Robert Ortenzio – Executive Chairman and Co-Founder Martin Jackson – EVP and CFO

Frank Morgan – RBC Capital Markets Chris Rigg – Susquehanna Financial Group A.J. Rice – UBS Ryan Halstead – Wells Fargo Kevin Fischbeck – Bank of America Merrill Lynch

Good morning and thank you for joining us today for Select Medical Holdings Corporation Earnings Conference Call to discuss the Third Quarter 2014 Results and the Company's Business Outlook. Speaking today are the company's Executive Chairman and Co-Founder, Robert Ortenzio; and the company's Executive Vice President and Chief Financial Officer, Martin Jackson. Management will give you an overview of the quarter’s highlights and then open the call for questions. Before we get started, we would like to remind you that this conference call may contain forward-looking statements regarding future events or the future financial performance of the company, including without limitation, statements regarding operating results, growth opportunities and other statements that refer to Select Medical plans, expectations, strategies, intentions and beliefs. These forward-looking statements are based on the information available to management of Select Medical today and the company assumes no obligation to update these statements as circumstances change. At this time, I will turn the conference call over to Mr. Robert Ortenzio.

Thank you, operator and good morning everyone. Thanks for joining us for Select Medical's third quarter earnings conference call for 2014. For our prepared remarks, I will provide some overall highlights for the company and our operating divisions and then ask Marty Jackson to provide some additional financial details and then we’ll open the call up for questions. Net revenue for the third quarter was $758.1 million compared to $722.8 million in the same quarter last year. During the quarter, we generated approximately 73% of our revenues from our specialty hospital segment, which includes both our long-term acute care and in-patient rehab hospitals and 27% from our outpatient rehab segment, which includes both our outpatient rehab clinics and our contract services. Our results for both the third quarter of this year and last year reflect the impact of both sequestration and MPPR reductions that became effective on April 1, 2013. Net revenue on our specialty hospitals for the third quarter increased 4.5% to $556.3 million compared to $532.6 million in the same quarter last year. In the third quarter we had a little over 332,000 patient days compared to 336,000 days in the same quarter last year. The majority of the decline in patient days was related to two hospitals that we had closed. Notwithstanding these closures, admissions in our specialty hospitals were 13,787 in the third quarter, consistent with the 13,778 admissions we experienced in the same quarter last year. Our net revenue per patient day increased to $1543 per day in the third quarter compared to $1471 per day in the same quarter last year. We experienced an increase in both our Medicare and non-Medicare net revenues per patient day. We generated approximately 82% of our specialty hospital revenue from our long-term acute care hospitals and 18% in our inpatient rehabilitation operations during the third quarter. Net revenue in our outpatient rehab segment for the third quarter increased 6% to $201.7 million compared to $190.2 million in the same quarter last year. The increase was the result of growth in our patient visits, expansion of our contracted management services in our clinic business and revenue growth in our contract therapy business. Net revenue in our outpatient clinic base business increased to $154.3 million compared to $147.3 million in the same quarter last year. For our owned clinics, patient visits increased 3.6% to over 1.2 million visits compared to the same quarter last year. Our net revenue per visit was $103 in both the third quarter this year and last year. Net revenue in our contract therapy business in the third quarter increased to $47.4 million compared to $42.9 million in the same quarter last year. The increase resulted from new contracts and expansion of services of existing contracts, which offset reductions from terminated contracts. Overall, adjusted EBITDA for the third quarter was $86.8 million compared to $80.4 million in the same quarter last year, with overall adjusted EBITDA margins at 11.5% for the third quarter compared to 11.1% margin for the same quarter last year. Specialty Hospital adjusted EBITDA for the third quarter was $81 million, compared to $75.3 million in the same quarter last year. Adjusted EBITDA margins for the Specialty Hospital segment was 14.6% compared to 14.1% in the same quarter last year. I also wanted to note during the quarter we incurred $3.9 million of start up losses in our newly opened LTCHs and incurred an incremental [Indiscernible] $1 million losses related to a recently closed LTCHs. Outpatient rehab adjusted EBITDA for the third quarter was $23 million compared to $21.6 million in the same quarter last year. Adjusted EBITDA margin for the outpatient segment was 11.4% in both the third quarter of this year and last year. For the outpatient clinic portion of our business, adjusted EBITDA was $20.9 million for the third quarter, compared to $19.1 million in the same quarter last year. Adjusted EBITDA margin for our outpatient clinics was 13.6% for the third quarter compared to 13% in the same quarter last year. For our contract services, adjusted EBITDA was $2.1 million for the third quarter compared to $2.5 million in the same quarter last year. The decline in contract services adjusted EBITDA was primarily related to an increase in bad debt expense, which is the result of a customer bankruptcy. Our reported earnings per fully diluted share was $0.20 in the third quarter of this year compared to $0.17 in the same quarter last year. I also want to provide a couple of updates since our second quarter earnings call in August. In conjunction with our earnings release yesterday afternoon, the company announced that our Board of Directors declared a quarterly cash dividend of $0.10 per share at its meeting on October 29. The dividend is expected to be paid on or about December 1, to stockholders of record on November 19. I would also like to provide an update on our rehab joint-venture development activities. Renovations on our 138-bed rehabilitation hospital joint-venture in Los Angeles with UCLA and Cedars-Sinai is progressing and we expect opening in late 2015. Our joint-venture with Cleveland Clinic, which was signed in the second quarter is progressing well and we expect groundbreaking on a new 60 bed rehab hospital sometime in the fourth quarter. Our joint venture with Emory University closed July 1, and we have had great success integrating our outpatient and LTCH operations with Emory’s LTCH inpatient and outpatient rehabilitation. Our joint-venture with PinnacleHealth Systems in Central Pennsylvania, which we signed in the third quarter of this year, should close during the fourth quarter after regulatory approvals and we have begun integrating their 55 bed rehab hospital and eight outpatient locations with our 15 outpatient locations. Overall we feel good about our progress and growth in this area as well as our pipeline. Also the previously mentioned our expectation to add 284 additional LTCH beds through expansion projects in new hospitals. We now expect this to be 250 new beds in total, which are in part offset by closures we mentioned. We still have one additional LTCH we plan to open this year and one in the second quarter of next year. Finally I have got to offer this update on government affairs. On October 10, CMS released final instructions on how the agency plans to enforce the LTCH moratorium, which was contained in the December criteria legislation. The CMS regional offices and their intermediaries use these instructions to process exceptions to the LTCH moratorium. The instructions generally restated what we already knew based upon earlier guidance and rulemaking. However, CMS is also using this final instruction to introduce one new interpretation of the law, which has the effect of expanding the LTCH moratorium in one respect. The new moratorium policy announced by CMS will require that new beds at new satellite facilities come from existing complement of LTCH beds, i.e. this new – this is a new interpretation with CMS now saying that we will prohibit any increase in beds even though a site might otherwise meet the criteria for a moratorium. As a result, an LTCH hospital that has established a new satellite must reduce beds elsewhere in the LTCH hospital in order to have beds at the new location. We disagree with this policy and believe it was not contemplated by the legislation. While we are questioning the policy with CMS, the implication is that some of our new LTCH projects that were planned to open as satellites may need to open as new independent LTCH exceptions to the legislative moratorium, and incur losses during their start-up period. We estimate the additional losses would be approximately $3 million in the fourth quarter with additional losses next year. I'll now turn it over to Marty Jackson to cover some additional financial highlights for the quarter before we open it up for questions.

Thanks Bob. For the third quarter our operating expenses, which include our cost of services, general and administrative expense and bad debt expense, increased 4.7% to $674.5 million compared to the same quarter last year. As a percentage of our net revenue, operating expenses for the third quarter declined 20 basis points to 89%. This compares to 89.2% in the same quarter last year. Cost of services increased 4.4% to $644.4 million for the third quarter compared to the same quarter last year. The primary increase in our cost of services was the incremental startup costs associated with the new specialty hospitals, increases in contract management services provided through our joint ventures and growth in services provided by our outpatient rehabilitation segment. As a percentage of net revenue, costs of services declined 40 basis points to 85% in the third quarter compared to 85.4% in the same quarter last year. G&A expense was $19.7 million in the third quarter, which as a percent of net revenue was 2.6% compared to $17.7 million or 2.5% of net revenue for the same quarter last year. The growth in G&A results primarily from increases in stock compensation expenses. Bad debt as a percent of net revenue was 1.4% for the third quarter. This compares to 1.3% for the same quarter last year. Total adjusted EBITDA was $86.8 million and adjusted EBITDA margins were 11.5% for the third quarter. This compares to adjusted EBITDA of $80.4 million and adjusted EBITDA margins of 11.1% in the same quarter last year. As Bob mentioned, our adjusted EBITDA in the quarter was adversely impacted by the $3.9 million of start-up losses in our new hospitals and $1 million in expense at a recently closed hospital. Depreciation and amortization expense was $17.6 million in the third quarter compared to $16.2 million in the same quarter last year. The increase in depreciation resulted primarily from new hospital development and expansion in our specialty hospital segment. We generated $2 million in equity and earnings of unconsolidated subsidiaries during the third quarter, this compares to a loss of $200,000 in the same quarter last year. These increases are mainly the result of contributions from our joint venture partnerships with Baylor and Ohio Health. Interest expense was $21.8 million in the third quarter. This compares to $21.3 million in the same quarter last year. The increase in interest expense was primarily related to an increase in average debt levels during the quarter compared to the same quarter last year. The company recorded income tax expense of $18 million in the third quarter. The effective tax rate for the quarter was 38.8% and this compares to the effective tax rate of 38.5% in the third quarter of last year. Net income attributable to Select Medical Holdings was $26.5 million in the third quarter, and fully diluted earnings per share was $0.20, compared to $23.3 million of net income and fully diluted earnings per share of $0.17 in the same quarter last year. We reduced our outstanding debt by $78.5 million in the quarter, and ended the quarter with $1.54 billion of debt outstanding $11 million of cash on the balance sheet. Our debt balances at the end of the quarter included $775.7 million in term loans, which includes the original issue discounts; $711.5 million of the 6.375% senior notes, which include issuance premiums, $40 million in revolving loans with the balance of $7.8 million consisting of other miscellaneous debt. Operating activities provided $98.1 million of cash flow in the third quarter. Day sales outstanding was 50 days at September 30, 2014 compared to 53 days at June 30, 2014 and 48 days at December 31, 2013. Investing activities used $14.6 million of cash flow for the third quarter. The use of cash was related to property improvements and equipment purchases of $22.9 million, and investments in businesses and acquisitions related payments of $3.7 million. This was partially offset by $11.9 million in distributions from unconsolidated subsidiaries during the quarter. We continue to see accelerated capital spending this year due to the LTAC development projects and rehab JV activities, which we expect to continue to the balance of this year and next year. Financing activities used $75.6 million of cash in the third quarter. Primary use of cash related to $70 million of net repayments on our revolving credit facility, $13.1 million in dividend payments and $3.7 million in net repayments of other debt. This was offset in part by the $13.6 million in proceeds from bank overdrafts in the quarter. I would also like to review the business outlook provided in our earnings press release. We provided an expected range for the fourth quarter of 2014, which tightens the range for the full year business outlook from our previous guidance. Our expectations for the fourth quarter 2014 include net operating revenue in the range of $765 million to $785 million; adjusted EBITDA in the range of $85 million to $90 million, and fully diluted income per share in the range of $0.19 to $0.22. Again this business outlook represents a tightening of the range of our previous business outlook and includes $3 million in additional start-up losses expected in the fourth quarter related to the new long-term acute care hospitals we expect to – that we expected to open as satellites that we now maybe required to open as newly independent LTCHs and must go through the LTCH qualification period. This concludes our prepared remarks, and at this time, we would like to turn it back to the operator to open up the call for questions.

(Operator instructions) Your first question will come from the line of Frank Morgan with RBC Capital Markets. You may begin. Frank Morgan - RBC Capital Markets: Good morning. Last quarter you had called out a couple of your larger LTCHs that had underperformed and you made some changes there, and I think you also called out retooling of the marketing at some of your locations and the patient criteria just wondering if you could share any details on how the underperformers have turned and how the new retooling of the marketing initiative is going? Thanks.

Thanks Frank for the question. Yes, now I think that in the business any particular quarter you can have a couple of hospitals particularly some that are your really strong performers that will have a bad quarter for a variety of reasons, and I did talk with [precedent] just called out a few of those at the last call, but I would tell you that we are pleased with the performance of the whole group and I think as I recall those that we identified as underperformers last quarter have recovered and are performing basically consistent with expectations and consistent with their prior performance. As far as the marketing, that is an ongoing – I mean that is a – that is a preparatory initiative for the new criteria, which we will begin to see at the – in future years, and that is ongoing. So we continue to tweak that, experiment with some – with some new procedures and we are generally pretty pleased with it, but it is a fine line because we continue to operate under the current reimbursement and the current criteria as we prepare for the new criteria. So we want to do those things that put us in a good position when the new criteria phases in, but also continue to run our business as it should be under current rules. Frank Morgan - RBC Capital Markets: One more and I will hop, on the – I think you called out $3 million of losses, a drag from some of the recent development activity, how long or how far into 2015 should we expect to see that? Thanks.

Yes Frank the drag will probably go through the second quarter of 2015 and that will be part of the – when we provide you with guidance for 2015 that will be incorporated into that guidance. Frank Morgan - RBC Capital Markets: Okay, thanks.

Your next question will come from the line of Chris Rigg from Susquehanna Financial Group. You may begin. Chris Rigg - Susquehanna Financial Group: Good morning. Thanks for taking my questions. Just wanted to follow up on the last questions on the start-up cost, can you – I just want to confirm the total amount of start-up expenses in 2014, you had 3.9 in Q2 and Q3 each, and then the fourth quarter you got the additional 3, so where does the entire year shakeout approximately?

Yes Chris, we anticipate that in Q4 we will have probably just a little more than $5 million of start up losses. The $3 million that we talked about was for Q4. In addition to that we still had some for the original start-up hospitals that we had in place. So that was an additional $2 million that will take the full year to almost $13 million. Chris Rigg - Susquehanna Financial Group: Okay, and I know you are not giving guidance for 2015, but normally I would expect some of that 13 to come off the subsequent year, but obviously you have got this new issue with the satellite facilities, can you give us at least directionally or even just an absolute number where you think the total start-up cost would have been because I was currently modeling around 10ish million but I think that might be a little bit light now for ’15.

It will be a little bit light. If you take a look at the way – the way you should think about it Chris is there is about a nine-month period of time where there is start-up losses, the six months period of time that we have to go through demonstration, and then in addition to that there is a couple of more months. So there is really if you take a look at that $3 million loss associated with the satellites turn to new hospitals, if you take a look at that $3 million and assume that – the $3 million is for three months. I assume it is going to carry on for another six months. Chris Rigg - Susquehanna Financial Group: Okay.

In 2015. Chris Rigg - Susquehanna Financial Group: Okay, great, and then on the revenue per patient day, it looks like that was the strongest increase in about 2ish years, is any of that in your view because of, sort of the marketing for the higher acuity patients because of the criteria or for some other factor?

Well, I think there is a host of factors, but I think you hit on one of the points. We did see an increase or a bump up in the case mix index on the Medicare side from 1.15 up to 1.17. So that is going to have an impact, a positive impact on your rate. Chris Rigg - Susquehanna Financial Group: Okay, great. I will leave it there. Thanks a lot.

And your next question will come from the line of A.J. Rice from UBS. You may begin. A.J. Rice - UBS: Hi everybody, thanks. Just one more question I guess on this CMS ruling, Bob as you said you don’t believe this was the intent, is there any recourse, is there any way to get it reconsidered or is it pretty much a done deal at this point?

Well, it’s a great question A.J. and I don’t know, we are making some enquiries at CMS. As you know the moratorium was put into place with legislation in December of last year and so for 10 months we have been kind of waiting for final guidance. In that interim period, we used the criteria that CMS used for pretty much the exact same moratorium in 2007 and 2010, and so this new wrinkle came as a bit of a surprise. I don’t think we could have anticipated it. We don’t really understand yet the thinking behind it, and we are trying to get that. So we have sent a letter to – it obviously can be changed because it is just guidance to the intermediary. It is not necessarily – it is somewhere in between kind of formal rule-making and the legislation. It is kind of guidance from CMS to the – to the intermediaries through licensure. So I think recourse is too strong of a word. I mean there is not an appeal process, but we are going to make some enquiries and I think try to understand why it was changed from what they used in 2010 – 2007 and 2010, particularly when you had a ten-month lag time and provider had to rely on something because he couldn’t just do nothing for 10 months. So, as usual this is a little bit of a frustration. So, we are going to obviously see if we can get some feedback and actually ask for a change, whether – if you ask me to handicap that, I don’t know that I really could at this point. A.J. Rice - UBS: Okay, I guess it begs the question as you think about the implementation of the LTCH patient criteria rules, or change, are there other significant open-ended issues that – I wouldn’t presume that there was a lot of those, but are there other open-ended issues that CMS has to give guidance on from your perspective as we move towards that implementation?

This is another good question. I think that the legislation is pretty straightforward, and the regs around it should be pretty straightforward as well. Obviously this – the tweak on the moratorium gave me a little bit of pause about what could be in the future as regs come out. I mean that is a thing that providers always worry about because the bureaucracy sometimes has their own views relative to what comes through legislation. So, the short answer to your question is I don’t think so. The criteria is pretty straightforward. It talks about – as you know, it talks about pulmonary in ICU, there is obviously some implementation things that have to be – that have to be – there has to be some guidance on. But I’m certainly – I hope that there is not, but we will be preparing and trying to have dialogue as we lead into the phasing of the new criteria to make sure that there aren’t any surprises, but I will add that the legislation was very detailed. So anything that is specifically in the legislation cannot be changed through the regulatory rulemaking process, but is there some areas, some grey areas, perhaps. But we’ll be working on that in trying to stay close with CMS. A.J. Rice - UBS: Okay. Another solid showing on the outpatient area in volumes, is that sort of the new norm or do you sort of feel like the market is settling out with that sort of mid single digit volume number there, I guess – my sense is that it is a little bit of a pickup from what we have seen in the last few years, and any thoughts or comments on that?

A.J. the operators on the outpatient side continue to do a great job on increasing volume. You are right, I mean, 3.6% increase on a year-over-year basis is terrific. As you model that out in the future I would not sit there at 3.6%. I would probably bring it back down into that maybe 2%, 2.5%. A.J. Rice - UBS: Okay, and it maybe my last question just on the stock repurchase, I know you guys stepped back this quarter, is that signaling other opportunities somewhere else for your cash or do you expect to be back in the market in subsequent quarters?

We expect it to be opportunistic about it and we have a lot of dollars that we are spending on both on LTAC projects as well as the rehab JVs. Given the price at these levels, you can expect us to be back in the market.

I think the other A.J., the other thing I do just mentioned I think you are starting to see this come through and I try to highlight it in my prepared remarks for the first time in the couple of years because of the certainty that we have got on the LTAC criteria last December even though there is some time before the phase and still little bit of uncertainty in terms of how it will perform, I think for investors. We have certainty on what the criteria is so it’s really allowed us to get back into a little bit of growth mode and you see that in our discussions about start-up losses, we have had an acceleration of our rehab joint ventures that’s going to require some capital and my first bias is to put capital towards growth but will also continue to be opportunistic. We had the dividend out there which appears though the board continues to be committed to. So we want to be judicious about our free cash flow, so I would say it would first go to development, acquisition is certainly there and the dividend and stock buybacks. A.J. Rice - UBS: Okay. Great. Thanks a lot.

Your next question will come from the line of Gary Lieberman from Wells Fargo. You may begin. Ryan Halstead - Wells Fargo: Thanks. This is Ryan Halstead on for Gary. Just a quick clarification I guess. On the moratorium exception, I just want to be clear, does that apply to the bed adds that you are planning?

It only applies to the bed adds, if they were being added as a satellite to an existing LTAC operation. It is not a fact the new starts, so I think that the number of beds that were in our prepared remarks of the edition, I think 250 beds I think that you can count on that. We feel confident that we will get those open. Ryan Halstead - Wells Fargo: Okay. Great. And then moving to the criteria, I guess I just want to be clear are you seeing any payers government or non-government that are already using the criteria?

No. Ryan Halstead - Wells Fargo: Okay. And then have you guys thought about quantifying what the impact would be in terms of what percentage of your patients maybe meet the per-requisite stay?

No, we have not. The move to new criteria still significantly far enough out there and we still have a lot of runway to get prepared for. So we haven’t given out any information and you shouldn't expect any over even through most of next year to give any more detail until some of our hospitals and hospital stays in gradually because it's based on cost report year. So we will have certain -- when that criteria becomes the law, we will have certain hospitals that phased in over the course of the year. So you will begin to be able to see the effects of that. Ryan Halstead - Wells Fargo: Okay. Then moving to your acquisitions, clearly the JV pace had accelerated pretty significantly after what was I guess a relatively slow pace. I guess should we expect that sort of deal, those JVs, the kind of flow in that pace where maybe it might be a little while before you might see a whole flow of announcements?

It's hard to predict. Obviously our preference would be to have this even announcement that we can smooth across the quarters in the years that when you are negotiating with systems of the type that we are, I mean sometimes the timeframe is really unpredictable. And so what I have said in the past is that when you look at the kind of systems that we try to joint venture with you can appreciate that there is a fair amount of negotiation in time if you look at the Cleveland Clinics and UCLAs and Cedars and Emory these are some of the most premiere hospitals and systems in the country and those are the types of partners that we want to have. So it is very difficult to predict. I can tell you that we continue to be in negotiations now with systems and providers that I think are very bit of profile of the ones we have announced so far and as we get them signed we will announce them but I have long since stop giving predictions about when they will be announced because the timing can be a little unpredictable but having said that we feel good about the pipeline. Ryan Halstead - Wells Fargo: Okay. Great. And maybe one last one, just to revisit the question of maybe acquiring complementary post-acute services, do you think the reimbursement outlook has changed that might make you move maybe more aggressively if you decided to do so?

Well, if your question is, are we actively looking to expand our product offering away from LTAC and rehab into some other post-acute silos, that's probably not in our near future. We feel that we have got a really good model with in-patient and out-patient rehab and we think there is a great opportunity for us to emerge as one of the strongest LTAC provider as we move into the new criteria. There is great opportunity there in our LTAC and in-patient, out-patient rehab. So we feel pretty good about where we are. So I don't think you should expect that we would be real active and trying to expand in other post-acute product offerings. Ryan Halstead - Wells Fargo: Okay. Great. Thank you very much.

Your next question will come from the line of Kevin Fischbeck from Bank of America Merrill Lynch. You may begin. Kevin Fischbeck - Bank of America Merrill Lynch: Okay. Great. Thanks. Just wanted to understand the start-up losses from CMS criteria. Is this more just a function of not having a provider numbers so you can’t bill for a while or is there additional cost that have to go with being separate facility versus being the satellite?

As the satellite, you immediately are able to bill LTAC rates and as a start-up, you basically have to go through the demonstration period. And during that demonstration period, you are an acute care hospital. And it's not until you go through that demonstration period showing that your patients have a length of stay in excess of 25 days that you then are designated as an LTAC and can receive LTAC reimbursement. So it's really a function of that. Kevin Fischbeck - Bank of America Merrill Lynch.: Okay. So is there any benefit? I guess, obviously, upfront it sounds like it's going to be a cost issue, more startup losses by having a facility. But is there any long-term benefit from it being a facility versus being a satellite? Would you operate it differently? Is there any silver lining down the road?

No. well I mean the only benefit you have is that under CMS's current interpretation of the satellite you can't increase the number of beds. So in essence we move from satellite to a new hospital. Therefore we can increase the number of beds.

That is the other – the short answer to your question is no, there is no easily apparent benefit to having to go through the losses. Kevin Fischbeck - Bank of America Merrill Lynch: Okay. So you do expect the same ultimate profitability of this, of these facilities?

Yes. Ultimately, as the hospital gets through in its license and is operating the profile of the hospital look the same. Kevin Fischbeck - Bank of America Merrill Lynch: Okay. And then you also mentioned -- I forget what the exact number was -- $1.6 million to $1.9 million related to a closed facility. Where was that in the P&L?

Yes, that was $1 million start-up loss. I am sorry, no start-up loss there was $1 million close cost that we had. Kevin Fischbeck - Bank of America Merrill Lynch: Okay. Is that in G&A or is that like a separate line?

No that would be in the operations. Kevin Fischbeck - Bank of America Merrill Lynch: Operations. Okay. And you guys closed a couple of hospitals this year. Is there any more thoughts of any other hospitals that may be closed?

Well as we get closer to the criteria, I think if you look in to probably 2016 as we position all the hospitals under the new criteria, I think that it's very possible that we may have some other hospitals that we just don't think for variety of reasons will meet the profile of the new criteria and may close. So yes we are constantly looking at that, I mean it's not going to be a large number because fortunately we have high acuity patients that many of which already qualified with the new criteria but yes we could see a couple of hospitals, so it’s depending on the market which maybe not be sustainable. Kevin Fischbeck - Bank of America Merrill Lynch: Okay. And I guess trying to think about how you feel the conversation has gone with you and CMS with – it sounds like in the past CMS has had some questions about the roll it out (inaudible) and things like that. I wasn't sure if this change in the satellite criteria really is emblematic of that still kind of framework and mindset in the eyes of CMS that they still want to control LTAC utilization; or whether do you feel like the dialogue has gotten better in recent years?

Well, I think the dialogue has gotten better recently. I think the criteria December of 2013 was – and I said at the time it was a watershed moment for the LTAC, I mean the LTAC have been the subject that have a lot of debate back and forth between CMS, MedPAC the industry and I think that there was always some consensus that there was a role for LTACs albeit more narrow than the position that they had at least holding the sums. So I don't think that anybody would argue that the criteria that was put in place is a narrow, stringent criteria. And the feedback that we have gotten from senior people at CMS is they are pleased with it. They think it's going to be a good thing for the industry and I think the dialogue back and forth since then has been constructive and healthy. So I actually feel very good about it. Kevin Fischbeck – Bank of America Merrill Lynch: Okay, and maybe just a last question -- you took down the number of new beds to 250 versus 284. Have you removed one hospital there? Or is it just fewer beds per hospital?

Yes we have removed one hospital and then that was the closure that we talking about Kevin. Kevin Fischbeck - Bank of America Merrill Lynch: Okay. So the closure was a facility that you were going to start up and then decided not to do? Okay. So that was eight hospitals with 250 beds, is the way we to think about it?

Yes. Kevin Fischbeck - Bank of America Merrill Lynch.: Okay. Alright. Great. Thanks.

And this time we have no further questions. I will to turn the call back over to management for your final remarks.

Thanks everybody for joining. I appreciate questions and we look forward to updating you next quarter.

And ladies and gentlemen this concludes your presentation. You may now disconnect and enjoy your day.