On May 26, 2017, HealthSouth Corporation (the Company) announced
it is exercising its option to redeem all of the outstanding
principal amount of its 2.00% Convertible Senior Subordinated
Notes due 2043 (the Notes) on June 26, 2017. The Company has
issued the notice of redemption to the holders of the Notes and
the press release attached hereto as Exhibit 99.1, which is
incorporated herein by reference.

In addition to announcing the redemption, the Company provides in
the press release estimates of the financial and accounting
impacts associated with the conversion of the Notes in the event
the holders elect to convert the Notes to shares of the Companys
common stock in lieu of the Companys cash redemption. In the
press release the Company also reiterates as of the date hereof
its guidance previously reported in the Current Reports on Form
8-K, dated May 16, 2017 and April 27, 2017, and during the
Companys earnings conference call held on April 28, 2017.
Accordingly, the Company continues to expect the following
full-year 2017 ranges:

The information contained herein is being furnished to Item 7.01
of Form 8-K, Regulation FD Disclosure. This information shall not
be deemed filed for purposes of Section 18 of the Securities
Exchange Act of 1934, as amended (the Exchange Act), or
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. The
furnishing of this information should not be deemed an admission
as to the materiality of any information contained herein.

Note Regarding Presentation of Non-GAAP Financial Measures

The financial guidance contained in the press release attached
hereto as Exhibit 99.1 includes non-GAAP financial measures,
specifically adjusted earnings per share and Adjusted EBITDA.

Excluding net operating revenues, the Company does not provide
guidance on a GAAP basis because it is unable to predict, with
reasonable certainty, the future impact of items that are deemed
to be non-indicative of its ongoing operations. Such items
include government, class action, and related settlements,
professional fees-accounting, tax, and legal, mark-to-market
adjustments for stock appreciation rights, gains or losses
related to hedging instruments, loss on early extinguishment of
debt, adjustments to its income tax provision (such as valuation
allowance adjustments and settlements of income tax claims),
items related to corporate and facility restructurings, and
certain other items the Company believes to be non-indicative of
its ongoing operations. These items are uncertain and will depend
on several factors, including industry and market conditions, and
could be material to the Companys results computed in accordance
with GAAP.

However, the following reasonably estimable GAAP measures for
2017 would be included in the reconciliation for Adjusted EBITDA:

Forward-Looking Statements

Statements contained in this Form 8-K and the press release
attached hereto as Exhibit 99.1, which are not historical facts,
such as the redemption or the conversion of the Notes, the
expected settlement consideration upon conversion, the financial
or accounting impacts of the redemption or any conversions, and
financial guidance, are forward-looking statements. In addition,
the Company, through its senior management, may from time to time
make forward-looking public statements concerning the matters
described herein. All such estimates, projections, and
forward-looking information speak only as of the date hereof, and
the Company undertakes no duty to publicly update or revise such
forward-looking information, whether as a result of new
information, future events, or otherwise. Such forward-looking
statements are necessarily estimates based upon current
information and involve a number of risks and uncertainties.
Actual events or results may differ materially from those
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 events or results to
differ materially from those estimated by the Company include,

but are not limited to, the Companys ability to comply with
extensive, complex, and ever-changing regulations in the
healthcare industry; the price of the Companys common stock as it
affects the tax and accounting impacts resulting from conversions
of the Notes; the price of the Companys common stock as it
affects the Companys willingness and ability to settle
conversions in shares of common stock or the holders decisions to
elect conversion; any adverse outcome of various lawsuits,
claims, and legal or regulatory proceedings involving the
Company, including its pending DOJ and HHS-OIG investigations and
any matters related to yet undiscovered issues, if any, at
acquired companies; the Companys ability to attract and retain
key management personnel, including as a part of executive
management succession planning; potential disruptions, breaches,
or other incidents affecting the proper operation, availability,
or security of the Companys information systems, including
unauthorized access to or theft of patient, business associate,
or other sensitive information; changes, delays in (including in
connection with resolution of Medicare payment reviews or
appeals), or suspension of reimbursement for the Companys
services by governmental or private payors; the ability to
successfully integrate acquired operations, including realization
of anticipated tax benefits, revenues, and cost savings,
minimizing the negative impact on margins arising from the
changes in staffing and other operating practices, and avoidance
of unforeseen exposure to liabilities; the Companys ability to
successfully complete and integrate de novo developments,
acquisitions, investments, and joint ventures consistent with its
growth strategy; changes in the regulation of the healthcare
industry at either or both of the federal and state levels,
including as part of national healthcare reform and deficit
reduction; competitive pressures in the healthcare industry and
the Companys response thereto; the Companys ability to obtain and
retain favorable arrangements with third-party payors; the
Companys ability to control costs, particularly labor and
employee benefit costs, including group medical expenses; adverse
effects resulting from coverage determinations made by Medicare
Administrative Contractors regarding its Medicare reimbursement
claims and lengthening delays in the Companys ability to recover
improperly denied claims through the administrative appeals
process on a timely basis; the Companys ability to adapt to
changes in the healthcare delivery system, including involvement
in coordinated care initiatives or programs that may arise with
its referral sources; the Companys ability to attract and retain
nurses, therapists, and other healthcare professionals in a
highly competitive environment with often severe staffing
shortages and the impact on the Companys labor expenses from
potential union activity and staffing shortages; general
conditions in the economy and capital markets, including any
crisis resulting from uncertainty in the sovereign debt market;
the increase in the costs of defending and insuring against
alleged professional liability claims and the Companys ability to
predict the estimated costs related to such claims; and other
factors which may be identified from time to time in the Companys
SEC filings and other public announcements, including its Form
10K for the year ended December 31, 2016 and Form 10-Q for the
quarter ended March 31, 2017.

ITEM 9.01. Financial Statements and Exhibits.

(d) Exhibits