Select Medical Corporation Announces
Results for Third Quarter and Nine Months Ended September 30, 2005

     MECHANICSBURG, PENNSYLVANIA — November 8, 2005 — Select Medical Corporation today announced results for the third quarter and nine months ended September 30, 2005.

     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 its 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 has 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 third quarter ended September 30, 2005, net operating revenues increased 17.2% to $477.7 million compared to $407.6 million for the same quarter, prior year. Income from operations increased 2.2% to $56.1 million compared to $55.0 million for the same quarter, prior year. Net income declined 36.0% to $17.8 million compared to $27.8 million for the same quarter, prior year. Additionally, 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, long-term incentive compensation and minority interest (“Adjusted EBITDA”) for the third quarter increased 29.1% to $84.2 million compared to $65.2 million for the same quarter, prior year. A reconciliation of net income to Adjusted EBITDA is attached to this release.

     For the combined nine months ended September 30, 2005, net operating revenues increased 17.0% to $1,452.2 million compared to $1,241.3 million for the same period, prior year. Income from operations decreased 63.6% to $63.1 million compared to $173.3 million for the same period, prior year. Select had a net loss of $39.9 million for the combined nine months ended September 30, 2005 compared to net income of $88.4 million for the same period, prior year. Additionally, Adjusted EBITDA for the combined nine months ended September 30, 2005 increased 29.4% to $262.4 million compared to $202.9 million for the same period, prior year.

Specialty Hospitals

     At September 30, 2005, Select operated 97 long-term acute care hospitals and four acute medical rehabilitation hospitals. This compares to 83 long-term acute care hospitals and four acute medical rehabilitation hospitals operated at September 30, 2004. For the third quarter of 2005, net operating revenues for all Select’s hospitals increased 26.0% to $340.9 million compared to $270.6 million for the same quarter, prior year. Total patient days for the third quarter 2005 were 242,850, admissions were 9,725 and net revenue per patient day was $1,371. This compares to 198,052 days, 8,197 admissions and net revenue per patient day of $1,338 for the same quarter, prior year. For the hospitals opened before January 1, 2004 and operated by Select throughout both periods, patient days in the third quarter of 2005 were 206,046 and admissions in the third quarter were 8,375, compared to 192,205 days and 7,941 admissions in the same quarter, prior year. Adjusted EBITDA for the segment increased 31.7% to $77.6 million compared to $58.9 million for the same quarter, prior year. The Adjusted EBITDA margin for the segment was 22.8% for the third quarter of 2005, compared to 21.8% for the same quarter, prior year. The Adjusted EBITDA margin for the hospitals opened before January 1, 2004 and operated by Select throughout both periods was 23.7% for the third quarter of 2005, compared to 22.9% for the same quarter, prior year.

     For the combined nine months ended September 30, 2005, net operating revenues for all Select’s hospitals increased 27.4% to $1,029.3 million compared to $807.9 million for the same period, prior year. Total patient days for the combined nine months ended September 30, 2005 were 739,860, admissions were 30,056 and net revenue per patient day was $1,358. This compares to 615,304 days, 25,241 admissions and net revenue per patient day of $1,287 for the same period, prior year. For the hospitals opened before January 1, 2004 and operated by Select throughout both periods, patient days for the combined nine months ended September 30, 2005 were 624,934 and admissions were 25,722, compared to 598,564 days and 24,597 admissions in the same period, prior year. Adjusted EBITDA for the segment for the combined nine months ended September 30, 2005 increased 34.4% to $235.2 million compared to $175.0 million for the same period, prior year. The Adjusted EBITDA margin for the segment for the combined nine months ended September 30, 2005 was 22.8%, compared to 21.7% for the same period, prior year. The Adjusted EBITDA margin for the hospitals opened before January 1, 2004 and operated by Select throughout both periods was 24.0% for the combined nine months ended September 30, 2005, compared to 22.4% for the same period, prior year.

Outpatient Rehabilitation

     At September 30, 2005, Select operated 730 outpatient clinics. This compares to 750 outpatient clinics at September 30, 2004. For the third quarter of 2005, net operating revenues increased 1.3% to $135.3 million compared to $133.5 million for the same quarter, prior year. Adjusted EBITDA for the third quarter increased 3.9% to $18.0 million compared to $17.3 million for the same quarter, prior year. The Adjusted EBITDA margin for the quarter was 13.3% compared to 13.0% in the same quarter, prior year. U.S. based patient visits for the quarter were 858,974 compared to 935,763 for the same quarter, prior year. Net revenue per visit was $90 for the third quarter of 2005 compared to $88 for the same quarter, prior year.

     For the combined nine months ended September 30, 2005, net operating revenues declined 1.7% to $416.1 million compared to $423.5 million for the same period, prior year. Adjusted EBITDA for the period declined 3.3% to $62.3 million compared to $64.4 million for the same period, prior year. The Adjusted EBITDA margin for the period was 15.0% compared to 15.2% in the same period, prior year. U.S. based patient visits for the period were 2,692,369 compared to 2,933,106 for the same period, prior year. Net revenue per visit was $90 for the period compared to $89 for the same period, prior year.

Conference Call

     The Company will host a conference call regarding the third quarter results and its business outlook on Wednesday, November 9, 2005, at 11:00 am EST. The domestic dial in number for the call is 1-866-261-3296. The international dial in number is 1-703-639-1223.

* * * * *

     Select Medical Corporation is a leading operator of specialty hospitals in the United States. Select operates 97 long-term acute care hospitals in 26 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 and Canada, with approximately 730 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
ir@selectmedicalcorp.com

I. Condensed Consolidated Statements of Operations
(In thousands)
(unaudited)
For the Three Months Ended September 30, 2005 and 2004

		Predecessor (1)					Successor (1)				%
		2004					2005				Change
Net operating revenues		$	407,570				$	477,698				17.2	%
Costs and expenses:
Cost of services			318,541					377,711				18.6	%
Stock compensation expense			—					1,424				N/M
Long-term incentive compensation			—					14,453				N/M
Bad debt expense			12,857					4,401				(65.8	)%
General and administrative			10,945					11,402				4.2	%
Depreciation and amortization			10,264					12,161				18.5	%
Income from operations			54,963					56,146				2.2	%
Interest income			(634	)				(287	)			(54.7	)%
Interest expense			8,632					25,604				196.6	%
Income from continuing operations before minority interests and income taxes			46,965					30,829				(34.4	)%
Minority interests			620					843				36.0	%
Income from continuing operations before income taxes			46,345					29,986				(35.3	)%
Income tax expense			18,674					12,170				(34.8	)%
Income from continuing operations			27,671					17,816				(35.6	)%
Income from discontinued operations, net of tax			146					—				N/M
Net income		$	27,817				$	17,816				(36.0	)%

II. Condensed Consolidated Statements of Operations
(In thousands)
(unaudited)
For the Nine Months Ended September 30, 2005 and 2004

		Predecessor (1)									Successor (1)				Combined (2)
						Period from					Period from
		For the Nine				January 1					February 25				Nine Months
		Months Ended				through					through				Ended
		September 30,				February 24,					September 30,				September 30,
		2004				2005					2005				2005				% Change
Net operating revenues		$	1,241,276			$	287,787				$	1,164,450			$	1,452,237				17.0	%
Costs and expenses:
Cost of services			965,848				225,428					908,736				1,134,164				17.4	%
Stock compensation expense			—				142,213					7,567				149,780				N/M
Long-term incentive compensation			—				—					14,453				14,453				N/M
Bad debt expense			36,056				6,661					14,425				21,086				(41.5	)%
General and administrative			36,490				7,484					27,069				34,553				(5.3	)%
Depreciation and amortization			29,533				6,177					28,898				35,075				18.8	%
Income (loss) from operations			173,349				(100,176	)				163,302				63,126				(63.6	)%
Loss on early retirement of debt			—				42,736					—				42,736				N/M
Merger related charges			—				12,025					—				12,025				N/M
Interest income			(1,485	)			(523	)				(568	)			(1,091	)			(26.5	)%
Interest expense			25,385				4,734					60,406				65,140				156.6	%
Income (loss) from continuing operations before minority interests, and income taxes			149,449				(159,148	)				103,464				(55,684	)			(137.3	)%
Minority interests			2,772				469					2,335				2,804				1.2	%
Income (loss) from continuing operations before income taxes			146,677				(159,617	)				101,129				(58,488	)			(139.9	)%
Income tax expense (benefit)			59,121				(59,366	)				40,819				(18,547	)			(131.4	)%
Income (loss) from continuing operations			87,556				(100,251	)				60,310				(39,941	)			(145.6	)%
Income from discontinued operations, net of tax			802				—					—				—				N/M
Net income (loss)		$	88,358			$	(100,251	)			$	60,310			$	(39,941	)			(145.2	)%

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

		Predecessor (1)					Successor (1)
		December 31,					September 30,
		2004					2005
Assets
Cash		$	247,476				$	9,364
Restricted cash			7,031					6,706
Accounts receivable, net			216,852					290,836
Current deferred tax asset			59,239					70,718
Other current assets			18,737					23,220
Total current assets			549,335					400,844
Property and equipment, net			165,336					224,790
Goodwill			302,069					1,362,757
Other identifiable intangibles			78,304					87,278
Non-current deferred tax asset			—					172
Other assets			18,677					63,551
Total assets		$	1,113,721				$	2,139,392
Liabilities and Stockholders’ Equity
Payables and accruals		$	232,063				$	271,246
Current portion of long term debt			3,557					7,949
Total current liabilities			235,620					279,195
Long term debt, net of current portion			351,033					1,372,091
Non-current deferred tax liability			4,458					—
Minority interests			6,667					7,458
Stockholders’ equity			515,943					480,648
Total liabilities and stockholders’ equity		$	1,113,721				$	2,139,392

IV. Key Statistics
(unaudited)
For the Three Months Ended September 30, 2005 and 2004

										%
		2004				2005				Change
Specialty Hospitals (a)
Number of hospitals — end of period			87				101				16.1	%
Net operating revenues (,000)		$	270,647			$	340,898				26.0	%
Number of patient days			198,052				242,850				22.6	%
Number of admissions			8,197				9,725				18.6	%
Net revenue per patient day (b)		$	1,338			$	1,371				2.5	%
Adjusted EBITDA (,000)		$	58,945			$	77,642				31.7	%
Adjusted EBITDA margin — all hospitals			21.8	%			22.8	%			4.6	%
Adjusted EBITDA margin — same store hospitals (c)			22.9	%			23.7	%			3.5	%
Outpatient Rehabilitation
Number of clinics — end of period			750				730				(2.7	)%
Net operating revenues (,000)		$	133,522			$	135,302				1.3	%
Number of visits (US)			935,763				858,974				(8.2	)%
Revenue per visit (US) (d)		$	88			$	90				2.3	%
Adjusted EBITDA (,000)		$	17,349			$	18,032				3.9	%
Adjusted EBITDA margin			13.0	%			13.3	%			2.3	%

V. Key Statistics
(unaudited)
For the Nine Months Ended September 30, 2005 and 2004

										%
		2004				2005				Change
Specialty Hospitals (a)
Number of hospitals — end of period			87				101				16.1	%
Net operating revenues (,000)		$	807,944			$	1,029,283				27.4	%
Number of patient days			615,304				739,860				20.2	%
Number of admissions			25,241				30,056				19.1	%
Net revenue per patient day (b)		$	1,287			$	1,358				5.5	%
Adjusted EBITDA (,000)		$	174,966			$	235,190				34.4	%
Adjusted EBITDA margin — all hospitals			21.7	%			22.8	%			5.1	%
Adjusted EBITDA margin — same store hospitals (c)			22.4	%			24.0	%			7.1	%
Outpatient Rehabilitation
Number of clinics — end of period			750				730				(2.7	)%
Net operating revenues (,000)		$	423,465			$	416,116				(1.7	)%
Number of visits (US)			2,933,106				2,692,369				(8.2	)%
Revenue per visit (US) (d)		$	89			$	90				1.1	%
Adjusted EBITDA (,000)		$	64,427			$	62,321				(3.3	)%
Adjusted EBITDA margin			15.2	%			15.0	%			(1.3	)%

VI. Net Income to Adjusted EBITDA Reconciliation
(In thousands)
(unaudited)
For the Three and Nine Months Ended September 30, 2005 and 2004

     The following table reconciles net income to Adjusted EBITDA for the Company. Adjusted EBITDA is used by the Company to report its segment performance in accordance with SFAS No. 131. Adjusted EBITDA is defined as 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, long-term incentive compensation, 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.

		Predecessor (1)					Successor (1)				Predecessor (1)									Successor (1)				Combined (2)
		Three Months Ended
		September 30,
															Period from					Period from
											For the Nine				January 1					February 25				For the Nine
											Months Ended				through					through				Months Ended
											September 30,				February 24,					September 30,				September 30,
		2004					2005				2004				2005					2005				2005
Net income (loss)		$	27,817				$	17,816			$	88,358			$	(100,251	)			$	60,310			$	(39,941	)
Income from discontinued operations, net of tax			(146	)				—				(802	)			—					—				—
Income tax expense (benefit)			18,674					12,170				59,121				(59,366	)				40,819				(18,547	)
Minority interest			620					843				2,772				469					2,335				2,804
Interest expense, net			7,998					25,317				23,900				4,211					59,838				64,049
Loss on early retirement of debt			—					—				—				42,736					—				42,736
Merger related charges			—					—				—				12,025					—				12,025
Stock compensation expense			—					1,424				—				142,213					7,567				149,780
Long-term incentive compensation			—					14,453				—				—					14,453				14,453
Depreciation and amortization			10,264					12,161				29,533				6,177					28,898				35,075
Adjusted EBITDA		$	65,227				$	84,184			$	202,882			$	48,214				$	214,220			$	262,434
Specialty hospitals		$	58,945				$	77,642			$	174,966			$	44,343				$	190,847			$	235,190
Outpatient rehabilitation			17,349					18,032				64,427				11,531					50,790				62,321
Other (3)			(11,067	)				(11,490	)			(36,511	)			(7,660	)				(27,417	)			(35,077	)
Adjusted EBITDA		$	65,227				$	84,184			$	202,882			$	48,214				$	214,220			$	262,434

The following tables reconcile specialty hospital same store information.

		Three Months Ended
		September 30, 2004				September 30, 2005
Specialty hospitals net operating revenue		$	270,647			$	340,898
Less: Specialty hospitals opened, acquired or closed after 1/1/04			3,599				52,589
Specialty hospitals same store net operating revenue		$	267,048			$	288,309
Specialty hospitals Adjusted EBITDA		$	58,945			$	77,642
Less: Specialty hospitals opened, acquired or closed after 1/1/04			(2,083	)			9,224
Specialty hospitals same store Adjusted EBITDA		$	61,028			$	68,418
All specialty hospitals Adjusted EBITDA margin			21.8	%			22.8	%
Specialty hospitals same store Adjusted EBITDA margin			22.9	%			23.7	%

		Nine Months Ended
		September 30, 2004				September 30, 2005
Specialty hospitals net operating revenue		$	807,944			$	1,029,283
Less: Specialty hospitals opened, acquired or closed after 1/1/04			7,574				154,006
Specialty hospitals same store net operating revenue		$	800,370			$	875,277
Specialty hospitals Adjusted EBITDA		$	174,966			$	235,190
Less: Specialty hospitals opened, acquired or closed after 1/1/04			(3,921	)			24,770
Specialty hospitals same store Adjusted EBITDA		$	178,887			$	210,420
All specialty hospitals Adjusted EBITDA margin			21.7	%			22.8	%
Specialty hospitals same store Adjusted EBITDA margin			22.4	%			24.0	%