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HEALTHSOUTH Announces Record Revenues; Operating Earnings Per Share of $.22, Up 16% for Fourth Quarter
PRNewswire-FirstCall
BIRMINGHAM, Ala.

HEALTHSOUTH Corporation announced operating results for the quarter and year ended December 31, 2001. For the quarter, HEALTHSOUTH's revenues were $1.115 billion, an increase of 3.5% as compared to $1.077 billion for the fourth quarter of 2000 and an increase of 7.5% after adjusting in both periods for divestitures in 2001. Income before unusual and non-recurring items for the 2001 quarter was $88.6 million, an increase of 15.2% compared to net income of $76.9 million in the 2000 quarter. The comparable income per share (assuming dilution) was $.22 for the 2001 quarter, consistent with consensus Wall Street estimates, an increase of 15.8% as compared to earnings per share (assuming dilution) of $.19 in the 2000 quarter.

For the year ended December 31, 2001, HEALTHSOUTH's revenues were $4.380 billion, compared to $4.195 billion for 2000. Income before unusual and non-recurring items for 2001 was $326.1 million, compared to net income of $278.5 million for 2000. The comparable income per share (assuming dilution) for 2001 was $.82, a 15.5% increase compared to net income per share (assuming dilution) of $.71 for 2000.

"Our fourth quarter results reflect a strong finish to a very successful year," said Richard M. Scrushy, Chairman of the Board and Chief Executive Officer of HEALTHSOUTH. "The fundamentals of our business showed continued improvement, as same-store volume growth ranged from 6.5% to 13% in our outpatient lines of business compared to the fourth quarter of 2000. Pricing trends were also strong on both a sequential quarter and year-over-year basis, contributing to an increase in our EBITDA margin to 28.2%. Looking ahead, our early experience under the new inpatient rehabilitation prospective payment system is confirming our expectations for the positive impact that PPS will have on our business. In addition, during the fourth quarter, we held the groundbreaking on our new HEALTHSOUTH Medical Center in Birmingham, which will be a state-of-the-art, wireless, digital facility that we believe will represent a major new advance in the way healthcare is delivered. We are proud of our performance last year, and we are committed to strategic growth, continued innovation and strong financial performance in 2002."

Unusual and non-recurring items reduced net income by $20.7 million in the fourth quarter. These items consisted of an $11.4 million net loss on the sale of the company's United Kingdom diagnostic centers and four non-strategic rehabilitation hospitals and a $9.3 million loss on the sale of certain properties in a sale-leaseback transaction, in each case net of income taxes. Net income for the year was also reduced by unusual and non-recurring items in the second quarter, which were discussed in that quarter's earnings announcement and which aggregated approximately $103 million, net of income taxes. Management believes that income and income per share excluding such unusual and non-recurring items provide a clearer picture of the company's operational performance than net income and earnings per share standing alone.

HEALTHSOUTH is the nation's largest provider of outpatient surgery, diagnostic imaging and rehabilitative healthcare services, with approximately 1,900 locations in all 50 states, the United Kingdom, Australia, Puerto Rico and Canada. HEALTHSOUTH can be found on the Web at http://www.healthsouth.com/.

HEALTHSOUTH will hold a conference call to discuss its fourth quarter results at 9:00 a.m. Central Time on Tuesday, March 12. Simultaneously with the conference call, a "webcast" of the call will be available to interested parties at http://www.healthsouth.com/ via an Internet link under the "Investor Relations" section. A replay of the call will be available at the same Internet site address for 15 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       Twelve Months Ended
                                December 31,             December 31,
                               2001       2000         2001         2000

  Revenues                 $1,115,152  $1,077,001   $4,380,477  $4,195,115
  Net income                  $67,898     $76,888     $202,387    $278,465

  Weighted average common
   shares outstanding         391,446     386,226      389,717     385,666

  Weighted average common
   shares outstanding -
   assuming dilution          399,940     395,356      399,227     391,016

  Net income per common share   $0.17       $0.20        $0.52       $0.72

  Net income per common
   share - assuming dilution    $0.17       $0.19        $0.51      $ 0.71

  ADJUSTMENT TO EXCLUDE
   UNUSUAL AND NON-RECURRING
   EXPENSES IN 2001

  Net income                  $67,898     $76,888     $202,387    $278,465

  Unusual and non-recurring
   expenses, net of
   minority interests         $34,244          --     $199,150          --

  Income tax benefit
   of unusual and
   non-recurring expenses    ($13,527)         --     ($75,405)         --

  Income excluding
   effects of unusual and
   non-recurring expenses     $88,615     $76,888     $326,132    $278,465

  Weighted average common
   shares outstanding -
   assuming dilution          415,442     395,356      414,729     391,016

  Income per common
   share excluding
   effects of unusual and
   non-recurring expenses -
   assuming dilution            $0.22       $0.19        $0.82       $.071


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

                                  Three Months Ended   Twelve Months Ended
                                     December 31,          December 31,
                                 2001        2000       2001         2000

  Revenues                   $1,115,152  $1,077,001  $4,380,477  $4,195,115

  Operating unit expenses       731,542     710,037   2,905,043   2,816,363
  Corporate general and
   administrative expenses       44,380      40,893     167,206     148,023
  Provision for doubtful
   accounts                      24,649      25,555     107,871      98,037
  Depreciation and
   amortization                  95,039      91,746     375,270     360,847
  Impairment of unamortized
   loan fee costs                    --          --       6,475          --
  Loss on sale of assets         34,244          --     174,127          --
  Interest expense               52,519      59,715     218,100     221,595
  Interest income                (1,607)     (1,770)     (7,349)     (9,104)
                                980,766     926,176   3,946,743   3,635,761
    Income before income taxes
     and minority interests     134,386     150,825     433,734     559,354
  Provision for income taxes     46,274      50,199     139,467     181,808
    Income before minority
     interests                   88,112     100,626     294,267     377,546
  Minority interests            (20,214)    (23,738)    (91,880)    (99,081)

    Net income                  $67,898     $76,888    $202,387    $278,465

  Weighted average common
   shares outstanding           391,446     386,226     389,717     385,666

  Net income per common share     $0.17       $0.20       $0.52       $0.72

  Weighted average common
   shares outstanding -
   assuming dilution            399,940     395,356     399,227     391,016

  Net income per common share -
   assuming dilution              $0.17       $0.19       $0.51       $0.71

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

                                      *           *           *          *

  * The effect of these securities was antidilutive during these periods.


  HEALTHSOUTH Corporation and Subsidiaries
  Consolidated Statements of Income Before Unusual and Non-Recurring Items
  (UNAUDITED - In thousands, except per share amounts)

                              Three Months Ended      Twelve Months Ended
                                 December 31,             December 31,
                                 2001        2000       2001        2000

  Revenues                   $1,115,152  $1,077,001  $4,380,477  $4,195,115

  Operating unit expenses       731,542     710,037   2,905,043   2,816,363
  Corporate general and
   administrative expenses       44,380      40,893     158,958     148,023
  Provision for doubtful
   accounts                      24,649      25,555      97,571      98,037
  Depreciation and amortization  95,039      91,746     375,270     360,847
  Impairment of unamortized
   loan fee costs                    --          --          --          --
  Loss on sale of assets             --          --          --          --
  Interest expense               52,519      59,715     218,100     221,595
  Interest income                (1,607)     (1,770)     (7,349)     (9,104)
                                946,522     926,176   3,747,593   3,635,761
    Income before income taxes
     and minority interests     168,630     150,825     632,884     559,354
  Provision for income taxes     59,801      50,199     214,872     181,808
    Income before minority
     interests                  108,829     100,626     418,012     377,546
  Minority interests            (20,214)    (23,738)    (91,880)    (99,081)

    Net income                  $88,615     $76,888    $326,132    $278,465

  Weighted average common
   shares outstanding           391,446     386,226     389,717     385,666


  Net income per common share     $0.23       $0.20       $0.84       $0.72

  Weighted average common
   shares outstanding -
   assuming dilution            415,442     395,356     414,729     391,016

  Net income per common share
   - assuming dilution             $0.22       $0.19       $0.82       $0.71

  Add-back to income for
   diluted earnings per share:
  Interest and amortization
   on convertible debt *            $3,112        --       $12,448        --

                                                  *                       *

  * The effect of these securities was antidilutive during these periods.


  HEALTHSOUTH Corporation and Subsidiaries
  Consolidated Statements of Income Before Unusual and Non-Recurring Items
  Three Months Ended December 31, 2001
  (UNAUDITED - In thousands, except per share amounts)

                                                                Three Months
                                                                   Ended
                                                                December 31,
                                                                    2001
                                  Three Months    Less Unusual     Before
                                     Ended          and         Unusual and
                                  December 31,  Non-Recurring  Non-Recurring
                                      2001          Items           Items

  Revenues                         $1,115,152                    $1,115,152
  Operating unit expenses             731,542                       731,542
  Corporate general and
   administrative                                                        --
     expenses                          44,380                        44,380
  Provision for doubtful accounts      24,649                        24,649
  Depreciation and amortization        95,039                        95,039
  Impairment of unamortized loan
   fee costs                                                             --
  Loss on sale of assets               34,244       34,244   (1)         --
  Interest expense                     52,519                        52,519
  Interest income                      (1,607)                       (1,607)
                                      980,766       34,244          946,522
  Income before income taxes and
   minority interests                 134,386      (34,244)         168,630
  Provision for income taxes           46,274      (13,527)          59,801
  Income before minority interests     88,112      (20,717)         108,829
  Minority interests                  (20,214)                      (20,214)
  Net income                          $67,898     $(20,717)         $88,615

  Weighted average common shares
   outstanding                        391,446                       391,446

  Net income per common share           $0.17                         $0.23

  Weighted average common shares
   outstanding - assuming dilution    399,940                       415,442

  Net income per common share -
   assuming dilution                    $0.17                         $0.22

  Add-back to income for diluted
   earnings per share:
     Interest and amortization on
       convertible debt *                  --                        $3,112

                                          *

  * The effect of these securities was antidilutive

  (1) Loss related to the sale of certain facilities.


  HEALTHSOUTH Corporation and Subsidiaries
  Consolidated Statements of Income Before Unusual and Non-Recurring Items
  Twelve Months Ended December 31, 2001
  (UNAUDITED - In thousands, except per share amounts)

                                                                   Twelve
                                                                Months Ended
                                                                December 31,
                                                                    2001
                                                                   Before
                                       Twelve      Less Unusual  Unusual and
                                    Months Ended       and          Non-
                                    December 31,  Non-Recurring   Recurring
                                        2001          Items         Items

  Revenues                           $4,380,477                  $4,380,477
  Operating unit expenses             2,905,043                   2,905,043
  Corporate general and
   administrative                                                        --
     expenses                           167,206      8,248  (1)     158,958
  Provision for doubtful accounts       107,871     10,300  (3)      97,571
  Depreciation and amortization         375,270                     375,270
  Impairment of unamortized loan fee
   costs                                  6,475      6,475  (2)          --
  Loss on sale of assets                174,127    174,127  (3)          --
  Interest expense                      218,100                     218,100
  Interest income                        (7,349)                     (7,349)
                                      3,946,743    199,150        3,747,593
  Income before income taxes and
   minority interests                   433,734   (199,150)         632,884
  Provision for income taxes            139,467    (75,405)         214,872
  Income before minority interests      294,267   (123,745)         418,012
  Minority interests                    (91,880)                    (91,880)
  Net income                           $202,387  $(123,745)        $326,132

  Weighted average common shares
   outstanding                          389,717                     389,717

  Net income per common share             $0.52                       $0.84

  Weighted average common shares
   outstanding - assuming dilution      399,227                     414,729

  Net income per common share -
   assuming dilution                      $0.51                       $0.82

  Add-back to income for diluted
   earnings per share:
     Interest and amortization on
      convertible debt *                     --                     $12,448

                                            *                           *

  * The effect of these securities was antidilutive

  (1) Charge related to settlement agreement with the United States
      Department of Justice.
  (2) Impairment charge related to the write-off of the unamortized balance
      of loan fees on retired debt.
  (3) Loss related to the sale of certain facilities.


  HEALTHSOUTH Corporation
  Quarterly Statistics (Unaudited)

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

  Outpatient Division Total Visits:
  (Revised to exclude Occupational Medicine)
  2000        2,212,042    2,266,260    2,195,908    2,271,269   8,945,479
  2001        2,198,772    2,249,908    2,243,112    2,391,459   9,083,251

  Inpatient Division Total Patient Days:
  2000          647,575      643,441      668,451      650,987   2,610,454
  2001          653,434      661,635      659,515      658,441   2,633,025

  Medical Center Division Total Patient Days:
  (Revised to Exclude Richmond Medical Center)
  2000           24,390       22,283       24,355       24,000      95,028
  2001           29,271       24,243       24,238       22,766     100,518

  Surgery Center Division Total Cases:
  2000          217,505      220,593      212,647      219,321     870,066
  2001          219,777      225,512      211,570      221,594     878,453

  Diagnostic Division Total Procedures:
  2000          213,505      221,052      242,647      250,621     927,825
  2001          268,645      274,623      275,908      275,191   1,094,367

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

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SOURCE: HEALTHSOUTH Corporation

Contact: Richard M. Scrushy, Chairman & CEO, or Tadd McVay, Executive
Vice President and Treasurer, both of HEALTHSOUTH Corporation,
+1-205-967-7116