Enhabit, Inc.EHAB
Enhabit, Inc. Goodwill & Intangibles Disclosure
Goodwill and Other Intangible Assets, Net
The Company performs its annual impairment test for indefinite-lived assets in the fourth quarter, or more frequently if triggering events occur. During the fourth quarter of 2025, management identified two certificates of need, with a total value of $3.0 million, that no longer held value due to its long-term growth assumptions within the associated geographic areas of these assets. These changes in assumptions resulted in the Company recognizing a non-cash impairment charge of $3.0 million for the year ended December 31, 2025, to reduce the carrying value of the intangible assets to fair value.
The following table shows changes in the carrying amount of Goodwill for the years ended December 31, 2025 and 2024 (in millions):
| Home Health | Hospice | Consolidated | |||||||||||||||
Goodwill as of December 31, 2023 | $ | 843.9 | $ | 217.8 | $ | 1,061.7 | |||||||||||
| Impairment | (161.7) | — | (161.7) | ||||||||||||||
Goodwill as of December 31, 2024 | 682.2 | 217.8 | 900.0 | ||||||||||||||
| Impairment | (44.7) | — | (44.7) | ||||||||||||||
Goodwill as of December 31, 2025 | $ | 637.5 | $ | 217.8 | $ | 855.3 | |||||||||||
Goodwill decreased because of the impairment charges recorded for the years ended December 31, 2025 and 2024.
The Company is required to test goodwill for impairment at least annually, as of October 1st, absent any triggering events that would accelerate an impairment assessment.
During the year ended December 31, 2023, management identified potential impairment triggering events in the second and third quarters and determined a quantitative analysis of the two reporting units should be performed. These triggering events included Enhabit’s performance compared to the 2023 forecast and decreases in the Company’s share price and market capitalization in each quarter. During the year ended December 31, 2023, the Company recorded an impairment charge of $85.8 million to reflect a decrease in the carrying value of the Hospice reporting unit.
During the third quarter of 2024, management identified potential impairment triggering events and determined a quantitative analysis of the two reporting units should be performed. These triggering events included a decrease in Enhabit’s share price and market capitalization. Based on the quantitative analysis performed in the third quarter of 2024, Enhabit recorded an impairment charge of $107.9 million to reflect a decrease in the carrying value of the Home Health reporting unit. We conducted our annual impairment test at October 1, 2024, which resulted in the same values determined as of September 30, 2024.
During the fourth quarter of 2024, management identified potential impairment triggering events and determined a quantitative analysis of the two reporting units should be performed. These triggering events included a decrease in the Home Health reporting unit’s performance compared to the 2024 forecast. Based on the quantitative analysis performed in the fourth quarter of 2024, Enhabit recorded an impairment charge of $53.8 million to reflect a decrease in the carrying value of the Home Health reporting unit. Due to improved performance in the Hospice reporting unit in the fourth quarter of 2024, its fair value exceeded its carrying value with adequate headroom as of December 31, 2024.
We conducted our annual impairment test at October 1, 2025 and during the fourth quarter of 2025 identified a potential impairment triggering event and determined a quantitative analysis should be performed. The triggering event was the release of the 2026 final rule for home health, which included a net negative home health payment update. Based on the
quantitative analysis performed in the fourth quarter of 2025, Enhabit recorded an impairment charge of $44.7 million to reflect a decrease in the carrying value of the Home Health reporting unit. Due to sustained positive performance in the Hospice reporting unit in 2025, its fair value exceeded its carrying value with adequate headroom as of December 31, 2025.
Management estimated the fair value of the reporting units using equal weighting of the income approach and market approach. The assumptions used in the income approach incorporate several significant estimates and judgments, including the revenue growth rates, timing of de novo location openings, forecasted operating margins, the weighted average cost of capital, and terminal growth rates. The market approach utilizes the guideline public company methodology, which uses valuation indicators, including market multiples of earnings before interest, taxes, depreciation, and amortization, from other businesses that are similar to each reporting unit and implied control premiums.
While management believes the assumptions used are reasonable and commensurate with the views of a market participant, there is also uncertainty in current general economic and market conditions. The result of the analysis is sensitive to changes in key assumptions, such as assumed future reimbursement rates, rising interest rates and labor costs and delays in the Company’s ability to complete de novo location openings, which could negatively impact forecasted cash flows and result in an impairment charge in future periods.
As of December 31, 2025 and 2024, Goodwill included consolidated accumulated impairment charges of $401.2 million and $356.5 million, respectively.
The following table provides information regarding other Intangible assets, net (in millions):
| Gross Carrying Amount | Accumulated Amortization | Net | |||||||||||||||
| Certificates of need: | |||||||||||||||||
| 2025 | $ | 85.8 | $ | (66.3) | $ | 19.5 | |||||||||||
| 2024 | $ | 89.2 | $ | (58.6) | $ | 30.6 | |||||||||||
| Licenses: | |||||||||||||||||
| 2025 | $ | 129.5 | $ | (112.4) | $ | 17.1 | |||||||||||
| 2024 | $ | 131.2 | $ | (107.1) | $ | 24.1 | |||||||||||
| Noncompete agreements: | |||||||||||||||||
| 2025 | $ | 14.8 | $ | (14.0) | $ | 0.8 | |||||||||||
| 2024 | $ | 15.1 | $ | (13.5) | $ | 1.6 | |||||||||||
| Trade names: | |||||||||||||||||
| 2025 | $ | 7.4 | $ | (7.4) | $ | — | |||||||||||
| 2024 | $ | 7.6 | $ | (7.6) | $ | — | |||||||||||
| Internal-use software: | |||||||||||||||||
| 2025 | $ | 32.3 | $ | (31.2) | $ | 1.1 | |||||||||||
| 2024 | $ | 32.1 | $ | (30.3) | $ | 1.8 | |||||||||||
| Total intangible assets: | |||||||||||||||||
| 2025 | $ | 269.8 | $ | (231.3) | $ | 38.5 | |||||||||||
| 2024 | $ | 275.2 | $ | (217.1) | $ | 58.1 | |||||||||||
Amortization expense for other intangible assets is as follows (in millions):
Year Ended December 31, | |||||||||||||||||
| 2025 | 2024 | 2023 | |||||||||||||||
| Amortization expense | $ | 16.6 | $ | 23.9 | $ | 23.5 | |||||||||||
Historical Timeline
| Fiscal Year | Filed | |
|---|---|---|
| 2025 | Mar 5, 2026 | Showing above |
| 2024 | Mar 6, 2025 | |
| 2023 | Mar 15, 2024 | |
| 2022 | Apr 14, 2023 | |
About Goodwill & Intangibles Disclosures
Goodwill and intangible asset disclosures reveal the premium paid in acquisitions and how management assesses whether that premium retains its value. Since goodwill is no longer amortized under US GAAP, the annual impairment test is the only mechanism that adjusts carrying values downward — making the assumptions behind that test critically important for investors.
Key signals: a history of goodwill impairments suggests management consistently overpays for acquisitions. Watch the gap between reporting unit fair value and carrying amount — when fair value exceeds carrying amount by less than 10-20%, a small decline in business performance could trigger a write-down. For finite-lived intangibles, examine useful life assumptions across customer relationships, technology, and trade names; aggressive estimates inflate near-term earnings. Compare total intangibles-to-total-assets ratios against peers to assess acquisition dependency. Rising goodwill as a percentage of equity can signal balance sheet fragility.