HealthSouth Reports Strong Results for Second Quarter 2013 and Raises Full-Year Guidance

    HealthSouth Reports Strong Results for Second Quarter 2013 and Raises
                              Full-Year Guidance

Revenue Growth of 5.8%

Discharge Growth of 6.3%

Cash Provided by Operating Activities of $105.4 million ($226.8 million
Year-to-Date)

Adjusted EBITDA Increased by 7.5%

Announces Initiation of Quarterly Cash Dividend on Common Stock

PR Newswire

BIRMINGHAM, Ala., July 25, 2013

BIRMINGHAM, Ala., July 25, 2013 /PRNewswire/ --HealthSouth Corporation (NYSE:
HLS), the nation's largest owner and operator of inpatient rehabilitation
hospitals, today reported its results of operations for the second quarter
ended June30, 2013.

"We are very pleased with the results of the second quarter," said Jay
Grinney, President and Chief Executive Officer of HealthSouth. "Net operating
revenues grew 5.8% quarter over quarter on strong demand for our services
while disciplined expense management resulted in a 7.5% increase in Adjusted
EBITDA despite sequestration headwinds. We also continued to grow our
portfolio of industry-leading hospitals with the opening of new hospitals in
Littleton, Colorado and Stuart, Florida; the latter is a joint venture with
Martin Health System. Importantly, our board of directors approved the
initiation of a quarterly cash dividend. This action underscores our
confidence in the sustainability of our business model and growth agenda while
rewarding existing shareholders and providing an incentive for new
shareholders to own our stock."

Second Quarter Results

  oConsolidated net operating revenues were $564.5 million for the second
    quarter of 2013 compared to $533.4 million for the second quarter of 2012,
    or an increase of 5.8%. This increase was attributable to a 6.3% increase
    in patient discharges and a 0.3% increase in net patient revenue per
    discharge. Discharge growth included a 3.3% increase in same-store
    discharges. Same-store discharges in the second quarter of 2013 were
    negatively impacted by the closure of 41 skilled nursing facility beds at
    two of the Company's hospitals in the first quarter of 2013. Approximately
    130 basis points of discharge growth from new stores resulted from the
    consolidation of St. Vincent Rehabilitation Hospital beginning in the
    third quarter of 2012. The increase in net patient revenue per discharge
    resulted from Medicare and managed care price adjustments, higher patient
    acuity, and a higher percentage of Medicare patients. Net patient revenue
    per discharge was negatively impacted in the second quarter of 2013 by
    sequestration and the ramping up of operations at three new hospitals. New
    hospitals are required to treat a minimum of 30 patients for zero revenue
    as part of the Medicare certification process.
  oIncome from continuing operations attributable to HealthSouth per diluted
    share for the second quarter of 2013 was $1.66 per share compared to $0.39
    per share for the same period of 2012. Earnings per share for the second
    quarter of 2013 included strong operating results, an income tax benefit
    of $1.15 per diluted share associated with a settlement with the IRS, and
    a lower share count. In April 2013, the Company entered into closing
    agreements with the IRS that settled income tax matters related to the
    previous restatement of its 2000 and 2001 financial statements, as well as
    certain other tax matters, through December 31, 2008 and resulted in an
    approximate $283 million increase in the Company's gross federal net
    operating loss. The lower share count in 2013 resulted from the Company's
    repurchase of approximately 9.1 million shares of its common stock in the
    first quarter of 2013.
  oCash flows provided by operating activities were $226.8 million for the
    six months ended June 30, 2013 compared to $195.0 million for the same
    period of 2012. This increase was primarily due to increased net operating
    revenues and continued disciplined expense management.
  oAdjusted EBITDA (see attached supplemental information) for the three
    months ended June 30, 2013 was $134.5 million compared to $125.1 million
    for the three months ended June 30, 2012, or an increase of 7.5%. This
    improvement was due primarily to continued revenue growth and disciplined
    expense management. Sequestration negatively impacted Adjusted EBITDA by
    approximately $8 million during the second quarter of 2013.
  oAdjusted free cash flow (see attached supplemental information) for the
    three months ended June 30, 2013 was $72.5 million compared to $70.0
    million for the same period of 2012. Adjusted free cash flow for the
    second quarter of 2013 benefited from higher Adjusted EBITDA and the
    timing of maintenance capital expenditures offset by the timing of
    interest payments.

"Our Company's ability to grow Adjusted EBITDA by 7.5% in the quarter in spite
of sequestration is further evidence of the strength of our business model,"
said Doug Coltharp, Executive Vice President and Chief Financial Officer of
HealthSouth. "Further, we continue to translate a high percentage of Adjusted
EBITDA into adjusted free cash flow, enhancing our flexibility to pursue an
array of shareholder value creating strategies."

Initiation of Quarterly Cash Dividend on Common Stock

On July 25, 2013, the Company's board of directors approved the initiation of
a quarterly cash dividend on its common stock of $0.18 per share, representing
$0.72 per share annually. The first quarterly dividend has been declared and
will be payable on or about October 15, 2013 to stockholders of record as of
the close of business on October 1, 2013. The Company expects quarterly
dividends to be paid in January, April, July, and October. However, the actual
declaration of any future cash dividends, and the establishment of record and
payment dates, will be subject to final approval by the Company's board of
directors each quarter after consideration of various factors, including the
Company's capital position and the best interests of its stockholders. Cash
dividends are expected to be funded using cash flows from operations, cash on
hand, and availability under the Company's revolving credit facility.

2013 Guidance

Based on its results for the first half of 2013, including the impact of the
income tax benefit discussed above, the Company is:

  oraising its full-year 2013 Adjusted EBITDA guidance to a range of $520
    million to $530 million from a range of $506 million to $516 million.
  oraising its full-year 2013 guidance for income from continuing operations
    attributable to HealthSouth per share to $2.87 to $2.93 per diluted share
    from $1.61 to $1.68 per basic share.

Earnings Conference Call and Webcast

The Company will host an investor conference call at 9:00 a.m. Eastern Time on
Friday, July26, 2013 to discuss its results for the second quarter of 2013.
For reference during the call, the Company will post certain supplemental
slides at http://investor.healthsouth.com.

The conference call may be accessed by dialing 877-587-6761 and giving the
pass code 97040207. International callers should dial 706-679-1635 and give
the same pass code. 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 at http://investor.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 July 26, 2013 until
August 9, 2013. To access the replay, please dial 855-859-2056. International
callers should dial 404-537-3406. The webcast will also be archived for replay
purposes after the live broadcast at http://investor.healthsouth.com.

About HealthSouth

HealthSouth is the nation's largest owner and operator of inpatient
rehabilitation hospitals in terms of patients treated and discharged,
revenues, and number of hospitals. Operating in 28 states across the country
and in Puerto Rico, HealthSouth serves patients through its network of
inpatient rehabilitation hospitals, outpatient rehabilitation satellite
clinics, and home health agencies. HealthSouth's hospitals provide a higher
level of rehabilitative care to patients who are recovering from conditions
such as stroke and other neurological disorders, orthopedic, cardiac and
pulmonary conditions, brain and spinal cord injuries, and amputations.
HealthSouth can be found on the Web at www.healthsouth.com.

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 June30, 2013 (the "June 2013 Form 10-Q"), when filed, as well as the
Company's Current Report on Form 8-K filed on July25, 2013. In addition, the
Company will post supplemental slides today on its website at
http://investor.healthsouth.com for reference during its July26, 2013
earnings call.

When filed, the June 2013 Form 10-Q can be found on the Company's website at
http://investor.healthsouth.com and the SEC's website at www.sec.gov.



HealthSouth Corporation and Subsidiaries
Condensed Consolidated Statements of Operations
(Unaudited)
                                     Three Months Ended  Six Months Ended
                                     June 30,            June 30,
                                     2013       2012     2013       2012
                                     (In Millions, Except Per Share Data)
Net operating revenues               $  564.5   $ 533.4  $ 1,137.1  $ 1,072.0
Less: Provision for doubtful         (7.0)      (6.5)    (14.4)     (12.8)
accounts
Net operating revenues less          557.5      526.9    1,122.7    1,059.2
provision for doubtful accounts
Operating expenses:
Salaries and benefits                273.6      257.4    548.2      518.4
Other operating expenses             81.0       75.0     159.1      148.8
Occupancy costs                      11.9       12.3     24.1       24.8
Supplies                             26.6       25.9     52.8       52.4
General and administrative expenses  29.5       28.0     59.7       58.0
Depreciation and amortization        23.1       20.0     45.2       39.5
Government, class action, and        (2.0)      —        (2.0)      —
related settlements
Professional fees—accounting, tax,   2.2        5.5      3.6        9.1
and legal
 Total operating expenses           445.9      424.1    890.7      851.0
Interest expense and amortization of 24.4       23.0     48.6       46.3
debt discounts and fees
Other income                         (1.9)      (0.4)    (2.6)      (1.3)
Equity in net income of              (3.3)      (3.1)    (6.2)      (6.4)
nonconsolidated affiliates
Income from continuing operations    92.4       83.3     192.2      169.6
before income tax (benefit) expense
Provision for income tax (benefit)   (86.5)     26.9     (53.0)     56.0
expense
Income from continuing operations    178.9      56.4     245.2      113.6
Income (loss) from discontinued      0.1        3.5      (0.3)      3.1
operations, net of tax
Net income                           179.0      59.9     244.9      116.7
Less: Net income attributable to     (13.8)     (13.2)   (28.4)     (25.8)
noncontrolling interests
Net income attributable to           165.2      46.7     216.5      90.9
HealthSouth
Less: Convertible perpetual          (5.8)      (6.0)    (11.5)     (12.4)
preferred stock dividends
Less: Repurchase of convertible      —          (0.3)    —          (0.8)
perpetual preferred stock
Net income attributable to           $  159.4   $ 40.4   $ 205.0    $ 77.7
HealthSouth common shareholders
Weighted average common shares
outstanding:
Basic                                86.1       94.6     90.0       94.5
Diluted                              99.8       108.0    103.4      108.3
Earnings per common share:
Basic earnings per share
attributable to HealthSouth
commonshareholders:
Continuing operations                $  1.85    $ 0.39   $ 2.28     $ 0.79
Discontinued operations              —          0.04     —          0.03
Net income                           $  1.85    $ 0.43   $ 2.28     $ 0.82
Diluted earnings per share
attributable to HealthSouth common
shareholders:
Continuing operations                $  1.66    $ 0.39   $ 2.09     $ 0.79
Discontinued operations              —          0.04     —          0.03
Net income                           $  1.66    $ 0.43   $ 2.09     $ 0.82
Amounts attributable to HealthSouth
common shareholders:
Income from continuing operations    $  165.1   $ 43.2   $ 216.8    $ 87.8
Income (loss) from discontinued      0.1        3.5      (0.3)      3.1
operations, net of tax
Net income attributable to           $  165.2   $ 46.7   $ 216.5    $ 90.9
HealthSouth

HealthSouth Corporation and Subsidiaries
Condensed Consolidated Balance Sheets
(Unaudited)
                                                   June30,   December31,
                                                   2013       2012
                                                   (In Millions)
Assets
Current assets:
Cash and cash equivalents                          $ 68.7     $   132.8
Accounts receivable, net of allowance for doubtful 273.7      249.3
 accounts of $32.0 in 2013; $28.7 in 2012
Deferred income tax assets                         137.5      137.5
Other current assets                               111.6      117.2
 Total current assets                             591.5      636.8
Property and equipment, net                        793.3      748.0
Goodwill                                           457.2      437.3
Intangible assets, net                             86.8       73.2
Deferred income tax assets                         444.8      393.5
Other long-term assets                             138.1      135.4
Total assets                                       $ 2,511.7  $   2,424.2
Liabilities and Shareholders' Equity
Current liabilities:
Accounts payable                                   $ 57.3     $   45.3
Accrued expenses and other current liabilities     254.3      255.6
Total current liabilities                          311.6      300.9
Long-term debt, net of current portion             1,319.7    1,239.9
Other long-term liabilities                        131.4      130.5
                                                   1,762.7    1,671.3
Commitments and contingencies
Convertible perpetual preferred stock              342.2      342.2
Redeemable noncontrolling interests                14.1       7.2
Shareholders' equity:
HealthSouth shareholders' equity                   274.8      291.0
Noncontrolling interests                           117.9      112.5
 Total shareholders' equity                       392.7      403.5
 Total liabilities and shareholders' equity     $ 2,511.7  $   2,424.2



HealthSouth Corporation and Subsidiaries
Condensed Consolidated Statements of Cash Flows
(Unaudited)
                                                     Six Months Ended June 30,
                                                     2013            2012
                                                     (In Millions)
Cash flows from operating activities:
Net income                                           $   244.9       $  116.7
Loss (income) from discontinued operations           0.3             (3.1)
Adjustments to reconcile net income to net cash
provided
 by operating activities—
Provision for doubtful accounts                      14.4            12.8
Depreciation and amortization                        45.2            39.5
Equity in net income of nonconsolidated affiliates   (6.2)           (6.4)
Distributions from nonconsolidated affiliates        5.0             5.5
Stock-based compensation                             12.8            12.0
Deferred tax (benefit) expense                       (53.5)          51.7
Other                                                0.3             3.0
Increase in assets—
 Accounts receivable                                (38.8)          (35.7)
 Other assets                                       (0.7)           (7.0)
Increase (decrease) in liabilities—
Accounts payable                                     9.5             10.3
Other liabilities                                    (6.2)           (6.0)
Net cash (used in) provided by operating activities
of                                                   (0.2)           1.7
 discontinued operations
 Total adjustments                                  (18.4)          81.4
Net cash provided by operating activities            226.8           195.0



HealthSouth Corporation and Subsidiaries
Condensed Consolidated Statements of Cash Flows (Continued)
(Unaudited)
                                                     Six Months Ended June 30,
                                                     2013             2012
                                                     (In Millions)
Cash flows from investing activities:
Purchases of property and equipment                  (69.0)           (82.8)
Capitalized software costs                           (11.9)           (11.6)
Acquisition of business, net of cash acquired        (28.9)           (2.1)
Proceeds from sale of restricted investments         10.3             0.2
Purchase of restricted investments                   (5.4)            (4.4)
Net change in restricted cash                        4.7              4.6
Other                                                (1.2)            0.1
Net cash provided by investing activities of         —                7.7
discontinued operations
Net cash used in investing activities                (101.4)          (88.3)
Cash flows from financing activities:
Principal payments on debt, including pre-payments   (0.7)            (4.7)
Principal borrowings on notes                        11.4             —
Borrowings on revolving credit facility              132.0            40.0
Payments on revolving credit facility                (59.0)           (50.0)
Principal payments under capital lease obligations   (6.7)            (5.7)
Repurchase of common stock, including fees and       (234.1)          —
expenses
Repurchase of convertible perpetual preferred stock  —                (46.0)
Dividends paid on convertible perpetual preferred    (11.5)           (13.1)
stock
Distributions paid to noncontrolling interests of    (23.9)           (24.0)
consolidated affiliates
Contributions from consolidated affiliates           —                7.9
Other                                                3.0              (0.1)
Net cash used in financing activities                (189.5)          (95.7)
(Decrease) increase in cash and cash equivalents     (64.1)           11.0
Cash and cash equivalents at beginning of period     132.8            30.1
Cash and cash equivalents at end of period           $    68.7        $  41.1



HealthSouth Corporation and Subsidiaries
Supplemental Information
Earnings Per Share
                                     QTD
                                     Q2 2013                Q2 2012
                                     (In Millions, Except Per Share Data)
Adjusted EBITDA                      $    134.5             $   125.1
Interest expense and amortization of (24.4)                 (23.0)
debt discounts and fees
Depreciation and amortization        (23.1)                 (20.0)
Stock-based compensation expense     (6.5)                  (5.9)
Noncash loss on disposal of assets   (1.7)                  (0.6)
                                     78.8                   75.6
Certain nonrecurring expenses:
Government, class action and related 2.0                    —
settlements
Professional fees—accounting, tax,   (2.2)                  (5.5)
and legal
Pre-tax income                       78.6                   70.1
Income tax benefit (expense) ^(1)    86.5            ^(2)   (26.9)
Income from continuing operations    $    165.1             $   43.2
^(3)
Basic shares                         86.1                   94.6
Diluted shares                       99.8                   108.0
Basic earnings per share ^(3)        $    1.85              $   0.39
Diluted earnings per share ^(3)      $    1.66              $   0.39      ^(4)

^(1) Current income tax (benefit) expense for the three months ended
June30, 2013 and 2012 was ($1.3) million and $2.2 million, respectively.

^(2) Includes an approximate $115 million, or $1.15 per diluted share,
benefit related to the Company's settlement with the IRS related to the
previous restatement of its 2000 and 2001 financial statements, as well as
certain other tax matters, through December 31, 2008.

^(3) Income from continuing operations attributable to HealthSouth

^(4) For the second quarter of 2012, adding back the dividends for the
Company's convertible perpetual preferred stock to income from continuing
operations causes a per share increase when calculating diluted earnings per
share resulting in an antidilutive per share amount. Therefore, basic and
diluted earnings per share are the same. A computation of basic and diluted
earnings per share can be found in Note 9, Earnings per Common Share, to the
condensed consolidated financial statements included in Part I, Item 1,
Financial Statements (Unaudited), of the Form 10-Q for the quarterly period
ended June30, 2013, when filed.



HealthSouth Corporation and Subsidiaries
Supplemental Information
Earnings Per Share
                                     YTD
                                     Q2 2013                Q2 2012
                                     (In Millions, Except Per Share Data)
Adjusted EBITDA                      $    273.8             $   252.1
Interest expense and amortization of (48.6)                 (46.3)
debt discounts and fees
Depreciation and amortization        (45.2)                 (39.5)
Stock-based compensation expense     (12.8)                 (12.0)
Noncash loss on disposal of assets   (1.8)                  (1.4)
                                     165.4                  152.9
Certain nonrecurring expenses:
Government, class action and related 2.0                    —
settlements
Professional fees—accounting, tax,   (3.6)                  (9.1)
and legal
Pre-tax income                       163.8                  143.8
Income tax benefit (expense) ^(1)    53.0            ^(2)   (56.0)
Income from continuing operations    $    216.8             $   87.8
^(3)
Basic shares                         90.0                   94.5
Diluted shares                       103.4                  108.3
Basic earnings per share ^(3)        $    2.28              $   0.79
Diluted earnings per share ^(3)      $    2.09              $   0.79      ^(4)

^(1) Current income tax expense for the six months ended June30, 2013
and 2012 was $0.5 million and $4.3 million, respectively.

^(2) Includes an approximate $115 million, or $1.11 per diluted share,
benefit related to the Company's settlement with the IRS related to the
previous restatement of its 2000 and 2001 financial statements, as well as
certain other tax matters, through December 31, 2008.

^(3) Income from continuing operations attributable to HealthSouth

^(4) For the six months ended June30, 2012, adding back the dividends
for the Company's convertible perpetual preferred stock to income from
continuing operations causes a per share increase when calculating diluted
earnings per share resulting in an antidilutive per share amount. Therefore,
basic and diluted earnings per share are the same. A computation of basic and
diluted earnings per share can be found in Note 9, Earnings per Common Share,
to the condensed consolidated financial statements included in Part I, Item 1,
Financial Statements (Unaudited), of the Form 10-Q for the quarterly period
ended June30, 2013, when filed.



HealthSouth Corporation and Subsidiaries
Supplemental Information
Reconciliation of Net Income to Adjusted EBITDA
                                          Three Months Ended  Six Months Ended
                                          June 30,            June 30,
                                          2013       2012     2013     2012
                                          (In Millions)
Net income                                $  179.0   $ 59.9   $ 244.9  $ 116.7
(Income) loss from discontinued
operations, net of tax, attributable to   (0.1)      (3.5)    0.3      (3.1)
HealthSouth
Provision for income tax (benefit)        (86.5)     26.9     (53.0)   56.0
expense
Interest expense and amortization of debt 24.4       23.0     48.6     46.3
discounts and fees
Professional fees—accounting, tax, and    2.2        5.5      3.6      9.1
legal
Government, class action, and related     (2.0)      —        (2.0)    —
settlements
Net noncash loss on disposal of assets    1.7        0.6      1.8      1.4
Depreciation and amortization             23.1       20.0     45.2     39.5
Stock-based compensation expense          6.5        5.9      12.8     12.0
Net income attributable to noncontrolling (13.8)     (13.2)   (28.4)   (25.8)
interests
Adjusted EBITDA                           $  134.5   $ 125.1  $ 273.8  $ 252.1

HealthSouth Corporation and Subsidiaries
Supplemental Information
Reconciliation of Net Cash Provided by Operating Activities to Adjusted Free
Cash Flow
                                               
                                                                  Year Ended
                              Three Months      Six Months        December 31,
                              Ended June 30,    Ended June 30,
                              2013     2012     2013     2012     2012
                              (In Millions)
Net cash provided by          $ 105.4  $ 114.0  $ 226.8  $ 195.0  $   411.5
operating activities
Impact of discontinued        (0.5)    (1.3)    0.2      (1.7)    (2.0)
operations
Net cash provided by
operating activities of       104.9    112.7    227.0    193.3    409.5
continuing operations
Capital expenditures for      (16.8)   (31.0)   (35.7)   (50.1)   (83.0)
maintenance
Dividends paid on convertible (5.8)    (6.3)    (11.5)   (13.1)   (24.6)
perpetual preferred stock
Distributions paid to
noncontrolling interests of   (10.7)   (10.9)   (23.9)   (24.0)   (49.3)
consolidated affiliates
Nonrecurring items:
Premium paid on redemption of —        —        —        —        1.9
bonds
Cash paid for:
Professional fees—accounting, 2.2      5.5      3.6      9.1      16.1
tax, and legal
Government, class action, and (1.3)    —        (1.3)    —        (2.6)
related settlements
Adjusted free cash flow       $ 72.5   $ 70.0   $ 158.2  $ 115.2  $   268.0

For the three months ended June30, 2013, net cash used in investing
activities was $53.5 million and resulted primarily from capital expenditures
and acquisition activity. Net cash used in financing activities during the
three months ended June30, 2013 was $63.3 million and resulted primarily from
net debt payments, distributions paid to noncontrolling interests of
consolidated affiliates, and dividends paid on the Company's convertible
perpetual preferred stock.

For the three months ended June30, 2012, net cash used in investing
activities was $55.4 million and resulted primarily from capital expenditures.
Net cash used in financing activities during the three months ended June30,
2012 was $61.8 million and resulted primarily from net debt payments, the
repurchase of 21,645 shares of the Company's convertible perpetual preferred
stock, distributions paid to noncontrolling interests of consolidated
affiliates, and dividends paid on the Company's convertible perpetual
preferred stock offset by capital contributions from consolidated affiliates.

For the six months ended June30, 2013, net cash used in investing activities
was $101.4 million and resulted primarily from capital expenditures and
acquisition activity. Net cash used in financing activities during the six
months ended June30, 2013 was $189.5 million and resulted primarily from
repurchases of common stock as part of the tender offer completed in the first
quarter of 2013.

For the six months ended June30, 2012, net cash used in investing activities
was $88.3 million and resulted primarily from capital expenditures. Net cash
used in financing activities during the six months ended June30, 2012 was
$95.7 million and resulted primarily from the repurchase of 46,645 shares of
the Company's convertible perpetual preferred stock, net debt payments,
distributions paid to noncontrolling interests of consolidated affiliates, and
dividends paid on the Company's convertible perpetual preferred stock offset
by capital contributions from consolidated affiliates.

For the year ended December31, 2012, net cash used in investing activities
was $178.8 million and resulted primarily from capital expenditures. Net cash
used in financing activities during the year ended December31, 2012 was
$130.0 million and resulted primarily from distributions paid to
noncontrolling interests of consolidated affiliates, repurchases of 46,645
shares of the Company's convertible perpetual preferred stock, dividends paid
on the Company's convertible perpetual preferred stock, and net principal
payments on debt offset by capital contributions from consolidated affiliates.

HealthSouth Corporation and Subsidiaries
Forward-Looking Statements

Statements contained in this press release which are not historical facts,
such as the dividend payment plans and the financial guidance, 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. All such estimates, projections, and
forward-looking information speak only as of the date hereof, and HealthSouth
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, involve a number of risks and uncertainties, and
relate to, among other things, future events, HealthSouth's plan to repurchase
its debt or equity securities, dividend strategies, effective income tax
rates, HealthSouth's business strategy, its financial plans, its future
financial performance, or its projected business results or model, or its
projected capital expenditures, or its leverage ratio. 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 HealthSouth include, but are not
limited to, any adverse outcome of various lawsuits, claims, and legal or
regulatory proceedings involving HealthSouth, including its pending HHS-OIG
investigations; potential disruptions, breaches, or other incidents affecting
the proper operation, availability, or security of HealthSouth's information
systems; significant changes in HealthSouth's management team; HealthSouth's
ability to successfully complete and integrate de novo developments,
acquisitions, investments, and joint ventures consistent with its growth
strategy; changes, delays in (including in connection with resolution of
Medicare payment reviews or appeals), 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, including as part of national healthcare reform and deficit
reduction; 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 and the impact on
HealthSouth's labor expenses from potential union activity and staffing
shortages; general conditions in the economy and capital markets; the increase
in the costs of defending and insuring against alleged professional liability
claims and HealthSouth's ability to predict the estimated costs related to
such claims; and other factors which may be identified from time to time in
HealthSouth's SEC filings and other public announcements, including
HealthSouth's Form 10‑K for the year ended December31, 2012 and Form 10-Q for
the quarters ended March31, 2013, and June 30, 2013, when filed.

Media Contact
Casey Lassiter, 205-410-2777
casey.lassiter@healthsouth.com

Investor Relations Contact
Mary Ann Arico, 205-969-6175
maryann.arico@healthsouth.com

SOURCE HealthSouth Corporation

Website: http://www.healthsouth.com