Earnings per Common Share

6 Months Ended

Jun. 30, 2011

Earnings per Common Share [Abstract]

Earnings per Common Share

9. Earnings per Common Share

     The calculation of earnings per common share is based on the weighted-average number of our common shares outstanding during the applicable period. The calculation for diluted earnings per common share recognizes the effect of all dilutive potential common shares that were outstanding during the respective periods, unless their impact would be antidilutive. The following table sets forth the computation of basic and diluted earnings per common share (in millions, except per share amounts):

	Three Months Ended June 30,						Six Months Ended June 30,
	2011			2010			2011			2010
Numerator:
Income from continuing operations	$	30.7		$	54.2		$	104.7		$	103.4
Less: Net income attributable to noncontrolling interests included in continuing operations		(11.3	)		(10.3	)		(23.1	)		(20.0	)
Less: Convertible perpetual preferred stock dividends		(6.5	)		(6.5	)		(13.0	)		(13.0	)
Income from continuing operations attributable to HealthSouth common shareholders		12.9			37.4			68.6			70.4
Income from discontinued operations, net of tax, attributable to HealthSouth common shareholders		2.5			3.4			20.1			4.6
Net income attributable to HealthSouth common shareholders	$	15.4		$	40.8		$	88.7		$	75.0
Denominator:
Basic weighted average common shares outstanding		93.3			92.8			93.2			92.7
Diluted weighted average common shares outstanding		109.5			108.2			109.3			108.2
Basic and diluted earnings per common share:
Income from continuing operations attributable to HealthSouth common shareholders	$	0.14		$	0.40		$	0.74		$	0.76
Income from discontinued operations, net of tax, attributable to HealthSouth common shareholders		0.03			0.04			0.21			0.05
Net income attributable to HealthSouth common shareholders	$	0.17		$	0.44		$	0.95		$	0.81

     Diluted earnings per share report the potential dilution that could occur if securities or other contracts to issue common stock were exercised or converted into common stock. These potential shares include dilutive stock options, restricted stock awards, restricted stock units, and convertible perpetual preferred stock. For the three and six months ended June 30, 2011, the number of potential shares approximated 16.2 million and 16.1 million, respectively. For the three and six months ended June 30, 2010, the number of potential shares approximated 15.4 million and 15.5 million, respectively. For the three and six months ended June 30, 2011 and 2010, approximately 13.1 million of the potential shares related to our Convertible perpetual preferred stock. For the three and six months ended June 30, 2011 and 2010, adding back the dividends for the Convertible perpetual preferred stock to our Income from continuing operations attributable to HealthSouth common shareholders causes a per share increase when calculating diluted earnings per common share resulting in an antidilutive per share amount. Therefore, basic and diluted earnings per common share are the same for all periods presented.

     Options to purchase approximately 1.1 million and 2.0 million shares of common stock were outstanding as of June 30, 2011 and 2010, respectively, but were not included in the computation of diluted weighted-average shares because to do so would have been antidilutive.

     See Note 11, Convertible Perpetual Preferred Stock, and Note 20, Earnings per Common Share, to the consolidated financial statements accompanying the 2010 Form 10-K for additional information related to common stock, common stock warrants, and convertible perpetual preferred stock.