Increases full-year guidance BIRMINGHAM, Ala., April 24, 2024 /PRNewswire/ -- Encompass Health Corporation (NYSE: EHC), the largest owner and operator of inpatient rehabilitation hospitals in the United States, today reported its results of operations for the first quarter ended March 31, 2024. Summary results Growth Q1 2024 Q1 2023 Dollars Percent (In Millions, Except Per Share Data) Net operating revenue $      1,316.0 $      1,160.4 $     155.6 13.4 % Income from continuing operations attributable to Encompass Health per diluted share 1.11 0.88 0.23 26.1 % Adjusted earnings per share 1.12 0.88 0.24 27.3 % Cash flows provided by operating activities 238.8 227.9 10.9 4.8 % Adjusted EBITDA 273.0 229.0 44.0 19.2 % Adjusted free cash flow 167.6 158.7 8.9 5.6 % (Actual Amounts) Discharges 61,111 55,557 10.0 %    Same-store discharge growth 6.7 % Net patient revenue per discharge $       20,990 $       20,415 2.8 % See attached supplemental information for calculations of non-GAAP measures and reconciliations to their most comparable GAAP measure. "We are pleased with our first quarter performance," said President and Chief Executive Officer of Encompass Health Mark Tarr. "Revenue growth of 13.4% driven primarily by strong discharge growth combined with prudent expense management to drive Adjusted EBITDA growth of 19.2%. Our value proposition and operating strategy continue to be validated and we remain highly optimistic about the long-term prospects of our business." Revenue growth of 13.4% resulted primarily from discharge growth of 10.0%, including same-store growth of 6.7%. Net revenue per discharge grew 2.8%. Cash flows provided by operating activities increased 4.8% to $238.8 million, primarily due to an increase in net income partly offset by changes in working capital. Adjusted EBITDA increased 19.2%, primarily from increased revenue and overall expense management. 2024 Guidance The Company increased its full-year guidance as follows: Full-Year 2024 Guidance Previous Guidance Updated Guidance (In Millions, Except Per Share Data) Net operating revenue $5,200 to $5,300 $5,250 to $5,325 Adjusted EBITDA $1,015 to $1,055 $1,030 to $1,065 Adjusted earnings per share from continuing operations attributable to Encompass Health $3.77 to $4.06 $3.86 to $4.11 For considerations regarding the Company's 2024 guidance, see the supplemental information posted on the Company's website at http://investor.encompasshealth.com. See also the "Other information" section below for an explanation of why the Company does not provide guidance for comparable GAAP measures for Adjusted EBITDA and adjusted earnings per share. Earnings conference call and webcast The Company will host an investor conference call at 10:00 a.m. Eastern Time on Thursday, April 25, 2024 to discuss its results for the first quarter of 2024. For reference during the call, the Company will post certain supplemental information at http://investor.encompasshealth.com. The conference call may be accessed by dialing 800 579-2543 and giving the conference ID EHCQ124. International callers should dial 785 424-1699 and give the same conference ID. Please call approximately ten minutes before the start of the call to ensure you are connected. The conference call will also be webcast live and will be available for on-line replay at http://investor.encompasshealth.com by clicking on an available link. About Encompass Health Encompass Health (NYSE:EHC) is the largest owner and operator of inpatient rehabilitation hospitals in the United States. With a national footprint that includes 160 hospitals in 37 states and Puerto Rico, the Company provides high-quality, compassionate rehabilitative care for patients recovering from a major injury or illness, using advanced technology and innovative treatments to maximize recovery. Encompass Health is ranked as one of Fortune's World's Most Admired Companies and Modern Healthcare's Best Places to Work in Healthcare.  For more information, visit encompasshealth.com, or follow us on our newsroom, Twitter, Instagram and Facebook. Other information The information in this press release is summarized and should be read in conjunction with the Company's Quarterly Report on Form 10-Q for the quarter ended March 31, 2024 (the "March 2024 Form 10-Q"), when filed, as well as the Company's Current Report on Form 8-K filed on April 24, 2024 (the "Q1 Earnings Form 8-K"), to which this press release is attached as Exhibit 99.1. In addition, the Company will post supplemental information today on its website at http://investor.encompasshealth.com for reference during its April 25, 2024 earnings call. The financial data contained in the press release and supplemental information include non-GAAP financial measures, including the Company's adjusted earnings per share, leverage ratio, Adjusted EBITDA, and adjusted free cash flow. Reconciliations to their most comparable GAAP measure, except with regard to non-GAAP guidance, are included below or in the Q1 Earnings Form 8-K. Readers are encouraged to review the "Note Regarding Presentation of Non-GAAP Financial Measures" included in the Q1 Earnings Form 8-K which provides further explanation and disclosure regarding the Company's use of these non-GAAP financial measures. Excluding net operating revenues, the Company does not provide guidance on a GAAP basis because it is unable to predict, with reasonable certainty, the future impact of items that are deemed to be outside the control of the Company or otherwise not indicative of its ongoing operating performance. Such items include government, class action, and related settlements; professional fees—accounting, tax, and legal; mark-to-market adjustments for stock appreciation rights; gains or losses related to hedging instruments; loss on early extinguishment of debt; adjustments to its income tax provision (such as valuation allowance adjustments and settlements of income tax claims); items related to corporate and facility restructurings; and certain other items the Company believes to be not indicative of its ongoing operations. These items cannot be reasonably predicted and will depend on several factors, including industry and market conditions, and could be material to the Company's results computed in accordance with GAAP. However, the following reasonably estimable GAAP measures for 2024 would be included in a reconciliation for Adjusted EBITDA if the other reconciling GAAP measures could be reasonably predicted: Interest expense and amortization of debt discounts and fees - approximately $145 million Amortization of debt-related items - approximately $10 million The Q1 Earnings Form 8-K and, when filed, the March 2024 Form 10-Q can be found on the Company's website at http://investor.encompasshealth.com and the SEC's website at https://www.sec.gov/.   Encompass Health Corporation and Subsidiaries Condensed Consolidated Statements of Comprehensive Income (Unaudited) Three Months Ended March 31, 2024 2023 (In Millions, Except Per Share Data) Net operating revenues $              1,316.0 $              1,160.4 Operating expenses: Salaries and benefits 711.6 629.0 Other operating expenses 203.9 177.9 Occupancy costs 14.0 13.8 Supplies 58.5 53.8 General and administrative expenses 50.2 43.4 Depreciation and amortization 70.3 63.9 Total operating expenses 1,108.5 981.8 Interest expense and amortization of debt discounts and fees 35.2 36.4 Other income (5.4) (3.6) Equity in net income of nonconsolidated affiliates (0.7) (0.4) Income from continuing operations before income tax expense 178.4 146.2 Provision for income tax expense 38.3 31.9 Income from continuing operations 140.1 114.3 Loss from discontinued operations, net of tax (1.3) (1.0) Net and comprehensive income 138.8 113.3 Less: Net and comprehensive income attributable to noncontrolling interests (26.3) (25.6) Net and comprehensive income attributable to Encompass Health $                 112.5 $                   87.7 Weighted average common shares outstanding: Basic 99.8 99.4 Diluted 102.2 100.9 Earnings per common share: Basic earnings per share attributable to Encompass Health common shareholders: Continuing operations $                   1.13 $                   0.89 Discontinued operations (0.01) (0.01) Net income $                   1.12 $                   0.88 Diluted earnings per share attributable to Encompass Health common shareholders: Continuing operations $                   1.11 $                   0.88 Discontinued operations (0.01) (0.01) Net income $                   1.10 $                   0.87 Amounts attributable to Encompass Health common shareholders: Income from continuing operations $                 113.8 $                   88.7 Loss from discontinued operations, net of tax (1.3) (1.0) Net income attributable to Encompass Health $                 112.5 $                   87.7   Encompass Health Corporation and Subsidiaries Condensed Consolidated Balance Sheets (Unaudited) March 31,2024 December 31,2023 (In Millions) Assets Current assets: Cash and cash equivalents $             134.4 $                69.1 Restricted cash 38.3 35.1 Accounts receivable 619.3 611.6 Other current assets 137.8