Exhibit 99.1

FOR IMMEDIATE RELEASE
Tuesday, February 8, 2011

REHABCARE REPORTS FOURTH QUARTER,
FISCAL YEAR 2010 RESULTS AND 2011 OUTLOOK;
ENTERS INTO DEFINITIVE MERGER AGREEMENT
TO BE ACQUIRED BY KINDRED HEALTHCARE

	•		Excluding transaction related expenses in the 2009 fourth quarter, net earnings per diluted share increase 86.5% year over year to $0.69
	•		Hospital division improves EBITDA margin to 15.2% in the fourth quarter from 12.9% in the third quarter
	•		Impacted by regulatory changes, Skilled Nursing Rehabilitation Services division reports 5.8% operating earnings margin in the quarter, consistent with expectations
	•		Hospital Rehabilitation Services division delivers near record operating earnings margin of 20.6%
	•		Cash flow from operations of $103.8 million in 2010 allows company to pay down debt by $65.7 million and lower debt to EBITDA ratio to 2.4

ST. LOUIS, MO, February 8, 2011—RehabCare Group, Inc. (NYSE:RHB) today reported the following unaudited financial results.

		Fourth				Third				Fourth				Year Ended
		Quarter				Quarter				Quarter				December 31,
Amounts in millions, except per share data		2010				2010				2009				2010				2009
														(unaudited)
Consolidated Operating Revenues		$	339.3			$	337.5			$	249.8			$	1,329.4			$	848.6
Consolidated Operating Earnings (a)			36.1				33.7				6.5				133.6				40.9
Consolidated Net Earnings from Continuing Operations			18.6				16.2				—				64.9				19.6
Gain from Discontinued Operations, Net of Tax (b)			0.7				0.6				0.3				1.2				1.4
Consolidated Net Earnings			19.3				16.8				0.3				66.1				21.0
Net (Earnings) Loss Attributable to Noncontrolling Interests			(2.2	)			(1.1	)			0.4				(3.6	)			2.0
Net Earnings Attributable to RehabCare			17.1				15.7				0.7				62.5				23.0
Diluted Earnings per Share Attributable to RehabCare:
Earnings from Continuing Operations, Net of Tax			0.66				0.61				0.02				2.48				1.14
Net Earnings			0.69				0.64				0.03				2.53				1.22
Hospital Operating Revenues			164.8				160.9				78.9				633.2				174.2
Hospital EBITDA (a)			25.1				20.7				(6.2	)			84.3				(18.5	)
Hospital Operating Earnings (Loss) (a)			19.2				14.8				(9.2	)			61.5				(26.1	)
SRS Operating Revenues			128.1				130.9				126.0				516.3				496.3
SRS EBITDA (a)			8.8				11.7				9.8				44.7				44.0
SRS Operating Earnings (a)			7.4				10.4				8.4				39.2				37.8
HRS Inpatient Operating Revenues			33.7				32.6				33.3				129.1				130.9
HRS Outpatient Operating Revenues			12.7				13.0				11.7				50.9				47.3
HRS Operating Revenues			46.4				45.6				45.0				180.0				178.2
HRS EBITDA (a)			10.2				9.1				7.9				35.1				31.9
HRS Operating Earnings (a)			9.6				8.5				7.3				32.9				29.5

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REHABCARE REPORTS FOURTH QUARTER,
FISCAL YEAR 2010 RESULTS AND 2011 OUTLOOK;
ENTERS INTO DEFINITIVE AGREEMENT TO BE ACQUIRED BY KINDRED HEALTHCARE

(a)		The fourth quarter and year ended December 31, 2009, include certain transaction related pretax charges of $9.4 million, or $0.34 per diluted share (see table on page 10).
(b)		The years ended December 31, 2010 and 2009 include after-tax gains from the discontinued operations of an inpatient rehabilitation facility in Miami of $1.2 million and $2.2 million, respectively. The year ended December 31, 2009, also includes a $0.8 million after-tax loss related to the Company’s Phase 2 Consulting business.

Management Comments

          “2010 was a period of transformation for our Hospital division, which finished the year on a high note,” commented John H. Short, Ph.D., RehabCare President and Chief Executive Officer. “Stronger census in the Houston market, substantial improvement of underperforming hospitals and an emphasis on cost management combined for significant margin expansion in the fourth quarter.”

          Dr. Short continued, “As expected, our Skilled Nursing Rehabilitation Services division experienced the repercussions of major regulatory changes in the fourth quarter. While same store revenues improved, earnings were compressed by lower productivity, and thus higher labor costs, as we ramped up staffing to provide more individual therapy. Given our ability to respond quickly and effectively to market pressures, we expect a steady recovery during 2011.

          “The Hospital Rehabilitation Services division delivered an exceptional earnings performance, with inpatient rehabilitation facility (IRF) same store volume growth of 6.8% driven in part by our automated pre-admission screening process. We will continue to leverage technology to streamline operations as well as position us for more integrated care.”

Proposed Acquisition by Kindred Healthcare, Inc.

          In a separate release earlier today, the Company announced that its Board of Directors unanimously approved a definitive merger agreement to be acquired by Kindred Healthcare, Inc. (NYSE: KND), which was entered into February 7, 2011. It is expected that the pending transaction will be completed on or about June 30, 2011.

          “Our combination with Kindred creates the nation’s premier provider of services along the post-acute continuum,” stated Dr. Short. “In addition to delivering significant shareholder value, our blended organization will provide an unmatched depth of services, resources and experience for our patients, clients and clinical professionals across the country. We are pleased that the RehabCare brand, which has been synonymous with high-quality, innovative post-acute care for nearly 30 years, will represent the combined company’s contract rehabilitation services going forward.”

Financial Overview of Fourth Quarter

          Consolidated operating revenues for the fourth quarter of 2010 were $339.3 million, a 35.8% increase compared to $249.8 million in the 2009 fourth quarter. Excluding Triumph, which contributed revenues of $117.8 million in the 2010 fourth quarter and $39.7 million in the 2009 fourth quarter, consolidated operating revenues increased $11.4 million, or 5.4%.

          Consolidated net earnings attributable to RehabCare were $17.1 million, or $0.69 per diluted share, in the fourth quarter of 2010 compared to $0.7 million, or $0.03 per diluted share, in the prior year

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REHABCARE REPORTS FOURTH QUARTER,
FISCAL YEAR 2010 RESULTS AND 2011 OUTLOOK;
ENTERS INTO DEFINITIVE AGREEMENT TO BE ACQUIRED BY KINDRED HEALTHCARE

quarter. Earnings in the fourth quarter of 2009 included $7.2 million, or $0.34 per diluted share, of certain after-tax charges, substantially all of which related to the Triumph merger (see table on page 10).

          The Company’s IRF in Miami has been classified as a discontinued operation as a result of an agreement with Select Medical Corporation, which closed on January 1, 2011, that involved the exchange of the IRF for Select’s 70-bed long-term acute care hospital (LTACH) in northwest Indiana. The Company generated income from this discontinued operation, net of tax, of $0.7 million, or $0.03 per diluted share, in the fourth quarter of 2010 and approximately $0.3 million, or $0.01 per diluted share, in the 2009 fourth quarter.

          Operating revenues in the Hospital division for the fourth quarter of 2010 increased $3.8 million, or 2.4%, sequentially to $164.8 million. Same store revenues increased $2.9 million, or 1.8% on a sequential basis. Earnings before interest, taxes, depreciation and amortization (EBITDA) improved by $4.4 million sequentially to $25.1 million, or 15.2% of revenue.

          At year end, the Hospital division operated a total of 34 hospitals, including 29 LTACHs and five IRFs.

          Operating revenues in the Skilled Nursing Rehabilitation Services (SRS) division increased 1.7% from $126.0 million in the fourth quarter of 2009 to $128.1 million in the fourth quarter of 2010, driven by a 2.2% increase in the average number of contract therapy programs operated. Contract therapy same store revenues increased 3.2%. Operating earnings were $7.4 million, or 5.8% of revenue, compared to $8.4 million, or 6.6% of revenue, in the fourth quarter of 2009.

          On December 31, 2010, SRS operated in 1,112 locations compared to 1,131 locations at the end of the third quarter of 2010 and 1,118 locations at the end of the fourth quarter of 2009. Openings and closings in the quarter totaled 38 and 57, respectively, resulting in a net 19 fewer units. SRS had 39 signed but unopened contracts at the end of the fourth quarter.

          In December, the Medicare Part B physician fee schedule and therapy cap exceptions process were extended through December 31, 2011.

          The Hospital Rehabilitation Services (HRS) division’s 2010 fourth quarter operating revenues increased 3.3% to $46.4 million from $45.0 million in the fourth quarter of 2009. Inpatient operating revenues increased 1.2% and same store revenues improved 4.9% over the prior year quarter. The average number of inpatient programs declined 1.5% compared to the prior year quarter. Outpatient operating revenues increased 9.0% in the 2010 fourth quarter despite an 11.8% decline in the average number of outpatient programs. This was driven by a 23.7% improvement in average revenue per program including 10.5% same store growth in outpatient revenues. HRS operating earnings were $9.6 million, or 20.6% of revenue, compared to operating earnings of $7.3 million, or 16.3% of revenue, for the 2009 fourth quarter.

          At December 31, 2010, the division operated 105 IRF programs, down one both sequentially and from a year ago. The division had two IRF openings and three IRF closings, one outpatient opening and one outpatient closing during the fourth quarter. At year end, the number of signed but unopened contracts was six, including three IRFs.

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REHABCARE REPORTS FOURTH QUARTER,
FISCAL YEAR 2010 RESULTS AND 2011 OUTLOOK;
ENTERS INTO DEFINITIVE AGREEMENT TO BE ACQUIRED BY KINDRED HEALTHCARE

Balance Sheet and Liquidity

          At December 31, 2010, the Company had $23.2 million in cash and cash equivalents and $398.5 million in outstanding debt excluding unamortized original issue discounts. The Company has paid down debt by $65.7 million during 2010. Days sales outstanding (DSO) remained flat sequentially at 61.9 days.

          For the year ended December 31, 2010, the Company generated cash from operations of $103.8 million and expended $30.6 million for capital expenditures, related to hospital start-ups, upgraded services at several hospitals, companywide information systems and hospital facility maintenance capital.

Outlook

              The Company does not provide consolidated revenue and earnings per share guidance, but provides the following outlook for 2011:

	•		The Hospital division expects total year revenue of $700 to $725 million and EBITDA margin of 14% to 15%, with sequentially improving margins throughout the year. This outlook reflects a net 1.0% lower Medicare reimbursement adjustment for the Company’s LTACHs in the current rate year.
	•		The Skilled Nursing Rehabilitation Services division expects total year revenue of $525 to $540 million and operating earnings margins to progressively improve from approximately 5.5% to 7% by year end. This reflects the impact of regulatory changes, including the Multiple Procedure Payment Reduction rule, new concurrent therapy rules and the rollout of information system technologies to be completed in April 2011.
	•		The Hospital Rehabilitation Services division expects full year revenue of $185 to $200 million and comparable quarterly operating earnings margins as achieved in 2010.
	•		The effective tax rate, after consideration of noncontrolling interests, is anticipated to be 38.25% for the year.
	•		Net income attributable to noncontrolling interests is expected to approximate $5 to $6 million for the full year.
	•		DSO is expected to be between 60 and 63 days.
	•		Capital expenditures are anticipated to be $25 million in 2011, consisting of $8 million of information systems investments, $7.5 million in expansion projects and $9.5 million related to maintenance.

Conference Call Information

          As noted in today’s separate acquisition announcement, Kindred and RehabCare management will host a conference call on February 8, 2011, beginning at 8:30 AM Eastern standard time. Listeners may access the call by dialing (913) 312-1305, or in a listen-only mode through Kindred’s website at www.kindredhealthcare.com.

          A replay of the call will be available beginning at approximately 11:30 AM Eastern on February 8 by dialing (719) 457-0820, access code 7191328. The replay will be available through February 16.

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REHABCARE REPORTS FOURTH QUARTER,
FISCAL YEAR 2010 RESULTS AND 2011 OUTLOOK;
ENTERS INTO DEFINITIVE AGREEMENT TO BE ACQUIRED BY KINDRED HEALTHCARE

About RehabCare Group

     Established in 1982 and headquartered in St. Louis, MO, RehabCare (www.rehabcare.com) is a leading provider of post-acute care, owning and operating 34 long-term acute care and rehabilitation hospitals and providing program management services in partnership with over 1,250 hospitals and skilled nursing facilities in 42 states and Puerto Rico. RehabCare is included in the Russell 2000 and Standard and Poor’s Small Cap 600 Indices.

Additional Information About the Transaction Between RehabCare and Kindred Healthcare, Inc.

In connection with the proposed transaction between Kindred and RehabCare, Kindred will file with the Securities and Exchange Commission (the “SEC”) a Registration Statement on Form S-4 that will include a joint proxy statement of Kindred and RehabCare that also constitutes a prospectus of Kindred. RehabCare and Kindred will mail the definitive proxy statement/prospectus to their respective stockholders. WE URGE INVESTORS AND SECURITY HOLDERS TO READ THE JOINT PROXY STATEMENT/PROSPECTUS REGARDING THE PROPOSED TRANSACTION WHEN IT BECOMES AVAILABLE BECAUSE IT WILL CONTAIN IMPORTANT INFORMATION. You may obtain a free copy of the joint proxy statement/prospectus (when available) and other related documents filed by RehabCare and Kindred with the SEC at the SEC’s website at www.sec.gov. The joint proxy statement/prospectus (when available) and the other documents filed by RehabCare and Kindred with the SEC may also be obtained for free by accessing RehabCare’s website at www.rehabcare.com and clicking on the “Investor Information” link and then clicking on the link for “SEC Filings”, and Kindred’s website at www.kindredhealthcare.com and clicking on the “Investors” link and then clicking on the link for “SEC Filings”.

Participants in the Transaction

RehabCare, Kindred, and their respective directors, executive officers and certain other members of management and employees may be soliciting proxies from their respective stockholders in favor of the proposed transaction. Information regarding the persons who may, under the rules of the SEC, be considered participants in the solicitation of stockholders in connection with the proposed transaction will be set forth in the joint proxy statement/prospectus when it is filed with the SEC. You can find information about RehabCare’s executive officers and directors in its definitive proxy statement filed with the SEC on March 23, 2010. You can find information about Kindred’s executive officers and directors in Kindred’s definitive proxy statement filed with the SEC on April 1, 2010. You can obtain free copies of these documents from RehabCare or Kindred, respectively, from the RehabCare and Kindred websites using the contact information above.

Forward-Looking Statements

Information set forth in this document contains forward-looking statements, which involve a number of risks and uncertainties. RehabCare cautions readers that any forward-looking information is not a guarantee of future performance and that actual results could differ materially from those contained in the forward-looking information. Such forward-looking statements include, but are not limited to, statements about the benefits of the business combination transaction involving RehabCare and Kindred, including future financial and operating results, the combined company’s plans, objectives, expectations and intentions and other statements that are not historical facts.

The following factors, among others, could cause actual results to differ from those set forth in the forward-looking statements: the ability to obtain regulatory approvals of the transaction on the proposed terms and schedule; the failure of RehabCare and Kindred stockholders to approve the transaction; failure to obtain the necessary financing for the transaction; the failure to consummate or delay in consummating the proposed merger for other reasons; the outcome of pending or potential litigation or governmental investigations; the risk that the businesses will not be integrated successfully or such integration may be more difficult, time-consuming or costly than expected; uncertainty of the expected financial performance of Kindred following completion of the proposed transaction; Kindred’s ability to achieve the cost savings and synergies contemplated by the proposed transaction within the expected time frame; disruption from the proposed transaction making it more difficult to maintain relationships with customers, employees or suppliers; and general economic conditions that are less favorable than expected. Additional factors that may affect future results are contained in RehabCare’s and Kindred’s filings with the SEC, which are available at the SEC’s web site at www.sec.gov. Many of these factors are beyond the control of RehabCare or Kindred. RehabCare and Kindred disclaim any obligation to update and revise statements contained in these materials based on new information or otherwise.

     This press release contains non-GAAP financial measures as such term is defined in Regulation G under the rules of the Securities and Exchange Commission. While the Company believes these non-GAAP financial measures are useful in evaluating the Company, this information should be considered as supplemental in nature and not as a substitute for or superior to the related financial information prepared in accordance with GAAP. Further, these non-GAAP financial measures may differ from similarly titled measures presented by other companies. The Company has included reconciliations of these non-GAAP measures to the most directly comparable GAAP measure in the tables of this release.

CONTACT: RehabCare Group, Inc.
Financial: Jay W. Shreiner, Chief Financial Officer
(314) 659-2189
Press: Donna Lee, Office of the CEO
(314) 659-2287

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REHABCARE REPORTS FOURTH QUARTER,
FISCAL YEAR 2010 RESULTS AND 2011 OUTLOOK;
ENTERS INTO DEFINITIVE AGREEMENT TO BE ACQUIRED BY KINDRED HEALTHCARE

I. Condensed Consolidated Statements of Earnings
(Unaudited; amounts in thousands, except per share data)

		Three Months Ended												Year Ended
		Dec. 31,				Sept. 30,				Dec. 31,				Dec. 31,				Dec. 31,
		2010				2010				2009				2010				2009
Operating revenues		$	339,344			$	337,481			$	249,807			$	1,329,443			$	848,612
Costs and expenses:
Operating			267,836				269,078				204,403				1,056,671				684,312
Selling, general and administrative			27,397				26,872				33,876				108,618				107,130
Depreciation and amortization			7,998				7,801				5,058				30,595				16,250
Total costs and expenses			303,231				303,751				243,337				1,195,884				807,692
Operating earnings			36,113				33,730				6,470				133,559				40,920
Interest income			20				32				79				98				98
Interest expense			(7,866	)			(8,250	)			(3,927	)			(33,167	)			(5,546	)
Other income (expense), net			312				5				8				319				12
Equity in net income of affiliates			199				114				105				640				431
Earnings from continuing operations before income taxes			28,778				25,631				2,735				101,449				35,915
Income tax expense			10,148				9,394				2,689				36,559				16,291
Earnings from continuing operations			18,630				16,237				46				64,890				19,624
Gain from discontinued operations			673				541				257				1,237				1,365
Net earnings			19,303				16,778				303				66,127				20,989
Net (earnings) loss attributable to noncontrolling interests			(2,250	)			(1,079	)			352				(3,677	)			1,966
Net earnings attributable to RehabCare		$	17,053			$	15,699			$	655			$	62,450			$	22,955
Amounts attributable to RehabCare:
Earnings from continuing operations		$	16,380			$	15,158			$	398			$	61,213			$	21,590
Gain from discontinued operations			673				541				257				1,237				1,365
Net earnings		$	17,053			$	15,699			$	655			$	62,450			$	22,955
Diluted EPS attributable to RehabCare:
Earnings from continuing operations		$	0.66			$	0.61			$	0.02			$	2.48			$	1.14
Gain from discontinued operations			0.03				0.03				0.01				0.05				0.08
Net earnings		$	0.69			$	0.64			$	0.03			$	2.53			$	1.22
Weighted average diluted shares			24,770				24,715				21,284				24,706				18,862

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REHABCARE REPORTS FOURTH QUARTER,
FISCAL YEAR 2010 RESULTS AND 2011 OUTLOOK;
ENTERS INTO DEFINITIVE AGREEMENT TO BE ACQUIRED BY KINDRED HEALTHCARE

II. Condensed Consolidated Balance Sheets
(Amounts in thousands)

		Unaudited
		December 31,				December 31,
		2010				2009
Assets
Cash and cash equivalents		$	23,205			$	24,690
Accounts receivable, net			222,179				199,447
Deferred tax assets			21,034				21,249
Other current assets			14,559				19,530
Total current assets			280,977				264,916
Property and equipment, net			119,591				111,814
Goodwill			559,866				566,078
Intangible assets			127,227				135,406
Investment in unconsolidated affiliate			4,913				4,761
Assets held for sale			10,407				—
Other assets			23,588				27,005
		$	1,126,569			$	1,109,980
Liabilities & Equity
Current portion of long-term debt		$	9,116			$	7,507
Payables & accruals			154,248				144,113
Total current liabilities			163,364				151,620
Long-term debt, less current portion			381,772				447,760
Other non-current liabilities			60,450				50,980
Stockholders’ equity			500,098				437,338
Noncontrolling interests			20,885				22,282
		$	1,126,569			$	1,109,980

III. Condensed Consolidated Statements of Cash Flows
(Unaudited; amounts in thousands)

		Year Ended
		December 31,
		2010				2009
Net cash provided by operating activities		$	103,838			$	48,090
Net cash used in investing activities			(30,981	)			(557,851	)
Net cash provided by (used in) financing activities			(74,342	)			507,078
Net decrease in cash and cash equivalents			(1,485	)			(2,683	)
Cash and cash equivalents at beginning of period			24,690				27,373
Cash and cash equivalents at end of period		$	23,205			$	24,690
Supplemental information:
Additions to property and equipment		$	(30,579	)		$	(13,215	)

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REHABCARE REPORTS FOURTH QUARTER,
FISCAL YEAR 2010 RESULTS AND 2011 OUTLOOK;
ENTERS INTO DEFINITIVE AGREEMENT TO BE ACQUIRED BY KINDRED HEALTHCARE

IV. Operating Statistics (Unaudited; dollars in thousands)

		Fourth				Third				Fourth				Year Ended
		Quarter				Quarter				Quarter				December 31,
		2010				2010				2009				2010				2009
Hospitals (a)
Operating revenues		$	164,778			$	160,937			$	78,876			$	633,156			$	174,194
Operating expenses			128,423				129,541				69,039				505,722				157,093
Selling, general and administrative			11,247				10,694				16,055				43,134				35,623
Depreciation and amortization			5,946				5,873				3,003				22,850				7,544
Operating earnings (loss)		$	19,162			$	14,829			$	(9,221	)		$	61,450			$	(26,066	)
Operating earnings margin			11.6	%			9.2	%			-11.7	%			9.7	%			-15.0	%
EBITDA		$	25,108			$	20,702			$	(6,218	)		$	84,300			$	(18,522	)
LTACHs
Number of hospitals — end of period			29				29				28				29				28
Available licensed beds — end of period			1,605				1,605				1,593				1,605				1,593
Admissions			3,680				3,754				1,767				14,519				3,604
Patient days			96,834				96,424				47,596				376,567				94,394
Average length of stay (Medicare days only)			25				25				27				26				26
Net inpatient revenue per patient day		$	1,545			$	1,513			$	1,342			$	1,523			$	1,267
Occupancy rate			66	%			65	%			67	%			64	%			63	%
Percent patient days — Medicare			74	%			74	%			72	%			73	%			72	%
IRFs (a)
Number of hospitals — end of period			5				5				5				5				5
Available licensed beds — end of period			183				183				183				183				183
Admissions			921				905				871				3,590				3,513
Discharges			935				894				891				3,587				3,477
Average length of stay (Medicare days only)			12				12				12				12				12
Net inpatient revenue per discharge		$	14,504			$	14,955			$	15,042			$	14,692			$	14,273
Occupancy rate			68	%			70	%			68	%			69	%			67	%
Percent patient days — Medicare			71	%			67	%			69	%			69	%			70	%

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REHABCARE REPORTS FOURTH QUARTER,
FISCAL YEAR 2010 RESULTS AND 2011 OUTLOOK;
ENTERS INTO DEFINITIVE AGREEMENT TO BE ACQUIRED BY KINDRED HEALTHCARE

IV. Operating Statistics Continued (Unaudited; dollars in thousands)

		Fourth				Third				Fourth				Year Ended
		Quarter				Quarter				Quarter				December 31,
		2010				2010				2009				2010				2009
Skilled Nursing Rehabilitation Services
Operating revenues		$	128,132			$	130,943			$	125,965			$	516,278			$	496,250
Operating expenses			107,344				107,067				103,698				423,399				402,461
Selling, general and administrative			11,950				12,138				12,448				48,172				49,753
Depreciation and amortization			1,466				1,385				1,463				5,523				6,283
Operating earnings		$	7,372			$	10,353			$	8,356			$	39,184			$	37,753
Operating earnings margin			5.8	%			7.9	%			6.6	%			7.6	%			7.6	%
EBITDA		$	8,838			$	11,738			$	9,819			$	44,707			$	44,036
Average number of contract therapy locations			1,146				1,136				1,121				1,135				1,088
End of period number of contract therapy locations			1,112				1,131				1,118				1,112				1,118
Patient visits (in thousands)			2,008				2,054				2,023				8,162				8,056
Hospital Rehabilitation Services
Operating revenues
Inpatient Rehabilitation Facility (IRF)		$	31,469			$	30,144			$	31,294			$	120,238			$	123,661
Subacute			2,217				2,454				1,981				8,890				7,202
Total Inpatient		$	33,686			$	32,598			$	33,275			$	129,128			$	130,863
Outpatient			12,748				13,003				11,691				50,881				47,305
Total HRS		$	46,434			$	45,601			$	44,966			$	180,009			$	178,168
Operating expenses			32,069				32,470				31,666				127,550				124,758
Selling, general and administrative			4,200				4,040				5,373				17,312				21,500
Depreciation and amortization			586				543				592				2,222				2,423
Operating earnings		$	9,579			$	8,548			$	7,335			$	32,925			$	29,487
Operating earnings margin			20.6	%			18.7	%			16.3	%			18.3	%			16.6	%
EBITDA		$	10,165			$	9,091			$	7,927			$	35,147			$	31,910
Average number of programs
IRF			106				106				110				105				112
Subacute			11				11				9				11				9
Total Inpatient			117				117				119				116				121
Outpatient			30				31				34				31				35
Total HRS			147				148				153				147				156
End of period number of programs
IRF			105				106				106				105				106
Subacute			11				11				9				11				9
Total Inpatient			116				117				115				116				115
Outpatient			30				30				30				30				30
Total HRS			146				147				145				146				145
IRF discharges			11,136				10,473				10,907				41,992				44,123
Outpatient visits (in thousands)			263				274				305				1,078				1,264

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Page 10

REHABCARE REPORTS FOURTH QUARTER,
FISCAL YEAR 2010 RESULTS AND 2011 OUTLOOK;
ENTERS INTO DEFINITIVE AGREEMENT TO BE ACQUIRED BY KINDRED HEALTHCARE

V. Charges/Credits Included in Statement of Earnings

(Amounts in thousands, except per share data)

		Fourth Quarter 2009
		Pre-Tax Impact				After-Tax Impact				Diluted EPS
Transaction expenses1		$	7,070			$	4,313			$	0.20
Tax impact of non-deductible transaction expenses2			—				1,502				0.07
Severance expenses3			862				526				0.03
Long-term incentive plan expense resulting from transaction2			1,443				880				0.04
			—				—				—
		$	9,375			$	7,221			$	0.34
Breakdown by division
Hospitals		$	8,405
Skilled Nursing Rehabilitation Services			648
Hospital Rehabilitation Services			322
		$	9,375

VI. Operating Earnings and EBITDA Reconciliation

		Fourth				Third				Fourth				Year Ended
		Quarter				Quarter				Quarter				December 31,
		2010				2010				2009				2010				2009
Net earnings		$	19,303			$	16,778			$	303			$	66,127			$	20,989
Income tax expense			10,148				9,394				2,689				36,559				16,291
Interest income			(20	)			(32	)			(79	)			(98	)			(98	)
Interest expense			7,866				8,250				3,927				33,167				5,546
Other (income) expense, net			(312	)			(5	)			(8	)			(319	)			(12	)
Equity in net income of affiliates			(199	)			(114	)			(105	)			(640	)			(431	)
Gain from discontinued operations			(673	)			(541	)			(257	)			(1,237	)			(1,365	)
Operating earnings			36,113				33,730				6,470				133,559				40,920
Depreciation and amortization			7,998				7,801				5,058				30,595				16,250
Consolidated EBITDA		$	44,111			$	41,531			$	11,528			$	164,154			$	57,170
Hospital operating earnings (loss)		$	19,162			$	14,829			$	(9,221	)		$	61,450			$	(26,066	)
Hospital depreciation and amortization			5,946				5,873				3,003				22,850				7,544
Hospital EBITDA		$	25,108			$	20,702			$	(6,218	)		$	84,300			$	(18,522	)
SRS operating earnings		$	7,372			$	10,353			$	8,356			$	39,184			$	37,753
SRS depreciation and amortization			1,466				1,385				1,463				5,523				6,283
SRS EBITDA		$	8,838			$	11,738			$	9,819			$	44,707			$	44,036
HRS operating earnings		$	9,579			$	8,548			$	7,335			$	32,925			$	29,487
HRS depreciation and amortization			586				543				592				2,222				2,423
HRS EBITDA		$	10,165			$	9,091			$	7,927			$	35,147			$	31,910

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