Investments in and Advances to Nonconsolidated Affiliates:

Investments in and advances to nonconsolidated affiliates as of December 31, 2013 represents our investment in 12 partially owned subsidiaries, of which 9 are general or limited partnerships, limited liability companies, or joint ventures in which HealthSouth or one of its subsidiaries is a general or limited partner, managing member, member, or venturer, as applicable. We do not control these affiliates but have the ability to exercise significant influence over the operating and financial policies of certain of these affiliates. Our ownership percentages in these affiliates range from approximately 1% to 51%. We account for these investments using the cost and equity methods of accounting. Our investments, which are included in Other long-term assets in our consolidated balance sheets, consist of the following (in millions):



	As of December 31,
	2013			2012
Equity method investments:
Capital contributions	$	2.9		$	2.8
Cumulative share of income	104.8			93.8
Cumulative share of distributions	(88.8		)	(77.4		)
	18.9			19.2
Cost method investments:
Capital contributions, net of distributions and impairments	1.4			1.6
Total investments in and advances to nonconsolidated affiliates	$	20.3		$	20.8

The following summarizes the combined assets, liabilities, and equity and the combined results of operations of our equity method affiliates (on a 100% basis, in millions):



	As of December 31,
	2013		2012
Assets—
Current	$	16.6	$	21.4
Noncurrent	36.2		36.6
Total assets	$	52.8	$	58.0
Liabilities and equity—
Current liabilities	$	2.4	$	6.6
Noncurrent liabilities	0.7		1.2
Partners’ capital and shareholders’ equity—
HealthSouth	18.9		19.2
Outside partners	30.8		31.0
Total liabilities and equity	$	52.8	$	58.0

Condensed statements of operations (in millions):



	For the Year Ended December 31,
	2013			2012			2011
Net operating revenues	$	74.3		$	83.3		$	87.0
Operating expenses	(43.6		)	(48.1		)	(53.1		)
Income from continuing operations, net of tax	24.6			28.3			26.5
Net income	24.6			28.3			26.5

During the third quarter of 2012, we negotiated with our partner to amend the joint venture agreement related to St. Vincent Rehabilitation Hospital which resulted in a change in accounting for this hospital from the equity method of accounting to a consolidated entity. The amendment revised certain participatory rights held by our joint venture partner resulting in HealthSouth gaining control of this entity from an accounting perspective. We accounted for this change in control as a business combination and consolidated this entity using the acquisition method. The consolidation of St. Vincent Rehabilitation Hospital did not have a material impact on our financial position, results of operations, or cash flows. As a result of our consolidation of this hospital and the remeasurement of our previously held equity interest at fair value, goodwill increased by $15.6 million, and we recorded a $4.9 million gain as part of Other income during the year ended December 31, 2012. See Note 6, Goodwill and Other Intangible Assets, and Note 12, Fair Value Measurements.

In December 2013, we signed an agreement to acquire an additional 30% equity interest from UMass Memorial Health Care, our joint venture partner in Fairlawn Rehabilitation Hospital in Worcester, Massachusetts. This transaction, which is subject to regulatory approval and is expected to close in 2014, will increase our ownership interest from 50% to 80% and will, when completed, result in a change in accounting for this hospital from the equity method of accounting to a consolidated entity. We expect to account for this change in control as a business combination and will consolidate this entity using the acquisition method. The consolidation of the operating results of Fairlawn Rehabilitation Hospital is not expected to have a material impact on our financial position, results of operations, or cash flows.