Accounting & Tax

HealthSouth Delays Results until 2005

The embattled company faces a deadline for applying for a waiver of default for its bond payments on Thursday.
Stephen TaubMay 12, 2004

HealthSouth Corp., currently embroiled in a massive accounting scandal, announced that it won’t report its most recent quarterly results or the results of a restatement until 2005.

The health-care company, which has already disclosed that it is being investigated by the Securities and Exchange Commission and the Department of Justice, reported that it is awaiting the completion of a forensic accounting review being conducted by PricewaterhouseCoopers.

A special HealthSouth audit review committee is preparing a report regarding the forensic review, according to the company. Further, the company has hired Grant Thornton to aid in reconstructing of the company’s financial accounts.

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Because it has not been able to issue audited financial statements, HealthSouth has been in default on its debt, which exceeds $3 billion. The company has been paying interest on its bonds and is seeking a waiver for the default from its creditors. The expiration date to obtain the waiver, however, is just before midnight on May 13, unless the company decides to extend it.

HealthSouth executives say they don’t expect to be in a position to file the company’s restated historical financial statements until it has completed putting its accounts in order and PwC completes its audit. The company hasn’t filed financial results with the SEC since November 2002.

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