regular basis. Thank you for making how well I’ve come back.” and all the tough love along the way.” “I will be OK.” where my new life began.” 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 “I’m no longer in constant pain on a“I feel great. a huge improvement in my life.”I can’t believe “Thanks for making me work to recover “Select Specialty Hospital is “Their prescription of personal care tailored to my needs is the best kind of medicine.” Positioned for the future A N N U A LR E P O R T

found kindness and empathy that made it easier to power and traumatic injuries. She was rushed to the hospital, his muscle atrophy and walking disorders. Speech therapy the shock and grappled with her boyfriend’s death, she food again. In occupational therapy, he’s working on two months in the hospital before transferring to Select Keziah’s physician and his team mapped out and executed than having her be his caregiver. “They’ve given me hope and purpose,” Mr. Rodriguez physically so she could move to an inpatient rehabilitation person with Parkinson’s can’t do anything. They have Hospital – Columbus East, Keziah met her first goal. She EX CEPTIONALCARE . EMP O WEREDFUTURES. Keziah Lewis, 19, and her boyfriend, Tyler Jarrell, 18, wereParkinson’s disease has changed the course of 82-year-enjoying the remaining days of summer vacation. Little didold Arturo Rodriguez’s life. Diagnosed in 2013, he began they know, they would soon be in the national spotlight.home therapy to cope with the muscle rigidity, tremors The couple headed to the Ohio State Fair where they linedand walking challenges that accompany the disease. up for a thrill ride, the Fire Ball. It began to swing and spin.However, the problems persisted. After he and his Without warning, their section of seats detached from thewife, May, cycled through several treatment options, ride. Keziah and Tyler flew through the air.including a nursing home, Mr. Rodriguez came to Select Tyler died on impact and Keziah sustained broken bonesRehabilitation Hospital of San Antonio. There, he said, he where she endured multiple surgeries. As Keziah absorbed through the intense physical therapy sessions to correct immersed herself in getting better. She spent almostis helping him overcome swallowing difficulties and enjoy Specialty Hospital – Columbus East for further recovery. dressing himself and brushing his teeth. It’s his goal, he said, to enjoy leisure time activities with his wife, rather a recovery plan. Her immediate goal was to recover enough hospital. After spending a month at Select Specialtysaid. “I want to defeat the common assumption that a continues rebuilding her strength.helped me believe that I can.” “I haven’t achieved all my recovery goals, but I’m 50 percent of the way there,” Keziah said. “I know I will attain them. It’s a process I look forward to.” 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 l ong - term a cute care rehabilitation hospitals

health partner is critical to achieving organizational goals and periodically secure new prosthetic legs, allowing him the to claim management and injury prevention, the company States Postal Service. The more advanced prosthetic, along with Dan’s new puppy, Keolis Transit America’s Las Vegas operations, chose times a day which have contributed to a decrease in his weight treatment. A comprehensive focus on treating and preventing a pool and a pontoon boat which they enjoy with their family. off. Since partnering with Concentra, the Keolis – Las Vegas America’s injury claim frequency and severity over time. to him about this, and about the expense of the leg. My son Dan Schwartz is a proud Navy veteran who served two For more than 100 years, Keolis has helped people travel tours in Vietnam aboard the fleet’s historic flagship the USSsafely, comfortably and efficiently. Keolis is dedicated to Enterprise. During his service, Dan sustained a noncombat-“Thinking Like a Passenger,” with a focus on exceeding related injury that required amputation of his left leg.expectations for rail and transit operations. In the intervening four decades since the surgery, Dan,Keolis Transit America’s top priority is ensuring the health 67, worked through the Veterans’ Administration [VA] to and safety of its 2,000 employees. Having a strong occupational freedom to walk his beloved dogs and work for the United ensuring a successful business. Taking a proactive approach partnered with Concentra, ensuring its new workers Through a collaboration between the VA and NovaCarecompensation provider had established relationships Prosthetics & Orthotics, Dan was fit with a prosthetic leg bywith third-party administrators and collection sites. Tony Fruci, CP, Center Director at NovaCare in St. Paul, MN. Cecil Fielder, director of safety, training and security for returned joy to the vet’s life. Dan is now able to walk threeConcentra for its approach to injury prevention and and blood pressure. He and his wife bought a new house with injuries was critical for this new partnership. The choice paid “My son is an occupational therapist,” Dan said. “I was talkingteam experienced a significant reduction in Keolis Transit said, ‘Dad, I think the VA would rather spend that amountSuccess is more than just dollars and cents. Cecil said he on your leg then start spending it on heart surgeries.’ Andvalues Concentra’s personable approach to business, direct he’s right. I can’t thank the VA enough, and I can’t praiseengagement with Concentra physicians about employee Tony enough. He’s always been very helpful and supportive.”care and the company’s commitment to client retention. 2 0 1 7 A N N U A L R E P O R T 1 oc cupational medicine outpatient rehabilitation

D E A RS H A R E H O L D E R We are pleased to report that 2017 was a good year for Select Medical. We successfully executed our long-term acute care criteria strategy; expanded the Company’s national footprint through joint ventures and acquisitions; and remained steadfast in delivering quality care, value and outcomes. These achievements were underscored by strong financial performance in 2017. Net operating revenues grew 3.7% year-over-year to more than $4.4 billion and operating income grew 18.7% year-over-year to $355.9 million. Today, Select Medical is a significant leader of post-acute care in the U.S. We’re the nation’s largest provider of long-term acute care hospital services, outpatient rehabilitation and occupational medicine. Our inpatient We proudly serve the health care needs of 60,000 patients per day who come through our vast network of hospitals, clinics and centers, including: With growth also comes the need to make investments in technology. We continue to implement an electronic medical record (EMR) strategy in both our long-term acute care and inpatient rehabilitation specialty hospitals, as well as deploy other enterprise platforms and digital tools throughout our business lines to increase operational efficiency across the entire organization. Growing in All Business Segments Long-Term Acute Care Hospitals (LTACHs) – We’re pleased to share that after 15 months of operating under the new federally-legislated patient criteria, the great majority of our patients are now meeting these requirements. Our operators have done a very good job educating the health care community on the chronically critically ill patient population for whom Congress expects LTACHs to provide care. another year of expansion propelled by the company’s well-honed joint venture model with an Adjusted EBITDA of $90.0 million, a 58.2% increase. Through our existing partnership with Cleveland Clinic, we opened two new hospitals for a total of 180 beds across the northern Ohio region. New joint venture agreements were also signed with Dignity Health to build and operate a hospital in Henderson, Nevada as well as Ochsner Health with plans to open a hospital in New Orleans in early 2018. In addition, we marked our entry into the Virginia rehabilitation market through a joint venture with Riverside Health. Outpatient Rehabilitation – On the outpatient rehabilitation segment front, even in a challenging year, Adjusted EBITDA was up 2.1% to $132.5 million. Innovation continued to be a priority with a focus on driving ReVital Cancer Rehabilitation Program in clinics across four regional markets including St. Louis, Louisville, Dallas and southern New Jersey. The program is set to expand to an additional six markets throughout 2018. Occupational Medicine – Concentra had another very good year with an Adjusted EBITDA increase of 10.2% from the prior year to $157.6 million. It was also successful in signing a definitive agreement to acquire U.S. HealthWorks (deal closed in early 2018). The combined operations represent the largest network of workforce health services in the U.S. r I i ehabilitation network is the second largest in the country and continues to expand each year. • 100 long-term acute care hospitals in 27 states • 1,616 outpatient rehabilitation clinics in 37 states and D.C. • 24 inpatient rehabilitation hospitals in 10 states • 312 occupational medicine centers in 38 states npatient Rehabilitation Hospitals and Joint Ventures – Our inpatient rehabilitation segment also saw ncreased awareness for specialty services and enhanced patient engagement. We also launched the new 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

 Unifying in Purpose This year, through an initiative called ONE Select, we leveraged the operational and cultural synergies among our lines of business. ONE Select seeks to closely align all facets of the company in order to identify, streamline and implement cohesive operational and cultural best practices across the organization. Our employees sit at the heart of this initiative. In addition to providing exceptional care experiences for our patients and their families, Select Medical was challenged by three natural disasters and rose to the occasion, unifying to help those hit hardest by nature’s wrath. Hurricanes Irma and Harvey and the northern California wildfires were true tests of grit, where our teams showed perseverance, dedication and compassion across many of our hospitals, centers and clinics. Our employees kept patients safe, offered continued or alternate medical care and provided a zone of comfort during and after the disasters. The performance of our teams in these high-stakes, life-threatening situations was nothing less than astounding. These disasters also resulted in the loss of some employees’ homes, vehicles and personal belongings. At this critical juncture, the Select Medical workforce – 42,200 employees strong – immediately stepped in donating funds through the Select Medical Charitable Foundation and providing financial relief to colleagues. We also continued our corporate support for national organizations such as the American Cancer Society, American Heart Association, Special Olympics and Junior Achievement, as well as many regional charities through our C.A.R.E.S. (Caring and Responsive Employees of Select) program. Focusing on Excellence As we embark on 2018, we are confident that our strong leadership, strategic partnerships, clinical excellence and patient-centered innovation will continue to serve as catalysts for growth, improved competitive performance and enhanced shareholder value. We thank you for your support in our ongoing commitment to improve the quality of life for millions of patients and their families in the communities we serve. Sincerely, 2 0 1 7 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)20172016201520142013 (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, acquisition costs associated with Concentra, Physiotherapy and U.S. HealthWorks, 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 Long term acute care Inpatient rehabilitation Outpatient rehabilitation Concentra(1) Other $ 4,443,603 355,878 177,184 1.33 — 238,131 $ 1,756,243 631,777 1,020,848 1,034,035 700 $ 4,286,021$ 3,742,736 $ 3,065,017 $ 2,975,648 299,847274,790 284,476301,436 115,411130,736120,627114,390 0.87 0.99 0.910.82 — 0.100.40 0.30 346,603 208,415170,642192,523 $ 1,785,164$ 1,902,776$ 1,840,179 $ 1,826,760 504,318444,005 404,720 371,361 995,374810,009 819,397777,177 1,000,624585,222 541724 721350 Total Net Operating Revenues Adjusted EBITDA Long term acute care Inpatient rehabilitation Outpatient rehabilitation Concentra(1) Other $ 4,443,603 $ 252,679 90,041 132,533 157,561 (94,822) $ 4,286,021$ 3,742,736 $ 3,065,017 $ 2,975,648 $ 224,609 $ 258,223$ 272,055$ 281,432 56,902 69,400 69,73272,411 129,83098,220 97,58490,313 143,00948,301 (88,543) (74,979) (75,499) (71,295) Total Adjusted EBITDA(2) BALANCE SHEET SNAPSHOT AT YEAR-END Cash and cash equivalents Working capital Total assets Total debt Stockholders’ equity $ 537,992 $ 122,549 315,423 5,127,166 2,699,902 823,368 $ 465,807 $ 399,165 $ 363,872$ 372,861 $ 99,029$ 14,435$ 3,354$ 4,319 191,268 19,869133,22082,878 4,920,626 4,388,6782,924,809 2,817,622 2,698,9892,385,8961,552,9761,445,275 815,725859,253739,515786,234

 BO ARDOFDIRE CT ORS Robert A. Ortenzio Bryan C. CresseyWilliam H. Frist Executive Chairman & Co-FounderFounder & Partner Former Majority Leader of Select Medical Holdings CorporationCressey & Companythe United States Senate Partner, Cressey & Company Rocco A. Ortenzio Harold L. Paz, M.D. Thomas A. Scully Vice Chairman & Co-FounderExecutive Vice President andGeneral Partner Select Medical Holdings CorporationChief Medical Officer Welsh, Carson, Anderson & Stowe Aetna Inc. Russell L. CarsonJames S. Ely III Leopold Swergold FounderFounder & Chief Executive Officer 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 Officer & Chief Accounting Officer Rocco A. Ortenzio John A. SaichRobert G. Breighner, Jr. Vice Chairman & Co-FounderExecutive Vice PresidentVice President, Compliance and Audit Services & Chief Human Resources Officer & Corporate Compliance Officer David S. Chernow Michael E. Tarvin President & Chief Executive Officer 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 7 A N N U A L R E P O R T6

 1S E L E C T M E D I C A L 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