ENHABIT, INC., 10-Q filed on 5/9/2024
Quarterly Report
v3.24.1.u1
Cover Page - shares
 3 Months Ended
Mar. 31, 2024
May 06, 2024
Cover [Abstract]    
Document Type 10-Q  
Document Quarterly Report true  
Document Period End Date Mar. 31, 2024  
Document Transition Report false  
Entity File Number 001-41406  
Entity Registrant Name Enhabit, Inc.  
Entity Incorporation, State or Country Code DE  
Entity Tax Identification Number 47-2409192  
Entity Address, Address Line One 6688 N. Central Expressway  
Entity Address, Address Line Two Suite 1300  
Entity Address, City or Town Dallas  
Entity Address, State or Province TX  
Entity Address, Postal Zip Code 75206  
City Area Code 214  
Local Phone Number 239-6500  
Title of 12(b) Security Common Stock, par value $0.01 per share  
Trading Symbol EHAB  
Security Exchange Name NYSE  
Entity Current Reporting Status Yes  
Entity Interactive Data Current Yes  
Entity Filer Category Accelerated Filer  
Entity Small Business false  
Entity Emerging Growth Company false  
Entity Shell Company false  
Entity Common Stock, Shares Outstanding   50,155,417
Entity Central Index Key 0001803737  
Current Fiscal Year End Date --12-31  
Document Fiscal Year Focus 2024  
Document Fiscal Period Focus Q1  
Amendment Flag false  
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Condensed Consolidated Statements of Income (Unaudited) - USD ($)
shares in Millions, $ in Millions
 3 Months Ended
Mar. 31, 2024
Mar. 31, 2023
Income Statement [Abstract]    
Net service revenue $ 262.4 $ 265.1
Revenue, Product and Service [Extensible Enumeration] Service [Member] Service [Member]
Cost of service, excluding depreciation and amortization $ 134.2 $ 132.6
Cost, Product and Service [Extensible Enumeration] Service [Member] Service [Member]
General and administrative expenses $ 107.5 $ 110.5
Depreciation and amortization 7.8 7.8
Operating income 12.9 14.2
Interest expense and amortization of debt discounts and fees 11.1 9.5
Income before income taxes and noncontrolling interests 1.8 4.7
Income tax expense 0.9 1.5
Net income 0.9 3.2
Less: Net income attributable to noncontrolling interests 0.7 0.5
Net income attributable to Enhabit, Inc. $ 0.2 $ 2.7
Weighted average common shares outstanding:    
Basic (in shares) 50.1 49.8
Diluted (in shares) 50.4 50.1
Earnings per common share:    
Basic (loss) earnings per share attributable to Enhabit, Inc. common stockholders (in dollars per share) $ 0.01 $ 0.05
Diluted (loss) earnings per share attributable to Enhabit, Inc. common stockholders (in dollars per share) $ 0.01 $ 0.05
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Condensed Consolidated Statements of Comprehensive Income (Unaudited) - USD ($)
$ in Millions
 3 Months Ended
Mar. 31, 2024
Mar. 31, 2023
Statement of Comprehensive Income [Abstract]    
Net income including noncontrolling interests $ 0.9 $ 3.2
Other comprehensive income:    
Unrealized gain (loss) on cash flow hedge, net of tax expense (benefit) of $0.4 and $(0.3), respectively 1.3 (1.1)
Total other comprehensive income (loss) 1.3 (1.1)
Comprehensive income including noncontrolling interests 2.2 2.1
Less: Comprehensive income attributable to noncontrolling interests 0.7 0.5
Comprehensive income attributable to Enhabit, Inc. $ 1.5 $ 1.6
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Condensed Consolidated Statements of Comprehensive Income (Unaudited) (Parentheticals) - USD ($)
$ in Millions
 3 Months Ended
Mar. 31, 2024
Mar. 31, 2023
Statement of Comprehensive Income [Abstract]    
Unrealized gain on cash flow hedges, tax $ 0.4 $ (0.3)
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Condensed Consolidated Balance Sheets (Unaudited) - USD ($)
$ in Millions
Mar. 31, 2024
Dec. 31, 2023
Current assets:    
Cash and cash equivalents $ 36.5 $ 27.4
Restricted cash 2.9 2.4
Accounts receivable, net of allowances 174.3 164.7
Prepaid expenses and other current assets 12.4 15.6
Total current assets 226.1 210.1
Property and equipment, net 20.6 19.0
Operating lease right-of-use assets 57.0 57.5
Goodwill 1,061.7 1,061.7
Intangible assets, net 74.6 80.0
Other long-term assets 5.2 5.3
Total assets [1] 1,445.2 1,433.6
Current liabilities:    
Current portion of long-term debt 22.8 22.5
Current operating lease liabilities 11.2 11.8
Accounts payable 9.0 7.6
Accrued payroll 49.1 38.5
Refunds due patients and other third-party payors 10.5 8.2
Accrued medical insurance 7.4 8.4
Other current liabilities 40.5 40.7
Total current liabilities 150.5 137.7
Long-term debt, net of current portion 526.7 530.1
Long-term operating lease liabilities, net of current portion 45.8 45.7
Deferred income tax liabilities 17.0 17.1
Other long-term liabilities 0.2 1.3
Total liabilities 740.2 731.9
Commitments and contingencies (See Note 6)
Redeemable noncontrolling interests 5.0 5.0
Enhabit, Inc. stockholders’ equity:    
Total Enhabit, Inc. stockholders’ equity 672.3 669.7
Noncontrolling interests 27.7 27.0
Total stockholders’ equity 700.0 696.7
Total liabilities and stockholders' equity [1] $ 1,445.2 $ 1,433.6
[1] Our consolidated assets as of March 31, 2024 and December 31, 2023 include total assets of variable interest entities of $17.9 million and $18.0 million, respectively, that cannot be used by us to settle the obligations of other entities. Our consolidated liabilities as of March 31, 2024 and December 31, 2023 include total liabilities of the variable interest entities of $1.2 million and $0.6 million, respectively. See Note 2, Variable Interest Entities.
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Condensed Consolidated Balance Sheets (Unaudited) (Parenthetical) - USD ($)
$ in Millions
Mar. 31, 2024
Dec. 31, 2023
Assets [1] $ 1,445.2 $ 1,433.6
Liabilities 740.2 731.9
VIE, Primary Beneficiary    
Assets 17.9 18.0
Liabilities $ 1.2 $ 0.6
[1] Our consolidated assets as of March 31, 2024 and December 31, 2023 include total assets of variable interest entities of $17.9 million and $18.0 million, respectively, that cannot be used by us to settle the obligations of other entities. Our consolidated liabilities as of March 31, 2024 and December 31, 2023 include total liabilities of the variable interest entities of $1.2 million and $0.6 million, respectively. See Note 2, Variable Interest Entities.
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Condensed Consolidated Statements of Stockholders' Equity (Unaudited) - USD ($)
shares in Millions, $ in Millions
Total
Common Stock
Capital in Excess of Par Value
Other Comprehensive Income
Retained Earnings
Treasury Stock
Noncontrolling Interests
Number of Common Shares Outstanding, beginning balance (in shares) at Dec. 31, 2022   50.1          
Balance at beginning of period at Dec. 31, 2022 $ 770.1 $ 0.5 $ 406.9 $ (0.7) $ 335.0 $ 0.0 $ 28.4
Number of Treasury Shares Outstanding, beginning balance (in shares) at Dec. 31, 2022           0.0  
Increase (Decrease) in Stockholders' Equity [Roll Forward]              
Net income 3.1       2.7   0.4
Other comprehensive income, net of tax (1.1)     (1.1)      
Distributions declared (2.2)           (2.2)
Stock-based compensation expense 1.5   1.5        
Restricted stock forfeited, including forfeitures due to net share settlement of income taxes (in shares)           0.1  
Restricted stock forfeited, including forfeitures due to net share settlement of income taxes (0.5)         $ (0.5)  
Number of Common Shares Outstanding, ending balance (in shares) at Mar. 31, 2023   50.1          
Balance at end of period at Mar. 31, 2023 770.9 $ 0.5 408.4 (1.8) 337.7 $ (0.5) 26.6
Number of Treasury Shares Outstanding, ending balance (in shares) at Mar. 31, 2023           0.1  
Number of Common Shares Outstanding, beginning balance (in shares) at Dec. 31, 2023   50.1          
Balance at beginning of period at Dec. 31, 2023 696.7 $ 0.5 415.8 (0.5) 254.5 $ (0.6) 27.0
Number of Treasury Shares Outstanding, beginning balance (in shares) at Dec. 31, 2023           0.1  
Increase (Decrease) in Stockholders' Equity [Roll Forward]              
Net income 0.9       0.2   0.7
Other comprehensive income, net of tax 1.3     1.3      
Stock-based compensation expense 1.8   1.8        
Restricted stock forfeited, including forfeitures due to net share settlement of income taxes (in shares)   0.1       0.1  
Restricted stock forfeited, including forfeitures due to net share settlement of income taxes (0.7)         $ (0.7)  
Number of Common Shares Outstanding, ending balance (in shares) at Mar. 31, 2024   50.2          
Balance at end of period at Mar. 31, 2024 $ 700.0 $ 0.5 $ 417.6 $ 0.8 $ 254.7 $ (1.3) $ 27.7
Number of Treasury Shares Outstanding, ending balance (in shares) at Mar. 31, 2024           0.2  
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Condensed Consolidated Statements of Cash Flows (Unaudited) - USD ($)
$ in Millions
 3 Months Ended
Mar. 31, 2024
Mar. 31, 2023
Cash flows from operating activities:    
Net income $ 0.9 $ 3.2
Adjustments to reconcile net income to net cash provided by operating activities—    
Depreciation and amortization 7.8 7.8
Amortization of debt related costs 0.4 0.3
Stock-based compensation 1.8 1.5
Deferred tax (benefit) expense (0.5) 0.3
Other (0.3) 0.0
Changes in assets and liabilities, net of acquisitions—    
Accounts receivable, net of allowances (9.7) (6.7)
Prepaid expenses and other assets 3.7 18.1
Accounts payable 1.4 2.3
Accrued payroll 10.7 12.2
Other liabilities 1.1 (9.4)
Net cash provided by operating activities 17.3 29.6
Cash flows from investing activities:    
Acquisition of businesses, net of cash acquired 0.0 (2.8)
Purchases of property and equipment, including capitalized software costs (1.8) (0.6)
Other 0.7 0.2
Net cash used in investing activities (1.1) (3.2)
Cash flows from financing activities:    
Principal payments on debt (5.0) (5.0)
Payments on revolving credit facility 0.0 (5.0)
Principal payments under finance lease obligations (1.0) (1.0)
Distributions paid to noncontrolling interests of consolidated affiliates 0.0 (2.5)
Other (0.6) (0.5)
Net cash used in financing activities (6.6) (14.0)
Increase in cash, cash equivalents, and restricted cash 9.6 12.4
Cash, cash equivalents, and restricted cash at beginning of year 29.8 27.2
Cash, cash equivalents, and restricted cash at end of period 39.4 39.6
Supplemental cash flow information:    
Cash received for income taxes, net (0.2) (5.9)
Cash paid for interest 11.8 10.2
Supplemental schedule of noncash activities:    
Property and equipment additions through finance leases 2.7 0.2
Operating lease additions $ 3.3 $ 7.9
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Summary of Significant Accounting Policies
 3 Months Ended
Mar. 31, 2024
Accounting Policies [Abstract]  
Summary of Significant Accounting Policies Summary of Significant Accounting Policies:
Organization and Description of Business—
Enhabit, Inc. (“Enhabit,” “we,” “us,” “our,” and the “Company”), incorporated in Delaware in 2014, provides a comprehensive range of Medicare-certified skilled home health and hospice services in 34 states, with a concentration in the southern half of the United States. We manage our operations and disclose financial information using two reportable segments: (1) home health and (2) hospice. See Note 7, Segment Reporting. Prior to July 1, 2022, the Company operated as a reporting segment of Encompass Health Corporation (“Encompass”).
Separation from Encompass—
On July 1, 2022, Encompass completed the separation of the Company through the distribution of all of the outstanding shares of common stock, par value $0.01 per share, of Enhabit to the stockholders of record of Encompass (the “Distribution”). As a result of the Distribution, Enhabit is now an independent public company, and its common stock is listed under the symbol “EHAB” on the New York Stock Exchange (the “Separation”).
The Separation was completed pursuant to a separation and distribution agreement (the “Separation and Distribution Agreement”) and other agreements with Encompass related to the Separation, including, but not limited to, a tax matters agreement (the “Tax Matters Agreement”), an employee matters agreement (the “Employee Matters Agreement”), and a transition services agreement (the “Transition Services Agreement” or “TSA”). Following the Separation, certain functions continue to be provided by Encompass under the TSA or are being performed using the Company’s own resources or third‑party providers. The Company incurred certain costs in its establishment as an independent, publicly traded company and expects to incur ongoing additional costs associated with operating as an independent, publicly traded company.
In early 2022, in anticipation of the Distribution, we transferred the “Encompass” trade name with a book value of $135.2 million and the related deferred tax liabilities with a book value of $31.0 million to Encompass, as they will continue to operate under the Encompass brand.
See also Note 3, Long‑term Debt.
Basis of Presentation and Consolidation—
The accompanying unaudited condensed consolidated financial statements of the Company and its subsidiaries should be read in conjunction with the audited consolidated financial statements and accompanying notes contained in the Company’s Annual Report for the year ended December 31, 2023 on Form 10-K (the “Form 10-K”) filed with the United States Securities and Exchange Commission (the “SEC”) on March 15, 2024. The unaudited condensed consolidated financial statements have been prepared in accordance with the rules and regulations of the SEC applicable to interim financial information. Certain information and note disclosures included in financial statements prepared in accordance with generally accepted accounting principles in the United States of America (“GAAP”) have been omitted in these interim statements, as allowed by such SEC rules and regulations. The Condensed Consolidated Balance Sheet as of December 31, 2023 has been derived from audited financial statements, but it does not include all disclosures required by GAAP. However, we believe the disclosures are adequate to make the information presented not misleading.
The unaudited results of operations for the interim periods shown in these financial statements are not necessarily indicative of operating results for the entire year. In our opinion, the accompanying unaudited condensed consolidated financial statements recognize all adjustments of a normal recurring nature considered necessary for a fair statement of the financial position, results of operations, and cash flows for each interim period presented.
The unaudited condensed consolidated financial statements include the assets, liabilities, revenues, and expenses of all wholly owned subsidiaries, majority-owned subsidiaries over which we exercise control, and, when applicable, entities in which we have a controlling financial interest. We eliminate all intercompany accounts and transactions within the Company from our financial results.
Net Service Revenue—
Our Net service revenue disaggregated by payor source and segment are as follows (in millions):
Home HealthHospiceConsolidated
Three Months Ended
March 31,		Three Months Ended
March 31,		Three Months Ended
March 31,
202420232024202320242023
Medicare$128.3 $146.0 $48.5 $47.6 $176.8 $193.6 
Medicare Advantage59.3 49.3 — — 59.3 49.3 
Managed care22.4 17.2 0.7 1.7 23.1 18.9 
Medicaid2.5 2.9 — — 2.5 2.9 
Other0.7 0.4 — — 0.7 0.4 
Total$213.2 $215.8 $49.2 $49.3 $262.4 $265.1 
For a discussion of our significant accounting policies, including our policy related to Net service revenue, see Note 1, Summary of Significant Accounting Policies, to the consolidated financial statements included in the Form 10-K.
Earnings Per Common Share—
The following table sets forth the computation of diluted weighted average common shares outstanding for the three months ended March 31, 2024 and 2023 (in millions):
Three Months Ended
March 31,
20242023
Weighted average common shares outstanding:
Basic50.149.8
Dilutive effect of restricted stock, restricted stock units and performance units0.30.3 
Diluted50.450.1
A total of 0.3 million and 0.3 million options to purchase Enhabit’s shares and 2.0 million and 0.5 million shares of restricted stock awards, performance units, and restricted stock units were excluded from the diluted weighted average common shares outstanding for the three months ended March 31, 2024 and 2023, respectively, because their effects were anti-dilutive. See Note 9, Stock-Based Payments, to the consolidated financial statements included in the Form 10-K for additional information.
Recent Accounting Pronouncements—
In November 2023, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2023-07, “Segment Reporting (Topic 280): Improvements to Reportable Segments Disclosures.” This standard provides guidance to improve the disclosures about a public entity's reportable segments and address requests from investors for additional, more detailed information about a reportable segment's expenses. The standard is effective for fiscal years beginning after December 15, 2023 and interim periods in fiscal years beginning after December 15, 2024. Early adoption is permitted, and the disclosures in this standard are required to be applied on a retrospective basis. The Company is currently evaluating the potential impact this standard will have on its consolidated financial statements and related disclosures.
In December 2023, the FASB issued ASU 2023-09, “Income Taxes (Topic 740): Improvements to Income Tax Disclosures.” This standard requires disaggregated income tax disclosures on the effective tax rate reconciliation and income taxes paid. This standard is effective for annual periods beginning after December 31, 2024. Early adoption is permitted, and the disclosures in this standard are required to be applied on a prospective basis with the option to apply the standard retrospectively. The Company is currently evaluating the potential impact this standard will have on its consolidated financial statements and related disclosures.
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Variable Interest Entities (VIEs)
 3 Months Ended
Mar. 31, 2024
Organization, Consolidation and Presentation of Financial Statements [Abstract]  
Variable Interest Entities (VIEs) Variable Interest Entities (“VIEs”):
As of March 31, 2024 and December 31, 2023, we consolidated two joint venture entities that are VIEs and of which we are the primary beneficiary. Our ownership percentages in these entities are 60% and 90% as of March 31, 2024. Through partnership and management agreements with or governing these entities, we manage these entities and handle all day-to-day operating decisions. Accordingly, we have the decision-making power over the activities that most significantly impact the economic performance of the VIEs and an obligation to absorb losses or receive benefits from the VIEs that could potentially be significant to the VIEs. These decisions and significant activities include, but are not limited to, marketing efforts, oversight of patient admissions, medical training, nurse and therapist scheduling, provision of healthcare services, billing, collections, and creation and maintenance of medical records. The terms of the agreements governing the VIEs prohibit us from using the assets of the VIEs to satisfy the obligations of other entities.
The carrying amounts and classifications of the consolidated VIEs’ assets and liabilities, which are included in our Unaudited Condensed Consolidated Balance Sheets, are as follows (in millions):
March 31,
2024		December 31,
2023
Assets
Current assets:
Restricted cash$2.2 $1.8 
Accounts receivable, net of allowances2.4 2.3 
Other current assets— 0.5 
Total current assets4.6 4.6 
Operating lease right-of-use assets0.1 0.1 
Goodwill12.4 12.4 
Intangible assets, net0.8 0.9 
Total assets$17.9 $18.0 
Liabilities
Current liabilities:
Current operating lease liabilities$0.1 $0.1 
Accrued payroll0.3 0.2 
Other current liabilities0.7 0.2 
Total current liabilities1.1 0.5 
Other long-term liabilities0.1 0.1 
Total liabilities$1.2 $0.6 
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Long-term Debt
 3 Months Ended
Mar. 31, 2024
Debt Disclosure [Abstract]  
Long-term Debt Long‑term Debt:
Our long-term debt outstanding consists of the following (in millions):
March 31,
2024		December 31, 2023
Credit Agreement—
Advances under revolving credit facility$180.0 $180.0 
Term loan A facility362.3 367.1 
Finance lease obligations7.2 5.5 
549.5 552.6 
Less: Current portion(22.8)(22.5)
Long-term debt, net of current portion$526.7 $530.1 
The following table shows scheduled principal payments due on long-term debt for the next five years (in millions):
Amount
April 1 through December 31, 2024$17.1 
202522.1 
202621.7 
2027491.3 
Gross maturities552.2 
Less: Unamortized debt issuance costs(2.7)
Total$549.5 
In June 2022, the Company entered into a credit agreement (the “Credit Agreement”) that consists of a $400.0 million term loan A facility (the “Term Loan A Facility”) and a $350.0 million revolving credit facility (the “Revolving Credit Facility” and together with the Term Loan A Facility, the “Credit Facilities”). The Credit Facilities mature in June 2027. Interest on the loans under the Credit Facilities is calculated by reference to the Secured Overnight Financing Rate (“SOFR”) or an alternative base rate, plus an applicable interest rate margin. Enhabit may voluntarily prepay outstanding loans under the Credit Facilities at any time without premium or penalty, other than customary breakage costs with respect to SOFR loans. The Term Loan A Facility contains customary mandatory prepayments, including with respect to proceeds from asset sales and from certain incurrences of indebtedness.
On June 30, 2022, we drew the full $400.0 million of the Term Loan A Facility and $170.0 million on the Revolving Credit Facility. The net proceeds of $566.6 million were distributed to Encompass prior to the completion of the Distribution. For additional information on the Separation, see Note 1, Summary of Significant Accounting Policies, to the accompanying unaudited condensed consolidated financial statements.
The Term Loan A Facility amortizes by an amount per annum equal to 5.0% of the outstanding principal amount thereon as of the closing date, payable in equal quarterly installments, with the balance being payable in June 2027. The Revolving Credit Facility provides the ability to borrow and obtain letters of credit, which is subject to a $75.0 million sublimit. Obligations under the Credit Facilities are guaranteed by our existing and future wholly owned domestic material subsidiaries (the “Guarantors”), subject to certain exceptions. Borrowings under the Credit Facilities are secured by first priority liens on substantially all the assets of Enhabit and the Guarantors, subject to certain exceptions. The Credit Facilities contain representations and warranties, affirmative and negative covenants, and events of default customary for secured financings of this type, including limitations with respect to liens, fundamental changes, indebtedness, restricted payments, investments, and affiliate transactions, in each case, subject to a number of important exceptions and qualifications.
On June 27, 2023, we amended the Credit Facilities (the “First Amendment”) to provide for, among other things: (i) a new tier to the pricing grid for interest rate margins when the total net leverage ratio exceeds 4.50 to 1.00; (ii) changes to the conditions concerning the Company’s total net leverage ratio that must be met for the Company to borrow incremental ratio-based amounts; (iii) an increase in the maximum permitted total net leverage ratio to 5.25 to 1.00 for the quarters ending June 30, 2023, September 30, 2023, and December 31, 2023, stepping down to 5.00 to 1.00 for the quarter ending March 31, 2024, 4.75 to 1.00 for the quarter ending June 30, 2024, and 4.50 to 1.00 for the quarter ending September 30, 2024 and thereafter; and (iv) modifications to the Company’s ability to declare and make certain restricted payments.
On September 29, 2023, we entered into a Limited Waiver (the “Waiver”) with Wells Fargo Bank, National Association, as administrative agent to the other lenders (the “Administrative Agent”) under the Credit Agreement and the First Amendment. The Waiver released the Company from the requirement to comply with the total net leverage ratio and the interest coverage ratio covenants for the three months ended September 30, 2023. The Waiver also required that, until such time as the Company certified compliance with the waived financial covenants, the aggregate principal amount of the Company’s revolving loans allowed under the Credit Agreement were decreased from $350.0 million to $230.0 million. All other covenants and terms of the Credit Agreement remained unchanged and in effect. Although we were not required to be in compliance with the financial covenants as of September 30, 2023, we were in compliance with the financial covenants under the Credit Facilities.
As of September 30, 2023, our forecasted results suggested there was uncertainty of meeting our covenants through a period of one year from the issuance date of the September 30, 2023 financial statements. As a result, on November 3, 2023, we amended the Credit Facilities (the “Second Amendment”) to provide for, among other things, (i) an increase in the maximum permitted Total Net Leverage Ratio (as defined in the Credit Agreement) to 6.75 to 1.00 for the quarters ending December 31, 2023 and March 31, 2024, stepping down to 6.50 to 1.00 for the quarters ending June 30, September 30 and December 31, 2024, 5.75 to 1.00 for the quarter ending March 31, 2025, and 4.50 to 1.00 for the quarter ending June 30, 2025 and thereafter; (ii) the addition of a Fixed Charge Coverage Ratio (as defined in the Credit Agreement) covenant of 1.15 to 1.00 until the end of the Covenant Adjustment Period (as defined below); (iii) no Interest Coverage Ratio (as defined in the Credit Agreement) covenant until the end of the Covenant Adjustment Period; (iv) a permanent reduction in the Revolving Credit Facility commitment from $350.0 million to $220.0 million; (v) an increase in the Applicable Commitment Fee (as defined in the Credit Agreement) during the Covenant Adjustment Period; (vi) suspension of the ability of the Company to request incremental commitments under the Credit Agreement during the Covenant Adjustment Period; (vii) an increase of 0.25% in the applicable interest rate margins on amounts outstanding under the Credit Agreement during the Covenant Adjustment Period; (viii) limits on the amount of cash the Company can keep on hand and outside the lender group during the Covenant Adjustment Period; and (ix) additional limits on permitted indebtedness and acquisitions, permitted liens, restricted payments and permitted investments during the Covenant Adjustment Period. The “Covenant Adjustment Period” begins on the date of the Second Amendment and ends on the earlier of (a) the date that the Company provides evidence of compliance with the financial covenants in the Credit Agreement, as amended, for the fiscal quarter ended June 30, 2025 and (b) the date that the Company provides evidence of compliance with the financial covenants in the Credit Agreement as in effect immediately prior to the First Amendment for the applicable quarter.
Under specified circumstances, including non-compliance with any of the covenants described above and the unavailability of any waiver, amendment or other modification thereto, we may not be able to borrow under the Revolving Credit Facility. Additionally, violation of the covenants would result in an event of default under the Credit Facilities. A default that occurs, and is not cured within any applicable cure period or is not waived, would permit lenders to accelerate the maturity of the debt under the Credit Facilities and to foreclose upon any collateral securing the debt.
As a result of the amendment above, our forecasted results indicate we will continue to be in compliance with those financial covenants through a period of one year from the issuance date of the March 31, 2024 financial statements. We cannot guarantee we will be in compliance with our financial covenants for each reporting period through a period of one year from the issuance date of the March 31, 2024 financial statements. As of March 31, 2024, we were in compliance with our financial covenants under the Credit Facilities. We continually evaluate our expected compliance with the covenants described above and take all appropriate steps to proactively renegotiate such covenants when appropriate.
As of March 31, 2024, amounts drawn under the Term Loan A Facility and the Revolving Credit Facility had an interest rate of 7.9%. On October 20, 2022, we entered into an interest rate swap to manage our exposure to interest rate movements for a portion of our Term Loan A Facility. The interest rate swap has a $200.0 million notional value and a maturity date of October 20, 2025. Beginning in October 2022, we receive the one-month SOFR and pay a fixed rate of interest of 4.3%. See also Note 5, Derivative Instrument.
The carrying amounts and estimated fair values of our long-term debt are presented in the following table (in millions):
As of March 31, 2024As of December 31, 2023
Carrying AmountEstimated Fair ValueCarrying AmountEstimated Fair Value
Long-term debt:
Advances under revolving credit facility$180.0 $180.0 $180.0 $180.0 
Term loan A facility$362.3 $353.7 $367.1 $354.4 
Finance lease obligations$7.2 $7.2 $5.5 $5.5 
Fair values for our long-term debt and financial commitments are determined using inputs, including quoted prices in nonactive markets, that are observable either directly or indirectly, or Level 2 inputs within the fair value hierarchy. See Note 1, Summary of Significant Accounting Policies—Fair Value Measurements, to the consolidated financial statements included in the Form 10-K.
v3.24.1.u1
Income Taxes
 3 Months Ended
Mar. 31, 2024
Income Tax Disclosure [Abstract]  
Income Taxes Income Taxes:
Our effective income tax rates were 50.0% and 31.9% for the three months ended March 31, 2024 and 2023, respectively. Our effective income tax rates differed from the federal statutory rate primarily due to the impact of stock‑based compensation.
At the Distribution, the Company entered into the Tax Matters Agreement with Encompass. The Tax Matters Agreement governs the Company’s respective rights, responsibilities and obligations with respect to taxes (including responsibility for taxes arising in the ordinary course of business and taxes, if any, incurred as a result of any failure of the Distribution to qualify as tax-free for U.S. federal income tax purposes), entitlement to refunds, allocation of tax attributes, preparation of tax returns, control of tax contests and other matters.
In addition, the Tax Matters Agreement imposes certain restrictions on the Company and its subsidiaries until the second anniversary of the Distribution (including restrictions on share issuances, business combinations, sales of assets and similar transactions) that are designed to preserve the tax-free status of the Distribution and certain related transactions. The Tax Matters Agreement provides special rules that allocate tax liabilities in the event the Distribution or certain related transactions are not tax-free. In general, under the Tax Matters Agreement, each party is responsible for any taxes imposed on Encompass or the Company that arise from the failure of the Distribution or certain related transactions to qualify as a transaction that is generally tax-free for U.S. federal income tax purposes under Section 355 of the Internal Revenue Code, to the extent that the failure to so qualify is attributable to actions, events or transactions relating to such party’s respective stock, assets or business, or a breach of the relevant covenants made by that party in the Tax Matters Agreement.
v3.24.1.u1
Derivative Instrument
 3 Months Ended
Mar. 31, 2024
Derivative Instruments and Hedging Activities Disclosure [Abstract]  
Derivative Instrument Derivative Instrument:
In October 2022, we entered into an interest rate swap agreement with a notional value of $200.0 million with a maturity of October 20, 2025. See Note 3, Long‑term Debt.
The activities of the cash flow hedge included in Accumulated other comprehensive income for the three months ended March 31, 2024 are presented in the following table (in millions):
Cash Flow Hedge
Balance as of December 31, 2023$(0.5)
Unrealized gain recognized in other comprehensive income, net of tax1.6 
Reclassified to interest expense, net of tax(0.3)
Balance as of March 31, 2024$0.8 
The fair value of derivative assets and liabilities within the Unaudited Condensed Consolidated Balance Sheets are presented in the following table (in millions):
March 31, 2024December 31, 2023
Prepaid and other current assets$1.2 $0.7 
Other long-term liabilities(0.2)(1.3)
Total$1.0 $(0.6)
Fair value for our derivative instrument is determined using inputs, including quoted prices in nonactive markets, that are observable either directly or indirectly, or Level 2 inputs within the fair value hierarchy. See Note 1, Summary of Significant Accounting Policies—Fair Value Measurements, to the consolidated financial statements included in the Form 10-K.
v3.24.1.u1
Contingencies and Other Commitments
 3 Months Ended
Mar. 31, 2024
Commitments and Contingencies Disclosure [Abstract]  
Contingencies and Other Commitments Contingencies and Other Commitments:
We operate in a highly regulated industry in which healthcare providers are routinely subject to litigation. As a result, various lawsuits, claims, and legal and regulatory proceedings have been and can be expected to be instituted or asserted against us. The resolution of any such lawsuits, claims, or legal and regulatory proceedings could materially and adversely affect our financial position, results of operations, and cash flows in a given period.
The Unaudited Condensed Consolidated Balance Sheets as of March 31, 2024 and December 31, 2023 both include $0.2 million, in Other current liabilities for claims made against the Company that are probable of loss and reasonably estimable and recoverable based on the Company’s insurance policies. Other current liabilities in the Unaudited Condensed Consolidated Balance Sheets as of March 31, 2024 and December 31, 2023 includes $9.5 million and $9.9 million, respectively, of accrued legal fees.
Other Commitments—
We are a party to service and other contracts in connection with conducting our business. Minimum amounts due under these agreements are $7.1 million in 2024, $2.0 million in 2025, and $0.6 million in 2026. These contracts primarily relate to software licensing and support.
v3.24.1.u1
Segment Reporting
 3 Months Ended
Mar. 31, 2024
Segment Reporting [Abstract]  
Segment Reporting Segment Reporting:
Our internal financial reporting and management structure is focused on the major types of services provided by the Company. We manage our operations using two operating segments that are also our reportable segments: (1) home health and (2) hospice. These reportable operating segments are consistent with information used by our Chief Executive Officer, who is our chief operating decision maker, to assess performance and allocate resources. The following is a brief description of our reportable segments:
•Home Health - Our home health operations represent the nation’s fourth-largest provider of Medicare-certified skilled home health services, measured by 2022 Medicare revenues. As of March 31, 2024, we operated 255 home health locations in 34 states, with a concentration in the southern half of the United States. We are the sole owner of 244 of these locations. We retain 50.0% to 81.0% ownership in the remaining 11 jointly owned locations. Our home health services include a comprehensive range of Medicare-certified home health nursing services to adult patients in need of care. These services include, among others, skilled nursing, physical, occupational, and speech therapy, medical social work, and home health aide services.
•Hospice - Our hospice operations represent one of the nation’s largest providers of Medicare-certified hospice services, measured by 2022 Medicare revenues. As of March 31, 2024, we operated 112 hospice locations in 24 states, with a concentration in the southern half of the United States. We are the sole owner of 108 of these locations. We retain 50.0% to 90.0% ownership in the remaining four jointly owned locations. Hospice care focuses on the quality of life for patients who are experiencing an advanced, life limiting illness while treating the person and symptoms of the disease, rather than the disease itself.
The accounting policies of our reportable segments are the same as those described in Note 1, Summary of Significant Accounting Policies, to the consolidated financial statements included in the Form 10-K. All revenues for our services are generated through external customers. See Note 1, Summary of Significant Accounting Policies—Net Service Revenue, for the disaggregation of our revenues. No corporate overhead is allocated to either of our reportable segments. Our Chief Executive Officer evaluates the performance of our segments and allocates resources to them based on adjusted earnings before interest, taxes, depreciation, and amortization (“Segment Adjusted EBITDA”). Segment assets are not reviewed by our Chief Executive Officer and therefore are not disclosed below.
Selected financial information for our reportable segments is as follows (in millions):
Home HealthHospice
Three Months Ended March 31,Three Months Ended March 31,
2024202320242023
Net service revenue$213.2 $215.8 $49.2 $49.3 
Cost of service, excluding depreciation and amortization109.9 108.2 24.3 24.4 
General and administrative expenses59.5 62.9 15.7 16.3 
Net income attributable to noncontrolling interests0.6 0.4 0.1 0.1 
Segment Adjusted EBITDA$43.2 $44.3 $9.1 $8.5 
Segment reconciliations (in millions):
Three Months Ended March 31,
20242023
Total Segment Adjusted EBITDA$52.3 $52.8 
Non-segment general and administrative expenses(30.5)(29.8)
Interest expense and amortization of debt discounts and fees(11.1)(9.5)
Depreciation and amortization(7.8)(7.8)
Stock-based compensation expense(1.8)(1.5)
Net income attributable to noncontrolling interests0.7 0.5 
Income before income taxes and noncontrolling interests$1.8 $4.7 
Additional detail regarding the revenues of our operating segments by service line follows (in millions):
Three Months Ended March 31,
20242023
Home Health:
Medicare $128.3 $146.0 
Non-Medicare82.6 67.1 
Private duty(1)
2.3 2.7 
Total home health213.2 215.8 
Hospice49.2 49.3 
Total net service revenue$262.4 $265.1 
(1)    Private duty represents long-term comprehensive hourly nursing medical care.
v3.24.1.u1
Related Party Transactions
 3 Months Ended
Mar. 31, 2024
Related Party Transactions [Abstract]  
Related Party Transactions Related Party Transactions:
In connection with the Separation, as discussed above, we entered into several agreements with Encompass that govern the relationship of the parties following the Distribution, including a Separation and Distribution Agreement, a Transition Services Agreement, a Tax Matters Agreement, and an Employee Matters Agreement. The Separation and Distribution Agreement contains provisions that, among other things, relate to (i) assets, liabilities, and contracts to be transferred, assumed, and assigned to each of Enhabit and Encompass as part of the Separation, (ii) cross-indemnities principally designed to place financial responsibility for the obligations and liabilities of the Enhabit business with Enhabit and financial responsibility for the obligations and liabilities of Encompass’s remaining business with Encompass, (iii) procedures with respect to claims subject to indemnification and related matters, (iv) the allocation between Enhabit and Encompass of rights and obligations under existing insurance policies with respect to occurrences prior to completion of the Distribution, as well as the right to proceeds and the obligation to incur certain deductibles under certain insurance policies, and (v) procedures governing Enhabit’s and Encompass’s obligations and allocations of liabilities with respect to ongoing litigation matters that may implicate each of Enhabit’s business and Encompass’s business.
Transition Services Agreement—
Historically, Encompass provided the Company with certain services, including, but not limited to, executive oversight, treasury, legal, accounting, human resources, tax, internal audit, financial reporting, information technology and investor relations. After the Separation, some of these services continued to be provided by Encompass to the Company on a temporary basis under the Transition Services Agreement (“TSA”). As of March 31, 2024, the TSA expired under its terms.
Data Analytics Investment—
During 2019, we made a $2.0 million investment in Medalogix, LLC, a healthcare predictive data and analytics company (“Medalogix”); this investment is accounted for under the measurement alternative for investments. In April 2021, Medalogix entered in an agreement whereby TVG Logic Holdings, LLC (“TVG”) acquired a majority of the issued and outstanding membership interests of Medalogix for cash. The transaction closed in May 2021. As a result of the transaction, the Company received $2.0 million of cash and a minority equity investment in TVG and recorded a $1.6 million gain as part of Other income during 2021. During the three months ended March 31, 2024 and 2023, we incurred costs of approximately $1.2 million and $1.1 million, respectively, in connection with the usage of Medalogix’s analytics platforms. These costs are included in Cost of service, excluding depreciation and amortization and General and administrative expenses in the Unaudited Condensed Consolidated Statements of Income.
v3.24.1.u1
Pay vs Performance Disclosure - USD ($)
$ in Millions
 3 Months Ended
Mar. 31, 2024
Mar. 31, 2023
Pay vs Performance Disclosure    
Net Income (Loss) $ 0.2 $ 2.7
v3.24.1.u1
Insider Trading Arrangements
 3 Months Ended
Mar. 31, 2024
Trading Arrangements, by Individual  
Rule 10b5-1 Arrangement Adopted false
Non-Rule 10b5-1 Arrangement Adopted false
Rule 10b5-1 Arrangement Terminated false
Non-Rule 10b5-1 Arrangement Terminated false
v3.24.1.u1
Summary of Significant Accounting Policies (Policies)
 3 Months Ended
Mar. 31, 2024
Accounting Policies [Abstract]  
Basis of Presentation
The accompanying unaudited condensed consolidated financial statements of the Company and its subsidiaries should be read in conjunction with the audited consolidated financial statements and accompanying notes contained in the Company’s Annual Report for the year ended December 31, 2023 on Form 10-K (the “Form 10-K”) filed with the United States Securities and Exchange Commission (the “SEC”) on March 15, 2024. The unaudited condensed consolidated financial statements have been prepared in accordance with the rules and regulations of the SEC applicable to interim financial information. Certain information and note disclosures included in financial statements prepared in accordance with generally accepted accounting principles in the United States of America (“GAAP”) have been omitted in these interim statements, as allowed by such SEC rules and regulations. The Condensed Consolidated Balance Sheet as of December 31, 2023 has been derived from audited financial statements, but it does not include all disclosures required by GAAP. However, we believe the disclosures are adequate to make the information presented not misleading.
Consolidation
The unaudited condensed consolidated financial statements include the assets, liabilities, revenues, and expenses of all wholly owned subsidiaries, majority-owned subsidiaries over which we exercise control, and, when applicable, entities in which we have a controlling financial interest. We eliminate all intercompany accounts and transactions within the Company from our financial results.
Recent Accounting Pronouncements
Recent Accounting Pronouncements—
In November 2023, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2023-07, “Segment Reporting (Topic 280): Improvements to Reportable Segments Disclosures.” This standard provides guidance to improve the disclosures about a public entity's reportable segments and address requests from investors for additional, more detailed information about a reportable segment's expenses. The standard is effective for fiscal years beginning after December 15, 2023 and interim periods in fiscal years beginning after December 15, 2024. Early adoption is permitted, and the disclosures in this standard are required to be applied on a retrospective basis. The Company is currently evaluating the potential impact this standard will have on its consolidated financial statements and related disclosures.
In December 2023, the FASB issued ASU 2023-09, “Income Taxes (Topic 740): Improvements to Income Tax Disclosures.” This standard requires disaggregated income tax disclosures on the effective tax rate reconciliation and income taxes paid. This standard is effective for annual periods beginning after December 31, 2024. Early adoption is permitted, and the disclosures in this standard are required to be applied on a prospective basis with the option to apply the standard retrospectively. The Company is currently evaluating the potential impact this standard will have on its consolidated financial statements and related disclosures.
v3.24.1.u1
Summary of Significant Accounting Policies (Tables)
 3 Months Ended
Mar. 31, 2024
Accounting Policies [Abstract]  
Schedule of Disaggregation of Net Service Revenue by Payor Source and Segment
Our Net service revenue disaggregated by payor source and segment are as follows (in millions):
Home HealthHospiceConsolidated
Three Months Ended
March 31,		Three Months Ended
March 31,		Three Months Ended
March 31,
202420232024202320242023
Medicare$128.3 $146.0 $48.5 $47.6 $176.8 $193.6 
Medicare Advantage59.3 49.3 — — 59.3 49.3 
Managed care22.4 17.2 0.7 1.7 23.1 18.9 
Medicaid2.5 2.9 — — 2.5 2.9 
Other0.7 0.4 — — 0.7 0.4 
Total$213.2 $215.8 $49.2 $49.3 $262.4 $265.1 
Schedule of Diluted Weighted Average Common Shares Outstanding
The following table sets forth the computation of diluted weighted average common shares outstanding for the three months ended March 31, 2024 and 2023 (in millions):
Three Months Ended
March 31,
20242023
Weighted average common shares outstanding:
Basic50.149.8
Dilutive effect of restricted stock, restricted stock units and performance units0.30.3 
Diluted50.450.1
v3.24.1.u1
Variable Interest Entities (VIEs) (Tables)
 3 Months Ended
Mar. 31, 2024
Organization, Consolidation and Presentation of Financial Statements [Abstract]  
Schedule of Variable Interest Entities
The carrying amounts and classifications of the consolidated VIEs’ assets and liabilities, which are included in our Unaudited Condensed Consolidated Balance Sheets, are as follows (in millions):
March 31,
2024		December 31,
2023
Assets
Current assets:
Restricted cash$2.2 $1.8 
Accounts receivable, net of allowances2.4 2.3 
Other current assets— 0.5 
Total current assets4.6 4.6 
Operating lease right-of-use assets0.1 0.1 
Goodwill12.4 12.4 
Intangible assets, net0.8 0.9 
Total assets$17.9 $18.0 
Liabilities
Current liabilities:
Current operating lease liabilities$0.1 $0.1 
Accrued payroll0.3 0.2 
Other current liabilities0.7 0.2 
Total current liabilities1.1 0.5 
Other long-term liabilities0.1 0.1 
Total liabilities$1.2 $0.6 
v3.24.1.u1
Long-term Debt (Tables)
 3 Months Ended
Mar. 31, 2024
Debt Disclosure [Abstract]  
Schedule of Long-Term Debt Outstanding
Our long-term debt outstanding consists of the following (in millions):
March 31,
2024		December 31, 2023
Credit Agreement—
Advances under revolving credit facility$180.0 $180.0 
Term loan A facility362.3 367.1 
Finance lease obligations7.2 5.5 
549.5 552.6 
Less: Current portion(22.8)(22.5)
Long-term debt, net of current portion$526.7 $530.1 
Schedule of Principal Payments Due on Long-term Debt
The following table shows scheduled principal payments due on long-term debt for the next five years (in millions):
Amount
April 1 through December 31, 2024$17.1 
202522.1 
202621.7 
2027491.3 
Gross maturities552.2 
Less: Unamortized debt issuance costs(2.7)
Total$549.5 
Schedule of Carrying Values and Estimated Fair Values of Long-term Debt
The carrying amounts and estimated fair values of our long-term debt are presented in the following table (in millions):
As of March 31, 2024As of December 31, 2023
Carrying AmountEstimated Fair ValueCarrying AmountEstimated Fair Value
Long-term debt:
Advances under revolving credit facility$180.0 $180.0 $180.0 $180.0 
Term loan A facility$362.3 $353.7 $367.1 $354.4 
Finance lease obligations$7.2 $7.2 $5.5 $5.5 
v3.24.1.u1
Derivative Instrument (Tables)
 3 Months Ended
Mar. 31, 2024
Derivative Instruments and Hedging Activities Disclosure [Abstract]  
Schedule of Cash Flow Hedges Included in Accumulated Other Comprehensive Income (Loss)
The activities of the cash flow hedge included in Accumulated other comprehensive income for the three months ended March 31, 2024 are presented in the following table (in millions):
Cash Flow Hedge
Balance as of December 31, 2023$(0.5)
Unrealized gain recognized in other comprehensive income, net of tax1.6 
Reclassified to interest expense, net of tax(0.3)
Balance as of March 31, 2024$0.8 
Schedule of Derivative Assets at Fair Value
The fair value of derivative assets and liabilities within the Unaudited Condensed Consolidated Balance Sheets are presented in the following table (in millions):
March 31, 2024December 31, 2023
Prepaid and other current assets$1.2 $0.7 
Other long-term liabilities(0.2)(1.3)
Total$1.0 $(0.6)
Schedule of Derivative Liabilities at Fair Value
The fair value of derivative assets and liabilities within the Unaudited Condensed Consolidated Balance Sheets are presented in the following table (in millions):
March 31, 2024December 31, 2023
Prepaid and other current assets$1.2 $0.7 
Other long-term liabilities(0.2)(1.3)
Total$1.0 $(0.6)
v3.24.1.u1
Segment Reporting (Tables)
 3 Months Ended
Mar. 31, 2024
Segment Reporting [Abstract]  
Schedule of Selected Financial Information
Selected financial information for our reportable segments is as follows (in millions):
Home HealthHospice
Three Months Ended March 31,Three Months Ended March 31,
2024202320242023
Net service revenue$213.2 $215.8 $49.2 $49.3 
Cost of service, excluding depreciation and amortization109.9 108.2 24.3 24.4 
General and administrative expenses59.5 62.9 15.7 16.3 
Net income attributable to noncontrolling interests0.6 0.4 0.1 0.1 
Segment Adjusted EBITDA$43.2 $44.3 $9.1 $8.5 
Schedule of Segment Reconciliation
Segment reconciliations (in millions):
Three Months Ended March 31,
20242023
Total Segment Adjusted EBITDA$52.3 $52.8 
Non-segment general and administrative expenses(30.5)(29.8)
Interest expense and amortization of debt discounts and fees(11.1)(9.5)
Depreciation and amortization(7.8)(7.8)
Stock-based compensation expense(1.8)(1.5)
Net income attributable to noncontrolling interests0.7 0.5 
Income before income taxes and noncontrolling interests$1.8 $4.7 
Schedule of Additional Detail Regarding Revenues by Service Line
Additional detail regarding the revenues of our operating segments by service line follows (in millions):
Three Months Ended March 31,
20242023
Home Health:
Medicare $128.3 $146.0 
Non-Medicare82.6 67.1 
Private duty(1)
2.3 2.7 
Total home health213.2 215.8 
Hospice49.2 49.3 
Total net service revenue$262.4 $265.1 
(1)    Private duty represents long-term comprehensive hourly nursing medical care.
v3.24.1.u1
Summary of Significant Accounting Policies - Additional Information (Details)
$ / shares in Units, shares in Millions, $ in Millions
 3 Months Ended
Jul. 01, 2022
$ / shares
Mar. 31, 2024
segment
state
shares
Mar. 31, 2023
shares
Dec. 31, 2022
USD ($)
Class of Stock [Line Items]        
Number of states in which entity operates | state   34    
Number of reportable segments | segment   2    
Common stock, par value (in dollars per share) | $ / shares $ 0.01      
Stock conversion ratio 0.5      
Deferred tax liabilities | $       $ 31.0
Options        
Class of Stock [Line Items]        
Antidilutive securities (in shares) | shares   0.3 0.3  
Restricted Stock, Performance Units, And Restricted Stock Units (RSUs)        
Class of Stock [Line Items]        
Antidilutive securities (in shares) | shares   2.0 0.5  
Trade Name        
Class of Stock [Line Items]        
Finite lived intangible asset | $       $ 135.2
v3.24.1.u1
Summary of Significant Accounting Policies - Schedule of Disaggregation of Net Service Revenue by Payor Source and Segment (Details) - USD ($)
$ in Millions
 3 Months Ended
Mar. 31, 2024
Mar. 31, 2023
Disaggregation of Revenue [Line Items]    
Net service revenue $ 262.4 $ 265.1
Medicare    
Disaggregation of Revenue [Line Items]    
Net service revenue 176.8 193.6
Medicare Advantage    
Disaggregation of Revenue [Line Items]    
Net service revenue 59.3 49.3
Managed care    
Disaggregation of Revenue [Line Items]    
Net service revenue 23.1 18.9
Medicaid    
Disaggregation of Revenue [Line Items]    
Net service revenue 2.5 2.9
Other    
Disaggregation of Revenue [Line Items]    
Net service revenue 0.7 0.4
Home Health    
Disaggregation of Revenue [Line Items]    
Net service revenue 213.2 215.8
Home Health | Medicare    
Disaggregation of Revenue [Line Items]    
Net service revenue 128.3 146.0
Home Health | Medicare Advantage    
Disaggregation of Revenue [Line Items]    
Net service revenue 59.3 49.3
Home Health | Managed care    
Disaggregation of Revenue [Line Items]    
Net service revenue 22.4 17.2
Home Health | Medicaid    
Disaggregation of Revenue [Line Items]    
Net service revenue 2.5 2.9
Home Health | Other    
Disaggregation of Revenue [Line Items]    
Net service revenue 0.7 0.4
Hospice    
Disaggregation of Revenue [Line Items]    
Net service revenue 49.2 49.3
Hospice | Medicare    
Disaggregation of Revenue [Line Items]    
Net service revenue 48.5 47.6
Hospice | Medicare Advantage    
Disaggregation of Revenue [Line Items]    
Net service revenue 0.0 0.0
Hospice | Managed care    
Disaggregation of Revenue [Line Items]    
Net service revenue 0.7 1.7
Hospice | Medicaid    
Disaggregation of Revenue [Line Items]    
Net service revenue 0.0 0.0
Hospice | Other    
Disaggregation of Revenue [Line Items]    
Net service revenue $ 0.0 $ 0.0
v3.24.1.u1
Summary of Significant Accounting Policies - Schedule of Diluted Weighted Average Common Shares Outstanding (Details) - shares
shares in Millions
 3 Months Ended
Mar. 31, 2024
Mar. 31, 2023
Weighted average common shares outstanding:    
Basic (in shares) 50.1 49.8
Dilutive effect of restricted stock, restricted stock units and performance units (in shares) 0.3 0.3
Diluted (in shares) 50.4 50.1
v3.24.1.u1
Variable Interest Entities (VIEs) - Additional Information (Details) - VIE, Primary Beneficiary - entity
 3 Months Ended
Mar. 31, 2024
Dec. 31, 2023
Variable Interest Entity [Line Items]    
Number of entities consolidated 2 2
Minimum    
Variable Interest Entity [Line Items]    
Ownership percentage 60.00%  
Maximum    
Variable Interest Entity [Line Items]    
Ownership percentage 90.00%  
v3.24.1.u1
Variable Interest Entities (VIEs) (Details) - USD ($)
$ in Millions
Mar. 31, 2024
Dec. 31, 2023
Current assets:    
Restricted cash $ 2.9 $ 2.4
Accounts receivable, net of allowances 174.3 164.7
Total current assets 226.1 210.1
Operating lease right-of-use assets 57.0 57.5
Goodwill 1,061.7 1,061.7
Intangible assets, net 74.6 80.0
Total assets [1] 1,445.2 1,433.6
Current liabilities:    
Current operating lease liabilities 11.2 11.8
Accrued payroll 49.1 38.5
Other current liabilities 40.5 40.7
Total current liabilities 150.5 137.7
Other long-term liabilities 0.2 1.3
Total liabilities 740.2 731.9
VIE, Primary Beneficiary    
Current assets:    
Restricted cash 2.2 1.8
Accounts receivable, net of allowances 2.4 2.3
Other current assets 0.0 0.5
Total current assets 4.6 4.6
Operating lease right-of-use assets 0.1 0.1
Goodwill 12.4 12.4
Intangible assets, net 0.8 0.9
Total assets 17.9 18.0
Current liabilities:    
Current operating lease liabilities 0.1 0.1
Accrued payroll 0.3 0.2
Other current liabilities 0.7 0.2
Total current liabilities 1.1 0.5
Other long-term liabilities 0.1 0.1
Total liabilities $ 1.2 $ 0.6
[1] Our consolidated assets as of March 31, 2024 and December 31, 2023 include total assets of variable interest entities of $17.9 million and $18.0 million, respectively, that cannot be used by us to settle the obligations of other entities. Our consolidated liabilities as of March 31, 2024 and December 31, 2023 include total liabilities of the variable interest entities of $1.2 million and $0.6 million, respectively. See Note 2, Variable Interest Entities.
v3.24.1.u1
Long-term Debt - Schedule of Long-Term Debt Outstanding (Details) - USD ($)
$ in Millions
Mar. 31, 2024
Dec. 31, 2023
Debt Instrument [Line Items]    
Finance lease obligations $ 7.2 $ 5.5
Long term debt including current maturities 549.5 552.6
Less: Current portion (22.8) (22.5)
Long-term debt, net of current portion 526.7 530.1
Line of Credit | Enhabit Credit Agreement | Revolving Credit Facility    
Debt Instrument [Line Items]    
Long-term debt 180.0 180.0
Line of Credit | Enhabit Credit Agreement | Term loan A facility    
Debt Instrument [Line Items]    
Long-term debt $ 362.3 $ 367.1
v3.24.1.u1
Long-term Debt - Schedule of Principal Payments Due on Long-term Debt (Details)
$ in Millions
Mar. 31, 2024
USD ($)
Amount  
April 1 through December 31, 2024 $ 17.1
2025 22.1
2026 21.7
2027 491.3
Gross maturities 552.2
Less: Unamortized debt issuance costs (2.7)
Total $ 549.5
v3.24.1.u1
Long-term Debt - Additional Information (Details)
 1 Months Ended
Nov. 03, 2023
USD ($)
Nov. 02, 2023
USD ($)
Jun. 27, 2023
Jun. 30, 2022
USD ($)
Jun. 30, 2022
USD ($)
Mar. 31, 2024
Sep. 29, 2023
USD ($)
Oct. 31, 2022
USD ($)
Oct. 20, 2022
USD ($)
Interest Rate Swap                  
Debt Instrument [Line Items]                  
Notional amount               $ 200,000,000 $ 200,000,000
Fixed interest rate (as percent)                 4.30%
Enhabit Credit Agreement | Line of Credit                  
Debt Instrument [Line Items]                  
Distributions to Encompass       $ 566,600,000          
Interest rate (as percent)           7.90%      
Term loan A facility | Enhabit Credit Agreement | Line of Credit                  
Debt Instrument [Line Items]                  
Debt instrument, face amount       400,000,000 $ 400,000,000        
Principal borrowings on term loan       400,000,000          
Percentage of outstanding principal payable in equal quarterly installments         5.00%        
Coverage leverage ratio, maximum     4.50            
Term loan A facility | Enhabit Credit Agreement | Credit Agreement | Covenant Period, One                  
Debt Instrument [Line Items]                  
Debt instrument, maximum permitted total net leverage ratio     5.25            
Term loan A facility | Enhabit Credit Agreement | Credit Agreement | Covenant Period, Two                  
Debt Instrument [Line Items]                  
Debt instrument, maximum permitted total net leverage ratio     5.00            
Term loan A facility | Enhabit Credit Agreement | Credit Agreement | Covenant Period, Three                  
Debt Instrument [Line Items]                  
Debt instrument, maximum permitted total net leverage ratio     4.75            
Term loan A facility | Enhabit Credit Agreement | Credit Agreement | Thereafter                  
Debt Instrument [Line Items]                  
Debt instrument, maximum permitted total net leverage ratio     4.50            
Term loan A facility | The Second Amendment | Credit Agreement                  
Debt Instrument [Line Items]                  
Coverage leverage ratio, maximum 6.75                
Debt instrument, maximum permitted total net leverage ratio 1.15                
Term loan A facility | The Second Amendment | Credit Agreement | Covenant Period, One                  
Debt Instrument [Line Items]                  
Debt instrument, maximum permitted total net leverage ratio 6.50                
Term loan A facility | The Second Amendment | Credit Agreement | Covenant Period, Two                  
Debt Instrument [Line Items]                  
Debt instrument, maximum permitted total net leverage ratio 5.75                
Term loan A facility | The Second Amendment | Credit Agreement | Thereafter                  
Debt Instrument [Line Items]                  
Debt instrument, maximum permitted total net leverage ratio 4.50                
Revolving Credit Facility | Enhabit Credit Agreement | Line of Credit                  
Debt Instrument [Line Items]                  
Line of credit facility, maximum borrowing capacity       350,000,000 $ 350,000,000        
Borrowings on revolving credit facility       170,000,000          
Revolving Credit Facility | The Waiver | Minimum | Administrative Agent                  
Debt Instrument [Line Items]                  
Debt instrument, face amount             $ 230,000,000    
Revolving Credit Facility | The Waiver | Maximum | Administrative Agent                  
Debt Instrument [Line Items]                  
Debt instrument, face amount             $ 350,000,000    
Revolving Credit Facility | The Second Amendment | Credit Agreement                  
Debt Instrument [Line Items]                  
Commitment fee amount $ 220,000,000 $ 350,000,000              
Interest rate margins 0.25%                
Letter of Credit | Enhabit Credit Agreement | Line of Credit                  
Debt Instrument [Line Items]                  
Line of credit facility, maximum borrowing capacity       $ 75,000,000 $ 75,000,000        
v3.24.1.u1
Long-term Debt - Schedule of Carrying Values and Estimated Fair Values of Long-term Debt (Details) - USD ($)
$ in Millions
Mar. 31, 2024
Dec. 31, 2023
Line of Credit | Enhabit Credit Agreement | Carrying Amount | Revolving Credit Facility    
Debt Instrument [Line Items]    
Long-term debt, fair value $ 180.0 $ 180.0
Line of Credit | Enhabit Credit Agreement | Carrying Amount | Term loan A facility    
Debt Instrument [Line Items]    
Long-term debt, fair value 362.3 367.1
Line of Credit | Enhabit Credit Agreement | Estimated Fair Value | Revolving Credit Facility    
Debt Instrument [Line Items]    
Long-term debt, fair value 180.0 180.0
Line of Credit | Enhabit Credit Agreement | Estimated Fair Value | Term loan A facility    
Debt Instrument [Line Items]    
Long-term debt, fair value 353.7 354.4
Finance lease obligations | Carrying Amount    
Debt Instrument [Line Items]    
Long-term debt, fair value 7.2 5.5
Finance lease obligations | Estimated Fair Value    
Debt Instrument [Line Items]    
Long-term debt, fair value $ 7.2 $ 5.5
v3.24.1.u1
Income Taxes (Details)
 3 Months Ended
Mar. 31, 2024
Mar. 31, 2023
Income Tax Disclosure [Abstract]    
Effective income tax rate reconciliation, percent 50.00% 31.90%
v3.24.1.u1
Derivative Instrument - Additional Information (Details) - USD ($)
Oct. 31, 2022
Oct. 20, 2022
Interest Rate Swap    
Derivative [Line Items]    
Notional amount $ 200,000,000 $ 200,000,000
v3.24.1.u1
Derivative Instrument - Schedule of Cash Flow Hedges Included in Accumulated Other Comprehensive Income (Loss) (Details) - USD ($)
$ in Millions
 3 Months Ended
Mar. 31, 2024
Mar. 31, 2023
Cash Flow Hedge    
Balance at beginning of period $ 696.7 $ 770.1
Unrealized gain recognized in other comprehensive income, net of tax 1.3 (1.1)
Balance at end of period 700.0 $ 770.9
Interest Rate Swap | Cash Flow Hedging | Accumulated Net Gain (Loss) from Cash Flow Hedges Attributable to Parent    
Cash Flow Hedge    
Balance at beginning of period (0.5)  
Unrealized gain recognized in other comprehensive income, net of tax 1.6  
Reclassified to interest expense, net of tax (0.3)  
Balance at end of period $ 0.8  
v3.24.1.u1
Derivative Instrument - Schedule of Derivative Assets and Liabilities at Fair Value (Details) - Interest Rate Swap - USD ($)
$ in Millions
Mar. 31, 2024
Dec. 31, 2023
Derivative [Line Items]    
Total $ 1.0 $ (0.6)
Prepaid Expenses and Other Current Assets    
Derivative [Line Items]    
Prepaid and other current assets 1.2 0.7
Other Long-term Liabilities    
Derivative [Line Items]    
Prepaid and other current assets $ (0.2)  
Other long-term liabilities   $ (1.3)
v3.24.1.u1
Contingencies and Other Commitments (Details) - USD ($)
$ in Millions
Mar. 31, 2024
Dec. 31, 2023
Commitments and Contingencies Disclosure [Abstract]    
Loss contingency, estimate of possible loss $ 0.2 $ 0.2
Accrued professional fees, current 9.5 $ 9.9
Other commitment, to be paid, remainder of year 7.1  
Other commitment, to be paid, year one 2.0  
Other commitment, to be paid, year two $ 0.6  
v3.24.1.u1
Segment Reporting - Additional Information (Details)
 3 Months Ended
Mar. 31, 2024
location
state
segment
Segment Reporting Information [Line Items]  
Number of reportable segments | segment 2
Number of states in which entity operates | state 34
Home Health  
Segment Reporting Information [Line Items]  
Number of locations 255
Number of states in which entity operates | state 34
Number of locations with sole ownership 244
Number of jointly owned home health locations 11
Home Health | Minimum  
Segment Reporting Information [Line Items]  
Joint venture, ownership percentage 50.00%
Home Health | Maximum  
Segment Reporting Information [Line Items]  
Joint venture, ownership percentage 81.00%
Hospice  
Segment Reporting Information [Line Items]  
Number of locations 112
Number of states in which entity operates | state 24
Number of locations with sole ownership 108
Number of jointly owned home health locations 4
Hospice | Minimum  
Segment Reporting Information [Line Items]  
Joint venture, ownership percentage 50.00%
Hospice | Maximum  
Segment Reporting Information [Line Items]  
Joint venture, ownership percentage 90.00%
v3.24.1.u1
Segment Reporting - Schedule of Selected Financial Information (Details) - USD ($)
$ in Millions
 3 Months Ended
Mar. 31, 2024
Mar. 31, 2023
Segment Reporting Information [Line Items]    
Net service revenue $ 262.4 $ 265.1
Cost of service, excluding depreciation and amortization 134.2 132.6
General and administrative expenses 107.5 110.5
Net income attributable to noncontrolling interests 0.7 0.5
Home Health    
Segment Reporting Information [Line Items]    
Net service revenue 213.2 215.8
Cost of service, excluding depreciation and amortization 109.9 108.2
General and administrative expenses 59.5 62.9
Net income attributable to noncontrolling interests 0.6 0.4
Segment Adjusted EBITDA 43.2 44.3
Hospice    
Segment Reporting Information [Line Items]    
Net service revenue 49.2 49.3
Cost of service, excluding depreciation and amortization 24.3 24.4
General and administrative expenses 15.7 16.3
Net income attributable to noncontrolling interests 0.1 0.1
Segment Adjusted EBITDA $ 9.1 $ 8.5
v3.24.1.u1
Segment Reporting - Schedule of Segment Reconciliation (Details) - USD ($)
$ in Millions
 3 Months Ended
Mar. 31, 2024
Mar. 31, 2023
Segment Reporting, Reconciling Item for Operating Profit (Loss) from Segment to Consolidated [Line Items]    
Non-segment general and administrative expenses $ (107.5) $ (110.5)
Interest expense and amortization of debt discounts and fees (11.1) (9.5)
Depreciation and amortization (7.8) (7.8)
Net income attributable to noncontrolling interests 0.7 0.5
Income before income taxes and noncontrolling interests 1.8 4.7
Operating Segments    
Segment Reporting, Reconciling Item for Operating Profit (Loss) from Segment to Consolidated [Line Items]    
Total Segment Adjusted EBITDA 52.3 52.8
Corporate, Non-Segment    
Segment Reporting, Reconciling Item for Operating Profit (Loss) from Segment to Consolidated [Line Items]    
Non-segment general and administrative expenses (30.5) (29.8)
Segment Reconciling Items    
Segment Reporting, Reconciling Item for Operating Profit (Loss) from Segment to Consolidated [Line Items]    
Interest expense and amortization of debt discounts and fees (11.1) (9.5)
Depreciation and amortization (7.8) (7.8)
Stock-based compensation expense (1.8) (1.5)
Net income attributable to noncontrolling interests $ 0.7 $ 0.5
v3.24.1.u1
Segment Reporting - Schedule of Additional Detail Regarding Revenues by Service Line (Details) - USD ($)
$ in Millions
 3 Months Ended
Mar. 31, 2024
Mar. 31, 2023
Revenue from External Customer [Line Items]    
Total net service revenue $ 262.4 $ 265.1
Home Health    
Revenue from External Customer [Line Items]    
Total net service revenue 213.2 215.8
Hospice    
Revenue from External Customer [Line Items]    
Total net service revenue 49.2 49.3
Medicare | Home Health    
Revenue from External Customer [Line Items]    
Total net service revenue 128.3 146.0
Non-Medicare | Home Health    
Revenue from External Customer [Line Items]    
Total net service revenue 82.6 67.1
Private duty | Home Health    
Revenue from External Customer [Line Items]    
Total net service revenue $ 2.3 $ 2.7
v3.24.1.u1
Related Party Transactions (Details) - USD ($)
$ in Millions
 3 Months Ended 12 Months Ended
Mar. 31, 2024
Mar. 31, 2023
Mar. 31, 2021
Dec. 31, 2019
Medalogix, LLC        
Related Party Transaction [Line Items]        
Payments to acquire investment       $ 2.0
Medalogix Analytics Platforms | Related Party        
Related Party Transaction [Line Items]        
Cash received     $ 2.0  
Gain as a result of transaction     $ 1.6  
Cost of service, excluding depreciation and amortization and general and administrative expenses $ 1.2 $ 1.1