Encompass Health (EHC) 8-K Regulation FD Disclosure

HealthSouth Corporation

Stifel Nicolaus / Johns Hopkins

Health Policy Symposium

Handout

Baltimore

September 15, 2009

Exhibit 99.1

Table of Contents

Note Regarding Forward-Looking Statements
The information contained in this presentation includes certain estimates, projections and other forward-looking information that
reflect our current views with respect to future events and financial performance. These estimates, projections and other forward-
looking information are based on assumptions that HealthSouth believes, as of the date hereof, are reasonable. Inevitably, there
will be differences between such estimates and actual results, and those differences may be material.

There can be no assurance that any estimates, projections or forward-looking information will be realized.All such estimates,
projections and forward-looking information speak only as of the date hereof. HealthSouth undertakes no duty to publicly update
or revise the information contained herein.

This presentation also includes estimates and projections published by the Centers for Medicare and Medicaid Services (“CMS”).
We are not able to verify those estimates or projections or the detailed calculations thereof by CMS which are not made public.
Any changes or errors in those calculations, among other uncertainties such as those referred to below and changes in CMS’s
own rules and policies, could cause actual results to differ materially from CMS’s projections.Furthermore, we do not believe
that CMS numbers are consistent with financial reporting results.CMS data and projections should not be used as an indication
of financial performance.

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 our Form 10-K for the year ended December 31, 2008, the Form 10-Q for the
quarters ended March 31, 2009, and June 30, 2009, and in other documents we previously filed with the SEC, many of which are
beyond our control, that may cause actual 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. The Appendix at the end of this presentation includes reconciliations of the non-GAAP financial measures
found 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. Our Form 8-K, dated September 14, 2009, to which the
following presentation slides are attached, provides further explanation and disclosure regarding our use of non-GAAP financial
measures and should be read in conjunction with these presentation slides.

Cautionary Statements

HealthSouth

IRH

LTCH

94Rehabilitation Hospitals

44Outpatient Satellites

6Long-Term Acute Care Hospitals

25Hospital-Based Home
Health Agencies

Operational Components

üRehabilitation Nursing

üPhysical Therapy

üOccupational Therapy

üSpeech-Language Therapy

üCase Management

üSpecialized Technology

Major Services

Largest Provider of Inpatient Rehabilitative Healthcare Services in the U.S.
Provider of Additional Post-Acute Services

Development Sites

Employees:~ 22,000

Corporate Office:Birmingham, AL

Exchange (Symbol):NYSE (HLS)

+ 5.6%

Discharge Volume

Consolidated Net Operating Revenues

($ Millions)

+ 5.9%

+ 9.4%

Adjusted Consolidated EBITDA(1)

($ Millions)

+ 129.4%

Adjusted Income from Continuing Operations per
Diluted Share(1)

Q2 2009 Recap (cont’d)

(1) Includes capital expenditures for the hospital refresh program.

Near term

Tocreate shareholder value as the preeminent provider of
rehabilitative care in the U.S. by:

–Driving organic growth through operational excellence;

–Creating a strong balance sheet through deleveraging; and

–Pursuing disciplined, opportunistic growth.

Longer Term

We will pursue acquisitions of complementary, post-acute services
provided they are accretive to HealthSouth. to HealthSouth

Strategy:

FIM Gain

LOS Efficiency

LOS Efficiency = Functional gain
divided by length of stay

Source:UDSmr Database - On Demand
Reports 2008 Year End Report

FIM Gain = Change in Functional
Independent Measurement (based on
an 18 point assessment) from
Admission to Discharge

** Benchmark = Expected, Risk Adjusted LOS Efficiency

Operational Excellence = “High-Quality” Care

*Benchmark = Expected Risk Adjusted FIM Change Avg.

Operational Excellence = “Cost-Effective” Care

CMS Fiscal Year 2010 IRF Rate Setting File Analysis (1)

	Freestanding (2)	Units (2)	Total	HealthSouth
				Hospitals (2)
Number of IRFs	228	953	1,181	94
Average # of Discharges per IRF	649	237	316	822
Outlier Payments as % of Total Payments	1.32%	4.08%	3.00%	0.43%
Average Estimated Total Payment per Discharge for FY 2010	$16,452	$16,741	$16,626	$15,996
Average Estimated Cost per Discharge for FY 2010	$14,021	$17,207	$15,945	$12,633

Notes:

(1)All data provided was filtered and compiled from the Centers for Medicare and Medicaid Services (CMS) Fiscal Year 2010 IRF rate setting final
rule file found at http://www.cms.hhs.gov/InpatientRehabFacPPS/07_DataFiles.asp#TopOfPage. The data presented was developed entirely by
CMS and is based on its definitions which are different in form and substance from the criteria HealthSouth uses for external reporting purposes.
Because CMS does not provide its detailed methodology, HealthSouth is not able to reconstruct the CMS projections or the calculation.

(2)The CMS file contains data for each of the 1,181 inpatient rehabilitation facilities used to estimate the policy updates for the FY 2010 Final IRF-
PPS Rule. Most of the data represents historical information from the CMS fiscal year 2008 period and does not reflect the same HealthSouth
hospitals in operation today. The data presented was separated into three categories: Freestanding, Units, and HealthSouth. HealthSouth is a
subset of Freestanding and the Total.

($ Billions)

Deleveraging

Debtto
EBITDA

Current undrawn revolver

matures in 2012

$400.0

Goal: 3.5x to 4.0x - No later than YE 2012

Debt Maturities (3)(Millions)

•No Near-Term Financing

•S & P from B “Stable” to B “Positive”

•Moody’s Upgrade to B2 “Stable”

(1)

Disciplined Growth

(1) Pending state license survey.

(2) CON is being appealed; operational date may change.

Bed expansions:

•Approximately 100 beds being added in 2009 and a similar amount
in 2010.

•Average investment per bed:

–Internal renovation = $15 - 45K

–New construction = $100 - 250K

•Cash pay-back:2 - - 3 years

New hospitals:

Q309 Initial Observations

Volume:

üThrough August, continued positive discharge growth trend.

üRemain on track for 4+% growth in second half of 2009.

Pricing:

üComparable quarter over quarter.

Expenses:

üContinued focus on high-quality, cost-effective patient care.

üContinue to monitor pending Medicare appeals.

2009 Guidance

(1) Reconciliation to GAAP provided on slides 30 through 33.

(2) Adjusted income from continuing operations per diluted share.

Adjusted Consolidated EBITDA(1)

•2009 Range:$354 million to $362 million

•6 Month 2009 actual(1): $192.7 million

Adjusted Earnings per Share(1)(2)

•2009 Range:$1.15 to $1.25 per share

•6 Month 2009 actual(1): $0.79 per share

Key Drivers:

üSustainable discharge growth

•Bed expansions

•New hospitals

üCost-effective, high-quality patient care

üDeleveraging

Investment Considerations

üIndustry Leader:Attractive industry with good demographics.

üStrong Cash Flows:Flexibility in use of FCF.

üContinued Deleveraging:Reduce leverage to between 3.5x and 4.0x
no later than YE 2012.

üSolid Organic Growth:Volume growth + expense management.

üOpportunistic, Disciplined Expansion:Bed expansions and new
hospitals coming online over next three years.

üWell Positioned:High-quality + cost-effective provider; proven track
record of adapting to regulatory changes.

Appendix and Reconciliations

(1) Includes 90 consolidated HealthSouth inpatient rehab hospitals and six long-term acute-care hospitals.

(1)

(1) Data provided by UDSMR, a data gathering and analysis organization for the rehabilitation industry; represents ~ 65-70% of industry, including 90 HealthSouth sites.

(2) Includes all 90 HealthSouth inpatient rehab hospitals and six long-term acute care hospitals.

Continued Market Share Gains

Projected sustainable discharge growth:4+% annual

(1)

(2)

üHealthSouth’s volume
growth outpaced
competitors.

üBed expansions will help
facilitate organic growth:

•~ 100 new beds in
2009;another ~ 100
in 2010

Revenues (Q2 2009 vs. Q2 2008)

•Inpatient revenue growth was driven by strong discharge volumes.

–Volume growth was driven by the sustained TeamWorks effort and disciplined development.

–Same store discharge growth was 4.7%.

•Net patient revenue / discharge was higher in Q209 due to an increasing trend within our
patient mix towards higher acuity neurological patients.

•Outpatient revenue declined as a result of 15 fewer outpatient satellites quarter over

    quarter.

Expenses (Q2 2009 vs. Q2 2008)

–Comparison for Q2 affected by a reduction of self-insurance costs resulting from revised
actuarial estimates in Q208.

–Increased provision for doubtful accounts to reflect aging of pending Medicare appeals.

Revenues (6 months)

Expenses (6 months)

Operational and Labor Metrics

(1) Includes all 90 HealthSouth inpatient rehab hospitals and six long-term acute care hospitals.

(2) Excludes 388 and 399 full-time equivalents for the three months ended June 30, 2009 and 2008, respectively, and 392 and 422 full-time equivalents for
the six months ended June 30, 2009 and 2008, respectively, who are considered part of corporate overhead with their salaries and benefits included in
general and administrative expenses in the Company’s condensed consolidated statements of operations. Full-time equivalents included in the above
table represent HealthSouth employees who participate in or support the operations of the Company’s hospitals.

(3) 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.

Payment Sources

(1) Managed Medicare revenues are included in “Managed care and other discount plans.”

Interest Rate Swaps
(Millions)

(1) We have the flexibility to peg 1,2,3 or 6 month Libor, or Prime.

(2) Lower interest rate on term loan as a result of the Moody’s upgrade.

(3) In June 2009, we entered into a received-fixed rate swap as a mirror offset to $100.0 million of the $1,056 million interest rate swap.

(4) Forward-starting interest rate swaps (designated as cash flow hedges).

Debt Schedule
(Millions)

(1) The Company had $49.8 million in cash and cash equivalents as of June 30, 2009.

(2) Credit Agreement limits debt pay down on non-term loan balances.We have the ability to buy back non-term loan debt with the discretionary
cash available to the Company.

Non-Operating Cash/Tax Position

Cash Refunds as of June 30, 2009

•Federal tax recoveries virtually complete.

–Approx. $42 million received.

•State tax refunds in progress.

–Approx. $11 million received.

–Approx. $10.5 million net receivable on
the balance sheet.

Future Cash Tax Payments

•Expect to pay about $5-7 million per year of
income tax.

–State income tax.

–Alternative Minimum Tax (AMT).

•With over $2.5 billion in NOLs and tax
deductions, we do not expect to pay significant
federal income taxes for approximately the next
10-12 years.

–At this time, we do not believe the use

of NOLs will be limited before they

expire, however, no assurances can

be provided.

•HealthSouth is not currently subject to an
annual use limitation (AUL) under the Internal
Revenue Code section 382.

•If we experienced a “change of ownership” as
defined by the Internal Revenue Code section
382, we would be subject to an AUL, which is
equal to the value of the company at the time of
the “change of ownership” multiplied by the long
-term tax exempt rate.

GAAP Considerations

•HealthSouth’s balance sheet currently reflects
a valuation allowance for the potential value
of NOLs and future deductions. The valuation
allowance is approximately $1.0 billion.

•GAAP tax rate will net to small amount for
foreseeable future as there will be a reduction
in the valuation allowance when NOLs are
utilized.

“Bundling”
Policy Objective: Reduce Readmission Rates

Note: Use of home healthcare and hospice is based on care that starts within three days of discharge. Other PAC care starts within one day of
discharge. Home health use includes episodes that overlap an inpatient stay.

Source:Medicare Payment Advisory Commission, “A Data Book: Healthcare spending and the Medicare program,” Chart 9-3 (June 2008).

“Bundling” - Can it Work?

1.Physicians must remain ultimately responsible for deciding patients’ post-acute
needs.

2.Patients must maintain their right to choose where they receive care.

3.Payments for post-acute care must be appropriate to ensure quality.

4.Payments for post-acute care must “flow” to actual providers of the care.

5.Access to post-acute care, especially in rural areas, must be ensured.

6.Existing laws, regulations, and policies that preclude continuity of
post-acute care must be changed or eliminated.

Six core principles must serve as the foundation for any bundling
payment system:

üTransitioning to a “bundled payment system” will be extremely complex.

ü“Bundling,” as a concept, has merit, but it needs to be tested to determine if

it can achieve desired results.

Notes:

(1) Completed an equity offering for 8.8 million shares on June 27, 2008.

(2) Does not include 2.0 million warrants issued in connection with a January 2004 loan repaid to Credit Suisse First
Boston. In connection with this transaction, we issued warrants to the lender to purchase two million shares of our
common stock. Each warrant has a term of ten years from the date of issuance and an exercise price of $32.50 per
share. The warrants were not assumed exercised for dilutive shares outstanding because they were antidilutive in the
periods presented.

(3) Does not include approximately 5.0 million shares of common stock and warrants to purchase approximately 8.2 million
shares of common stock at a strike price of $41.40 to settle our class action securities litigation. This agreement received
final court approval in January 2007. As of June 30, 2009, these shares of common stock and warrants have not been
issued and are not included in our basic or diluted common shares outstanding. Absent a petition for certiorari, we expect
the shares to be distributed in September 2009.

(4) The difference between the basic and diluted shares outstanding is primarily related to our convertible perpetual
preferred stock.

Three & Six Months Reconciliations of Net Income to Adjusted Income
from Continuing Operations and Adjusted Consolidated EBITDA (1) (3)

YTD Reconciliation of Adjusted Consolidated EBITDA (1) to Net Cash
Provided by Operating Activities

Reconciliation Notes

1.Adjusted income from continuing operations and Adjusted Consolidated EBITDA are non-
GAAP financial measures. The Company’s leverage ratio (Total Consolidated Debt to
Adjusted Consolidated EBITDA for the trailing four quarters) is, likewise, a non-GAAP
financial measure. Management and some members of the investment community utilize
adjusted income from continuing operations as a financial measure and Adjusted
Consolidated EBITDA and leverage ratio as liquidity measures 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 these adjusted
measures, the reader should be aware that in the future HealthSouth may incur expenses
similar to the adjustments set forth above.

2.Per share amounts for each period presented are based on basic weighted average
common shares outstanding for all amounts except adjusted income from continuing
operations per diluted share, which is based on diluted weighted average shares
outstanding. The difference in shares between the basic and diluted shares outstanding is
primarily related to our convertible perpetual preferred stock. Per share amounts do not
include 5.0 million shares not yet issued under the securities litigation settlement.

3.Adjusted income from continuing operations per diluted share and Adjusted Consolidated
EBITDA are two components of our guidance.

4.The Company’s Credit Agreement allows certain other items to be added to arrive at
Adjusted Consolidated EBITDA, and there may be certain other deductions required.