Business
HealthSouth delays annual report
NEWS IN BRIEF — Posted April 10, 2006
Still struggling to recover from a massive accounting fraud, HealthSouth Corp. said it would delay filing its 2005 annual financial report, which it expects will show at least $260 million more in losses than the year before.
In a March 17 filing with the Securities and Exchange Commission, the Birmingham, Ala.-based outpatient services giant said it had to delay the report, because its resources have been tied up with restructuring its finances, reconstructing accounting records, defending litigation and revamping leadership in the wake of the $2.7 billion accounting fraud. The company said it expected to file its report March 31, rather than its March 16 deadline.
This would be the third straight year HealthSouth has missed the filing deadline.
The filing also said HealthSouth expects its 2005 pretax losses to be $260 million to $280 million greater than 2004's loss of $174.5 million, largely because of a litigation settlement and changes in federal reimbursement rules.
That would mean a loss of at least $434.5 million for 2005, about the same as the company's 2003 loss but less than its $466.8 million loss in 2002.
HealthSouth also said it expects an "adverse opinion" from auditors examining how the company is handling internal financial controls.
The accounting fraud was first disclosed in March 2003 and resulted in more than a dozen former HealthSouth executives losing their jobs and either pleading guilty or being convicted on criminal charges, although ousted founder Richard Scrushy was found innocent of having any role in the fraud.
Note: This item originally appeared at http://www.ama-assn.org/amednews/2006/04/10/bibf0410.htm.
