SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 12b-25
Commission File Number: 000-14940
NOTIFICATION OF LATE FILING
|X| Form 10-K |_| Form 11-K |_| Form 20-F |_| Form 10-Q |_| Form N-SAR
For Period Ended: December 31, 2005
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|_| Transition Report on Form 10-K |_| Transition Report on Form 10-Q
|_| Transition Report on Form 20-F |_| Report on Form N-SAR
|_| Transition Report on Form 11-K
For Transition Period Ended: Not applicable
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Nothing in this form shall be construed to imply that the Commission
has verified any information contained herein.
If the notification relates to a portion of the filing checked above,
identify the item(s) to which the notification relates: Not applicable
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PART I
REGISTRANT INFORMATION
Full name of registrant: HealthSouth Corporation
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Former name, if applicable: Not Applicable
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Address of principal executive office: One HealthSouth Parkway
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City, state and zip code: Birmingham, Alabama 35243
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PART II
RULE 12b-25 (b) AND (c)
If the subject report could not be filed without unreasonable effort
or expense and the registrant seeks relief pursuant to Rule 12b-25(b), the
following should be completed. (Check box if appropriate.)
| (a) The reason described in detail in Part III of this form
| could not be eliminated without unreasonable effort or
| expense;
|
| (b) The subject annual report, semi-annual report, transition
| report on Form 10-K, Form 20-F, Form 11-K, Form N-SAR or
|X| | Form N-CSR, or portion thereof, will be filed on or
| before the fifteenth calendar day following the
| prescribed due date; or the subject quarterly report or
| transition report on Form 10-Q, or portion thereof, will
| be filed on or before the fifth calendar day following
| the prescribed due date; and
|
| (c) The accountant's statement or other exhibit required by
| Rule 12b-25(c) has been attached, if applicable.
PART III
NARRATIVE
State below in reasonable detail the reasons why Forms 10-K, 11-K,
20-F, 10-Q, N-SAR, N-CSR, or the transition report portion thereof, could not
be filed within the prescribed time period.
Over the past three years, HealthSouth Corporation (the "Company") has
devoted a significant portion of its time and attention to matters primarily
outside the ordinary course of business, including replacing its executive
management team, cooperating with federal investigators, defending numerous
lawsuits, restructuring its finances and reconstructing its accounting records.
During the past nine months, the Company filed with the Securities and Exchange
Commission (the "SEC") (i) its comprehensive Annual Report on Form 10-K ("2003
Annual Report") for the fiscal years ended December 31, 2003 and 2002,
including a restatement of previously issued consolidated financial statements
for the fiscal years ended December 31, 2001 and 2000 and (ii) its Annual
Report on Form 10-K for the fiscal year ended December 31, 2004 ("2004 Annual
Report").
The reconstruction of the Company's historical financial and
accounting records and the preparation of the 2003 Annual Report and the 2004
Annual Report required substantial resources of the Company. As previously
disclosed in the Company's 2004 Annual Report, management concluded that due to
the existence of material weaknesses, the Company's internal control over
financial reporting was not effective as of December 31, 2004. The Company has
spent substantial time and effort improving its internal control over financial
reporting. Nevertheless, because of the continued existence of certain of these
material weaknesses as of December 31, 2005, management will conclude in
Management's Report on Internal Control Over Financial Reporting in its 2005
Annual Report on Form 10-K that the Company's internal control over financial
reporting was not effective as of December 31, 2005. Also, as a result of these
material weaknesses, the Company's management believes that the report of its
independent registered public accounting firm will contain an adverse opinion
with respect to the effectiveness of the Company's internal control over
financial reporting as of December 31, 2005. A material weakness is a control
deficiency, or combination of control deficiencies, that results in more than a
remote likelihood that a material misstatement of the annual or interim
financial statements will not be prevented or detected. The following material
weaknesses, as more fully described in the Company's 2004 Annual Report on Form
10-K, continued to exist as of December 31, 2005. Specifically, the Company did
not maintain effective controls over:
1. its control environment relative to the prevention of override by
management of established controls and procedures;
2. its financial close and reporting process, including material
weaknesses related to (i) the recording of non-recurring journal
entries, (ii) the use of spreadsheets in the period-end closing
process and other spreadsheets supporting the Company's financial
reporting, and (iii) the recording and monitoring of intercompany
balances;
3. access to financial application programs and data throughout the
Company;
4. cash and cash equivalents and restricted cash accounts;
5. account receivable accounts and the related net operating revenue
accounts;
6. property and equipment, leased property and equipment, and the
related depreciation and lease rental expenses;
7. income taxes, including the accurate determination and reporting of
income taxes receivable and payable, deferred income tax assets and
liabilities and the related income tax provision; and
8. investment in and advances to and equity in net income of
non-consolidated affiliates and the minority interest in equity of
and interests in consolidated affiliates.
As the Company has not yet completed its 2005 annual consolidated
financial statements, management has not yet completed its evaluation of
internal control over financial reporting as of December 31, 2005. Therefore,
as the Company completes its evaluation of internal control over financial
reporting and its 2005 annual consolidated financial statements, additional
control deficiencies may be identified and those control deficiencies may
represent one or more additional material weaknesses. The Company intends to
disclose a more detailed description of these material weaknesses, including
its plan for remediating these weaknesses, in its 2005 Annual Report on Form
10-K.
As a result of the foregoing, the Company is unable to timely prepare
its financial statements with respect to its fiscal year ended December 31,
2005. As such, the Company will not be able to file its Annual Report on Form
10-K for the fiscal year ended December 31, 2005 ("2005 Annual Report") on a
timely basis. The Company intends to complete the preparation of its financial
statements for the fiscal year ended December 31, 2005 and file its 2005 Annual
Report relating thereto by March 31, 2006, as prescribed by Rule 12b-25(b).
PART IV
OTHER INFORMATION
(1) Name and telephone number of person to contact in regard to this
notification:
Gregory L. Doody (205) 967-7116
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(Name) (Area Code) (Telephone Number)
(2) Have all other periodic reports required under Section 13 or 15(d)
of the Securities Exchange Act of 1934 or Section 30 of the Investment Company
Act of 1940 during the preceding 12 months or for such shorter period that the
registrant was required to file such report(s) been filed? If the answer is no,
identify report(s).
|_| Yes |X| No
As previously indicated in its Notifications of Late Filing on Form
12b-25, the Company was unable to timely file the following reports for
substantially the same reasons as set forth in Part III above: (i) its
Quarterly Reports on Form 10-Q for all quarterly periods ended after September
30, 2002, for which such reports were required and (ii) its Annual Reports on
Form 10-K for the fiscal years ended December 31, 2002, 2003 and 2004. As
reported above, the Company filed a comprehensive 2003 Annual Report with the
SEC on June 27, 2005 and filed its 2004 Annual Report with the SEC on December
2, 2005. The comprehensive 2003 Annual Report contained the required financial
statements for the periods ended December 31, 2002 and 2003 and the 2004 Annual
Report contained the required financial statements for the period ended
December 31, 2004. The Company has not filed any of the previously described
Quarterly Reports, nor did it include the required quarterly information in the
comprehensive 2003 Annual Report or the 2004 Annual Report filed with the SEC.
(3) Is it anticipated that any significant change in results of
operations from the corresponding period for the last fiscal year will be
reflected by the earnings statements to be included in the subject report or
portion thereof?
|X| Yes |_| No
If so: attach an explanation of the anticipated change, both
narratively and quantitatively, and, if appropriate, state the reasons why a
reasonable estimate of the results cannot be made.
At this time, the Company is not in a position to provide with
specificity the amount of any change in results of operations for the year
ended December 31, 2005, as compared to results of operations for the prior
year. However, the Company currently anticipates that its 2005 pre-tax loss
will increase by approximately $260 to $280 million from the prior year,
principally resulting from the previously disclosed $215 million non-cash
charge relating to its preliminary global litigation settlement, as well as the
negative effect of the 75% Rule and recent Inpatient Rehabilitation Facilities
-- Prospective Payment System changes on the results of its inpatient division.
The Company expects a larger decline in its 2005 consolidated net operating
revenues, as compared to the prior period, principally relating to the loss of
revenues from facilities that were closed, divested or otherwise deconsolidated
in 2005. Such revenue decline has been largely offset by reduced expenses.
HealthSouth Corporation
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(Name of Registrant as Specified in Charter)
Has caused this notification to be signed on its behalf by the
undersigned thereunto duly authorized.
HealthSouth Corporation
By: /s/ Gregory L. Doody
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Gregory L. Doody
Executive Vice President,
General Counsel and Secretary
Date: March 17, 2006