Encompass Health hospital closed indefinitely by floods
Encompass Health reaffirmed 2026 guidance; Sea Pines contributed approximately $14 million to Adjusted EBITDA in the first nine months.
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Form Type
8-K
Rhea-AI Filing Summary
Encompass Health Corp (EHC) said flooding left its 90-bed Sea Pines Rehabilitation Hospital in Melbourne, Florida, closed indefinitely after torrential rains on November 1–2, 2026. Sea Pines is owned by a joint venture between Encompass Health and Holmes Regional Medical Center. All patients were safely evacuated and either admitted to another appropriate medical facility or discharged home; all employees were accounted for. The joint venture is committed to reopening the hospital and is evaluating refurbishment or replacement.
Encompass Health reaffirmed full-year 2026 guidance of $6,450 million to $6,500 million in net operating revenue, $1,395 million to $1,415 million in Adjusted EBITDA, and $6.23 to $6.37 in adjusted earnings per share from continuing operations attributable to Encompass Health. In the first nine months of 2026, Sea Pines recorded approximately $44 million in net operating revenue, contributed approximately $14 million to Adjusted EBITDA, and recorded 1,876 discharges. During closure, it will incur remediation and certain operating expenses; Encompass Health intends to exclude these expenses and related insurance proceeds from reported non-GAAP measures.
Positive
- None.
Negative
- Minor point90-bed Sea Pines hospital remains closed indefinitely after flood damage.
Filing Explained
Sea Pines’ reported
8-K Event Classification
2 items: 7.01, 9.01
2 items
Item 7.01
Regulation FD Disclosure
Disclosure
Material non-public information disclosed under Regulation Fair Disclosure, often investor presentations or guidance.
Item 9.01
Financial Statements and Exhibits
Exhibits
Financial statements, pro forma financial information, or exhibit attachments filed with this report.
Key Figures
Net operating revenue guidance: $6,450 million to $6,500 million
Adjusted EBITDA guidance: $1,395 million to $1,415 million
Adjusted earnings per share: $6.23 to $6.37 per share
+4 more
7 metrics
Net operating revenue guidance
$6,450 million to $6,500 million
Full-year 2026 guidance, reaffirmed
Adjusted EBITDA guidance
$1,395 million to $1,415 million
Full-year 2026 guidance, reaffirmed
Adjusted earnings per share
$6.23 to $6.37 per share
Full-year 2026 guidance, reaffirmed
Sea Pines net operating revenue
Approximately $44 million
First nine months of 2026
Sea Pines Adjusted EBITDA contribution
Approximately $14 million
First nine months of 2026
Sea Pines discharges
1,876 discharges
First nine months of 2026
Sea Pines hospital capacity
90 beds
Sea Pines Rehabilitation Hospital
Key Terms
non-GAAP financial measures, Adjusted EBITDA, adjusted earnings per share, interest coverage ratio
4 terms
non-GAAP financial measures financial
"financial data contained in the press release include non-GAAP financial measures"
Non-GAAP financial measures are numbers companies use to show their financial performance that exclude certain expenses or income. They help investors see how the company might perform without one-time costs or other unusual items, giving a different perspective from official reports. However, since they can be adjusted, they don’t always tell the full story and should be looked at alongside standard financial figures.
Adjusted EBITDA financial
"uses Adjusted EBITDA on a consolidated basis as a liquidity measure"
Adjusted EBITDA is a way companies measure how much money they make from their core operations, like running a business, by removing certain costs or income that aren’t part of regular business activities. It helps investors see how well a company is doing without distractions from unusual expenses or gains, making it easier to compare companies or track performance over time.
interest coverage ratio financial
"its interest coverage ratio and its leverage ratio"
A measure of how easily a company can pay the interest on its debt, calculated by comparing the earnings it generates from operations to the interest it owes. It matters to investors because a higher ratio means the company can comfortably meet interest payments — like having several paychecks set aside to cover your rent — while a low ratio signals greater risk of missed payments or financial strain.
FAQ
AI-generated questions and answers. How Rhea-AI works. Not financial advice.
What happened to EHC's Sea Pines hospital?
Sea Pines Rehabilitation Hospital, a 90-bed facility in Melbourne, Florida, was flooded after torrential rains on November 1–2, 2026, and remains closed indefinitely. All patients were safely evacuated and either admitted to another appropriate medical facility or discharged home, and all employees were accounted for.
What is EHC's full-year 2026 guidance?
EHC reaffirmed full-year 2026 guidance of $6,450 million to $6,500 million in net operating revenue, $1,395 million to $1,415 million in Adjusted EBITDA, and $6.23 to $6.37 in adjusted earnings per share from continuing operations attributable to Encompass Health.
AI-generated analysis. How Rhea-AI works. Not financial advice.
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant To Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report (date of earliest event reported): November 6, 2026
(Exact name of Registrant as specified in its Charter)
(State or Other Jurisdiction of Incorporation)
| (Commission File Number) | (IRS Employer Identification No.) | ||||
Attention: Corporate Secretary
(Address of Principal Executive Offices, Including Zip Code)
(205 ) 967-7116
(Registrant’s Telephone Number, Including Area Code)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
Written communication pursuant to Rule 425 under the Securities Act (17 CFR 230.425) | |||||
| Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) | |||||
Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) | |||||
Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) | |||||
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 or Rule 12b-2 of the Securities Exchange Act of 1934. Emerging growth company ☐
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Securities registered pursuant to Section 12(b) of the Act:
| Title of each class | Trading Symbol(s) | Name of each exchange on which registered | ||||||
ITEM 7.01. Regulation FD Disclosure.
On November 6, 2026, Encompass Health Corporation (“Encompass Health” or the “Company”) issued the press release, attached to this report as Exhibit 99.1 and incorporated herein by reference, regarding recent storm-related damage suffered by one of its hospitals in Florida.
The information contained herein is being furnished pursuant to Item 7.01 of Form 8-K, “Regulation FD Disclosure.” This information shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or incorporated by reference in any filing under the Securities Act of 1933, as amended, or the Exchange Act, except as shall be expressly set forth by specific reference in such a filing. The furnishing of this information will not be deemed an admission as to the materiality of any information contained herein.
Note Regarding Presentation of Non-GAAP Financial Measures
The financial data contained in the press release include non-GAAP financial measures, including the Company’s adjusted earnings per share and Adjusted EBITDA.
The Company is providing adjusted earnings per share from continuing operations attributable to Encompass Health (“adjusted earnings per share”). The Company believes the presentation of adjusted earnings per share provides useful additional information to investors because it provides better comparability of ongoing operating performance to prior periods given that it excludes the impact of 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 and equity instruments; loss on early extinguishment of debt; adjustments to its income tax provision (such as valuation allowance adjustments, settlements of income tax claims, windfall tax benefits, and executive compensation disallowance); items related to corporate and facility restructurings; and certain other items the Company believes to be non-indicative of its ongoing operating performance. It is reasonable to expect that one or more of these excluded items will occur in future periods, but the amounts recognized can vary significantly from period to period and may not directly relate to the Company’s ongoing operating performance. Accordingly, they can complicate comparisons of the Company’s results of operations across periods and comparisons of the Company’s results to those of other healthcare companies. Adjusted earnings per share should not be considered as a measure of financial performance under generally accepted accounting principles in the United States (“GAAP”) as the items excluded from it are significant components in understanding and assessing financial performance. Because adjusted earnings per share is not a measurement determined in accordance with GAAP and is thus susceptible to varying calculations, it may not be comparable as presented to other similarly titled measures of other companies.
The Company uses Adjusted EBITDA on a consolidated basis as a liquidity measure. The Company believes this financial measure on a consolidated basis is important in analyzing its liquidity because it is the key component of certain material covenants contained within the Company’s credit agreement, which is discussed in more detail in Part II, Item 7, Management’s Discussion and Analysis of Financial Condition and Results of Operations, “Liquidity and Capital Resources,” and Note 8, Long-term Debt, to the consolidated financial statements included in its Annual Report on Form 10‑K for the year ended December 31, 2025 (the “2025 Form 10‑K”). These covenants are material terms of the credit agreement. Noncompliance with these financial covenants under the credit agreement—its interest coverage ratio and its leverage ratio—could result in the Company’s lenders requiring the Company to immediately repay all amounts borrowed. If the Company anticipated a potential covenant violation, it would seek relief from its lenders, which would have some cost to the Company, and such relief might be on terms less favorable to those in the Company’s existing credit agreement. In addition, if the Company cannot satisfy these financial covenants, it would be prohibited under the credit agreement from engaging in certain activities, such as incurring additional indebtedness, paying common stock dividends, making certain payments, and acquiring and disposing of assets. Consequently, Adjusted EBITDA is critical to the Company’s assessment of its liquidity. The representation of an Adjusted EBITDA contribution by an individual hospital to the consolidated number is only an estimate as the Company does not produce interim financial statements in accordance with GAAP at the subsidiary level.
In general terms, the credit agreement definition of Adjusted EBITDA, therein referred to as “Adjusted Consolidated EBITDA,” allows the Company to add back to consolidated net income interest expense, income taxes, and depreciation and amortization and then add back to consolidated net income (1) all unusual or nonrecurring items reducing consolidated net income (of which only up to $10 million in a year may be cash expenditures), (2) any losses from discontinued operations, (3) non-ordinary course fees, costs and expenses incurred with respect to any litigation or settlement, (4) share-based compensation expense, (5) costs and expenses associated with changes in the fair value of marketable securities, (6) costs and expenses associated with the issuance or prepayment of debt and acquisitions, and (7) any restructuring charges and certain pro-forma cost savings and synergies related to transactions and initiatives, which in the aggregate are not in excess of 25% of Adjusted Consolidated EBITDA. The Company also subtracts from consolidated net income all unusual or nonrecurring items to the extent they increase consolidated net income.
The calculation of Adjusted EBITDA under the credit agreement does not require us to deduct net income attributable to noncontrolling interests or gains on fair value adjustments of hedging and equity instruments, disposal of assets, and development activities. It also does not allow us to add back losses on fair value adjustments of hedging instruments or unusual or nonrecurring cash expenditures in excess of $10 million. These items and amounts, in addition to the items falling within the credit agreement’s “unusual or nonrecurring” classification, may occur in future periods, but can vary significantly from period to period and may not directly relate to, or be indicative of, the Company's ongoing liquidity or operating performance. Accordingly, the Adjusted EBITDA calculation presented here includes adjustments for them.
Adjusted EBITDA is not a measure of financial performance under GAAP, and the items excluded from Adjusted EBITDA are significant components in understanding and assessing financial performance. Therefore, Adjusted EBITDA should not be considered a substitute for net income or cash flows from operating, investing, or financing activities. Because Adjusted EBITDA is not a measurement determined in accordance with GAAP and is thus susceptible to varying calculations, Adjusted EBITDA, as presented, may not be comparable to other similarly titled measures of other companies. Revenues and expenses are measured in accordance with the policies and procedures described in Note 1, Summary of Significant Accounting Policies, to the consolidated financial statements accompanying the 2025 Form 10‑K.
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 2026 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 $130 million
•Amortization of debt-related items - approximately $10 million
ITEM 9.01. Financial Statements and Exhibits.
(d) Exhibits.
| Exhibit Number | Description | |||||||
99.1 | Press release of Encompass Health Corporation, dated November 6, 2026. | |||||||
| 104 | Cover Page Interactive Data File - the cover page iXBRL tags are embedded within the Inline XBRL document | |||||||
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this Report to be signed on its behalf by the undersigned hereunto duly authorized.
| ENCOMPASS HEALTH CORPORATION | ||||||||
| By: | /S/ DOUGLAS E. COLTHARP | |||||||
| Name: | Douglas E. Coltharp | |||||||
| Title: | Executive Vice President and Chief Financial Officer | |||||||
Dated: November 6, 2026
Encompass Health announces indefinite closure of Sea Pines Rehabilitation Hospital due to flood damage
BIRMINGHAM, Ala., and MELBOURNE, Fla., Nov. 6, 2026 — On Nov. 1-2, 2026, sustained torrential rains led to the flooding, evacuation and closure of Sea Pines Rehabilitation Hospital in Melbourne, Florida (“Sea Pines”). Sea Pines is a 90-bed hospital owned by a joint venture between Encompass Health and Holmes Regional Medical Center (a subsidiary of Health First). All patients were safely evacuated from Sea Pines and were either admitted to another appropriate medical facility or were discharged home. All Sea Pines employees have been accounted for. The flooding resulted in substantial damage to Sea Pines, and the hospital remains closed indefinitely. The joint venture is committed to reopening and continuing the operation of Sea Pines and is evaluating alternatives for refurbishing or replacing the hospital.
“We are enormously grateful for the heroic efforts of our hospital staff and the first responders in ensuring the safety of our patients during this catastrophic weather event,” said Pat Tuer, Encompass Health executive vice president and chief operating officer. “Sea Pines has served the greater Melbourne area for more than 40 years, and we are committed to restoring and enhancing our capacity to do so. Reopening Sea Pines is a high priority, and we are currently in discussions with our joint venture partner to determine the best path forward.”
During the period of closure, Sea Pines will incur expenses related to remediation and will continue to incur certain operating expenses. Encompass Health believes these expenses are not indicative of the Company’s ongoing operating performance and therefore intends to exclude these items, as well as any related insurance proceeds, from its reported non-GAAP measures. In light of this determination, Encompass Health is reaffirming its Full-Year 2026 Guidance provided on Oct. 28, 2026, as follows (in millions, except per share data):
Net operating revenue | $6,450 to $6,500 | ||||
Adjusted EBITDA | $1,395 to $1,415 | ||||
Adjusted earnings per share from continuing operations attributable to Encompass Health | $6.23 to $6.37 | ||||
The Company noted that for the first nine months of 2026, Sea Pines had Net operating revenue of approximately $44 million, contributed approximately $14 million to Adjusted EBITDA, and recorded 1,876 total discharges.
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 179 hospitals in 39 states and Puerto Rico, the Company provides high-quality, compassionate rehabilitative care for patients recovering from major injuries or illnesses, using advanced technology and innovative treatments to maximize recovery. Encompass Health is recognized by Newsweek as America’s Most Awarded Leader in Inpatient Rehabilitation and is ranked among Fortune’s World’s Most Admired Companies™ and Forbes’ America’s Best Companies. It is also recognized by Becker’s Healthcare and Modern Healthcare as a top healthcare employer. For more information, visit encompasshealth.com and follow us on our newsroom, X, Instagram and Facebook.
From Fortune. © 2026 Fortune Media IP Limited. All rights reserved. Fortune® is a registered trademark and Fortune World's Most Admired Companies™ is a trademark of Fortune Media IP Limited and are used under license. Fortune and Fortune Media IP Limited are not affiliated with, and do not endorse products or services of Encompass Health.
Forward-looking statements
Statements contained in this press release and the supplemental information which are not historical facts, such as those relating to the financial guidance, business outlook and the reopening of the Sea Pines hospital, are forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. In addition, Encompass Health, through its senior management, may from time to time make forward-looking public statements concerning the matters described herein. All such estimates, projections, and forward-looking information speak only as of the date hereof, and Encompass Health undertakes no duty to publicly update or revise such forward-looking information, whether as a result of new information, future events, or otherwise. Such forward-looking statements are necessarily estimates based upon current information and involve a number of risks and uncertainties. Actual events or results may differ materially from those anticipated in these forward-looking statements as a result of a variety of factors. While it is impossible to identify all such factors, factors which could cause actual events or results to differ materially from those estimated by Encompass Health include, but are not limited to, possible reductions or other changes in Medicaid reimbursement, including Medicaid directed and supplemental payment programs and Medicaid waiver programs, which may decrease our revenues and increase our provider tax expenses; the demand for Encompass Health’s services, including based on any downturns in the economy and consumer confidence in patient care; any adverse outcome of various lawsuits, claims, and legal or regulatory proceedings involving Encompass Health; potential disruptions, breaches, or other incidents affecting the proper operation, availability, or security of Encompass Health's or its vendors' or partners’ information systems, including unauthorized access to or theft of patient, business associate, or other sensitive information or inability to provide patient care because of system unavailability; Encompass Health's ability to complete remediation or redevelopment of the Sea Pines hospital on a timely basis; increases in Medicare audit activity, including increased use of sampling and extrapolation, resulting in additional unpaid
Statements contained in this press release and the supplemental information which are not historical facts, such as those relating to the financial guidance, business outlook and the reopening of the Sea Pines hospital, are forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. In addition, Encompass Health, through its senior management, may from time to time make forward-looking public statements concerning the matters described herein. All such estimates, projections, and forward-looking information speak only as of the date hereof, and Encompass Health undertakes no duty to publicly update or revise such forward-looking information, whether as a result of new information, future events, or otherwise. Such forward-looking statements are necessarily estimates based upon current information and involve a number of risks and uncertainties. Actual events or results may differ materially from those anticipated in these forward-looking statements as a result of a variety of factors. While it is impossible to identify all such factors, factors which could cause actual events or results to differ materially from those estimated by Encompass Health include, but are not limited to, possible reductions or other changes in Medicaid reimbursement, including Medicaid directed and supplemental payment programs and Medicaid waiver programs, which may decrease our revenues and increase our provider tax expenses; the demand for Encompass Health’s services, including based on any downturns in the economy and consumer confidence in patient care; any adverse outcome of various lawsuits, claims, and legal or regulatory proceedings involving Encompass Health; potential disruptions, breaches, or other incidents affecting the proper operation, availability, or security of Encompass Health's or its vendors' or partners’ information systems, including unauthorized access to or theft of patient, business associate, or other sensitive information or inability to provide patient care because of system unavailability; Encompass Health's ability to complete remediation or redevelopment of the Sea Pines hospital on a timely basis; increases in Medicare audit activity, including increased use of sampling and extrapolation, resulting in additional unpaid
reimbursement claims and an increase in the backlog of appealed claims denials; changes, delays in (including in connection with resolution of Medicare payment reviews or appeals), or suspension of reimbursement for Encompass Health's services by governmental or private payors; changes in the regulation of the healthcare industry at either or both of the federal and state levels, including as part of national healthcare reform and deficit reduction and Encompass Health's ability to adapt operations to those changes, including in connection with the CMS inpatient rehabilitation review choice demonstration project; competitive pressures in the healthcare industry and Encompass Health's response thereto; Encompass Health's ability to obtain and retain favorable arrangements with third-party payors; Encompass Health's ability to control costs, particularly labor and employee benefit costs; adverse effects resulting from coverage determinations made by Medicare Administrative Contractors regarding its Medicare reimbursement claims and lengthening delays in Encompass Health's ability to recover improperly denied claims through the administrative appeals process on a timely basis, including as part of the review choice demonstration; Encompass Health's ability to adapt to changes in the healthcare delivery system, including value-based purchasing such as the Transforming Episode Accountability Model and involvement in coordinated care initiatives or programs that may arise with its referral sources; Encompass Health's ability to attract and retain nurses, therapists, and other healthcare professionals in a highly competitive environment with often severe staffing shortages, which may be worsened by infectious disease outbreaks, and the impact on Encompass Health's labor expenses from potential union activity, staffing shortages, and competitive compensation practices; general conditions in the economy and capital markets, including any instability or uncertainty related to trade war, armed conflict or an act of terrorism, governmental impasse over approval of the United States federal budget, an increase in the debt ceiling, or an international sovereign debt crisis; the increase in the cost of, or the decrease in the availability of, construction materials and necessary supplies, including as a result of tariffs and import restrictions; the increase in the costs of defending and insuring against alleged professional liability claims, and Encompass Health's ability to predict the estimated costs related to such claims; and other factors which may be identified from time to time in Encompass Health's SEC filings and other public announcements, including Encompass Health's Form 10-K for the year ended Dec. 31, 2025 and Form 10-Q for the quarters ended March 31, 2026, June 30, 2026, and Sept. 30, 2026.
Media contact:
Polly Manuel | 205-970-5912
media@encompasshealth.com
Polly Manuel | 205-970-5912
media@encompasshealth.com
Investor relations contact:
Mark Miller | 205-970-5860
mark.miller@encompasshealth.com
Mark Miller | 205-970-5860
mark.miller@encompasshealth.com