UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant To Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report (date of earliest event reported): April 27, 2005
HEALTHSOUTH Corporation
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(Exact Name of Registrant as Specified in its Charter)
Delaware
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(State or Other Jurisdiction of Incorporation)
1-10315 63-0860407
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(Commission File Number) (IRS Employer Identification No.)
One HEALTHSOUTH Parkway, Birmingham, Alabama 35243
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(Address of Principal Executive Offices, Including Zip Code)
(205) 967-7116
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(Registrant's Telephone Number, Including Area Code)
Check the appropriate box below if the Form 8-K filing is intended to
simultaneously satisfy the filing obligation of the registrant under any of the
following provisions:
[ ] Written communications pursuant to Rule 425 under the Securities Act
(17 CFR 230.425)
[ ] Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17
CFR 240.14a-12)
[ ] Pre-commencement communications pursuant to Rule 14d-2(b) under the
Exchange Act (17 CFR 240.14d-2(b))
[ ] Pre-commencement communications pursuant to Rule 13e-4(c) under the
Exchange Act (17 CFR 240.13e-4(c))
ITEM 7.01. Regulation FD Disclosure.
On April 27, 2005, representatives of HEALTHSOUTH Corporation
("HEALTHSOUTH" or the "Company") made a presentation to HEALTHSOUTH
stakeholders using slides containing the information attached to this Current
Report on Form 8-K as Exhibit 99. Copies of slides used in the presentation,
including graphic images, are available for viewing on the Company's website
located at www.healthsouth.com, although we reserve the right to discontinue
that availability at any time.
The information contained herein is furnished pursuant to Item 7.01 of
Form 8-K, including Exhibit 99 attached hereto, and shall not be deemed to be
"filed" for the purposes of Section 18 of the Securities Exchange Act of 1934
or otherwise subject to the liabilities of that Section, unless we specifically
incorporate it by reference in a document filed under the Securities Act of
1933 or the Securities Exchange Act of 1934. By filing this Current Report on
Form 8-K and furnishing this information, we make no admission as to the
materiality of any information in this Current Report on Form 8-K.
Cautionary Statements Regarding Presentation
In connection with our efforts to update our stakeholders on our
operations and other matters, we are providing an operational and financial
update of the Company's business. The presentation contains certain estimates
and other forward-looking information which are based on assumptions that we
believe, as of the date hereof, are reasonable, however, there will inevitably
be differences between such estimates and our actual results, because events
and circumstances frequently do not occur as expected, and those differences
may be material. The estimates and forward-looking statements contained herein,
while presented with numeric specificity, are based on numerous assumptions and
are subject to significant uncertainties and contingencies, many of which are
beyond our control. Consequently, there can be no assurance that any estimates
and forward-looking statements will be realized. Because the Company currently
is undertaking a reconstruction of our accounting records and a restatement of
our results, the numbers presented in the presentation as actual could change
as a result of the reconstruction and restatement process. You are cautioned
not to place undue reliance on the estimates and results in the presentation.
We prepared the presentation on a basis consistent with methodologies
used in our prior presentations: (a) no adjustments were made for retrospective
or prospective changes for consolidation or equity method of accounting; (b)
"Restructuring Charges", which are defined below, are presented in a non-GAAP
manner; (c) certain items included in the presentation as Restructuring Charges
may be recurring and (d) there are no asset impairment charges (e.g.,
write-down of goodwill) reflected in the results.
We undertake no duty or obligation to publicly update or revise the
information contained in this Current Report on Form 8-K, although we may do so
from time to time as we believe is warranted. Any such updating may be made
through the filing of other reports or documents with the SEC, through press
releases or through other public disclosure.
The SEC and the United States Department of Justice ("DOJ") are
investigating our financial reporting and related activities and significant
litigation exists regarding these matters. The Centers for Medicare and
Medicaid Services ("CMS") are also investigating our cost reports and other
related activities. HEALTHSOUTH, as well as certain of our past and present
officers and directors, is also subject to a number of class action, derivative
and individual lawsuits relating to, among other things, allegations of
violation of federal securities laws. We remain in default of its existing
senior bank credit facility.
In addition, our Audit Committee dismissed Ernst & Young LLP as our
independent accountants and Ernst & Young withdrew their audit reports on all
of our previously filed financial statements, which should not be relied upon.
No financial statements currently are available for any prior period and our
financial statements will be restated.
Forward Looking Statements
Certain matters discussed herein constitute forward-looking statements
within the meaning of Section 27A of the Securities Act of 1933 and Section 21E
of the Securities Exchange Act of 1934, which represent HEALTHSOUTH's current
expectations and beliefs concerning future events that involve risks and
uncertainties which could cause actual results to differ materially from those
currently anticipated. Such information is based on numerous assumptions (a
substantial number of which are contained in the presentation) and involve a
number of risks and uncertainties, many of which are beyond our control,
including: completion of the investigations by the SEC and DOJ into our
financial reporting; completion of the investigation by CMS into our cost
reports and other matters; the resolution of outstanding litigation, including
certain class action litigation alleging violations under federal securities
laws and certain "qui tam" actions; completion of the reconstruction and
restatement of our financial performance; our ability to successfully refinance
our existing public indebtedness as it becomes due; our ability to amend or
refinance our senior bank credit facility, which is currently in default; our
ability to continue to operate in the ordinary course and manage our
relationships with our creditors, vendors and suppliers, physician partners,
employees and patients; changes, delays in or suspension of reimbursement for
our 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 the implementation of the recently adopted 75% Rule; competitive
pressures in the healthcare industry and our response thereto; our ability to
obtain and retain favorable arrangements with third-party payors; and general
conditions in the economy and capital markets. You are cautioned not to place
undue reliance on the forward-looking statements contained in the presentation.
Note Regarding Presentation of Non-GAAP Financial Measures
The financial data contained herein includes non-GAAP financial
measures, including "EBITDA", to assist in assessing projected and actual
operating performance and to facilitate quantification of planned business
activities. "EBITDA" as used by HEALTHSOUTH in the presentation is consistent
with the definition of Adjusted Consolidated EBITDA in our Senior Subordinated
Credit Agreement dated as of January 16, 2004, which is an exhibit to our
Current Report on Form 8-K filed with the SEC on January 20, 2004. In summary,
this definition allows us to add back charges to EBITDA classified as
Restructuring Charges by HEALTHSOUTH until June 2005. These charges are
generally not consistent with the definition of restructuring charges as
defined by GAAP. Costs which we classify as "Restructuring Charges" are: (a)
professional fees associated with litigation, financial restructuring,
government investigations, forensic accounting, creditor advisors, accounting
reconstruction, audit and tax work associated with the restatement, and
Sarbanes-Oxley implementation; (b) recruiting fees; (c) severance costs; (d)
lease buy-outs; and (e) non-ordinary course charges incurred after March 19,
2003 and related to the our overall corporate restructuring. Under our Senior
Subordinated Credit Agreement, professional fees associated with the
class-action and shareholder derivative litigation can be added back to EBITDA
after June 30, 2005.
Financial information relating to our 2004 and 2005 budget and 2004
actual results have been presented after consideration of accounting for
consolidation of joint ventures and partnership interests on a basis consistent
with prior years. Actual results may vary after our reconstruction and
restatement efforts are completed and proper accounting determination is made
with respect to the joint ventures.
EBITDA may be useful to stakeholders because it is commonly used as an
analytical indicator within the healthcare industry to calculate facility
performance, allocate resources and measure leverage capacity and debt service
ability. EBITDA should not be considered as a measure of financial performance
under GAAP.
Because we are currently unable to prepare a balance sheet for any
completed period or a projected balance sheet, reconciliation for non-GAAP
financial measures to a financial measure calculated in accordance with GAAP is
not currently possible. Until we prepare financial statements for prior
periods, we are not able to provide a projected balance sheet or income
statement for any prior or projected period and, therefore, we are not able to
provide a presentation of a comparable financial measure calculated in
accordance with GAAP or reconcile "EBITDA" to such a GAAP financial measure. In
addition, once our reconstruction and restatement process is completed, it
could cause changes in the results indicated in the presentation.
ITEM 9.01. Financial Statements and Exhibits.
(c) Exhibits.
See Exhibit Index.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the Registrant has duly caused this Current Report on Form 8-K to be signed on
its behalf by the undersigned hereunto duly authorized.
HEALTHSOUTH CORPORATION
By: /s/ Gregory L. Doody
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Name: Gregory L. Doody
Title: Executive Vice President,
General Counsel and
Secretary
Dated: April 27, 2005
EXHIBIT INDEX
Exhibit Number Description
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99 Text of slide presentation of HEALTHSOUTH
Corporation used in connection with the Company's
April 27, 2005 investor conference call.