FOR IMMEDIATE RELEASE		4716 Old Gettysburg Road Mechanicsburg, PA 17055

Select Medical Corporation Announces
Results for Second Quarter and Six Months Ended June 30, 2006

     MECHANICSBURG, PENNSYLVANIA – August 11, 2006 – Select Medical Corporation today announced results for its second quarter and six months ended June 30, 2006.

     On February 24, 2005, Select Medical Corporation (“Select”) consummated a merger with a wholly-owned subsidiary of Select Medical Holdings Corporation (“Holdings”) pursuant to which Select became a wholly-owned subsidiary of Holdings. Holdings is owned by an investor group that includes Welsh, Carson, Anderson & Stowe IX, LP (“Welsh Carson”), Thoma Cressey Equity Partners, Inc. (“Thoma Cressey”) and members of Select’s senior management. As a result of the merger, Select’s assets and liabilities have been adjusted to their fair value as of the closing. Select also experienced an increase in aggregate outstanding indebtedness as a result of financing transactions associated with the merger. Accordingly, amortization expense and interest expense are higher in periods following the merger. Additionally, certain costs associated with the merger are reflected in the 2005 income statement periods. As a result, the financial statements for the periods before and after the merger are not comparable in certain respects.

     For the second quarter ended June 30, 2006, net operating revenues increased 1.8% to $482.1 million compared to $473.7 million for the same quarter, prior year. Income from operations was $78.0 million compared to $71.6 million for the same quarter, prior year. Net income was $33.9 million compared to $29.4 million for the same quarter, prior year. Net income before interest, income taxes, depreciation and amortization, income from discontinued operations, loss on early retirement of debt, merger related charges, stock compensation expense, other income and minority interest (“Adjusted EBITDA”) for the second quarter ended June 30, 2006 increased 5.9% to $90.6 million compared to $85.6 million for the same quarter, prior year. A reconciliation of net income to Adjusted EBITDA is attached to this release.

     For the six months ended June 30, 2006, net operating revenues increased 2.3% to $961.9 million compared to $939.8 million for the same period, prior year. Income from operations was $144.4 million compared to $0.5 million for the same period, prior year. Net income was $69.3 million compared to a loss of $57.8 million for the same period, prior year. As a result of the merger, Select incurred substantial costs related to stock compensation expense, loss on early retirement of debt and merger related charges that contributed to the lower income from operations and net loss experienced for the combined six months ended June 30, 2005. Adjusted EBITDA for the six months ended June 30, 2006 declined 1.3% to $168.9 million compared to $171.1 million for the same period, prior year. A reconciliation of net income to Adjusted EBITDA is attached to this release.

     On March 1, 2006, a subsidiary of Select sold all the issued and outstanding shares of Canadian Back Institute Limited (“CBIL”) for approximately C$89.8 million in cash (US $79.0 million). CBIL comprised Select’s entire Canadian operations. As a result of the sale, the operating results of CBIL have been reclassified and reported as discontinued operations for all reported periods, and its assets and liabilities have been reclassified as held for sale on Select’s December 31, 2005 balance sheet.

Specialty Hospitals

     At June 30, 2006, Select operated 96 long-term acute care hospitals and four acute medical rehabilitation hospitals. This compares to 98 long-term acute care hospitals and four acute medical rehabilitation hospitals operated at June 30, 2005. For the second quarter of 2006, net operating revenues for all of Select’s hospitals increased 3.8% to $360.8 million compared to $347.5 million for the same quarter, prior year. Total patient days for the second quarter of 2006 were 246,275, admissions were 10,154 and net revenue per patient day was $1,435. This compares to 246,171 days, 9,995 admissions and net revenue per patient day of $1,375 for the same quarter, prior year. For the hospitals opened or acquired as of January 1, 2005 and operated by Select throughout both periods, patient days in the second quarter of 2006 were 245,484 and admissions were 10,113, compared to 241,687 days and 9,833 admissions in the same quarter, prior year. Adjusted EBITDA for the segment increased 5.2% to $82.7 million compared to $78.6 million for the same quarter, prior year. The Adjusted EBITDA margin for the segment was 22.9% for the second quarter of 2006, compared to 22.6% for the same quarter, prior year. The Adjusted EBITDA margin for the hospitals opened or acquired as of January 1, 2005 and operated by Select throughout both periods was 23.5% for the second quarter of 2006, compared to 22.8% for the same quarter, prior year.

     For the six months ended June 30, 2006, net operating revenues for all of Select’s hospitals increased 4.5% to $720.4 million compared to $689.6 million for the same period, prior year. Total patient days for the six months ended June 30, 2006 were 497,976, admissions were 20,637 and net revenue per patient day was $1,419. This compares to 497,010 days, 20,331 admissions and net revenue per patient day of $1,352 for the same period, prior year. For the hospitals opened or acquired as of January 1, 2005 and operated by Select throughout both periods, patient days for the six months ended June 30, 2006 were 495,892 and admissions were 20,534, compared to 487,032 days and 19,942 admissions in the same period, prior year. Adjusted EBITDA for the segment was constant at $157.4 million compared to $157.7 million for the same period, prior year. The Adjusted EBITDA margin for the segment was 21.8% for the six months ended June 30, 2006, compared to 22.9% for the same period, prior year. The Adjusted EBITDA margin for the hospitals opened or acquired as of January 1, 2005 and operated by Select throughout both periods was 22.2% for the six months ended June 30, 2006, compared to 23.0% for the same period, prior year.

Outpatient Rehabilitation

     At June 30, 2006, Select operated 610 outpatient clinics. This compares to 632 outpatient clinics at June 30, 2005. Patient visits for the quarter were 762,177 compared to 863,966 for the same quarter, prior year. For the second quarter of 2006, net operating revenues declined 3.2% to $120.6 million compared to $124.6 million for the same quarter, prior year. The decline in net operating revenues and patient visits was principally related to a decline in the number of clinics we own and operate and a decline in the volume of visits per clinic. We are continuing to experience declines in our patient visits in a number of markets that result from physicians opening competing physical therapy practices. Adjusted EBITDA for the second quarter of 2006 remained constant at $18.4 million compared to $18.5 million for the same quarter, prior year. The Adjusted EBITDA margin for the quarter was 15.3% compared to 14.9% in the same quarter, prior year. Net revenue per visit was $94 for the second quarter of 2006 compared to $89 for the same quarter, prior year.

     Patient visits for the six months ended June 30, 2006 were 1,547,016 compared to 1,727,139 for the same period, prior year. For the six months ended June 30, 2006, net operating revenues declined 2.5% to $239.9 million compared to $246.1 million for the same period, prior year. Adjusted EBITDA for the six months ended June 30, 2006 declined 10.6% to $33.2 million compared to $37.1 million for the same period, prior year. The Adjusted EBITDA margin for the six months ended June 30, 2006 was 13.8% compared to 15.1% in the same period, prior year. Net revenue per visit was $93 for the six months ended June 30, 2006 compared to $90 for the same period, prior year.

LTACH Regulations

     On May 2, 2006, CMS released its final annual payment rate updates for the 2007 LTCH-PPS rate year (affecting discharges and cost reporting periods beginning on or after July 1, 2006 and before July 1, 2007). The May 2006 final rule makes several changes to LTCH-PPS payment methodologies and amounts.

     For discharges occurring on or after July 1, 2006, the rule changes the payment methodology for Medicare patients with a length of stay less than or equal to five-sixths of the geometric average length of stay for each LTC-DRG (referred to as “short-stay outlier” or “SSO” cases). Previously, payment for these patients was based on the lesser of (1) 120 percent of the cost of the case; (2) 120 percent of the LTC-DRG specific per diem amount multiplied by the patient’s length of stay; or (3) the full LTC-DRG payment. The final rule modifies the limitation in clause (1) above to reduce payment for SSO cases to 100 percent (rather than 120 percent) of the cost of the case. The final rule also adds a fourth limitation, capping payment for SSO cases at a per diem rate derived from blending 120 percent of the LTC-DRG specific per diem amount with a per diem rate based on the general acute care hospital inpatient prospective payment system (“IPPS”). Under this methodology, as a patient’s length of stay increases, the percentage of the per diem amount based upon the IPPS component will decrease and the percentage based on the LTC-DRG component will increase. The final rule reflects a moderation of the fourth limitation of the SSO payment policy that CMS had proposed in January 2006, which would have limited SSO payments solely to an amount based on the IPPS.

     In addition, for discharges occurring on or after July 1, 2006, the final rule provides for (i) a zero-percent update for the 2007 LTCH-PPS rate year to the LTCH-PPS standard federal rate used as a basis for LTCH-PPS payments; (ii) the elimination of the surgical case exception to the three-day or less interruption of stay policy, under which surgical exception Medicare reimburses a general acute care hospital directly for surgical services furnished to a long-term acute care hospital patient during a brief interruption of stay from the long-term acute care hospital, rather than requiring the long-term acute care hospital to bear responsibility for such surgical services; and (iii) increasing the costs that a long-term acute care hospital must bear before Medicare will make additional payments for a case under its high-cost outlier policy for the 2007 LTCH-PPS rate year.

     CMS estimates that the changes in the May 2006 final rule will result in an approximately 3.7 percent decrease in LTCH Medicare payments-per-discharge as compared to the 2006 rate year, largely attributable to the revised SSO payment methodology. Based upon Select’s historical Medicare patient volumes and revenues, Select expects that the May 2006 final rule will reduce Medicare revenues associated with SSO cases and high cost outlier cases to its long-term acute care hospitals by approximately $30.0 million on an annual basis. Additionally, had CMS updated the LTCH-PPS standard federal rate by the 2007 estimated market basket index of 3.4 percent rather than applying the zero-percent update, Select estimates that it would have received approximately $31.0 million in additional annual Medicare revenues, based on Select’s historical Medicare patient volumes and revenues (such revenues would have been paid to Select’s hospitals for discharges beginning on or after July 1, 2006).

Conference Call

     Select will host a conference call regarding its second quarter results on Monday, August 14, 2006, at 10:30 am EDT. The domestic dial in number for the call is 1-866-238-0638. The international dial in number is 1-703-639-1157.

* * * * *

     Select Medical Corporation is a leading operator of specialty hospitals in the United States. Select currently operates 96 long-term acute care hospitals in 27 states. Select operates four acute medical rehabilitation hospitals in New Jersey. Select is also a leading operator of outpatient rehabilitation clinics in the United States, with approximately 610 locations. Select also provides medical rehabilitation services on a contract basis at nursing homes, hospitals, assisted living and senior care centers, schools and worksites. Information about Select is available at http://www.selectmedicalcorp.com/

     Certain statements contained herein that are not descriptions of historical facts are “forward-looking” statements (as such term is defined in the Private Securities Litigation Reform Act of 1995). Because such statements include risks and uncertainties, actual results may differ materially from those expressed or implied by such forward-looking statements. Factors that could cause results to differ materially from those expressed or implied by such forward-looking statements include, but are not limited to those discussed in filings made by Select with the Securities and Exchange Commission. Many of the factors that will determine Select’s future results are beyond the ability of management to control or predict. Readers should not place undue reliance on forward-looking statements, which reflect management’s views only as of the date hereof. Select undertakes no obligation to revise or update any forward-looking statements, or to make any other forward-looking statements, whether as a result of new information, future events or otherwise.

Investor inquiries:

Joel Veit, 717/972-1100

I. Condensed Consolidated Statements of Operations
(In thousands)
(unaudited)
For the Three Months Ended June 30, 2005 and 2006

										%
		2005				2006				Change
Net operating revenues		$	473,704			$	482,141				1.8	%
Costs and expenses:
Cost of services			371,559				372,500				0.3	%
General and administrative			13,075				11,549				(11.7	)%
Bad debt expense			5,308				8,433				58.9	%
Depreciation and amortization			12,156				11,666				(4.0	)%
Income from operations			71,606				77,993				8.9	%
Other income			308				1,608				422.1	%
Interest income			193				197				2.1	%
Interest expense			(25,054	)			(23,995	)			(4.2	)%
Income from continuing operations before minority interests and income taxes			47,053				55,803				18.6	%
Minority interests			554				335				(39.5	)%
Income from continuing operations before income taxes			46,499				55,468				19.3	%
Income tax expense			18,712				21,531				15.1	%
Income from continuing operations			27,787				33,937				22.1	%
Income from discontinued operations, net of tax			1,634				—				N/M
Net income		$	29,421			$	33,937				15.3	%

II. Condensed Consolidated Statements of Operations
(In thousands)
(unaudited)
For the Six Months Ended June 30, 2005 and 2006

		Predecessor (1)					Successor (1)				Combined (2)				Successor (1)
		Period from
		January 1					Period from
		through					February 25				Six Months				Six Months
		February 24,					through June				Ended June 30,				Ended June 30,
		2005					30, 2005				2005				2006				% Change
Net operating revenues		$	277,736				$	662,090			$	939,826			$	961,884				2.3	%
Costs and expenses:
Cost of services			244,321					512,086				756,407				757,697				0.2	%
General and administrative			122,509					21,739				144,248				23,749				(83.5	)%
Bad debt expense			6,588					9,866				16,454				13,433				(18.4	)%
Depreciation and amortization			5,933					16,282				22,215				22,561				1.6	%
Income (loss) from operations			(101,615	)				102,117				502				144,444				N/M
Loss on early retirement of debt			(42,736	)				—				(42,736	)			—				N/M
Merger related charges			(12,025	)				—				(12,025	)			—				N/M
Other income			267					411				678				4,042				496.2	%
Interest income			523					270				793				419				(47.2	)%
Interest expense			(4,651	)				(34,654	)			(39,305	)			(48,267	)			22.8	%
Income (loss) from continuing operations before minority interests, and income taxes			(160,237	)				68,144				(92,093	)			100,638				N/M
Minority interests			330					856				1,186				726				(38.8	)%
Income (loss) from continuing operations before income taxes			(160,567	)				67,288				(93,279	)			99,912				N/M
Income tax expense (benefit)			(59,794	)				27,100				(32,694	)			40,626				N/M
Income (loss) from continuing operations			(100,773	)				40,188				(60,585	)			59,286				N/M
Income from discontinued operations, net of tax (includes pretax gain of $13,950 in 2006)			522					2,306				2,828				10,018				254.2	%
Net income (loss)		$	(100,251	)			$	42,494			$	(57,757	)		$	69,304				N/M

(1)		On February 24, 2005, Select Medical Corporation (“Select”) merged with a subsidiary of Select Medical Holdings Corporation (“Holdings”) and became a wholly-owned subsidiary of Holdings. Select’s financial position and results of operations prior to the Merger are presented separately in the consolidated financial statements as “Predecessor” financial statements, while the financial position and results of operations following the merger are presented as “Successor” financial statements. Due to the revaluation of assets as a result of purchase accounting associated with the Merger, the pre-merger financial statements are not comparable with those after the Merger in certain respects.
(2)		Although the Predecessor and Successor results are not comparable by definition in certain respects due to the merger and the resulting revaluation, for ease of comparison, the financial data for the period after the merger, February 25, 2005 through June 30, 2005 (Successor period), has been added to the financial data for the period from January 1, 2005 through February 24, 2005 (Predecessor period), to arrive at the combined six months ended June 30, 2005. As a result of the merger, interest expense, loss on early retirement of debt, merger related charges, stock compensation expense, depreciation and amortization have been impacted.

III. Condensed Consolidated Balance Sheets
(In thousands)
(unaudited)

		December 31,				June 30,
		2005				2006
Assets
Cash		$	35,861			$	12,140
Restricted cash			6,345				5,548
Accounts receivable, net			256,798				268,024
Current deferred tax asset			59,135				57,182
Prepaid taxes			4,110				—
Other assets held for sale			13,876				—
Other current assets			19,725				17,803
Total current assets			395,850				360,697
Property and equipment, net			248,541				301,366
Goodwill			1,305,210				1,319,011
Other identifiable intangibles			86,789				83,409
Other assets held for sale			61,388				—
Other assets			65,591				70,889
Total assets		$	2,163,369			$	2,135,372
Liabilities and Stockholders’ Equity
Payables and accruals		$	296,765			$	264,984
Income taxes payable			—				33,589
Current liabilities held for sale			4,215				—
Current portion of long term debt			6,516				6,350
Total current liabilities			307,496				304,923
Long term debt, net of current portion			1,315,764				1,227,463
Non-current deferred tax liability			25,771				37,684
Non-current liabilities held for sale			3,817				—
Minority interests			4,356				2,507
Stockholders’ equity			506,165				562,795
Total liabilities and stockholders’ equity		$	2,163,369			$	2,135,372

IV. Key Statistics
(unaudited)
For the Three Months Ended June 30, 2005 and 2006

										%
		2005				2006				Change
Specialty Hospitals (a)
Number of hospitals – end of period			102				100				(2.0	)%
Net operating revenues (,000)		$	347,508			$	360,772				3.8	%
Number of patient days			246,171				246,275				0.0	%
Number of admissions			9,995				10,154				1.6	%
Net revenue per patient day (b)		$	1,375			$	1,435				4.4	%
Adjusted EBITDA (,000)		$	78,613			$	82,673				5.2	%
Adjusted EBITDA margin – all hospitals			22.6	%			22.9	%			1.3	%
Adjusted EBITDA margin – same store hospitals (c)			22.8	%			23.5	%			3.1	%
Outpatient Rehabilitation (d)
Number of clinics – end of period			632				610				(3.5	)%
Net operating revenues (,000)		$	124,645			$	120,641				(3.2	)%
Number of visits			863,966				762,177				(11.8	)%
Revenue per visit (e)		$	89			$	94				5.6	%
Adjusted EBITDA (,000)		$	18,548			$	18,423				(0.7	)%
Adjusted EBITDA margin			14.9	%			15.3	%			2.7	%

(a)		Specialty hospitals consist of long-term acute care hospitals and acute medical rehabilitation hospitals.
(b)		Net revenue per patient day is calculated by dividing specialty hospital patient service revenue by the total number of patient days.
(c)		Adjusted EBITDA margin – same store hospitals represents the Adjusted EBITDA margin for those hospitals opened or acquired on or before January 1, 2005 and operated throughout both periods.
(d)		Outpatient rehabilitation information for 2005 has been restated to remove the clinics operated by CBIL, which is being reported as discontinued operations. Occupational health clinics have been reclassified as managed clinics.
(e)		Net revenue per visit is calculated by dividing outpatient rehabilitation clinic revenue by the total number of visits. For purposes of this computation, outpatient rehabilitation clinic revenue does not include managed clinics or contract services revenue.

V. Key Statistics
(unaudited)
For the Six Months Ended June 30, 2005 and 2006

										%
		2005				2006				Change
Specialty Hospitals (a)
Number of hospitals – end of period			102				100				(2.0	)%
Net operating revenues (,000)		$			$	720,444				4.5	%
Number of patient days			497,010				497,976				0.2	%
Number of admissions			20,331				20,637				1.5	%
Net revenue per patient day (b)		$	1,352			$	1,419				5.0	%
Adjusted EBITDA (,000)		$	157,740			$	157,391				(0.2	)%
Adjusted EBITDA margin – all hospitals			22.9	%			21.8	%			(4.8	)%
Adjusted EBITDA margin – same store hospitals (c)			23.0	%			22.2	%			(3.5	)%
Outpatient Rehabilitation (d)
Number of clinics – end of period			632				610				(3.5	)%
Net operating revenues (,000)		$	246,100			$	239,931				(2.5	)%
Number of visits			1,727,139				1,547,016				(10.4	)%
Revenue per visit (e)		$	90			$	93				3.3	%
Adjusted EBITDA (,000)		$	37,112			$	33,183				(10.6	)%
Adjusted EBITDA margin			15.1	%			13.8	%			(8.6	)%

(a)		Specialty hospitals consist of long-term acute care hospitals and acute medical rehabilitation hospitals.
(b)		Net revenue per patient day is calculated by dividing specialty hospital patient service revenue by the total number of patient days.
(c)		Adjusted EBITDA margin – same store hospitals represents the Adjusted EBITDA margin for those hospitals opened or acquired on or before January 1, 2005 and operated throughout both periods.
(d)		Outpatient rehabilitation information for 2005 has been restated to remove the clinics operated by CBIL, which is being reported as discontinued operations. Occupational health clinics have been reclassified as managed clinics.
(e)		Net revenue per visit is calculated by dividing outpatient rehabilitation clinic revenue by the total number of visits. For purposes of this computation, outpatient rehabilitation clinic revenue does not include managed clinics or contract services revenue.

VI. Net Income to Adjusted EBITDA Reconciliation
(In thousands)
(unaudited)
For the Three and Six Months Ended June 30, 2005 and 2006

     The following table reconciles net income (loss) to Adjusted EBITDA for Select. Adjusted EBITDA is used by Select to report its segment performance in accordance with SFAS No. 131. Adjusted EBITDA is defined as net income (loss) before interest, income taxes, depreciation and amortization, income from discontinued operations, loss on early retirement of debt, merger related charges, stock compensation expense, other income and minority interest. We believe that the presentation of Adjusted EBITDA is important to investors because Adjusted EBITDA is used by management to evaluate financial performance and determine resource allocation for each of our operating units.

     Adjusted EBITDA is not a measure of financial performance under generally accepted accounting principles. Items excluded from Adjusted EBITDA are significant components in understanding and assessing financial performance. Adjusted EBITDA should not be considered in isolation or as an alternative to, or substitute for, net income, cash flows generated by operations, investing or financing activities, or other financial statement data presented in the consolidated financial statements as indicators of financial performance or liquidity. Because Adjusted EBITDA is not a measurement determined in accordance with generally accepted accounting principles and is thus susceptible to varying calculations, Adjusted EBITDA as presented may not be comparable to other similarly titled measures of other companies.

		Successor (1)
		Three Months Ended June 30								Predecessor (1)					Successor (1)				Combined (2)				Successor(1)
										Period from
										January 1					Period from
										through					February 25				For the Six				For the Six
										February 24					through June				Months Ended				Months Ended
		2005				2005				2005					30, 2006				June 30, 2005				June 30, 3006
Net income (loss)		$	29,421			$	33,937			$	(100,251	)			$	42,494			$	(57,757	)		$	69,304
Income from discontinued operations, net of tax			(1,634	)			—				(522	)				(2,306	)			(2,828	)			(10,018	)
Income tax expense (benefit)			18,712				21,531				(59,794	)				27,100				(32,694	)			40,626
Minority interest			554				335				330					856				1,186				726
Interest expense, net			24,861				23,798				4,128					34,384				38,512				47,848
Other income			(308	)			(1,608	)			(267	)				(411	)			(678	)			(4,042	)
Loss on early retirement of debt			—				—				42,736					—				42,736				—
Merger related charges			—				—				12,025					—				12,025				—
Stock compensation expense (3)			1,817				945				142,213					6,143				148,356				1,891
Depreciation and amortization			12,156				11,666				5,933					16,282				22,215				22,561
Adjusted EBITDA		$	85,579			$	90,604			$	46,531				$	124,542			$	171,073			$	168,896
Specialty hospitals		$	78,613			$	82,673			$	44,384				$	113,356			$	157,740			$	157,391
Outpatient rehabilitation			18,548				18,423				9,848					27,264				37,112				33,183
Other (4)			(11,582	)			(10,492	)			(7,701	)				(16,078	)			(23,779	)			(21,678	)
Adjusted EBITDA		$	85,579			$	90,604			$	46,531				$	124,542			$	171,073			$	168,896

(1)		On February 24, 2005, Select Medical Corporation (“Select”) merged with a subsidiary of Select Medical Holdings Corporation (“Holdings”) and became a wholly owned subsidiary of Holdings. Select’s financial position and results of operations prior to the merger are presented separately in the consolidated financial statements as “Predecessor” financial statements, while the financial position and results of operations following the merger are presented as “Successor” financial statements. Due to the revaluation of assets as a result of purchase accounting associated with the merger, the pre-merger financial statements are not comparable with those after the merger in certain respects.
(2)		Although the Predecessor and Successor results are not comparable by definition in certain respects due to the merger and the resulting revaluation, for ease of comparison, the financial data for the period after the merger, February 25, 2005 through June 30, 2005 (Successor period), has been added to the financial data for the period from January 1, 2005 through February 24, 2005 (Predecessor period), to arrive at the combined six months ended June 30, 2005. As a result of the merger, interest expense, loss on early retirement of debt, merger related charges, stock compensation expense, depreciation and amortization have been impacted.
(3)		For the three months ended June 30, 2005 and 2006, for the period from January 1 through February 24, 2005, the period from February 25 through June 30, 2005, and for the six months ended June 30, 2006, $1.8 million, $0.9 million, $115.0 million, $6.1 million and $1.9 million, respectively, of stock compensation expense was included in general administrative expense on Select’s consolidated statement of operations. For the period from January 1 through February 24, 2005, $27.2 million of stock compensation expense was included in cost of services on Select’s consolidated statement of operations.
(4)		Other primarily includes Select’s general and administrative costs.

The following tables reconcile specialty hospital same store information.

		Three Months Ended
		June 30, 2005				June 30, 2006
Specialty hospitals net operating revenue		$	347,508			$	360,772
Less: Specialty hospitals in development or closed after 1/1/05			4,240				770
Specialty hospitals same store net operating revenue		$	343,268			$	360,002
Specialty hospitals Adjusted EBITDA		$	78,613			$	82,673
Less: Specialty hospitals in development or closed after 1/1/05			505				(1,970	)
Specialty hospitals same store Adjusted EBITDA		$	78,108			$	84,643
All specialty hospitals Adjusted EBITDA margin			22.6	%			22.9	%
Specialty hospitals same store Adjusted EBITDA margin			22.8	%			23.5	%

		Six Months Ended
		June 30, 2005				June 30, 2006
Specialty hospitals net operating revenue		$	689,552			$	720,444
Less: Specialty hospitals in development or closed after 1/1/05			10,268				974
Specialty hospitals same store net operating revenue		$	679,284			$	719,470
Specialty hospitals Adjusted EBITDA		$	157,740			$	157,391
Less: Specialty hospitals in development or closed after 1/1/05			1,839				(2,347	)
Specialty hospitals same store Adjusted EBITDA		$	155,901			$	159,738
All specialty hospitals Adjusted EBITDA margin			22.9	%			21.8	%
Specialty hospitals same store Adjusted EBITDA margin			23.0	%			22.2	%

VII. Discontinued Operations Income Statement
(In thousands)
(unaudited)
For the Three and Six Months Ended June 30, 2005 and the Two Months Ended February 28 2006

The following table summarizes the income statement information relating to our discontinued operations of CBIL sold on March 1, 2006

		Successor (1)				Predecessor (1)					Successor (1)				Combined (2)				Successor (1)
						Period from													For the Two
						January 1					Period from								Months
		For the Three				through					February 25				Six Months				Ended
		Months Ended				February 24,					through June				Ended June				February 28,
		June 30, 2005				2005					30, 2005				30, 2005				2006
Net operating revenues		$	17,936			$	10,051				$	24,662			$	34,713			$	12,902
Costs and expenses:
Cost of services			13,911				8,295					19,010				27,305				10,733
Bad debt expense			107				73					158				231				87
Depreciation and amortization			333				244					455				699				176
Income from discontinued operations			3,585				1,439					5,039				6,478				1,906
Other expense			308				267					411				678				—
Gain on sale			—				—					—				—				(13,950	)
Interest expense (income)			101				83					137				220				(31	)
Income from discontinued operations before minority interests and income taxes			3,176				1,089					4,491				5,580				15,887
Minority interests			476				139					636				775				340
Income from discontinued operations before income taxes			2,700				950					3,855				4,805				15,547
Income tax expense			1,066				428					1,549				1,977				5,529
Income from discontinued operations, net of tax		$	1,634			$	522				$	2,306			$	2,828			$	10,018

(1)		On February 24, 2005, Select Medical Corporation (Select) merged with a subsidiary of Select Medical Holdings Corporation (“Holdings”) and became a wholly-owned subsidiary of Holdings. Select’s financial position and results of operations prior to the Merger are presented separately in the consolidated financial statements as “Predecessor” financial statements, while the financial position and results of operations following the merger are presented as “Successor” financial statements. Due to the revaluation of assets as a result of purchase accounting associated with the Merger, the pre-merger financial statements are not comparable with those after the Merger in certain respects.
(2)		Although the Predecessor and Successor results are not comparable by definition in certain respects due to the merger and the resulting revaluation, for ease of comparison, the financial data for the period after the merger, February 25, 2005 through June 30, 2005 (Successor period), has been added to the financial data for the period from January 1, 2005 through February 24, 2005 (Predecessor period), to arrive at the combined six months ended June 30, 2005. As a result of the merger, interest expense, loss on early retirement of debt, merger related charges, stock compensation expense, depreciation and amortization have been impacted.