HealthSouth Corporation
Consolidated net operating revenues were $431.6 million for the third quarter of 2007 compared to $413.5 million for the third quarter of 2006. Net operating revenues from our inpatient hospitals were $383.5 million, representing a 5.1% increase over the same quarter of 2006. This increase was primarily attributable to an increase in our patient case mix index and continued compliant case growth, both of which increased our revenue per discharge, offset by slightly lower discharges quarter over quarter due primarily to nine hospitals that moved from a 60% compliance threshold to a 65% compliance threshold under the 75% Rule on July 1, 2007.
Total operating expenses increased by 0.7% while salaries and benefits increased by 3.8% in the third quarter of 2007 compared to the third quarter of 2006. This increase represents our continued investment in our most valuable resource, our employees, and was lower than the 5.5% increase we experienced in the second quarter of 2007 over the comparable period of 2006 primarily due to lower contract labor utilization. The third quarter of 2006 included a $35.0 million recovery of incentive bonuses from our former chairman and chief executive officer, Richard M. Scrushy. Excluding this recovery, operating expenses decreased by 7.7% quarter over quarter due primarily to continued reductions in our general and administrative expenses, professional fees, and amounts recorded as government, class action, and related settlements expense. General and administrative expenses decreased due primarily to the divestiture of our surgery centers, outpatient, and diagnostic divisions in the second and third quarters of 2007, though some costs related to the divested divisions remained in the third quarter.
Operating earnings (see supplemental information attached to this press release for calculation) were $43.3 million for the third quarter of 2007 compared to operating earnings of $28.7 million for the third quarter of 2006.
“We saw good progress in the current quarter as both revenues and operating earnings improved over prior year,” said Jay Grinney, President and Chief Executive Officer of HealthSouth. “Inpatient hospital revenues were up 5.1% and salaries and benefits improved as a percent of net operating revenues. In addition, based on industry data published through the Uniform Data System for Medical Rehabilitation for the second quarter of 2007, our hospitals continued to grow their market share of compliant cases. This industry information, as reported on a quarter lag, showed a 6.7% compliant case growth by HealthSouth during the second quarter of 2007 compared to an average 1.8% decline for non-HealthSouth rehabilitation sites, which reinforces our role as the nation’s preeminent provider of inpatient rehabilitative services.”
The Company reported a pre-tax loss from continuing operations of $31.1 million, or $0.40 per share (basic and diluted), for the third quarter of 2007 compared to its pre-tax loss from continuing operations of $56.0 million, or $0.70 per share (basic and diluted), for the third quarter of 2006. Our pre- tax loss from continuing operations for the third quarter of 2007 included an $8.6 million gain related to the sale of our remaining investment in Source Medical Solutions, Inc.
Net income available to common shareholders was $281.1 million, or $3.58 per basic share ($3.13 per diluted share), for the third quarter of 2007 compared to a net loss available to common shareholders of $82.6 million, or $1.04 per share (basic and diluted), for the third quarter of 2006. Our net income in the third quarter of 2007 included approximately $40.4 million of post-tax gains associated with our divestures. Net income for the quarter also included a $281.1 million income tax benefit as a result of our recovery of federal income taxes paid and associated interest related to tax years 1996 through 1999. As previously reported, in October 2007, we received a $440 million income tax recovery from the Internal Revenue Service (the “IRS”).
“Our income tax recovery was a great accomplishment,” said John Workman, Executive Vice President and Chief Financial Officer of HealthSouth. “We truly appreciate the work done on this project by our team at HealthSouth and its outside advisors, and the professional manner with which the IRS worked with us on this project. The use of the proceeds from this income tax recovery allowed us to reduce our debt significantly subsequent to the end of the quarter. We are also continuing to see progress in lowering our general and administrative expenses as a result of the completion of the divestitures, even as we are investing in new activities that we expect to benefit future performance. We are making sound progress to position our general and administrative expense at the appropriate level for the remaining business. With the final SEC Settlement and Medicare Program Settlement payments being made in the fourth quarter of 2007, we are well positioned to generate free cash flow in the future.”
Cash Flow and Balance Sheet
Cash and cash equivalents were $15.9 million as of September 30, 2007. Total debt was $2.4 billion. Capital expenditures were $10.0 million for the quarter and $25.2 million for the year-to-date period.
Our government, class action, and related settlements liability decreased by $24.7 million during the third quarter of 2007 and by $141.3 million since December 31, 2006. We expect to make the final payment of $21.9 million for our Medicare Program Settlement in December 2007, and we made the final $25.0 million payment related to our SEC Settlement in October 2007.
Our leverage and liquidity are improving. During the second and third quarters of 2007, we used the net proceeds from the divestiture of our surgery centers, outpatient, and diagnostic divisions to pay down debt. As a result of these transactions, our total debt outstanding has decreased from $3.4 billion as of December 31, 2006 to $2.4 billion as of September 30, 2007. In addition, in October 2007, we used approximately $405 million of our $440 million income tax recovery from the IRS to pay down amounts outstanding under our Credit Agreement.
In addition to the debt pre-payments discussed above, during the third quarter of 2007, we used available cash and borrowings on our revolving credit facility to redeem approximately $32 million of our 10.75% Senior Notes due 2016. In October 2007, we used available cash to redeem an additional $19 million of these higher interest rate notes.
Other Information
As discussed in more detail in our Form 10-Q’s filed with the United States Securities and Exchange Commission (the “SEC”) for the quarterly periods ended June 30, 2007 and March 31, 2007, historically, we have reported five segments: inpatient, surgery centers, outpatient, diagnostic, and corporate and other. Based on our strategic focus in the inpatient rehabilitation industry and the reclassification of our surgery centers, outpatient, and diagnostic divisions to discontinued operations, we modified our segment reporting from five reportable segments to one reportable segment in the first quarter of 2007. Amounts historically reported as part of our corporate and other segment, which primarily represented the corporate overhead costs associated with our operating divisions, are no longer considered a reportable segment due to our strategic repositioning as a pure- play post-acute care provider and the change in the manner in which we now manage the Company. Rather, these corporate overhead costs are now presented on the line entitled General and administrative expenses in our condensed consolidated statements of operations and comprehensive income (loss). Therefore, the condensed consolidated results of operations of the Company presented herein represent the continuing operations of our inpatient division, including corporate overhead. Our condensed consolidated results of operations include overhead costs associated with managing and providing shared services to our surgery centers, outpatient, and diagnostic divisions, even though these divisions qualify as discontinued operations.
The Company expects to file its Form 10-Q for the quarterly period ended September 30, 2007 this week. When filed, the report can be found on the SEC’s website at www.sec.gov. The information in this press release is summarized and should be read in conjunction with the Form 10-Q for the quarterly period ended September 30, 2007, when filed.
HealthSouth Corporation and Subsidiaries
Condensed Consolidated Statements of Operations
and Comprehensive Income (Loss)
(Unaudited)
Three Months Ended Nine Months Ended
September 30, September 30,
2007 2006 2007 2006
Net operating revenues $431.6 $413.5 $1,313.5 $1,288.8
Operating expenses:
Salaries and benefits 213.1 205.3 642.1 612.3
Other operating expenses 66.1 48.5 195.1 175.5
General and administrative
expenses 27.5 36.5 107.2 107.6
Supplies 24.2 25.4 75.1 75.5
Depreciation and
amortization 19.9 20.7 57.8 63.3
Impairment of long-lived
assets 0.4 - 15.1 -
Recovery of amounts due from
Richard M. Scrushy - (35.0) - (35.0)
Occupancy costs 12.8 15.6 38.5 39.9
Provision for doubtful
accounts 5.7 11.1 26.6 25.9
Loss on disposal of assets 0.6 1.0 2.2 5.2
Government, class action, and
related settlements expense 3.9 28.4 (31.7) 49.9
Professional fees-accounting,
tax, and legal 9.2 23.1 44.3 99.4
Total operating expenses 383.4 380.6 1,172.3 1,219.5
Loss on early extinguishment
of debt 2.2 - 19.9 365.6
Interest expense and
amortization of debt
discounts and fees 60.2 56.8 177.9 176.8
Other income (9.4) (0.8) (14.5) (5.7)
Loss on interest rate swap 21.4 28.7 6.8 13.9
Equity in net income of
nonconsolidated affiliates (2.3) (2.4) (7.4) (6.8)
Minority interests in earnings
of consolidated affiliates 7.2 6.6 23.2 22.8
Loss from continuing
operations before
income tax (benefit)
expense (31.1) (56.0) (64.7) (497.3)
Provision for income tax
(benefit) expense (281.1) 2.1 (288.2) 21.0
Income (loss) from
continuing operations 250.0 (58.1) 223.5 (518.3)
Income (loss) from
discontinued operations, net
of income tax (benefit)
expense 37.6 (18.0) 475.7 (35.4)
Net income (loss) 287.6 (76.1) 699.2 (553.7)
Convertible perpetual
preferred dividends (6.5) (6.5) (19.5) (15.7)
Net income (loss)
available to common
shareholders $281.1 $(82.6) $679.7 $(569.4)
Comprehensive income (loss):
Net income (loss) $287.6 $(76.1) $699.2 $(553.7)
Other comprehensive income
(loss), net of tax:
Foreign currency
translation adjustment - 0.4 0.1 0.3
Unrealized gain (loss)
on available-for-sale
securities 0.3 1.6 (3.0) 1.4
Other comprehensive
income (loss), net of
tax 0.3 2.0 (2.9) 1.7
Comprehensive income
(loss) $287.9 $(74.1) $696.3 $(552.0)
HealthSouth Corporation and Subsidiaries
Condensed Consolidated Statements of Operations
and Comprehensive Income (Loss) (Continued)
(Unaudited)
Three Months Ended Nine Months Ended
September 30, September 30,
2007 2006 2007 2006
(In Millions, Except Per Share Data)
Weighted average common shares
outstanding:
Basic 78.5 79.6 78.6 79.5
Diluted 91.8 92.9 91.9 89.6
Earnings (loss) per common
share:
Basic:
Income (loss) from
continuing operations
available to common
shareholders $3.10 $(0.81) $2.60 $(6.72)
Income (loss) from
discontinued
operations, net
of income tax
(benefit) expense 0.48 (0.23) 6.05 (0.44)
Net income (loss) per
share available to
common shareholders $3.58 $(1.04) $8.65 $(7.16)
Diluted:
Income (loss) from
continuing operations
available to common
shareholders $2.72 $(0.81) $2.43 $(6.72)
Income (loss) from
discontinued
operations, net
of income tax
(benefit) expense 0.41 (0.23) 5.18 (0.44)
Net income (loss) per share
available to common
shareholders $3.13 $(1.04) $7.61 $(7.16)
HealthSouth Corporation and Subsidiaries
Condensed Consolidated Balance Sheets
(Unaudited)
(In Millions, Except Share Data)
September 30, December 31,
2007 2006
Assets
Current assets:
Cash and cash equivalents $15.9 $27.1
Current portion of restricted cash 53.2 60.3
Current portion of restricted
marketable securities 17.5 37.5
Accounts receivable, net of allowance
for doubtful accounts of $36.3 in 2007;
$35.3 in 2006 229.7 213.9
Insurance recoveries receivable 230.0 230.0
Other current assets 98.4 78.0
Current assets held for sale 24.2 233.5
Total current assets 668.9 880.3
Property and equipment, net 755.0 810.5
Goodwill 406.0 406.1
Intangible assets, net 27.2 30.4
Investment in and advances to
nonconsolidated affiliates 41.3 37.7
Assets held for sale 87.9 834.4
Income tax refund receivable 453.7 218.8
Other long-term assets 88.9 142.6
Total assets $2,528.9 $3,360.8
Liabilities and Shareholders' Deficit
Current liabilities:
Current portion of long-term debt $40.9 $33.6
Accounts payable 50.1 66.9
Accrued expenses and other current liabilities 364.5 372.4
Government, class action, and related
settlements 429.3 570.6
Current liabilities held for sale 134.7 218.0
Total current liabilities 1,019.5 1,261.5
Long-term debt, net of current portion 2,351.9 3,343.1
Liabilities held for sale 6.6 40.6
Other long-term liabilities 175.4 241.7
3,553.4 4,886.9
Commitments and contingencies
Minority interest in equity of
consolidated affiliates 93.6 271.1
Convertible perpetual preferred stock,
$.10 par value; 1,500,000 shares authorized;
400,000 issued in 2007 and 2006;
liquidation preference of $1,000 per share 387.4 387.4
Shareholders' deficit:
Common stock, $.01 par value;
200,000,000 shares authorized;
issued: 88,112,764 in 2007;
87,999,513 in 2006 0.9 0.9
Capital in excess of par value 2,838.7 2,849.5
Accumulated deficit (4,018.9) (4,713.9)
Accumulated other comprehensive
(loss) income (1.2) 1.6
Treasury stock, at cost (9,519,218 shares
in 2007 and 9,320,001 shares in 2006) (325.0) (322.6)
Notes receivable from shareholders,
officers, and management employees - (0.1)
Total shareholders' deficit (1,505.5) (2,184.6)
Total liabilities and shareholders' deficit $2,528.9 $3,360.8
HealthSouth Corporation and Subsidiaries
Condensed Consolidated Statements of Cash Flows
(Unaudited)
(In Millions)
Nine Months Ended
September 30,
2007 2006
Net cash used in operating activities $(145.6) $(79.3)
Net cash provided by investing activities 1,187.9 53.9
Net cash used in financing activities (1,066.8) (118.1)
Effect of exchange rate on cash
and cash equivalents 0.1 0.3
Decrease in cash and cash equivalents (24.4) (143.2)
Cash and cash equivalents at beginning of period 27.1 166.6
Cash and cash equivalents of divisions and
facilities held for sale at beginning of period 14.4 12.5
Less: Cash and cash equivalents of divisions and
facilities held for sale at end of period (1.2) (12.5)
Cash and cash equivalents at end of period $15.9 $23.4
Operating activities. Operating cash associated with discontinued operations decreased from a $32.6 million source of cash in the nine months ended September 30, 2006 to a $34.5 million use of cash in the nine months ended September 30, 2007. Excluding the change in operating cash associated with discontinued operations, our net cash used in operating activities would have decreased by approximately $0.8 million.
Investing activities. The increase in cash provided by investing activities was due to the cash proceeds received from the divestiture of our surgery centers, outpatient, and diagnostic divisions during the second and third quarters of 2007.
Financing activities. The increase in net cash used in financing activities was due to the use of the cash proceeds from the divestiture of our surgery centers, outpatient, and diagnostic divisions to reduce debt outstanding under our Credit Agreement during the second and third quarters of 2007. During the nine months ended September 30, 2007, we made approximately $985.5 million of net debt payments. During the nine months ended September 30, 2006, we had net borrowings of approximately $58.1 million, including the issuance of convertible perpetual preferred stock.
HealthSouth Corporation and Subsidiaries
Supplemental Non-GAAP Disclosures
Adjusted Consolidated EBITDA
Three Months Ended Nine Months Ended
September 30, September 30,
2007 2006 2007 2006
(In Millions)
Net income (loss) $287.6 $(76.1) $699.2 $(553.7)
(Income) loss from
discontinued operations (37.6) 18.0 (475.7) 35.4
Provision for income tax
(benefit) expense (281.1) 2.1 (288.2) 21.0
Loss on interest rate swap 21.4 28.7 6.8 13.9
Interest expense and
amortization of debt
discounts and fees 60.2 56.8 177.9 176.8
Loss on early extinguishment
of debt 2.2 - 19.9 365.6
Government, class action, and
related settlements 3.9 28.4 (31.7) 49.9
Net noncash loss on disposal of
assets 0.6 1.1 2.2 5.3
Impairment charges 0.4 - 15.1 -
Depreciation and amortization 19.9 20.7 57.8 63.3
Professional fees-accounting,
tax, and legal 9.2 23.1 44.3 99.4
Compensation expense under
FASB Statement
No. 123( R ) 2.0 3.6 8.1 11.6
Restructuring activities under
FASB Statement No. 146 - - - 0.3
Sarbanes-Oxley related costs - 0.9 0.3 4.2
Adjusted Consolidated
EBITDA(1)* $88.7 $107.3 $236.0 $293.0
(1) Adjusted Consolidated EBITDA is a non-GAAP financial measure. We
believe it is useful to investors as it is used in our covenant
calculations under our Credit Agreement.
Adjusted Consolidated EBITDA is not a measure of financial
performance under accounting principles generally accepted in the
United States and should not be considered as an alternative to net
income (loss) or to cash flows from operating, investing, or
financing activities. Because Adjusted Consolidated EBITDA is not a
measure determined in accordance with generally accepted accounting
principles and is susceptible to varying calculations, Adjusted
Consolidated EBITDA, as presented, may not be comparable to other
similarly titled measures presented by other companies.
Our Credit Agreement allows certain items to be added to arrive at
Adjusted Consolidated EBITDA that are viewed as not being ongoing
costs once the Company has completed its restructuring.
After consummation of the divestitures of our surgery centers,
outpatient, and diagnostic divisions, and in accordance with our
Credit Agreement, Adjusted Consolidated EBITDA is calculated to give
effect to each divestiture, including adjustments for the allocation
of corporate overhead to each divested division. However, these
allocations are estimates and are not necessarily indicative of the
Adjusted Consolidated EBITDA that would have resulted had the
applicable divisions been divested as of the beginning of each period
presented. Accordingly, these adjustments are not included in the
above table. In addition, we are allowed to add other income,
including interest income, to the calculation of Adjusted
Consolidated EBITDA under our Credit Agreement. This includes
interest income associated with our federal income tax recovery. This
amount has not been included in the above calculation as it would not
be indicative of our Adjusted Consolidated EBITDA for future periods.
Adjusted Consolidated EBITDA for the three and nine months ended
September 30, 2007 includes an $8.6 million gain on the sale of our
remaining investment in Source Medical Solutions, Inc. Adjusted
Consolidated EBITDA for the three and nine months ended September 30,
2006 includes a $35.0 million recovery of incentive bonuses from
Richard M. Scrushy, our former chairman and chief executive officer.
* Adjusted Consolidated EBITDA includes general and administrative
expenses for all divisions. General and administrative expenses
approximated 6.4% and 8.2% of consolidated net operating revenues for
the three and nine months ended September 30, 2007, respectively.
However, these percentages decrease by 60 basis points and 260 basis
points, respectively, if you include the revenues of the divisions
reported in discontinued operations.
HealthSouth Corporation and Subsidiaries
Supplemental Non-GAAP Disclosures
Operating Earnings
We define operating earnings as income before (1) loss on early extinguishment of debt, (2) interest expense and amortization of debt discounts and fees, (3) other income, (4) loss on interest rate swap, and (5) income tax (benefit) expense. We use operating earnings as an analytical indicator to assess our performance. Our operating earnings for the three and nine months ended September 30, 2007 and 2006 were as follows:
Three Months Ended Nine Months Ended
September 30, September 30,
2007 2006 2007 2006
(In Millions)
Net operating revenues $431.6 $413.5 $1,313.5 $1,288.8
Total operating expenses 383.4 380.6 1,172.3 1,219.5
Equity in net income of
nonconsolidated affiliates (2.3) (2.4) (7.4) (6.8)
Minority interests in earnings
of consolidated affiliates 7.2 6.6 23.2 22.8
Operating earnings $43.3 $28.7 $125.4 $53.3
Operating earnings is not a defined measure of financial performance under accounting principles generally accepted in the United States and should not be considered as an alternative to net income (loss). Because operating earnings is not a measure determined in accordance with generally accepted accounting principles and is susceptible to varying calculations, operating earnings, as presented, may not be comparable to other similarly titled measures presented by other companies.
HealthSouth Corporation and Subsidiaries
Supplemental Information
September 30, December 31, September 30,
2007 2006 2006
# of inpatient rehabilitation
hospitals 94 92 92
# of long-term acute care hospitals 6 10 10
# of outpatient satellites 70 81 91
Three Months Ended Nine Months Ended
September 30, September 30,
2007 2006 2007 2006
(In Millions)
Net patient revenue-inpatient $383.5 $364.9 $1,164.9 $1,122.3
Net patient revenue-outpatient
and other revenues 48.1 48.6 148.6 166.5
Net operating revenues $431.6 $413.5 $1,313.5 $1,288.8
(Actual Amounts)
Discharges* 24,709 24,938 76,279 76,463
Outpatient visits 324,962 356,601 1,017,257 1,110,202
Average length of stay 15.4 days 15.4 days 15.2 days 15.2 days
Occupancy % 61.8% 63.5% 63.7% 64.9%
# of licensed beds 6,669 6,567 6,669 6,567
Full-time equivalents** 15,434 15,614 15,530 15,738
* Represents discharges from our consolidated hospitals. As of
September 30, 2007, we had 91 consolidated hospitals.
** Excludes 589 and 865 full-time equivalents for the three months ended
September 30, 2007 and 2006, respectively, and 761 and 845 full-time
equivalents for the nine months ended September 30, 2007 and 2006,
respectively, who are considered part of corporate overhead with their
salaries and benefits included in general and administrative expenses
in our condensed consolidated statements of operations and
comprehensive income (loss). Full-time equivalents included in the
above table represent those who participate in or support the
operations of our hospitals.
Our required compliance rates under the 75% Rule are as follows:
Minimum Compliance Threshold
# of
Cost Reporting Consolidated
Year End Hospitals* 50% 60% 65% 75%
June 30 9 July 1, July 1, July 1, July 1,
2004 - 2005 - 2007 - 2008 -
June 30, June 30, June 30, forward
2005 2007 2008
December 31 65 January 1, January 1, January 1, January 1,
2005 - 2006 - 2008 - 2009 -
December 31, December 31, December 31, forward
2005 2007 2008
May 31 17 June 1, June 1, June 1, June 1,
2005 - 2006 - 2008 - 2009 -
May 31, May 31, May 31, forward
2006 2008 2009
* As of September 30, 2007, we operated 94 inpatient rehabilitation
hospitals, including 3 hospitals which we account for under the equity
method of accounting.
HealthSouth Corporation and Subsidiaries
Supplemental Information
During the three and nine months ended September 30, 2007 and 2006, we derived consolidated net operating revenues from the following payor sources:
Three Months Ended Nine Months Ended
September 30, September 30,
2007 2006 2007 2006
Medicare 66.0% 68.1% 67.7% 68.7%
Medicaid 2.1% 2.1% 1.9% 2.1%
Workers' compensation 2.4% 2.6% 2.3% 2.6%
Managed care and other
discount plans 19.2% 19.2% 18.6% 18.4%
Other third-party payors 6.7% 4.9% 6.2% 5.0%
Patients 1.1% 0.5% 0.7% 0.3%
Other income 2.5% 2.6% 2.6% 2.9%
Total 100.0% 100.0% 100.0% 100.0%
Our operating results of discontinued operations were as follows:
Three Months Ended Nine Months Ended
September 30, September 30,
2007 2006 2007 2006
(In Millions)
Net operating revenues $41.2 $331.8 $603.3 $1,050.3
Costs and expenses 36.4 349.9 574.6 1,075.8
Impairments 1.3 0.2 37.2 6.9
Income (loss) from
discontinued operations 3.5 (18.3) (8.5) (32.4)
Gain on disposal of assets of
discontinued operations 1.6 4.6 3.1 9.3
Gain on divestiture of
divisions 40.4 - 443.6 -
Income tax (expense) benefit (7.9) (4.3) 37.5 (12.3)
Income (loss) from
discontinued
operations, net of tax $37.6 $(18.0) $475.7 $(35.4)
HealthSouth Corporation and Subsidiaries
Earnings Conference Call
The Company will host an investor conference call at 8:30 a.m. Eastern Time on Tuesday, November 6, 2007, to discuss its results for the third quarter of 2007.
The conference call may be accessed by dialing 866-491-4244 and giving the pass code 9323478. International callers should dial 973-582-2815 and give the same pass code. Please call approximately 10 minutes before the start of the call to ensure you are connected. The conference call will also be webcast live and will be available at www.healthsouth.com by clicking on an available link.
A replay of the conference call will be available, beginning approximately two hours after the completion of the conference call, from November 6 until November 20, 2007. To access the replay, please dial 877-519-4471. International callers should dial 973-341-3080. The webcast will also be archived for replay purposes for two weeks after the live broadcast on www.healthsouth.com.
About HealthSouth
HealthSouth is the nation’s largest provider of inpatient rehabilitation services. Operating in 26 states across the country and in Puerto Rico, HealthSouth serves more than 250,000 patients annually through its network of inpatient rehabilitation hospitals, long-term acute care hospitals, outpatient rehabilitation satellites, and home health agencies. HealthSouth strives to be the health care company of choice for its patients, employees, physicians and shareholders and can be found on the Web at www.healthsouth.com.
Statements contained in this press release which are not historical facts are forward-looking statements. In addition, HealthSouth, through its senior management, may from time to time make forward-looking public statements concerning the matters described herein. Such forward-looking statements are necessarily estimates based upon current information and involve a number of risks and uncertainties. HealthSouth’s actual results may differ materially from the results 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 results to differ materially from those estimated by HealthSouth include, but are not limited to, any adverse outcome of various lawsuits, claims, and legal or regulatory proceedings that may be brought against us or any adverse outcome relating to the settlement of the federal securities class action previously disclosed by us; significant changes in HealthSouth’s management team; HealthSouth’s ability to successfully manage the post-closing financial risks and challenges related to its divestiture transactions; HealthSouth’s ability to continue to operate in the ordinary course and manage its relationships with its creditors, including its lenders, bondholders, vendors and suppliers, employees, and customers; HealthSouth’s ability to successfully remediate its internal control weakness; changes, delays in, or suspension of reimbursement for HealthSouth’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; competitive pressures in the healthcare industry and HealthSouth’s response thereto; HealthSouth’s ability to obtain and retain favorable arrangements with third- party payors; HealthSouth’s ability to attract and retain nurses, therapists, and other healthcare professionals in a highly competitive environment with often severe staffing shortages; general conditions in the economy and capital markets; and other factors which may be identified from time to time in the Company’s SEC filings and other public announcements, including HealthSouth’s Form 10-K for the year ended December 31, 2006 and related Current Report on Form 8-K filed on March 30, 2007.
Media Contact
Andy Brimmer, 205-410-2777
First Call Analyst:
FCMN Contact:
SOURCE: HealthSouth Corporation
CONTACT: Andy Brimmer of HealthSouth Corporation, +1-205-410-2777