S E L E C TM E D I C A LH O L D I N G SC O R P O R A T I O N 20 years of growth A N N U A LR E P O R T Her plans changed, however, when she was caught in an stroke threatened to silence her powerful voice. With a range o

S E L E C TM E D I C A LH O L D I N G SC O R P O R A T I O N 20 years of growth A N N U A LR E P O R T

Her plans changed, however, when she was caught in an stroke threatened to silence her powerful voice. With a range of physical, cognitive and emotional several close-range gunshot wounds but lost 2/3 of her lung independence. She put her faith in God, she said, and the medical intervention saved her life. and perform everyday tasks as a quadruple amputee. During and perseverance, hard work and hope. The next stage of caregivers who supported her, as well as her family. ADIVERSENETW ORKDELIVERING EX CEPTIONALRESU L T SF OR20YEARS After retiring, Julie Dombo was excited to pursue her twin Grammy Award-winning singer the Rev. Stefanie R. passions of weight lifting and race walking.Minatee travelled the world with the renowned Jubilation Choir, sharing her musical gifts. But last year, a massive armed robbery at a store in her hometown. She survived and, due to complications, her hands and feet. Significantchallenges, Rev. Minatee feared never fully regaining her Kessler Institute for Rehabilitation. Her team of experts After stabilizing, she began her next stage of recovery athelped her recover her mind, body and spirit. Select Specialty Hospital Wichita. She learned to breathe This journey has taught me the importance of patience her two-month stay, she found comfort and healing with my life is finally here, she said. Rev. Minatee returned to the choir, touring and sharing Select Specialty is where I began my new life, she said.her gift with the world. is the newest addition to the Select Medical family. This wholly owned subsidiary brings a nationwide network of outpatient physical rehabilitation centers into our company. In addition, it offers a range of services including general orthopedics, spinal care, neurological rehabilitation, orthotics and prosthetics services. S E L E C T M E D I C A LI M P R O V I N G Q U A L I T Y O F L I F E REHABILITATION HOSPITALS L ONG - TERM A CUTE CARE

His mother, Melissa, thought physical therapy would help. STATES FACILITIES NATIONWIDE EMPLOYEES YEARS OF EXPERIENCE IN OUTPATIENT Ben is a young boy with Pearson Syndrome. This rareAfter a workplace fall, Martha Smith needed help for the condition causes significant health issues, including loss pain and stiffness she was experiencing. Her employer s of muscle strength.Workers Compensation program referred her to Concentra in the Austin area. When one center gave up on Ben, as the disease wasHer physical therapist took special care to evaluate her, degenerative and progressive, she reached out to NovaCareshe said, even though she was his final patient of the day. Huber Heights in Ohio and connected with our pediatricThe extra time narrowed down her ailments and delivered care team.personalized care that brought relief. Ben is now gaining strength, endurance and balance. Let me say, that I haven t felt this good for a while, Melissa used the center s PT services herself followingMartha said. I am happier because I feel I have good surgery on a torn Achilles.solutions to my problem. The Huber Heights team has been an answer to myShe s made a copy of her PT s business card and hands prayers, she said.them out to friends who need physical therapy. MORE THAN 500 IN28 3,458 25 PHYSICAL REHABILITATION CARE 2 0 1 6 A N N U A L R E P O R T 1 oc cupational medicine outpatient rehabilitation

A L E T T E RF R O ML E A D E R S H I P Select Medical made a commitment 20 years ago to deliver an exceptional patient care experience that pro-motes healing and recovery in a compassionate environment. We have honored that promise every day since 1997, by helping to define the nation s standard of excellence in specialized hospital and rehabilitative care. Today, we are nearly 41,500 employees strong treating tens of thousands of patients a year in our 103 long-term acute care hospitals, 20 acute medical rehabilitation hospitals, 1,611 outpatient rehabilitation clinics and 300 Concentra occupational medicine centers. Growing With Intent Select Medical has a two-decade track record of strategic growth, with 2016 marking another year of new of the company s business portfolio of hospital care and outpatient services. Consequently, our payment mix is now weighted toward commercial payors. Our specialty hospitals, operating as long-term acute care hospitals (LTACHs), fully transitioned to new patient criteria rules this year. The division s leadership, combined with preeminent clinical expertise in treating high-acuity patients, positioned the company to lead the industry in meeting the newly defined standards. These mandated changes were significant, and we continue to focus on achieving normalized operations to gain a larger share of patients in this uniquely specialized market in 2017 and beyond. This year, the specialty hospital division successfully opened the California Rehabilitation Institute, our Additionally, Cleveland Clinic Rehabilitation Hospital, a 2015 joint venture with Cleveland Clinic, continued to build momentum. As we enter 2017, we are poised to continue our growth trajectory supported by new partnerships with some of the nation s premier health systems. With the successful integration of Concentra, our largest acquisition in company history, we continued to and expanded our national outpatient footprint by more than 500 clinics. These two significant acquisitions allowed us to realize and leverage meaningful synergies across our national care network. Cultivating A Culture With Purpose Select Medical s success is attributed to our ability to attract the best talent possible to care for our patients. Our employees are guided daily by fundamental principles that are part of The Select Medical Way. These core values and cultural behaviors serve as the foundation for every member of the Select Medical experience. It is this strong sense of purpose that motivates our team to connect and fulfill our mission. The company s employee-driven CARES (Caring and Responsive Employees of Select) initiative also raised money for dozens of charities. This effort, combined with ongoing corporate support for national organizations such as American Cancer Society, American Heart Association, Special Olympics and Junior Achievement, made a significant social impact for millions of people. j j f f oint ventures, acquisitions and service expansions across the organization. We also achieved better balance oint venture with UCLA Health and Cedars-Sinai, as well as TriHealth Rehabilitation Hospital in Cincinnati. urther enhance opportunities in occupational medicine. In March, we acquired Physiotherapy Associates amily to deliver an exceptional patient experience, and for the company to deliver an exceptional employee 2 S E L E C T M E D I C A LI M P R O V I N G Q U A L I T Y O F L I F E

Looking Ahead With Optimism Our strong leadership, successful partnerships and unmatched clinical expertise have been the catalyst for growth during the past 20 years. We are highly optimistic that the future holds even more promise for expansion, innovation and impact. This, in turn, sharpens our competitive edge, market position and patient outcomes to drive overall performance and stockholder value. We sincerely thank you for your support and recognition of who we are and what we do. Together, we truly are improving the quality of life in the communities we serve. Sincerely, Robert Ortenzio Rocco Ortenzio David S. Chernow Executive Chairman & Co-Founder Vice Chairman & Co-Founder President & Chief Executive Officer Improving quality of life. 2 0 1 6 A N N U A L R E P O R T 3

FINANCIAL HIGHLIGHT S SELE CT MEDICAL HOLDINGS C ORP OR ATION (In thousands, except per share data)20162015201420132012 (1) The selected financial data for the company s Concentra segment for the periods presented begins as of June 1, 2015, which is the date the Concentra acquisition was consummated. (2) Adjusted EBITDA is used by Select Medical to report its segment performance. Adjusted EBITDA is defined as earnings excluding interest, income taxes, depreciation and amortization, gain (loss) on early retirement of debt, stock compensation expense, Concentra acquisition costs, Physiotherapy acquisition costs, non-operating gain (loss) and equity in earnings (losses) of unconsolidated subsidiaries. Refer to Item 6 and Item 7 for further consideration of Adjusted EBITDA as a Non-GAAP measure. 4 S E L E C T M E D I C A LI M P R O V I N G Q U A L I T Y O F L I F E FOR THE YEARS ENDED Net operating revenues Income from operations Net income attributable to Select Medical Holdings Corporation Income per common share, fully diluted Dividends per share Cash flow from operations SEGMENT INFORMATION Net operating revenues Specialty hospitals Outpatient rehabilitation Concentra(1) Other $ 4,286,021 299,847 115,411 0.87 346,603 $ 2,289,482 995,374 1,000,624 541 $ 3,742,736$ 3,065,017 $ 2,975,648 $ 2,948,969 274,790 284,476301,436336,859 130,736120,627114,390148,230 0.99 0.910.82 1.05 0.100.40 0.30 1.50 208,415170,642192,523298,682 $ 2,346,781 $ 2,244,899$ 2,198,121 $ 2,197,529 810,009 819,397777,177 751,317 585,222 724 721350 123 Total Net Operating Revenues Adjusted EBITDA Specialty hospitals Outpatient rehabilitation Concentra(1) Other $ 4,286,021 $ 281,511 129,830 143,009 (88,543) $ 3,742,736$ 3,065,017 $ 2,975,648 $ 2,948,969 $ 327,623$ 341,787$ 353,843$ 381,354 98,220 97,58490,31387,024 48,301 (74,979) (75,499) (71,295)(62,531) Total Adjusted EBITDA(2) BALANCE SHEET SNAPSHOT AT YEAR-END Cash and cash equivalents Working capital Total assets Total debt Stockholders equity $ 465,807 $ 99,029 236,433 4,944,395 2,698,989 815,725 $ 399,165 $ 363,872$ 372,861$ 405,847 $ 14,435$ 3,354$ 4,319$ 40,144 19,869133,22082,87880,397 4,388,6782,924,809 2,817,6222,761,361 2,385,8961,552,9761,445,2751,470,243 859,253739,515786,234717,048

BO ARDOFDIRE CT ORS Robert A. Ortenzio Bryan C. CresseyWilliam H. Frist Executive Chairman & Co-FounderFounder & Partner Former Majority Leader of the United States Senate Select Medical Holdings CorporationCressey & CompanyPartner, Cressey & Company Rocco A. Ortenzio James E. Dalton, Jr. Thomas A. Scully Vice Chairman & Co-FounderRetired CEOGeneral Partner Select Medical Holdings CorporationQuorum Health Group, Inc.Welsh, Carson, Anderson & Stowe Russell L. CarsonJames S. Ely III Leopold Swergold FounderFounder & Chief Executive Offcer Managing Member Welsh, Carson, Anderson & StowePriCap Advisors, LLCAnvers Management Company, LLC EXE CUTIVEOFFICERS Robert A. Ortenzio Martin F. JacksonScott A. Romberger Executive Chairman & Co-FounderExecutive Vice PresidentSenior Vice President, Controller & Chief Financial Offcer & Chief Accounting Offcer Rocco A. Ortenzio John A. SaichRobert G. Breighner, Jr. Vice Chairman & Co-FounderExecutive Vice PresidentVice President, Compliance and Audit Services & Chief Human Resources Offcer & Corporate Compliance Offcer David S. Chernow Michael E. Tarvin President & Chief Executive Offcer Executive Vice President, General Counsel & Secretary C ORP OR A TEINF ORM A TION Corporate Headquarters Stockholder Inquiries Register & Stock Transfer Agent Select Medical Holdings CorporationJoel T. Veit Stockholder correspondence 4714 Gettysburg RoadSenior Vice President & Treasurershould be mailed to: Mechanicsburg, PA 17055-50364714 Gettsyburg RoadComputershare 717.972.1100Mechanicsburg, PA 17055-5036P.O. Box 30170 717.972.1100 | ir@selectmedical.comCollege Station, TX 77842-3170 Independent Registered Public Stock ExchangeOvernight correspondence Accounting Firm NYSE should be mailed to: PricewaterhouseCoopers LLPSymbol: SEMComputershare Penn National Insurance Plaza211 Quality Circle, Suite 210 2 N. 2nd Street, Suite 1100Internet Address College Station, TX 77845-3170 Harrisburg, PA 17101selectmedicalholdings.com 2 0 1 6 A N N U A L R E P O R TC4

Our Mission SELE CT MEDICAL WILL PR O VIDE AN EX CEPTIONAL P A TIENT CARE EXPERIENCE THA T PR OMO TES HEALING AND RE C O VER Y IN A C OMP ASSIONA TE ENVIR ONMEN T . LEARN MORE A T >>SELE CT MEDICALHOLDINGS. C O M 47 14 GETTY SBUR G R O AD , ME CHANICSBUR G, P A 17 055