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We operate through two business segments, our specialty hospital segment and our outpatient rehabilitation segment. Our long-term acute care hospitals provide a wide range of services designed to treat medically complex conditions, pulmonary conditions, neurological disorders, cancers, cardiac conditions, wound care, renal disorders, infectious disease and other complicated conditions. Our balance sheet this year was also strengthened by an increase in our cash balance and a reduction in our debt to total capitalization. In the past four years, we have developed and opened 36 new long-term acute care hospitals. Caring and Responsive Employees of Select Committee energized our corporate campus and the community through.

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Of our long-term acute care hospitals, 76 were certified by the federal Medicare program as long-term acute care hospitals, and the other three, all of which opened inwere awaiting certification upon completion of their conditions for qualification.

These services are performed under many of the same brand names that we use in operating our outpatient clinics, as well as additional established brands, including Select Medical Rehabilitation Services, Rehab Management Services and Metro Therapy.

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Within our Specialty Hospital segment, revenue increased Our Specialty Hospitals demonstrated another strong year, as evidenced by the opening of eight new long-term acute care hospitals and the successful implementation of LTCH-PPS the Medicare prospective payment system for long-term acute care hospitals at all of our eligible long-term.

Ortenzio Executive Chairman Robert A. Caring and Responsive Employees of Select Committee energized our corporate campus and the community through. In addition to our outpatient clinics, the outpatient division also provides medical rehabilitation services on a contract basis at nursing homes, hospitals, assisted living and senior care centers, schools and worksites.

At each clinic, our clinical team offers a wide range of rehabilitative services that maximize functionality vu well-being for individuals suffering from musculoskeletal injuries. Our Company ended the year with 79 long-term acute care hospitals and four acute medical rehabilitation hospitals. The addition of Kessler is particularly significant as it marked our entry into the inpatient rehabilitation industry.

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Our balance sheet this year was also strengthened by an increase in our cash balance and a reduction in our debt to total capitalization. Accomplishments During the last four months ofthe operations teams at Select Medical and Kessler have partnered to lay the foundation for a successful integration.

Inour Company achieved several major accomplishments. In our Outpatient Rehabilitation business, we continued to grow our integrated network of physical therapy clinics to serve the needs of our patients through a wide range of vvvu programs and specialized services. At the end ofour Company operated clinics throughout the United States and Canada, up from clinics at the end of Ortenzio, both of whom have significant experience in the healthcare industry.

Select Medical Corporation, headquartered in Mechanicsburg, Pennsylvania, commenced operations in Since inception, Select has been led vv our current management team, including our co-founders, Rocco A.

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SEM Internet Address www. The addition of the four Kessler rehabilitation hospitals complemented our overall strong performance within the Specialty Hospital segment. This team works closely with referring physicians and case managers to ensure that patients receive a combined approach of intensive nursing care, focused respiratory services and individualized therapies to achieve optimal outcomes.

All four of our acute medical rehabilitation hospitals are certified by the federal Medicare program as inpatient rehabilitation facilities. Select also provides medical rehabilitation services on a contract basis at nursing homes, hospitals, assisted living and senior care centers, schools and worksites. Experienced clinicians work with referring physicians, employers, payors and case managers to ensure high quality rehabilitation for our patients.

Ortenzio and Robert A.

We operate through two business segments, our specialty hospital segment and our outpatient rehabilitation segment. Long-Term Acute Care Hospitals Overview Our long-term acute care hospitals provide highly specialized care to promote recovery from the most critical and complex medical conditions. The addition of Kessler provided our Company with a platform in the inpatient rehabilitation industry and added depth in several of our outpatient rehabilitation markets.

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Accomplishments Inwe grew our outpatient business through the addition of the Kessler outpatient rehabilitation clinics, which complemented our existing local market network on the East Coast.

While our outpatient rehabilitation business did experience margin compression inrevenue for the segment in increased by 9. Our mission and values include providing specialty inpatient services and outpatient rehabilitation services to those we serve, while seeking to provide high-quality health care and cost-effective outcomes for our patients, a positive work environment for our staff and a good return to our shareholders.

The outpatient division ended the year with outpatient rehabilitation clinics through out the United States and Canada, an increase from at the end of Select is also a leading operator of outpatient rehabilitation clinics in the United States and Canada. We believe that we will continue to distinguish ourselves as leaders within long-term acute care by providing a broader scope of clinical programs and services.

We extend our sincere thanks and deep appreciation to our Board of Directors for their guidance and support, to our employees for their talents and dedication, to our patients who entrust us with their care, and to you, our shareholders, for your support and vvj in Select Medical Corporation. We declared and paid our first dividend and completed a 2-for-1 split of our common stock.

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