Earnings Per Common Share (Tables)

12 Months Ended

Dec. 31, 2013

Schedule of Error Corrections and Prior Period Adjustments Table

Revisions for the years ended December 31, 2012 and 2011 are presented below.



	Year Ended December 31,
	2012		2011
Basic earnings per share attributable to HealthSouth common shareholders, as reported:
Continuing operations	$	1.65	$	1.42
Discontinued operations	0.04		0.54
Net income	$	1.69	$	1.96
Basic earnings per share attributable to HealthSouth common shareholders as revised using the two-class method:
Continuing operations	$	1.62	$	1.39
Discontinued operations	0.05		0.52
Net income	$	1.67	$	1.91

Computation of Basic and Diluted Earnins per Common Share

The following table sets forth the computation of basic and diluted earnings per common share (in millions, except per share amounts):



	For the Year Ended December 31,
	2013			2012			2011
Numerator:
Income from continuing operations	$	382.5		$	231.4		$	205.8
Less: Net income attributable to noncontrolling interests included in continuing operations	(57.8		)	(50.9		)	(47.0		)
Less: Income allocated to participating securities	(3.4		)	(2.2		)	(3.2		)
Less: Convertible perpetual preferred stock dividends	(21.0		)	(23.9		)	(26.0		)
Less: Repurchase of convertible perpetual preferred stock	(71.6		)	(0.8		)	—
Income from continuing operations attributable to HealthSouth common shareholders	228.7			153.6			129.6
(Loss) income from discontinued operations, net of tax, attributable to HealthSouth common shareholders	(1.1		)	4.5			49.9
Less: Income from discontinued operations allocated to participating securities	—			(0.1		)	(1.2		)
Net income attributable to HealthSouth common shareholders	$	227.6		$	158.0		$	178.3

Denominator:
Basic weighted average common shares outstanding	88.1			94.6			93.3
Diluted weighted average common shares outstanding	102.1			108.1			109.2

Basic and diluted earnings per share attributable to HealthSouth common shareholders:
Continuing operations	$	2.59		$	1.62		$	1.39
Discontinued operations	(0.01		)	0.05			0.52
Net income	$	2.58		$	1.67		$	1.91

Reconciliation of Weighted Average Number of Shares Outstanding

The following table sets forth the reconciliation between basic weighted average common shares outstanding and diluted weighted average common shares outstanding (in millions):



	For the Year Ended December 31,
	2013	2012	2011
Basic weighted average common shares outstanding	88.1	94.6	93.3
Convertible perpetual preferred stock	10.5	12.0	13.1
Convertible senior subordinated notes	1.0	—	—
Restricted stock awards, dilutive stock options, and restricted stock units	2.5	1.5	2.8
Diluted weighted average common shares outstanding	102.1	108.1	109.2

Schedule of Warrants

The following table summarizes information relating to these warrants and their activity during 2013 and through their expiration date (number of warrants in millions):



	Number of Warrants		Weighted Average Exercise Price
Common stock warrants outstanding as of December 31, 2012	10.0		$	32.50
Cashless exercise	(4.8	)	32.50
Cash exercise	(2.3	)	32.50
Common stock warrants outstanding as of December 31, 2013	2.9		32.50
Cashless exercise	(1.8	)	32.16
Cash exercise	(1.0	)	32.16
Expired	(0.1	)	32.16
Common stock warrants outstanding as of January 16, 2014	—

- Definition

Tabular disclosure of prior period adjustments to previously issued financial statements including (1) the effect of the correction on each financial statement line item and any per-share amounts affected for each prior period presented (2) the cumulative effect of the change on retained earnings or other appropriate components of equity or net assets in the statement of financial position, as of the beginning of the earliest period presented, and (3) the effect of the prior period adjustments (both gross and net of applicable income tax) on the net income of each prior period presented in the entity's annual report for the year in which the adjustments are made.

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- Definition

Tabular disclosure of warrants or rights issued. Warrants and rights outstanding are derivative securities that give the holder the right to purchase securities (usually equity) from the issuer at a specific price within a certain time frame. Warrants are often included in a new debt issue to entice investors by a higher return potential. The main difference between warrants and call options is that warrants are issued and guaranteed by the company, whereas options are exchange instruments and are not issued by the company. Also, the lifetime of a warrant is often measured in years, while the lifetime of a typical option is measured in months. Disclose the title of issue of securities called for by warrants and rights outstanding, the aggregate amount of securities called for by warrants and rights outstanding, the date from which the warrants or rights are exercisable, and the price at which the warrant or right is exercisable.

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