The UAB Health System and HealthSouth Corporation (OTC Pink Sheets: HLSH) have signed a non-binding letter of intent to negotiate the sale of HealthSouth's acute care hospital and surrounding property located at 1201 11th Avenue South in Birmingham. The letter includes an exclusive negotiation period.

"This facility has been an important piece of the fabric of our community for a number of years and we hope to see that continue," said David Hoidal, CEO of the UAB Health System. "This facility will help UAB in its efforts to continue to meet the community need for high quality healthcare that is readily accessible."

"HealthSouth Medical Center has earned an excellent reputation throughout the years, built on outstanding patient care provided by its employees," said Jay Grinney, President and CEO of HealthSouth. "Our decision to sell this acute-care facility allows HealthSouth to better focus on our core businesses of inpatient and outpatient rehabilitation, ambulatory surgery, and diagnostics. At the same time, we are committed to the Birmingham community and want to ensure that the healthcare needs are met by quality providers. UAB has the expertise and resources necessary to continue to serve the community's needs and, additionally, may be able to provide our employees with an opportunity to continue to work at the hospital."

In addition to the 219-bed hospital, UAB and HealthSouth are negotiating the sale of the professional office building, parking deck and several other facilities on the 17.5 acre site. According to Hoidal, no decisions regarding what specific services would be located at the facility have been made.

About UAB

The UAB Health System is internationally known for its expert physicians, medical education, groundbreaking research and strong commitment to compassionate, personal care for patients. The system includes the 908 licensed-bed UAB Hospital, the Callahan Eye Foundation Hospital at UAB, UAB Medical West, The Kirklin Clinic, The Kirklin Clinic at Acton Road, the Health Services Foundation, Viva Health, a network of neighborhood health centers and primary care programs in Montgomery, Tuscaloosa and Huntsville.

About HealthSouth

HealthSouth is one of the nation's largest providers of healthcare services, operating outpatient surgery, diagnostic imaging and rehabilitative healthcare facilities nationwide. HealthSouth can be found on the Web at http://www.healthsouth.com/ .

UAB Contact: Gary Mans 205-934-3884

HealthSouth Contact: Andy Brimmer 205-410-2777

SOURCE: HealthSouth Corporation