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<p style=' margin-bottom:0pt; margin-top:4.5pt;text-align:center;'><B><font SIZE=5>UNITED STATES </font></B></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><B><font SIZE=5>SECURITIES AND EXCHANGE COMMISSION </font></B></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><B><font SIZE=2>WASHINGTON, DC 20549 </font></B></p>

<p style=' margin-bottom:0pt; margin-top:4.5pt;text-align:center;'><B><font SIZE=5>FORM 8-K</font></B></p>

<p style=' margin-bottom:0pt; margin-top:4.5pt;text-align:center;'><B><font SIZE=2>CURRENT REPORT</font></B></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><b><font size=2>Pursuant To Section 13 or 15(d) of the Securities Exchange Act of 1934</font></b></p>

<p style=' margin-bottom:0pt; margin-top:4.5pt;text-align:center;'><b><font size=2>Date of Report (date of earliest event reported): March</font></b><font size=2>&nbsp;</font><b><font size=2>12, 2007</font></b></p>

<p style=' margin-bottom:0pt; margin-top:4.5pt;text-align:center;'><b><font size=6>HealthSouth Corporation </font></b></p>

<p style=' margin-bottom:0pt; margin-top:1.5pt;text-align:center;'><b><font size=1>(Exact Name of Registrant as Specified in its Charter) </font></b></p>

<p style=' margin-bottom:0pt; margin-top:4.5pt;text-align:center;'><b><font size=2>Delaware</font></b></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><b><font size=1>(State or Other Jurisdiction of Incorporation)</font></b></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=1>&nbsp;</font></p>


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            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><b><font size=2>001-10315</font></b></p> </td>
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            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><b><font size=2>63-0860407</font></b></p> </td> </tr>
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            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><b><font size=1>(Commission File Number)</font></b></p> </td>
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            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><b><font size=1>(I.R.S. Employer</font></b><br> <b><font size=1>Identification No.)</font></b></p> </td> </tr></table>
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<p style=' margin-bottom:0pt; margin-top:4.5pt;text-align:center;'><b><font size=2>One HealthSouth Parkway, Birmingham, Alabama 35243</font></b></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><b><font size=1>(Address of Principal Executive Officers, Including Zip Code) </font></b></p>

<p style=' margin-bottom:0pt; margin-top:4.5pt;text-align:center;'><b><font size=2>(205)</font></b><font size=2>&nbsp;</font><b><font size=2>967-7116</font></b></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><b><font size=1>(Registrant&#146;s telephone number) </font></b></p>

<p style=' margin-bottom:12pt; margin-top:12pt;text-align:left;'><font size=2>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:</font></p>


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            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font face=Wingdings>o</font></p> </td>
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            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)</font></p> </td> </tr></table>
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            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)</font></p> </td> </tr></table>
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            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))</font></p> </td> </tr></table>
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            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))</font></p> </td> </tr></table>
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<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>
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<p style=' margin-bottom:12pt; margin-top:0pt;text-align:left;'><B><font SIZE=2>ITEM 7.01. </font></B><i><b><font size=2>Regulation FD Disclosure</font></b></i><b><font size=2>.</font></b></p>

<p style=' margin-bottom:12pt; margin-top:0pt; text-indent:0.5in;text-align:left;'><font size=2>In March&nbsp;2007, representatives of HealthSouth Corporation (the &#147;Company&#148;) will make presentations at investment banking healthcare industry conferences using slides containing the information attached to this Current Report on Form 8-K as Exhibit 99. The presentation will address, among other things, the Company&#146;s previously announced strategic repositioning and management&#146;s growth expectations for the Company under a more focused, &#147;pure-play,&#148; post-acute strategy.</font></p>

<p style=' margin-bottom:12pt; margin-top:0pt; text-indent:0.5in;text-align:left;'><font size=2>The information in this Current Report on Form 8-K, including the information set forth in Exhibit 99, shall not be deemed &#147;filed&#148; for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the &#147;Exchange Act&#148;), nor shall it be incorporated by reference in any filing under the Securities Act of 1933, as amended, or the Exchange Act, except as shall be expressly set forth by specific reference in such a filing.</font></p>

<p style=' margin-bottom:12pt; margin-top:0pt;text-align:left;'><i><b><font size=2>Note Regarding Presentation of Non-GAAP Financial Measures</font></b></i></p>

<p style=' margin-bottom:12pt; margin-top:0pt; text-indent:0.5in;text-align:left;'><font size=2>The financial data contained in the presentation includes non-GAAP financial measures, including &#147;Adjusted Consolidated EBITDA.&#148; The Company continues to believe Adjusted Consolidated EBITDA under its 2006 Credit Agreement is a measure of operating performance, leverage capacity, its ability to service its debt, and its ability to make capital expenditures. </font></p>

<p style=' margin-bottom:12pt; margin-top:0pt; text-indent:0.5in;text-align:left;'><font size=2>The Company uses Adjusted Consolidated EBITDA on a consolidated basis as a liquidity measure. The Company believes this financial measure on a consolidated basis is important in analyzing its liquidity because it is the key component of certain material covenants contained within the Company&#146;s 2006 Credit Agreement, which is discussed in more detail in the Company&#146;s Annual Report on Form 10-K for the fiscal year ended December 31, 2006 (the &#147;2006 Form 10-K&#148;). These covenants are material terms of the 2006 Credit Agreement, and the 2006 Credit Agreement represents a substantial portion of the Company&#146;s capitalization. Non-compliance with these financial covenants under the 2006 Credit Agreement&#151;its interest coverage ratio and its leverage ratio&#151;could result in the Company&#146;s lenders requiring the Company to immediately repay all amounts borrowed. In
addition, if the Company cannot satisfy these financial covenants, it would be prohibited under the 2006 Credit Agreement from engaging in certain activities, such as incurring additional indebtedness, making certain payments, and acquiring and disposing of assets. Consequently, Adjusted Consolidated EBITDA is critical to the Company&#146;s assessment of its liquidity.</font></p>

<p style=' margin-bottom:12pt; margin-top:0pt; text-indent:0.5in;text-align:left;'><font size=2>The Company also uses Adjusted Consolidated EBITDA to assess its operating performance. The Company believes it is meaningful because it provides investors with a measure used by its internal decision makers for evaluating its business. The Company&#146;s internal decision makers believe Adjusted Consolidated EBITDA is a meaningful measure because it represents a view of the Company&#146;s recurring operating performance and allows the Company&#146;s management to readily view operating trends, perform analytical comparisons, and perform benchmarking between segments. Additionally, the Company&#146;s management believes the inclusion of professional fees associated with litigation, financial restructuring, government investigations, forensic accounting, creditor advisors, accounting reconstruction, audit and tax work associated with the reconstruction process, and non-ordinary course
charges incurred after March 19, 2003 (the date the United States Securities and Exchange Commission filed a lawsuit against the Company and its former chairman and chief executive officer alleging that it historically overstated earnings) and related to its overall corporate restructuring (including matters related to internal controls) distort, within EBITDA, their ability to efficiently assess and view the core operating trends on a consolidated basis and within segments.</font></p>

<p style=' margin-bottom:12pt; margin-top:0pt; text-indent:0.5in;text-align:left;'><font size=2>In general terms, the definition of Adjusted Consolidated EBITDA, per the 2006 Credit Agreement, allows the Company to add back to Adjusted Consolidated EBITDA all unusual non-cash items or non-recurring items. These items include, but may not be limited to, (1)&nbsp;expenses associated with government, class action, and related settlements, (2)&nbsp;fees, costs, and expenses related to the Company&#146;s recapitalization transactions, (3)&nbsp;any losses from discontinued operations and closed locations, (4)&nbsp;charges in respect of professional fees for reconstruction and restatement of financial statements, including fees paid to outside professional firms for matters related to internal controls and legal fees for continued litigation defense and support matters discussed in the 2006 Form 10-K, and (5)&nbsp;compensation expenses recorded in accordance with FASB Statement
No.&nbsp;123(R), </font><i><font size=2>Share-Based Payment</font></i><font size=2>.</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>
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<p style=' margin-bottom:12pt; margin-top:0pt; text-indent:0.5in;text-align:left;'><font size=2>However, Adjusted Consolidated EBITDA is not a measure of financial performance under generally accepted accounting principles in the United States of America ("GAAP"), and the items excluded from Adjusted Consolidated EBITDA are significant components in understanding and assessing financial performance. Therefore, Adjusted Consolidated EBITDA should not be considered a substitute for </font><i><font size=2>Net loss</font></i><font size=2> or cash flows from operating, investing, or financing activities. The Company reconciles Adjusted Consolidated EBITDA to </font><i><font size=2>Net loss</font></i><font size=2> and to </font><i><font size=2>Net cash used in operating activities</font></i><font size=2>, which reconciliations are set forth below and in the presentation. Because Adjusted Consolidated EBITDA is not a measurement determined in accordance with GAAP and is thus susceptible to
varying calculations, Adjusted Consolidated EBITDA, as presented, may not be comparable to other similarly titled measures of other companies. Revenues and expenses are measured in accordance with the policies and procedures described in the 2006 Form 10-K.</font></p>

<p style=' margin-bottom:12pt; margin-top:0pt;text-align:center;'><b><font size=2>Reconciliation of Net Loss to Adjusted Consolidated EBITDA</font></b></p>


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            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:1.0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
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            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><b><font size=2>For The Year Ended December 31,</font></b></p> </td> </tr>
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        <td width="439" valign=bottom style='padding:0in 5.75pt 0in 5.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:1.0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="68" valign=bottom style='border-bottom: solid black 1.0pt; padding:0in 5.75pt 0in 5.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><b><font size=2>2006</font></b></p> </td>
        <td width="19" valign=bottom style='padding:0in 5.75pt 0in 5.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:1.0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="68" valign=bottom style='border-bottom: solid black 1.0pt; padding:0in 5.75pt 0in 5.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><b><font size=2>2005</font></b></p> </td> </tr>
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        <td width="439" valign=bottom style='padding:0in 5.75pt 0in 5.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
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            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><font size=2>(In Millions)</font></p> </td> </tr>
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            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><b><font size=2>Net loss</font></b></p> </td>
        <td width="68" valign=bottom style='padding:0in 5.75pt 0in 5.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>$&nbsp;&nbsp;&nbsp;(625.0)</font></p> </td>
        <td width="19" valign=bottom style='padding:0in 5.75pt 0in 5.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="68" valign=bottom style='padding:0in 5.75pt 0in 5.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>$&nbsp;&nbsp;&nbsp;(446.0)</font></p> </td> </tr>
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        <td width="439" valign=bottom style='padding:0in 5.75pt 0in 5.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Loss from discontinued operations</font></p> </td>
        <td width="68" valign=bottom style='padding:0in 5.75pt 0in 5.75pt'>
            <p style='margin-left:0pt;text-indent:19.5pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>26.0</font></p> </td>
        <td width="19" valign=bottom style='padding:0in 5.75pt 0in 5.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="68" valign=bottom style='padding:0in 5.75pt 0in 5.75pt'>
            <p style='margin-left:0pt;text-indent:19.5pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>67.2</font></p> </td> </tr>
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        <td width="439" valign=bottom style='padding:0in 5.75pt 0in 5.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Provision for income tax expense</font></p> </td>
        <td width="68" valign=bottom style='padding:0in 5.75pt 0in 5.75pt'>
            <p style='margin-left:0pt;text-indent:19.5pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>41.1</font></p> </td>
        <td width="19" valign=bottom style='padding:0in 5.75pt 0in 5.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="68" valign=bottom style='padding:0in 5.75pt 0in 5.75pt'>
            <p style='margin-left:0pt;text-indent:19.5pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>38.4</font></p> </td> </tr>
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        <td width="439" valign=bottom style='padding:0in 5.75pt 0in 5.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Loss on interest rate swap</font></p> </td>
        <td width="68" valign=bottom style='padding:0in 5.75pt 0in 5.75pt'>
            <p style='margin-left:0pt;text-indent:19.5pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>10.5</font></p> </td>
        <td width="19" valign=bottom style='padding:0in 5.75pt 0in 5.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="68" valign=bottom style='padding:0in 5.75pt 0in 5.75pt'>
            <p style='margin-left:0pt;text-indent:24.0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>&#150;</font></p> </td> </tr>
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        <td width="439" valign=bottom style='padding:0in 5.75pt 0in 5.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Loss on sale of marketable securities</font></p> </td>
        <td width="68" valign=bottom style='padding:0in 5.75pt 0in 5.75pt'>
            <p style='margin-left:0pt;text-indent:24.0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>0.3</font></p> </td>
        <td width="19" valign=bottom style='padding:0in 5.75pt 0in 5.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="68" valign=bottom style='padding:0in 5.75pt 0in 5.75pt'>
            <p style='margin-left:0pt;text-indent:24.0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>&#150;</font></p> </td> </tr>
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        <td width="439" valign=bottom style='padding:0in 5.75pt 0in 5.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Interest income</font></p> </td>
        <td width="68" valign=bottom style='padding:0in 5.75pt 0in 5.75pt'>
            <p style='margin-left:0pt;text-indent:16.5pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>(15.7)</font></p> </td>
        <td width="19" valign=bottom style='padding:0in 5.75pt 0in 5.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="68" valign=bottom style='padding:0in 5.75pt 0in 5.75pt'>
            <p style='margin-left:0pt;text-indent:16.5pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>(17.1)</font></p> </td> </tr>
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        <td width="439" valign=bottom style='padding:0in 5.75pt 0in 5.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Interest expense and amortization of debt discounts and fees</font></p> </td>
        <td width="68" valign=bottom style='padding:0in 5.75pt 0in 5.75pt'>
            <p style='margin-left:0pt;text-indent:15.0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>335.1</font></p> </td>
        <td width="19" valign=bottom style='padding:0in 5.75pt 0in 5.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="68" valign=bottom style='padding:0in 5.75pt 0in 5.75pt'>
            <p style='margin-left:0pt;text-indent:15.0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>337.5</font></p> </td> </tr>
    <tr >
        <td width="439" valign=bottom style='padding:0in 5.75pt 0in 5.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Loss on early extinguishment of debt</font></p> </td>
        <td width="68" valign=bottom style='padding:0in 5.75pt 0in 5.75pt'>
            <p style='margin-left:0pt;text-indent:15.0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>365.6</font></p> </td>
        <td width="19" valign=bottom style='padding:0in 5.75pt 0in 5.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="68" valign=bottom style='padding:0in 5.75pt 0in 5.75pt'>
            <p style='margin-left:0pt;text-indent:24.0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>&#150;</font></p> </td> </tr>
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        <td width="439" valign=bottom style='padding:0in 5.75pt 0in 5.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Professional fees&#151;accounting, tax, and legal</font></p> </td>
        <td width="68" valign=bottom style='padding:0in 5.75pt 0in 5.75pt'>
            <p style='margin-left:0pt;text-indent:15.0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>163.6</font></p> </td>
        <td width="19" valign=bottom style='padding:0in 5.75pt 0in 5.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="68" valign=bottom style='padding:0in 5.75pt 0in 5.75pt'>
            <p style='margin-left:0pt;text-indent:15.0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>169.8</font></p> </td> </tr>
    <tr >
        <td width="439" valign=bottom style='padding:0in 5.75pt 0in 5.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Government, class action, and related settlements expense</font></p> </td>
        <td width="68" valign=bottom style='padding:0in 5.75pt 0in 5.75pt'>
            <p style='margin-left:0pt;text-indent:19.5pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>38.8</font></p> </td>
        <td width="19" valign=bottom style='padding:0in 5.75pt 0in 5.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="68" valign=bottom style='padding:0in 5.75pt 0in 5.75pt'>
            <p style='margin-left:0pt;text-indent:15.0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>215.0</font></p> </td> </tr>
    <tr >
        <td width="439" valign=bottom style='padding:0in 5.75pt 0in 5.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Impairment charges</font></p> </td>
        <td width="68" valign=bottom style='padding:0in 5.75pt 0in 5.75pt'>
            <p style='margin-left:0pt;text-indent:19.5pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>15.2</font></p> </td>
        <td width="19" valign=bottom style='padding:0in 5.75pt 0in 5.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="68" valign=bottom style='padding:0in 5.75pt 0in 5.75pt'>
            <p style='margin-left:0pt;text-indent:19.5pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>43.3</font></p> </td> </tr>
    <tr >
        <td width="439" valign=bottom style='padding:0in 5.75pt 0in 5.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Net non-cash loss on disposal of assets</font></p> </td>
        <td width="68" valign=bottom style='padding:0in 5.75pt 0in 5.75pt'>
            <p style='margin-left:0pt;text-indent:24.0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>6.4</font></p> </td>
        <td width="19" valign=bottom style='padding:0in 5.75pt 0in 5.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="68" valign=bottom style='padding:0in 5.75pt 0in 5.75pt'>
            <p style='margin-left:0pt;text-indent:19.5pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>16.6</font></p> </td> </tr>
    <tr >
        <td width="439" valign=bottom style='padding:0in 5.75pt 0in 5.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Depreciation and amortization</font></p> </td>
        <td width="68" valign=bottom style='padding:0in 5.75pt 0in 5.75pt'>
            <p style='margin-left:0pt;text-indent:15.0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>148.2</font></p> </td>
        <td width="19" valign=bottom style='padding:0in 5.75pt 0in 5.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="68" valign=bottom style='padding:0in 5.75pt 0in 5.75pt'>
            <p style='margin-left:0pt;text-indent:15.0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>162.6</font></p> </td> </tr>
    <tr >
        <td width="439" valign=bottom style='padding:0in 5.75pt 0in 5.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Compensation expense under FASB Statement No. 123(R)</font></p> </td>
        <td width="68" valign=bottom style='padding:0in 5.75pt 0in 5.75pt'>
            <p style='margin-left:0pt;text-indent:19.5pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>15.5</font></p> </td>
        <td width="19" valign=bottom style='padding:0in 5.75pt 0in 5.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="68" valign=bottom style='padding:0in 5.75pt 0in 5.75pt'>
            <p style='margin-left:0pt;text-indent:24.0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>&#150;</font></p> </td> </tr>
    <tr >
        <td width="439" valign=bottom style='padding:0in 5.75pt 0in 5.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Sarbanes-Oxley related costs</font></p> </td>
        <td width="68" valign=bottom style='padding:0in 5.75pt 0in 5.75pt'>
            <p style='margin-left:0pt;text-indent:24.0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>4.8</font></p> </td>
        <td width="19" valign=bottom style='padding:0in 5.75pt 0in 5.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="68" valign=bottom style='padding:0in 5.75pt 0in 5.75pt'>
            <p style='margin-left:0pt;text-indent:19.5pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>32.2</font></p> </td> </tr>
    <tr >
        <td width="439" valign=bottom style='padding:0in 5.75pt 0in 5.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:1.0pt;margin-bottom:0pt'><font size=2>Restructuring charges under FASB Statement No. 146</font></p> </td>
        <td width="68" valign=bottom style='padding:0in 5.75pt 0in 5.75pt'>
            <p style='margin-left:0pt;text-indent:24.0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>5.1</font></p> </td>
        <td width="19" valign=bottom style='padding:0in 5.75pt 0in 5.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:1.0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="68" valign=bottom style='padding:0in 5.75pt 0in 5.75pt'>
            <p style='margin-left:0pt;text-indent:24.0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>8.1</font></p> </td> </tr>
    <tr >
        <td width="439" valign=bottom style='padding:0in 5.75pt 0in 5.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:1.5pt;margin-bottom:0pt'><b><font size=2>Adjusted Consolidated EBITDA</font></b></p> </td>
        <td width="68" valign=bottom style='border-top:solid black 1.0pt; border-left:none;border-bottom:double black 2.25pt;border-right:none;  padding:0in 5.75pt 0in 5.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>$&nbsp;&nbsp;&nbsp;&nbsp;535.5</font></p> </td>
        <td width="19" valign=bottom style='padding:0in 5.75pt 0in 5.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:1.5pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="68" valign=bottom style='border-top:solid black 1.0pt; border-left:none;border-bottom:double black 2.25pt;border-right:none;  padding:0in 5.75pt 0in 5.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>$&nbsp;&nbsp;&nbsp;&nbsp;627.6</font></p> </td> </tr></table>
</div>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>
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<p style=' margin-bottom:12pt; margin-top:0pt;text-align:center;'>
<b><font size=2>Reconciliation of Adjusted Consolidated EBITDA to Net Cash Used in Operating Activities</font></b></p>


<div align=center>

<table border="0" cellspacing=0 cellpadding=0 width="592" style='border-collapse:collapse'>
    <tr >
        <td width="437" valign=bottom style='padding:0in 5.75pt 0in 5.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:1.0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td  colspan="3" valign=bottom style=' border-bottom:solid black 1.0pt; padding:0in 5.75pt 0in 5.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><b><font size=2>For The Year Ended December 31,</font></b></p> </td> </tr>
    <tr >
        <td width="437" valign=bottom style='padding:0in 5.75pt 0in 5.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:1.0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="68" valign=bottom style='border-bottom: solid black 1.0pt; padding:0in 5.75pt 0in 5.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><b><font size=2>2006</font></b></p> </td>
        <td width="19" valign=bottom style='padding:0in 5.75pt 0in 5.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:1.0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="68" valign=bottom style='border-bottom: solid black 1.0pt; padding:0in 5.75pt 0in 5.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><b><font size=2>2005</font></b></p> </td> </tr>
    <tr >
        <td width="437" valign=bottom style='padding:0in 5.75pt 0in 5.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td  colspan="3" valign=bottom style='padding:0in 5.75pt 0in 5.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><font size=2>(In Millions)</font></p> </td> </tr>
    <tr >
        <td width="437" valign=bottom style='padding:0in 5.75pt 0in 5.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><b><font size=2>Adjusted Consolidated EBITDA</font></b></p> </td>
        <td width="68" valign=bottom style='padding:0in 5.75pt 0in 5.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;535.5</font></p> </td>
        <td width="19" valign=bottom style='padding:0in 5.75pt 0in 5.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="68" valign=bottom style='padding:0in 5.75pt 0in 5.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;627.6</font></p> </td> </tr>
    <tr >
        <td width="437" valign=bottom style='padding:0in 5.75pt 0in 5.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Compensation expense under FASB Statement No. 123(R)</font></p> </td>
        <td width="68" valign=bottom style='padding:0in 5.75pt 0in 5.75pt'>
            <p style='margin-left:0pt;text-indent:17.25pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>(15.5)</font></p> </td>
        <td width="19" valign=bottom style='padding:0in 5.75pt 0in 5.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="68" valign=bottom style='padding:0in 5.75pt 0in 5.75pt'>
            <p style='margin-left:0pt;text-indent:24.75pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>&#150;</font></p> </td> </tr>
    <tr >
        <td width="437" valign=bottom style='padding:0in 5.75pt 0in 5.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Restructuring charges under FASB Statement No. 146</font></p> </td>
        <td width="68" valign=bottom style='padding:0in 5.75pt 0in 5.75pt'>
            <p style='margin-left:0pt;text-indent:21.75pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>(5.1)</font></p> </td>
        <td width="19" valign=bottom style='padding:0in 5.75pt 0in 5.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="68" valign=bottom style='padding:0in 5.75pt 0in 5.75pt'>
            <p style='margin-left:0pt;text-indent:21.75pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>(8.1)</font></p> </td> </tr>
    <tr >
        <td width="437" valign=bottom style='padding:0in 5.75pt 0in 5.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Sarbanes-Oxley related costs</font></p> </td>
        <td width="68" valign=bottom style='padding:0in 5.75pt 0in 5.75pt'>
            <p style='margin-left:0pt;text-indent:21.75pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>(4.8)</font></p> </td>
        <td width="19" valign=bottom style='padding:0in 5.75pt 0in 5.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="68" valign=bottom style='padding:0in 5.75pt 0in 5.75pt'>
            <p style='margin-left:0pt;text-indent:17.25pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>(32.2)</font></p> </td> </tr>
    <tr >
        <td width="437" valign=bottom style='padding:0in 5.75pt 0in 5.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Provision for doubtful accounts</font></p> </td>
        <td width="68" valign=bottom style='padding:0in 5.75pt 0in 5.75pt'>
            <p style='margin-left:0pt;text-indent:15.75pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>119.3</font></p> </td>
        <td width="19" valign=bottom style='padding:0in 5.75pt 0in 5.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="68" valign=bottom style='padding:0in 5.75pt 0in 5.75pt'>
            <p style='margin-left:0pt;text-indent:20.25pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>94.3</font></p> </td> </tr>
    <tr >
        <td width="437" valign=bottom style='padding:0in 5.75pt 0in 5.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Net gain on disposal of assets</font></p> </td>
        <td width="68" valign=bottom style='padding:0in 5.75pt 0in 5.75pt'>
            <p style='margin-left:0pt;text-indent:17.25pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>(10.9)</font></p> </td>
        <td width="19" valign=bottom style='padding:0in 5.75pt 0in 5.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="68" valign=bottom style='padding:0in 5.75pt 0in 5.75pt'>
            <p style='margin-left:0pt;text-indent:24.75pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>&#150;</font></p> </td> </tr>
    <tr >
        <td width="437" valign=bottom style='padding:0in 5.75pt 0in 5.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Professional fees&#151;accounting, tax, and legal</font></p> </td>
        <td width="68" valign=bottom style='padding:0in 5.75pt 0in 5.75pt'>
            <p style='margin-left:0pt;text-indent:12.75pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>(163.6)</font></p> </td>
        <td width="19" valign=bottom style='padding:0in 5.75pt 0in 5.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="68" valign=bottom style='padding:0in 5.75pt 0in 5.75pt'>
            <p style='margin-left:0pt;text-indent:12.75pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>(169.8)</font></p> </td> </tr>
    <tr >
        <td width="437" valign=bottom style='padding:0in 5.75pt 0in 5.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Interest expense and amortization of debt discounts and fees</font></p> </td>
        <td width="68" valign=bottom style='padding:0in 5.75pt 0in 5.75pt'>
            <p style='margin-left:0pt;text-indent:12.75pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>(335.1)</font></p> </td>
        <td width="19" valign=bottom style='padding:0in 5.75pt 0in 5.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="68" valign=bottom style='padding:0in 5.75pt 0in 5.75pt'>
            <p style='margin-left:0pt;text-indent:12.75pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>(337.5)</font></p> </td> </tr>
    <tr >
        <td width="437" valign=bottom style='padding:0in 5.75pt 0in 5.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Interest income</font></p> </td>
        <td width="68" valign=bottom style='padding:0in 5.75pt 0in 5.75pt'>
            <p style='margin-left:0pt;text-indent:20.25pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>15.7</font></p> </td>
        <td width="19" valign=bottom style='padding:0in 5.75pt 0in 5.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="68" valign=bottom style='padding:0in 5.75pt 0in 5.75pt'>
            <p style='margin-left:0pt;text-indent:20.25pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>17.1</font></p> </td> </tr>
    <tr >
        <td width="437" valign=bottom style='padding:0in 5.75pt 0in 5.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Loss (gain) on sale of investments, excluding marketable securities</font></p> </td>
        <td width="68" valign=bottom style='padding:0in 5.75pt 0in 5.75pt'>
            <p style='margin-left:0pt;text-indent:24.75pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>1.6</font></p> </td>
        <td width="19" valign=bottom style='padding:0in 5.75pt 0in 5.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="68" valign=bottom style='padding:0in 5.75pt 0in 5.75pt'>
            <p style='margin-left:0pt;text-indent:24.75pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>0.1</font></p> </td> </tr>
    <tr >
        <td width="437" valign=bottom style='padding:0in 5.75pt 0in 5.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Equity in net income of nonconsolidated affiliates</font></p> </td>
        <td width="68" valign=bottom style='padding:0in 5.75pt 0in 5.75pt'>
            <p style='margin-left:0pt;text-indent:17.25pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>(21.3)</font></p> </td>
        <td width="19" valign=bottom style='padding:0in 5.75pt 0in 5.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="68" valign=bottom style='padding:0in 5.75pt 0in 5.75pt'>
            <p style='margin-left:0pt;text-indent:17.25pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>(29.4)</font></p> </td> </tr>
    <tr >
        <td width="437" valign=bottom style='padding:0in 5.75pt 0in 5.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Minority interests in earnings of consolidated affiliates</font></p> </td>
        <td width="68" valign=bottom style='padding:0in 5.75pt 0in 5.75pt'>
            <p style='margin-left:0pt;text-indent:20.25pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>92.3</font></p> </td>
        <td width="19" valign=bottom style='padding:0in 5.75pt 0in 5.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="68" valign=bottom style='padding:0in 5.75pt 0in 5.75pt'>
            <p style='margin-left:0pt;text-indent:20.25pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>97.2</font></p> </td> </tr>
    <tr >
        <td width="437" valign=bottom style='padding:0in 5.75pt 0in 5.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Amortization of debt issue costs, debt discounts, and fees</font></p> </td>
        <td width="68" valign=bottom style='padding:0in 5.75pt 0in 5.75pt'>
            <p style='margin-left:0pt;text-indent:20.25pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>18.3</font></p> </td>
        <td width="19" valign=bottom style='padding:0in 5.75pt 0in 5.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="68" valign=bottom style='padding:0in 5.75pt 0in 5.75pt'>
            <p style='margin-left:0pt;text-indent:20.25pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>39.0</font></p> </td> </tr>
    <tr >
        <td width="437" valign=bottom style='padding:0in 5.75pt 0in 5.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Amortization of restricted stock</font></p> </td>
        <td width="68" valign=bottom style='padding:0in 5.75pt 0in 5.75pt'>
            <p style='margin-left:0pt;text-indent:24.75pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>3.4</font></p> </td>
        <td width="19" valign=bottom style='padding:0in 5.75pt 0in 5.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="68" valign=bottom style='padding:0in 5.75pt 0in 5.75pt'>
            <p style='margin-left:0pt;text-indent:24.75pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>2.0</font></p> </td> </tr>
    <tr >
        <td width="437" valign=bottom style='padding:0in 5.75pt 0in 5.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Distributions from nonconsolidated affiliates</font></p> </td>
        <td width="68" valign=bottom style='padding:0in 5.75pt 0in 5.75pt'>
            <p style='margin-left:0pt;text-indent:20.25pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>14.1</font></p> </td>
        <td width="19" valign=bottom style='padding:0in 5.75pt 0in 5.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="68" valign=bottom style='padding:0in 5.75pt 0in 5.75pt'>
            <p style='margin-left:0pt;text-indent:20.25pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>22.5</font></p> </td> </tr>
    <tr >
        <td width="437" valign=bottom style='padding:0in 5.75pt 0in 5.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Stock-based compensation</font></p> </td>
        <td width="68" valign=bottom style='padding:0in 5.75pt 0in 5.75pt'>
            <p style='margin-left:0pt;text-indent:20.25pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>12.1</font></p> </td>
        <td width="19" valign=bottom style='padding:0in 5.75pt 0in 5.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="68" valign=bottom style='padding:0in 5.75pt 0in 5.75pt'>
            <p style='margin-left:0pt;text-indent:24.75pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>&#150;</font></p> </td> </tr>
    <tr >
        <td width="437" valign=bottom style='padding:0in 5.75pt 0in 5.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Current portion of income tax provision</font></p> </td>
        <td width="68" valign=bottom style='padding:0in 5.75pt 0in 5.75pt'>
            <p style='margin-left:0pt;text-indent:21.75pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>(7.9)</font></p> </td>
        <td width="19" valign=bottom style='padding:0in 5.75pt 0in 5.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="68" valign=bottom style='padding:0in 5.75pt 0in 5.75pt'>
            <p style='margin-left:0pt;text-indent:17.25pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>(21.4)</font></p> </td> </tr>
    <tr >
        <td width="437" valign=bottom style='padding:0in 5.75pt 0in 5.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Change in assets and liabilities, net of acquisitions</font></p> </td>
        <td width="68" valign=bottom style='padding:0in 5.75pt 0in 5.75pt'>
            <p style='margin-left:0pt;text-indent:12.75pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>(215.4)</font></p> </td>
        <td width="19" valign=bottom style='padding:0in 5.75pt 0in 5.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="68" valign=bottom style='padding:0in 5.75pt 0in 5.75pt'>
            <p style='margin-left:0pt;text-indent:12.75pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>(101.8)</font></p> </td> </tr>
    <tr >
        <td width="437" valign=bottom style='padding:0in 5.75pt 0in 5.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Cash portion of 2006 government, class action, and related settlements expense</font></p> </td>
        <td width="68" valign=bottom style='padding:0in 5.75pt 0in 5.75pt'>
            <p style='margin-left:0pt;text-indent:17.25pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>(14.9)</font></p> </td>
        <td width="19" valign=bottom style='padding:0in 5.75pt 0in 5.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="68" valign=bottom style='padding:0in 5.75pt 0in 5.75pt'>
            <p style='margin-left:0pt;text-indent:24.75pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>&#150;</font></p> </td> </tr>
    <tr >
        <td width="437" valign=bottom style='padding:0in 5.75pt 0in 5.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Change in government, class action, and related settlements liability</font></p> </td>
        <td width="68" valign=bottom style='padding:0in 5.75pt 0in 5.75pt'>
            <p style='margin-left:0pt;text-indent:12.75pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>(118.4)</font></p> </td>
        <td width="19" valign=bottom style='padding:0in 5.75pt 0in 5.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="68" valign=bottom style='padding:0in 5.75pt 0in 5.75pt'>
            <p style='margin-left:0pt;text-indent:12.75pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>(165.4)</font></p> </td> </tr>
    <tr >
        <td width="437" valign=bottom style='padding:0in 5.75pt 0in 5.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Other operating cash used in discontinued operations</font></p> </td>
        <td width="68" valign=bottom style='padding:0in 5.75pt 0in 5.75pt'>
            <p style='margin-left:0pt;text-indent:17.25pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>(19.6)</font></p> </td>
        <td width="19" valign=bottom style='padding:0in 5.75pt 0in 5.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="68" valign=bottom style='padding:0in 5.75pt 0in 5.75pt'>
            <p style='margin-left:0pt;text-indent:17.25pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>(36.5)</font></p> </td> </tr>
    <tr >
        <td width="437" valign=bottom style='padding:0in 5.75pt 0in 5.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:1.0pt;margin-bottom:0pt'><font size=2>Other</font></p> </td>
        <td width="68" valign=bottom style='padding:0in 5.75pt 0in 5.75pt'>
            <p style='margin-left:0pt;text-indent:21.75pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>(0.2)</font></p> </td>
        <td width="19" valign=bottom style='padding:0in 5.75pt 0in 5.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:1.0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="68" valign=bottom style='padding:0in 5.75pt 0in 5.75pt'>
            <p style='margin-left:0pt;text-indent:21.75pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>(0.6)</font></p> </td> </tr>
    <tr >
        <td width="437" valign=bottom style='padding:0in 5.75pt 0in 5.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:1.5pt;margin-bottom:0pt'><b><font size=2>Net Cash Used in Operating Activities</font></b></p> </td>
        <td width="68" valign=bottom style='border-top:solid black 1.0pt; border-left:none;border-bottom:double black 2.25pt;border-right:none;  padding:0in 5.75pt 0in 5.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>$&nbsp;&nbsp;&nbsp;(120.4)</font></p> </td>
        <td width="19" valign=bottom style='padding:0in 5.75pt 0in 5.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:1.5pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="68" valign=bottom style='border-top:solid black 1.0pt; border-left:none;border-bottom:double black 2.25pt;border-right:none;  padding:0in 5.75pt 0in 5.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(2.9)</font></p> </td> </tr></table>
</div>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:12pt; margin-top:0pt;text-align:left;'><i><b><font size=2>Forward-Looking Statements</font></b></i></p>

<p style=' margin-bottom:12pt; margin-top:0pt; text-indent:0.5in;text-align:left;'><font size=2>The information contained in the presentation includes certain estimates, projections, and other forward-looking information that reflect the Company&#146;s current views with respect to future events and financial performance. These estimates, projections, and other forward-looking information are based on assumptions that the Company believes, as of the date hereof, are reasonable. Inevitably, there will be differences between such estimates and actual results, and those differences may be material.</font></p>

<p style=' margin-bottom:12pt; margin-top:0pt; text-indent:0.5in;text-align:left;'><font size=2>There can be no assurance that any estimates, projections, or forward-looking information will be realized.</font></p>

<p style=' margin-bottom:12pt; margin-top:0pt; text-indent:0.5in;text-align:left;'><font size=2>All such estimates, projections and forward-looking information speak only as of the date hereof. The Company undertakes no duty to publicly update or revise the information contained herein.</font></p>

<p style=' margin-bottom:12pt; margin-top:0pt; text-indent:0.5in;text-align:left;'><font size=2>You are cautioned not to place undue reliance on the estimates, projections, and other forward-looking information in the presentation as they are based on current expectations and general assumptions and are subject to various risks, uncertainties, and other factors, including those set forth in the Annual Report on Form 10-K for the fiscal year ended December&nbsp;31, 2006 and in other documents that the Company previously filed with the SEC, many of which are beyond the Company&#146;s control, that may cause actual results to differ materially from the views, beliefs and estimates expressed herein.</font></p>

<p style=' margin-bottom:12pt; margin-top:0pt;text-align:left;'><B><font SIZE=2>ITEM 9.01. </font></B><i><b><font size=2>Financial Statements and Exhibits</font></b></i></p>


<div align=left>

<table border="0" cellspacing=0 cellpadding=0 width="113" style='border-collapse:collapse'>
    <tr >
        <td width="48" nowrap valign=top style='padding:0in 0in 12.0pt 0in; '>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>(d)</font></p> </td>
        <td width="65" nowrap valign=top style='padding:0in 0in 12.0pt 0in; '>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Exhibits</font></p> </td> </tr></table>
</div>

<p style=' margin-bottom:12pt; margin-top:0pt;text-align:left;'><font size=2>See Exhibit Index.</font></p>

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<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><B><font SIZE=2>SIGNATURES </font></B></p>

<p style=' margin-bottom:0pt; margin-top:9pt; text-indent:0.34in;text-align:left;'><font size=2>Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this Report to be signed on its behalf by the undersigned hereunto duly authorized. </font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>


<div align=right>

<table border="0" cellspacing=0 cellpadding=0 width="624" style='border-collapse:collapse'>
    <tr >
        <td  colspan="2" valign=top >
            <p style='margin-left:12.0pt;text-indent:-12.0pt'><font SIZE=2>H</font><font SIZE=1>EALTH</font><font SIZE=2>S</font><font SIZE=1>OUTH</font><font size=2> C</font><font SIZE=1>ORPORATION</font></p> </td> </tr>
    <tr style='height:9.75pt'>
        <td width="49" style='height:9.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="575" style='height:9.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td> </tr>
    <tr >
        <td width="49" valign=top >
            <p style='margin-left:12.0pt;text-indent:-12.0pt'><font size=2>By:</font>   </p> </td>
        <td width="575" valign=top style='border-bottom:solid black 1.0pt; '>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><font size=2>/s/&nbsp;&nbsp;&nbsp;&nbsp;John P. Whittington</font><font size=1>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</font></p> </td> </tr>
    <tr >
        <td width="49" valign=top style='padding:0in 0in 0in .1in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="575" valign=bottom >
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Name:&nbsp;&nbsp;&nbsp;&nbsp;John P. Whittington</font></p> </td> </tr>
    <tr >
        <td width="49" valign=top style='padding:0in 0in 0in .1in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="575" valign=bottom >
            <p style='margin-left:34.55pt;text-indent:-34.55pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Title:&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Executive Vice President, General Counsel, and Corporate Secretary</font></p> </td> </tr></table>
</div>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:12pt; margin-top:0pt;text-align:left;'><font size=2>Dated: March&nbsp;12, 2007</font></p>

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<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><B><font SIZE=2>EXHIBIT INDEX</font></B></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>


<div align=center>

<table border="0" cellspacing=0 cellpadding=0 width="624" style='margin-left:0pt;border-collapse:collapse'>
    <tr >
        <td width="88" valign=top >
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:5.0pt;margin-bottom: 5.0pt'><u><font size=2>Exhibit Number</font></u><u></u></p> </td>
        <td width="17" valign=bottom >
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:5.0pt;margin-bottom: 5.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="520" valign=top >
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:5.0pt;margin-bottom: 5.0pt'><u><font size=2>Description</font></u><u></u></p> </td> </tr>
    <tr >
        <td width="88" valign=top >
            <p style='margin-left:0in;text-indent:0pt;text-align:center;margin-top:5.0pt;margin-bottom:5.0pt'><font size=2>99</font></p> </td>
        <td width="17" valign=bottom >
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:5.0pt;margin-bottom: 5.0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="520" valign=top >
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:5.0pt;margin-bottom: 5.0pt'><font size=2>Text of slide presentation of HealthSouth Corporation used in connection with the Company&#146;s March&nbsp;2007 presentations at investment banking healthcare industry conferences.</font></p> </td> </tr></table>
</div>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>
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<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>


</div>
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Form 8-K
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 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): March
12, 2007
HealthSouth Corporation
(Exact Name of Registrant as Specified in its Charter)
Delaware
(State or Other Jurisdiction of Incorporation)
001-10315
63-0860407
(Commission File Number)
(I.R.S. Employer
Identification No.)
One HealthSouth Parkway, Birmingham, Alabama 35243
(Address of Principal Executive Officers, Including Zip Code)
(205)
967-7116
(Registrant's telephone number)
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:
o
Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
o
Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
o
Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
o
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
.
In March 2007, representatives of HealthSouth Corporation (the "Company") will make presentations at investment banking healthcare industry conferences using slides containing the information attached to this Current Report on Form 8-K as Exhibit 99. The presentation will address, among other things, the Company's previously announced strategic repositioning and management's growth expectations for the Company under a more focused, "pure-play," post-acute strategy.
The information in this Current Report on Form 8-K, including the information set forth in Exhibit 99, shall not be deemed "filed" for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the "Exchange Act"), nor shall it be incorporated by reference in any filing under the Securities Act of 1933, as amended, or the Exchange Act, except as shall be expressly set forth by specific reference in such a filing.
Note Regarding Presentation of Non-GAAP Financial Measures
The financial data contained in the presentation includes non-GAAP financial measures, including "Adjusted Consolidated EBITDA." The Company continues to believe Adjusted Consolidated EBITDA under its 2006 Credit Agreement is a measure of operating performance, leverage capacity, its ability to service its debt, and its ability to make capital expenditures.
The Company uses Adjusted Consolidated EBITDA on a consolidated basis as a liquidity measure. The Company believes this financial measure on a consolidated basis is important in analyzing its liquidity because it is the key component of certain material covenants contained within the Company's 2006 Credit Agreement, which is discussed in more detail in the Company's Annual Report on Form 10-K for the fiscal year ended December 31, 2006 (the "2006 Form 10-K"). These covenants are material terms of the 2006 Credit Agreement, and the 2006 Credit Agreement represents a substantial portion of the Company's capitalization. Non-compliance with these financial covenants under the 2006 Credit Agreement—its interest coverage ratio and its leverage ratio—could result in the Company's lenders requiring the Company to immediately repay all amounts borrowed. In
addition, if the Company cannot satisfy these financial covenants, it would be prohibited under the 2006 Credit Agreement from engaging in certain activities, such as incurring additional indebtedness, making certain payments, and acquiring and disposing of assets. Consequently, Adjusted Consolidated EBITDA is critical to the Company's assessment of its liquidity.
The Company also uses Adjusted Consolidated EBITDA to assess its operating performance. The Company believes it is meaningful because it provides investors with a measure used by its internal decision makers for evaluating its business. The Company's internal decision makers believe Adjusted Consolidated EBITDA is a meaningful measure because it represents a view of the Company's recurring operating performance and allows the Company's management to readily view operating trends, perform analytical comparisons, and perform benchmarking between segments. Additionally, the Company's management believes the inclusion of professional fees associated with litigation, financial restructuring, government investigations, forensic accounting, creditor advisors, accounting reconstruction, audit and tax work associated with the reconstruction process, and non-ordinary course
charges incurred after March 19, 2003 (the date the United States Securities and Exchange Commission filed a lawsuit against the Company and its former chairman and chief executive officer alleging that it historically overstated earnings) and related to its overall corporate restructuring (including matters related to internal controls) distort, within EBITDA, their ability to efficiently assess and view the core operating trends on a consolidated basis and within segments.
In general terms, the definition of Adjusted Consolidated EBITDA, per the 2006 Credit Agreement, allows the Company to add back to Adjusted Consolidated EBITDA all unusual non-cash items or non-recurring items. These items include, but may not be limited to, (1) expenses associated with government, class action, and related settlements, (2) fees, costs, and expenses related to the Company's recapitalization transactions, (3) any losses from discontinued operations and closed locations, (4) charges in respect of professional fees for reconstruction and restatement of financial statements, including fees paid to outside professional firms for matters related to internal controls and legal fees for continued litigation defense and support matters discussed in the 2006 Form 10-K, and (5) compensation expenses recorded in accordance with FASB Statement
No. 123(R),
Share-Based Payment
.
However, Adjusted Consolidated EBITDA is not a measure of financial performance under generally accepted accounting principles in the United States of America ("GAAP"), and the items excluded from Adjusted Consolidated EBITDA are significant components in understanding and assessing financial performance. Therefore, Adjusted Consolidated EBITDA should not be considered a substitute for
Net loss
or cash flows from operating, investing, or financing activities. The Company reconciles Adjusted Consolidated EBITDA to
Net loss
and to
Net cash used in operating activities
, which reconciliations are set forth below and in the presentation. Because Adjusted Consolidated EBITDA is not a measurement determined in accordance with GAAP and is thus susceptible to
varying calculations, Adjusted Consolidated EBITDA, as presented, may not be comparable to other similarly titled measures of other companies. Revenues and expenses are measured in accordance with the policies and procedures described in the 2006 Form 10-K.
Reconciliation of Net Loss to Adjusted Consolidated EBITDA
For The Year Ended December 31,
2006
2005
(In Millions)
Net loss
$   (625.0)
$   (446.0)
Loss from discontinued operations
26.0
67.2
Provision for income tax expense
41.1
38.4
Loss on interest rate swap
10.5
–
Loss on sale of marketable securities
0.3
–
Interest income
(15.7)
(17.1)
Interest expense and amortization of debt discounts and fees
335.1
337.5
Loss on early extinguishment of debt
365.6
–
Professional fees—accounting, tax, and legal
163.6
169.8
Government, class action, and related settlements expense
38.8
215.0
Impairment charges
15.2
43.3
Net non-cash loss on disposal of assets
6.4
16.6
Depreciation and amortization
148.2
162.6
Compensation expense under FASB Statement No. 123(R)
15.5
–
Sarbanes-Oxley related costs
4.8
32.2
Restructuring charges under FASB Statement No. 146
5.1
8.1
Adjusted Consolidated EBITDA
$    535.5
$    627.6
Reconciliation of Adjusted Consolidated EBITDA to Net Cash Used in Operating Activities
For The Year Ended December 31,
2006
2005
(In Millions)
Adjusted Consolidated EBITDA
$     535.5
$     627.6
Compensation expense under FASB Statement No. 123(R)
(15.5)
–
Restructuring charges under FASB Statement No. 146
(5.1)
(8.1)
Sarbanes-Oxley related costs
(4.8)
(32.2)
Provision for doubtful accounts
119.3
94.3
Net gain on disposal of assets
(10.9)
–
Professional fees—accounting, tax, and legal
(163.6)
(169.8)
Interest expense and amortization of debt discounts and fees
(335.1)
(337.5)
Interest income
15.7
17.1
Loss (gain) on sale of investments, excluding marketable securities
1.6
0.1
Equity in net income of nonconsolidated affiliates
(21.3)
(29.4)
Minority interests in earnings of consolidated affiliates
92.3
97.2
Amortization of debt issue costs, debt discounts, and fees
18.3
39.0
Amortization of restricted stock
3.4
2.0
Distributions from nonconsolidated affiliates
14.1
22.5
Stock-based compensation
12.1
–
Current portion of income tax provision
(7.9)
(21.4)
Change in assets and liabilities, net of acquisitions
(215.4)
(101.8)
Cash portion of 2006 government, class action, and related settlements expense
(14.9)
–
Change in government, class action, and related settlements liability
(118.4)
(165.4)
Other operating cash used in discontinued operations
(19.6)
(36.5)
Other
(0.2)
(0.6)
Net Cash Used in Operating Activities
$   (120.4)
$       (2.9)
Forward-Looking Statements
The information contained in the presentation includes certain estimates, projections, and other forward-looking information that reflect the Company's current views with respect to future events and financial performance. These estimates, projections, and other forward-looking information are based on assumptions that the Company believes, as of the date hereof, are reasonable. Inevitably, there will be differences between such estimates and actual results, and those differences may be material.
There can be no assurance that any estimates, projections, or forward-looking information will be realized.
All such estimates, projections and forward-looking information speak only as of the date hereof. The Company undertakes no duty to publicly update or revise the information contained herein.
You are cautioned not to place undue reliance on the estimates, projections, and other forward-looking information in the presentation as they are based on current expectations and general assumptions and are subject to various risks, uncertainties, and other factors, including those set forth in the Annual Report on Form 10-K for the fiscal year ended December 31, 2006 and in other documents that the Company previously filed with the SEC, many of which are beyond the Company's control, that may cause actual results to differ materially from the views, beliefs and estimates expressed herein.
ITEM 9.01.
Financial Statements and Exhibits
(d)
Exhibits
See Exhibit Index.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this Report to be signed on its behalf by the undersigned hereunto duly authorized.
H
EALTH
S
OUTH
C
ORPORATION
By:
/s/    John P. Whittington
Name:    John P. Whittington
Title:     Executive Vice President, General Counsel, and Corporate Secretary
Dated: March 12, 2007
EXHIBIT INDEX
Exhibit Number
Description
99
Text of slide presentation of HealthSouth Corporation used in connection with the Company's March 2007 presentations at investment banking healthcare industry conferences.