HealthSouth Corporation (BULLETIN BOARD: HLSH.OB) today announced the signing of a definitive agreement to sell Cedar Court Rehabilitation Hospital in Melbourne, Australia, and related assets, to Epworth Foundation and ING Management Limited. The Cedar Court assets include a 74-bed rehabilitation hospital and outpatient center, a stand alone rehabilitation facility at the Oasis Leisure Center, and an occupational medicine rehabilitation therapy business. The transaction is still subject to customary closing conditions, including clearance under the Australian Competition and Consumer Commission, the Victorian Department of Human Services and other regulatory approvals. Cedar Court was the last of HealthSouth's international facilities and this transaction signifies the termination of its non-domestic operations.

"HealthSouth is proud of the quality healthcare provided by the employees at all the Cedar Court related facilities and the impact they have made on the local healthcare community in the past," said Mark Tarr, President of HealthSouth's Inpatient Division. "We are pleased they will be able to continue to serve the community under new ownership while we focus on strengthening HealthSouth's core businesses and growing in our target markets throughout the United States."

About HealthSouth

HealthSouth is one of the nation's largest providers of outpatient surgery, diagnostic imaging and rehabilitative healthcare services, operating facilities nationwide. HealthSouth 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 the investigation by the Department of Justice into HealthSouth's financial reporting and related activity calling into question the accuracy of the company's previously filed financial statements; the consummation of the proposed settlement of pending litigation relating to these matters; significant changes in HealthSouth's management team; 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 weaknesses; 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, 2005 and Form 10-Q for the quarter ended March 31, 2006..

Media Contact

Andy Brimmer, 205-410-2777

SOURCE: HealthSouth Corporation