Select Medical (SEM) 10-Q 3 Nov 16 2016 Q3 Quarterly report Financial data

Document and Entity Information

Document and Entity Information - shares	9 Months Ended
	Sep. 30, 2016	Oct. 31, 2016
Document and Entity Information
Entity Registrant Name	SELECT MEDICAL HOLDINGS CORP
Entity Central Index Key	1,320,414
Document Type	10-Q
Document Period End Date	Sep. 30, 2016
Amendment Flag	false
Current Fiscal Year End Date	--12-31
Entity Current Reporting Status	Yes
Entity Filer Category	Large Accelerated Filer
Entity Common Stock, Shares Outstanding		132,329,220
Document Fiscal Year Focus	2,016
Document Fiscal Period Focus	Q3

Condensed Consolidated Balance

Condensed Consolidated Balance Sheets - USD ($) $ in Thousands	Sep. 30, 2016	Dec. 31, 2015
Current Assets:
Cash and cash equivalents	$ 68,223	$ 14,435
Accounts receivable, net of allowance for doubtful accounts of $61,133 and $61,084 at 2015 and 2016, respectively	592,711	603,558
Current deferred tax asset	50,647	28,688
Prepaid income taxes	11,474	16,694
Other current assets	82,680	85,779
Total Current Assets	805,735	749,154
Property and equipment, net	863,485	864,124
Goodwill	2,674,623	2,314,624
Other identifiable intangibles, net	338,220	318,675
Other assets	163,342	142,101
Total Assets	4,845,405	4,388,678
Current Liabilities:
Bank overdrafts	20,151	28,615
Current portion of long-term debt and notes payable	12,690	225,166
Accounts payable	114,181	137,409
Accrued payroll	138,090	120,989
Accrued vacation	78,776	73,977
Accrued interest	32,964	9,401
Accrued other	142,431	133,728
Due to third party payors	11,065
Total Current Liabilities	550,348	729,285
Long-term debt, net of current portion	2,642,115	2,160,730
Non-current deferred tax liability	210,000	218,705
Other non-current liabilities	136,527	133,220
Total Liabilities	3,538,990	3,241,940
Commitments and contingencies (Note 11)
Redeemable non-controlling interests	246,429	238,221
Stockholders' Equity:
Common stock	132	131
Capital in excess of par	440,316	424,506
Retained earnings (accumulated deficit)	528,593	434,616
Total Select Medical Holdings Corporation and Select Medical Corporation Stockholders' Equity	969,041	859,253
Non-controlling interest	90,945	49,264
Total Equity	1,059,986	908,517
Total Liabilities and Equity	4,845,405	4,388,678
Select
Current Assets:
Cash and cash equivalents	68,223	14,435
Accounts receivable, net of allowance for doubtful accounts of $61,133 and $61,084 at 2015 and 2016, respectively	592,711	603,558
Current deferred tax asset	50,647	28,688
Prepaid income taxes	11,474	16,694
Other current assets	82,680	85,779
Total Current Assets	805,735	749,154
Property and equipment, net	863,485	864,124
Goodwill	2,674,623	2,314,624
Other identifiable intangibles, net	338,220	318,675
Other assets	163,342	142,101
Total Assets	4,845,405	4,388,678
Current Liabilities:
Bank overdrafts	20,151	28,615
Current portion of long-term debt and notes payable	12,690	225,166
Accounts payable	114,181	137,409
Accrued payroll	138,090	120,989
Accrued vacation	78,776	73,977
Accrued interest	32,964	9,401
Accrued other	142,431	133,728
Due to third party payors	11,065
Total Current Liabilities	550,348	729,285
Long-term debt, net of current portion	2,642,115	2,160,730
Non-current deferred tax liability	210,000	218,705
Other non-current liabilities	136,527	133,220
Total Liabilities	3,538,990	3,241,940
Commitments and contingencies (Note 11)
Redeemable non-controlling interests	246,429	238,221
Stockholders' Equity:
Common stock	0	0
Capital in excess of par	921,069	904,375
Retained earnings (accumulated deficit)	47,972	(45,122)
Total Select Medical Holdings Corporation and Select Medical Corporation Stockholders' Equity	969,041	859,253
Non-controlling interest	90,945	49,264
Total Equity	1,059,986	908,517
Total Liabilities and Equity	$ 4,845,405	$ 4,388,678

Condensed Consolidated Balance3

Condensed Consolidated Balance Sheets (Parenthetical) - USD ($) $ in Thousands	Sep. 30, 2016	Dec. 31, 2015
Accounts receivable, allowance for doubtful accounts (in dollars)	$ 61,084	$ 61,133
Common stock, par value (in dollars per share)	$ 0.001	$ 0.001
Common stock, shares authorized	700,000,000	700,000,000
Common stock, shares issued	132,395,317	131,282,798
Common stock, shares outstanding	132,395,317	131,282,798
Select
Accounts receivable, allowance for doubtful accounts (in dollars)	$ 61,084	$ 61,133
Common stock, par value (in dollars per share)	$ 0.01	$ 0.01
Common stock, shares issued	100	100
Common stock, shares outstanding	100	100

Condensed Consolidated Statemen

Condensed Consolidated Statements of Operations shares in Thousands, $ in Thousands	9 Months Ended
	Sep. 30, 2015USD ($)$ / sharesshares
Net operating revenues	$ 2,703,531
Costs and expenses:
Cost of services	2,309,213
General and administrative	67,917
Bad debt expense	43,243
Depreciation and amortization	70,668
Total costs and expenses	2,491,041
Income from operations	212,490
Other income and expense:
Equity in earnings of unconsolidated subsidiaries	12,788
Non-operating gain (loss)	29,647
Interest expense	(79,728)
Income before income taxes	175,197
Income tax expense	65,048
Net income	110,149
Less: Net income (loss) attributable to non-controlling interests	8,740
Net income attributable to Select Medical Holdings Corporation and Select Medical Corporation	$ 101,409
Basic (in dollars per share) | $ / shares	$ 0.77
Diluted (in dollars per share) | $ / shares	0.77
Dividends paid per share | $ / shares	$ 0.10
Weighted average shares outstanding:
Weighted average shares - basic | shares	127,541
Weighted average shares - diluted | shares	127,844
Select
Net operating revenues	$ 2,703,531
Costs and expenses:
Cost of services	2,309,213
General and administrative	67,917
Bad debt expense	43,243
Depreciation and amortization	70,668
Total costs and expenses	2,491,041
Income from operations	212,490
Other income and expense:
Equity in earnings of unconsolidated subsidiaries	12,788
Non-operating gain (loss)	29,647
Interest expense	(79,728)
Income before income taxes	175,197
Income tax expense	65,048
Net income	110,149
Less: Net income (loss) attributable to non-controlling interests	8,740
Net income attributable to Select Medical Holdings Corporation and Select Medical Corporation	$ 101,409

Condensed Consolidated Stateme5

Condensed Consolidated Statement of Changes in Equity and Income - 9 months ended Sep. 30, 2016 - USD ($) shares in Thousands, $ in Thousands	Comprehensive IncomeSelect	Comprehensive Income	Common StockSelect	Common Stock	Capital in Excess of ParSelect	Capital in Excess of Par	Retained Earnings (Accumulated Deficit)Select	Retained Earnings (Accumulated Deficit)	Non-controlling InterestsSelect	Non-controlling Interests	Select	Total
Balance at Dec. 31, 2015			$ 0	$ 131	$ 904,375	$ 424,506	$ (45,122)	$ 434,616	$ 49,264	$ 49,264	$ 908,517	$ 908,517
Balance (in shares) at Dec. 31, 2015			0	131,283
Increase (Decrease) in Stockholders' Equity
Net income	$ 93,037	$ 93,037					95,239	95,239	(2,202)	(2,202)	93,037	93,037
Net income - attributable to redeemable non-controlling interests	11,752	11,752
Total comprehensive income	$ 104,789	$ 104,789
Additional investment by Holdings					1,488						1,488
Dividends declared and paid to Holdings							(1,939)				(1,939)
Contribution related to restricted stock awards and stock option issuances by Holdings					12,348						12,348
Issuance and vesting of restricted stock				$ 1		12,343						12,344
Issuance and vesting of restricted stock (in shares)				1,089
Tax benefit from stock based awards					514	514					514	514
Repurchase of common shares				$ 0		(883)		(1,056)				(1,939)
Repurchase of common shares (in shares)				(155)
Stock option expense						4						4
Exercise of stock options				$ 0		1,488						1,488
Exercise of stock options (in shares)				178
Non-controlling interests acquired in business combination									2,514	2,514	2,514	2,514
Distributions to non-controlling interests									(6,939)	(6,939)	(6,939)	(6,939)
Issuance of non-controlling interests					2,377	2,377			47,801	47,801	50,178	50,178
Purchase of redeemable non-controlling interests							466	466			466	466
Other					(33)	(33)	(672)	(672)	507	507	(198)	(198)
Balance at Sep. 30, 2016			$ 0	$ 132	$ 921,069	$ 440,316	$ 47,972	$ 528,593	$ 90,945	$ 90,945	$ 1,059,986	$ 1,059,986
Balance (in shares) at Sep. 30, 2016			0	132,395

Condensed Consolidated Stateme6

Condensed Consolidated Statements of Cash Flows - USD ($) $ in Thousands	9 Months Ended
	Sep. 30, 2016	Sep. 30, 2015
Operating activities
Net income	$ 104,789	$ 110,149
Adjustments to reconcile net income to net cash provided by operating activities:
Distributions from unconsolidated subsidiaries	16,145	11,814
Depreciation and amortization	107,887	70,668
Amortization of leasehold interests	457
Provision for bad debts	51,591	43,243
Equity in earnings of unconsolidated subsidiaries	(14,466)	(12,788)
Loss on early retirement of debt	11,626
Loss on disposal of assets	282
Gain on sale of assets and businesses	(42,192)	(1,264)
Gain on sale of equity investment	(241)	(29,647)
Impairment of equity investment	5,339
Stock compensation expense	12,924	9,244
Amortization of debt discount, premium and issuance costs	11,845	6,746
Deferred income taxes	(13,088)	(6,925)
Changes in operating assets and liabilities, net of effects from acquisition of businesses:
Accounts receivable	(40,776)	(48,778)
Other current assets	12,094	(4,580)
Other assets	4,689	4,540
Accounts payable	(17,752)	3,047
Accrued expenses	52,996	32,716
Due to third party payors	11,065
Income taxes	5,033	15,246
Net cash provided by operating activities	280,247	203,431
Investing activities
Purchases of property and equipment	(118,260)	(113,992)
Proceeds from sale of assets and businesses	71,388	1,542
Investment in businesses	(3,140)	(1,703)
Proceeds from sale of equity investment	1,241	33,096
Acquisition of businesses, net of cash acquired	(414,231)	(1,049,872)
Net cash used in investing activities	(463,002)	(1,130,929)
Financing activities
Borrowings on revolving facilities	420,000	840,000
Payments on revolving facilities	(545,000)	(675,000)
Net proceeds from term loans	795,344	623,575
Payments on term loans	(434,842)	(26,884)
Borrowings of other debt	23,801	11,041
Principal payments on other debt	(15,477)	(13,167)
Dividends paid to common stockholders		(13,129)
Repurchase of common stock	(1,939)	(13,622)
Proceeds from issuance of common stock	1,488	1,604
Proceeds from issuance of non-controlling interests	11,846	217,065
Proceeds from (repayments of) bank overdrafts	(8,464)	2,353
Tax benefit from stock based awards	514	383
Purchase of non-controlling interests	(1,530)
Distributions to non-controlling interests	(9,198)	(7,440)
Net cash provided by financing activities	236,543	946,779
Net increase in cash and cash equivalents	53,788	19,281
Cash and cash equivalents at beginning of period	14,435	3,354
Cash and cash equivalents at end of period	68,223	22,635
Supplemental Cash Flow Information
Cash paid for interest	92,928	59,937
Cash paid for taxes	59,937	55,905
Select
Operating activities
Net income	104,789	110,149
Adjustments to reconcile net income to net cash provided by operating activities:
Distributions from unconsolidated subsidiaries	16,145	11,814
Depreciation and amortization	107,887	70,668
Amortization of leasehold interests	457
Provision for bad debts	51,591	43,243
Equity in earnings of unconsolidated subsidiaries	(14,466)	(12,788)
Loss on early retirement of debt	11,626
Loss on disposal of assets	282
Gain on sale of assets and businesses	(42,192)	(1,264)
Gain on sale of equity investment	(241)	(29,647)
Impairment of equity investment	5,339
Stock compensation expense	12,924	9,244
Amortization of debt discount, premium and issuance costs	11,845	6,746
Deferred income taxes	(13,088)	(6,925)
Changes in operating assets and liabilities, net of effects from acquisition of businesses:
Accounts receivable	(40,776)	(48,778)
Other current assets	12,094	(4,580)
Other assets	4,689	4,540
Accounts payable	(17,752)	3,047
Accrued expenses	52,996	32,716
Due to third party payors	11,065
Income taxes	5,033	15,246
Net cash provided by operating activities	280,247	203,431
Investing activities
Purchases of property and equipment	(118,260)	(113,992)
Proceeds from sale of assets and businesses	71,388	1,542
Investment in businesses	(3,140)	(1,703)
Proceeds from sale of equity investment	1,241	33,096
Acquisition of businesses, net of cash acquired	(414,231)	(1,049,872)
Net cash used in investing activities	(463,002)	(1,130,929)
Financing activities
Borrowings on revolving facilities	420,000	840,000
Payments on revolving facilities	(545,000)	(675,000)
Net proceeds from term loans	795,344	623,575
Payments on term loans	(434,842)	(26,884)
Borrowings of other debt	23,801	11,041
Principal payments on other debt	(15,477)	(13,167)
Dividends paid to Holdings	(1,939)	(26,751)
Equity investment by Holdings	1,488	1,604
Proceeds from issuance of non-controlling interests	11,846	217,065
Proceeds from (repayments of) bank overdrafts	(8,464)	2,353
Tax benefit from stock based awards	514	383
Purchase of non-controlling interests	(1,530)
Distributions to non-controlling interests	(9,198)	(7,440)
Net cash provided by financing activities	236,543	946,779
Net increase in cash and cash equivalents	53,788	19,281
Cash and cash equivalents at beginning of period	14,435	3,354
Cash and cash equivalents at end of period	68,223	22,635
Supplemental Cash Flow Information
Cash paid for interest	92,928	59,937
Cash paid for taxes	$ 59,937	$ 55,905

Basis of Presentation

Basis of Presentation	9 Months Ended
	Sep. 30, 2016
Basis of Presentation
Basis of Presentation	1. Basis of Presentation The unaudited condensed consolidated financial statements of Select Medical Holdings Corporation (“Holdings”) and Select Medical Corporation (“Select”) as of September 30, 2016, and for the three and nine month periods ended September 30, 2015 and 2016, have been prepared in accordance with generally accepted accounting principles (“GAAP”). In the opinion of management, such information contains all adjustments, which are normal and recurring in nature, necessary for a fair statement of the financial position, results of operations and cash flow for such periods. All significant intercompany transactions and balances have been eliminated. The results of operations for the three and nine months ended September 30, 2016 are not necessarily indicative of the results to be expected for the full fiscal year ending December 31, 2016. Holdings and Select and their subsidiaries are collectively referred to as the “Company.” The condensed consolidated financial statements of Holdings include the accounts of its wholly owned subsidiary, Select. Holdings conducts substantially all of its business through Select and its subsidiaries. Certain information and disclosures normally included in the notes to consolidated financial statements have been condensed or omitted consistent with the rules and regulations of the Securities and Exchange Commission (the “SEC”), although the Company believes the disclosure is adequate to make the information presented not misleading. The accompanying unaudited condensed consolidated financial statements should be read in conjunction with the consolidated financial statements and notes thereto for the year ended December 31, 2015 contained in the Company’s Annual Report on Form 10-K filed with the SEC on February 26, 2016.

Accounting Policies

Accounting Policies	9 Months Ended
	Sep. 30, 2016
Accounting Policies
Accounting Policies	2. Accounting Policies Use of Estimates The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, and disclosure of contingent assets and liabilities, at the date of the financial statements, and reported amounts of revenues and expenses during the reporting period. Actual results could differ materially from those estimates. Recent Accounting Pronouncements In August 2016, the Financial Accounting Standards Board (the “FASB”) issued Accounting Standards Update (“ASU”) 2016-15 , Statement of Cash Flows (Topic 230), Classification of Certain Cash Receipts and Cash Payments, which addresses the diversity in practice in how certain cash receipts and cash payments are presented and classified in the statement of cash flows. The standard will be effective for fiscal years beginning after December 15, 2017. The Company is currently evaluating the standard to determine the impact it will have on its consolidated financial statements. In March 2016, the FASB issued ASU 2016-09, Compensation-Stock Compensation , which simplifies various aspects of accounting for share-based payments to employees. The areas for simplification involve several aspects of the accounting for employee share-based payment transactions, including the income tax consequences, classification of awards as either equity or liabilities, and classification on the statement of cash flows. The standard will be effective for fiscal years beginning after December 15, 2016. The Company is currently evaluating the standard to determine the impact it will have on its consolidated financial statements. In February 2016, the FASB issued ASU 2016-02, Leases . This ASU includes a lessee accounting model that recognizes two types of leases; finance and operating. This ASU requires that a lessee recognize on the balance sheet assets and liabilities for all leases with lease terms of more than twelve months. Lessees will need to recognize almost all leases on the balance sheet as a right-of-use asset and a lease liability. For income statement purposes, the FASB retained the dual model, requiring leases to be classified as either operating or finance. The recognition, measurement, and presentation of expenses and cash flows arising from a lease by a lessee will depend on its classification as finance or operating lease. For short-term leases of twelve months or less, lessees are permitted to make an accounting election by class of underlying asset not to recognize right-of-use assets or lease liabilities. If the alternative is elected, lease expense would be recognized generally on the straight-line basis over the respective lease term. The amendments in ASU 2016-02 will take effect for public companies for fiscal years beginning after December 15, 2018, including interim periods within those fiscal years. Earlier application is permitted as of the beginning of an interim or annual reporting period. A modified retrospective approach is required for leases that exist or are entered into after the beginning of the earliest comparative period in the financial statements. The Company is currently evaluating the standard to determine the impact it will have on its consolidated financial statements. In November 2015, the FASB issued ASU No. 2015-17, Balance Sheet Classification of Deferred Taxes , which changes the presentation of deferred income taxes. The intent is to simplify the presentation of deferred income taxes through the requirement that deferred tax liabilities and assets be classified as noncurrent in a classified statement of financial position. The revised guidance is effective for annual fiscal periods beginning after December 15, 2016. Early adoption is permitted. The Company is currently evaluating the standard to determine the impact it will have on its consolidated financial statements. In May 2014, March 2016, and April 2016 the FASB issued ASU 2014-09, Revenue from Contracts with Customers , ASU 2016-08, Revenue from Contracts with Customers, Principal versus Agent Considerations , ASU 2016-10, Revenue from Contracts with Customers, Identifying Performance Obligations and Licensing , and ASU 2016-12, Revenue from Contracts with Customers, Narrow Scope Improvements and Practical Expedients , respectively, which supersede most of the current revenue recognition requirements. The core principle of the new guidance is that an entity should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. New disclosures about the nature, amount, timing and uncertainty of revenue and cash flows arising from contracts with customers are also required. The original standards were effective for fiscal years beginning after December 15, 2016; however, in July 2015, the FASB approved a one-year deferral of these standards, with a new effective date for fiscal years beginning after December 15, 2017. The standards require the selection of a modified retrospective or cumulative effect transition method for retrospective application. The Company is currently evaluating the standards to determine the impact they will have on its consolidated financial statements. Recently Adopted Accounting Pronouncements In April and August 2015, the FASB issued ASU 2015-03 and ASU 2015-15, each titled Interest- Imputation of Interest , to simplify the presentation of debt issuance costs. The standard requires debt issuance costs be presented in the balance sheet as a direct deduction from the carrying value of the debt liability. The FASB clarified that debt issuance costs related to line-of-credit arrangements can be presented as an asset and amortized over the term of the arrangement. The Company adopted the standard at the beginning of the first quarter of 2016. The balance sheet as of December 31, 2015 was retrospectively conformed to reflect the adoption of the standard and approximately $38.0 million of unamortized debt issuance costs were reclassified to be a direct reduction of debt, rather than a component of other assets.

Acquisitions

Acquisitions	9 Months Ended
	Sep. 30, 2016
Acquisitions
Acquisitions	3. Acquisitions Physiotherapy Acquisition On March 4, 2016, Select acquired 100% of the issued and outstanding equity securities of Physiotherapy Associates Holdings, Inc. (“Physiotherapy”) for $406.3 million, net of $12.3 million of cash acquired. Select financed the acquisition using a combination of cash on hand and proceeds from an incremental term loan facility under the Select credit facilities, as defined below (see Note 7 for more details). During the nine months ended September 30, 2016, $3.2 million of Physiotherapy acquisition costs were recognized in general and administrative expense. Physiotherapy is a national provider of outpatient physical rehabilitation care offering a wide range of services, including general orthopedics, spinal care and neurological rehabilitation, as well as orthotics and prosthetics services. The Physiotherapy acquisition is being accounted for under the provisions of Accounting Standards Codification (“ASC”) 805, Business Combinations. The Company has prepared a preliminary allocation of the purchase price to tangible and identifiable intangible assets acquired and liabilities assumed based on their estimated fair values. The Company is in the process of completing its assessment of fair values for identifiable tangible and intangible assets, and liabilities assumed; therefore, the values set forth below are subject to adjustment during the measurement period for such activities as estimating useful lives of long-lived assets and finite lived intangibles and completing assessment of fair values by obtaining appraisals. The amount of these potential adjustments could be significant. The Company expects to complete its purchase price allocation activities by December 31, 2016. The following table summarizes the preliminary allocation of the purchase price to the fair value of identifiable assets acquired and liabilities assumed, in accordance with the acquisition method of accounting (in thousands): Cash and cash equivalents $ Identifiable tangible assets, excluding cash and cash equivalents Identifiable intangible assets Goodwill Total assets Total liabilities Acquired non-controlling interests Net assets acquired Less: Cash and cash equivalents acquired ) Net cash paid $ Goodwill of $319.1 million has been recognized in the transaction, representing the excess of the purchase price over the value of the tangible and intangible assets acquired and liabilities assumed. The factors considered in determining the goodwill that resulted from the Physiotherapy purchase price included Physiotherapy’s future earnings potential and the value of the assembled workforce. The goodwill has been allocated to the outpatient rehabilitation segment and is not deductible for tax purposes. However, prior to its acquisition by the Company, Physiotherapy completed certain acquisitions that resulted in goodwill with an estimated value of $8.8 million that is deductible for tax purposes, which the Company will deduct through 2030. Due to the integrated nature of our operations, it is not practicable to separately identify net revenue and earnings of Physiotherapy on a stand-alone basis. Concentra Acquisition On June 1, 2015, MJ Acquisition Corporation, a joint venture that Select created with Welsh, Carson, Anderson & Stowe XII, L.P., consummated the acquisition of Concentra, Inc. (“Concentra”), the indirect operating subsidiary of Concentra Group Holdings, LLC, and its subsidiaries. Pursuant to the terms of the stock purchase agreement, dated as of March 22, 2015, by and among MJ Acquisition Corporation, Concentra and Humana Inc., MJ Acquisition Corporation acquired 100% of the issued and outstanding equity securities of Concentra from Humana, Inc. for $1,047.2 million, net of $3.8 million of cash acquired. During the year ended December 31, 2015, the Company finalized the purchase price allocation to identifiable intangible assets, fixed assets, non-controlling interests, and certain pre-acquisition contingencies. During the quarter ended June 30, 2016, the Company completed the accounting for certain deferred tax matters. The following table summarizes the allocation of the purchase price to the fair value of identifiable assets acquired and liabilities assumed, in accordance with the acquisition method of accounting (in thousands): Cash and cash equivalents $ Identifiable tangible assets, excluding cash and cash equivalents Identifiable intangible assets Goodwill Total assets Total liabilities Acquired non-controlling interests Net assets acquired Less: Cash and cash equivalents acquired ) Net cash paid $ Goodwill of $651.2 million was recognized in the transaction, representing the excess of the purchase price over the value of the tangible and intangible assets acquired and liabilities assumed. The factors considered in determining the goodwill that resulted from the Concentra purchase price included Concentra’s future earnings potential and the value of Concentra’s assembled workforce. The goodwill is allocated to the Concentra segment and is not deductible for tax purposes. However, prior to its acquisition by MJ Acquisition Corporation, Concentra completed certain acquisitions that resulted in goodwill with an estimated value of $23.9 million that is deductible for tax purposes, which the Company will deduct through 2025. For the three months ended September 30, 2016, Concentra contributed net revenue of $258.5 million and net income of approximately $0.9 million, which are reflected in the Company’s consolidated statements of operations. For the nine months ended September 30, 2016, Concentra contributed net revenue of $764.3 million and net income of approximately $7.9 million, which are reflected in the Company’s consolidated statements of operations. Pro Forma Results The following pro forma unaudited results of operations have been prepared assuming the acquisitions of Concentra and Physiotherapy occurred January 1, 2014 and 2015, respectively. These results are not necessarily indicative of results of future operations nor of the results that would have actually occurred had the acquisitions been consummated on the aforementioned dates. The Company’s results of operations for the three months ended September 30, 2016 include both Concentra and Physiotherapy for the entire period and there are no pro forma adjustments; therefore, no pro forma information is presented for the period. For the Three Months For the Nine Months 2015 2015 2016 (in thousands, except per share amounts) Net revenue $ $ $ Net income attributable to Holdings Income per common share: Basic $ $ $ Diluted $ $ $ The pro forma financial information is based on the preliminary allocation of the purchase price of the Physiotherapy acquisition, and is therefore subject to adjustment upon finalizing the purchase price allocation, as described above, during the measurement period. The net income tax impact was calculated at a statutory rate, as if Concentra and Physiotherapy had been subsidiaries of the Company as of January 1, 2014 and 2015, respectively. Pro forma results for the nine months ended September 30, 2015 were adjusted to include $3.2 million of Physiotherapy acquisition costs and exclude $4.7 million of Concentra acquisition costs. Pro forma results for the nine months ended September 30, 2016 were adjusted to exclude approximately $3.2 million of Physiotherapy acquisition costs. Other Acquisitions In addition to the acquisition of Physiotherapy, the Company completed other acquisitions consisting of hospital, clinic, and center businesses during the nine months ended September 30, 2016. The specialty hospital transactions were conducted principally through either the exchange of nonmonetary assets or issuance of equity interests. Assets transferred and equity interests issued for these acquisitions consisted of $7.6 million in cash payments, net of cash received, $17.7 million for specialty hospitals exchanged, and issuance of $38.3 million of equity interests. The specialty hospital exchange transaction resulted in a non-operating gain totaling $6.5 million due, in part, to a bargain purchase because the fair values of the identifiable assets received in the exchange transaction exceeded the fair values of the transferred hospitals. The assets received in these acquisitions consisted principally of cash, real property, and goodwill, of which $46.2 million, $0.9 million, and $4.1 million of goodwill was recognized in our specialty hospital, outpatient rehabilitation, and Concentra reporting units, respectively.

Sale of Businesses

Sale of Businesses	9 Months Ended
	Sep. 30, 2016
Sale of Businesses
Sale of Businesses	4. Sale of Businesses The Company recognized non-operating gains totaling $42.1 million for the nine months ended September 30, 2016, principally as the result of the sale of its contract therapy businesses for $65.0 million, resulting in a non-operating gain of $33.9 million. Additionally, the Company sold nine outpatient rehabilitation clinics to an entity in which the Company holds a non-controlling interest, resulting in a non-operating gain of $1.7 million.

Equity Investment Events

Equity Investment Events	9 Months Ended
	Sep. 30, 2016
Equity Investment Events
Equity Investment Events	5. Equity Investment Events During the nine months ended September 30, 2016, an entity in which the Company owned a non-controlling interest was sold, which resulted in a non-operating loss of $5.1 million.

Intangible Assets

Intangible Assets	9 Months Ended
	Sep. 30, 2016
Intangible Assets
Intangible Assets	6. Intangible Assets The net carrying value of the Company’s goodwill and identifiable intangible assets consist of the following: December 31, September 30, (in thousands) Goodwill $ $ Identifiable intangibles—Indefinite lived assets: Trademarks Certificates of need Accreditations Identifiable intangibles—Finite lived assets: Customer relationships Favorable leasehold interests Non-compete agreements — Total identifiable intangibles $ $ The Company’s customer relationships and non-compete agreement assets amortize over their estimated useful lives. Amortization expense was $4.1 million and $3.0 million for the three months ended September 30, 2016 and 2015, respectively. Amortization expense was $12.2 million and $4.4 million for the nine months ended September 30, 2016 and 2015, respectively. Estimated amortization expense of the Company’s customer relationships and non-compete agreements for each of the five succeeding years is $16.3 million. In addition, the Company has recognized unfavorable leasehold interests which are recorded as liabilities. The net carrying value of unfavorable leasehold interests was $4.0 million and $3.0 million as of September 30, 2016 and December 31, 2015, respectively. The Company’s favorable leasehold assets and unfavorable leasehold liabilities are amortized to rent expense over the remaining term of their respective leases to reflect a market rent per period based upon the market conditions present at the acquisition date. The net effect of this amortization increased rent expense by $0.2 million for the three months ended September 30, 2016 and $0.5 million for the nine months ended September 30, 2016. The Company’s accreditations and trademarks have renewal terms. The costs to renew these intangibles are expensed as incurred. At September 30, 2016, the accreditations and trademarks have a weighted average time until next renewal of 1.5 years and 3.1 years, respectively. The changes in the carrying amount of goodwill for the Company’s reportable segments for the nine months ended September 30, 2016 are as follows: Specialty Outpatient Concentra Total (in thousands) Balance as of December 31, 2015 $ $ $ $ Acquired Measurement period adjustment — ) ) Disposed ) ) — ) Balance as of September 30, 2016 $ $ $ $ See Note 3 for details of the goodwill acquired during the period.

Indebtedness

Indebtedness	9 Months Ended
	Sep. 30, 2016
Indebtedness
Indebtedness	7. Indebtedness For purposes of this indebtedness footnote, references to Select exclude Concentra, because the Concentra credit facilities are non-recourse to Holdings and Select. The components of long-term debt and notes payable are shown in the following tables: December 31, September 30, (in thousands) Select 6.375% senior notes(1) $ $ Select credit facilities: Select revolving facility Select term loans(2) Other—Select Total Select debt Less: Select current maturities Select long-term debt maturities $ $ Concentra credit facilities: Concentra revolving facility $ $ — Concentra term loans(3) Other—Concentra Total Concentra debt Less: Concentra current maturities Concentra long-term debt maturities $ $ Total current maturities $ $ Total long-term debt maturities Total debt $ $ (1) Includes unamortized premium of $1.2 million and $1.1 million at December 31, 2015 and September 30, 2016, respectively. Includes unamortized debt issuance costs of $10.4 million and $8.9 million at December 31, 2015 and September 30, 2016, respectively. (2) Includes unamortized discounts of $2.8 million and $12.9 million at December 31, 2015 and September 30, 2016, respectively. Includes unamortized debt issuance costs of $7.4 million and $14.8 million at December 31, 2015 and September 30, 2016, respectively. (3) Includes unamortized discounts of $2.9 million at both December 31, 2015 and September 30, 2016. Includes unamortized debt issuance costs of $20.2 million and $13.7 million at December 31, 2015 and September 30, 2016, respectively. Maturities of Long-Term Debt and Notes Payable Maturities of the Company’s long-term debt for the period from October 1, 2016 through December 31, 2016 and the years after 2016 are approximately as follows: Select Concentra Total (in thousands) October 1, 2016 — December 31, 2016 $ $ $ 2017 2018 2019 2020 2021 and beyond Total principal Unamortized discounts and premiums ) ) ) Unamortized debt issuance costs ) ) ) Total $ $ $ Excess Cash Flow Payment On March 2, 2016, Select made a principal prepayment of $10.2 million associated with its term loans (the “Select term loans”) in accordance with the provision in the Select credit facilities that requires mandatory prepayments of term loans as a result of annual excess cash flow as defined in the Select credit facilities. Select Credit Facilities On March 4, 2016, Select entered into an Additional Credit Extension Amendment (the “Additional Credit Extension Amendment”) to Select’s senior secured credit facility with JPMorgan Chase Bank, N.A., as administrative agent, collateral agent and lender, and the additional lenders named therein (the “Select credit facilities”). The Additional Credit Extension Amendment (i) provided for the lenders named therein to make available an aggregate of $625.0 million of Series F Tranche B Term Loans, (ii) extended the financial covenants through March 3, 2021, (iii) added a 1.00% prepayment premium for prepayments made with new term loans on or prior to March 4, 2017 if such new term loans have a lower yield than the Series F Tranche B Term Loans, and (iv) made certain other technical amendments to the Select credit facilities. The Series F Tranche B Term Loans bear interest at a rate per annum equal to the Adjusted LIBO Rate (as defined in the Select credit facilities, subject to an Adjusted LIBO Rate floor of 1.00%) plus 5.00% for Eurodollar Loans or the Alternate Base Rate (as defined in the Select credit facilities) plus 4.00% for Alternate Base Rate Loans (as defined in the Select credit facilities). Select is required to make principal payments on the Series F Tranche B Term Loans in quarterly installments on the last day of each of March, June, September and December, beginning June 30, 2016, in amounts equal to 0.25% of the aggregate principal amount of the Series F Tranche B Term Loans outstanding as of the date of the Additional Credit Extension Amendment. The balance of the Series F Tranche B Term Loans is payable on March 3, 2021. Except as specifically set forth in the Additional Credit Extension Amendment, the terms and conditions of the Series F Tranche B Term Loans are identical to the terms of the outstanding Series E Term B Loans under the Select credit facilities and the other loan documents to which Select is party. Select used the proceeds of the Series F Tranche B Term Loans to (i) refinance in full the Series D Tranche B Term Loans due December 20, 2016, (ii) consummate the acquisition of Physiotherapy, and (iii) pay fees and expenses incurred in connection with the acquisition of Physiotherapy, the refinancing, and the Additional Credit Extension Amendment. As a result of the Additional Credit Extension Amendment relating to the Series F Tranche B Term Loans, the interest rate payable on the Series E Tranche B Term Loans was increased from Adjusted LIBO plus 4.00% (subject to an Adjusted LIBO rate floor of 1.00%), or Alternative Base Rate plus 3.00%, to Adjusted LIBO plus 5.00% (subject to an Adjusted LIBO rate floor of 1.00%), or Alternative Base Rate plus 4.00%. During the nine months ended September 30, 2016, the Company recognized a loss on early retirement of debt of $0.8 million relating to the repayment of the Series D Tranche B Term Loans under the Select credit facilities. Concentra Credit Facilities On September 26, 2016, Concentra entered into Amendment No. 1 (the “Concentra Credit Agreement Amendment”) to its first lien credit agreement (the “Concentra first lien credit agreement”) dated June 1, 2015. The Concentra first lien credit agreement initially provided for $500.0 million in first lien credit facilities composed of $450.0 million, seven-year term loans (“Concentra first lien term loan”) and a $50.0 million, five-year revolving credit facility (“Concentra revolving facility”). The Concentra Credit Agreement Amendment provided an additional $200.0 million of first lien term loans due June 1, 2022, the proceeds of which were used to prepay in full Concentra’s second lien term loan due June 1, 2023; and also amended certain restrictive covenants to give Concentra greater operational flexibility. The Concentra first lien term loan continues to bear interest at a rate equal to Adjusted LIBO (as defined in the Concentra first lien credit agreement) plus 3.00% (subject to an Adjusted LIBO floor of 1.00%), or Alternate Base Rate (as defined in the Concentra first lien credit agreement) plus 2.00% (subject to an Alternate Base Rate floor of 2.00%). The Concentra first lien term loan amortizes in equal quarterly installments of $1.6 million through March 31, 2022, with the remaining unamortized aggregate principal due on the maturity date. The reacquisition price of the second lien term loans was $202.0 million. The premium plus the expensing of unamortized deferred financing costs and original issuance discount resulted in a loss on early retirement of debt of $10.9 million during the three months ended September 30, 2016.

Fair Value

Fair Value	9 Months Ended
	Sep. 30, 2016
Fair Value
Fair Value	8. Fair Value Financial instruments include cash and cash equivalents, notes payable, and long-term debt. The carrying amount of cash and cash equivalents approximates fair value because of the short-term maturity of these instruments. December 31, 2015 September 30, 2016 Face Carrying Fair Face Carrying Fair (in thousands) Select 6.375% senior notes(1) $ $ $ $ $ $ Select credit facilities(2) Concentra credit facilities(3) (1) The carrying value includes unamortized premium of $1.2 million and $1.1 million at December 31, 2015 and September 30, 2016, respectively, and unamortized debt issuance costs of $10.4 million and $8.9 million at December 31, 2015 and September 30, 2016, respectively. (2) The carrying value includes unamortized discounts of $2.8 million and $12.9 million at December 31, 2015 and September 30, 2016, respectively, and unamortized debt issuance costs of $7.4 million and $14.8 million at December 31, 2015 and September 30, 2016, respectively. (3) The carrying value includes unamortized discounts of $2.9 million at both December 31, 2015 and September 30, 2016 and unamortized debt issuance costs of $20.2 million and $13.7 million at December 31, 2015 and September 30, 2016, respectively. The fair value of the Select credit facilities and the Concentra credit facilities was based on quoted market prices for this debt in the syndicated loan market. The fair value of Select’s 6.375% senior notes debt was based on quoted market prices. The Company considers the inputs in the valuation process to be Level 2 in the fair value hierarchy. Level 2 in the fair value hierarchy is defined as inputs that are observable for the asset or liability, either directly or indirectly, which includes quoted prices for identical assets or liabilities in markets that are not active.

Segment Information

Segment Information	9 Months Ended
	Sep. 30, 2016
Segment Information
Segment Information	9. Segment Information The Company’s reportable segments consist of: (i) specialty hospitals, (ii) outpatient rehabilitation, and (iii) Concentra. Other activities include the Company’s corporate shared services and certain other non-consolidating joint ventures and minority investments in other healthcare related businesses. The accounting policies of the segments are the same as those described in the summary of significant accounting policies. The Company evaluates performance of the segments based on Adjusted EBITDA. 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. The following tables summarize selected financial data for the Company’s reportable segments. The segment results of Holdings are identical to those of Select. Three Months Ended September 30, 2015 Specialty Outpatient Concentra Other Total (in thousands) Net operating revenues $ $ $ $ $ Adjusted EBITDA ) Total assets Capital expenditures Three Months Ended September 30, 2016 Specialty Outpatient Concentra Other Total (in thousands) Net operating revenues $ $ $ $ $ Adjusted EBITDA ) Total assets Capital expenditures Nine Months Ended September 30, 2015 Specialty Outpatient Concentra(2) Other Total (in thousands) Net operating revenues $ $ $ $ $ Adjusted EBITDA ) Total assets Capital expenditures Nine Months Ended September 30, 2016 Specialty Outpatient Concentra Other Total (in thousands) Net operating revenues $ $ $ $ $ Adjusted EBITDA ) Total assets Capital expenditures A reconciliation of Adjusted EBITDA to income before income taxes is as follows: Three Months Ended September 30, 2015 Specialty Outpatient Concentra Other Total (in thousands) Adjusted EBITDA $ $ $ $ ) Depreciation and amortization ) ) ) ) Stock compensation expense — — ) ) Income (loss) from operations $ $ $ $ ) $ Non-operating gain Equity in earnings of unconsolidated subsidiaries Interest expense ) Income before income taxes $ Three Months Ended September 30, 2016 Specialty Outpatient Concentra Other Total (in thousands) Adjusted EBITDA $ $ $ $ ) Depreciation and amortization ) ) ) ) Stock compensation expense — — ) ) Income (loss) from operations $ $ $ $ ) $ Non-operating loss ) Loss on early retirement of debt ) Equity in earnings of unconsolidated subsidiaries Interest expense ) Income before income taxes $ Nine Months Ended September 30, 2015 Specialty Outpatient Concentra(2) Other Total (in thousands) Adjusted EBITDA $ $ $ $ ) Depreciation and amortization ) ) ) ) Stock compensation expense — — ) ) Concentra acquisition costs — — ) — Income (loss) from operations $ $ $ $ ) $ Non-operating gain Equity in earnings of unconsolidated subsidiaries Interest expense ) Income before income taxes $ Nine Months Ended September 30, 2016 Specialty Outpatient Concentra Other Total (in thousands) Adjusted EBITDA $ $ $ $ ) Depreciation and amortization ) ) ) ) Stock compensation expense — — ) ) Physiotherapy acquisition costs — — — ) Income (loss) from operations $ $ $ $ ) $ Non-operating gain Loss on early retirement of debt ) Equity in earnings of unconsolidated subsidiaries Interest expense ) Income before income taxes $ (1) The outpatient rehabilitation segment includes the operating results of contract therapy businesses through March 31, 2016 and Physiotherapy beginning March 4, 2016. (2) 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.

Income per Common Share

Income per Common Share	9 Months Ended
	Sep. 30, 2016
Income per Common Share
Income per Common Share	10. Income per Common Share Holdings applies the two-class method for calculating and presenting income per common share. The two-class method is an earnings allocation formula that determines earnings per share for each class of stock participation rights in undistributed earnings. The following table sets forth for the periods indicated the calculation of income per common share in Holdings’ consolidated statements of operations and the differences between basic weighted average shares outstanding and diluted weighted average shares outstanding used to compute basic and diluted income per common share, respectively: For the Three Months Ended For the Nine Months Ended 2015 2016 2015 2016 (in thousands, except per share amounts) Numerator: Net income attributable to Select Medical Holdings Corporation $ $ $ $ Less: Earnings allocated to unvested restricted stockholders Net income available to common stockholders $ $ $ $ Denominator: Weighted average shares — basic Effect of dilutive securities: Stock options Weighted average shares — diluted Basic income per common share $ $ $ $ Diluted income per common share $ $ $ $

Commitments and Contingencies

Commitments and Contingencies	9 Months Ended
	Sep. 30, 2016
Commitments and Contingencies
Commitments and Contingencies	11. Commitments and Contingencies Litigation The Company is a party to various legal actions, proceedings and claims (some of which are not insured), and regulatory and other governmental audits and investigations in the ordinary course of its business. The Company cannot predict the ultimate outcome of pending litigation, proceedings and regulatory and other governmental audits and investigations. These matters could potentially subject the Company to sanctions, damages, recoupments, fines and other penalties. The Department of Justice, Centers for Medicare & Medicaid Services (“CMS”) or other federal and state enforcement and regulatory agencies may conduct additional investigations related to the Company’s businesses in the future that may, either individually or in the aggregate, have a material adverse effect on the Company’s business, financial position, results of operations and liquidity. To address claims arising out of the Company’s operations, the Company maintains professional malpractice liability insurance and general liability insurance, subject to self-insured retention of $2.0 million per medical incident for professional liability claims and $2.0 million per occurrence for general liability claims. The Company also maintains umbrella liability insurance covering claims which, due to their nature or amount, are not covered by or not fully covered by the Company’s other insurance policies. These insurance policies also do not generally cover punitive damages and are subject to various deductibles and policy limits. Significant legal actions, as well as the cost and possible lack of available insurance, could subject the Company to substantial uninsured liabilities. In the Company’s opinion, the outcome of these actions, individually or in the aggregate, will not have a material adverse effect on its financial position, results of operations, or cash flows. Healthcare providers are subject to lawsuits under the qui tam provisions of the federal False Claims Act. Qui tam lawsuits typically remain under seal (hence, usually unknown to the defendant) for some time while the government decides whether or not to intervene on behalf of a private qui tam plaintiff (known as a relator) and take the lead in the litigation. These lawsuits can involve significant monetary damages and penalties and award bounties to private plaintiffs who successfully bring the suits. The Company is and has been a defendant in these cases in the past, and may be named as a defendant in similar cases from time to time in the future. Evansville Litigation . On October 19, 2015, the plaintiff-relators filed a Second Amended Complaint in United States of America, ex rel. Tracy Conroy, Pamela Schenk and Lisa Wilson v. Select Medical Corporation, Select Specialty Hospital—Evansville, LLC (‘‘SSH-Evansville’’), Select Employment Services, Inc., and Dr. Richard Sloan. The case is a civil action filed in the United States District Court for the Southern District of Indiana by private plaintiff-relators on behalf of the United States under the federal False Claims Act. The plaintiff-relators are the former CEO and two former case managers at SSH-Evansville, and the defendants currently include the Company, SSH-Evansville, a subsidiary of the Company serving as common paymaster for its employees, and a physician who practices at SSH-Evansville. The plaintiff-relators allege that, from 2006 until April 2012, SSH-Evansville discharged patients too early or held patients too long, improperly discharged patients to and readmitted them from short stay hospitals, up-coded diagnoses at admission, and admitted patients for whom long-term acute care was not medically necessary. They also allege that the defendants engaged in retaliation in violation of federal and state law. The Second Amended Complaint replaces a prior complaint that was filed under seal on September 28, 2012 and served on the Company on February 15, 2013, after a federal magistrate judge unsealed it on January 8, 2013. All deadlines in the case had been stayed after the seal was lifted in order to allow the government time to complete its investigation and to decide whether or not to intervene. On June 19, 2015, the U.S. Department of Justice notified the District Court of its decision not to intervene in the case, and the District Court thereafter approved a case management plan imposing certain deadlines. In December 2015, the defendants filed a Motion to Dismiss the Second Amended Complaint on multiple grounds. One basis for the Motion to Dismiss was the False Claims Act’s public disclosure bar, which disqualifies qui tam actions that are based on fraud already publicly disclosed through enumerated sources, unless the relator is an original source. The Affordable Care Act, enacted on March 23, 2010, altered the public disclosure bar language of the False Claims Act by, among other things, giving the United States the right to oppose dismissal of a case based on the public disclosure bar. In their Motion to Dismiss, the defendants contended that the public disclosure bar applies because substantially the same conduct as the plaintiff-relators have alleged had previously been publicly disclosed, including in a New York Times article and a prior qui tam case. A second basis for the defendants’ Motion to Dismiss was that the plaintiff-relators did not plead their claims with sufficient particularity, as required by the Federal Rules of Civil Procedure. Then, based on the Affordable Care Act’s changes to the public disclosure bar language of the False Claims Act, the United States filed a notice asserting a veto of the defendants’ use of the public disclosure bar for claims arising from conduct from and after March 23, 2010. The defendants filed briefs challenging the United States’ contention that the statutory changes gives it an unfettered right to veto the applicability of the public disclosure bar. On September 30, 2016, the District Court partially granted and partially denied the defendants’ Motion to Dismiss. It ruled that the plaintiff-relators alleged substantially the same conduct as had been publicly disclosed and that the plaintiff relators are not original sources, so that the public disclosure bar requires dismissal of all non-retaliation claims arising from conduct before March 23, 2010. The District Court also ruled that the statutory changes to the public disclosure bar gave the United States the power to veto its applicability to claims arising from conduct on and after March 23, 2010, and therefore did not dismiss those claims based on the public disclosure bar. However, the District Court ruled that the plaintiff-relators did not plead certain of their claims relating to interrupted stay manipulation and premature discharging of patients with the requisite particularity, and dismissed those claims. The District Court declined to dismiss the plaintiff-relators’ claims arising from conduct from and after March 23, 2010 relating to delayed discharging of patients and upcoding and the plaintiff-relators’ retaliation claims. On October 17, 2016, the defendants filed a Motion seeking certification to file an interlocutory appeal with the United States Court of Appeals for the Seventh Circuit of the District Court’s ruling that the United States’ has the power to veto the application of the public disclosure bar to the defendants’ conduct from and after March 23, 2010. The Company intends to vigorously defend this action, but at this time the Company is unable to predict the timing and outcome of this matter. Knoxville Litigation . On July 13, 2015, the federal District Court for the Eastern District of Tennessee unsealed a qui tam Complaint in Armes v. Garman, et al, No. 3:14-cv-00172-TAV-CCS, which named as defendants Select, Select Specialty Hospital—Knoxville, Inc. (‘‘SSH-Knoxville’’), Select Specialty Hospital—North Knoxville, Inc. and ten current or former employees of these facilities. The Complaint was unsealed after the United States and the State of Tennessee notified the court on July 13, 2015 that each had decided not to intervene in the case. The Complaint is a civil action that was filed under seal on April 29, 2014 by a respiratory therapist formerly employed at SSH-Knoxville. The Complaint alleges violations of the federal False Claims Act and the Tennessee Medicaid False Claims Act based on extending patient stays to increase reimbursement and to increase average length of stay; artificially prolonging the lives of patients to increase Medicare reimbursements and decrease inspections; admitting patients who do not require medically necessary care; performing unnecessary procedures and services; and delaying performance of procedures to increase billing. The Complaint was served on some of the defendants during October 2015. In November 2015, the defendants filed a Motion to Dismiss the Complaint on multiple grounds. The defendants first argued that False Claims Act’s first-to-file bar required dismissal of plaintiff-relator’s claims. Under the first-to-file bar, if a qui tam case is pending, no person may bring a related action based on the facts underlying the first action. The defendants asserted that the plaintiff-relator’s claims were based on the same underlying facts as were asserted in the Evansville litigation, discussed above. The defendants also argued that the plaintiff-relator’s claims must be dismissed under the public disclosure bar, and because the plaintiff-relator did not plead his claims with sufficient particularity. In June 2016, the District Court granted the defendants’ Motion to Dismiss and dismissed the plaintiff-relator’s lawsuit in its entirety. The District Court ruled that the first-to-file bar precludes all but one of the plaintiff-relator’s claims, and that the remaining claim must also be dismissed because the plaintiff-relator failed to plead it with sufficient particularity. In July 2016, the plaintiff-relator filed a Notice of Appeal to the United States Court of Appeals for the Sixth Circuit. Then, on October 11, 2016, the plaintiff-relator filed a Motion to Remand the case to the District Court for further proceedings, arguing that the September 30, 2016 decision in the Evansville litigation, discussed above, undermines the basis for the District Court’s dismissal. The Company intends to vigorously defend this action, but at this time the Company is unable to predict the timing and outcome of this matter. Construction Commitments At September 30, 2016, the Company had outstanding commitments under construction contracts related to new construction, improvements and renovations at the Company’s long term acute care properties, inpatient rehabilitation facilities, and Concentra centers totaling approximately $16.2 million.

Financial Information for Subsi

Financial Information for Subsidiary Guarantors and Non-Guarantor Subsidiaries under Select's 6.375% Senior Notes	9 Months Ended
	Sep. 30, 2016
Financial Information for Subsidiary Guarantors and Non-Guarantor Subsidiaries under Select's 6.375% Senior Notes
Financial Information for Subsidiary Guarantors and Non-Guarantor Subsidiaries under Select's 6.375% Senior Notes	12. Financial Information for Subsidiary Guarantors and Non-Guarantor Subsidiaries under Select’s 6.375% Senior Notes Select’s 6.375% senior notes are fully and unconditionally guaranteed, except for customary limitations, on a senior basis by all of Select’s wholly owned subsidiaries (the ‘‘Subsidiary Guarantors’’) which is defined as a subsidiary where Select or a subsidiary of Select holds all of the outstanding ownership interests. Certain of Select’s subsidiaries did not guarantee the 6.375% senior notes (the ‘‘Non-Guarantor Subsidiaries,’’ including Group Holdings and its subsidiaries, which were designated as Non-Guarantor subsidiaries by Select’s board of directors at the closing of the Concentra acquisition, the ‘‘Non-Guarantor Concentra’’). Select conducts a significant portion of its business through its subsidiaries. Presented below is condensed consolidating financial information for Select, the Subsidiary Guarantors, the Non-Guarantor Subsidiaries, and Non-Guarantor Concentra at December 31, 2015 and September 30, 2016 and for the three and nine months ended September 30, 2015 and 2016. The equity method has been used by Select with respect to investments in subsidiaries. The equity method has been used by Subsidiary Guarantors with respect to investments in Non-Guarantor Subsidiaries. Separate financial statements for Subsidiary Guarantors are not presented. Certain reclassifications have been made to prior reported amounts in order to conform to the current year guarantor structure. Select Medical Corporation Condensed Consolidating Balance Sheet September 30, 2016 (unaudited) Select (Parent Subsidiary Non-Guarantor Non-Guarantor Eliminations Consolidated (in thousands) Assets Current Assets: Cash and cash equivalents $ $ $ $ $ — $ Accounts receivable, net — )(e) Current deferred tax asset — Intercompany receivables — — )(a) — Prepaid income taxes — — — Other current assets — Total Current Assets ) Property and equipment, net — Investment in affiliates — — )(b) (c) — Goodwill — — — Other identifiable intangibles, net — — — Non-current deferred tax asset — — — )(d) — Other assets — Total Assets $ $ $ $ $ ) $ Liabilities and Equity Current Liabilities: Bank overdrafts $ $ — $ — $ — $ — $ Current portion of long-term debt and notes payable — Accounts payable — Intercompany payables — — )(a) — Accrued payroll — Accrued vacation — Accrued interest — Accrued other — Due to third party payors — — — )(e) Total Current Liabilities ) Long-term debt, net of current portion — Subordinate debt ) — — — Non-current deferred tax liability — )(d) Other non-current liabilities — Total Liabilities ) Redeemable non-controlling interests — — — Stockholder’s Equity: Common stock — — — — Capital in excess of par — — — — Retained earnings (accumulated deficit) ) )(c) Subsidiary investment — )(b) — Total Select Medical Corporation Stockholder’s Equity ) Non-controlling interest — — — Total Equity ) Total Liabilities and Equity $ $ $ $ $ ) $ (a) Elimination of intercompany. (b) Elimination of investments in consolidated subsidiaries. (c) Elimination of investments in consolidated subsidiaries’ earnings. (d) Reclass of non-current deferred tax asset to report net non-current deferred tax liability in consolidation. (e) Reclass of accounts receivable, net to report a net due to third party payor liability in consolidation. Select Medical Corporation Condensed Consolidating Statement of Operations For the Three Months Ended September 30, 2016 (unaudited) Select (Parent Subsidiary Non-Guarantor Non-Guarantor Eliminations Consolidated (in thousands) Net operating revenues $ $ $ $ $ — $ Costs and expenses: Cost of services — General and administrative — — — Bad debt expense — — Depreciation and amortization — Total costs and expenses — Income (loss) from operations ) ) — Other income and expense: Intercompany interest and royalty fees ) ) — — — Intercompany management fees ) ) — — — Loss on early retirement of debt — — — ) — ) Equity in earnings of unconsolidated subsidiaries — — — Non-operating gain (loss) ) — — — ) Interest expense ) ) ) ) — ) Income (loss) from operations before income taxes ) ) — Income tax expense (benefit) ) — Equity in earnings of subsidiaries ) — — )(a) — Net income (loss) ) ) Less: Net income (loss) attributable to non-controlling interests — — ) — ) Net income (loss) attributable to Select Medical Corporation $ $ $ ) $ $ ) $ (a) Elimination of equity in earnings of subsidiaries. Select Medical Corporation Condensed Consolidating Statement of Operations For the Nine Months Ended September 30, 2016 (unaudited) Select (Parent Subsidiary Non-Guarantor Non-Guarantor Eliminations Consolidated (in thousands) Net operating revenues $ $ $ $ $ — $ Costs and expenses: Cost of services — General and administrative — — — Bad debt expense — — Depreciation and amortization — Total costs and expenses — Income (loss) from operations ) ) — Other income and expense: Intercompany interest and royalty fees ) ) — — — Intercompany management fees ) ) — — — Loss on early retirement of debt ) — — ) — ) Equity in earnings of unconsolidated subsidiaries — — — Non-operating gain — — — Interest expense ) ) ) ) — ) Income (loss) from operations before income taxes ) — Income tax expense — Equity in earnings of subsidiaries ) — — )(a) — Net income (loss) ) ) Less: Net income (loss) attributable to non-controlling interests — — ) — Net income (loss) attributable to Select Medical Corporation $ $ $ ) $ $ ) $ (a) Elimination of equity in earnings of subsidiaries. Select Medical Corporation Condensed Consolidating Statement of Cash Flows For the Nine Months Ended September 30, 2016 (unaudited) Select (Parent Subsidiary Non-Guarantor Non-Guarantor Eliminations Consolidated (in thousands) Operating activities Net income (loss) $ $ $ ) $ $ )(a) $ Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities: Distributions from unconsolidated subsidiaries — — — Depreciation and amortization — Amortization of leasehold interests — — — Provision for bad debts — — Equity in earnings of unconsolidated subsidiaries — ) ) — — ) Loss on early retirement of debt — — — Loss (gain) on disposal of assets ) ) — Gain on sale of assets and businesses ) ) — — — ) Gain on sale of equity method investment — ) — — — ) Impairment on equity investment — — — — Stock compensation expense — — — Amortization of debt discount, premium and issuance costs — — — Deferred income taxes ) — — ) — ) Changes in operating assets and liabilities, net of effects from acquisition of businesses: Equity in earnings of subsidiaries ) — — (a) — Accounts receivable — ) ) — ) Other current assets ) ) — Other assets ) ) — Accounts payable ) ) — ) Accrued expenses ) — Due to third party payors — ) — — Income taxes — — — Net cash provided by (used in) operating activities ) ) — Investing activities Purchases of property and equipment ) ) ) ) — ) Proceeds from sale of assets and businesses — — Investment in businesses — ) — — — ) Proceeds from sale of equity investment — — — — Acquisition of businesses, net of cash acquired ) ) — ) — ) Net cash used in investing activities ) ) ) ) — ) Financing activities Borrowings on revolving facilities — — — — Payments on revolving facilities ) — — ) — ) Net proceeds from term loans — — — Payments on term loans ) — — ) — ) Borrowings of other debt — — Principal payments on other debt ) ) ) ) — ) Dividends paid to Holdings ) — — — — ) Equity investment by Holdings — — — — Intercompany ) — — — Proceeds from issuance of non-controlling interest — — — — Repayments of bank overdrafts ) — — — — ) Tax benefit from stock based awards — — — — Purchase of non-controlling interests — ) ) — — ) Distributions to non-controlling interests — — ) ) — ) Net cash provided by (used in) financing activities ) ) — Net increase (decrease) in cash and cash equivalents ) — Cash and cash equivalents at beginning of period Cash and cash equivalents at end of period $ $ $ $ $ — $ (a) Elimination of equity in earnings of consolidated subsidiaries. Select Medical Corporation Condensed Consolidating Balance Sheet December 31, 2015 Select (Parent Subsidiary Non-Guarantor Non-Guarantor Eliminations Consolidated (in thousands) Assets Current Assets: Cash and cash equivalents $ $ $ $ $ — $ Accounts receivable, net — — Current deferred tax asset — Intercompany receivables — — )(a) — Prepaid income taxes — — — Other current assets — Total Current Assets ) Property and equipment, net — Investment in affiliates — — )(b) (c) — Goodwill — — — Other identifiable intangibles, net — — — Non-current deferred tax asset — — — )(d) — Other assets — Total Assets $ $ $ $ $ ) $ Liabilities and Equity Current Liabilities: Bank overdrafts $ $ — $ — $ — $ — $ Current portion of long-term debt and notes payable — Accounts payable — Intercompany payables — — )(a) — Accrued payroll — Accrued vacation — Accrued interest — — Accrued other — Total Current Liabilities ) Long-term debt, net of current portion — Non-current deferred tax liability — )(d) Other non-current liabilities — Total Liabilities ) Redeemable non-controlling interests — — Stockholder’s Equity: Common stock — — — — Capital in excess of par — — — — Retained earnings (accumulated deficit) ) ) ) )(c) ) Subsidiary investment — )(b) — Total Select Medical Corporation Stockholder’s Equity ) Non-controlling interest — — — Total Equity ) Total Liabilities and Equity $ $ $ $ $ ) $ (a) Elimination of intercompany. (b) Elimination of investments in consolidated subsidiaries. (c) Elimination of investments in consolidated subsidiaries’ earnings. (d) Reclass of non-current deferred tax asset to report net non-current deferred tax liability in consolidation. Select Medical Corporation Condensed Consolidating Statement of Operations For the Three Months Ended September 30, 2015 (unaudited) Select (Parent Subsidiary Non-Guarantor Non-Guarantor Eliminations Consolidated (in thousands) Net operating revenues $ $ $ $ $ — $ Costs and expenses: Cost of services — General and administrative — — — Bad debt expense — — Depreciation and amortization — Total costs and expenses — Income (loss) from operations ) — Other income and expense: Intercompany interest and royalty fees ) — — — Intercompany management fees ) ) — — — Non-operating gain — — — — Equity in earnings of unconsolidated subsidiaries — — — Interest expense ) ) ) ) — ) Income (loss) from operations before income taxes ) — Income tax expense (benefit) ) ) ) — Equity in earnings of subsidiaries — — )(a) — Net income ) Less: Net income attributable to non-controlling interests — — Net income attributable to Select Medical Corporation $ $ $ $ $ ) $ (a) Elimination of equity in earnings of subsidiaries. Select Medical Corporation Condensed Consolidating Statement of Operations For the Nine Months Ended September 30, 2015 (unaudited) Select (Parent Subsidiary Non-Guarantor Non-Guarantor Eliminations Consolidated (in thousands) Net operating revenues $ $ $ $ $ — $ Costs and expenses: Cost of services — General and administrative ) — — Bad debt expense — — Depreciation and amortization — Total costs and expenses — Income (loss) from operations ) — Other income and expense: Intercompany interest and royalty fees ) — — — Intercompany management fees ) ) — — — Non-operating gain — — — — Equity in earnings of unconsolidated subsidiaries — — — Interest expense ) ) ) ) — ) Income (loss) from operations before income taxes ) — Income tax expense (benefit) ) ) ) — Equity in earnings of subsidiaries — — )(a) — Net income ) Less: Net income attributable to non-controlling interests — — Net income (loss) attributable to Select Medical Corporation $ $ $ $ ) $ ) $ (a) Elimination of equity in earnings of subsidiaries. Select Medical Corporation Condensed Consolidating Statement of Cash Flows For the Nine Months Ended September 30, 2015 (unaudited) Select (Parent Subsidiary Non-Guarantor Non-Guarantor Eliminations Consolidated (in thousands) Operating activities Net income $ $ $ $ $ )(a) $ Adjustments to reconcile net income to net cash provided by (used in) operating activities: Distributions from unconsolidated subsidiaries — — — Depreciation and amortization — Provision for bad debts — — Equity in earnings of unconsolidated subsidiaires — ) ) — — ) Gain on sale of assets and businesses — ) ) ) — ) Gain on sale of equity investment — ) — — — ) Stock compensation expense — — — Amortization of debt discount, premium and issuance costs — — — Deferred income taxes ) — — — — ) Changes in operating assets and liabilities, net of effects from acquisition of businesses: Equity in earnings of subsidiaries ) ) — — (a) — Accounts receivable — ) ) ) — ) Other current assets ) ) ) ) — ) Other assets ) — — Accounts payable ) ) ) — Accrued expenses — Income taxes — — ) — Net cash provided by (used in) operating activities ) — Investing activities Purchases of property and equipment ) ) ) ) — ) Proceeds from sale of assets — — Investment in businesses — ) ) — — ) Proceeds from sale of equity investment — — — — Acquisition of businesses, net of cash acquired — — ) ) — ) Net cash used in investing activities ) ) ) ) — ) Financing activities Borrowings on revolving facilities — — — Payments on revolving facilities ) — — ) — ) Net proceeds from term loans — — — — Payments on term loans ) — — — — ) Borrowings of other debt — — Principal payments on other debt ) ) ) ) — ) Dividends paid to Holdings ) — — — — ) Equity investment by Holdings — — — — Proceeds from issuance of non-controlling interests — — — — Proceeds from bank overdrafts — — — — Tax benefit from stock based awards — — — — Intercompany ) ) ) — — Distributions to non-controlling interests — — ) ) — ) Net cash provided by (used in) financing activities ) ) — Net increase (decrease) in cash and cash equivalents ) — Cash and cash equivalents at beginning of period — — Cash and cash equivalents at end of period $ $ $ $ $ — $ (a) Elimination of equity in earnings of consolidated subsidiaries.

Accounting Policies (Policies)

Accounting Policies (Policies)	9 Months Ended
	Sep. 30, 2016
Accounting Policies
Use of Estimates	Use of Estimates The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, and disclosure of contingent assets and liabilities, at the date of the financial statements, and reported amounts of revenues and expenses during the reporting period. Actual results could differ materially from those estimates.
Recent Accounting Pronouncements	Recent Accounting Pronouncements In August 2016, the Financial Accounting Standards Board (the “FASB”) issued Accounting Standards Update (“ASU”) 2016-15 , Statement of Cash Flows (Topic 230), Classification of Certain Cash Receipts and Cash Payments, which addresses the diversity in practice in how certain cash receipts and cash payments are presented and classified in the statement of cash flows. The standard will be effective for fiscal years beginning after December 15, 2017. The Company is currently evaluating the standard to determine the impact it will have on its consolidated financial statements. In March 2016, the FASB issued ASU 2016-09, Compensation-Stock Compensation , which simplifies various aspects of accounting for share-based payments to employees. The areas for simplification involve several aspects of the accounting for employee share-based payment transactions, including the income tax consequences, classification of awards as either equity or liabilities, and classification on the statement of cash flows. The standard will be effective for fiscal years beginning after December 15, 2016. The Company is currently evaluating the standard to determine the impact it will have on its consolidated financial statements. In February 2016, the FASB issued ASU 2016-02, Leases . This ASU includes a lessee accounting model that recognizes two types of leases; finance and operating. This ASU requires that a lessee recognize on the balance sheet assets and liabilities for all leases with lease terms of more than twelve months. Lessees will need to recognize almost all leases on the balance sheet as a right-of-use asset and a lease liability. For income statement purposes, the FASB retained the dual model, requiring leases to be classified as either operating or finance. The recognition, measurement, and presentation of expenses and cash flows arising from a lease by a lessee will depend on its classification as finance or operating lease. For short-term leases of twelve months or less, lessees are permitted to make an accounting election by class of underlying asset not to recognize right-of-use assets or lease liabilities. If the alternative is elected, lease expense would be recognized generally on the straight-line basis over the respective lease term. The amendments in ASU 2016-02 will take effect for public companies for fiscal years beginning after December 15, 2018, including interim periods within those fiscal years. Earlier application is permitted as of the beginning of an interim or annual reporting period. A modified retrospective approach is required for leases that exist or are entered into after the beginning of the earliest comparative period in the financial statements. The Company is currently evaluating the standard to determine the impact it will have on its consolidated financial statements. In November 2015, the FASB issued ASU No. 2015-17, Balance Sheet Classification of Deferred Taxes , which changes the presentation of deferred income taxes. The intent is to simplify the presentation of deferred income taxes through the requirement that deferred tax liabilities and assets be classified as noncurrent in a classified statement of financial position. The revised guidance is effective for annual fiscal periods beginning after December 15, 2016. Early adoption is permitted. The Company is currently evaluating the standard to determine the impact it will have on its consolidated financial statements. In May 2014, March 2016, and April 2016 the FASB issued ASU 2014-09, Revenue from Contracts with Customers , ASU 2016-08, Revenue from Contracts with Customers, Principal versus Agent Considerations , ASU 2016-10, Revenue from Contracts with Customers, Identifying Performance Obligations and Licensing , and ASU 2016-12, Revenue from Contracts with Customers, Narrow Scope Improvements and Practical Expedients , respectively, which supersede most of the current revenue recognition requirements. The core principle of the new guidance is that an entity should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. New disclosures about the nature, amount, timing and uncertainty of revenue and cash flows arising from contracts with customers are also required. The original standards were effective for fiscal years beginning after December 15, 2016; however, in July 2015, the FASB approved a one-year deferral of these standards, with a new effective date for fiscal years beginning after December 15, 2017. The standards require the selection of a modified retrospective or cumulative effect transition method for retrospective application. The Company is currently evaluating the standards to determine the impact they will have on its consolidated financial statements.
Recently Adopted Accounting Pronouncements	Recently Adopted Accounting Pronouncements In April and August 2015, the FASB issued ASU 2015-03 and ASU 2015-15, each titled Interest- Imputation of Interest , to simplify the presentation of debt issuance costs. The standard requires debt issuance costs be presented in the balance sheet as a direct deduction from the carrying value of the debt liability. The FASB clarified that debt issuance costs related to line-of-credit arrangements can be presented as an asset and amortized over the term of the arrangement. The Company adopted the standard at the beginning of the first quarter of 2016. The balance sheet as of December 31, 2015 was retrospectively conformed to reflect the adoption of the standard and approximately $38.0 million of unamortized debt issuance costs were reclassified to be a direct reduction of debt, rather than a component of other assets.

Acquisitions (Tables)

Acquisitions (Tables)	9 Months Ended
	Sep. 30, 2016
Acquisitions
Schedule of pro forma unaudited results of operations	For the Three Months For the Nine Months 2015 2015 2016 (in thousands, except per share amounts) Net revenue $ $ $ Net income attributable to Holdings Income per common share: Basic $ $ $ Diluted $ $ $
Physiotherapy
Acquisitions
Schedule of allocation of the purchase price to the fair value of identifiable assets acquired and liabilities assumed	The following table summarizes the preliminary allocation of the purchase price to the fair value of identifiable assets acquired and liabilities assumed, in accordance with the acquisition method of accounting (in thousands): Cash and cash equivalents $ Identifiable tangible assets, excluding cash and cash equivalents Identifiable intangible assets Goodwill Total assets Total liabilities Acquired non-controlling interests Net assets acquired Less: Cash and cash equivalents acquired ) Net cash paid $
Concentra Inc
Acquisitions
Schedule of allocation of the purchase price to the fair value of identifiable assets acquired and liabilities assumed	The following table summarizes the allocation of the purchase price to the fair value of identifiable assets acquired and liabilities assumed, in accordance with the acquisition method of accounting (in thousands): Cash and cash equivalents $ Identifiable tangible assets, excluding cash and cash equivalents Identifiable intangible assets Goodwill Total assets Total liabilities Acquired non-controlling interests Net assets acquired Less: Cash and cash equivalents acquired ) Net cash paid $

Intangible Assets (Tables)

Intangible Assets (Tables)	9 Months Ended
	Sep. 30, 2016
Intangible Assets
Schedule of net carrying value of the Company's goodwill and identifiable intangible assets	December 31, September 30, (in thousands) Goodwill $ $ Identifiable intangibles—Indefinite lived assets: Trademarks Certificates of need Accreditations Identifiable intangibles—Finite lived assets: Customer relationships Favorable leasehold interests Non-compete agreements — Total identifiable intangibles $ $
Schedule of changes in the carrying amount of goodwill for the Company's reportable segments	Specialty Outpatient Concentra Total (in thousands) Balance as of December 31, 2015 $ $ $ $ Acquired Measurement period adjustment — ) ) Disposed ) ) — ) Balance as of September 30, 2016 $ $ $ $

Indebtedness (Tables)

Indebtedness (Tables)	9 Months Ended
	Sep. 30, 2016
Indebtedness
Schedule of components of long-term debt and notes payable	December 31, September 30, (in thousands) Select 6.375% senior notes(1) $ $ Select credit facilities: Select revolving facility Select term loans(2) Other—Select Total Select debt Less: Select current maturities Select long-term debt maturities $ $ Concentra credit facilities: Concentra revolving facility $ $ — Concentra term loans(3) Other—Concentra Total Concentra debt Less: Concentra current maturities Concentra long-term debt maturities $ $ Total current maturities $ $ Total long-term debt maturities Total debt $ $ (1) Includes unamortized premium of $1.2 million and $1.1 million at December 31, 2015 and September 30, 2016, respectively. Includes unamortized debt issuance costs of $10.4 million and $8.9 million at December 31, 2015 and September 30, 2016, respectively. (2) Includes unamortized discounts of $2.8 million and $12.9 million at December 31, 2015 and September 30, 2016, respectively. Includes unamortized debt issuance costs of $7.4 million and $14.8 million at December 31, 2015 and September 30, 2016, respectively. (3) Includes unamortized discounts of $2.9 million at both December 31, 2015 and September 30, 2016. Includes unamortized debt issuance costs of $20.2 million and $13.7 million at December 31, 2015 and September 30, 2016, respectively.
Schedule of maturities of the Company's long-term debt	Select Concentra Total (in thousands) October 1, 2016 — December 31, 2016 $ $ $ 2017 2018 2019 2020 2021 and beyond Total principal Unamortized discounts and premiums ) ) ) Unamortized debt issuance costs ) ) ) Total $ $ $

Fair Value (Tables)

Fair Value (Tables)	9 Months Ended
	Sep. 30, 2016
Fair Value
Schedule of carrying amounts and estimated fair values of financial instruments	December 31, 2015 September 30, 2016 Face Carrying Fair Face Carrying Fair (in thousands) Select 6.375% senior notes(1) $ $ $ $ $ $ Select credit facilities(2) Concentra credit facilities(3) (1) The carrying value includes unamortized premium of $1.2 million and $1.1 million at December 31, 2015 and September 30, 2016, respectively, and unamortized debt issuance costs of $10.4 million and $8.9 million at December 31, 2015 and September 30, 2016, respectively. (2) The carrying value includes unamortized discounts of $2.8 million and $12.9 million at December 31, 2015 and September 30, 2016, respectively, and unamortized debt issuance costs of $7.4 million and $14.8 million at December 31, 2015 and September 30, 2016, respectively. (3) The carrying value includes unamortized discounts of $2.9 million at both December 31, 2015 and September 30, 2016 and unamortized debt issuance costs of $20.2 million and $13.7 million at December 31, 2015 and September 30, 2016, respectively.

Segment Information (Tables)

Segment Information (Tables)	9 Months Ended
	Sep. 30, 2016
Segment Information
Schedule of selected financial data for the Company's reportable segments	Three Months Ended September 30, 2015 Specialty Outpatient Concentra Other Total (in thousands) Net operating revenues $ $ $ $ $ Adjusted EBITDA ) Total assets Capital expenditures Three Months Ended September 30, 2016 Specialty Outpatient Concentra Other Total (in thousands) Net operating revenues $ $ $ $ $ Adjusted EBITDA ) Total assets Capital expenditures Nine Months Ended September 30, 2015 Specialty Outpatient Concentra(2) Other Total (in thousands) Net operating revenues $ $ $ $ $ Adjusted EBITDA ) Total assets Capital expenditures Nine Months Ended September 30, 2016 Specialty Outpatient Concentra Other Total (in thousands) Net operating revenues $ $ $ $ $ Adjusted EBITDA ) Total assets Capital expenditures
Schedule of reconciliation of Adjusted EBITDA to income before income taxes	Three Months Ended September 30, 2015 Specialty Outpatient Concentra Other Total (in thousands) Adjusted EBITDA $ $ $ $ ) Depreciation and amortization ) ) ) ) Stock compensation expense — — ) ) Income (loss) from operations $ $ $ $ ) $ Non-operating gain Equity in earnings of unconsolidated subsidiaries Interest expense ) Income before income taxes $ Three Months Ended September 30, 2016 Specialty Outpatient Concentra Other Total (in thousands) Adjusted EBITDA $ $ $ $ ) Depreciation and amortization ) ) ) ) Stock compensation expense — — ) ) Income (loss) from operations $ $ $ $ ) $ Non-operating loss ) Loss on early retirement of debt ) Equity in earnings of unconsolidated subsidiaries Interest expense ) Income before income taxes $ Nine Months Ended September 30, 2015 Specialty Outpatient Concentra(2) Other Total (in thousands) Adjusted EBITDA $ $ $ $ ) Depreciation and amortization ) ) ) ) Stock compensation expense — — ) ) Concentra acquisition costs — — ) — Income (loss) from operations $ $ $ $ ) $ Non-operating gain Equity in earnings of unconsolidated subsidiaries Interest expense ) Income before income taxes $ Nine Months Ended September 30, 2016 Specialty Outpatient Concentra Other Total (in thousands) Adjusted EBITDA $ $ $ $ ) Depreciation and amortization ) ) ) ) Stock compensation expense — — ) ) Physiotherapy acquisition costs — — — ) Income (loss) from operations $ $ $ $ ) $ Non-operating gain Loss on early retirement of debt ) Equity in earnings of unconsolidated subsidiaries Interest expense ) Income before income taxes $ (1) The outpatient rehabilitation segment includes the operating results of contract therapy businesses through March 31, 2016 and Physiotherapy beginning March 4, 2016. (2) 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.

Income per Common Share (Tables

Income per Common Share (Tables)	9 Months Ended
	Sep. 30, 2016
Income per Common Share
Schedule of computation of basic and diluted income per common share	For the Three Months Ended For the Nine Months Ended 2015 2016 2015 2016 (in thousands, except per share amounts) Numerator: Net income attributable to Select Medical Holdings Corporation $ $ $ $ Less: Earnings allocated to unvested restricted stockholders Net income available to common stockholders $ $ $ $ Denominator: Weighted average shares — basic Effect of dilutive securities: Stock options Weighted average shares — diluted Basic income per common share $ $ $ $ Diluted income per common share $ $ $ $

Financial Information for Sub26

Financial Information for Subsidiary Guarantors and Non-Guarantor Subsidiaries under Select's 6.375% Senior Notes (Tables) - Select	9 Months Ended
	Sep. 30, 2016
Schedule of Condensed Consolidating Balance Sheet	Select Medical Corporation Condensed Consolidating Balance Sheet September 30, 2016 (unaudited) Select (Parent Subsidiary Non-Guarantor Non-Guarantor Eliminations Consolidated (in thousands) Assets Current Assets: Cash and cash equivalents $ $ $ $ $ — $ Accounts receivable, net — )(e) Current deferred tax asset — Intercompany receivables — — )(a) — Prepaid income taxes — — — Other current assets — Total Current Assets ) Property and equipment, net — Investment in affiliates — — )(b) (c) — Goodwill — — — Other identifiable intangibles, net — — — Non-current deferred tax asset — — — )(d) — Other assets — Total Assets $ $ $ $ $ ) $ Liabilities and Equity Current Liabilities: Bank overdrafts $ $ — $ — $ — $ — $ Current portion of long-term debt and notes payable — Accounts payable — Intercompany payables — — )(a) — Accrued payroll — Accrued vacation — Accrued interest — Accrued other — Due to third party payors — — — )(e) Total Current Liabilities ) Long-term debt, net of current portion — Subordinate debt ) — — — Non-current deferred tax liability — )(d) Other non-current liabilities — Total Liabilities ) Redeemable non-controlling interests — — — Stockholder’s Equity: Common stock — — — — Capital in excess of par — — — — Retained earnings (accumulated deficit) ) )(c) Subsidiary investment — )(b) — Total Select Medical Corporation Stockholder’s Equity ) Non-controlling interest — — — Total Equity ) Total Liabilities and Equity $ $ $ $ $ ) $ (a) Elimination of intercompany. (b) Elimination of investments in consolidated subsidiaries. (c) Elimination of investments in consolidated subsidiaries’ earnings. (d) Reclass of non-current deferred tax asset to report net non-current deferred tax liability in consolidation. (e) Reclass of accounts receivable, net to report a net due to third party payor liability in consolidation. Select Medical Corporation Condensed Consolidating Balance Sheet December 31, 2015 Select (Parent Subsidiary Non-Guarantor Non-Guarantor Eliminations Consolidated (in thousands) Assets Current Assets: Cash and cash equivalents $ $ $ $ $ — $ Accounts receivable, net — — Current deferred tax asset — Intercompany receivables — — )(a) — Prepaid income taxes — — — Other current assets — Total Current Assets ) Property and equipment, net — Investment in affiliates — — )(b) (c) — Goodwill — — — Other identifiable intangibles, net — — — Non-current deferred tax asset — — — )(d) — Other assets — Total Assets $ $ $ $ $ ) $ Liabilities and Equity Current Liabilities: Bank overdrafts $ $ — $ — $ — $ — $ Current portion of long-term debt and notes payable — Accounts payable — Intercompany payables — — )(a) — Accrued payroll — Accrued vacation — Accrued interest — — Accrued other — Total Current Liabilities ) Long-term debt, net of current portion — Non-current deferred tax liability — )(d) Other non-current liabilities — Total Liabilities ) Redeemable non-controlling interests — — Stockholder’s Equity: Common stock — — — — Capital in excess of par — — — — Retained earnings (accumulated deficit) ) ) ) )(c) ) Subsidiary investment — )(b) — Total Select Medical Corporation Stockholder’s Equity ) Non-controlling interest — — — Total Equity ) Total Liabilities and Equity $ $ $ $ $ ) $ (a) Elimination of intercompany. (b) Elimination of investments in consolidated subsidiaries. (c) Elimination of investments in consolidated subsidiaries’ earnings. (d) Reclass of non-current deferred tax asset to report net non-current deferred tax liability in consolidation.
Schedule of Condensed Consolidating Statement of Operations	Select Medical Corporation Condensed Consolidating Statement of Operations For the Three Months Ended September 30, 2016 (unaudited) Select (Parent Subsidiary Non-Guarantor Non-Guarantor Eliminations Consolidated (in thousands) Net operating revenues $ $ $ $ $ — $ Costs and expenses: Cost of services — General and administrative — — — Bad debt expense — — Depreciation and amortization — Total costs and expenses — Income (loss) from operations ) ) — Other income and expense: Intercompany interest and royalty fees ) ) — — — Intercompany management fees ) ) — — — Loss on early retirement of debt — — — ) — ) Equity in earnings of unconsolidated subsidiaries — — — Non-operating gain (loss) ) — — — ) Interest expense ) ) ) ) — ) Income (loss) from operations before income taxes ) ) — Income tax expense (benefit) ) — Equity in earnings of subsidiaries ) — — )(a) — Net income (loss) ) ) Less: Net income (loss) attributable to non-controlling interests — — ) — ) Net income (loss) attributable to Select Medical Corporation $ $ $ ) $ $ ) $ (a) Elimination of equity in earnings of subsidiaries. Select Medical Corporation Condensed Consolidating Statement of Operations For the Nine Months Ended September 30, 2016 (unaudited) Select (Parent Subsidiary Non-Guarantor Non-Guarantor Eliminations Consolidated (in thousands) Net operating revenues $ $ $ $ $ — $ Costs and expenses: Cost of services — General and administrative — — — Bad debt expense — — Depreciation and amortization — Total costs and expenses — Income (loss) from operations ) ) — Other income and expense: Intercompany interest and royalty fees ) ) — — — Intercompany management fees ) ) — — — Loss on early retirement of debt ) — — ) — ) Equity in earnings of unconsolidated subsidiaries — — — Non-operating gain — — — Interest expense ) ) ) ) — ) Income (loss) from operations before income taxes ) — Income tax expense — Equity in earnings of subsidiaries ) — — )(a) — Net income (loss) ) ) Less: Net income (loss) attributable to non-controlling interests — — ) — Net income (loss) attributable to Select Medical Corporation $ $ $ ) $ $ ) $ (a) Elimination of equity in earnings of subsidiaries. Select Medical Corporation Condensed Consolidating Statement of Operations For the Three Months Ended September 30, 2015 (unaudited) Select (Parent Subsidiary Non-Guarantor Non-Guarantor Eliminations Consolidated (in thousands) Net operating revenues $ $ $ $ $ — $ Costs and expenses: Cost of services — General and administrative — — — Bad debt expense — — Depreciation and amortization — Total costs and expenses — Income (loss) from operations ) — Other income and expense: Intercompany interest and royalty fees ) — — — Intercompany management fees ) ) — — — Non-operating gain — — — — Equity in earnings of unconsolidated subsidiaries — — — Interest expense ) ) ) ) — ) Income (loss) from operations before income taxes ) — Income tax expense (benefit) ) ) ) — Equity in earnings of subsidiaries — — )(a) — Net income ) Less: Net income attributable to non-controlling interests — — Net income attributable to Select Medical Corporation $ $ $ $ $ ) $ (a) Elimination of equity in earnings of subsidiaries. Select Medical Corporation Condensed Consolidating Statement of Operations For the Nine Months Ended September 30, 2015 (unaudited) Select (Parent Subsidiary Non-Guarantor Non-Guarantor Eliminations Consolidated (in thousands) Net operating revenues $ $ $ $ $ — $ Costs and expenses: Cost of services — General and administrative ) — — Bad debt expense — — Depreciation and amortization — Total costs and expenses — Income (loss) from operations ) — Other income and expense: Intercompany interest and royalty fees ) — — — Intercompany management fees ) ) — — — Non-operating gain — — — — Equity in earnings of unconsolidated subsidiaries — — — Interest expense ) ) ) ) — ) Income (loss) from operations before income taxes ) — Income tax expense (benefit) ) ) ) — Equity in earnings of subsidiaries — — )(a) — Net income ) Less: Net income attributable to non-controlling interests — — Net income (loss) attributable to Select Medical Corporation $ $ $ $ ) $ ) $ (a) Elimination of equity in earnings of subsidiaries.
Schedule of Condensed Consolidating Statement of Cash Flows	Select Medical Corporation Condensed Consolidating Statement of Cash Flows For the Nine Months Ended September 30, 2016 (unaudited) Select (Parent Subsidiary Non-Guarantor Non-Guarantor Eliminations Consolidated (in thousands) Operating activities Net income (loss) $ $ $ ) $ $ )(a) $ Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities: Distributions from unconsolidated subsidiaries — — — Depreciation and amortization — Amortization of leasehold interests — — — Provision for bad debts — — Equity in earnings of unconsolidated subsidiaries — ) ) — — ) Loss on early retirement of debt — — — Loss (gain) on disposal of assets ) ) — Gain on sale of assets and businesses ) ) — — — ) Gain on sale of equity method investment — ) — — — ) Impairment on equity investment — — — — Stock compensation expense — — — Amortization of debt discount, premium and issuance costs — — — Deferred income taxes ) — — ) — ) Changes in operating assets and liabilities, net of effects from acquisition of businesses: Equity in earnings of subsidiaries ) — — (a) — Accounts receivable — ) ) — ) Other current assets ) ) — Other assets ) ) — Accounts payable ) ) — ) Accrued expenses ) — Due to third party payors — ) — — Income taxes — — — Net cash provided by (used in) operating activities ) ) — Investing activities Purchases of property and equipment ) ) ) ) — ) Proceeds from sale of assets and businesses — — Investment in businesses — ) — — — ) Proceeds from sale of equity investment — — — — Acquisition of businesses, net of cash acquired ) ) — ) — ) Net cash used in investing activities ) ) ) ) — ) Financing activities Borrowings on revolving facilities — — — — Payments on revolving facilities ) — — ) — ) Net proceeds from term loans — — — Payments on term loans ) — — ) — ) Borrowings of other debt — — Principal payments on other debt ) ) ) ) — ) Dividends paid to Holdings ) — — — — ) Equity investment by Holdings — — — — Intercompany ) — — — Proceeds from issuance of non-controlling interest — — — — Repayments of bank overdrafts ) — — — — ) Tax benefit from stock based awards — — — — Purchase of non-controlling interests — ) ) — — ) Distributions to non-controlling interests — — ) ) — ) Net cash provided by (used in) financing activities ) ) — Net increase (decrease) in cash and cash equivalents ) — Cash and cash equivalents at beginning of period Cash and cash equivalents at end of period $ $ $ $ $ — $ (a) Elimination of equity in earnings of consolidated subsidiaries. Select Medical Corporation Condensed Consolidating Statement of Cash Flows For the Nine Months Ended September 30, 2015 (unaudited) Select (Parent Subsidiary Non-Guarantor Non-Guarantor Eliminations Consolidated (in thousands) Operating activities Net income $ $ $ $ $ )(a) $ Adjustments to reconcile net income to net cash provided by (used in) operating activities: Distributions from unconsolidated subsidiaries — — — Depreciation and amortization — Provision for bad debts — — Equity in earnings of unconsolidated subsidiaires — ) ) — — ) Gain on sale of assets and businesses — ) ) ) — ) Gain on sale of equity investment — ) — — — ) Stock compensation expense — — — Amortization of debt discount, premium and issuance costs — — — Deferred income taxes ) — — — — ) Changes in operating assets and liabilities, net of effects from acquisition of businesses: Equity in earnings of subsidiaries ) ) — — (a) — Accounts receivable — ) ) ) — ) Other current assets ) ) ) ) — ) Other assets ) — — Accounts payable ) ) ) — Accrued expenses — Income taxes — — ) — Net cash provided by (used in) operating activities ) — Investing activities Purchases of property and equipment ) ) ) ) — ) Proceeds from sale of assets — — Investment in businesses — ) ) — — ) Proceeds from sale of equity investment — — — — Acquisition of businesses, net of cash acquired — — ) ) — ) Net cash used in investing activities ) ) ) ) — ) Financing activities Borrowings on revolving facilities — — — Payments on revolving facilities ) — — ) — ) Net proceeds from term loans — — — — Payments on term loans ) — — — — ) Borrowings of other debt — — Principal payments on other debt ) ) ) ) — ) Dividends paid to Holdings ) — — — — ) Equity investment by Holdings — — — — Proceeds from issuance of non-controlling interests — — — — Proceeds from bank overdrafts — — — — Tax benefit from stock based awards — — — — Intercompany ) ) ) — — Distributions to non-controlling interests — — ) ) — ) Net cash provided by (used in) financing activities ) ) — Net increase (decrease) in cash and cash equivalents ) — Cash and cash equivalents at beginning of period — — Cash and cash equivalents at end of period $ $ $ $ $ — $ (a) Elimination of equity in earnings of consolidated subsidiaries.

Accounting Policies (Details)

Accounting Policies (Details) - USD ($) $ in Thousands	Sep. 30, 2016	Dec. 31, 2015
Recently Adopted Accounting Pronouncements
Unamortized debt issuance costs	$ 37,428
Debt liability	$ 2,654,805	$ 2,385,896
Adoption Of ASU 2015-03 and ASU 2015-15 | Adjustment for recently adopted accounting pronouncements
Recently Adopted Accounting Pronouncements
Unamortized debt issuance costs		(38,000)
Debt liability		(38,000)
Select | Adoption Of ASU 2015-03 and ASU 2015-15 | Adjustment for recently adopted accounting pronouncements
Recently Adopted Accounting Pronouncements
Unamortized debt issuance costs		(38,000)
Debt liability		$ (38,000)

Acquisitions - Physiotherapy Ac

Acquisitions - Physiotherapy Acquisition (Details) - USD ($) $ in Thousands	Mar. 04, 2016	Sep. 30, 2016	Sep. 30, 2016	Sep. 30, 2015	Mar. 03, 2016	Dec. 31, 2015
Fair value of identifiable assets acquired and liabilities assumed
Goodwill		$ 2,674,623	$ 2,674,623			$ 2,314,624
Net cash paid			414,231	$ 1,049,872
Physiotherapy
Acquisitions
Voting equity interests acquired	100.00%
Acquisition costs			3,200
Fair value of identifiable assets acquired and liabilities assumed
Cash and cash equivalents	$ 12,300	12,340	12,340
Identifiable tangible assets, excluding cash and cash equivalents		92,981	92,981
Identifiable intangible assets		32,484	32,484
Goodwill		319,145	319,145
Total assets		456,950	456,950
Total liabilities		35,792	35,792
Acquired non-controlling interests		2,514	2,514
Net assets acquired		418,644	$ 418,644
Net cash paid	$ 406,300	$ 406,304
Estimated value of goodwill, deductible for tax purposes					$ 8,800

Acquisitions - Concentra Acquis

Acquisitions - Concentra Acquisition (Details) - USD ($) $ in Thousands	Jun. 01, 2015	Sep. 30, 2016	Sep. 30, 2016	Sep. 30, 2015	Dec. 31, 2015	May 31, 2015
Fair value of identifiable assets acquired and liabilities assumed
Goodwill		$ 2,674,623	$ 2,674,623		$ 2,314,624
Net cash paid			414,231	$ 1,049,872
Concentra Inc
Fair value of identifiable assets acquired and liabilities assumed
Contributed net revenue		258,500	764,300
Contributed net income		$ 900	$ 7,900
Concentra Inc | Humana | MJ Acquisition Corporation
Acquisitions
Voting equity interests acquired	100.00%
Fair value of identifiable assets acquired and liabilities assumed
Cash and cash equivalents	$ 3,800				3,772
Identifiable tangible assets, excluding cash and cash equivalents					406,926
Identifiable intangible assets					254,990
Goodwill					651,152
Total assets					1,316,840
Total liabilities					248,797
Acquired non-controlling interests					17,084
Net assets acquired					1,050,959
Net cash paid	$ 1,047,200				$ 1,047,187
Estimated value of goodwill, deductible for tax purposes						$ 23,900

Acquisitions - Proforma Results

Acquisitions - Proforma Results and Other Acquisitions (Details) - USD ($) $ / shares in Units, $ in Thousands	Mar. 04, 2016	Sep. 30, 2016	Sep. 30, 2015	Sep. 30, 2016	Sep. 30, 2015	Dec. 31, 2015
Acquisitions
Net cash paid				$ 414,231	$ 1,049,872
Goodwill		$ 2,674,623		2,674,623		$ 2,314,624
Pro Forma
Pro forma results of operations
Net revenue			$ 1,099,857	3,293,286	3,350,131
Net income attributable to Holdings			$ 26,277	$ 93,407	$ 88,502
Income per common share:
Basic (in dollars per share)			$ 0.20	$ 0.71	$ 0.67
Diluted (in dollars per share)			$ 0.20	$ 0.71	$ 0.67
Specialty Hospitals
Acquisitions
Goodwill		1,396,826		$ 1,396,826		1,357,379
Outpatient Rehabilitation
Acquisitions
Goodwill		618,207		618,207		306,595
Concentra
Acquisitions
Goodwill		659,590		659,590		$ 650,650
Physiotherapy
Acquisitions
Net cash paid	$ 406,300	406,304
Goodwill		319,145		319,145
Income per common share:
Acquisition costs included (excluded) from proforma results				3,200
Physiotherapy | Pro Forma
Income per common share:
Acquisition costs included (excluded) from proforma results				(3,200)	$ 3,200
Concentra Inc | Pro Forma
Income per common share:
Acquisition costs included (excluded) from proforma results					$ (4,700)
Other Acquisitions
Acquisitions
Net cash paid				7,600
Issuance of equity interests				38,300
Other Acquisitions | Specialty Hospitals
Acquisitions
Transfer of specialty hospitals				17,700
Non-operating gain to bargain purchase				6,500
Goodwill		46,200		46,200
Other Acquisitions | Outpatient Rehabilitation
Acquisitions
Goodwill		900		900
Other Acquisitions | Concentra
Acquisitions
Goodwill		$ 4,100		$ 4,100

Sale of Businesses (Details)

Sale of Businesses (Details) $ in Millions	9 Months Ended
	Sep. 30, 2016USD ($)item
Sale of Businesses
Gain on disposal	$ 42.1
Contract Therapy | Disposed by Sale
Sale of Businesses
Gain on disposal	33.9
Total consideration from sale of businesses	65
Outpatient Rehabilitation | Disposed by Sale
Sale of Businesses
Gain on disposal	$ 1.7
Number of Businesses Sold | item	9

Equity Investment Events (Detai

Equity Investment Events (Details) $ in Millions	9 Months Ended
	Sep. 30, 2016USD ($)
Equity Investment Events
Non-operating loss from sale of non-controlling equity investment	$ 5.1

Intangible Assets - Carrying Va

Intangible Assets - Carrying Value and Amortization (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2016	Sep. 30, 2015	Sep. 30, 2016	Sep. 30, 2015	Dec. 31, 2015
Intangible Assets, (including Goodwill)
Goodwill	$ 2,674,623		$ 2,674,623		$ 2,314,624
Total identifiable intangibles	3,012,843		3,012,843		2,633,299
Estimated amortization expense
Carrying value of unfavorable leasehold interests	4,000		4,000		3,000
Increased rent expense	200		500
Customer relationships
Intangible Assets, (including Goodwill)
Identifiable intangibles - Finite lived assets:	122,095		122,095		132,751
Favorable leasehold interests
Intangible Assets, (including Goodwill)
Identifiable intangibles - Finite lived assets:	11,227		11,227		8,248
Non-compete agreements
Intangible Assets, (including Goodwill)
Identifiable intangibles - Finite lived assets:	23,085		23,085
Customer relationship and non-compete agreements
Amortized intangible assets:
Amortization expense	4,100	$ 3,000	12,200	$ 4,400
Estimated amortization expense
2,017	16,300		16,300
2,018	16,300		16,300
2,019	16,300		16,300
2,020	16,300		16,300
2,021	16,300		16,300
Trademarks
Intangible Assets, (including Goodwill)
Identifiable intangibles - Indefinite lived assets:	166,698		$ 166,698		162,609
Weighted average time until next renewal			3 years 1 month 6 days
Certificates of need
Intangible Assets, (including Goodwill)
Identifiable intangibles - Indefinite lived assets:	13,070		$ 13,070		13,022
Accreditations
Intangible Assets, (including Goodwill)
Identifiable intangibles - Indefinite lived assets:	$ 2,045		$ 2,045		$ 2,045
Weighted average time until next renewal			1 year 6 months

Intangible Assets - Changes in

Intangible Assets - Changes in the Carrying Amount of Goodwill (Details) $ in Thousands	9 Months Ended
	Sep. 30, 2016USD ($)
Goodwill
Balance at the beginning of the period	$ 2,314,624
Acquired	408,473
Measurement period adjustment	(33,323)
Disposed	(15,151)
Balance at the end of the period	2,674,623
Specialty Hospitals
Goodwill
Balance at the beginning of the period	1,357,379
Acquired	46,205
Disposed	(6,758)
Balance at the end of the period	1,396,826
Outpatient Rehabilitation
Goodwill
Balance at the beginning of the period	306,595
Acquired	358,153
Measurement period adjustment	(38,148)
Disposed	(8,393)
Balance at the end of the period	618,207
Concentra
Goodwill
Balance at the beginning of the period	650,650
Acquired	4,115
Measurement period adjustment	4,825
Balance at the end of the period	$ 659,590

Indebtedness - Components of Lo

Indebtedness - Components of Long-term Debt and Loss on extinguishment of debt (Details) - USD ($) $ in Thousands	Mar. 04, 2016	Mar. 03, 2016	Mar. 02, 2016	Jun. 01, 2015	Sep. 30, 2016	Sep. 30, 2016	Sep. 26, 2016	Dec. 31, 2015
Long-term debt and notes payable
Total debt					$ 2,654,805	$ 2,654,805		$ 2,385,896
Less: current maturities					12,690	12,690		225,166
Long-term debt, net of current portion					2,642,115	2,642,115		2,160,730
Unamortized debt issuance costs					37,428	37,428
Loss on early retirement of debt					10,853	11,626
Concentra
Long-term debt and notes payable
Total debt					633,224	633,224		634,971
Less: current maturities					5,422	5,422		2,261
Long-term debt, net of current portion					627,802	627,802		632,710
Unamortized debt issuance costs					13,703	13,703
Concentra | Credit facility
Long-term debt and notes payable
Unamortized discounts					2,900	2,900		2,900
Unamortized debt issuance costs					13,700	13,700		20,200
Aggregate principal amount					643,870	643,870		652,750
Concentra | Revolving credit facility
Long-term debt and notes payable
Total debt								5,000
Concentra | Term loans
Long-term debt and notes payable
Total debt					627,262	627,262		624,659
Unamortized discounts					2,900	2,900		2,900
Unamortized debt issuance costs					13,700	13,700		20,200
Concentra | Other
Long-term debt and notes payable
Total debt					5,962	5,962		5,312
Select Excluding Concentra
Long-term debt and notes payable
Total debt					2,021,581	2,021,581		1,750,925
Less: current maturities					7,268	7,268		222,905
Long-term debt, net of current portion					2,014,313	2,014,313		1,528,020
Unamortized debt issuance costs					23,725	23,725
Select Excluding Concentra | Revolving credit facility
Long-term debt and notes payable
Total debt					175,000	175,000		295,000
Select Excluding Concentra | Term loans
Long-term debt and notes payable
Total debt					1,121,655	1,121,655		743,071
Unamortized discounts					12,900	12,900		2,800
Unamortized debt issuance costs					$ 14,800	$ 14,800		$ 7,400
Select Excluding Concentra | 6.375% senior notes
Long-term debt and notes payable
Interest rate of debt (as a percent)					6.375%	6.375%		6.375%
Total debt					$ 702,124	$ 702,124		$ 700,867
Unamortized premiums					1,100	1,100		1,200
Unamortized debt issuance costs					8,900	8,900		10,400
Select Excluding Concentra | Other
Long-term debt and notes payable
Total debt					22,802	22,802		11,987
Select
Long-term debt and notes payable
Less: current maturities					12,690	12,690		225,166
Long-term debt, net of current portion					2,642,115	2,642,115		2,160,730
Loss on early retirement of debt					10,853	11,626
Select | Credit facility
Long-term debt and notes payable
Unamortized discounts					12,900	12,900		2,800
Unamortized debt issuance costs					14,800	14,800		7,400
Aggregate principal amount					$ 1,324,315	$ 1,324,315		$ 1,048,277
Select | Term loans
Long-term debt and notes payable
Principal prepayments from excess cash flow			$ 10,200
Select | 6.375% senior notes
Long-term debt and notes payable
Interest rate of debt (as a percent)					6.375%	6.375%		6.375%
Unamortized premiums					$ 1,100	$ 1,100		$ 1,200
Unamortized debt issuance costs					8,900	8,900		10,400
Aggregate principal amount					710,000	710,000		$ 710,000
Select | Series F Term Loan | Additional Credit Extension Amendment
Long-term debt and notes payable
Aggregate principal amount	$ 625,000
Frequency of installment payments	quarterly
Principal payments, quarterly installments (as a percent)	0.25%
Select | Series F Term Loan | Additional Credit Extension Amendment | Adjusted LIBO rate floor
Long-term debt and notes payable
Interest rate of debt (as a percent)	1.00%
Select | Series F Term Loan | Additional Credit Extension Amendment | Adjusted LIBO
Long-term debt and notes payable
Variable rate basis	Adjusted LIBO
Interest rate margin (as a percent)	5.00%
Select | Series F Term Loan | Additional Credit Extension Amendment | Alternate base rate
Long-term debt and notes payable
Variable rate basis	Alternate Base Rate
Interest rate margin (as a percent)	4.00%
Select | Series F Term Loan | Prior to March 4, 2017 | Additional Credit Extension Amendment
Long-term debt and notes payable
Prepayment premium (as a percent)	1.00%
Select | Series E Term Loan | Adjusted LIBO rate floor
Long-term debt and notes payable
Interest rate of debt (as a percent)		1.00%
Select | Series E Term Loan | Adjusted LIBO
Long-term debt and notes payable
Variable rate basis		Adjusted LIBO
Interest rate margin (as a percent)		4.00%
Select | Series E Term Loan | Alternate base rate
Long-term debt and notes payable
Variable rate basis		Alternative Base Rate
Interest rate margin (as a percent)		3.00%
Select | Series E Term Loan | Additional Credit Extension Amendment | Adjusted LIBO rate floor
Long-term debt and notes payable
Interest rate of debt (as a percent)	1.00%
Select | Series E Term Loan | Additional Credit Extension Amendment | Adjusted LIBO
Long-term debt and notes payable
Variable rate basis	Adjusted LIBO
Interest rate margin (as a percent)	5.00%
Select | Series E Term Loan | Additional Credit Extension Amendment | Alternate base rate
Long-term debt and notes payable
Variable rate basis	Alternative Base Rate
Interest rate margin (as a percent)	4.00%
Select | Series D Term Loan
Long-term debt and notes payable
Loss on early retirement of debt						$ 800
Concentra Inc | First Lien Credit Agreement
Long-term debt and notes payable
Maximum borrowing capacity				$ 500,000
Frequency of installment payments						quarterly
Concentra Inc | First Lien Credit Agreement | Adjusted LIBO rate floor
Long-term debt and notes payable
Variable rate basis						Adjusted LIBO floor
Interest rate margin (as a percent)						1.00%
Concentra Inc | First Lien Credit Agreement | Adjusted LIBO
Long-term debt and notes payable
Variable rate basis						Adjusted LIBO
Interest rate margin (as a percent)						3.00%
Concentra Inc | First Lien Credit Agreement | Alternate base rate
Long-term debt and notes payable
Variable rate basis						Alternate Base Rate
Interest rate margin (as a percent)						2.00%
Concentra Inc | First Lien Credit Agreement | Alternate base rate floor
Long-term debt and notes payable
Variable rate basis						Alternate Base Rate floor
Interest rate margin (as a percent)						2.00%
Concentra Inc | First Lien Credit Agreement - Term Loan
Long-term debt and notes payable
Aggregate principal amount				$ 450,000
Debt instrument term (in years)				7 years
Periodic payment in equal quarterly installments						$ 1,600
Concentra Inc | First Lien Credit Agreement - Revolving Facility
Long-term debt and notes payable
Maximum borrowing capacity				$ 50,000
Debt instrument term (in years)				5 years
Concentra Inc | Second Lien Credit Agreement
Long-term debt and notes payable
Debt instrument repurchased amount					202,000	$ 202,000
Loss on early retirement of debt					$ 10,900
Concentra Inc | Concentra Credit Agreement Amendment
Long-term debt and notes payable
Aggregate principal amount							$ 200,000

Indebtedness - Maturities of Lo

Indebtedness - Maturities of Long-term Debt and Notes Payable (Details) $ in Thousands	Sep. 30, 2016USD ($)
Maturities of Long-Term Debt and Notes Payable
October 1, 2016 - December 31, 2016	$ 6,396
2,017	24,621
2,018	713,043
2,019	24,720
2,020	12,959
2021 and beyond	1,925,210
Total principal	2,706,949
Unamortized discounts and premiums	(14,716)
Unamortized debt issuance costs	(37,428)
Total	2,654,805
Concentra
Maturities of Long-Term Debt and Notes Payable
October 1, 2016 - December 31, 2016	2,160
2,017	7,890
2,018	6,617
2,019	6,636
2,020	6,656
2021 and beyond	619,873
Total principal	649,832
Unamortized discounts and premiums	(2,905)
Unamortized debt issuance costs	(13,703)
Total	633,224
Select Excluding Concentra
Maturities of Long-Term Debt and Notes Payable
October 1, 2016 - December 31, 2016	4,236
2,017	16,731
2,018	706,426
2,019	18,084
2,020	6,303
2021 and beyond	1,305,337
Total principal	2,057,117
Unamortized discounts and premiums	(11,811)
Unamortized debt issuance costs	(23,725)
Total	$ 2,021,581

Fair Value (Details)

Fair Value (Details) - USD ($) $ in Thousands	Sep. 30, 2016	Dec. 31, 2015
Fair Value
Unamortized debt issuance costs	$ 37,428
Concentra
Fair Value
Unamortized debt issuance costs	13,703
Credit facility | Select
Fair Value
Face Value	1,324,315	$ 1,048,277
Carrying Value	1,296,655	1,038,071
Fair Value	1,318,943	1,023,616
Unamortized discounts	12,900	2,800
Unamortized debt issuance costs	14,800	7,400
Credit facility | Concentra
Fair Value
Face Value	643,870	652,750
Carrying Value	627,262	629,659
Fair Value	642,260	645,392
Unamortized discounts	2,900	2,900
Unamortized debt issuance costs	$ 13,700	$ 20,200
6.375% senior notes | Select
Fair Value
Interest rate of debt (as a percent)	6.375%	6.375%
Face Value	$ 710,000	$ 710,000
Carrying Value	702,124	700,867
Fair Value	698,853	623,948
Unamortized premium	1,100	1,200
Unamortized debt issuance costs	$ 8,900	$ 10,400

Segment Information - Selected

Segment Information - Selected Financial Data (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2016	Sep. 30, 2015	Sep. 30, 2016	Sep. 30, 2015	Dec. 31, 2015
Summary of selected financial data
Net operating revenues	$ 1,053,795	$ 1,021,123	$ 3,239,756	$ 2,703,531
Adjusted EBITDA	98,077	84,511	368,149	298,348
Total assets	4,845,405	4,314,405	4,845,405	4,314,405	$ 4,388,678
Capital expenditures	38,002	45,080	118,260	113,992
Operating Segments | Specialty Hospitals
Summary of selected financial data
Net operating revenues	544,491	562,328	1,729,261	1,753,445
Adjusted EBITDA	48,264	53,656	217,759	241,575
Total assets	2,461,751	2,333,049	2,461,751	2,333,049
Capital expenditures	24,378	27,494	79,366	81,329
Operating Segments | Outpatient Rehabilitation
Summary of selected financial data
Net operating revenues	250,710	199,593	745,720	603,831
Adjusted EBITDA	31,995	23,807	99,006	74,662
Total assets	977,431	541,435	977,431	541,435
Capital expenditures	6,234	4,023	15,032	11,048
Operating Segments | Concentra
Summary of selected financial data
Net operating revenues	258,507	258,969	764,252	345,798
Adjusted EBITDA	40,888	25,584	118,080	36,783
Total assets	1,327,438	1,332,975	1,327,438	1,332,975
Capital expenditures	2,720	9,640	10,647	13,494
Other
Summary of selected financial data
Net operating revenues	87	233	523	457
Adjusted EBITDA	(23,070)	(18,536)	(66,696)	(54,672)
Total assets	78,785	106,946	78,785	106,946
Capital expenditures	$ 4,670	$ 3,923	$ 13,215	$ 8,121

Segment Information - Reconcili

Segment Information - Reconciliation of Adjusted EBITDA to Income Before Taxes (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2016	Sep. 30, 2015	Sep. 30, 2016	Sep. 30, 2015
Segment information
Adjusted EBITDA	$ 98,077	$ 84,511	$ 368,149	$ 298,348
Depreciation and amortization	(37,165)	(31,472)	(107,887)	(70,668)
Income from operations	56,162	48,214	244,102	212,490
Non-operating gain (loss)	(1,028)	29,647	37,094	29,647
Loss on early retirement of debt	(10,853)		(11,626)
Equity in earnings of unconsolidated subsidiaries	5,268	6,348	14,466	12,788
Interest expense	(44,482)	(33,052)	(127,662)	(79,728)
Income before income taxes	5,067	51,157	156,374	175,197
Physiotherapy
Segment information
Acquisition costs			3,200
Operating Segments | Specialty Hospitals
Segment information
Adjusted EBITDA	48,264	53,656	217,759	241,575
Depreciation and amortization	(14,317)	(13,782)	(42,022)	(40,409)
Income from operations	33,947	39,874	175,737	201,166
Operating Segments | Outpatient Rehabilitation
Segment information
Adjusted EBITDA	31,995	23,807	99,006	74,662
Depreciation and amortization	(6,159)	(3,247)	(16,397)	(9,564)
Income from operations	25,836	20,560	82,609	65,098
Operating Segments | Concentra
Segment information
Adjusted EBITDA	40,888	25,584	118,080	36,783
Depreciation and amortization	(15,278)	(13,316)	(45,570)	(17,510)
Stock compensation expense	(193)	(811)	(577)	(811)
Income from operations	25,417	11,457	71,933	13,747
Operating Segments | Concentra | Concentra Inc
Segment information
Acquisition costs				4,715
Other
Segment information
Adjusted EBITDA	(23,070)	(18,536)	(66,696)	(54,672)
Depreciation and amortization	(1,411)	(1,127)	(3,898)	(3,185)
Stock compensation expense	(4,557)	(4,014)	(12,347)	(9,664)
Income from operations	$ (29,038)	$ (23,677)	(86,177)	$ (67,521)
Other | Physiotherapy
Segment information
Acquisition costs			$ (3,236)

Income per Common Share (Detail

Income per Common Share (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2016	Sep. 30, 2015	Sep. 30, 2016	Sep. 30, 2015
Numerator:
Net income attributable to Select Medical Holdings Corporation	$ 6,471	$ 29,406	$ 95,239	$ 101,409
Less: Earnings allocated to unvested restricted stockholders	209	923	2,852	2,925
Net income available to common stockholders	$ 6,262	$ 28,483	$ 92,387	$ 98,484
Denominator:
Weighted average shares - basic	127,848	127,386	127,659	127,541
Effect of dilutive securities: Stock options (in shares)	141	263	145	303
Weighted average shares - diluted	127,989	127,649	127,804	127,844
Income per common share
Basic income per common share (in dollars per share)	$ 0.05	$ 0.22	$ 0.72	$ 0.77
Diluted income per common share (in dollars per share)	$ 0.05	$ 0.22	$ 0.72	$ 0.77

Commitments and Contingencies -

Commitments and Contingencies - Litigation (Details) $ in Millions	Oct. 19, 2015item	Jul. 13, 2015item	Sep. 30, 2016USD ($)
Select, SSH-Knoxville, and SSH-North Knoxville
Commitments and Contingencies
Number of current or former employees named as defendants | item		10
Professional liability claims
Commitments and Contingencies
Self insurance retention per occurrence | $			$ 2
General liability claims
Commitments and Contingencies
Self insurance retention per occurrence | $			$ 2
Amended complaint | SSH-Evansville
Commitments and Contingencies
Number of case managers identified as plaintiff | item	2

Commitments and Contingencies42

Commitments and Contingencies - Construction Commitments (Details) $ in Millions	9 Months Ended
	Sep. 30, 2016USD ($)
Construction Commitments
Construction Commitments
Construction contract commitments	$ 16.2

Financial Information for Sub43

Financial Information for Subsidiary Guarantors and Non-Guarantor Subsidiaries under Select's 6.375% Senior Notes (Details)	Sep. 30, 2016	Dec. 31, 2015
6.375% senior notes | Select
Financial information for subsidiary guarantors and non-guarantor subsidiaries under select's 6.375% senior notes
Interest rate of debt (as a percent)	6.375%	6.375%

Financial Information for Sub44

Financial Information for Subsidiary Guarantors and Non-Guarantor Subsidiaries under Select's 6.375% Senior Notes - Condensed Consolidating Balance Sheet (Details) - USD ($) $ in Thousands	Sep. 30, 2016	Dec. 31, 2015	Sep. 30, 2015	Dec. 31, 2014
Current Assets:
Cash and cash equivalents	$ 68,223	$ 14,435	$ 22,635	$ 3,354
Accounts receivable, net	592,711	603,558
Current deferred tax asset	50,647	28,688
Prepaid income taxes	11,474	16,694
Other current assets	82,680	85,779
Total Current Assets	805,735	749,154
Property and equipment, net	863,485	864,124
Goodwill	2,674,623	2,314,624
Other identifiable intangibles, net	338,220	318,675
Other assets	163,342	142,101
Total Assets	4,845,405	4,388,678	4,314,405
Current Liabilities:
Bank overdrafts	20,151	28,615
Current portion of long-term debt and notes payable	12,690	225,166
Accounts payable	114,181	137,409
Accrued payroll	138,090	120,989
Accrued vacation	78,776	73,977
Accrued interest	32,964	9,401
Accrued other	142,431	133,728
Due to third party payors	11,065
Total Current Liabilities	550,348	729,285
Long-term debt, net of current portion	2,642,115	2,160,730
Non-current deferred tax liability	210,000	218,705
Other non-current liabilities	136,527	133,220
Total Liabilities	3,538,990	3,241,940
Redeemable non-controlling interests	246,429	238,221
Stockholder's Equity:
Common stock	132	131
Capital in excess of par	440,316	424,506
Retained earnings (accumulated deficit)	528,593	434,616
Total Select Medical Holdings Corporation and Select Medical Corporation Stockholders' Equity	969,041	859,253
Non-controlling interest	90,945	49,264
Total Equity	1,059,986	908,517
Total Liabilities and Equity	4,845,405	4,388,678
Select
Current Assets:
Cash and cash equivalents	68,223	14,435	22,635	3,354
Accounts receivable, net	592,711	603,558
Current deferred tax asset	50,647	28,688
Prepaid income taxes	11,474	16,694
Other current assets	82,680	85,779
Total Current Assets	805,735	749,154
Property and equipment, net	863,485	864,124
Goodwill	2,674,623	2,314,624
Other identifiable intangibles, net	338,220	318,675
Other assets	163,342	142,101
Total Assets	4,845,405	4,388,678
Current Liabilities:
Bank overdrafts	20,151	28,615
Current portion of long-term debt and notes payable	12,690	225,166
Accounts payable	114,181	137,409
Accrued payroll	138,090	120,989
Accrued vacation	78,776	73,977
Accrued interest	32,964	9,401
Accrued other	142,431	133,728
Due to third party payors	11,065
Total Current Liabilities	550,348	729,285
Long-term debt, net of current portion	2,642,115	2,160,730
Non-current deferred tax liability	210,000	218,705
Other non-current liabilities	136,527	133,220
Total Liabilities	3,538,990	3,241,940
Redeemable non-controlling interests	246,429	238,221
Stockholder's Equity:
Common stock	0	0
Capital in excess of par	921,069	904,375
Retained earnings (accumulated deficit)	47,972	(45,122)
Total Select Medical Holdings Corporation and Select Medical Corporation Stockholders' Equity	969,041	859,253
Non-controlling interest	90,945	49,264
Total Equity	1,059,986	908,517
Total Liabilities and Equity	4,845,405	4,388,678
Select | Reportable legal entities | Select (Parent Company Only)
Current Assets:
Cash and cash equivalents	71	4,070	5,070	70
Current deferred tax asset	13,208	11,556
Prepaid income taxes	5,076	7,979
Other current assets	11,674	10,521
Total Current Assets	30,029	34,126
Property and equipment, net	45,241	38,872
Investment in affiliates	4,587,985	4,111,682
Non-current deferred tax asset	15,215	12,297
Other assets	7,723	3,842
Total Assets	4,686,193	4,200,819
Current Liabilities:
Bank overdrafts	20,151	28,615
Current portion of long-term debt and notes payable	4,836	221,769
Accounts payable	10,206	10,445
Intercompany payables	2,177,863	1,974,229
Accrued payroll	13,877	22,970
Accrued vacation	3,286	6,406
Accrued interest	31,387	6,315
Accrued other	44,347	38,883
Total Current Liabilities	2,305,953	2,309,632
Long-term debt, net of current portion	2,004,106	984,744
Subordinate debt	(641,466)
Other non-current liabilities	48,559	47,190
Total Liabilities	3,717,152	3,341,566
Stockholder's Equity:
Common stock	0	0
Capital in excess of par	921,069	904,375
Retained earnings (accumulated deficit)	47,972	(45,122)
Total Select Medical Holdings Corporation and Select Medical Corporation Stockholders' Equity	969,041	859,253
Total Equity	969,041	859,253
Total Liabilities and Equity	4,686,193	4,200,819
Select | Reportable legal entities | Subsidiary Guarantors
Current Assets:
Cash and cash equivalents	4,692	3,706	4,143	2,454
Accounts receivable, net	385,135	419,554
Current deferred tax asset	23,273	6,733
Intercompany receivables	2,177,863	1,974,229
Other current assets	34,134	34,887
Total Current Assets	2,625,097	2,439,109
Property and equipment, net	580,519	548,820
Investment in affiliates	90,815	66,015
Goodwill	2,015,033	1,663,974
Other identifiable intangibles, net	103,511	72,776
Other assets	81,266	108,524
Total Assets	5,496,241	4,899,218
Current Liabilities:
Current portion of long-term debt and notes payable	469	197
Accounts payable	72,890	101,156
Intercompany payables	175,638	127,373
Accrued payroll	75,189	66,908
Accrued vacation	46,583	50,254
Accrued interest	4	3
Accrued other	55,704	42,939
Due to third party payors	15,634
Total Current Liabilities	442,111	388,830
Long-term debt, net of current portion	599	452,417
Subordinate debt	524,292
Non-current deferred tax liability	110,989	114,394
Other non-current liabilities	51,248	41,904
Total Liabilities	1,129,239	997,545
Redeemable non-controlling interests		870
Stockholder's Equity:
Retained earnings (accumulated deficit)	1,290,294	1,189,688
Subsidiary investment	3,076,708	2,711,115
Total Select Medical Holdings Corporation and Select Medical Corporation Stockholders' Equity	4,367,002	3,900,803
Total Equity	4,367,002	3,900,803
Total Liabilities and Equity	5,496,241	4,899,218
Select | Reportable legal entities | Non-Guarantor Subsidiaries
Current Assets:
Cash and cash equivalents	4,140	625	715	$ 830
Accounts receivable, net	91,629	68,332
Current deferred tax asset	4,023	4,761
Intercompany receivables	175,638	127,373
Other current assets	11,784	5,731
Total Current Assets	287,214	206,822
Property and equipment, net	45,701	61,126
Other assets	54,703	659
Total Assets	387,618	268,607
Current Liabilities:
Current portion of long-term debt and notes payable	1,963	939
Accounts payable	17,329	16,997
Accrued payroll	11,502	3,916
Accrued vacation	15,809	9,363
Accrued interest	4
Accrued other	9,671	9,866
Total Current Liabilities	56,278	41,081
Long-term debt, net of current portion	9,607	90,860
Subordinate debt	117,174
Non-current deferred tax liability	9,852	9,239
Other non-current liabilities	4,563	4,798
Total Liabilities	197,474	145,978
Redeemable non-controlling interests	10,639	11,224
Stockholder's Equity:
Retained earnings (accumulated deficit)	(37,700)	(8,932)
Subsidiary investment	129,833	74,011
Total Select Medical Holdings Corporation and Select Medical Corporation Stockholders' Equity	92,133	65,079
Non-controlling interest	87,372	46,326
Total Equity	179,505	111,405
Total Liabilities and Equity	387,618	268,607
Select | Reportable legal entities | Non-Guarantor Concentra
Current Assets:
Cash and cash equivalents	59,320	6,034	$ 12,707
Accounts receivable, net	120,516	115,672
Current deferred tax asset	10,143	5,638
Prepaid income taxes	6,398	8,715
Other current assets	25,088	34,640
Total Current Assets	221,465	170,699
Property and equipment, net	192,024	215,306
Goodwill	659,590	650,650
Other identifiable intangibles, net	234,709	245,899
Other assets	19,650	29,076
Total Assets	1,327,438	1,311,630
Current Liabilities:
Current portion of long-term debt and notes payable	5,422	2,261
Accounts payable	13,756	8,811
Accrued payroll	37,522	27,195
Accrued vacation	13,098	7,954
Accrued interest	1,569	3,083
Accrued other	32,709	42,040
Total Current Liabilities	104,076	91,344
Long-term debt, net of current portion	627,803	632,709
Non-current deferred tax liability	104,374	107,369
Other non-current liabilities	32,157	39,328
Total Liabilities	868,410	870,750
Redeemable non-controlling interests	235,790	226,127
Stockholder's Equity:
Retained earnings (accumulated deficit)	1,730	(6,120)
Subsidiary investment	217,935	217,935
Total Select Medical Holdings Corporation and Select Medical Corporation Stockholders' Equity	219,665	211,815
Non-controlling interest	3,573	2,938
Total Equity	223,238	214,753
Total Liabilities and Equity	1,327,438	1,311,630
Select | Eliminations
Current Assets:
Accounts receivable, net	(4,569)
Intercompany receivables	(2,353,501)	(2,101,602)
Total Current Assets	(2,358,070)	(2,101,602)
Investment in affiliates	(4,678,800)	(4,177,697)
Non-current deferred tax asset	(15,215)	(12,297)
Total Assets	(7,052,085)	(6,291,596)
Current Liabilities:
Intercompany payables	(2,353,501)	(2,101,602)
Due to third party payors	(4,569)
Total Current Liabilities	(2,358,070)	(2,101,602)
Non-current deferred tax liability	(15,215)	(12,297)
Total Liabilities	(2,373,285)	(2,113,899)
Stockholder's Equity:
Retained earnings (accumulated deficit)	(1,254,324)	(1,174,636)
Subsidiary investment	(3,424,476)	(3,003,061)
Total Select Medical Holdings Corporation and Select Medical Corporation Stockholders' Equity	(4,678,800)	(4,177,697)
Total Equity	(4,678,800)	(4,177,697)
Total Liabilities and Equity	$ (7,052,085)	$ (6,291,596)

Financial Information for Sub45

Financial Information for Subsidiary Guarantors and Non-Guarantor Subsidiaries under Select's 6.375% Senior Notes - Condensed Consolidating Statement of Operations (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2016	Sep. 30, 2015	Sep. 30, 2016	Sep. 30, 2015
Condensed Consolidating Statement of Operations
Net operating revenues	$ 1,053,795	$ 1,021,123	$ 3,239,756	$ 2,703,531
Costs and expenses:
Cost of services	915,703	900,949	2,754,950	2,309,213
General and administrative	27,088	22,201	81,226	67,917
Bad debt expense	17,677	18,287	51,591	43,243
Depreciation and amortization	37,165	31,472	107,887	70,668
Total costs and expenses	997,633	972,909	2,995,654	2,491,041
Income from operations	56,162	48,214	244,102	212,490
Other income and expense:
Loss on early retirement of debt	(10,853)		(11,626)
Equity in earnings of unconsolidated subsidiaries	5,268	6,348	14,466	12,788
Non-operating gain (loss)	(1,028)	29,647	37,094	29,647
Interest expense	(44,482)	(33,052)	(127,662)	(79,728)
Income before income taxes	5,067	51,157	156,374	175,197
Income tax expense (benefit)	1,075	18,347	51,585	65,048
Net income	3,992	32,810	104,789	110,149
Less: Net income (loss) attributable to non-controlling interests	(2,479)	3,404	9,550	8,740
Net income attributable to Select Medical Holdings Corporation and Select Medical Corporation	6,471	29,406	95,239	101,409
Select
Condensed Consolidating Statement of Operations
Net operating revenues	1,053,795	1,021,123	3,239,756	2,703,531
Costs and expenses:
Cost of services	915,703	900,949	2,754,950	2,309,213
General and administrative	27,088	22,201	81,226	67,917
Bad debt expense	17,677	18,287	51,591	43,243
Depreciation and amortization	37,165	31,472	107,887	70,668
Total costs and expenses	997,633	972,909	2,995,654	2,491,041
Income from operations	56,162	48,214	244,102	212,490
Other income and expense:
Loss on early retirement of debt	(10,853)		(11,626)
Equity in earnings of unconsolidated subsidiaries	5,268	6,348	14,466	12,788
Non-operating gain (loss)	(1,028)	29,647	37,094	29,647
Interest expense	(44,482)	(33,052)	(127,662)	(79,728)
Income before income taxes	5,067	51,157	156,374	175,197
Income tax expense (benefit)	1,075	18,347	51,585	65,048
Net income	3,992	32,810	104,789	110,149
Less: Net income (loss) attributable to non-controlling interests	(2,479)	3,404	9,550	8,740
Net income attributable to Select Medical Holdings Corporation and Select Medical Corporation	6,471	29,406	95,239	101,409
Select | Reportable legal entities | Select (Parent Company Only)
Condensed Consolidating Statement of Operations
Net operating revenues	85	233	522	457
Costs and expenses:
Cost of services	626	581	1,576	1,591
General and administrative	26,967	22,169	81,198	63,387
Depreciation and amortization	1,411	1,128	3,898	3,186
Total costs and expenses	29,004	23,878	86,672	68,164
Income from operations	(28,919)	(23,645)	(86,150)	(67,707)
Other income and expense:
Intercompany interest and royalty fees	(1,613)	(355)	(4,203)	(952)
Intercompany management fees	33,693	(1,967)	127,832	37,320
Loss on early retirement of debt			(773)
Non-operating gain (loss)	(6,963)		33,932
Interest expense	(24,353)	(15,029)	(70,243)	(43,210)
Income before income taxes	(28,155)	(40,996)	395	(74,549)
Income tax expense (benefit)	5,701	(13,708)	13,840	(25,644)
Equity in earnings of subsidiaries	40,327	56,694	108,684	150,314
Net income	6,471	29,406	95,239	101,409
Net income attributable to Select Medical Holdings Corporation and Select Medical Corporation	6,471	29,406	95,239	101,409
Select | Reportable legal entities | Subsidiary Guarantors
Condensed Consolidating Statement of Operations
Net operating revenues	654,966	644,458	2,086,884	1,994,703
Costs and expenses:
Cost of services	540,053	568,272	1,689,064	1,693,968
General and administrative	121	32	28	(185)
Bad debt expense	9,671	12,002	30,634	30,737
Depreciation and amortization	17,363	14,338	49,744	42,020
Total costs and expenses	567,208	594,644	1,769,470	1,766,540
Income from operations	87,758	49,814	317,414	228,163
Other income and expense:
Intercompany interest and royalty fees	(26,871)	347	(76,817)	933
Intercompany management fees	(25,728)	7,955	(107,532)	(18,911)
Equity in earnings of unconsolidated subsidiaries	5,238	6,319	14,384	12,718
Non-operating gain (loss)	5,935	29,647	3,162	29,647
Interest expense	(8,013)	(6,091)	(21,332)	(18,177)
Income before income taxes	38,319	87,991	129,279	234,373
Income tax expense (benefit)	(7,365)	32,841	24,620	93,461
Equity in earnings of subsidiaries	(6,347)	1,226	(4,053)	9,536
Net income	39,337	56,376	100,606	150,448
Less: Net income (loss) attributable to non-controlling interests		10		41
Net income attributable to Select Medical Holdings Corporation and Select Medical Corporation	39,337	56,366	100,606	150,407
Select | Reportable legal entities | Non-Guarantor Subsidiaries
Condensed Consolidating Statement of Operations
Net operating revenues	140,237	117,463	388,098	362,573
Costs and expenses:
Cost of services	162,594	102,400	431,796	309,206
Bad debt expense	2,624	1,785	6,722	7,128
Depreciation and amortization	3,113	2,690	8,675	7,952
Total costs and expenses	168,331	106,875	447,193	324,286
Income from operations	(28,094)	10,588	(59,095)	38,287
Other income and expense:
Intercompany interest and royalty fees	28,484	8	81,020	19
Intercompany management fees	(7,965)	(5,988)	(20,300)	(18,409)
Equity in earnings of unconsolidated subsidiaries	30	29	82	70
Interest expense	(1,952)	(1,577)	(5,442)	(4,617)
Income before income taxes	(9,497)	3,060	(3,735)	15,350
Income tax expense (benefit)	1,565	(346)	2,172	(1,634)
Net income	(11,062)	3,406	(5,907)	16,984
Less: Net income (loss) attributable to non-controlling interests	(4,810)	2,121	(2,082)	7,402
Net income attributable to Select Medical Holdings Corporation and Select Medical Corporation	(6,252)	1,285	(3,825)	9,582
Select | Reportable legal entities | Non-Guarantor Concentra
Condensed Consolidating Statement of Operations
Net operating revenues	258,507	258,969	764,252	345,798
Costs and expenses:
Cost of services	212,430	229,696	632,514	304,448
General and administrative				4,715
Bad debt expense	5,382	4,500	14,235	5,378
Depreciation and amortization	15,278	13,316	45,570	17,510
Total costs and expenses	233,090	247,512	692,319	332,051
Income from operations	25,417	11,457	71,933	13,747
Other income and expense:
Loss on early retirement of debt	(10,853)		(10,853)
Interest expense	(10,164)	(10,355)	(30,645)	(13,724)
Income before income taxes	4,400	1,102	30,435	23
Income tax expense (benefit)	1,174	(440)	10,953	(1,135)
Net income	3,226	1,542	19,482	1,158
Less: Net income (loss) attributable to non-controlling interests	2,331	1,273	11,632	1,297
Net income attributable to Select Medical Holdings Corporation and Select Medical Corporation	895	269	7,850	(139)
Select | Eliminations
Other income and expense:
Equity in earnings of subsidiaries	(33,980)	(57,920)	(104,631)	(159,850)
Net income	(33,980)	(57,920)	(104,631)	(159,850)
Net income attributable to Select Medical Holdings Corporation and Select Medical Corporation	$ (33,980)	$ (57,920)	$ (104,631)	$ (159,850)

Financial Information for Sub46

Financial Information for Subsidiary Guarantors and Non-Guarantor Subsidiaries under Select's 6.375% Senior Notes - Condensed Consolidating Statement of Cash Flows (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended		12 Months Ended
	Sep. 30, 2016	Sep. 30, 2015	Sep. 30, 2016	Sep. 30, 2015	Dec. 31, 2015
Operating activities
Net income (loss)	$ 3,992	$ 32,810	$ 104,789	$ 110,149
Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities:
Distributions from unconsolidated subsidiaries			16,145	11,814
Depreciation and amortization	37,165	31,472	107,887	70,668
Amortization of leasehold interests			457
Provision for bad debts	17,677	18,287	51,591	43,243
Equity in earnings of unconsolidated subsidiaries	(5,268)	(6,348)	(14,466)	(12,788)
Loss on early retirement of debt	10,853		11,626
Loss (gain) on disposal of assets			282
Gain on sale of assets and businesses			(42,192)	(1,264)
Gain on sale of equity method investment			(241)	(29,647)
Impairment on equity investment			5,339
Stock compensation expense			12,924	9,244
Amortization of debt discount, premium and issuance costs			11,845	6,746
Deferred income taxes			(13,088)	(6,925)
Changes in operating assets and liabilities, net of effects from acquisition of businesses:
Accounts receivable			(40,776)	(48,778)
Other current assets			12,094	(4,580)
Other assets			4,689	4,540
Accounts payable			(17,752)	3,047
Accrued expenses			52,996	32,716
Income taxes			5,033	15,246
Net cash provided by operating activities			280,247	203,431
Investing activities
Purchases of property and equipment	(38,002)	(45,080)	(118,260)	(113,992)
Proceeds from sale of assets and businesses			71,388	1,542
Investment in businesses			(3,140)	(1,703)
Proceeds from sale of equity investment			1,241	33,096
Acquisition of businesses, net of cash acquired			(414,231)	(1,049,872)
Net cash used in investing activities			(463,002)	(1,130,929)
Financing activities
Borrowings on revolving facilities			420,000	840,000
Payments on revolving facilities			(545,000)	(675,000)
Net proceeds from term loans			795,344	623,575
Payments on term loans			(434,842)	(26,884)
Borrowings of other debt			23,801	11,041
Principal payments on other debt			(15,477)	(13,167)
Proceeds from issuance of non-controlling interests			11,846	217,065
Proceeds from (repayments of) bank overdrafts			(8,464)	2,353
Tax benefit from stock based awards			514	383
Purchase of non-controlling interests			(1,530)
Distributions to non-controlling interests			(9,198)	(7,440)
Net cash provided by financing activities			236,543	946,779
Net increase in cash and cash equivalents			53,788	19,281
Cash and cash equivalents at beginning of period			14,435	3,354	$ 3,354
Cash and cash equivalents at end of period	68,223	22,635	68,223	22,635	14,435
Select
Operating activities
Net income (loss)	3,992	32,810	104,789	110,149
Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities:
Distributions from unconsolidated subsidiaries			16,145	11,814
Depreciation and amortization	37,165	31,472	107,887	70,668
Amortization of leasehold interests			457
Provision for bad debts	17,677	18,287	51,591	43,243
Equity in earnings of unconsolidated subsidiaries	(5,268)	(6,348)	(14,466)	(12,788)
Loss on early retirement of debt	10,853		11,626
Loss (gain) on disposal of assets			282
Gain on sale of assets and businesses			(42,192)	(1,264)
Gain on sale of equity method investment			(241)	(29,647)
Impairment on equity investment			5,339
Stock compensation expense			12,924	9,244
Amortization of debt discount, premium and issuance costs			11,845	6,746
Deferred income taxes			(13,088)	(6,925)
Changes in operating assets and liabilities, net of effects from acquisition of businesses:
Accounts receivable			(40,776)	(48,778)
Other current assets			12,094	(4,580)
Other assets			4,689	4,540
Accounts payable			(17,752)	3,047
Accrued expenses			52,996	32,716
Due to third party payors			11,065
Income taxes			5,033	15,246
Net cash provided by operating activities			280,247	203,431
Investing activities
Purchases of property and equipment			(118,260)	(113,992)
Proceeds from sale of assets and businesses			71,388	1,542
Investment in businesses			(3,140)	(1,703)
Proceeds from sale of equity investment			1,241	33,096
Acquisition of businesses, net of cash acquired			(414,231)	(1,049,872)
Net cash used in investing activities			(463,002)	(1,130,929)
Financing activities
Borrowings on revolving facilities			420,000	840,000
Payments on revolving facilities			(545,000)	(675,000)
Net proceeds from term loans			795,344	623,575
Payments on term loans			(434,842)	(26,884)
Borrowings of other debt			23,801	11,041
Principal payments on other debt			(15,477)	(13,167)
Dividends paid to Holdings			(1,939)	(26,751)
Equity investment by Holdings			1,488	1,604
Proceeds from issuance of non-controlling interests			11,846	217,065
Proceeds from (repayments of) bank overdrafts			(8,464)	2,353
Tax benefit from stock based awards			514	383
Purchase of non-controlling interests			(1,530)
Distributions to non-controlling interests			(9,198)	(7,440)
Net cash provided by financing activities			236,543	946,779
Net increase in cash and cash equivalents			53,788	19,281
Cash and cash equivalents at beginning of period			14,435	3,354	3,354
Cash and cash equivalents at end of period	68,223	22,635	68,223	22,635	14,435
Select | Reportable legal entities | Select (Parent Company Only)
Operating activities
Net income (loss)	6,471	29,406	95,239	101,409
Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities:
Depreciation and amortization	1,411	1,128	3,898	3,186
Loss on early retirement of debt			773
Loss (gain) on disposal of assets			225
Gain on sale of assets and businesses			(33,932)
Stock compensation expense			12,347	8,433
Amortization of debt discount, premium and issuance costs			9,289	5,500
Deferred income taxes			(902)	(6,925)
Changes in operating assets and liabilities, net of effects from acquisition of businesses:
Equity in earnings of subsidiaries	(40,327)	(56,694)	(108,684)	(150,314)
Other current assets			(1,153)	(2,090)
Other assets			(3,881)	5,833
Accounts payable			(239)	(572)
Accrued expenses			19,692	12,541
Income taxes			2,716	18,410
Net cash provided by operating activities			(4,612)	(4,589)
Investing activities
Purchases of property and equipment			(13,315)	(8,119)
Proceeds from sale of assets and businesses			63,418
Acquisition of businesses, net of cash acquired			(406,305)
Net cash used in investing activities			(356,202)	(8,119)
Financing activities
Borrowings on revolving facilities			420,000	830,000
Payments on revolving facilities			(540,000)	(665,000)
Net proceeds from term loans			600,127
Payments on term loans			(228,962)	(26,884)
Borrowings of other debt			8,748	6,486
Principal payments on other debt			(10,971)	(8,800)
Dividends paid to Holdings			(1,939)	(26,751)
Equity investment by Holdings			1,488	1,604
Intercompany			116,274	(95,683)
Proceeds from (repayments of) bank overdrafts			(8,464)	2,353
Tax benefit from stock based awards			514	383
Net cash provided by financing activities			356,815	17,708
Net increase in cash and cash equivalents			(3,999)	5,000
Cash and cash equivalents at beginning of period			4,070	70	70
Cash and cash equivalents at end of period	71	5,070	71	5,070	4,070
Select | Reportable legal entities | Subsidiary Guarantors
Operating activities
Net income (loss)	39,337	56,376	100,606	150,448
Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities:
Distributions from unconsolidated subsidiaries			70	11,737
Depreciation and amortization	17,363	14,338	49,744	42,020
Amortization of leasehold interests			58
Provision for bad debts	9,671	12,002	30,634	30,737
Equity in earnings of unconsolidated subsidiaries	(5,238)	(6,319)	(14,384)	(12,718)
Loss (gain) on disposal of assets			(107)
Gain on sale of assets and businesses			(8,260)	(1,257)
Gain on sale of equity method investment			(241)	(29,647)
Impairment on equity investment			5,339
Changes in operating assets and liabilities, net of effects from acquisition of businesses:
Equity in earnings of subsidiaries	6,347	(1,226)	4,053	(9,536)
Accounts receivable			3,772	(35,725)
Other current assets			9,685	(2,006)
Other assets			53,125	(1,546)
Accounts payable			(22,374)	8,139
Accrued expenses			22,231	15,433
Due to third party payors			15,634
Net cash provided by operating activities			249,585	166,079
Investing activities
Purchases of property and equipment			(58,441)	(87,070)
Proceeds from sale of assets and businesses			7,964	1,519
Investment in businesses			(3,140)	(826)
Proceeds from sale of equity investment			1,241	33,096
Acquisition of businesses, net of cash acquired			(3,523)
Net cash used in investing activities			(55,899)	(53,281)
Financing activities
Principal payments on other debt			(528)	(1,313)
Intercompany			(190,878)	(109,796)
Purchase of non-controlling interests			(1,294)
Net cash provided by financing activities			(192,700)	(111,109)
Net increase in cash and cash equivalents			986	1,689
Cash and cash equivalents at beginning of period			3,706	2,454	2,454
Cash and cash equivalents at end of period	4,692	4,143	4,692	4,143	3,706
Select | Reportable legal entities | Non-Guarantor Subsidiaries
Operating activities
Net income (loss)	(11,062)	3,406	(5,907)	16,984
Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities:
Distributions from unconsolidated subsidiaries			16,075	77
Depreciation and amortization	3,113	2,690	8,675	7,952
Provision for bad debts	2,624	1,785	6,722	7,128
Equity in earnings of unconsolidated subsidiaries	(30)	(29)	(82)	(70)
Loss (gain) on disposal of assets			185
Gain on sale of assets and businesses				(6)
Changes in operating assets and liabilities, net of effects from acquisition of businesses:
Accounts receivable			(25,450)	(6,085)
Other current assets			(6,053)	(12)
Other assets			(54,044)	253
Accounts payable			332	(2,011)
Accrued expenses			13,606	2,713
Due to third party payors			(4,569)
Net cash provided by operating activities			(50,510)	26,923
Investing activities
Purchases of property and equipment			(35,857)	(5,309)
Proceeds from sale of assets and businesses			6	9
Investment in businesses				(877)
Acquisition of businesses, net of cash acquired				(2,686)
Net cash used in investing activities			(35,851)	(8,863)
Financing activities
Borrowings of other debt			12,237	1,547
Principal payments on other debt			(1,813)	(796)
Intercompany			74,604	(12,456)
Proceeds from issuance of non-controlling interests			11,846
Purchase of non-controlling interests			(236)
Distributions to non-controlling interests			(6,762)	(6,470)
Net cash provided by financing activities			89,876	(18,175)
Net increase in cash and cash equivalents			3,515	(115)
Cash and cash equivalents at beginning of period			625	830	830
Cash and cash equivalents at end of period	4,140	715	4,140	715	625
Select | Reportable legal entities | Non-Guarantor Concentra
Operating activities
Net income (loss)	3,226	1,542	19,482	1,158
Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities:
Depreciation and amortization	15,278	13,316	45,570	17,510
Amortization of leasehold interests			399
Provision for bad debts	5,382	4,500	14,235	5,378
Loss on early retirement of debt	10,853		10,853
Loss (gain) on disposal of assets			(21)
Gain on sale of assets and businesses				(1)
Stock compensation expense			577	811
Amortization of debt discount, premium and issuance costs			2,556	1,246
Deferred income taxes			(12,186)
Changes in operating assets and liabilities, net of effects from acquisition of businesses:
Accounts receivable			(19,098)	(6,968)
Other current assets			9,615	(472)
Other assets			9,489
Accounts payable			4,529	(2,509)
Accrued expenses			(2,533)	2,029
Income taxes			2,317	(3,164)
Net cash provided by operating activities			85,784	15,018
Investing activities
Purchases of property and equipment			(10,647)	(13,494)
Proceeds from sale of assets and businesses				14
Acquisition of businesses, net of cash acquired			(4,403)	(1,047,186)
Net cash used in investing activities			(15,050)	(1,060,666)
Financing activities
Borrowings on revolving facilities				10,000
Payments on revolving facilities			(5,000)	(10,000)
Net proceeds from term loans			195,217	623,575
Payments on term loans			(205,880)
Borrowings of other debt			2,816	3,008
Principal payments on other debt			(2,165)	(2,258)
Intercompany				217,935
Proceeds from issuance of non-controlling interests				217,065
Distributions to non-controlling interests			(2,436)	(970)
Net cash provided by financing activities			(17,448)	1,058,355
Net increase in cash and cash equivalents			53,286	12,707
Cash and cash equivalents at beginning of period			6,034
Cash and cash equivalents at end of period	59,320	12,707	59,320	12,707	$ 6,034
Select | Eliminations
Operating activities
Net income (loss)	(33,980)	(57,920)	(104,631)	(159,850)
Changes in operating assets and liabilities, net of effects from acquisition of businesses:
Equity in earnings of subsidiaries	$ 33,980	$ 57,920	$ 104,631	$ 159,850