1098690--3/29/2006--CONCENTRA_OPERATING

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{debt, indebtedness, cash}

{product, market, service}

{personnel, key, retain}

{system, service, information}

{regulation, change, law}

{condition, economic, financial}

{acquisition, growth, future}

{capital, credit, financial}

{product, liability, claim}

{competitive, industry, competition}

{investment, property, distribution}

{tax, income, asset}

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If we cannot generate cash, we will not be able to service our indebtedness. Despite our current levels of indebtedness, we still may be able to incur substantially more debt and are actively investigating a number of potential acquisitions. This could further increase the risks described above. To service our indebtedness, we will require a significant amount of cash. Our ability to generate cash depends upon factors beyond our control. Some of our borrowings are at a variable rate of interest, which may result in higher interest expense in the event of increases in interest rates. We are more highly leveraged than some of our competitors, which may place us at a competitive disadvantage. The terms of our amended credit facility, our parent s bridge loan agreement, and the indentures governing our 9 1 / 2 % senior subordinated notes and our 9 1 / 8 % senior subordinated notes impose many restrictions on us. If we are unable to preserve or increase our market share among national and regional insurance carriers and large, self-funded employers, our results may be adversely affected. If we lose a significant customer, our results may be adversely affected. Our revenue and profitability may decrease if our customers lose market share to competitors who do not use our services to the same extent. If pricing pressures intensify, our results could be adversely affected. If we are unable to acquire or develop occupational healthcare centers in new markets, our results may be adversely affected. The nature of the markets that we serve may constrain our ability to raise prices at rates sufficient to keep pace with the inflation of our costs. If competition increases, our growth and profits may decline. Some of our larger group health customers may seek to provide certain workers compensation preferred provider organization services that could be competitive to the services we provide to payors in that market. Our Beech Street PPO faces competitive pressure, particularly price competition, that could reduce the revenue and profitability in our Network Services segment. Future acquisitions and joint ventures may use significant resources or be unsuccessful. If we incur material liabilities as a result of acquiring companies, including our recent Beech Street and OH+R acquisitions, our operating results may be adversely affected. We are subject to risks associated with acquisitions of intangible assets. If we are unable to manage growth, we may be unable to achieve our expansion strategy. If we are unable to leverage our information systems to enhance our outcome-driven service model, our results may be adversely affected. If our data processing is interrupted or our licenses to use software are revoked, our ability to operate our business could be adversely affected. If lawsuits against us are successful, we may incur significant liabilities. The increased costs of professional and general liability insurance may have an adverse effect on our profitability. If the average annual growth in nationwide employment does not offset declines in the frequency of workplace injuries and illnesses, then the size of our market may decline and adversely affect our ability to grow. Our affiliated professional groups may not be able to recruit and retain sufficient qualified physicians and other licensed providers. A significant number of our affiliated physicians may leave our affiliated groups, or our affiliated professional groups may be unable to enforce the non-competition covenants of departing physicians. Regulatory authorities or other parties may assert that, in conducting our business, we may be engaged in unlawful fee splitting or the corporate practice of medicine. We have experienced a decline in the performance of our Care Management Services business, which may continue. We operate in an industry that is subject to extensive federal, state, and local regulation, and changes in law and regulatory interpretations could reduce our revenue and profitability. Workers compensation reform legislation in California may adversely affect our financial performance. Healthcare providers are becoming increasingly resistant to the application of certain healthcare cost containment techniques; this may increase our costs, or may cause revenue from our cost containment operations to decrease. Our PPOs may experience decreases in the discounts we receive from providers, thereby adversely affecting our competitive position, revenue, and profitability in our Network Services segment. Federal regulators have increased their antitrust enforcement activity with respect to certain provider relationships, which may adversely affect our Network Services operations. The managed care industry receives significant negative publicity that may adversely affect our profitability. If healthcare reform intensifies competition and reduces the costs associated with workers compensation claims, the rates we charge for our services may decrease and may negatively impact our financial performance. If the utilization by healthcare payors of early intervention services, including our occupational healthcare, first notice of loss or injury, and telephonic case management services, continues to increase, the revenue from our later stage network and care management services may be adversely affected. Future cost containment initiatives undertaken by state workers compensation commissions and other third-party payors may adversely affect our financial performance. Changes in federal or state laws, rules, and regulations, including those governing the corporate practice of medicine, fee splitting, workers compensation, and insurance laws, rules, and regulations, may affect our ability to expand all our operations into other states and, therefore, may reduce our profitability. Confidentiality laws and regulations may increase the cost of our business, limit our service offerings, or create a risk of liability. Demand for our network services may be adversely affected if our prospective network services clients are unable to implement the transaction and security standards required under HIPAA. We may not be able to comply with Section 404 of the Sarbanes-Oxley Act in the future. Changes in the federal Anti-Kickback Statute and Stark Law and/or similar state laws, rules, and regulations may adversely affect our profitability and ability to expand our operations. The providers in our affiliated professional groups may begin to participate in Medicare on some basis, which may subject them or us to additional regulation and scrutiny. Our senior management has been key to our growth, and we may be adversely affected if we lose any member of our senior management. We may be confronted with increasing difficulties in the recruiting and development of a management team that possesses the necessary skills and expertise to successfully undertake our strategies.

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1098690--3/29/2006--CONCENTRA_OPERATING_CORP