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): September 4, 2003
HEALTHSOUTH Corporation
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(Exact Name of Registrant as Specified in its Charter)
Delaware
(State or Other Jurisdiction of Incorporation)
1-10315 63-0860407
(Commission File Number) (IRS Employer Identification No.)
One HealthSouth Parkway, Birmingham, Alabama 35243
(Address of Principal Executive Offices, Including Zip Code)
(205) 967-7116
(Registrant's Telephone Number, Including Area Code)
ITEM 9. Regulation FD Disclosure.
On September 4, 2003, representatives of HEALTHSOUTH Corporation will
begin providing to HEALTHSOUTH employees a letter to be used to update employees
on HEALTHSOUTH compensation plans and recent developments at HEALTHSOUTH. We are
furnishing the text of this letter pursuant to the Securities and Exchange
Commission's Regulation FD. This information is furnished pursuant to Item 9 of
Form 8-K and shall not be deemed to be "filed" for 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 report on Form 8-K and furnishing this information, we make no
admission as to the materiality of any information in this report that is
required to be disclosed solely by reason of Regulation FD.
The information contained in the letter is summary information that is
intended to be considered in the context of our SEC filings and other public
announcements that we may make, by press release or otherwise, from time to
time. We undertake no duty or obligation to publicly update or revise the
information contained in this report, although we may do so from time to time as
our management believes 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 information presented in this report (including the letter)
includes forward-looking statements in addition to historical information. These
statements involve known and unknown risks and relate to future events, our
future financial performance or our projected business results. In some cases,
you can identify forward-looking statements by terminology such as "may,"
"will," "should," "expects," "plans," "anticipates," "believes," "estimates,"
"predicts," "targets," "potential" or "continue" or the negative of these terms
or other comparable terminology. Such forward-looking statements are necessarily
estimates based upon current information, involve a number of risks and
uncertainties and are made pursuant to the "safe harbor" provisions of the
Private Securities Litigation Reform Act of 1995. Actual events or results may
differ materially from the results anticipated in these forward-looking
statements as a result of a variety of factors. While it is impossible to
identify all such factors, factors which could cause actual results to differ
materially from those estimated by us include: the investigations by the
Department of Justice, the SEC and other governmental agencies into our
financial reporting and related activity calling into question the accuracy of
our previously filed financial statements; our statement that, as a result of
the investigations, our previously filed financial statements should no longer
be relied upon and we may restate our prior financial statements; the withdrawal
by our former accountants of their audit reports on all of our previously filed
financial statements; the outcome of pending litigation filed against us;
significant changes in our management team; our ability to successfully amend,
restructure and/or renegotiate our existing indebtedness or cure or receive
waivers of the events of default under such agreements, the failure of which may
result in our filing of a voluntary petition for bankruptcy; our ability to
continue to operate in the ordinary course and manage our relationships with our
creditors, including our lenders, bondholders, vendors and suppliers, 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; changes to or delays
in the implementation of the prospective payment system for inpatient
rehabilitation services; competitive pressures in the healthcare industry and
our response thereto; our ability to obtain and retain favorable arrangements
with third-party payors; general conditions in the economy and capital markets;
and other factors which may be identified from time to time in our SEC filings
and other public announcements.
The text of the letter is as follows:
[LOGO OMITTED]
September 4, 2003
Dear HealthSouth Employee,
Thanks to your ongoing support, HealthSouth continues our operational and
financial recovery. As a further, tangible sign of our progress, we are pleased
to announce that we are once again in a position to invest in our most important
assets - our dedicated and hard-working employees. Accordingly, we are moving
forward with the annual merit raises, which will be effective company-wide next
month. In addition, we have reviewed the facility-based incentive programs for
each division and have made decisions about past due bonuses and new plans for
the future. Please note that all of the facility-based incentive plans outlined
in this letter are strictly designed to reward the thousands of employees who
impact patient care on a daily basis - corporate senior executives are not
included in any of these incentive programs.
Employees who earned bonuses under the Facility Incentive Plan (FIP) that was in
place last year will be paid in full for all divisions. You will be receiving
more details about these payments from your divisional leadership in the near
future.
The timing of payments under the former FIP is dependent on the completion of
PricewaterhouseCoopers' forensic review of each division's financials. The
forensic review of the surgery center division is largely complete and these
employees can expect their bonus checks by the end of September. PwC has
indicated that the forensic reviews for the diagnostic and both the inpatient
and outpatient rehabilitation divisions are taking more time than originally
anticipated, but we expect these reviews will be completed in the next couple of
months. These employees should receive their checks in time for the holidays in
December.
In addition, new incentive plans have been developed for each division and
customized to reflect and support divisional business needs and goals. We have
worked closely with the company's divisional leadership to create plans that
properly incentivize our hard-working employees across the country.
The new plans for both the inpatient rehabilitation and surgery center divisions
will go into effect in January 2004. These two divisions continue to enjoy solid
business prospects and profitability. As we've mentioned before, HealthSouth's
diagnostic and outpatient rehabilitation businesses, however, are facing
persistent market challenges that we are addressing through a variety of means.
We are focused on growing these two divisions and, as a means of providing an
immediate "shot-in-the-arm" to them, we are implementing a new incentive plan
for the outpatient rehabilitation division effective Sept. 1, 2003 and for the
diagnostics division effective Sept. 15, 2003. Details of these new incentive
plans will be sent to the respective facilities in the near future.
We are also developing an incentive plan for non-division-specific employees,
which will be announced at a later date for implementation in January 2004.
We know that HealthSouth provides a valuable service to the tens of thousands of
patients we serve every day, and we would not succeed without the efforts of our
employees across the country. We appreciate your support and dedication as we
move forward and continue to provide quality healthcare to our patients. If you
have questions, please e-mail them to employeehotline@healthsouth.com. We will
continue to keep you informed of our progress.
Sincerely,
Joel C. Gordon Robert P. May
Interim Chairman of the Board Interim Chief Executive Officer
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.
HEALTHSOUTH CORPORATION
By: /s/ GUY SANSONE
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Name: Guy Sansone
Title: Acting Chief Financial Officer
Dated: September 4, 2003