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HEALTHSOUTH Net Income Up 15% for First Quarter

HEALTHSOUTH Corporation announced operating results for the quarter ended March 31, 2001. For the first quarter, HEALTHSOUTH's revenues were $1.090 billion, an increase of 7% as compared to $1.021 billion for the first quarter of 2000. Net income for the 2001 quarter was $75.3 million, an increase of 15% compared to net income of $65.3 million in the 2000 quarter. Earnings per share (assuming dilution) were $.19 for the 2001 quarter, consistent with consensus Wall Street estimates, an increase of 12% as compared to earnings per share (assuming dilution) of $.17 in the 2000 quarter. For the quarter, the company's earnings before interest, taxes, depreciation and amortization (EBITDA) margin was 27.3%, compared to 26.4% in the first quarter of 2000.

"The first quarter of 2001 showed a continuation of the improvement in key operating statistics that we saw in 2000," said Richard M. Scrushy, Chairman of the Board and Chief Executive Officer of HEALTHSOUTH. "In addition to continued growth in revenues, net income and earnings per share, we saw favorable same-store volume and pricing trends in the quarter, despite the effects of having an extra business day in the 2000 quarter due to the leap year. We are especially pleased with the performance of our surgery center operations, which produced same-store volume growth of 4.4% over the 2000 quarter. We believe this reflects the early successes of our focused syndication efforts in our surgery centers. During the quarter, we also announced the pending divestiture of our occupational medicine operations, which closed this week, and of our Richmond, Virginia acute-care hospital, which we expect to close near the end of the month. The net proceeds from these transactions will be used to pay down bank debt. We closed out the quarter with the announcement of a strategic partnership with Oracle Corporation to build the world's first digital hospital, reinforcing our position as a leader in healthcare innovation."

HEALTHSOUTH is the nation's largest provider of outpatient surgery, diagnostic imaging and rehabilitative healthcare services, with over 2,000 locations in all 50 states, the United Kingdom, Australia, Puerto Rico and Canada. HEALTHSOUTH can be found on the Web at .

HEALTHSOUTH will hold a conference call to discuss its first quarter results at 9:00 a.m. Central Time on Thursday, April 26. Simultaneously with the conference call, a webcast of the call will be available to interested parties at via an Internet link under the "Investor Relations" section and also at . A replay of the call will be available at the same Internet site addresses for 30 days following the call.

Statements contained in this press release which are not historical facts are forward-looking statements. Without limiting the generality of the preceding statement, all statements in this press release concerning or relating to estimated and projected earnings, margins, costs, expenditures, cash flows, growth rates and financial results 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 reflecting the best judgment of HEALTHSOUTH's senior management based upon current information, involve a number of risks and uncertainties and are made pursuant to the "safe harbor" provisions of the Private Securities Litigation Reform Act of 1995. HEALTHSOUTH's actual results may differ materially from the results anticipated in these forward-looking statements as a result of a variety of factors, including those identified in this press release and in the public filings made by HEALTHSOUTH with the Securities and Exchange Commission, including HEALTHSOUTH's Annual Report on Form 10-K for the year ended December 31, 2000 and its Quarterly Reports on Form 10-Q, and forward- looking statements contained in this press release or in other public statements of HEALTHSOUTH or its senior management should be considered in light of those factors. There can be no assurance that such factors or other factors will not affect the accuracy of such forward-looking statements.

                        Summary Operating Results
             (unaudited; in thousands, except per share data)

                                                   Three Months Ended
                                                          March 31,
                                                      2001           2000

  Revenues                                     $ 1,090,462    $ 1,021,335
  Net income                                       $75,311        $65,326

  Weighted average common shares outstanding       388,143        385,644

  Weighted average common shares and common
    equivalent shares outstanding --
    assuming dilution                              398,456        389,019
  Net income per common share                        $0.19          $0.17
  Net income per common share -- assuming dilution   $0.19          $0.17

                 HEALTHSOUTH Corporation and Subsidiaries
                    Consolidated Statements of Income
           (UNAUDITED - In thousands, except per share amounts)

                                               Three Months Ended March 31,
                                                    2001           2000

   Revenues                                     $1,090,462     $1,021,335

   Operating unit expenses                         736,046        693,993
   Corporate general and administrative expenses    32,655         34,021
   Provision for doubtful accounts                  24,383         23,256
   Depreciation and amortization                    91,219         89,655
   Interest expense                                 59,420         49,560
   Interest income                                  (2,721)        (2,835)
                                                   941,001        887,650
  Income before income taxes and minority
    interests                                      149,461        133,685
   Provision for income taxes                       49,170         42,651
                                                   100,291         91,034
   Minority interests                              (24,981)       (25,708)
   Net income                                      $75,311        $65,326

   Weighted average common shares outstanding      388,143        385,644

   Net income per common share                       $0.19          $0.17

   Weighted average common shares outstanding --
     assuming dilution                             398,456        389,019

   Net income per common share -- assuming
     dilution:                                       $0.19          $0.17

   Add-back to income for diluted earnings per share:
     Interest and amortization on convertible
     debt                                              ---            ---

                                                        *              *

   *  The effect of these securities was antidilutive.

                           HEALTHSOUTH Corporation
                       Quarterly Statistics (Unaudited)

                   1st Qtr    2nd Qtr   3rd Qtr   4th Qtr       Total

  Outpatient Division Total Visits:

  1999           2,431,015  2,533,341 2,590,112  2,589,238    10,143,706
  2000           2,659,111  2,703,664 2,625,632  2,670,339    10,658,746
  2001           2,590,712  2,590,712

  Inpatient Division Total Patient Days:

  1999             614,686    626,262   608,878    621,349     2,471,175
  2000             647,575    643,441   668,451    650,987     2,610,454
  2001             653,434    653,434

  Medical Center Division Total Patient Days:

  1999              30,537     30,254    27,837     27,621       116,249
  2000              32,288     29,626    30,934     31,470       124,318
  2001              37,154     37,154

  Surgery Center Division Total Cases:

  1999             215,139    220,699   208,468    218,988       863,294
  2000             217,505    220,593   212,647    219,321       870,066
  2001             219,777    219,777

  Diagnostic Division Total Procedures:

  1999             200,496    205,909   191,493    198,728       796,626
  2000             213,505    221,052   242,647    250,621       927,825
  2001             268,645    268,645

For more information, contact Richard M. Scrushy, Chairman & CEO, or Tadd McVay, Senior Vice President and Treasurer, at 205-967-7116



Contact: Richard M. Scrushy, Chairman & CEO, or Tadd McVay, Senior Vice
President and Treasurer, both of HEALTHSOUTH Corporation, 205-967-7116