EXHIBIT 13.1
| **SIX-YEAR FINANCIAL SUMMARY****                |   |        |   |   |   |     |   |   |   |    |   |   |   |     |   |   |   |    |   |   |   |    |   |
|-------------------------------------------------|--------|-------------|--------|--------|--------|----------|--------|--------|--------|---------|--------|--------|--------|----------|--------|--------|--------|---------|--------|--------|--------|---------|--------|
| *Dollars in thousands, except per share data*** |   |        |   |   |   |     |   |   |   |    |   |   |   |     |   |   |   |    |   |   |   |    |   |
| ***(Year ended December 31,)***                 |   | **2006**    |   |   |   | 2005     |   |   |   | 2004    |   |   |   | 2003     |   |   |   | 2002    |   |   |   | 2001    |   |
| Consolidated statement of earnings data:        |   |        |   |   |   |     |   |   |   |    |   |   |   |     |   |   |   |    |   |   |   |    |   |
| Operating revenues                              | **$**  | **614,793** |   |   | $      | 454,266  |   |   | $      | 383,846 |   |   | $      | 539,322  |   |   | $      | 562,565 |   |   | $      | 542,265 |   |
| Operating earnings (loss) **(2) (3)**           |   | **20,955**  |   |   |   | 33,267   |   |   |   | 41,804  |   |   |   | (14,396) |   |   |   | 39,697  |   |   |   | 36,967  |   |
| Net earnings (loss) **(2)(3) (4)**              |   | **7,280**   |   |   |   | (16,982) |   |   |   | 23,181  |   |   |   | (13,699) |   |   |   | 24,395  |   |   |   | 21,035  |   |
| Net earnings (loss) per share: **(2) (3) (4)**  |   |        |   |   |   |     |   |   |   |    |   |   |   |     |   |   |   |    |   |   |   |    |   |
| Basic                                           | **$**  | **0.43**    |   |   | $      | (1.01)   |   |   | $      | 1.42    |   |   | $      | (0.86)   |   |   | $      | 1.45    |   |   | $      | 1.25    |   |
| Diluted                                         | **$**  | **0.42**    |   |   | $      | (1.01)   |   |   | $      | 1.38    |   |   | $      | (0.86)   |   |   | $      | 1.38    |   |   | $      | 1.16    |   |
| Weighted average shares outstanding (000s):     |   |        |   |   |   |     |   |   |   |    |   |   |   |     |   |   |   |    |   |   |   |    |   |
| Basic                                           |   | **17,008**  |   |   |   | 16,751   |   |   |   | 16,292  |   |   |   | 16,000   |   |   |   | 16,833  |   |   |   | 16,775  |   |
| Diluted                                         |   | **17,243**  |   |   |   | 16,751   |   |   |   | 16,835  |   |   |   | 16,000   |   |   |   | 17,642  |   |   |   | 18,077  |   |
|                                            |   |        |   |   |   |     |   |   |   |    |   |   |   |     |   |   |   |    |   |   |   |    |   |
| Consolidated balance sheet data:                |   |        |   |   |   |     |   |   |   |    |   |   |   |     |   |   |   |    |   |   |   |    |   |
| Working capital                                 | **$**  | **85,982**  |   |   | $      | 60,664   |   |   | $      | 76,451  |   |   | $      | 76,952   |   |   | $      | 67,846  |   |   | $      | 77,524  |   |
| Total assets                                    |   | **428,296** |   |   |   | 272,925  |   |   |   | 277,666 |   |   |   | 233,626  |   |   |   | 235,530 |   |   |   | 250,661 |   |
| Total liabilities                               |   | **217,431** |   |   |   | 74,677   |   |   |   | 70,638  |   |   |   | 55,671   |   |   |   | 46,916  |   |   |   | 51,625  |   |
| Stockholders’ equity                       |   | **210,779** |   |   |   | 198,248  |   |   |   | 207,028 |   |   |   | 177,955  |   |   |   | 188,614 |   |   |   | 199,036 |   |
|                                            |   |        |   |   |   |     |   |   |   |    |   |   |   |     |   |   |   |    |   |   |   |    |   |
| Financial statistics:                           |   |        |   |   |   |     |   |   |   |    |   |   |   |     |   |   |   |    |   |   |   |    |   |
| Operating margin **(2) (3)**                    |   | **3.4%**    |   |   |   | 7.3%     |   |   |   | 10.9%   |   |   |   | (2.7)%   |   |   |   | 7.1%    |   |   |   | 6.8%    |   |
| Net margin **(2) (3) (4)**                      |   | **1.2%**    |   |   |   | (3.7)%   |   |   |   | 6.0%    |   |   |   | (2.5)%   |   |   |   | 4.3%    |   |   |   | 3.9%    |   |
| Current ratio                                   |   | **1.9:1**   |   |   |   | 1.9:1    |   |   |   | 2.3:1   |   |   |   | 2.9:1    |   |   |   | 2.8:1   |   |   |   | 2.7:1   |   |
| Diluted EPS growth rate **(2) (3) (4)**         |   | **141.6%**  |   |   |   | (173.2)% |   |   |   | 260.5%  |   |   |   | (162.3)% |   |   |   | 19.0%   |   |   |   | (20.0)% |   |
| Return on equity **(1) (2) (3) (4)**            |   | **3.6%**    |   |   |   | (8.4)%   |   |   |   | 12.0%   |   |   |   | (7.5)%   |   |   |   | 12.6%   |   |   |   | 13.3%   |   |
|                                            |   |        |   |   |   |     |   |   |   |    |   |   |   |     |   |   |   |    |   |   |   |    |   |
| Operating statistics:                           |   |        |   |   |   |     |   |   |   |    |   |   |   |     |   |   |   |    |   |   |   |    |   |
| Freestanding hospitals:                         |   |        |   |   |   |     |   |   |   |    |   |   |   |     |   |   |   |    |   |   |   |    |   |
| Number of locations at end of year **(5)**      |   | **8**       |   |   |   | 5        |   |   |   | N/A     |   |   |   | N/A      |   |   |   | N/A     |   |   |   | N/A     |   |
| Number of patient discharges **(5)**            |   | **3,891**   |   |   |   | 1,110    |   |   |   | N/A     |   |   |   | N/A      |   |   |   | N/A     |   |   |   | N/A     |   |
| Program management:                             |   |        |   |   |   |     |   |   |   |    |   |   |   |     |   |   |   |    |   |   |   |    |   |
| Inpatient units:                                |   |        |   |   |   |     |   |   |   |    |   |   |   |     |   |   |   |    |   |   |   |    |   |
| Average number of programs                      |   | **137**     |   |   |   | 145      |   |   |   | 142     |   |   |   | 133      |   |   |   | 135     |   |   |   | 137     |   |
| Average admissions per program                  |   | **360**     |   |   |   | 372      |   |   |   | 383     |   |   |   | 422      |   |   |   | 411     |   |   |   | 394     |   |
| Outpatient programs:                            |   |        |   |   |   |     |   |   |   |    |   |   |   |     |   |   |   |    |   |   |   |    |   |
| Average number of locations                     |   | **41**      |   |   |   | 42       |   |   |   | 42      |   |   |   | 48       |   |   |   | 55      |   |   |   | 61      |   |
| Patient visits (000s)                           |   | **1,130**   |   |   |   | 1,146    |   |   |   | 1,133   |   |   |   | 1,248    |   |   |   | 1,366   |   |   |   | 1,439   |   |
| Contract therapy:                               |   |        |   |   |   |     |   |   |   |    |   |   |   |     |   |   |   |    |   |   |   |    |   |
| Average number of locations **(6)**             |   | **1,018**   |   |   |   | 749      |   |   |   | 588     |   |   |   | 460      |   |   |   | 378     |   |   |   | 250     |   |

 
| **(1)** | Average of beginning and ending equity. |
|---------|-----------------------------------------|
| **(2)** | The results for 2001 include $9.0 million in non-recurring charges related to our supplemental staffing division. |
|---------|-------------------------------------------------------------------------------------------------------------------|
| **(3)** | The results for 2003 include a pretax loss on net assets held for sale of $43.6 million ($30.6 million after tax or $1.90 per diluted share). |
|---------|-----------------------------------------------------------------------------------------------------------------------------------------------|
| **(4)** | The results for 2005 include after tax losses on our equity investment in InteliStaf Holdings, Inc. of $36.5 million or $2.18 per diluted share. |
|---------|--------------------------------------------------------------------------------------------------------------------------------------------------|
| **(5)** | We entered the freestanding hospitals business on August 1, 2005 with the acquisition of substantially all of the operating assets of MeadowBrook Healthcare, Inc. |
|---------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| **(6)** | Effective July 1, 2006, we acquired Symphony Health Services, LLC and its RehabWorks business, which added 470 contract therapy locations. |
|---------|--------------------------------------------------------------------------------------------------------------------------------------------|

 

 

 

 

**Stock Data**

 

The Company’s common stock is listed and traded on the New York Stock Exchange under the symbol “RHB.”  The stock prices below are the high and low closing sale prices per share of our common stock, as reported on the New York Stock Exchange, for the periods indicated.

 
| CALENDAR QUARTER | 1st  | 2nd    | 3rd    | 4th    |
|------------------|------|--------|--------|--------|
| 2006             | High | $20.90 | $18.48 | $18.72 | $15.50 |
|             | Low  | 18.02  | 15.10  | 12.94  | 11.68 |
| 2005             | High | $30.20 | $30.62 | $27.89 | $21.46 |
|             | Low  | 25.91  | 26.15  | 20.43  | 19.21 |

 

The Company has not paid dividends on its common stock during the two most recently completed fiscal years and has not declared any dividends during the current fiscal year. The Company does not anticipate paying cash dividends in the foreseeable future.

 

The number of holders of the Company’s common stock as of March 5, 2007, was approximately 10,100, including 552 shareholders of record and an estimated 9,550 persons or entities holding common stock in nominee name.

 

Shareholders may receive earnings news releases, which provide timely financial information, by notifying our investor relations department or by visiting our website: http://www.rehabcare.com.