 5 in Florida) and a shift in cost timing towards the later part of the year, alongside an evolving payer mix with boosted Medicare Advantage discharges.
- Q4 Financial Performance: Net operating revenue increased to $1,405.0 million (12.7% YoY) and adjusted EBITDA grew to $289.6 million (13.6% increase)
- 2025 Guidance: Forecasts project net operating revenue of $5.8–5.9 billion, adjusted EBITDA of $1.16–1.20 billion, and adjusted EPS between $4.67–4.96
- Operational Strength: Achieved a 7.8% growth in patient discharges, underscoring robust execution
- Adjusted EPS & Free Cash Flow: Adjusted EPS reached $1.17 and adjusted free cash flow was $190.5 million, highlighting strong operating performance
- Capacity & Leverage: Expanded capacity by opening 6 de novo hospitals with 280 beds, adding 107 beds to existing facilities, and reducing net leverage from 2.7x to 2.2x
- Q4 2024 Highlights: Achieved net operating revenue of $1,405.0 million with a 12.7% increase over Q4 2023, along with improvements in Adjusted EBITDA and EPS
- 2025 Guidance Issued: Projected net operating revenue between $5,800–$5,900 million, Adjusted EBITDA between $1,160–$1,200 million, and EPS from continuing operations of $4.67–$4.96
- Capacity Expansion: In 2024, added 427 beds through new hospitals and expansions, reinforcing its growth strategy