Fourth Quarter 2016 Earnings Call
 February 22, 2017
 SUPPLEMENTAL INFORMATION
 2
 The information contained in this presentation includes certain estimates, projections and other forward-looking
 information that reflect HealthSouth’s current outlook, views and plans with respect to future events, including legislative
 and regulatory developments, strategy, capital expenditures, acquisition and other development activities, cyber
 security, dividend strategies, repurchases of securities, effective tax rates, financial performance, financial assumptions,
 business model, balance sheet and cash flow plans, and shareholder value-enhancing transactions. These estimates,
 projections and other forward-looking information are based on assumptions HealthSouth believes, as of the date
 hereof, are reasonable. Inevitably, there will be differences between such estimates and actual events or results, and
 those differences may be material.
 There can be no assurance 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. HealthSouth
 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
 this 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 Form 10-K for the year ended December 31, 2016, when
 filed, and in other documents HealthSouth previously filed with the SEC, many of which are beyond HealthSouth’s
 control, that may cause actual events or results to differ materially from the views, beliefs and estimates expressed
 herein.
 Note Regarding Presentation of Non-GAAP Financial Measures
 The following presentation includes certain “non-GAAP financial measures” as defined in Regulation G under the
 Securities Exchange Act of 1934, including Adjusted EBITDA, leverage ratios, adjusted earnings per share, and
 adjusted free cash flow. Schedules are attached that reconcile the non-GAAP financial measures included in the
 following presentation to the most directly comparable financial measures calculated and presented in accordance with
 Generally Accepted Accounting Principles in the United States. HealthSouth’s Form 8-K, dated February 21, 2017, to
 which the following supplemental information is attached as Exhibit 99.2, provides further explanation and disclosure
 regarding HealthSouth’s use of non-GAAP financial measures and should be read in conjunction with this supplemental
 information.
 Forward-Looking Statements
 3
 Table of Contents
 Q4 2016 Summary................................................................................................................................................. 4-5
 IRF-Home Health Clinical Collaboration ................................................................................................................ 6
 Inpatient Rehabilitation Segment ........................................................................................................................... 7-8
 Home Health & Hospice Segment ......................................................................................................................... 9-10
 Earnings per Share ................................................................................................................................................ 11-12
 Adjusted Free Cash Flow....................................................................................................................................... 13
 Guidance................................................................................................................................................................ 14-15
 Adjusted Free Cash Flow and Tax Assumptions.................................................................................................... 16
 Free Cash Flow Priorities....................................................................................................................................... 17
 Appendix
 Map of Locations.................................................................................................................................................... 19
 Pre-Payment Claims Denials - Inpatient Rehabilitation Segment.......................................................................... 20
 Expansion Activity .................................................................................................................................................. 21
 Business Outlook ................................................................................................................................................... 22-24
 Debt Schedule and Maturity Profile ....................................................................................................................... 25-26
 New-Store/Same-Store IRF Growth ...................................................................................................................... 27
 Payment Sources (Percent of Revenues).............................................................................................................. 28
 Inpatient Rehabilitation Operational and Labor Metrics ......................................................................................... 29
 Home Health & Hospice Operational Metrics ........................................................................................................ 30
 Common Stock Warrants ....................................................................................................................................... 31
 Share Information .................................................................................................................................................. 32
 Segment Operating Results................................................................................................................................... 33-34
 Reconciliations to GAAP........................................................................................................................................ 35-43
 End Notes .............................................................................................................................................................. 44-45
 4
 Q4 2016 Summary
 Q4 Full Year
 (In Millions) Q4 2016 Q4 2015 % 2016 2015 %
 HealthSouth Consolidated
 Net operating revenues $ 949.9 $ 879.3 8.0% $ 3,707.2 $ 3,162.9 17.2%
 Adjusted EBITDA $ 198.8 $ 191.5 3.8% $ 793.6 $ 682.5 16.3%
 Inpatient Rehabilitation Segment
 Net operating revenues $ 767.6 $ 725.9 5.7% $ 3,021.1 $ 2,653.1 13.9%
 Adjusted EBITDA $ 197.6 $ 189.9 4.1% $ 797.2 $ 691.0 15.4%
 Home Health and Hospice Segment
 Net operating revenues $ 182.3 $ 153.4 18.8% $ 686.1 $ 509.8 34.6%
 Adjusted EBITDA $ 28.0 $ 26.5 5.7% $ 102.4 $ 83.1 23.1%
 Major takeaways:
 u Strong revenue growth in both segments
  IRF growth primarily driven by pricing (net revenue per discharge increase of 4.8% in Q4 2016)
  Home health and hospice growth primarily driven by volumes (admissions growth of 22.1% in Q4
 2016; same-store = 14.0%)
 u Consolidated Adjusted EBITDA growth of 3.8% in Q4 2016 and 16.3% for full-year 2016
 u Adjusted free cash flow increased 19.0% to $462.9 million in 2016 (up from $389.0 million in 2015) -see page 13.
 Reconciliations to GAAP provided on pages 35-43
 5
 Q4 2016 Summary (cont.) 
u Balance Sheet
  Leverage ratio of 3.8x at year end; funded debt reduced by ~$155 million during full-year 2016
 u Sold Pediatric Home Health Assets
  Non-strategic assets
  Pre-tax gain of ~$3 million
  Tax expense of ~$6 million due to limited tax basis in assets sold
  Represented ~$2 million of Adjusted EBITDA in 2016
 u Expansion Activity (see page 21)
  Opened 50-bed hospital in Modesto, CA
  10 IRF development projects underway (6 are joint ventures)
  Expanded existing hospitals by 13 beds
  Acquired four home health agencies — Springfield, VA; Laramie, WY; Cheyenne, WY; and Sarasota, FL
 — and opened a de novo home health agency in Georgetown, TX
  Acquired one hospice location in Wheat Ridge, CO and opened one de novo hospice location in
 Nashville, TN
 u Shareholder Distributions
  Repurchased 1.1 million shares of common stock for $41.5 million in Q4 2016 (full-year 2016
 repurchases of 1.7 million shares for $64.1 million)
  Paid quarterly cash dividend of $0.24 per share in October 2016
  Declared a $0.24 per share quarterly cash dividend in October 2016 which was paid in January 2017
 u Expiration of Warrants in January 2017 (see page 31)
  Issued a total of 699,346 new common shares
 ü 644,376 warrants exercised on a cash basis; received cash proceeds of $26.7 million
 ü 6,475,449 warrants exercised on a cashless basis; resulted in issuance of 54,970 common shares
  1,031,440 warrants expired unexercised
 6
 IRF-Home Health Clinical Collaboration (All Payors)
 Q4 2015 Q4 2016
 10,360 10,074
 2,735 3,963
 20.9%
 Collaboration Rate
 28.2%
 Collaboration Rate
 HealthSouth IRF Discharges to Non-
 Encompass Home Health
 HealthSouth IRF Discharges to
 Encompass Home Health
 Clinical collaboration rate with
 HealthSouth IRFs increased by
 730 basis points over Q4 2015
 u Overlap markets are defined as a
 HealthSouth IRF located within a 30-
 mile radius of an Encompass
 location
 u Currently, 59% of HealthSouth’s
 IRFs are located within overlap
 markets.
 u The Company’s clinical
 collaboration rate goal for overlap
 markets is 35% to 40% within the
 next three years.
 Overlap Markets
 7
 Inpatient Rehabilitation Segment - Revenue
 Q4 Q4 Favorable/
 ($millions) 2016 2015 (Unfavorable)
 Net operating revenues:
 Inpatient $ 740.9 $ 696.8 6.3%
 Outpatient and other 26.7 29.1 (8.2%)
 Total segment revenue $ 767.6 $ 725.9 5.7%
 (Actual Amounts)
 Discharges 41,474 40,891 1.4%
 Same-store discharge growth 0.1%
 Net patient revenue / discharge $ 17,864 $ 17,040 4.8%
 u Revenue growth was driven by pricing and new-store volume growth.
 u Same-store discharge growth was impacted by certain market specific situations which the
 Company believes are temporary in nature.
 u New-store discharge growth resulted from joint ventures in Hot Springs, AR (February 2016),
 Bryan, TX (August 2016), and Broken Arrow, OK (August 2016) and the opening of wholly owned
 hospitals in Franklin, TN (December 2015) and Modesto, CA (October 2016).
 u Growth in revenue per discharge resulted from patient mix (higher percentage of stroke patients
 and integration of Reliant).
 u Outpatient and other revenue decrease was due primarily to the closure of six outpatient
 programs in certain markets.
 8
 Inpatient Rehabilitation Segment -
 Adjusted EBITDA 
Q4 % of
 Revenue
 Q4 % of
 Revenue($millions) 2016 2015
 Net operating revenues $ 767.6 $ 725.9
  Less: Provision for doubtful accounts (13.2) 1.7% (13.3) 1.8%
 Net operating revenues less
 provision for doubtful accounts 754.4 712.6
 Operating expenses:
     Salaries and benefits (386.2) 50.3% (359.8) 49.6%
 Other operating expenses(a) (109.8) 14.3% (103.2) 14.2%
 Supplies (32.7) 4.3% (32.3) 4.4%
 Occupancy costs (15.2) 2.0% (14.5) 2.0%
 Hospital operating expenses (157.7) 20.5% (150.0) 20.7%
 Other income 0.8 1.3
 Equity in nonconsolidated affiliates 2.4 2.3
 Noncontrolling interests (16.1) (16.5)
 Segment Adjusted EBITDA $ 197.6 $ 189.9
 Percent change 4.1%
 In arriving at Adjusted EBITDA, the following were
 excluded:
 (a) Loss on disposal or impairment of
 assets $ 2.0 $ 2.5
 Segment Adjusted
 EBITDA for the quarter
 of $197.6 million 
- Salaries and benefits
 increased as a percent of
 revenue due to the ramp up of
 new stores and staffing
 increases at the Reliant
 hospitals since their acquisition
 on October 1, 2015.
 - Other operating expenses increased as a
 percent of revenue due to higher year-over-
 year self-insurance costs.
 - Bad debt expense as a percent of revenue decreased
 primarily due to the recovery of payments that were delayed
 for administrative reasons at the Company's largest Medicare
 Administrative Contractor in 2016; new pre-payment claim
 denials in Q4 2016 were lower than Q4 2015, but higher than
 Q3 2016 (see page 20).
 Reconciliations to GAAP provided on pages 35-43
 - Supplies decreased as a percent of revenue due to
 continued supply chain efficiencies, including the
 continued transition of brand name drugs to generic.
 9
 Home Health and Hospice Segment - Revenue
 Q4 Q4 Favorable/
 ($millions) 2016 2015 (Unfavorable)
 Net operating revenues:
    Home health revenue $ 165.2 $ 144.4 14.4%
    Hospice revenue 17.1 9.0 90.0%
    Total segment revenue $ 182.3 $ 153.4 18.8%
 (Actual Amounts)
 Admissions 27,957 22,892 22.1%
 Same-store admissions growth 14.0%
 Episodes 49,253 42,697 15.4%
 Same-store episode growth 12.4%
 Revenue per episode $ 3,023 $ 3,005 0.6%
 u Revenue growth was driven by strong same-store and new-store volume growth.
  Approximately 320 basis points of same-store admission growth resulted from clinical
 collaboration with HealthSouth’s IRFs.
 u New-store admission and episode growth resulted primarily from the acquisition of CareSouth
 (acquired November 2, 2015).
 u Higher revenue per episode due to patient mix
  Higher therapy mix (impacted by clinical collaboration)
  Integration of CareSouth
  Partially offset by Medicare reimbursement rate cuts
 10
 Q4
 % of
 Revenue
 Q4
 % of
 Revenue($millions) 2016 2015
 Net operating revenues $ 182.3 $ 153.4
  Less: Provision for doubtful accounts (1.3) 0.7% (0.7) 0.5%
 Net operating revenues less provision for
 doubtful accounts 181.0 152.7
 Operating expenses:(a)
   Cost of services (89.7) 49.2% (73.0) 47.6%
   Support and overhead costs (62.7) 34.4% (51.0) 33.2%
 (152.4) 83.6% (124.0) 80.8%
 Equity in net income of nonconsolidated
 affiliates 0.1 0.1
 Noncontrolling interests (0.7) (2.3)
 Segment Adjusted EBITDA $ 28.0 $ 26.5
 Percent change 5.7%
 In arriving at Adjusted EBITDA, the following
 was excluded:
 (a) Gain on disposal or impairment of assets (3.3) (0.1)
 Home Health and Hospice Segment -
 Adjusted EBITDA
 Segment  Adjusted
 EBITDA for the
 quarter of  $28.0
 million.
 - Operating expenses as a
 percent of net operating
 revenues increased due to
 Medicare reimbursement rate
 cuts, higher cost per visit
 (driven by an increased
 percentage of therapy patients),
 salary and benefit increases,
 and expenses related to the
 integration of CareSouth. 
* Reconciliation to GAAP provided on pages 29-31
 Reconciliations to GAAP provided on pages 35-43
 11
 Earnings per Share - As Reported
 Q4 Year Ended
 (In Millions, Except Per Share Data) 2016 2015 2016 2015
 Inpatient rehabilitation segment Adjusted EBITDA $ 197.6 $ 189.9 $ 797.2 $ 691.0
 Home health and hospice segment Adjusted
 EBITDA 28.0 26.5 102.4 83.1
 General and administrative expenses (26.8) (24.9) (106.0) (94.8)
 Gain related to SCA equity interest — — — 3.2
 Consolidated Adjusted EBITDA 198.8 191.5 793.6 682.5
 Interest expense and amortization of debt
 discounts and fees (41.6) (44.6) (172.1) (142.9)
 Depreciation and amortization (43.8) (41.4) (172.6) (139.7)
 Stock-based compensation expense (10.0) (4.4) (27.4) (26.2)
 Noncash gain (loss) on disposal or impairment
 of assets 1.3 (2.4) (0.7) (2.6)
 104.7 98.7 420.8 371.1
 Certain items non-indicative of ongoing
 operations:
 Government, class action, and related
 settlements — 0.5 — (7.5)
 Loss on early extinguishment of debt — (2.4) (7.4) (22.4)
 Professional fees - accounting, tax, and legal — (0.3) (1.9) (3.0)
 Transaction costs — (6.7) — (12.3)
 Pre-tax income 104.7 89.8 411.5 325.9
 Income tax expense(1) (39.7) (43.5) (163.9) (141.9)
 Income from continuing operations* $ 65.0 $ 46.3 $ 247.6 $ 184.0
 Interest and amortization on 2.0% Convertible
 Senior Subordinated Notes (net of tax)(2) 2.5 2.4 9.7 9.4
 Diluted shares (see page 32) 99.2 100.6 99.5 101.0
 Diluted earnings per share*(2) $ 0.68 $ 0.48 $ 2.59 $ 1.92
 uEPS for Q4 2016 were impacted by:
  Lower interest expense due to the redemptions
 of the 7.75% Senior Notes due 2022
  Lower state income tax rate driven by the
 Reliant and CareSouth acquisitions (Q4 2015
 tax rate was higher than the statutory rate due to
 an increase in the Company’s valuation
 allowance related to certain state NOLs(3))
  Lower share count resulting from stock
 repurchases
  Higher stock compensation due to the mark-to-
 market adjustment for stock appreciation rights(4)
 uEPS for FY 2016 were impacted by:
  Higher depreciation and amortization resulting
 from acquisitions and capital investments
  Higher interest expense related to the financing
 of the Reliant and CareSouth acquisitions
 (acquired Q4 2015)
  Loss on early extinguishment of debt associated
 with the redemptions of the 7.75% Senior Notes
 due 2022
  Lower share count resulting from stock
 repurchases
 uEPS for 2015 were impacted by:
  Loss on early extinguishment of debt associated
 with the redemption of the 8.125% Senior Notes
 due 2020
  General Medicine settlement
  Reliant transaction costs
 * Earnings per share are determined using income from continuing operations attributable to HealthSouth.
 Refer to pages 44-45 for end notes.
 12
 Q4 Full Year
 2016 2015 2016 2015
 Earnings per share, as reported $ 0.68 $ 0.48 $ 2.59 $ 1.92
 Adjustments, net of tax:
 Government, class action, and related settlements — — — 0.04
 Professional fees — accounting, tax, and legal — — 0.01 0.02
 Mark-to-market adjustment for stock appreciation rights(4) 0.02 — 0.01 0.01
 Income tax valuation allowance and other tax adjustments (0.01) 0.05 (0.01) 0.05
 Transaction costs — 0.05 — 0.08
 Loss on early extinguishment of debt — 0.01 0.04 0.13
 Sale of pediatric home health assets and hospital 0.03 — 0.02 —
 Adjusted earnings per share* $ 0.72 $ 0.59 $ 2.67 $ 2.24
 Adjusted Earnings per Share(5)
 * Adjusted EPS may not sum due to rounding. See complete calculations of adjusted earnings per share on pages 40-43.
 Refer to pages 44-45 for end notes.
 Adjusted earnings per share removes from the GAAP earnings per share calculation the
 impact of items the Company believes are non-indicative of its ongoing operations.
 13
 Adjusted Free Cash
 Flow FY 2015
 Adjusted
 EBITDA
 Working Capital
 and Other
 Cash Interest
 Expense
 Cash Tax
 Payments,
 Net of Refunds
 Maintenance
 Capital Expenditures
 Preferred
 Dividends
 Adjusted Free Cash
 Flow FY 2016
 $389.0
 $111.1 $33.0
 ($29.8) ($22.4) ($21.1)
 $3.1
 $462.9
 2016 Adjusted Free Cash Flow(6) 
Reconciliations to GAAP provided on pages 35-43
 Refer to pages 44-45 for end notes.
 u Adjusted free cash flow in 2016 grew 19.0% as a result of increased Adjusted EBITDA and favorable
 working capital changes.
 ü Working capital changes were mainly attributable to the recovery of payments that were delayed for
 administrative reasons at the Company’s largest MAC and the timing of payroll-related liabilities.
 ü Cash interest expense increased due to the financing of the Reliant and CareSouth acquisitions.
 ü Cash tax payments increased due to the exhaustion of the federal NOL and the tax impact of the
 gain on the sale of the home health pediatric assets.
 ü Increased maintenance capital expenditures resulted from growth in the IRF segment, an enhanced
 hospital maintenance program, and refurbishments at larger hospitals.
 14 Refer to pages 44-45 for end notes.
 Guidance 
Adjusted EBITDA(7) 
Adjusted Earnings per Share
 from Continuing Operations
 Attributable to HealthSouth(5)
 Net Operating Revenues Net Operating Revenues
 $3,850 million to $3,950 million
 Adjusted EBITDA(7) 
$800 million to $820 million
 Adjusted Earnings per Share
 from Continuing Operations
 Attributable to HealthSouth(5)
 $2.61 to $2.73
 $3,707.2 million
 $793.6 million
 $2.67
 2017
 Guidance
 2016
 Actuals
 15
 Guidance Considerations
 Inpatient Rehabilitation
 u Estimated 1.9% increase in Medicare
 pricing for Q1 through Q3; ~1.0% for Q4
 (see page 23)
 u Salary increase of ~3.0% (see page 24)
 u 2016 included the benefit of a retroactive
 indirect medical education (“IME”)
 adjustment of ~$4 million at the former
 Reliant hospital in Woburn, MA.
 u Bad debt expense of 1.8% to 2.0% of net
 operating revenues
 Home Health and Hospice
 u Estimated 3.6%, or ~$21 million, net
 Medicare pricing reduction for CY 2017
 (see page 23)
 u Salary increase of ~3.0% (see page 24)
 u Estimated incremental cost of $1.0
 million to $1.5 million for the pre-claim
 review demonstration scheduled to begin
 in Florida on April 1, 2017
 u Inclusive of home health and hospice
 acquisitions in 2017 (see page 17)
 u Sale of pediatric home health assets in
 Q4 2016; Pediatrics generated ~$2 million
 of Adjusted EBITDA in 2016
 Consolidated
 u Diluted share count of ~100 million shares
 u Tax rate of approximately 40%
 16
 Adjusted Free Cash Flow(6) and Tax Assumptions
 Certain Cash Flow Items
 (millions)
 2015
 Actuals
 2016
 Actuals
 2017
 Assumptions
 • Cash interest expense
 (net of amortization of debt discounts and fees) $128.6 $158.4 $150 to $160
 • Cash payments for taxes, net of
 refunds $9.4 $31.9 $120 to $175
 • Working Capital and Other $69.2 $36.2 $50 to $70
 • Maintenance CAPEX $83.1 $104.2 $130 to $150
 • Dividends paid on preferred
 stock(8) $3.1 $— $0
 • Adjusted Free Cash Flow $389.0 $462.9 $245 to $370
 Reconciliations to GAAP provided on pages 35-43
 Refer to pages 44-45 for end notes.
 *  The Company has filed with the IRS for a tax accounting method change related to billings denied under pre-payment claims reviews that, if accepted,
 would replenish the gross federal NOL by ~$130 million. Exhaustion of the federal NOL at year-end 2016 excludes the impact of this filing.
 u Increased cash payments for
 taxes due to exhaustion of
 federal NOL as of 
December 31, 2016*
 u Increased maintenance capital
 expenditures due to growth in
 the Company, enhanced
 hospital maintenance
 program, and leasehold
 improvements and furnishings
 associated with the build-out
 of the Company’s new home
 office location (building will be
 leased)
 17 Note: 2015 amount for debt borrowings included ~$208 million related to the Reliant hospitals' capital lease obligations.See the debt schedule on page 25. Refer to pages 44-45 for end notes.
 Free Cash Flow Priorities
 (In Millions)
 2015 2016 2017
 Actuals Actuals Assumptions
 IRF bed expansions $20.8 $19.1 $30 to $40
 New IRF’s
     - De novos 47.8 72.6 85 to 105
     - Acquisitions 786.2 — TBD
     - Replacement hospitals — 11.1 10 to 20
 New home health and hospice acquisitions 200.2 48.1 50 to 100
 $1,055.0 $150.9
 $175 to $265,
 excluding IRF
 acquisitions
 2015 2016 2017
 Actuals Actuals Assumptions
 Debt (borrowings) redemptions, net $(1,060.3) $155.1 $TBD
 Cash dividends on common stock(10) 77.2 83.8 ~$87
 Common stock repurchases 45.3 65.6 TBD
 $(937.8) $304.5 $TBD
 Shareholder
 Distributions
 Growth
 in Core 
Business
 Debt 
Reduction
 Highest Priorit
 y
 The Company has ~$39 million of
 contractual debt repayment obligations in
 2017.(9)
 ~$96 million authorization remaining
 as of December 31, 2016
 Quarterly cash dividend currently set at
 $0.24 per common share
 Appendix
 19
 HealthSouth: A Leading Provider of Post-Acute Care
 59% of HealthSouth's IRFs are
 located within a 30-mile radius
 of an Encompass location.
 Inpatient Rehabilitation
 Portfolio - As of December 31, 2016
 123
 Inpatient Rehabilitation Hospitals
 • 37 operate as joint ventures with
 acute care hospitals
 30 Number of States (plus Puerto Rico)
 ~ 28,000 Employees
 Key Statistics - Full Year 2016
 ~ $3.0 Billion Revenue
 165,305 Inpatient Discharges
 640,702 Outpatient Visits
 Note: One of the 123 IRFs and two of the 188 adult home health locations are nonconsolidated.
           These locations are accounted for using the equity method of accounting.
 Encompass 
Home Health and Hospice
 Portfolio – As of December 31, 2016
 188 Home Health Locations
 35 Hospice Locations
 25 Number of States
 ~ 7,700 Employees
 Key Statistics - Full Year 2016
 ~ $686 million Revenue
 185,737 Home Health Episodes
 3,337 Hospice Admissions
 IRF Market Share
 Largest owner & operator of IRFs
 21% of Licensed Beds
 28% of Medicare Patients Served
 Home Health and
 Hospice Market Share
 4th largest provider of
 Medicare-certified skilled
 home health services
 20
 Pre-Payment Claims Denials - Inpatient Rehabilitation Segment
 Impact to Income Statement
 Period New Denials
 Collections of
 Previously
 Denied
 Claims
 Bad Debt
 Expense for
 New Denials
 Update of
 Reserve
 for Prior
 Denials
 (In Millions)
 Q4 2016 $17.8 $(4.4) $5.4 $0.5
 Q3 2016 15.7 (8.5) 4.6 —
 Q2 2016 18.7 (4.9) 4.6 —
 Q1 2016 22.7 (8.4) 6.0 —
 Q4 2015 22.5 (4.1) 5.6 (1.3)
 Q3 2015 22.0 (4.1) 5.9 (1.1)
 Q2 2015 18.2 (3.8) 4.9 —
 Q1 2015 16.3 (3.0) 4.2 —
 Q4 2014 22.0 (6.6) 6.2 (3.2)
 Q3 2014 15.8 (0.5) 1.7 —
 Q2 2014 7.1 (1.7) 3.0 —
 Impact to Balance Sheet
 Dec. 30,
 2016
 Dec. 31,
 2015
 Dec. 31,
 2014
 (In Millions)
 Pre-payment claims denials $ 159.7 $ 114.8 $ 59.3
 Recorded reserves (47.9) (31.2) (22.8)
 Net accounts receivable
 from pre-payment claims
 denials $ 111.8 $ 83.6 $ 36.5
 Background
  For several years, under programs designated as “widespread
 probes,” certain Medicare Administrative Contractors (“MACs”)
 have conducted pre-payment claim reviews and denied
 payment for certain diagnosis codes.
 – Pre-payment claim denials increased for IRFs during 2014
 and 2015 due to a widespread review of neurological billing
 codes and expansion of ongoing lower extremity code
 denials.
  HealthSouth appeals most denials. On claims it takes to an
 administrative law judge (“ALJ”), HealthSouth historically has
 experienced an approximate 70% success rate.
 – MACs identify medical documentation issues as a leading
 basis for denials.
 – HealthSouth's investment in clinical information systems and
 its medical services department has further improved its
 documentation and reduced technical denials.
 – However, MACs and other HHS contractors continue to
 issue denials without regulatory basis.
  By statute, ALJ decisions are due within 90 days of a request
 for hearing, but appeals are taking years. HHS has proposed
 rule changes to address the backlog of appeals, but their effect
 is uncertain.
  A federal court recently ordered HHS to eliminate the backlog
 by the end of calendar year 2020. HHS has appealed the order.
  All Medicare providers continue to experience delays. The
 backlog is growing because the ALJs receive one year's worth
 of appeals every four to six weeks, according to HHS.
 – Currently, ALJs are hearing HealthSouth appeals from
 claims denied up to five years ago.
 HealthSouth reserves for pre-payment claim denials via the provision for
 doubtful accounts upon notice from a MAC that a claim is under review.
 21
 Expansion Activity
 Inpatient Rehabilitation Facilities
 # of New Beds
 2016 2017 2018
 De Novo:
     Modesto, CA 50 — —
     Pearland, TX — 40 —
     Murrieta, CA — — 50
     Shelby County, AL — — 34
 Hilton Head, SC — — 38
 Joint Ventures:
     Hot Springs, AR 40 — —
     Bryan, TX 49 — —
     Broken Arrow, OK* 22 18 —
     Westerville, OH — 60 —
     Jackson, TN — 48 —
 Gulfport, MS — 33 —
     Murrells Inlet, SC — — 29
 Winston-Salem, NC — — 68
 Bed Expansions, net** 83 ~150 ~100
 244 349 319
     Little River, SC (46 beds pending CON approval)
 *
 **
 Operating a unit in place (22 beds) while completing a de novo (40 beds) for a net increase of 18 beds in 2017.
 Net bed expansions in each year may change due to the timing of certain regulatory approvals and/or construction delays.
 2016 does not include impact of sale of 61-bed hospital in Beaumont, TX or closure of 83-bed hospital in Austin, TX.
 Q4 2016 acquisition highlights:
 u Acquired Summit Home Health Care (two home health
 agencies in WY)
 u Opened one de novo home health agency in Georgetown, TX
 and one de novo hospice location in Nashville, TN
 u Acquired one home health agency in Springfield, VA
 u Acquired one home health agency in Sarasota, FL
 u Acquired one hospice location in Wheat Ridge, CO
 Q4 2016 expansion activity highlights:
 u Opened new 50-bed hospital in Modesto, CA in October 2016
 u Received CON approval to build a 68-bed hospital in Winston-
 Salem, NC (joint venture with Novant Health)
 u Expanded existing hospital in Jonesboro, AR by 13 beds
 u Entered into a joint venture with Memorial Hospital at Gulfport
 to own and operate an existing 33-bed inpatient rehabilitation
 unit in Gulfport, MS2
 3
 4
 5
 6
 10 IRF DevelopmentProjects Underway 2 New States
 8
 9
 Home Health and Hospice
 # of locations
 December 31, 2015 213
 Acquisitions 13
 De Novo 5
 Merged / Closed Locations (8)
 December 31, 2016 223
 1
 S7
 Winston-Salem, NC
 10
 9
 22
 • Same-store IRF growth
 • New-store IRF growth (de novos and acquisitions)
 • Same-store home health and hospice growth
 • New-store home health and hospice growth (acquisitions)
 Core
 Growth
 Strong
 Balance Sheet
 Key 
Operational
 Initiatives
 Shareholder
 Distributions
 Opportunistic
 Growth
 Business Outlook 2017 to 2019*
 2017 2018 2019
 Business Model
 • Adjusted EBITDA CAGR: 5% - 9%** 
• Strong free cash flow generation
 • Quarterly cash dividends
 • Opportunistic repurchases
 -  (~$96 million authorization remaining as of December 31, 2016)
 • Develop and implement risk sharing strategies
 • Enhance clinical collaboration between HealthSouth and Encompass
 • Refine and expand clinical data analytics utilization to further improve patient outcomes
 • Leverage clinical expertise to increase stroke admissions
 • Complete installation of EMR and enhance utilization via continuous in-service upgrades
 • Target leverage of 3.5x to
 3.8x by year end, subject to
 opportunities for creating
 shareholder value
 Strategy Componen
 t
 • Consider acquisitions of other complementary businesses
 • Target leverage of 3.5x or less, subject to opportunities for
 creating shareholder value
 * If legislation affecting Medicare is passed, HealthSouth will evaluate its effect on its business model.
 ** This is a multi-year CAGR; annual results may fall outside the range.
 23
 • 10% to15% annual episode
 growth
 • Includes $35-$40 million per 
annum in agency acquisitions
 Volume
 (Includes New Stores)
 Inpatient Rehabilitation Home Health & Hospice
 Medicare Pricing
 Approx. 73% of Revenue Approx. 83% of Revenue
 FY 2017
 Q416-Q317
 FY 2018
 Q417-Q318(11)
 FY 2019
 Q418-Q319
 Mgmt. Estimate
 CY 2017
 Q117-Q417
 CY 2018
 Q118-Q418(11)
 CY 2019
 Q119-Q419
 Mgmt. Estimate
 Market basket update 2.7% 1.0% 3.3% 2.8% 1.0% 3.1%
 Healthcare reform reduction (75) bps - (75) bps - - -
 Healthcare reform rebasing
 adjustment - - - (2.3%) -
 Coding intensity reduction - - - (0.9%) (0.9%) -
 Expiration of rural add-on - - - - Approx.(0.7%) -
 Healthcare reform productivity
 adjustment  (30) bps - (100) bps  (30) bps - (100) bps
 Net impact - all providers 1.65% 1.0% 1.55% (0.7%) (0.6%) 2.1%
 Outlier fixed dollar loss adjustment - - - (0.1%) - -
 Impact from case mix re-weighting - - - (0.9%) - -
 Impact from change in outlier
 calculation - - - (1.9%) - -
 Estimated impact to HealthSouth(12) 1.9% (3.6%)
 Medicare Advantage 
& Managed Care Pricing
 Approx. 19% of Revenue Approx. 13% of Revenue
 Expected Increases 2-4% 2-4% 2-4% 0-2% 0-2% 0-2%
 Business Outlook 2017 to 2019: Revenue Assumptions
 • 3+% annual discharge growth • 10+% annual episode growth
 Refer to pages 44-45 for end notes.
 24
 Inpatient Rehabilitation Home Health and Hospice
 Business Outlook 2017 to 2019: Labor and Other Expense Assumptions
 Salaries 
& Benefits
 ~70%
 Hospital
 Expenses
 ~30%
 Salaries and Benefits 2017 2018 2019
 Salary increases 2.75-3.25% 2.75-3.25% 2.75-3.25%
 Benefit costs increases 5-10% 5-10% 5-10%
 Hospital Expenses
 • Other operating expenses and supply
 costs tracking with inflation
 Salaries 
& Benefits
 ~85%
 Other
 Expenses
 ~15%
 Home Health Expenses
 • Other operating expenses and supply
 costs tracking with inflation
 Percent of Salaries & Benefits
 Salaries ~ 90%
 Benefits ~10%
 25
 Debt Schedule
 Change in
 Dec. 31, Dec. 31,  Debt vs.
 ($millions) 2016 2015  YE 2015
 Advances under $600 million revolving credit facility,
     July 2020 - LIBOR +200bps $ 152.0 $ 130.0 $ 22.0
 Term loan facility, July 2020 - LIBOR +200bps 421.2 443.3 (22.1)
 Bonds Payable:
 7.75% Senior Notes due 2022 — 174.3 (174.3)
 5.125% Senior Notes due 2023 295.3 294.6 0.7
 5.75% Senior Notes due 2024 1,193.2 1,192.6 0.6
 5.75% Senior Notes due 2025 343.9 343.4 0.5
 2.0% Convertible Senior Subordinated Notes due 2043 275.7 265.9 9.8
 Other notes payable 55.8 39.2 16.6
 Capital lease obligations 279.3 288.2 (8.9)
 Long-term debt $ 3,016.4 $ 3,171.5 $ (155.1)
 Debt to Adjusted EBITDA 3.8x 4.6x
 Reconciliations to GAAP provided on pages 35-43
 26
 2016 2019 2020 2020 2021 2022 2023 2024 2025 2043
 $350 Senior
 Notes 5.75%
 $1,200
 Senior
 Notes
 5.75%
 $320 Conv.
 Sr. Sub.
 Notes 2.0%
 $300 Senior
 Notes
 5.125%
 $152
 Drawn +
 $33
 reserved
 for LC’s 
Holders have a put
 option in 2020
 As of December 31, 2016*
 Debt Maturity Profile - Face Value
 ($ in millions)
 $415
 Available
 Callable beginning
 November 2017
 HealthSouth is positioned with a cost-efficient, flexible capital structure.
 Callable beginning March 2018
 Revolver
 Revolver
 Capacity $421
 Term
 Loans
 Callable beginning
 September 2020
 * This chart does not include ~$279 million of capital lease obligations or ~$56 million of other notes payable.
 See the debt schedule on page 25.
 No significant debt
 maturities prior to 2020
 27
 25.0
 20.0
 15.0
 10.0
 5.0
 0.0
 Q1 2014 Q2 2014 Q3 2014 Q4 2014 Q1 2015 Q2 2015 Q3 2015 Q4 2015 Q1 2016 Q2 2016 Q3 2016 Q4 2016
 New-Store/Same-Store IRF Growth
 Q1 2014 Q2 2014 Q3 2014 Q4 2014 Q1 2015 Q2 2015 Q3 2015 Q4 2015 Q1 2016 Q2 2016 Q3 2016 Q4 2016
 Fairlawn(13) 0.6% 1.9% 1.9% 2.0% 1.1%
 New Store 2.0% 1.0% —% 0.6% 1.8% 4.4% 5.7% 15.6% 14.2% 11.7% 10.7% 1.3%
 Same Store* 0.4% 1.4% 1.9% 2.2% 2.9% 2.8% 3.9% 3.0% 2.8% 1.9% 1.9% 0.1%
 Total by Qtr. 2.4% 3.0% 3.8% 4.7% 6.7% 8.3% 9.6% 18.6% 17.0% 13.6% 12.6% 1.4%
 Total by Year 3.5% 10.9% 10.8%
 Same-Store
 Year* 1.3% 3.2% 1.7%
 Same-Store
 Year UDS(14) (0.2)% 1.3% (0.6)%
 Altamonte Springs, FL (50 beds)
 Johnson City, TN (26 beds)
 Newnan, GA (50 beds)
 Middletown, DE (34 beds) 
Reliant (857 beds)
 Franklin, TN (40 beds)
 Lexington, KY (158 beds)
 Savannah, GA (50 beds)
 Hot Springs, AR (40 beds)
 Bryan, TX (49 beds)
 Broken Arrow, OK (22 beds)
 * Includes consolidated HealthSouth inpatient rehabilitation hospitals classified as same store during each period
 Refer to pages 44-45 for end notes.
 Modesto, CA (50 beds)
 28
 Payment Sources (Percent of Revenues)
 Inpatient
 Rehabilitation
 Segment
 Home Health
 and Hospice
 Segment
 Consolidated
 Q4 Q4 Q4 Full Year
 2016 2015 2016 2015 2016 2015 2016 2015
 Medicare 73.3% 73.6% 84.3% 82.6% 75.3% 75.2% 75.2% 74.9%
 Medicare Advantage 7.8% 7.8% 8.7% 9.2% 8.0% 8.0% 7.9% 7.9%
 Managed care 10.9% 10.7% 3.9% 2.9% 9.6% 9.4% 9.8% 9.8%
 Medicaid 3.0% 2.5% 3.0% 5.1% 3.0% 2.9% 3.2% 3.0%
 Other third-party payors 1.9% 2.3% —% —% 1.5% 1.9% 1.4% 1.7%
 Workers’ compensation 1.1% 1.1% —% —% 0.9% 0.9% 0.8% 0.9%
 Patients 0.7% 0.7% —% 0.1% 0.6% 0.6% 0.5% 0.6%
 Other income 1.3% 1.3% 0.1% 0.1% 1.1% 1.1% 1.2% 1.2%
 Total 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% 100.0%
 29
 Inpatient Rehabilitation Operational and Labor Metrics
 Q4 Q3 Q2 Q1 Q4 Q3 Q2 Q1 Full Year
 2016 2016 2016 2016 2015 2015 2015 2015 2016 2015
 (In Millions)
 Net patient revenue-
 inpatient $ 740.9 $ 724.1 $ 721.2 $ 719.4 $ 696.8 $ 625.1 $ 618.7 $ 606.6 $ 2,905.5 $ 2,547.2
 Net patient revenue-
 outpatient and other 26.7 27.6 31.4 29.8 29.1 26.5 26.6 23.7 115.6 105.9
 Net operating revenues $ 767.6 $ 751.7 $ 752.6 $ 749.2 $ 725.9 $ 651.6 $ 645.3 $ 630.3 $ 3,021.1 $ 2,653.1
 (Actual Amounts)
 Discharges(15) 41,474 41,368 41,365 41,098 40,891 36,746 36,408 35,116 165,305 149,161
 Net patient revenue per
 discharge $ 17,864 $ 17,504 $ 17,435 $ 17,505 $ 17,040 $ 17,011 $ 16,994 $ 17,274 $ 17,577 $ 17,077
 Outpatient visits 154,311 158,981 164,761 162,649 163,119 138,121 144,914 131,353 640,702 577,507
 Average length of stay 12.8 12.7 12.6 12.9 12.6 12.9 13.0 13.3 12.8 12.9
 Occupancy % 67.8% 67.8% 68.2% 68.9% 66.4% 69.6% 70.4% 72.8% 67.8% 62.8%
 # of licensed beds* 8,504 8,441 8,430 8,481 8,404 7,422 7,374 7,100 8,504 8,404
 Occupied beds 5,766 5,723 5,749 5,843 5,580 5,166 5,191 5,169 5,766 5,278
 Full-time equivalents
 (FTEs)(16) 19,930 19,663 19,503 19,352 19,136 17,782 17,601 17,002 19,612 17,880
 Contract labor 245 241 205 194 152 141 118 116 221 132
 Total FTE and contract
 labor 20,175 19,904 19,708 19,546 19,288 17,923 17,719 17,118 19,833 18,012
 EPOB(17) 3.50 3.48 3.43 3.35 3.46 3.47 3.41 3.31 3.44 3.41
 * The decrease in licensed beds from Q1 2016 to Q2 2016 was due to the sale of the hospital in Beaumont, TX (61 beds).
 Refer to pages 44-45 for end notes.
 30
 Home Health and Hospice Operational Metrics
 Q4 Q3 Q2 Q1 Q4 Q3 Q2 Q1 Full Year
 2016 2016 2016 2016 2015 2015 2015 2015 2016 2015
 (In Millions)
 Net home health revenue $ 165.2 $ 162.0 $ 157.1 $ 150.9 $ 144.4 $ 118.3 $ 111.5 $ 103.9 $ 635.2 $ 478.1
 Net hospice and other revenue 17.1 13.1 11.0 9.7 9.0 8.7 7.6 6.4 50.9 31.7
 Net operating revenues $ 182.3 $ 175.1 $ 168.1 $ 160.6 $ 153.4 $ 127.0 $ 119.1 $ 110.3 $ 686.1 $ 509.8
 Home Health: (Actual Amounts)
 Admissions(18) 27,957 27,239 25,753 25,763 22,892 18,076 16,862 16,499 106,712 74,329
 Recertifications 21,422 20,888 20,432 19,453 18,909 16,542 15,103 14,485 82,195 65,039
 Episodes 49,253 46,866 45,774 43,844 42,697 33,542 31,817 29,512 185,737 137,568
 Average revenue per episode $ 3,023 $ 3,032 $ 3,033 $ 3,035 $ 3,005 $ 3,123 $ 3,082 $ 3,102 $ 3,031 $ 3,072
 Episodic visits per episode 18.4 19.0 18.9 19.1 18.2 19.6 19.4 19.6 18.8 19.1
 Total visits 1,033,502 1,001,021 967,968 937,804 862,224 721,055 675,095 630,999 3,940,295 2,889,373
 Cost per visit $ 76 $ 75 $ 73 $ 73 $ 73 $ 72 $ 71 $ 71 $ 74 $ 72
 Hospice:
 Admissions(19) 996 832 785 724 614 620 594 624 3,337 2,452
 Patient days 104,183 83,628 71,277 63,431 59,100 55,627 49,272 40,898 322,519 204,898
 Revenue per day $ 164 $ 157 $ 154 $ 153 $ 155 $ 156 $ 154 $ 156 $ 158 $ 155
 Refer to pages 44-45 for end notes.
 31
 Common Stock Warrants
 On September 30, 2009, HealthSouth issued 8,151,265 warrants in satisfaction of its obligation
 under the comprehensive settlement of the 2003 consolidated class action suit brought by the
 Company’s stockholders and bondholders.  
Under the terms of the agreement, the warrants were exercisable at a price of $41.40 per
 share by means of cash or cashless exercise at the option of the holder.  
The warrants expired at 5 p.m. EST on January 17, 2017.
 Warrants Shares Issued
 Cash Received
 (Millions)
 Outstanding Warrants 8,151,265 — $ —
 Cash Exercise* (644,376) 644,376 26.7
 Cashless Exercise** (6,475,449) 54,970 —
 Expired (Unexercised) (1,031,440) — —
 As of January 17, 2017 — 699,346 $ 26.7
 HealthSouth repurchased approximately 1.1 million shares of common stock in Q4 2016,
 resulting in a net reduction to the diluted share count of approximately 0.4 million shares
 after the exercise of the above warrants in January 2017.
   * In a cash exercise, the warrant holder exchanges one warrant for one share of common stock and tenders cash of $41.40 per share.
 ** If the holder chooses a cashless exercise, the company issues the number of shares equal in value to the in-the-money amount of 
    the warrant. No cash is received from the holder.
 32
 Share Information
 Weighted Average for the Period
 Q4 Full Year
 (Millions) 2016 2015 2016 2015 2014
 Basic shares outstanding(8) 88.6 90.1 89.1 89.4 86.8
 Convertible perpetual preferred stock(8) — — — 1.0 3.2
 Convertible senior subordinated notes(20) 8.6 8.4 8.5 8.3 8.2
 Restricted stock awards, dilutive stock options,
 restricted stock units, and common stock warrants(21) 2.0 2.1 1.9 2.3 2.5
 Diluted shares outstanding 99.2 100.6 99.5 101.0 100.7
 End of Period
 Q4 Full Year
 (Millions) 2016 2015 2016 2015 2014
 Basic shares outstanding(8) 88.3 89.3 88.3 89.3 86.6
 Approx. Approx.
 Date Conversion Rate Conversion Price
 Convertible senior subordinated notes(20) 1/3/17 26.9106 $37.16
 Refer to pages 44-45 for end notes.
 33
 Segment Operating Results
 Q4 2016 Q4 2015
 IRF
 Home
 Health and
 Hospice
 Reclasses HealthSouthConsolidated IRF
 Home
 Health and
 Hospice
 Reclasses HealthSouthConsolidated
 Net operating revenues $ 767.6 $ 182.3 $ — $ 949.9 $ 725.9 $ 153.4 $ — $ 879.3
 Less: Provision for doubtful accounts (13.2) (1.3) — (14.5) (13.3) (0.7) — (14.0)
 754.4 181.0 — 935.4 712.6 152.7 — 865.3
 Operating Expenses:
 Inpatient Rehabilitation:
 Salaries and benefits (386.2) — (130.1) (516.3) (359.8) — (107.0) (466.8)
 Other operating expenses(a) (109.8) — (16.6) (126.4) (103.2) — (12.4) (115.6)
 Supplies (32.7) — (3.1) (35.8) (32.3) — (2.3) (34.6)
 Occupancy (15.2) — (2.6) (17.8) (14.5) — (2.3) (16.8)
 Home Health and Hospice:
 Cost of services sold (excluding
 depreciation and amortization) — (89.7) 89.7 — — (73.0) 73.0 —
 Support and overhead costs — (62.7) 62.7 — — (51.0) 51.0 —
 (543.9) (152.4) — (696.3) (509.8) (124.0) — (633.8)
 Other income 0.8 — — 0.8 1.3 — — 1.3
 Equity in net income of nonconsolidated
 affiliates 2.4 0.1 — 2.5 2.3 0.1 — 2.4
 Noncontrolling interest (16.1) (0.7) — (16.8) (16.5) (2.3) — (18.8)
 Segment Adjusted EBITDA $ 197.6 $ 28.0 $ — 225.6 $ 189.9 $ 26.5 $ — 216.4
 General and administrative expenses(b)(c) (26.8) (24.9)
 Adjusted EBITDA $ 198.8 $ 191.5
 In arriving at Adjusted EBITDA, the following were excluded:
 (a) Loss (gain) on disposal or
 impairment of assets
 $ 2.0 $ (3.3) $ — $ (1.3) $ 2.5 $ (0.1) $ — $ 2.4
 (b) Transaction costs — — — — — — — 6.7
 (c) Stock-based compensation — — — 10.0 — — — 4.4
 Reconciliations to GAAP provided on pages 35-43
 34
 Segment Operating Results
 Year Ended December 31, 2016 Year Ended December 31, 2015
 IRF
 Home
 Health and
 Hospice
 Reclasses HealthSouthConsolidated IRF
 Home
 Health and
 Hospice
 Reclasses HealthSouthConsolidated
 Net operating revenues $ 3,021.1 $ 686.1 $ — $ 3,707.2 $ 2,653.1 $ 509.8 $ — $ 3,162.9
 Less: Provision for doubtful accounts (57.0) (4.2) — (61.2) (44.7) (2.5) — (47.2)
 2,964.1 681.9 — 3,646.0 2,608.4 507.3 — 3,115.7
 Operating Expenses: —
 Inpatient Rehabilitation: —
 Salaries and benefits (1,493.4) — (492.5) (1,985.9) (1,310.6) — (360.2) (1,670.8)
 Other operating expenses(a) (431.5) — (59.9) (491.4) (387.7) — (41.8) (429.5)
 Supplies (128.8) — (11.2) (140.0) (120.9) — (7.8) (128.7)
 Occupancy (61.2) — (10.1) (71.3) (46.2) — (7.7) (53.9)
 Home Health and Hospice:
 Cost of services sold (excluding
 depreciation and amortization) — (336.5) 336.5 — — (244.8) 244.8 —
 Support and overhead costs — (237.2) 237.2 — — (172.7) 172.7 —
 (2,114.9) (573.7) — (2,688.6) (1,865.4) (417.5) — (2,282.9)
 Other income 2.9 — — 2.9 2.3 — — 2.3
 Equity in net income of nonconsolidated
 affiliates 9.1 0.7 — 9.8 8.6 0.1 — 8.7
 Noncontrolling interest (64.0) (6.5) — (70.5) (62.9) (6.8) — (69.7)
 Segment Adjusted EBITDA $ 797.2 $ 102.4 $ — 899.6 $ 691.0 $ 83.1 $ — 774.1
 General and administrative expenses(b)(c) (106.0) (94.8)
 Gain related to SCA equity interest — 3.2
 Adjusted EBITDA $ 793.6 $ 682.5
 In arriving at Adjusted EBITDA, the following were excluded:
 (a) Loss (gain) on disposal or
 impairment of assets
 $ 4.3 $ (3.6) $ — $ 0.7 $ 2.8 $ (0.2) $ — $ 2.6
 (b) Transaction costs — — — — — — — 12.3
 (c) Stock-based compensation — — — 27.4 — — — 26.2
 Reconciliations to GAAP provided on pages 35-43
 35
 Reconciliation of Net Income to Adjusted EBITDA(7)
 2016
 Q1 Q2 Q3 Q4 Full Year
 (in millions, except per share data) Total
 Per
 Share Total
 Per
 Share Total
 Per
 Share Total
 Per
 Share Total
 Per
 Share
 Net Income $ 76.7 $ 81.2 $ 78.1 $ 82.1 $ 318.1
 Loss (income) from disc ops, net of tax,
 attributable to HealthSouth 0.1 0.1 0.1 (0.3) —
 Net income attributable to
 noncontrolling interests (18.7) (18.6) (16.4) (16.8) (70.5)
 Income from continuing operations
 attributable to HealthSouth* 58.1 $ 0.61 62.7 $ 0.65 61.8 $ 0.64 65.0 $ 0.68 247.6 $ 2.59
 Pro fees - acct, tax, and legal 0.2 1.7 — — 1.9
 Provision for income tax expense 39.7 42.4 42.1 39.7 163.9
 Interest expense and amortization of
 debt discounts and fees 44.6 43.4 42.5 41.6 172.1
 Depreciation and amortization 42.4 42.9 43.5 43.8 172.6
 Loss on early extinguishment of debt 2.4 2.4 2.6 — 7.4
 Net noncash loss (gain) on disposal or
 impairment of assets 0.2 0.2 1.6 (1.3) 0.7
 Stock-based compensation expense 4.5 8.6 4.3 10.0 27.4
 Adjusted EBITDA $ 192.1 $ 204.3 $ 198.4 $ 198.8 $ 793.6
 Weighted average common shares
 outstanding:
 Basic 89.5 89.3 89.1 88.6 89.1
 Diluted 99.4 99.4 99.4 99.2 99.5
 * Per share amounts for each period presented are based on diluted weighted-average shares outstanding.
 Refer to pages 44-45 for end notes.
 36
 Reconciliation of Net Income to Adjusted EBITDA(7)
 2015
 Q1 Q2 Q3 Q4 Full Year
 (in millions, except per share data) Total
 Per
 Share Total
 Per
 Share Total
 Per
 Share Total
 Per
 Share Total
 Per
 Share
 Net Income $ 59.0 $ 60.2 $ 67.8 $ 65.8 $ 252.8
 Loss (income) from disc ops, net of tax,
 attributable to HealthSouth 0.3 1.6 (0.3) (0.7) 0.9
 Net income attributable to noncontrolling
 interests (16.5) (17.3) (17.1) (18.8) (69.7)
 Income from continuing operations
 attributable to HealthSouth* 42.8 $ 0.44 44.5 $ 0.47 50.4 $ 0.52 46.3 $ 0.48 184.0 $ 1.92
 Gov’t, class action, and related
 settlements 8.0 — — (0.5) 7.5
 Pro fees - acct, tax, and legal 2.2 0.1 0.4 0.3 3.0
 Provision for income tax expense 30.3 32.2 35.9 43.5 141.9
 Interest expense and amortization of
 debt discounts and fees 31.8 30.9 35.6 44.6 142.9
 Depreciation and amortization 31.9 32.7 33.7 41.4 139.7
 Loss on early extinguishment of debt 1.2 18.8 — 2.4 22.4
 Net noncash (gain) loss on disposal or
 impairment of assets (1.5) 0.8 0.9 2.4 2.6
 Stock-based compensation expense 9.4 6.2 6.2 4.4 26.2
 Transaction costs — 3.3 2.3 6.7 12.3
 Adjusted EBITDA $ 156.1 $ 169.5 $ 165.4 $ 191.5 $ 682.5
 Weighted average common shares
 outstanding:
 Basic 87.1 89.8 90.6 90.1 89.4
 Diluted 101.1 101.5 101.5 100.6 101.0
 * Per share amounts for each period presented are based on diluted weighted-average shares outstanding.
 Refer to pages 44-45 for end notes.
 37
 Net Cash Provided by Operating Activities Reconciled
 to Adjusted EBITDA
 Q4 Full Year
 (Millions) 2016 2015 2016 2015
 Net cash provided by operating activities $ 116.0 $ 116.6 $ 605.5 $ 484.8
 Provision for doubtful accounts (14.5) (14.0) (61.2) (47.2)
 Professional fees—accounting, tax, and legal — 0.3 1.9 3.0
 Interest expense and amortization of debt discounts and
 fees 41.6 44.6 172.1 142.9
 Equity in net income of nonconsolidated affiliates 2.5 2.4 9.8 8.7
 Net income attributable to noncontrolling interests in
 continuing operations (16.8) (18.8) (70.5) (69.7)
 Amortization of debt-related items (3.5) (3.4) (13.8) (14.3)
 Distributions from nonconsolidated affiliates (2.6) (3.2) (8.5) (7.7)
 Current portion of income tax expense 17.4 4.4 31.0 14.8
 Change in assets and liabilities 41.3 53.6 102.9 147.1
 Net premium paid on bond transactions — 1.9 5.8 3.9
 Windfall tax benefits from share-based compensation 17.3 — 17.3 —
 Cash used in (provided by) operating activities of
 discontinued operations 0.1 (0.1) 0.7 0.7
 Transaction costs — 6.7 — 12.3
 Other — 0.5 0.6 3.2
 Adjusted EBITDA $ 198.8 $ 191.5 $ 793.6 $ 682.5
 38
 Reconciliation of Segment Adjusted EBITDA to Income
 from Continuing Operations Before Income Tax Expense
 Three Months Ended Year Ended
 December 31, December 31,
 2016 2015 2016 2015
 In Millions
 Total segment Adjusted EBITDA $ 225.6 $ 216.4 $ 899.6 $ 774.1
 General and administrative expenses (36.8) (36.0) (133.4) (133.3)
 Depreciation and amortization (43.8) (41.4) (172.6) (139.7)
 Gain (loss) on disposal or impairment of assets 1.3 (2.4) (0.7) (2.6)
 Government, class action, and related settlements — 0.5 — (7.5)
 Professional fees - accounting, tax, and legal — (0.3) (1.9) (3.0)
 Loss on early extinguishment of debt — (2.4) (7.4) (22.4)
 Interest expense and amortization of debt discounts and fees (41.6) (44.6) (172.1) (142.9)
 Net income attributable to noncontrolling interests 16.8 18.8 70.5 69.7
 Gain related to SCA equity interest — — — 3.2
    Income from continuing operations before income tax
 expense $ 121.5 $ 108.6 $ 482.0 $ 395.6
 39
 Reconciliation of Net Cash Provided by Operating
 Activities to Adjusted Free Cash Flow(6) 
Q4 Full Year
 ($millions) 2016 2015 2016 2015 2014
 Net cash provided by operating activities $ 116.0 $ 116.6 $ 605.5 $ 484.8 $ 444.9
 Impact of discontinued operations 0.1 (0.1) 0.7 0.7 1.2
 Net cash provided by operating activities of continuing operations 116.1 116.5 606.2 485.5 446.1
 Capital expenditures for maintenance (39.7) (27.1) (104.2) (83.1) (92.0)
 Dividends paid on convertible perpetual preferred stock(8) — — — (3.1) (6.3)
 Distributions paid to noncontrolling interests of consolidated affiliates (15.4) (14.8) (64.9) (54.4) (54.1)
 Items non-indicative of ongoing operations:
 Cash paid for professional fees - accounting, tax, and legal — 0.3 1.9 4.1 8.6
 Transaction costs and related assumed liabilities — 6.5 0.8 28.3 2.0
 Net premium on bond issuance/repayment — 1.9 5.8 4.0 4.3
 Windfall tax benefits from share-based compensation 17.3 — 17.3 — —
 Cash (received) paid for government, class action, and related
 settlements — (0.3) — 7.7 2.7
 Adjusted free cash flow $ 78.3 $ 83.0 $ 462.9 $ 389.0 $ 311.3
 Cash dividends on common stock $ 21.4 $ 21.0 $ 83.8 $ 77.2 $ 65.8
 Refer to pages 44-45 for end notes.
 40
 For the Three Months Ended December 31, 2016
 Adjustments
 As
 Reported
 Mark-to-
 Market
 Adjustment
 for Stock
 Appreciation
 Rights
 Sale of
 Pediatric
 Home Health
 Assets and
 Hospital
 Income Tax
 Valuation
 and Other
 Adjustments
 As
 Adjusted
 (In Millions, Except Per Share Amounts)
 Adjusted EBITDA $ 198.8 $ — $ — $ — $ 198.8
 Depreciation and amortization (43.8) — — — (43.8)
 Interest expense and amortization of debt
 discounts and fees (41.6) — — — (41.6)
 Stock-based compensation (10.0) 3.0 — — (7.0)
 Loss on disposal or impairment of assets 1.3 — (3.3) — (2.0)
 Income from continuing operations
 before income tax expense 104.7 3.0 (3.3) — 104.4
 Provision for income tax expense (39.7) (1.1) 6.1 (0.6) (35.3)
 Income from continuing operations
 attributable to HealthSouth $ 65.0 $ 1.9 $ 2.8 $ (0.6) $ 69.1
 Add: Interest on convertible debt, net of tax 2.5 2.5
 Numerator for diluted earnings per
 share $ 67.5 $ 71.6
 Diluted earnings per share from continuing
 operations* $ 0.68 $ 0.02 $ 0.03 $ (0.01) $ 0.72
 Diluted shares used in calculation 99.2
 Adjusted EPS(5) - Q4 2016
 *  Adjusted EPS may not sum across due to rounding.
    Reconciliations to GAAP provided on pages 35-43; Refer to pages 44-45 for end notes.
 41
 For the Three Months Ended December 31, 2015
 Adjustments
 As
 Reported
 Gov’t, Class
 Action, &
 Related
 Settlements
 Pro.
 Fees -
 Acct.,
 Tax, &
 Legal
 Income
 Tax
 Valuation
 & Other
 Adj.
 Transaction
 Costs
 Loss on
 Early
 Exting.
 of Debt
 As
 Adjusted
 (In Millions, Except Per Share Amounts)
 Adjusted EBITDA $ 191.5 $ — $ — $ — $ — $ — $ 191.5
 Depreciation and amortization (41.4) — — — — — (41.4)
 Government, class action, and related settlements 0.5 (0.5) — — — — —
 Professional fees - accounting, tax, and legal (0.3) — 0.3 — — — —
 Loss on early extinguishment of debt (2.4) — — — — 2.4 —
 Interest expense and amortization of debt
 discounts and fees (44.6) — — — — — (44.6)
 Stock-based compensation (4.4) — — — — — (4.4)
 Loss on disposal or impairment of assets (2.4) — — — — — (2.4)
 Transaction costs (6.7) — — — 6.7 — —
 Income from continuing operations before
 income tax expense 89.8 (0.5) 0.3 — 6.7 2.4 98.7
 Provision for income tax expense (43.5) 0.2 (0.1) 4.7 (2.1) (1.0) (41.8)
 Income from continuing operations
 attributable to HealthSouth $ 46.3 $ (0.3) $ 0.2 $ 4.7 $ 4.6 $ 1.4 $ 56.9
 Add: Interest on convertible debt, net of tax 2.4 2.4
 Numerator for diluted earnings per share $ 48.7 $ 59.3
 Diluted earnings per share from continuing
 operations* $ 0.48 $ — $ — $ 0.05 $ 0.05 $ 0.01 $ 0.59
 Diluted shares used in calculation 100.6
 Adjusted EPS(5) - Q4 2015
 *  Adjusted EPS may not sum across due to rounding.
    Reconciliations to GAAP provided on pages 35-43; Refer to pages 44-45 for end notes.
 42
 For the Year Ended December 31, 2016
 Adjustments
 As
 Reported
 Pro.
 Fees -
 Acct.,
 Tax, &
 Legal
 Mark-to-
 Market
 Adjustment
 for Stock
 Appreciation
 Rights
 Loss
 on
 Early
 Exting.
 of Debt
 Sale of
 Pediatric
 Home Health
 Assets and
 Hospital
 Income Tax
 Valuation
 and Other
 Adjustments
 As
 Adjusted
 (In Millions, Except Per Share Amounts)
 Adjusted EBITDA $ 793.6 $ — $ — $ — $ — $ — $ 793.6
 Depreciation and amortization (172.6) — — — — — (172.6)
 Professional fees - accounting, tax, and legal (1.9) 1.9 — — — — —
 Loss on early extinguishment of debt (7.4) — — 7.4 — — —
 Interest expense and amortization of debt
 discounts and fees (172.1) — — — — — (172.1)
 Stock-based compensation (27.4) — 1.6 — — — (25.8)
 Loss on disposal or impairment of assets (0.7) — — — (4.2) — (4.9)
 Income from continuing operations
 before income tax expense 411.5 1.9 1.6 7.4 (4.2) — 418.2
 Provision for income tax expense (163.9) (0.8) (0.6) (3.0) 6.5 (0.6) (162.4)
 Income from continuing operations
 attributable to HealthSouth $ 247.6 $ 1.1 $ 1.0 $ 4.4 $ 2.3 $ (0.6) $ 255.8
 Add: Interest on convertible debt, net of tax 9.7 9.7
 Numerator for diluted earnings per share $ 257.3 $ 265.5
 Diluted earnings per share from continuing
 operations* $ 2.59 $ 0.01 $ 0.01 $ 0.04 $ 0.02 $ (0.01) $ 2.67
 Diluted shares used in calculation 99.5
 Adjusted EPS(5) - YTD 2016
 *  Adjusted EPS may not sum across due to rounding.
    Reconciliations to GAAP provided on pages 35-43; Refer to pages 44-45 for end notes.
 43
 For the Year Ended December 31, 2015
 As
 Reported
 Gov’t,
 Class
 Action, &
 Related
 Settlements
 Pro.
 Fees -
 Acct.,
 Tax, &
 Legal
 Income
 Tax
 Valuation
 & Other
 Adj.
 Mark-to-
 Market
 Adjustment
 for Stock
 Appreciation
 Rights
 Transaction
 Costs
 Loss
 on
 Early
 Exting.
 of Debt
 As
 Adjusted
 (In Millions, Except Per Share Amounts)
 Adjusted EBITDA $ 682.5 $ — $ — $ — $ — $ — $ — $ 682.5
 Depreciation and amortization (139.7) — — — — — — (139.7)
 Government, class action, and related
 settlements (7.5) 7.5 — — — — — —
 Professional fees - accounting, tax, and
 legal (3.0) — 3.0 — — — — —
 Loss on early extinguishment of debt (22.4) — — — — — 22.4 —
 Interest expense and amortization of debt
 discounts and fees (142.9) — — — — — — (142.9)
 Stock-based compensation (26.2) — — — 1.2 — — (25.0)
 Loss on disposal or impairment of assets (2.6) — — — — — — (2.6)
 Transaction costs (12.3) — — — — 12.3 — —
 Income from continuing operations
 before income tax expense 325.9 7.5 3.0 — 1.2 12.3 22.4 372.3
 Provision for income tax expense (141.9) (3.0) (1.2) 4.7 (0.5) (4.1) (9.0) (155.0)
 Income from continuing operations
 attributable to HealthSouth $ 184.0 $ 4.5 $ 1.8 $ 4.7 $ 0.7 $ 8.2 $ 13.4 $ 217.3
 Add: Interest on convertible debt, net
 of tax 9.4 9.4
 Numerator for diluted earnings per
 share $ 193.4 $ 226.7
 Diluted earnings per share from
 continuing operations* $ 1.92 $ 0.04 $ 0.02 $ 0.05 $ 0.01 $ 0.08 $ 0.13 $ 2.24
 Diluted shares used in calculation 101.0
 Adjusted EPS(5) - YTD 2015
 *  Adjusted EPS may not sum across due to rounding.
    Reconciliations to GAAP provided on pages 35-43; Refer to pages 44-45 for end notes.
 44
 End Notes
 (1) Current income tax expense was $17.4 million and $4.4 million for Q4 2016 and Q4 2015, respectively. Current income tax expense was $31.0 million and $14.8
 million for the year ended December 31, 2016 and 2015, respectively.
 (2) The interest and amortization related to the convertible senior subordinated notes must be added to income from continuing operations when calculating diluted
 earnings per share because the debt is assumed to have been converted and the applicable shares are included in the diluted share count.
 (3) The increase in the Company’s income tax valuation allowance in 2015 related primarily to changes to its state apportionment percentages resulting from
 its acquisitions of Encompass, Reliant, and CareSouth as well as changes to its forecast of earnings in each jurisdiction.
 (4) In connection with the Encompass acquisition, the Company granted stock appreciation rights based on the common stock of HealthSouth Home Health Holdings,
 Inc. to certain members of Encompass management. The fair value of Holdings’ common stock is determined using the product of the trailing 12-month specified
 performance measure for Holdings and a specified median market EBITDA multiple based on a basket of public home health companies. The fair value of these
 stock appreciation rights will vary from period to period based on Encompass’ performance and the change in the multiple of the basket of public home health
 companies.
 (5) HealthSouth is providing adjusted earnings per share from continuing operations attributable to HealthSouth (“adjusted earnings per share”), which is a non-GAAP
 measure. The Company believes the presentation of adjusted earnings per share provides useful additional information to investors because it provides better
 comparability of ongoing performance to prior periods given that it excludes the impact of 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 deemed to be non-indicative of ongoing operations. It is reasonable to expect that one or more of these excluded
 items will occur in future periods, but the amounts recognized can vary significantly from period to period and may not directly relate to the Company's ongoing
 operations. Accordingly, they can complicate comparisons of the Company's results of operations across periods and comparisons of the Company's results to
 those of other healthcare companies. Adjusted earnings per share should not be considered as a measure of financial performance under generally accepted
 accounting principles in the United States as the items excluded from it are significant components in understanding and assessing financial performance.
 Because adjusted earnings per share is not a measurement determined in accordance with GAAP and is thus susceptible to varying calculations, it may not be
 comparable as presented to other similarly titled measures of other companies.*
 (6) Definition of adjusted free cash flow, which is a non-GAAP measure, is net cash provided by operating activities of continuing operations minus capital
 expenditures for maintenance, dividends paid on preferred stock, distributions to noncontrolling interests, and certain other items deemed to be non-indicative of
 ongoing operations. Common stock dividends are not included in the calculation of adjusted free cash flow.
 (7) Adjusted EBITDA is a non-GAAP financial measure. The Company’s leverage ratio (total consolidated debt to Adjusted EBITDA for the trailing four quarters) is,
 likewise, a non-GAAP measure. Management and some members of the investment community utilize Adjusted EBITDA as a financial measure and the leverage
 ratio as a liquidity measure on an ongoing basis. These measures are not recognized in accordance with GAAP and should not be viewed as an alternative to
 GAAP measures of performance or liquidity. In evaluating Adjusted EBITDA, the reader should be aware that in the future HealthSouth may incur expenses similar
 to the adjustments set forth.
 (8) In March 2006, the Company completed the sale 400,000 shares of its 6.5% Series A Convertible Perpetual Preferred Stock. In Q4 2013, the Company
 exchanged $320 million of newly issued 2.0% Convertible Senior Subordinated Notes due 2043 for 257,110 shares of its outstanding preferred stock. In April
 2015, the Company exercised its rights to force conversion of all outstanding shares of its preferred stock. On the conversion date, each outstanding share of
 preferred stock was converted into 33.9905 shares of common stock, resulting in the issuance of 3,271,415 shares of common stock. 
(9) The contractual debt repayment obligations in 2017 includes ~$15 million of capital lease payments and ~$1 million of other notes payable.
 (10) On July 16, 2015, the board of directors approved a $0.02 per share, or 9.5%, increase to the quarterly cash dividend on the Company’s common stock, bringing
 the quarterly cash dividend to $0.23 per common share. On July 21, 2016, the board of directors approved a $0.01 per share, or 4.3%, increase to the quarterly
 cash dividend on the Company’s common stock, bringing the quarterly cash dividend to $0.24 per common share.
 (11) The Medicare Access and CHIP Reauthorization Act of 2015 mandated a market basket update of +1.0% in 2018 for post-acute providers including rehabilitation
 hospitals as well as home health and hospice agencies.
 * Reconciliations to GAAP provided on pages 35-43.
 45
 End Notes, con’t.
 (12) The Company estimates the expected impact of each rule utilizing, among other things, the acuity of its patients over the 8-month (home health segment) to 12-
 month (inpatient rehabilitation segment) period prior to each rule’s release and incorporates other adjustments included in each rule. These estimates are prior to
 the impact of sequestration.
 (13) HealthSouth acquired an additional 30% equity interest in Fairlawn Rehabilitation Hospital in Worcester, MA from its joint venture partner. This transaction
 increased HealthSouth’s ownership interest from 50% to 80% and resulted in a change in accounting for this hospital from the equity method to a consolidated
 entity effective June 1, 2014.
 (14) Data provided by Uniform Data System for Medical Rehabilitation, a division of UB Foundation Activities, Inc., a data gathering and analysis organization for the
 rehabilitation industry; represents ~70% of industry, including HealthSouth sites
 (15) Represents discharges from 122 consolidated hospitals in Q4 2016; 121 consolidated hospitals in Q3 2016; 120 consolidated hospitals in Q2 2016; 121
 consolidated hospitals in Q1 2016; 120 consolidated hospitals in Q4 2015; 108 consolidated hospitals in Q3 2015 and Q2 2015; and 106 consolidated hospitals in
 Q1 2015
 (16) Excludes approximately 420 full-time equivalents in the 2016 periods and approximately 400 full-time equivalents in the 2015 periods presented who are
 considered part of corporate overhead with their salaries and benefits included in general and administrative expenses in the Company’s consolidated statements
 of operations. Full-time equivalents included in the table represent HealthSouth employees who participate in or support the operations of the Company’s hospitals.
 (17) Employees per occupied bed, or “EPOB,” is calculated by dividing the number of full-time equivalents, including an estimate of full-time equivalents from the
 utilization of contract labor, by the number of occupied beds during each period. The number of occupied beds is determined by multiplying the number of licensed
 beds by the Company’s occupancy percentage.
 (18) Represents home health admissions from 186 consolidated locations in Q4 2016; 188 consolidated locations in Q3 2016; 187 consolidated locations in Q2 2016;
 184 consolidated locations in Q1 2016 and Q4 2015; 141 consolidated locations in Q3 2015; 139 consolidated locations in Q2 2015; and 143 consolidated
 locations in Q1 2015
 (19) Represents hospice admissions from 35 locations in Q4 2016; 33 locations in Q3 2016; 29 locations in Q2 2016; 27 locations in Q1 2016 and Q4 2015; 23
 locations in Q3 2015; and 21 locations in Q2 2015 and Q1 2015.
 (20) In November 2013, the Company closed separate, privately negotiated exchanges in which it issued $320 million of 2.0% Convertible Senior Subordinated Notes
 due 2043 in exchange for 257,110 shares of its 6.5% Series A Convertible Perpetual Preferred Stock. The Company recorded ~$249 million as debt and ~$71
 million as equity. The convertible notes are convertible, at the option of the holders, at any time on or prior to the close of business on the business day immediately
 preceding December 1, 2043 into shares of the Company’s common stock and is subject to customary antidilution adjustments. The Company has the right to
 redeem the convertible notes before December 1, 2018 if the volume weighted-average price of the Company’s common stock is at least 120% of the conversion
 price ($44.59) of the convertible notes for a specified period. On or after December 1, 2018, the Company may, at its option, redeem all or any part of the
 convertible notes. In either case, the redemption price will be equal to 100% of the principal amount of the convertible notes to be redeemed, plus accrued and
 unpaid interest.
 (21) The agreement to settle the Company’s class action securities litigation received final court approval in January 2007. The 5.0 million shares of common stock and
 warrants to purchase ~8.2 million shares of common stock at a strike price of $41.40 (expired January 17, 2017) related to this settlement were issued on
 September 30, 2009. The 5.0 million common shares are included in the basic outstanding shares. The warrants were not included in the diluted share count prior
 to 2015 because the strike price had historically been above the market price. In Q4 2016, full-year 2016, Q4 2015, full-year 2014, and full-year 2013, zero shares
 related to the warrants were included in the diluted share count due to antidilution based on the stock price. In full-year 2015, 80,814 shares related to the warrants
 were included in the diluted share count using the treasury stock method. See also page 31.