2020 Q2 Form 10-Q Financial Statement

#000078516120000056 Filed on July 31, 2020

View on sec.gov

Income Statement

Concept 2020 Q2 2019 Q2
Revenue $1.074B $1.135B
YoY Change -5.37% 6.3%
Cost Of Revenue $50.60M $41.70M
YoY Change 21.34% 6.11%
Gross Profit $1.024B $1.093B
YoY Change -6.38% 6.31%
Gross Profit Margin 95.29% 96.33%
Selling, General & Admin $715.2M $720.3M
YoY Change -0.71% 10.37%
% of Gross Profit 69.88% 65.88%
Research & Development
YoY Change
% of Gross Profit
Depreciation & Amortization $60.70M $52.70M
YoY Change 15.18% 6.04%
% of Gross Profit 5.93% 4.82%
Operating Expenses $924.2M $922.8M
YoY Change 0.15% 8.35%
Operating Profit $85.20M $152.6M
YoY Change -44.17% -2.99%
Interest Expense $45.80M $37.70M
YoY Change 21.49% 0.0%
% of Operating Profit 53.76% 24.71%
Other Income/Expense, Net $5.800M $2.200M
YoY Change 163.64% 69.23%
Pretax Income $60.00M $134.5M
YoY Change -55.39% -5.48%
Income Tax $11.80M $23.50M
% Of Pretax Income 19.67% 17.47%
Net Earnings $33.50M $91.20M
YoY Change -63.27% -0.65%
Net Earnings / Revenue 3.12% 8.04%
Basic Earnings Per Share $0.34 $0.93
Diluted Earnings Per Share $0.34 $0.92
COMMON SHARES
Basic Shares Outstanding 98.70M shares 98.00M shares
Diluted Shares Outstanding 99.90M shares 99.30M shares

Balance Sheet

Concept 2020 Q2 2019 Q2
SHORT-TERM ASSETS
Cash & Short-Term Investments $419.0M $221.7M
YoY Change 88.99% 275.76%
Cash & Equivalents $419.0M $221.7M
Short-Term Investments
Other Short-Term Assets $73.10M $70.40M
YoY Change 3.84% -21.95%
Inventory
Prepaid Expenses
Receivables $553.2M $496.0M
Other Receivables $0.00 $0.00
Total Short-Term Assets $1.102B $844.9M
YoY Change 30.39% 25.8%
LONG-TERM ASSETS
Property, Plant & Equipment $2.041B $1.788B
YoY Change 14.17% 14.2%
Goodwill $2.319B $2.112B
YoY Change 9.81% 1.78%
Intangibles $455.8M $443.6M
YoY Change 2.75% 0.05%
Long-Term Investments $5.400M $13.90M
YoY Change -61.15% 10.32%
Other Assets $305.3M $296.9M
YoY Change 2.83% 14.85%
Total Long-Term Assets $5.401B $4.967B
YoY Change 8.73% 12.44%
TOTAL ASSETS
Total Short-Term Assets $1.102B $844.9M
Total Long-Term Assets $5.401B $4.967B
Total Assets $6.503B $5.812B
YoY Change 11.88% 14.2%
SHORT-TERM LIABILITIES
YoY Change
Accounts Payable $93.10M $95.60M
YoY Change -2.62% 11.68%
Accrued Expenses $534.4M $619.2M
YoY Change -13.7% 36.9%
Deferred Revenue
YoY Change
Short-Term Debt $0.00 $0.00
YoY Change
Long-Term Debt Due $36.90M $38.10M
YoY Change -3.15% 5.83%
Total Short-Term Liabilities $664.4M $752.9M
YoY Change -11.75% 31.19%
LONG-TERM LIABILITIES
Long-Term Debt $3.547B $2.720B
YoY Change 30.41% 4.58%
Other Long-Term Liabilities $191.7M $157.2M
YoY Change 21.95% -17.18%
Total Long-Term Liabilities $191.7M $157.2M
YoY Change 21.95% -17.18%
TOTAL LIABILITIES
Total Short-Term Liabilities $664.4M $752.9M
Total Long-Term Liabilities $191.7M $157.2M
Total Liabilities $4.638B $3.876B
YoY Change 19.67% 15.2%
SHAREHOLDERS EQUITY
Retained Earnings
YoY Change
Common Stock
YoY Change
Preferred Stock
YoY Change
Treasury Stock (at cost)
YoY Change
Treasury Stock Shares
Shareholders Equity $1.463B $1.276B
YoY Change
Total Liabilities & Shareholders Equity $6.503B $5.812B
YoY Change 11.88% 14.2%

Cashflow Statement

Concept 2020 Q2 2019 Q2
OPERATING ACTIVITIES
Net Income $33.50M $91.20M
YoY Change -63.27% -0.65%
Depreciation, Depletion And Amortization $60.70M $52.70M
YoY Change 15.18% 6.04%
Cash From Operating Activities $222.3M $145.4M
YoY Change 52.89% -14.07%
INVESTING ACTIVITIES
Capital Expenditures -$87.50M -$90.10M
YoY Change -2.89% 53.75%
Acquisitions
YoY Change
Other Investing Activities -$4.600M -$10.00M
YoY Change -54.0% -92.95%
Cash From Investing Activities -$92.10M -$100.1M
YoY Change -7.99% -50.05%
FINANCING ACTIVITIES
Cash Dividend Paid
YoY Change
Common Stock Issuance & Retirement, Net
YoY Change
Debt Paid & Issued, Net
YoY Change
Cash From Financing Activities 182.8M 122.2M
YoY Change 49.59% 61000.0%
NET CHANGE
Cash From Operating Activities 222.3M 145.4M
Cash From Investing Activities -92.10M -100.1M
Cash From Financing Activities 182.8M 122.2M
Net Change In Cash 313.0M 167.5M
YoY Change 86.87% -640.32%
FREE CASH FLOW
Cash From Operating Activities $222.3M $145.4M
Capital Expenditures -$87.50M -$90.10M
Free Cash Flow $309.8M $235.5M
YoY Change 31.55% 3.38%

Facts In Submission

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CY2020Q2 ehc Net Income Loss Availableto Common Stockholders
NetIncomeLossAvailabletoCommonStockholders
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CY2019Q2 ehc Net Income Loss Availableto Common Stockholders
NetIncomeLossAvailabletoCommonStockholders
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ehc Net Income Loss Availableto Common Stockholders
NetIncomeLossAvailabletoCommonStockholders
120100000 USD
ehc Net Income Loss Availableto Common Stockholders
NetIncomeLossAvailabletoCommonStockholders
192800000 USD
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WeightedAverageNumberOfSharesOutstandingBasic
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CY2019Q2 us-gaap Weighted Average Number Of Shares Outstanding Basic
WeightedAverageNumberOfSharesOutstandingBasic
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us-gaap Weighted Average Number Of Shares Outstanding Basic
WeightedAverageNumberOfSharesOutstandingBasic
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us-gaap Weighted Average Number Of Shares Outstanding Basic
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us-gaap Income Loss From Continuing Operations Per Basic Share
IncomeLossFromContinuingOperationsPerBasicShare
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us-gaap Income Loss From Continuing Operations Per Basic Share
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IncomeLossFromDiscontinuedOperationsNetOfTaxPerBasicShare
0
ehc Income Loss From Continuing Operations Attributable To Common Shareholders Diluted
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120500000 USD
ehc Income Loss From Continuing Operations Attributable To Common Shareholders Diluted
IncomeLossFromContinuingOperationsAttributableToCommonShareholdersDiluted
194100000 USD
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IncomeLossFromDiscontinuedOperationsNetOfTaxAttributableToReportingEntity
100000 USD
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WeightedAverageNumberOfDilutedSharesOutstanding
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us-gaap Weighted Average Number Of Diluted Shares Outstanding
WeightedAverageNumberOfDilutedSharesOutstanding
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us-gaap Weighted Average Number Of Diluted Shares Outstanding
WeightedAverageNumberOfDilutedSharesOutstanding
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CY2020Q2 us-gaap Income Loss From Continuing Operations Per Diluted Share
IncomeLossFromContinuingOperationsPerDilutedShare
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us-gaap Income Loss From Discontinued Operations Net Of Tax Attributable To Reporting Entity
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us-gaap Income Loss From Discontinued Operations Net Of Tax Attributable To Reporting Entity
IncomeLossFromDiscontinuedOperationsNetOfTaxAttributableToReportingEntity
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NetIncomeLossAvailableToCommonStockholdersDiluted
33500000 USD
CY2019Q2 us-gaap Net Income Loss Available To Common Stockholders Diluted
NetIncomeLossAvailableToCommonStockholdersDiluted
91200000 USD
us-gaap Net Income Loss Available To Common Stockholders Diluted
NetIncomeLossAvailableToCommonStockholdersDiluted
120500000 USD
us-gaap Net Income Loss Available To Common Stockholders Diluted
NetIncomeLossAvailableToCommonStockholdersDiluted
193500000 USD
CY2020Q2 us-gaap Weighted Average Number Of Diluted Shares Outstanding
WeightedAverageNumberOfDilutedSharesOutstanding
99900000 shares
CY2019Q2 us-gaap Income Loss From Discontinued Operations Net Of Tax Per Basic Share
IncomeLossFromDiscontinuedOperationsNetOfTaxPerBasicShare
0
us-gaap Income Loss From Discontinued Operations Net Of Tax Per Basic Share
IncomeLossFromDiscontinuedOperationsNetOfTaxPerBasicShare
0
us-gaap Income Loss From Discontinued Operations Net Of Tax Per Basic Share
IncomeLossFromDiscontinuedOperationsNetOfTaxPerBasicShare
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EarningsPerShareBasic
0.34
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EarningsPerShareBasic
0.93
us-gaap Earnings Per Share Basic
EarningsPerShareBasic
1.22
us-gaap Earnings Per Share Basic
EarningsPerShareBasic
1.96
CY2020Q2 us-gaap Income Loss From Continuing Operations Including Portion Attributable To Noncontrolling Interest
IncomeLossFromContinuingOperationsIncludingPortionAttributableToNoncontrollingInterest
48200000 USD
CY2019Q2 us-gaap Income Loss From Continuing Operations Including Portion Attributable To Noncontrolling Interest
IncomeLossFromContinuingOperationsIncludingPortionAttributableToNoncontrollingInterest
111000000.0 USD
us-gaap Income Loss From Continuing Operations Including Portion Attributable To Noncontrolling Interest
IncomeLossFromContinuingOperationsIncludingPortionAttributableToNoncontrollingInterest
157000000.0 USD
us-gaap Income Loss From Continuing Operations Including Portion Attributable To Noncontrolling Interest
IncomeLossFromContinuingOperationsIncludingPortionAttributableToNoncontrollingInterest
236700000 USD
CY2020Q2 us-gaap Income Loss From Continuing Operations Attributable To Noncontrolling Entity
IncomeLossFromContinuingOperationsAttributableToNoncontrollingEntity
14800000 USD
CY2019Q2 us-gaap Income Loss From Continuing Operations Attributable To Noncontrolling Entity
IncomeLossFromContinuingOperationsAttributableToNoncontrollingEntity
19700000 USD
us-gaap Income Loss From Continuing Operations Attributable To Noncontrolling Entity
IncomeLossFromContinuingOperationsAttributableToNoncontrollingEntity
36500000 USD
us-gaap Income Loss From Continuing Operations Attributable To Noncontrolling Entity
IncomeLossFromContinuingOperationsAttributableToNoncontrollingEntity
42600000 USD
CY2020Q2 ehc Income Loss From Continuing Operations Attributable To Common Shareholders Diluted
IncomeLossFromContinuingOperationsAttributableToCommonShareholdersDiluted
33400000 USD
CY2019Q2 ehc Income Loss From Continuing Operations Attributable To Common Shareholders Diluted
IncomeLossFromContinuingOperationsAttributableToCommonShareholdersDiluted
91300000 USD
CY2019Q2 us-gaap Income Loss From Continuing Operations Per Diluted Share
IncomeLossFromContinuingOperationsPerDilutedShare
0.92
us-gaap Income Loss From Continuing Operations Per Diluted Share
IncomeLossFromContinuingOperationsPerDilutedShare
1.21
us-gaap Income Loss From Continuing Operations Per Diluted Share
IncomeLossFromContinuingOperationsPerDilutedShare
1.95
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IncomeLossFromDiscontinuedOperationsNetOfTaxPerDilutedShare
0
CY2019Q2 us-gaap Income Loss From Discontinued Operations Net Of Tax Per Diluted Share
IncomeLossFromDiscontinuedOperationsNetOfTaxPerDilutedShare
0
us-gaap Income Loss From Discontinued Operations Net Of Tax Per Diluted Share
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0
us-gaap Income Loss From Discontinued Operations Net Of Tax Per Diluted Share
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EarningsPerShareDiluted
0.34
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EarningsPerShareDiluted
0.92
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EarningsPerShareDiluted
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EarningsPerShareDiluted
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WeightedAverageNumberOfSharesOutstandingBasic
98700000 shares
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WeightedAverageNumberOfSharesOutstandingBasic
98000000.0 shares
us-gaap Weighted Average Number Of Shares Outstanding Basic
WeightedAverageNumberOfSharesOutstandingBasic
98500000 shares
us-gaap Weighted Average Number Of Shares Outstanding Basic
WeightedAverageNumberOfSharesOutstandingBasic
98200000 shares
CY2020Q2 us-gaap Incremental Common Shares Attributable To Share Based Payment Arrangements
IncrementalCommonSharesAttributableToShareBasedPaymentArrangements
1200000 shares
CY2019Q2 us-gaap Incremental Common Shares Attributable To Share Based Payment Arrangements
IncrementalCommonSharesAttributableToShareBasedPaymentArrangements
1300000 shares
us-gaap Incremental Common Shares Attributable To Share Based Payment Arrangements
IncrementalCommonSharesAttributableToShareBasedPaymentArrangements
1100000 shares
us-gaap Incremental Common Shares Attributable To Share Based Payment Arrangements
IncrementalCommonSharesAttributableToShareBasedPaymentArrangements
1300000 shares
CY2020Q2 us-gaap Weighted Average Number Of Diluted Shares Outstanding
WeightedAverageNumberOfDilutedSharesOutstanding
99900000 shares
CY2019Q2 us-gaap Weighted Average Number Of Diluted Shares Outstanding
WeightedAverageNumberOfDilutedSharesOutstanding
99300000 shares
us-gaap Weighted Average Number Of Diluted Shares Outstanding
WeightedAverageNumberOfDilutedSharesOutstanding
99600000 shares
us-gaap Weighted Average Number Of Diluted Shares Outstanding
WeightedAverageNumberOfDilutedSharesOutstanding
99500000 shares
us-gaap Loss Contingency Disclosures
LossContingencyDisclosures
<div style="line-height:120%;font-size:10pt;"><span style="font-family:inherit;font-size:10pt;font-weight:bold;">Contingencies and Other Commitments</span></div><div style="line-height:120%;padding-bottom:13px;text-align:left;text-indent:48px;font-size:10pt;"><span style="font-family:inherit;font-size:10pt;">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. </span></div><div style="line-height:120%;padding-bottom:13px;text-align:left;font-size:10pt;"><span style="font-family:inherit;font-size:10pt;font-style:italic;">Nichols Litigation—</span></div><div style="line-height:120%;padding-bottom:13px;text-align:left;text-indent:48px;font-size:10pt;"><span style="font-family:inherit;font-size:10pt;">We were named as a defendant in a lawsuit filed March 28, 2003 by several individual stockholders in the Circuit Court of Jefferson County, Alabama, captioned </span><span style="font-family:inherit;font-size:10pt;font-style:italic;">Nichols v. HealthSouth Corp</span><span style="font-family:inherit;font-size:10pt;">. In July 2019, we entered into settlement agreements with all but one plaintiff and paid those settling plaintiffs an aggregate amount of cash less than </span><span style="font-family:inherit;font-size:10pt;"><span>$0.1 million</span></span><span style="font-family:inherit;font-size:10pt;">. The remaining plaintiff alleges that we, some of our former officers, and our former investment bank engaged in a scheme to overstate and misrepresent our earnings and financial position. The plaintiff is seeking compensatory and punitive damages. </span></div><div style="line-height:120%;padding-bottom:13px;text-align:left;text-indent:48px;font-size:10pt;"><span style="font-family:inherit;font-size:10pt;">This case was stayed in the circuit court on August 8, 2005. However, the complaint has been amended from time to time, including to request certification as a class action. Additionally, one of the former officers named as a defendant has repeatedly attempted to remove the case to federal district court. We filed our latest motion to remand the case back to state court on January 10, 2013. On September 27, 2013, the federal court remanded the case back to state court. On December 10, 2014, we filed a motion to dismiss on the grounds the plaintiffs lacked standing because their claims were derivative in nature, and the claims were time-barred by the statute of limitations. On May 26, 2016, the trial court granted our motion to dismiss. On appeal, the Supreme Court of Alabama reversed the trial court’s dismissal on March 23, 2018. On April 6, 2018, we filed an application for rehearing with the Alabama Supreme Court. On March 22, 2019, the Alabama Supreme Court denied our application for rehearing and remanded the case to the trial court for further proceedings. The court has not yet set a date for the trial to begin. </span></div><div style="line-height:120%;padding-bottom:13px;text-align:left;text-indent:48px;font-size:10pt;"><span style="font-family:inherit;font-size:10pt;">We intend to vigorously defend ourselves in this case against the sole remaining plaintiff. Based on the stage of litigation, review of the current facts and circumstances as we understand them, the nature of the underlying claim, the results of the proceedings to date, and the nature and scope of the defense we continue to mount, we do not believe an adverse judgment or settlement is probable in this matter, and it is also not possible to estimate an amount of loss, if any, or range of possible loss that might result from an adverse judgment or settlement of this case.</span></div><div style="line-height:120%;padding-bottom:13px;text-align:left;font-size:10pt;"><span style="font-family:inherit;font-size:10pt;font-style:italic;">Other Matters—</span></div><div style="line-height:120%;padding-bottom:13px;text-align:left;text-indent:48px;font-size:10pt;"><span style="font-family:inherit;font-size:10pt;">The False Claims Act allows private citizens, called “relators,” to institute civil proceedings on behalf of the United States alleging violations of the False Claims Act. These lawsuits, also known as “whistleblower” or “</span><span style="font-family:inherit;font-size:10pt;font-style:italic;">qui tam</span><span style="font-family:inherit;font-size:10pt;">” actions, can involve significant monetary damages, fines, attorneys’ fees and the award of bounties to the relators who successfully prosecute or bring these suits to the government. </span><span style="font-family:inherit;font-size:10pt;font-style:italic;">Qui tam</span><span style="font-family:inherit;font-size:10pt;"> cases are sealed at the time of filing, which means knowledge of the information contained in the complaint typically is limited to the relator, the federal government, and the presiding court. The defendant in a </span><span style="font-family:inherit;font-size:10pt;font-style:italic;">qui tam</span><span style="font-family:inherit;font-size:10pt;"> action may remain unaware of the existence of a sealed complaint for years. While the complaint is under seal, the government reviews the merits of the case and may conduct a broad investigation and seek discovery from the </span></div><div style="line-height:120%;padding-bottom:13px;text-align:left;font-size:10pt;"><span style="font-family:inherit;font-size:10pt;">defendant and other parties before deciding whether to intervene in the case and take the lead on litigating the claims. The court lifts the seal when the government makes its decision on whether to intervene. If the government decides not to intervene, the relator may elect to continue to pursue the lawsuit individually on behalf of the government. It is possible that </span><span style="font-family:inherit;font-size:10pt;font-style:italic;">qui tam</span><span style="font-family:inherit;font-size:10pt;"> lawsuits have been filed against us, which suits remain under seal, or that we are unaware of such filings or precluded by existing law or court order from discussing or disclosing the filing of such suits. We may be subject to liability under one or more undisclosed </span><span style="font-family:inherit;font-size:10pt;font-style:italic;">qui tam</span><span style="font-family:inherit;font-size:10pt;"> cases brought pursuant to the False Claims Act.</span></div><div style="line-height:120%;padding-bottom:13px;text-align:left;text-indent:48px;font-size:10pt;"><span style="font-family:inherit;font-size:10pt;">It is our obligation as a participant in Medicare and other federal healthcare programs to routinely conduct audits and reviews of the accuracy of our billing systems and other regulatory compliance matters. As a result of these reviews, we have made, and will continue to make, disclosures to the United States Department of Health and Human Services Office of Inspector General and CMS relating to amounts we suspect represent over-payments from these programs, whether due to inaccurate billing or otherwise. Some of these disclosures have resulted in, or may result in, Encompass Health refunding amounts to Medicare or other federal healthcare programs.</span></div>
us-gaap Number Of Operating Segments
NumberOfOperatingSegments
2 segment
CY2020Q2 us-gaap Assets
Assets
6502500000 USD
CY2020Q2 us-gaap Investments In Affiliates Subsidiaries Associates And Joint Ventures
InvestmentsInAffiliatesSubsidiariesAssociatesAndJointVentures
5400000 USD
CY2019Q4 us-gaap Assets
Assets
6080700000 USD
CY2019Q4 us-gaap Investments In Affiliates Subsidiaries Associates And Joint Ventures
InvestmentsInAffiliatesSubsidiariesAssociatesAndJointVentures
7400000 USD
CY2020Q2 us-gaap Income Loss From Continuing Operations Before Income Taxes Extraordinary Items Noncontrolling Interest
IncomeLossFromContinuingOperationsBeforeIncomeTaxesExtraordinaryItemsNoncontrollingInterest
60000000.0 USD
CY2019Q2 us-gaap Income Loss From Continuing Operations Before Income Taxes Extraordinary Items Noncontrolling Interest
IncomeLossFromContinuingOperationsBeforeIncomeTaxesExtraordinaryItemsNoncontrollingInterest
134500000 USD
us-gaap Income Loss From Continuing Operations Before Income Taxes Extraordinary Items Noncontrolling Interest
IncomeLossFromContinuingOperationsBeforeIncomeTaxesExtraordinaryItemsNoncontrollingInterest
195900000 USD
us-gaap Income Loss From Continuing Operations Before Income Taxes Extraordinary Items Noncontrolling Interest
IncomeLossFromContinuingOperationsBeforeIncomeTaxesExtraordinaryItemsNoncontrollingInterest
291000000.0 USD
CY2020Q2 us-gaap Assets
Assets
6502500000 USD
CY2019Q4 us-gaap Assets
Assets
6080700000 USD
CY2020Q2 us-gaap Revenue From Contract With Customer Excluding Assessed Tax
RevenueFromContractWithCustomerExcludingAssessedTax
1074100000 USD
CY2019Q2 us-gaap Revenue From Contract With Customer Excluding Assessed Tax
RevenueFromContractWithCustomerExcludingAssessedTax
1135000000.0 USD
us-gaap Revenue From Contract With Customer Excluding Assessed Tax
RevenueFromContractWithCustomerExcludingAssessedTax
2256100000 USD
us-gaap Revenue From Contract With Customer Excluding Assessed Tax
RevenueFromContractWithCustomerExcludingAssessedTax
2259000000.0 USD

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