SOURCE: Sun Healthcare Group, Inc.

August 02, 2005 23:22 ET

Sun Healthcare Group, Inc. Announces Second Quarter 2005 Earnings; Reports Net Income of $6.9 Million; Demonstrates Progress on Key Initiatives; and Affirms Guidance for 2005

IRVINE, CA -- (MARKET WIRE) -- August 2, 2005 -- Sun Healthcare Group, Inc. (NASDAQ: SUNH) today announced results for the second quarter ended June 30, 2005.

Earnings

For the quarter ended June 30, 2005, Sun reported total net revenues of $214.5 million and net income of $6.9 million (net income of $0.45 per share on a fully-diluted basis), which included net income of $5.7 million on discontinued operations, compared with total net revenues of $204.8 million and net income of $7.3 million for the quarter ended June 30, 2004, which included a $4.0 million net loss on discontinued operations.

The 2005 second quarter net income included a reduction of $12.0 million of excess reserves for general and professional liability insurance, offset by a $5.1 million increase in reserves for workers' compensation insurance related to incidents in prior periods. The 2004 second quarter net income included a reduction of $3.0 million of excess reserves for general and professional liability and workers' compensation insurance related to incidents in prior periods. The 2004 second quarter net income also included the forgiveness of $3.7 million of debt, a retroactive Medicaid rate increase of $1.0 million and $0.5 million of restructuring-related vendor discounts.

During our year-end 2004 earnings call, I announced our four-point agenda to continue focusing on (i) improvements in same store operations, (ii) identifying the potential for further infrastructure realignment, (iii) the continued progress in resolving our general and professional liability legacy claims, and (iv) growing via acquisition. We are seeing good progress in all of the initiatives for 2005. Since December 2003, our balance sheet liabilities related to general and professional liability exposures have improved by $30.8 million, which has positively impacted our equity," said Richard K. Matros, Sun's chairman and chief executive officer. Matros continued, "Substantially all of our operating units have shown sequential quarter over quarter improvement that has resulted in consolidated improvement in revenues, EBITDAR, EBITDA, net segment income and G&A in 2005. Additionally, on a year over year basis, we are seeing top- and bottom-line improvement in our inpatient, staffing and home health operations and have stabilized and improved revenues in our rehabilitation operations."

For the quarter ended June 30, 2005, Sun reported income from continuing operations of $1.3 million (net income of $0.08 per share on a fully diluted basis), as compared to income from continuing operations of $11.3 million for the same period in 2004. The 2005 second quarter EBITDAR from continuing operations was $17.1 million in comparison with $24.6 million from continuing operations for the same period in 2004.

For the six months ended June 30, 2005, Sun reported total net revenues of $421.7 million and net income of $5.8 million (net income of $0.37 per share on a fully-diluted basis), which included net income of $6.0 million on discontinued operations, compared with total net revenues of $409.4 million and a net loss of $3.1 million for the six months ended June 30, 2004, which included a net loss of $10.8 million on discontinued operations. For the six months ended June 30, 2005, Sun reported a net loss on continuing operations of $0.3 million as compared to net income on continuing operations of $7.7 million for the same period in 2004. EBITDAR from continuing operations for the six months ended June 30, 2005, was $30.0 million as compared to $34.9 million for the same period in 2004.

Inpatient Business

Net revenues from inpatient services operations, which comprised 71 percent of Sun's second quarter total net revenue, increased 4.1 percent to $152.2 million from $146.2 million for the same period in 2004. The revenue gain was primarily attributable to: (i) a 110 basis point improvement in Medicare patient mix to 14.2 percent from 13.1 percent of total occupancy, and (ii) higher per diem rates in all payor categories, partially offset by a decline in overall occupancy of 30 basis points to 89.9 percent from 90.2 percent. The segment EBITDAR decreased 18.3 percent to $22.8 million for the quarter ended June 30, 2005, from $27.9 million for the same period in 2004. Significant factors contributing to this decrease were the previously mentioned $3.7 million gain on extinguishment of debt, a revenue increase attributable to 2003 of $1.0 million resulting from implementation of North Carolina's provider tax that was included in revenues for the second quarter of 2004 and a $1.1 million increase in employee health insurance expenses that occurred in 2005.

"This marks the sixth consecutive quarter of year over year Medicare growth as a percent of revenues for SunBridge," said William Mathies, president of SunBridge Healthcare Corporation. "Our nursing facility teams have continued to make strides in developing their clinical competencies and converting those improved skills into new business."

Ancillary Business

Net revenues from Sun's ancillary business operations, comprised of SunDance Rehabilitation Corporation, CareerStaff Unlimited, Inc., SunPlus Home Health Services, Inc., and SunAlliance Healthcare Services, Inc., net of affiliated revenue, increased $3.9 million, or 6.7 percent, to $62.3 million for the quarter ended June 30, 2005, from $58.4 million for the same period in 2004. Segment EBITDAR for the ancillary operations for the quarter ended June 30, 2005, decreased $1.9 million, or 26.8 percent, over the same period in 2004, to $5.2 million from $7.1 million.

"The majority of the increase in revenue is attributable to our three primary ancillary services operations of rehabilitation, medical staffing and home health services, and was due primarily to increased volume in existing contracts and new sales." Mr. Matros reported, "The EBITDAR decrease was primarily due to increases in wages and health insurance costs in our rehabilitation therapy services operations and strategic issues in our laboratory and radiology services operations."

Acquisition of Peak Medical Corporation

Mr. Matros also mentioned that the previously announced acquisition of Peak Medical Corporation is on track for closing in the fourth quarter.

We are looking forward to completing this significant acquisition, as it is a critical component of the four-point agenda outlined to our shareholders earlier this year," said Matros. "We expect to mail our proxy statement to stockholders for this transaction in September, after our Board has determined a meeting date and we have finalized the pro forma financial information for the second quarter. The closing of the transaction will occur after our stockholders have approved it, we have received all necessary state regulatory approvals and other closing conditions have been met."

2005 Guidance

Mr. Matros affirmed the previously provided 2005 guidance, stating, "We continue to be pleased with the improved performance in our operations and note that these results are consistent with the 2005 guidance that we provided in our March 2, 2005 earnings release."

Conference Call

Sun's senior management will hold a conference call to discuss the Company's second quarter operating results on Wednesday, Aug. 3, at 1 p.m. EDT / 10 a.m. PDT. To listen to the conference call, dial (877) 516-8526 and refer to Sun Healthcare Group. A recording of the call will be available from 4 p.m. EDT on Aug. 3 until midnight EDT on Aug. 10 by calling (800) 642-1687 and using access code 7618815.

About Sun Healthcare Group, Inc.

Sun Healthcare Group, Inc., with executive offices located in Irvine, California, owns SunBridge Healthcare Corporation and other affiliated companies that operate long-term and postacute care facilities in many states. In addition, the Sun Healthcare Group family of companies provides therapy through SunDance Rehabilitation Corporation, medical staffing through CareerStaff Unlimited, Inc., home care through SunPlus Home Health Services, Inc., and medical laboratory and mobile radiology services through SunAlliance Healthcare Services, Inc.

Statements made in this release that are not historical facts, including our estimates regarding financial performance in 2005, are "forward-looking" statements (as defined in the Private Securities Litigation Reform Act of 1995) that involve risks and uncertainties and are subject to change at any time. These forward-looking statements may include, but are not limited to, statements containing words such as "anticipate," "believe," "plan," "estimate," "expect," "hope," "intend," "may" and similar expressions. Factors that could cause actual results to differ are identified in the public filings made by the company with the Securities and Exchange Commission and include changes in Medicare and Medicaid reimbursements; potential liability for losses not covered by, or in excess of, our insurance; the effects of government regulations and investigations; our ability to generate cash flow sufficient to operate our business; our ability to integrate the operations of Peak Medical Corporation when that acquisition is completed; increasing labor costs and the shortage of qualified healthcare personnel; and our ability to receive increases in reimbursement rates from government payors to cover increased costs. More information on factors that could affect our business and financial results are included in our public filings made with the Securities and Exchange Commission, including our Annual Report on Form 10-K and Quarterly Reports on Form 10-Q, copies of which are available at Sun's web site, www.sunh.com.

The forward-looking statements involve known and unknown risks, uncertainties and other factors that are, in some cases, beyond our control. We caution investors that any forward-looking statements made by us are not guarantees of future performance. We disclaim any obligation to update any such factors or to announce publicly the results of any revisions to any of the forward-looking statements to reflect future events or developments.

THIS MATERIAL IS NOT A SUBSTITUTE FOR THE DEFINITIVE PROXY STATEMENT THAT SUN INTENDS TO FILE WITH THE SEC AND MAIL TO STOCKHOLDERS IN CONNECTION WITH THE PROPOSED ACQUISITION OF PEAK MEDICAL CORPORATION. BEFORE MAKING ANY VOTING DECISION WITH RESPECT TO THE PROPOSED TRANSACTION, INVESTORS AND STOCKHOLDERS OF SUN ARE URGED TO READ THE PROXY STATEMENT AND OTHER RELEVANT MATERIALS BECAUSE THEY WILL CONTAIN IMPORTANT INFORMATION, INCLUDING RISK FACTORS, ABOUT THE PROPOSED TRANSACTION.

The proxy statement and other relevant materials, and any other documents filed by Sun with the SEC, may be obtained free of charge at the SEC's web site at www.sec.gov. In addition, investors and stockholders of Sun may obtain free copies of the documents filed with the SEC by contacting Sun's investor relations department at (505) 468-2341 (TDD users, please call (505) 468-4458) or by sending a written request to Investor Relations, Sun Healthcare Group, Inc., 101 Sun Avenue NW, Albuquerque, NM 87109. You may also read and copy any reports, statements, and other information filed by Sun with the SEC at the SEC public reference room at Room 1580, 100 F Street, N.E., Washington, D.C. 20549. Please call the SEC at (800) SEC-0330 or visit the SEC's web site for further information on its public reference room.

Sun, certain of its directors and certain of its executive officers may be deemed to be participants in the solicitation of proxies from Sun stockholders in favor of the proposed transaction. Information concerning Sun's directors and executive officers may be found in the documents filed by Sun with the SEC.


                SUN HEALTHCARE GROUP, INC. AND SUBSIDIARIES

                                 CONDENSED
                        CONSOLIDATED BALANCE SHEETS
                               (in thousands)

                                    June 30, 2005   December 31, 2004
                                      ---------        ---------
                                     (unaudited)      (unaudited)
                  ASSETS

Current assets:
  Cash and cash equivalents           $  14,451        $  22,596
  Accounts receivable, net              106,354           95,829
  Restricted cash                        24,058           26,649
  Other current assets                   13,712           14,098
                                      ---------        ---------

  Total current assets                  158,575          159,172

Property and equipment, net             108,974          105,852
Restricted cash, non-current             37,698           34,111
Other assets, net                        19,084           16,780
                                      ---------        ---------

    Total assets                      $ 324,331        $ 315,915
                                      =========        =========


       LIABILITIES AND STOCKHOLDERS' DEFICIT

Current liabilities:
  Accounts payable                    $  36,973        $  36,163
  Accrued compensation and benefits      36,180           38,243
  Accrued self-insurance obligations,
   current portion                       36,239           40,236
  Other accrued liabilities              56,672           57,649
  Current portion of long-term debt      18,435           17,476
                                      ---------        ---------

  Total current liabilities             184,499          189,767

Accrued self insurance obligations,
 net of current portion                 123,678          130,686
Long-term debt, net of current
 portion                                106,462           89,706
Other long-term liabilities              27,155           29,136
                                      ---------        ---------

  Total liabilities                     441,794          439,295

Stockholders' deficit                  (117,463)        (123,380)
                                      ---------        ---------
    Total liabilities and
    stockholders' deficit             $ 324,331        $ 315,915
                                      =========        =========


                    SUN HEALTHCARE GROUP, INC. AND SUBSIDIARIES

                                    CONDENSED
                       CONSOLIDATED STATEMENTS OF OPERATIONS
                       (in thousands, except per share data)

                                        For the               For the
                                   Three Months Ended    Three Months Ended
                                      June 30, 2005        June 30, 2004
                                        ---------            ---------
                                       (unaudited)          (unaudited)

Total net revenues                      $ 214,473            $ 204,776
                                        ---------            ---------
Costs and expenses:
  Operating salaries and benefits         127,982              118,421
  Self-insurance for workers'
    compensation and general and
    professional liability insurance        7,697                7,285
  Other operating costs                    43,819               41,972
  Facility rent expense                     9,843                9,577
  General and administrative expenses      16,912               15,161
  Depreciation                              1,099                  646
  Amortization                              1,216                1,086
  Provision for losses on accounts
   receivable                               1,008                1,030
  Interest, net                             3,052                1,841
  Restructuring costs, net                     37                  453
  Loss (gain) on sale of assets, net          562                 (396)
  Gain on extinguishment of debt, net           -               (3,734)
                                        ---------            ---------
Total costs and expenses                  213,227              193,342
                                        ---------            ---------

Income before income taxes and
 discontinued operations                    1,246               11,434
Income tax (benefit) expense                  (12)                 164
                                        ---------            ---------
Income from continuing operations           1,258               11,270
                                        ---------            ---------

Discontinued operations:
  Income (loss) from discontinued
   operations, net                          5,689               (6,488)
  (Loss) gain on disposal of
   discontinued operations, net               (17)               2,518
                                        ---------            ---------
Income (loss) on discontinued
 operations, net                            5,672               (3,970)
                                        ---------            ---------

Net income                              $   6,930            $   7,300
                                        =========            =========

Basic and diluted income per common
 and common equivalent share:
  Income from continuing operations     $    0.08            $    0.74
  Income (loss) on discontinued
   operations, net                           0.37                (0.26)
                                        ---------            ---------
Net income                              $    0.45            $    0.48
                                        =========            =========

Weighted average number of common and
 common equivalent shares outstanding:
  Basic                                    15,351               15,142
  Diluted                                  15,352               15,206


                  SUN HEALTHCARE GROUP, INC. AND SUBSIDIARIES

                                    CONDENSED
                       CONSOLIDATED STATEMENTS OF OPERATIONS
                       (in thousands, except per share data)

                                         For the              For the
                                    Six Months Ended      Six Months Ended
                                      June 30, 2005        June 30, 2004
                                        ---------            ---------
                                       (unaudited)          (unaudited)

Total net revenues                      $ 421,656            $ 409,418
                                        ---------            ---------
Costs and expenses:
  Operating salaries and benefits         252,347              240,479
  Self-insurance for workers'
    compensation and general and
    professional liability insurance       17,200               19,644
  Other operating costs                    85,534               83,244
  Facility rent expense                    19,584               19,967
  General and administrative
   expenses                                34,542               31,507
  Depreciation                              2,166                1,305
  Amortization                              2,280                2,146
  Provision for losses on accounts
   receivable                               1,637                3,399
  Interest, net                             5,709                3,957
  Loss on asset impairment                    361                    -
  Restructuring costs, net                    107                1,287
  Loss (gain) on sale of assets, net          868                 (375)
  Loss (gain) on extinguishment of
   debt, net                                  408               (3,734)
                                        ---------            ---------
Total costs and expenses                  422,743              402,826
                                        ---------            ---------

(Loss) income before income taxes
  and discontinued operations              (1,087)               6,592
Income tax benefit                           (816)              (1,122)
                                        ---------            ---------
(Loss) income from continuing
 operations                                  (271)               7,714
                                        ---------            ---------

Discontinued operations:
  Income (loss) from discontinued
   operations, net                          5,025              (12,100)
  Gain on disposal of discontinued
   operations, net                          1,008                1,261
                                        ---------            ---------
Income (loss) on discontinued
 operations, net                            6,033              (10,839)
                                        ---------            ---------

Net income (loss)                       $   5,762            $  (3,125)
                                        =========            =========

Basic and diluted income (loss) per
 common and common equivalent share:
  (Loss) income from continuing
   operations                           $   (0.02)           $    0.57
  Income (loss) on discontinued
   operations, net                           0.39                (0.80)
                                        ---------            ---------
Net income (loss)                       $    0.37            $   (0.23)
                                        =========            =========

Weighted average number of common and
 common equivalent shares outstanding:
  Basic                                    15,332               13,627
  Diluted                                  15,332               13,673


                   SUN HEALTHCARE GROUP, INC. AND SUBSIDIARIES

                                   CONDENSED
                     CONSOLIDATED STATEMENTS OF CASH FLOWS
                                 (in thousands)

                                         For the              For the
                                   Three Months Ended    Three Months Ended
                                     June 30, 2005         June 30, 2004
                                        ---------            ---------
                                       (unaudited)           (unaudited)
Cash flows from operating activities:
Net income                              $   6,930            $   7,300
Adjustments to reconcile net income
 to net cash used for operating
 activities, including discontinued
 operations:
   Gain on extinguishment of debt, net                          (3,734)
   Depreciation                             1,099                  726
   Amortization                             1,216                1,108
   Amortization of favorable and
    unfavorable lease intangibles            (448)              (1,091)
   Provision for losses on accounts
    receivable                              1,018                3,018
   Loss (gain) on disposal of
    discontinued operations, net               17               (2,518)
   Loss (gain) on sale of assets, net         562                 (396)
   Restricted stock and stock option
    compensation                              320                  321
   Other, net                                  60                  984
   Changes in operating assets and
    liabilities, net of acquisitions      (12,457)             (14,060)
                                        ---------            ---------
     Net cash used for operating
      activities before reorganization
      costs                                (1,683)              (8,342)
     Net cash paid for reorganization
      costs                                     -                  (44)
                                        ---------            ---------
     Net cash used for operating
      activities                           (1,683)              (8,386)
                                        ---------            ---------

Cash flows from investing activities:
   Capital expenditures, net               (4,145)              (3,060)
   Proceeds from sale of assets held
    for sale                                  947                    -
   Acquisitions, net                       (1,205)                   -
   Repayment of long-term notes
    receivable                                  -                   46
                                        ---------            ---------
     Net cash used for investing
      activities                           (4,403)              (3,014)
                                        ---------            ---------

Cash flows from financing activities:
   Net borrowings under Revolving Loan
    Agreement                              16,330                    -
   Long-term debt repayments              (13,019)              (3,419)
                                        ---------            ---------
     Net cash provided by (used for)
      financing activities                  3,311               (3,419)
                                        ---------            ---------
Net decrease in cash and cash
 equivalents                            $  (2,775)            $(14,819)
                                        =========            =========


                  SUN HEALTHCARE GROUP, INC. AND SUBSIDIARIES

                                CONDENSED
                   CONSOLIDATED STATEMENTS OF CASH FLOWS
                            (in thousands)

                                              For the           For the
                                            Six Months        Six Months
                                               Ended             Ended
                                          June 30, 2005      June 30, 2004
                                          -------------      -------------
                                           (unaudited)        (unaudited)
Cash flows from operating activities:
Net income (loss)                            $ 5,762              $ (3,125)
Adjustments to reconcile net income
 (loss) to net cash used for
 operating activities, including
 discontinued operations:
      Loss (gain) on extinguishment
       of debt, net                              408                (3,734)
      Depreciation                             2,166                 1,456
      Amortization                             2,282                 2,188
      Amortization of favorable and
       unfavorable lease intangibles            (956)               (2,224)
      Provision for losses on accounts
       receivable                              1,668                 5,947
      Gain on disposal of discontinued
       operations, net                        (1,008)               (1,261)
      Loss (gain) on sale of assets, net         868                  (375)
      Loss on asset impairment                   361                     -
      Restricted stock and stock
       option compensation                       552                   566
      Other, net                                  83                 1,135
      Changes in operating assets and
       liabilities, net of acquisitions      (30,084)              (31,817)
                                           ---------             ---------
      Net cash used for operating
       activities before
       reorganization costs                  (17,898)              (31,244)
      Net cash paid for reorganization
       costs                                      -                   (499)
                                           ---------             ---------
      Net cash used for operating
       activities                            (17,898)              (31,743)
                                           ---------             ---------

Cash flows from investing activities:
      Capital expenditures, net               (7,717)               (4,922)
      Proceeds from sale of assets
       held for sale                           1,713                     -
      Acquisitions, net                       (1,205)                    -
      Repayment of long-term notes
       receivable                                237                    56
                                           ---------             ---------
      Net cash used for investing
       activities                             (6,972)               (4,866)
                                           ---------             ---------

Cash flows from financing activities:
      Net borrowings (payments) under
       Revolving Loan Agreement               33,351               (13,091)
      Long-term debt repayments              (16,324)               (4,964)
      Distribution of partnership equity        (302)                    -
      Net proceeds from issuance
       of common stock                             -                52,266
                                           ---------             ---------
      Net cash provided by financing
       activities                             16,725                34,211
                                           ---------             ---------
Net decrease in cash and cash
 equivalents                                $ (8,145)             $ (2,398)
                                           =========             =========


                SUN HEALTHCARE GROUP, INC. AND SUBSIDIARIES

         RECONCILIATION OF NET INCOME TO EBITDA(M) and EBITDAR(M)
                              (in thousands)

                                            For the             For the
                                         Three Months        Three Months
                                             Ended               Ended
                                         June 30, 2005       June 30, 2004
                                         -------------       -------------
                                          (unaudited)           (unaudited)

 Total net revenues                        $ 214,473             $ 204,776
                                           ---------             ---------

 Net income                                  $ 6,930               $ 7,300
                                           ---------             ---------

  Income from continuing operations            1,258                11,270

  Income tax (benefit) expense                   (12)                  164

  Restructuring costs, net                        37                   453

  Loss (gain) on sale of assets, net             562                  (396)
                                           ---------             ---------

 Net segment income                          $ 1,845              $ 11,491

  Interest, net                                3,052                 1,841

  Depreciation and amortization                2,315                 1,732
                                           ---------             ---------

 EBITDA                                      $ 7,212              $ 15,064

  Facility rent expense                        9,843                 9,577
                                           ---------             ---------

 EBITDAR                                    $ 17,055              $ 24,641

  General and administrative expenses         16,912                15,161
                                           ---------             ---------

 EBITDAM                                    $ 24,124              $ 30,225
 EBITDARM                                   $ 33,967              $ 39,802



EBITDA is defined as earnings before depreciation,  amortization,
interest, net, income taxes,  restructuring  costs,  net,  loss (gain)
on sale of assets,  net, income (loss) on discontinued operations, and
loss on asset impairment.  EBITDAM is defined as EBITDA  before  general
and  administrative  expenses.  EBITDAR is defined as EBITDA before
facility rent expense.  EBITDARM is defined as EBITDAR before  general
and  administrative  expenses.  EBITDA,  EBITDAM,  EBITDAR  and EBITDARM
are used by management to evaluate  financial  performance and resource
allocation  for each entity within the operating  units and for the
Company as a whole.  EBITDA,  EBITDAM,  EBITDAR and EBITDARM are commonly
used as analytical indicators within the healthcare industry and also
serve as measures of leverage capacity and debt service ability.
EBITDA, EBITDAM, EBITDAR and EBITDARM should not be considered as
measures of financial  performance under generally accepted accounting
principles.  As the items excluded from EBITDA, EBITDAM,  EBITDAR and
EBITDARM are significant  components in  understanding  and assessing
financial performance,  EBITDA, EBITDAM,  EBITDAR and EBITDARM should
not be considered in isolation or as  alternatives  to net income (loss),
cash flows generated by or used  in  operating,  investing  or
financing  activities  or  other  financial statement data presented in
the consolidated  financial statements as indicators of financial
performance or liquidity.  Because  EBITDA,  EBITDAM,  EBITDAR and
EBITDARM are not  measurements  determined  in  accordance  with U.S.
generally accepted accounting principles and are thus susceptible to
varying calculations, EBITDA,  EBITDAM,  EBITDAR and EBITDARM as
presented  may not be  comparable  to other similarly titled measures
of other companies.


             SUN HEALTHCARE GROUP, INC. AND SUBSIDIARIES

      RECONCILIATION OF NET INCOME TO EBITDA(M) and EBITDAR(M)
                          (in thousands)

                                            For the             For the
                                        Six Months Ended   Six Months Ended
                                          June 30, 2005      June 30, 2004
                                          -------------      -------------
                                          (unaudited)         (unaudited)

 Total net revenues                        $ 421,656             $ 409,418
                                           ---------             ---------
 Net income (loss)                           $ 5,762              $ (3,125)
                                           ---------             ---------
  (Loss) income from continuing
    operations                                  (271)                7,714

  Income tax (benefit)                          (816)               (1,122)

  Loss on asset impairment                       361                     -

  Restructuring costs, net                       107                 1,287

  Loss on sale of assets, net                    868                  (375)
                                           ---------             ---------
 Net segment income                            $ 249               $ 7,504

  Interest, net                                5,709                 3,957

  Depreciation and amortization                4,446                 3,451
                                           ---------             ---------
 EBITDA                                     $ 10,404              $ 14,912

  Facility rent expense                       19,584                19,967
                                           ---------             ---------
 EBITDAR                                    $ 29,988              $ 34,879

  General and administrative expenses         34,542                31,507
                                           ---------             ---------
 EBITDAM                                    $ 44,946              $ 46,419
 EBITDARM                                   $ 64,530              $ 66,386


              SUN HEALTHCARE GROUP, INC. AND SUBSIDIARIES

 RECONCILIATION OF NET SEGMENT INCOME (LOSS) TO EBITDA(M) and EBITDAR(M)
                        ($ in thousands)

               For the Three Months Ended June 30, 2005
                             (unaudited)

                                      Rehabilitation Medical      Home
                             Inpatient   Therapy     Staffing     Health
                             Services    Services    Services    Services
                             ---------   ---------   ---------   ---------

Nonaffiliated revenue        $ 152,171   $  26,016   $  16,768   $  15,076

Affiliated revenue                   1       9,287         192           -
                             ---------   ---------   ---------   ---------

    Total revenue              152,172      35,303      16,960      15,076

Net segment income (loss)    $  10,547   $   2,145   $   1,477   $     857

Interest, net                    1,619          69           1           2

Depreciation and amortization    1,606          74          70         237
                             ---------   ---------   ---------   ---------

    EBITDA                   $  13,772   $   2,288   $   1,548   $   1,096

Facility rent expense            9,000         129         172         448
                             ---------   ---------   ---------   ---------

    EBITDAR                  $  22,772   $   2,417   $   1,720   $   1,544

General and administrative
 expenses                        3,340       1,851         516         317
                             ---------   ---------   ---------   ---------

    EBITDAM                  $  17,112   $   4,139   $   2,064   $   1,413
    EBITDARM                 $  26,112   $   4,268   $   2,236   $   1,861


              EBITDA margin        9.1%        6.5%        9.1%        7.3%

             EBITDAR margin       15.0%        6.8%       10.1%       10.2%

             EBITDAM margin       11.2%       11.7%       12.2%        9.4%

            EBITDARM margin       17.2%       12.1%       13.2%       12.3%


                             Laboratory            Elimination of
                            & Radiology             Affiliated
                             Services    Corporate    Revenue  Consolidated
                             ---------   ---------   ---------   ---------

Nonaffiliated revenue        $   4,440   $       2   $       -   $ 214,473
                             ---------   ---------   ---------   ---------

Affiliated revenue                  45           -      (9,525)          -

    Total revenue                4,485           2      (9,525)    214,473

Net segment income (loss)    $    (657)  $ (12,524)  $       -   $   1,845

Interest, net                        -       1,361           -       3,052

Depreciation and amortization      100         228           -       2,315
                             ---------   ---------   ---------   ---------

    EBITDA                   $    (557)  $ (10,935)  $       -   $   7,212

Facility rent expense               94           -           -       9,843
                             ---------   ---------   ---------   ---------

    EBITDAR                  $    (463)  $ (10,935)  $       -   $  17,055

General and administrative
 expenses                           30      10,858           -      16,912
                             ---------   ---------   ---------   ---------

    EBITDAM                  $    (527)  $     (77)  $       -   $  24,124
    EBITDARM                 $    (433)  $     (77)  $       -   $  33,967


              EBITDA margin      -12.4%                                3.4%

             EBITDAR margin      -10.3%                                8.0%

             EBITDAM margin      -11.8%                               11.2%

            EBITDARM margin       -9.7%                               15.8%


              SUN HEALTHCARE GROUP, INC. AND SUBSIDIARIES

 RECONCILIATION OF NET SEGMENT INCOME (LOSS) TO EBITDA(M) and EBITDAR(M)
                        ($ in thousands)

               For the Three Months Ended June 30, 2004
                             (unaudited)

                                      Rehabilitation Medical      Home
                             Inpatient   Therapy     Staffing     Health
                             Services    Services    Services    Services
                             ---------   ---------   ---------   ---------

Nonaffiliated revenue        $ 146,395   $  26,187   $  13,628   $  13,789

Affiliated revenue                (149)      8,375         533           -
                             ---------   ---------   ---------   ---------

    Total revenue              146,246      34,562      14,161      13,789

Net segment income (loss)    $  17,211   $   3,593   $   1,078   $     776

Interest, net                      796          (4)          -          29

Depreciation and amortization    1,232          57          47         155
                             ---------   ---------   ---------   ---------

    EBITDA                   $  19,239   $   3,646   $   1,125   $     960

Facility rent expense            8,692         150         193         449
                             ---------   ---------   ---------   ---------

    EBITDAR                  $  27,931   $   3,796   $   1,318   $      (3)

General and administrative
 expenses                        2,767         831         834         204
                             ---------   ---------   ---------   ---------

    EBITDAM                  $  22,006   $   4,477   $   1,959   $   1,164
    EBITDARM                 $  30,698   $   4,627   $   2,152   $   1,613


              EBITDA margin       13.2%       10.5%        7.9%        7.0%

             EBITDAR margin       19.1%       11.0%        9.3%       10.2%

             EBITDAM margin       15.0%       13.0%       13.8%        8.4%

            EBITDARM margin       21.0%       13.4%       15.2%       11.7%


                             Laboratory            Elimination of
                            & Radiology             Affiliated
                             Services    Corporate    Revenue  Consolidated
                             ---------   ---------   ---------   ---------

Nonaffiliated revenue        $   4,764   $      13   $       -   $ 204,776

Affiliated revenue                  51           -      (8,810)          -
                             ---------   ---------   ---------   ---------

    Total revenue                4,815          13      (8,810)    204,776
                             ---------   ---------   ---------   ---------

Net segment income (loss)    $     508   $ (11,675)  $       -   $  11,491

Interest, net                      (46)      1,066           -       1,841

Depreciation and amortization       74         167           -       1,732
                             ---------   ---------   ---------   ---------

    EBITDA                   $     536   $ (10,442)  $       -   $  15,064

Facility rent expense               93           -           -       9,577
                             ---------   ---------   ---------   ---------

    EBITDAR                  $     629   $ (10,442)  $       -   $  24,641

General and administrative
 expenses                          113      10,412           -      15,161
                             ---------   ---------   ---------   ---------

    EBITDAM                  $     649   $     (30)  $       -   $  30,225
    EBITDARM                 $     742   $     (30)  $       -   $  39,802


              EBITDA margin       11.1%                                7.4%

             EBITDAR margin       13.1%                               12.0%

             EBITDAM margin       13.5%                               14.8%

            EBITDARM margin       15.4%                               19.4%


              SUN HEALTHCARE GROUP, INC. AND SUBSIDIARIES

 RECONCILIATION OF NET SEGMENT INCOME (LOSS) TO EBITDA(M) and EBITDAR(M)
                        ($ in thousands)

               For the Six Months Ended June 30, 2005
                             (unaudited)

                                      Rehabilitation Medical      Home
                             Inpatient   Therapy     Staffing     Health
                             Services    Services    Services    Services
                             ---------   ---------   ---------   ---------

Nonaffiliated revenue        $ 300,982   $  49,992   $  31,636   $  29,887

Affiliated revenue                  (1)     18,126         363           -
                             ---------   ---------   ---------   ---------

    Total revenue              300,981      68,118      31,999      29,887

Net segment income (loss)    $  18,384   $   4,125   $   2,450   $   1,411

Interest, net                    3,481          (9)          3           5

Depreciation and amortization    3,072         128         118         430
                             ---------   ---------   ---------   ---------

    EBITDA                   $  24,937   $   4,244   $   2,571   $   1,846

Facility rent expense           17,910         254         341         894
                             ---------   ---------   ---------   ---------

    EBITDAR                  $  42,847   $   4,498   $   2,912   $   2,740
General and administrative
 expenses                        6,466       3,697       1,078         580
                             ---------   ---------   ---------   ---------

    EBITDAM                  $  31,403   $   7,941   $   3,649   $   2,426
    EBITDARM                 $  49,313   $   8,195   $   3,990   $   3,320


              EBITDA margin        8.3%        6.2%        8.0%        6.2%

             EBITDAR margin       14.2%        6.6%        9.1%        9.2%

             EBITDAM margin       10.4%       11.7%       11.4%        8.1%

            EBITDARM margin       16.4%       12.0%       12.5%       11.1%


                             Laboratory            Elimination of
                            & Radiology             Affiliated
                             Services    Corporate    Revenue  Consolidated
                             ---------   ---------   ---------   ---------

Nonaffiliated revenue        $   9,151   $       8   $       -   $ 421,656

Affiliated revenue                  99           -     (18,587)          -
                             ---------   ---------   ---------   ---------

    Total revenue                9,250           8     (18,587)    421,656

Net segment income (loss)    $    (602)  $ (25,519)  $       -   $     249

Interest, net                        -       2,229           -       5,709

Depreciation and amortization      249         449           -       4,446
                             ---------   ---------   ---------   ---------

    EBITDA                   $    (353)  $ (22,841)  $       -   $  10,404

Facility rent expense              185           -           -      19,584
                             ---------   ---------   ---------   ---------

    EBITDAR                  $    (168)  $ (22,841)  $       -   $  29,988

General and administrative
 expenses                           30      22,691           -      34,542
                             ---------   ---------   ---------   ---------

    EBITDAM                  $    (323)  $    (150)  $       -   $  44,946
    EBITDARM                 $    (138)  $    (150)  $       -   $  64,530


              EBITDA margin       -3.8%                                2.5%

             EBITDAR margin       -1.8%                                7.1%

             EBITDAM margin       -3.5%                               10.7%

            EBITDARM margin       -1.5%                               15.3%


              SUN HEALTHCARE GROUP, INC. AND SUBSIDIARIES

 RECONCILIATION OF NET SEGMENT INCOME (LOSS) TO EBITDA(M) and EBITDAR(M)
                        ($ in thousands)

               For the Six Months Ended June 30, 2004
                             (unaudited)

                                      Rehabilitation Medical      Home
                             Inpatient   Therapy     Staffing     Health
                             Services    Services    Services    Services
                             ---------   ---------   ---------   ---------

Nonaffiliated revenue        $ 291,044   $  53,658   $  27,403   $  27,575

Affiliated revenue                (301)     16,621       1,089           -
                             ---------   ---------   ---------   ---------

    Total revenue              290,743      70,279      28,492      27,575

Net segment income (loss)    $  21,521   $   6,884   $   1,430   $   1,410

Interest, net                    1,663          (5)          1          31

Depreciation and amortization    2,456         165          91         302
                             ---------   ---------   ---------   ---------

    EBITDA                   $  25,640   $   7,044   $   1,522   $   1,743

Facility rent expense           18,163         308         416         900
                             ---------   ---------   ---------   ---------

    EBITDAR                  $  43,803   $   7,352   $   1,938   $   2,643

General and administrative
 expenses                        5,707       1,653       1,600         464
                             ---------   ---------   ---------   ---------

    EBITDAM                  $  31,347   $   8,697   $   3,122   $   2,207
    EBITDARM                 $  49,510   $   9,005   $   3,538   $   3,107


             EBITDA margin         8.8%       10.0%        5.3%        6.3%

            EBITDAR margin        15.1%       10.5%        6.8%        9.6%

            EBITDAM margin        10.8%       12.4%       11.0%        8.0%

           EBITDARM margin        17.0%       12.8%       12.4%       11.3%


                             Laboratory            Elimination of
                            & Radiology             Affiliated
                             Services    Corporate    Revenue  Consolidated
                             ---------   ---------   ---------   ---------

Nonaffiliated revenue        $   9,694   $      44   $       -   $ 409,418

Affiliated revenue                 104           -     (17,513)          -
                             ---------   ---------   ---------   ---------

    Total revenue                9,798          44     (17,513)    409,418

Net segment income (loss)    $     802   $ (24,543)  $       -   $   7,504

Interest, net                      (46)      2,313           -       3,957

Depreciation and amortization      146         291           -       3,451
                             ---------   ---------   ---------   ---------

    EBITDA                   $     902   $ (21,939)  $       -   $  14,912

Facility rent expense              180           -           -      19,967
                             ---------   ---------   ---------   ---------

    EBITDAR                  $   1,082   $ (21,939)  $       -   $  34,879

General and administrative
 expenses                          228      21,855           -      31,507
                             ---------   ---------   ---------   ---------

    EBITDAM                  $   1,130   $     (84)  $       -   $  46,419
    EBITDARM                 $   1,310   $     (84)  $       -   $  66,386


             EBITDA margin         9.2%                                3.6%

            EBITDAR margin        11.0%                                8.5%

            EBITDAM margin        11.5%                               11.3%

           EBITDARM margin        13.4%                               16.2%


              SUN HEALTHCARE GROUP, INC. AND SUBSIDIARIES

    RECONCILIATION OF NET SEGMENT INCOME (LOSS) TO EBITDA AND EBITDAR
                       INPATIENT SERVICES ONLY
                          ($ in thousands)

               For the Three Months Ended June 30, 2005
                             (unaudited)

                                                                 Inpatient
                      Inpatient     Inpatient                    Services -
                      Services -    Services -                    Planned
                      Retained      Overhead       Americare      Divested
                     ----------    ----------     ----------    ----------

Total revenues       $  150,287    $        -     $      569    $    1,316
                     ----------    ----------     ----------    ----------
Net segment income
 (loss)              $   14,089    $   (3,340)    $      107    $       22

Interest, net               640             -              -            (3)

Depreciation and
 amortization             1,280             -             14            11

                     ----------    ----------     ----------    ----------
    EBITDA           $   16,009    $   (3,340)    $      121    $       30

Facility rent expense     9,834             -              9            29
                     ----------    ----------     ----------    ----------

    EBITDAR          $   25,843    $   (3,340)    $      130    $       59
                     ==========    ==========     ==========    ==========

        EBITDA margin      10.7%                        21.3%          2.3%

       EBITDAR margin      17.2%                        22.8%          4.5%


                     Inpatient
                     Services                        Total
                      before                       Inpatient
                      Clipper      Clipper (1)     Services
                     ----------    ----------     ----------

Total revenues       $  152,172    $        -     $  152,172
                     ----------    ----------     ----------
Net segment income
 (loss)              $   10,878    $     (331)    $   10,547

Interest, net               637           982          1,619

Depreciation and
 amortization             1,305           301          1,606

                     ----------    ----------     ----------
    EBITDA           $   12,820    $      952     $   13,772

Facility rent expense     9,872          (872)    $    9,000
                     ----------    ----------     ----------

    EBITDAR          $   22,692    $       80     $   22,772
                     ==========    ==========     ==========

        EBITDA margin       8.4%                         9.1%

       EBITDAR margin      14.9%                        15.0%

(1) Clipper represents our interest of less than eight percent in nine
    entities that are consolidated pursuant to the Financial Accounting
    Standard Board's revised Interpretation No. 46, Consolidation of
    Variable Interest Entities. Sun began consolidating Clipper on July 1,
    2004.


              SUN HEALTHCARE GROUP, INC. AND SUBSIDIARIES

    RECONCILIATION OF NET SEGMENT INCOME (LOSS) TO EBITDA AND EBITDAR
                       INPATIENT SERVICES ONLY
                          ($ in thousands)

               For the Three Months Ended June 30, 2004
                             (unaudited)

                                                                 Inpatient
                      Inpatient     Inpatient                    Services -
                      Services -    Services -                    Planned
                      Retained      Overhead       Americare      Divested
                     ----------    ----------     ----------    ----------

Total revenues       $  144,311    $        -     $      661    $    1,274
                     ----------    ----------     ----------    ----------
Net segment income
 (loss)              $   19,453    $   (2,767)    $      125    $      400

Interest, net               805             -              -            (9)

Depreciation and
 amortization             1,211             -             10            11

                     ----------    ----------     ----------    ----------
    EBITDA           $   21,469    $   (2,767)    $      135    $      402

Facility rent expense     8,641             -             21            30
                     ----------    ----------     ----------    ----------

    EBITDAR          $   30,110    $   (2,767)    $      156    $      432
                     ==========    ==========     ==========    ==========

        EBITDA margin      14.9%                        20.4%         31.6%

       EBITDAR margin      20.9%                        23.6%         33.9%


                     Inpatient
                     Services                         Total
                      before                        Inpatient
                      Clipper       Clipper (1)     Services
                     ----------    ----------     ----------

Total revenues       $  146,246    $        -     $  146,246
                     ----------    ----------     ----------
Net segment income
 (loss)              $   17,211    $        -     $   17,211

Interest, net               796             -            796

Depreciation and
 amortization             1,232             -          1,232

                     ----------    ----------     ----------
    EBITDA           $   19,239    $        -     $   19,239

Facility rent expense     8,692             -     $    8,692
                     ----------    ----------     ----------

    EBITDAR          $   27,931    $        -     $   27,931
                     ==========    ==========     ==========

        EBITDA margin      13.2%                        13.2%

       EBITDAR margin      19.1%                        19.1%


              SUN HEALTHCARE GROUP, INC. AND SUBSIDIARIES

    RECONCILIATION OF NET SEGMENT INCOME (LOSS) TO EBITDA AND EBITDAR
                       INPATIENT SERVICES ONLY
                          ($ in thousands)

                For the Six Months Ended June 30, 2005
                             (unaudited)

                                                                 Inpatient
                      Inpatient     Inpatient                    Services -
                      Services -    Services -                    Planned
                      Retained      Overhead       Americare      Divested
                     ----------    ----------     ----------    ----------

Total revenues       $  297,187    $        -     $    1,175    $    2,619
                     ----------    ----------     ----------    ----------
Net segment income
 (loss)              $   25,688    $   (6,466)    $      266    $       87

Interest, net             1,439             -              -            (7)

Depreciation and
 amortization             2,386             -             26            22

                     ----------    ----------     ----------    ----------
    EBITDA           $   29,513    $   (6,466)    $      292    $      102

Facility rent expense    19,580             -             19            59
                     ----------    ----------     ----------    ----------

    EBITDAR          $   49,093    $   (6,466)    $      311    $      161
                     ==========    ==========     ==========    ==========

        EBITDA margin       9.9%                        24.9%          3.9%

       EBITDAR margin      16.5%                        26.5%          6.1%


                     Inpatient
                     Services                        Total
                      before                       Inpatient
                      Clipper      Clipper (1)     Services
                     ----------    ----------     ----------

Total revenues       $  300,981    $        -     $  300,981
                     ----------    ----------     ----------

Net segment income
 (loss)              $   19,575    $   (1,191)    $   18,384

Interest, net             1,432         2,049          3,481

Depreciation and
 amortization             2,434           638          3,072

                     ----------    ----------     ----------
    EBITDA           $   23,441    $    1,496     $   24,937

Facility rent expense    19,658        (1,748)    $   17,910
                     ----------    ----------     ----------

    EBITDAR          $   43,099    $     (252)    $   42,847
                     ==========    ==========     ==========

        EBITDA margin       7.8%                         8.3%

       EBITDAR margin      14.3%                        14.2%


              SUN HEALTHCARE GROUP, INC. AND SUBSIDIARIES

    RECONCILIATION OF NET SEGMENT INCOME (LOSS) TO EBITDA AND EBITDAR
                       INPATIENT SERVICES ONLY
                          ($ in thousands)

                For the Six Months Ended June 30, 2004
                             (unaudited)

                                                                 Inpatient
                      Inpatient     Inpatient                    Services -
                      Services -    Services -                    Planned
                      Retained      Overhead       Americare      Divested
                     ----------    ----------     ----------    ----------

Total revenues       $  286,679    $        -     $    1,417    $    2,647
                     ----------    ----------     ----------    ----------
Net segment income
 (loss)              $   26,487    $   (5,707)    $      289    $      452

Interest, net             1,693             -              -           (30)

Depreciation and
 amortization             2,414             -             21            21

                     ----------    ----------     ----------    ----------
    EBITDA           $   30,594    $   (5,707)    $      310    $      443

Facility rent expense    18,060             -             43            60
                     ----------    ----------     ----------    ----------

    EBITDAR          $   48,654    $   (5,707)    $      353    $      503
                     ==========    ==========     ==========    ==========

        EBITDA margin      10.7%                        21.9%         16.7%

       EBITDAR margin      17.0%                        24.9%         19.0%


                     Inpatient
                     Services                         Total
                      before                        Inpatient
                      Clipper       Clipper (1)     Services
                     ----------    ----------     ----------

Total revenues       $  290,743    $        -     $  290,743
                     ----------    ----------     ----------
Net segment income
 (loss)              $   21,521    $        -     $   21,521

Interest, net             1,663             -          1,663

Depreciation and
 amortization             2,456             -          2,456

                     ----------    ----------     ----------
    EBITDA           $   25,640    $        -     $   25,640

Facility rent expense    18,163             -     $   18,163
                     ----------    ----------     ----------

    EBITDAR          $   43,803    $        -     $   43,803
                     ==========    ==========     ==========

        EBITDA margin       8.8%                         8.8%

       EBITDAR margin      15.1%                        15.1%


             SUN HEALTHCARE GROUP, INC. AND SUBSIDIARIES

           Sun Healthcare Group, Inc. and Subsidiaries
                  Selected Operating Statistics
                      Continuing Operations

                                   For the                 For the
                              Three Months Ended       Six Months Ended
                                   June 30,                June 30,
                               2005        2004        2005        2004
                              ------      ------      ------      ------
Number of Licensed beds:
    SNF                       10,424      10,632      10,424      10,632
    Hospitals                    192         192         192         192

Number of facilities:
    SNF                          100         103         100         103
    Hospitals                      3           3           3           3

Occupancy %:
    SNF                         90.4%       90.9%       90.5%       90.8%
    Hospitals                   63.7%       54.8%       61.3%       54.6%
      Inpatient Services        89.9%       90.2%       89.9%       90.1%

Payor Mix % based on patient
 days - SNF:
    Medicare                    13.5%       12.5%       13.3%       12.6%
    Medicaid                    63.3%       64.4%       63.2%       64.2%
    Private and other           23.2%       23.1%       23.5%       23.2%

Payor Mix % based on patient
 days - Hospitals:
    Medicare                    67.7%       72.6%       71.3%       72.2%
    Medicaid                    11.1%        9.8%        9.3%        8.1%
    Private and other           21.2%       17.6%       19.4%       19.7%

Payor Mix % based on patient
 days - Inpatient Services:
    Medicare                    14.2%       13.1%       14.1%       13.2%
    Medicaid                    62.6%       63.7%       62.5%       63.6%
    Private and other           23.2%       23.2%       23.4%       23.2%

Revenue Mix % of revenues
 - SNF:
    Medicare                    27.8%       25.9%       27.5%       26.2%
    Medicaid                    49.9%       51.9%       50.0%       51.6%
    Private and other           22.3%       22.2%       22.5%       22.2%

Revenue Mix % of revenues
 - Hospitals:
    Medicare                    72.5%       76.6%       75.0%       74.9%
    Medicaid                     9.2%        7.8%        7.8%        7.0%
    Private and other           18.3%       15.6%       17.2%       18.1%

Revenue Mix % of revenues -
 Inpatient Services:
    Medicare                    31.6%       30.0%       31.3%       29.9%
    Medicaid                    46.5%       48.4%       46.6%       48.2%
    Private and other           21.9%       21.6%       22.1%       21.9%


           Sun Healthcare Group, Inc. and Subsidiaries
                  Selected Operating Statistics
                      Continuing Operations

                            Three Months Ended        Six Months Ended
                                 June 30,                  June 30,
                            2005         2004         2005         2004
                         ----------   ----------   ----------   ----------

Revenues PPD - SNF:
    Medicare (Part A)    $   323.91   $   311.68   $   322.57   $   312.44
    Medicaid             $   135.49   $   132.83   $   135.55   $   132.04
    Private and other    $   147.68   $   142.14   $   148.22   $   141.93

Revenues PPD - Hospitals:
    Medicare (Part A)    $ 1,090.13   $ 1,047.52   $ 1,052.83   $ 1,021.58
    Medicaid             $   870.71   $   880.97   $   882.31   $   905.52
    Private and other    $ 1,348.95   $ 1,047.00   $ 1,189.25   $ 1,632.51

Revenues - Non-affiliated
 (in thousands):
  Inpatient Services:
    Medicare             $   48,061   $   43,802   $   94,147   $   87,065
    Medicaid                 70,827       70,825      140,401      140,167
    Private and other        33,283       31,768       66,434       63,812
                         ----------   ----------   ----------   ----------
       Subtotal          $  152,171   $  146,395   $  300,982   $  291,044

Rehabilitation Therapy   $   26,016   $   26,187   $   49,992   $   53,658
    Medical Staffing         16,768       13,628       31,636       27,403
    Home Health              15,076       13,789       29,887       27,575
    Laboratory and
     Radiology                4,440        4,764        9,151        9,694
                         ----------   ----------   ----------   ----------
       Subtotal          $   62,300   $   58,368   $  120,666   $  118,330

    Other - non-core
     businesses          $        2   $       13   $        8   $       44
                         ----------   ----------   ----------   ----------
       Total             $  214,473   $  204,776   $  421,656   $  409,418
                         ==========   ==========   ==========   ==========


Rehab contracts:
  Affiliated - continuing        89           92           89           92
  Non-Affiliated                316          307          316          307


DSO:
  Inpatient Services
   - SNF                         35           34           35           34
  Inpatient Services
   - Hospitals                   64           65           64           65
  Rehabilitation Therapy        103          118          103          118
  Medical Staffing               56           62           56           62
  Home Health                    57           59           57           59
  Laboratory and Radiology       98           88           98           88

Contact Information

  • Contact:
    Investor Inquiries
    (505) 468-2341

    Media Inquiries
    (505) 468-4582