# EDGAR Filing Document

**Accession Number:** 0001320414
**File Stem:** 0001104659-26-017585
**Filing Date:** 2026-2
**Character Count:** 58920
**Document Hash:** f2188ba7bbece55cedfbb69c4bca2ddb
**Contains OCR:** False
**Source Format:** 

## Filing Content

## Filing Summary
**0001104659-26-017585.hdr.sgml**: 20260219

**ACCESSION NUMBER**: 0001104659-26-017585

**CONFORMED SUBMISSION TYPE**: 8-K

**PUBLIC DOCUMENT COUNT**: 14

**CONFORMED PERIOD OF REPORT**: 20260212

**ITEM INFORMATION**: Results of Operations and Financial Condition

**ITEM INFORMATION**: Other Events

**ITEM INFORMATION**: Financial Statements and Exhibits

**FILED AS OF DATE**: 20260219

**DATE AS OF CHANGE**: 20260219

**FILER**: 

**COMPANY DATA:**
- **COMPANY CONFORMED NAME:** SELECT MEDICAL HOLDINGS CORP
- **CENTRAL INDEX KEY:** 0001320414
- **STANDARD INDUSTRIAL CLASSIFICATION:** SERVICES-HOSPITALS [8060]
- **ORGANIZATION NAME:** 08 Industrial Applications and Services
- **EIN:** 000000000
- **FISCAL YEAR END:** 1231

**FILING VALUES:**
- **FORM TYPE:** 8-K
- **SEC ACT:** 1934 Act
- **SEC FILE NUMBER:** 001-34465
- **FILM NUMBER:** 26655172

**BUSINESS ADDRESS:**
- **STREET 1:** C/O SELECT MEDICAL CORP
- **STREET 2:** 4714 GETTYSBURG RD
- **CITY:** MECHANICSBURG
- **STATE:** PA
- **ZIP:** 17055
- **BUSINESS PHONE:** 717-972-1100

**MAIL ADDRESS:**
- **STREET 1:** C/O SELECT MEDICAL CORP
- **STREET 2:** 4714 GETTYSBURG RD
- **CITY:** MECHANICSBURG
- **STATE:** PA
- **ZIP:** 17055

?xml version='1.0' encoding='ASCII'?

**UNITED STATES**

**SECURITIES AND EXCHANGE COMMISSION**

**Washington, DC 20549**

**FORM 8-K**

**current report**

**Pursuant to Section 13 or 15(d) of the**

**Securities Exchange Act of 1934**

**Date of Report (Date of earliest event reported): February 12, 2026**

**SELECT MEDICAL HOLDINGS CORPORATION**

(Exact name of registrant as specified in its charter)

---

| | | |
|:---|:---|:---|
| **Delaware** | **001-34465** | **20-1764048** |
| (State or other jurisdiction of <br> Incorporation) | (Commission File <br> Number) | (I.R.S. Employer <br>Identification No.) |

---

**4714 Gettysburg Road, P.O. Box 2034**

**Mechanicsburg, PA 17055**

(Address of principal executive offices) (Zip Code)

**(717) 972-1100**

(Registrant's telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act:

---

| | | |
|:---|:---|:---|
| Title of each class | Trading Symbol(s) | Name of each exchange on which registered |
| Common Stock, par value $0.001 per share | SEM | New York Stock Exchange (NYSE) |

---

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

◻ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

◻ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

◻ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

◻ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Indicate by check mark whether either registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

Emerging growth company ¨

If an emerging growth company, indicate by check mark if either registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ◻

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| | |
|:---|:---|
| **Item 2.02** | **Results of Operations and Financial Condition.** |

---

On February 19, 2026, Select Medical Holdings Corporation (the "Company") issued a press release announcing its financial results for its fourth quarter and fiscal year ended December 31, 2025 (the "Press Release"). A copy of the Press Release and the attached financial schedules are attached as Exhibit 99.1 to this report and incorporated herein by reference.

The information in this report (including Exhibit 99.1) is being furnished pursuant to Item 2.02 and shall not be deemed to be "filed" for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the "Exchange Act"), or otherwise subject to the liabilities of that section, nor shall it be deemed to be incorporated by reference in any filing under the Securities Act of 1933, as amended (the "Securities Act"), or the Exchange Act.

---

| | |
|:---|:---|
| **Item 8.01** | **Other Events** |

---

***Dividend Declaration***

On February 12, 2026, the Company's board of directors declared a cash dividend of $0.0625 per share. The dividend will be payable on or about March 12, 2026 to stockholders of record as of the close of business on March 2, 2026.

---

| | |
|:---|:---|
| **Item **9.01** | **Financial Statements and Exhibits.** |

---

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) Exhibits.

---

| | |
|:---|:---|
| &nbsp;&nbsp;Exhibit Number | &nbsp;&nbsp;Description |
| &nbsp;&nbsp;[99.1](tm266741d1_ex99-1.htm) | &nbsp;&nbsp;[Press Release, dated February 19, 2026, announcing financial results for the fourth quarter and year ended December 31, 2025.](tm266741d1_ex99-1.htm) |
| &nbsp;&nbsp;104 | &nbsp;&nbsp;Cover Page Interactive Data File (embedded within the Inline XBRL document) |

---

**SIGNATURE**

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

---

| | | |
|:---|:---|:---|
|  | SELECT MEDICAL HOLDINGS CORPORATION | SELECT MEDICAL HOLDINGS CORPORATION |
| Date: February 19, 2026 | By: | /s/ John F. Duggan |
|  |  | John F. Duggan |
|  |  | Executive Vice President, General Counsel and Secretary |

---

## Exhibit 99.1

**Exhibit 99.1**

![](tm266741d1_ex99-1img001.jpg)

---

| | |
|:---|:---|
| **FOR IMMEDIATE RELEASE** | **4714 Gettysburg Road**<br> **Mechanicsburg, PA 17055**<br>**NYSE Symbol: SEM** |

---

**Select Medical Holdings Corporation Announces Results** 

**For Its Fourth Quarter and Year Ended December 31, 2025, Its 2026 Business Outlook, and Cash Dividend**

MECHANICSBURG, PENNSYLVANIA — February 19, 2026 — Select Medical Holdings Corporation ("Select Medical," "we," "us," or "our") (NYSE: SEM) today announced results for its fourth quarter and year ended December 31, 2025, its 2026 business outlook, and the declaration of a cash dividend.

For the fourth quarter ended December 31, 2025, revenue increased 6.4% to $1,396.6 million, compared to $1,312.6 million for the same quarter, prior year. Income from continuing operations before other income and expense increased 203.1% to $63.9 million for the fourth quarter ended December 31, 2025, compared to $21.1 million for the same quarter, prior year. Income from continuing operations, net of tax, increased 461.0% to $37.7 million for the fourth quarter ended December 31, 2025, compared to loss from continuing operations, net of tax, of $10.5 million for the same quarter, prior year. In connection with the distribution of Concentra Group Holdings Parent ("Concentra") common stock to our stockholders, there was a one-time acceleration of $45.9 million of stock compensation expense, which reduced income (loss) from continuing operations for the quarter ended December 31, 2024. Additionally, during the quarter ended December 31, 2024, we recognized a loss on early retirement of debt of $17.9 million. Adjusted EBITDA was $104.7 million for the fourth quarter ended December 31, 2025, compared to $116.0 million for the same quarter, prior year. Earnings per common share from continuing operations increased 184.2% to $0.16 for the fourth quarter ended December 31, 2025, compared to diluted loss per common share from continuing operations of $0.19 for the same quarter, prior year. Adjusted earnings per common share from continuing operations, net of tax, was $0.16 for the fourth quarter ended December 31, 2025, compared to $0.18 for the same quarter, prior year. Prior year adjusted earnings per common share excludes the one-time acceleration of stock compensation expense, the loss on early retirement of debt, and certain transaction costs associated with the Concentra transaction. The definition of Adjusted EBITDA and a reconciliation of income from continuing operations, net of tax, to Adjusted EBITDA are presented in table IX of this release. A reconciliation of earnings per common share from continuing operations, net of tax, to adjusted earnings per common share from continuing operations, net of tax, is presented in table X of this release.

For the year ended December 31, 2025, revenue increased 5.1% to $5,452.8 million, compared to $5,187.1 million for the prior year. Income from continuing operations before other income and expense increased 25.3% to $336.2 million for the year ended December 31, 2025, compared to $268.3 million for the prior year. Income from continuing operations, net of tax, increased 65.0% to $214.5 million for the year ended December 31, 2025, compared to $130.0 million for the prior year. In connection with the distribution of Concentra, there was a one-time acceleration of $45.9 million of stock compensation expense, which reduced income from continuing operations for the year ended December 31, 2024. Additionally, during the year ended December 31, 2024, we recognized a loss on early retirement of debt of $28.8 million. Adjusted EBITDA was $493.2 million for the year ended December 31, 2025, compared to $510.4 million for the prior year. Earnings per common share from continuing operations, net of tax, increased 127.5% to $1.16 for the year ended December 31, 2025, compared to $0.51 for the prior year. Adjusted earnings per common share from continuing operations, net of tax, increased 23.4% to $1.16 for the year ended December 31, 2025, compared to $0.94 for the prior year. Prior year adjusted earnings per common share excludes the one-time acceleration of stock compensation expense and the loss on early retirement of debt. The definition of Adjusted EBITDA and a reconciliation of income from continuing operations, net of tax, to Adjusted EBITDA are presented in table IX of this release. A reconciliation of earnings per common share from continuing operations, net of tax, to adjusted earnings per common share from continuing operations, net of tax, is presented in table X of this release.

On November 25, 2024, we completed a tax-free distribution of 104,093,503 shares of common stock of Concentra to our stockholders. Following the completion of the distribution, we no longer own any shares of Concentra's common stock. The results of Concentra, and related transaction costs, have been reflected as discontinued operations in the prior period consolidated statements of operations.

On November 24, 2025, the Company received a non-binding indication of interest from Robert A. Ortenzio, our Executive Chairman, Co-Founder and Director, to acquire all of the Company's outstanding shares for cash consideration of $16.00 to $16.20 per share of our common stock (the "Proposal" and such transaction, the "Take Private Transaction"). Mr. Ortenzio publicly announced the Proposal on November 24, 2025 in a Schedule 13D filing with the SEC. On November 25, 2025, in connection with the Proposal, the disinterested members of the Board of Directors met and voted to form an independent special committee of the Board of Directors (the "Special Committee"). The Special Committee is carefully reviewing and evaluating the Proposal in consultation with their advisors and will determine the appropriate course of action in the best interests of the Company and its stockholders. In connection therewith, the Special Committee is evaluating other potential strategic alternatives to maximize stockholder value.

<u>Company Overview</u>

Select Medical is one of the largest operators of critical illness recovery hospitals, rehabilitation hospitals, and outpatient rehabilitation clinics in the United States based on number of facilities. Select Medical's reportable segments include the critical illness recovery hospital segment, the rehabilitation hospital segment, and the outpatient rehabilitation segment. As of December 31, 2025, Select Medical operated 104 critical illness recovery hospitals in 28 states, 38 rehabilitation hospitals in 15 states, and 1,917 outpatient rehabilitation clinics in 39 states and the District of Columbia. At December 31, 2025, Select Medical had operations in 39 states and the District of Columbia. Information about Select Medical is available at <u>www.selectmedical.com</u>.

<u>Critical Illness Recovery Hospital Segment</u>

For the fourth quarter ended December 31, 2025, revenue for the critical illness recovery hospital segment increased 4.9% to $629.7 million, compared to $600.4 million for the same quarter, prior year. Adjusted EBITDA for the critical illness recovery hospital segment increased 5.3% to $66.4 million for the fourth quarter ended December 31, 2025, compared to $63.1 million for the same quarter, prior year. The Adjusted EBITDA margin for the critical illness recovery hospital segment was 10.5% both the fourth quarters ended December 31, 2025 and 2024. Certain critical illness recovery hospital key statistics are presented in table VII of this release for the fourth quarters ended December 31, 2025 and 2024.

For the year ended December 31, 2025, revenue for the critical illness recovery hospital segment increased 1.4% to $2,477.8 million, compared to $2,444.2 million for the prior year. Adjusted EBITDA for the critical illness recovery hospital segment was $265.4 million for the year ended December 31, 2025, compared to $301.6 million for the prior year. The Adjusted EBITDA margin for the critical illness recovery hospital segment was 10.7% for the year ended December 31, 2025, compared to 12.3% for the prior year. Certain critical illness recovery hospital key statistics are presented in table VIII of this release for the years ended December 31, 2025 and 2024.

<u>Rehabilitation Hospital Segment</u>

For the fourth quarter ended December 31, 2025, revenue for the rehabilitation hospital segment increased 15.2% to $339.2 million, compared to $294.4 million for the same quarter, prior year. Adjusted EBITDA for the rehabilitation hospital segment increased 11.1% to $69.2 million for the fourth quarter ended December 31, 2025, compared to $62.3 million for the same quarter, prior year. The Adjusted EBITDA margin for the rehabilitation hospital segment was 20.4% for the fourth quarter ended December 31, 2025, compared to 21.2% for the same quarter, prior year. Certain rehabilitation hospital key statistics are presented in table VII of this release for both the fourth quarters ended December 31, 2025 and 2024.

For the year ended December 31, 2025, revenue for the rehabilitation hospital segment increased 16.1% to $1,289.0 million, compared to $1,110.6 million for the prior year. Adjusted EBITDA for the rehabilitation hospital segment increased 13.4% to $278.6 million for the year ended December 31, 2025, compared to $245.7 million for the prior year. The Adjusted EBITDA margin for the rehabilitation hospital segment was 21.6% for the year ended December 31, 2025, compared to 22.1% for the prior year. Certain rehabilitation hospital key statistics are presented in table VIII of this release for the years ended December 31, 2025 and 2024.

<u>Outpatient Rehabilitation Segment</u>

For the fourth quarter ended December 31, 2025, revenue for the outpatient rehabilitation segment increased 1.6% to $324.6 million, compared to $319.6 million for the same quarter, prior year. Adjusted EBITDA for the outpatient rehabilitation segment was $11.2 million for the fourth quarter ended December 31, 2025, compared to $26.6 million for the same quarter, prior year. The Adjusted EBITDA margin for the outpatient rehabilitation segment was 3.4% for the fourth quarter ended December 31, 2025, compared to 8.3% for the same quarter, prior year. Certain outpatient rehabilitation key statistics are presented in table VII of this release for the fourth quarters ended December 31, 2025 and 2024.

For the year ended December 31, 2025, revenue for the outpatient rehabilitation segment increased 2.8% to $1,284.9 million, compared to $1,250.3 million for the prior year. Adjusted EBITDA for the outpatient rehabilitation segment was $90.2 million for the year ended December 31, 2025, compared to $108.6 million for the prior year. The Adjusted EBITDA margin for the outpatient rehabilitation segment was 7.0% for the year ended December 31, 2025, compared to 8.7% for the prior year. Certain outpatient rehabilitation key statistics are presented in table VIII of this release for the years ended December 31, 2025 and 2024.

<u>Dividend</u>

On February 12, 2026, Select Medical's Board of Directors declared a cash dividend of $0.0625 per share. The dividend will be payable on or about March 12, 2026 to stockholders of record as of the close of business on March 2, 2026.

There is no assurance that future dividends will be declared. The declaration and payment of dividends in the future are at the discretion of Select Medical's Board of Directors after taking into account various factors, including, but not limited to, Select Medical's financial condition, operating results, available cash and current and anticipated cash needs, the terms of Select Medical's indebtedness, and other factors Select Medical's Board of Directors may deem to be relevant.

<u>Stock Repurchase Program</u>

The Board of Directors of Select Medical has authorized a common stock repurchase program to repurchase up to $1.0 billion worth of shares of its common stock. The common stock repurchase program will remain in effect until December 31, 2027, unless further extended or earlier terminated by the Board of Directors. Stock repurchases under this program may be made in the open market or through privately negotiated transactions, and at times and in such amounts as Select Medical deems appropriate. Select Medical funds this program with cash on hand and borrowings under its revolving credit facility.

During the year ended December 31, 2025, Select Medical repurchased 6,375,512 shares at a cost of approximately $96.5 million, or $15.13 per share, which includes transaction costs. From the inception of the common stock repurchase program through December 31, 2025, Select Medical has repurchased 54,610,335 shares at a cost of approximately $696.8 million, or $12.76 per share, which includes transaction costs. On August 16, 2022, Congress passed the Inflation Reduction Act of 2022, which enacted a 1% excise tax on stock repurchases that exceed $1.0 million, effective January 1, 2023. For the year ended December 31, 2025, $0.8 million has been accrued for the 1% excise tax as a cost of the stock repurchase.

<u>Business Outlook</u>

Select Medical is issuing its business outlook for 2026. Select Medical expects revenue to be in the range of $5.6 billion to $5.8 billion, Adjusted EBITDA to be in the range of $520.0 million to $540.0 million, and fully diluted earnings per share to be in the range of $1.22 to $1.32. A reconciliation of full year 2026 Adjusted EBITDA expectations to income from continuing operations, net of tax, is presented in table XI of this release.

<u>Conference Call</u>

Select Medical will host a conference call regarding its results for the fourth quarter and full year ended December 31, 2025, and its business outlook on Friday, February 20, 2026, at 9:00am ET. The conference call will be a live webcast and can be accessed at Select Medical Holdings Corporation's website at <u>www.selectmedicalholdings.com</u>. A replay of the webcast will be available shortly after the call through the same link.

For listeners wishing to dial-in via telephone, or participate in the question and answer session, you may pre-register for the call at <u>Select Medical Earnings Call Registration</u> to obtain your dial-in number and unique passcode.

\* \* \* \* \*

Certain statements contained herein that are not descriptions of historical facts are "forward-looking" statements (as such term is defined in the Private Securities Litigation Reform Act of 1995), including statements related to Select Medical's 2026 long-term business outlook. Because such statements include risks and uncertainties, actual results may differ materially from those expressed or implied by such forward-looking statements due to factors including the following:

&nbsp;&nbsp;&nbsp;&nbsp;• changes in government reimbursement for our services and/or new payment policies may result in a reduction
in revenue, an increase in costs, and a reduction in profitability;

&nbsp;&nbsp;&nbsp;&nbsp;• adverse economic conditions including an inflationary environment, and changes to United States tariff
and import/export regulations, could cause us to continue to experience increases in the prices of labor and other costs of doing business
resulting in a negative impact on our business, operating results, cash flows, and financial condition;

&nbsp;&nbsp;&nbsp;&nbsp;• shortages in qualified nurses, therapists, physicians, or other licensed providers, and/or the inability
to attract or retain qualified healthcare professionals could limit our ability to staff our facilities;

&nbsp;&nbsp;&nbsp;&nbsp;• shortages in qualified health professionals could cause us to increase our dependence on contract labor,
increase our efforts to recruit and train new employees, and expand upon our initiatives to retain existing staff, which could increase
our operating costs significantly;

&nbsp;&nbsp;&nbsp;&nbsp;• the negative impact of public threats such as a global pandemic or widespread outbreak of an infectious
disease similar to the COVID-19 pandemic;

&nbsp;&nbsp;&nbsp;&nbsp;• the failure of our Medicare-certified long term care hospitals or inpatient rehabilitation facilities
to maintain their Medicare certifications may cause our revenue and profitability to decline;

&nbsp;&nbsp;&nbsp;&nbsp;• the failure of our Medicare-certified long term care hospitals and inpatient rehabilitation facilities
operated as "hospitals within hospitals" to qualify as hospitals separate from their host hospitals may cause our revenue
and profitability to decline;

&nbsp;&nbsp;&nbsp;&nbsp;• a government investigation or assertion that we have violated applicable regulations may result in sanctions
or reputational harm and increased costs;

&nbsp;&nbsp;&nbsp;&nbsp;• acquisitions or joint ventures may prove difficult or unsuccessful, use significant resources, or expose
us to unforeseen liabilities;

&nbsp;&nbsp;&nbsp;&nbsp;• our plans and expectations related to our acquisitions and our ability to realize anticipated synergies;

&nbsp;&nbsp;&nbsp;&nbsp;• private third-party payors for our services may adopt payment policies that could limit our future revenue
and profitability;

&nbsp;&nbsp;&nbsp;&nbsp;• the failure to maintain established relationships with the physicians in the areas we serve could reduce
our revenue and profitability;

&nbsp;&nbsp;&nbsp;&nbsp;• the impact of the non-binding indication of interest from our Executive Chairman, Co-Founder and Director,
and the Board of Directors' evaluation of the proposal on our business and results of operations;

&nbsp;&nbsp;&nbsp;&nbsp;• competition may limit our ability to grow and result in a decrease in our revenue and profitability;

&nbsp;&nbsp;&nbsp;&nbsp;• the loss of key members of our management team could significantly disrupt our operations;

&nbsp;&nbsp;&nbsp;&nbsp;• the effect of claims asserted against us could subject us to substantial uninsured liabilities;

&nbsp;&nbsp;&nbsp;&nbsp;• a security breach of our or our third-party vendors' information technology systems may subject
us to potential legal and reputational harm and may result in a violation of the Health Insurance Portability and Accountability Act of
1996 or the Health Information Technology for Economic and Clinical Health Act; and

&nbsp;&nbsp;&nbsp;&nbsp;**•** other factors discussed from time to time in our filings with the Securities and Exchange Commission (the
 "SEC"), including factors discussed under the heading "Risk Factors" of the annual report on Form 10-K for
the year ended December 31, 2025.

Except as required by applicable law, including the securities laws of the United States and the rules and regulations of the SEC, we are under no obligation to publicly update or revise any forward-looking statements, whether as a result of any new information, future events, or otherwise. You should not place undue reliance on our forward-looking statements. Although we believe that the expectations reflected in forward-looking statements are reasonable, we cannot guarantee future results or performance.

Investor inquiries:

Robert S. Kido

Senior Vice President and Treasurer

717-972-1100

<u>ir@selectmedical.com</u>

SOURCE: Select Medical Holdings Corporation

**I. Condensed Consolidated Statements of Operations** 

**For the Three Months Ended December 31, 2024 and 2025**

**(In thousands, except per share amounts, unaudited)**

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| | | | |
|:---|:---|:---|:---|
|  | **2024** | **2025** | **% Change** |
| Revenue | $1312564 | $1396634 | 6.4% |
| Costs and expenses: |  |  |  |
| &nbsp;&nbsp;&nbsp;Cost of services, exclusive of depreciation and amortization | 1175099 | 1250800 | 6.4 |
| &nbsp;&nbsp;&nbsp;General and administrative | 80197 | 45693 | (43.0) |
| &nbsp;&nbsp;&nbsp;Depreciation and amortization | 36283 | 36205 | (0.2) |
| Total costs and expenses | 1291579 | 1332698 | 3.2 |
| Other operating income | 106 |  | N/M |
| Income from continuing operations before other income and expense | 21091 | 63936 | 203.1 |
| Other income and expense: |  |  |  |
| &nbsp;&nbsp;&nbsp;Loss on early retirement of debt | (17906) |  | N/M |
| &nbsp;&nbsp;&nbsp;Equity in earnings of unconsolidated subsidiaries | 10423 | 15399 | 47.7 |
| &nbsp;&nbsp;&nbsp;Interest expense | (28551) | (28871) | 1.1 |
| Income (loss) from continuing operations before income taxes | (14943) | 50464 | 437.7 |
| Income tax expense (benefit) from continuing operations | (4487) | 12722 | 383.5 |
| Income (loss) from continuing operations, net of tax | (10456) | 37742 | 461.0 |
| Discontinued operations: |  |  |  |
| &nbsp;&nbsp;&nbsp;Income from discontinued business | 24669 |  | N/M |
| &nbsp;&nbsp;&nbsp;Income tax expense from discontinued business | 10457 |  | N/M |
| Income from discontinued operations, net of tax | 14212 |  | N/M |
| Net income | 3756 | 37742 | 904.8 |
| Less: Net income attributable to non-controlling interests | 19806 | 17568 | (11.3) |
| Net income (loss) attributable to Select Medical | $(16050) | $20174 | 225.7 |
| Net income (loss) attributable to Select Medical's common stockholders: |  |  |  |
| &nbsp;&nbsp;&nbsp;Income (loss) from continuing operations, net of tax | $(23664) | $20174 |  |
| &nbsp;&nbsp;&nbsp;Income from discontinued operations, net of tax | 7614 |  |  |
| Net income (loss) attributable to Select Medical's common stockholders | $(16050) | $20174 |  |
| Basic earnings (loss) per common share: |  |  |  |
| &nbsp;&nbsp;&nbsp;Continuing operations | $(0.18) | $0.16 |  |
| &nbsp;&nbsp;&nbsp;Discontinued operations | 0.06 |  |  |
| Total basic earnings (loss) per common share<sup>(1)</sup> | $(0.12) | $0.16 |  |
| Diluted earnings (loss) per common share: |  |  |  |
| &nbsp;&nbsp;&nbsp;Continuing operations | $(0.19) | $0.16 |  |
| &nbsp;&nbsp;&nbsp;Discontinued operations | 0.06 |  |  |
| Total diluted earnings (loss) per common share<sup>(1)</sup> | $(0.13) | $0.16 |  |

---

(1) Refer to table III for calculation of earnings per common share.

N/M Not meaningful.

**II. Condensed Consolidated Statements of Operations** 

**For the Years Ended December 31, 2024 and 2025**

**(In thousands, except per share amounts, unaudited)**

---

| | | | |
|:---|:---|:---|:---|
|  | **2024** | **2025** | **% Change** |
| Revenue | $5187105 | $5452830 | 5.1% |
| Costs and expenses: |  |  |  |
| &nbsp;&nbsp;&nbsp;Cost of services, exclusive of depreciation and amortization | 4553461 | 4823535 | 5.9 |
| &nbsp;&nbsp;&nbsp;General and administrative | 225869 | 154414 | (31.6) |
| &nbsp;&nbsp;&nbsp;Depreciation and amortization | 142866 | 140303 | (1.8) |
| Total costs and expenses | 4922196 | 5118252 | 4.0 |
| Other operating income | 3406 | 1592 | (53.3) |
| Income from continuing operations before other income and expense | 268315 | 336170 | 25.3 |
| Other income and expense: |  |  |  |
| &nbsp;&nbsp;&nbsp;Loss on early retirement of debt | (28845) |  | N/M |
| &nbsp;&nbsp;&nbsp;Equity in earnings of unconsolidated subsidiaries | 63904 | 54521 | (14.7) |
| &nbsp;&nbsp;&nbsp;Interest expense | (128605) | (117942) | (8.3) |
| Income from continuing operations before income taxes | 174769 | 272749 | 56.1 |
| Income tax expense from continuing operations | 44782 | 58216 | 30.0 |
| Income from continuing operations, net of tax | 129987 | 214533 | 65.0 |
| Discontinued operations: |  |  |  |
| &nbsp;&nbsp;&nbsp;Income from discontinued business | 223414 |  | N/M |
| &nbsp;&nbsp;&nbsp;Income tax expense from discontinued business | 56697 |  | N/M |
| Income from discontinued operations, net of tax | 166717 |  | N/M |
| Net income | 296704 | 214533 | (27.7) |
| Less: Net income attributable to non-controlling interests | 82666 | 68314 | (17.4) |
| Net income attributable to Select Medical | $214038 | $146219 | (31.7)% |
| Net income attributable to Select Medical's common stockholders: |  |  |  |
| &nbsp;&nbsp;&nbsp;Income from continuing operations, net of tax | $65473 | $146219 |  |
| &nbsp;&nbsp;&nbsp;Income from discontinued operations, net of tax | 148565 |  |  |
| &nbsp;&nbsp;&nbsp;Net income attributable to Select Medical's common stockholders: | $214038 | $146219 |  |
| Earnings per common share: |  |  |  |
| &nbsp;&nbsp;&nbsp;Continuing operations - basic and diluted | $0.51 | $1.16 |  |
| &nbsp;&nbsp;&nbsp;Discontinued operations - basic and diluted | 1.15 |  |  |
| &nbsp;&nbsp;&nbsp;Total earnings per common share - basic and diluted:<sup>(1)</sup> | $1.66 | $1.16 |  |

---

(1) Refer to table III for calculation of earnings per common share.

N/M Not meaningful.

**III. Earnings per Share** 

**For the Three Months and Years Ended December 31, 2024 and 2025**

**(In thousands, except per share amounts, unaudited)**

Select Medical's capital structure includes common stock and unvested restricted stock awards. To compute earnings per share ("EPS"), Select Medical applies the two-class method because its unvested restricted stock awards are participating securities which are entitled to participate equally with its common stock in undistributed earnings. Select Medical applies the treasury stock method when computing diluted EPS.

The following table sets forth the income from continuing operations, net of tax, attributable to Select Medical's common stockholders, its common shares outstanding, and its participating securities outstanding for the three months and years ended December 31, 2024 and 2025:

---

| | | | | |
|:---|:---|:---|:---|:---|
|  | **Basic EPS** | **Basic EPS** | **Basic EPS** | **Basic EPS** |
|  | **Three Months Ended <br> December 31,** | **Three Months Ended <br> December 31,** | **Years Ended**<br> **December 31,** | **Years Ended**<br> **December 31,** |
|  | **2024** | **2025** | **2024** | **2025** |
| Income (loss) from continuing operations, net of tax | $(10456) | $37742 | $129987 | $214533 |
| Less: Net income attributable to non-controlling interests | 13208 | 17568 | 64514 | 68314 |
| Income (loss) from continuing operations, net of tax, attributable to Select Medical's common stockholders | (23664) | 20174 | 65473 | 146219 |
| Less: distributed and undistributed net income (loss) attributable to participating securities<sup>(1)</sup> | (597) | 542 | 2319 | 3354 |
| Income (loss) from continuing operations, net of tax, attributable to common shares | $(23067) | $19632 | $63154 | $142865 |

---

The following tables set forth the computation of EPS for the three months and years ended December 31, 2024 and 2025:

---

| | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|
|  | **Three Months Ended December 31,** | **Three Months Ended December 31,** | **Three Months Ended December 31,** | **Three Months Ended December 31,** | **Three Months Ended December 31,** | **Three Months Ended December 31,** |
|  | **2024** | **2024** | **2024** | **2024** | **2024** | **2024** |
|  | **Loss from<br> Continuing <br> Operations, <br> Net of Tax, <br> Allocation - <br> Basic** | **Basic Shares<sup>(1)</sup>** | **Basic EPS** | **Loss from<br> Continuing <br> Operations, <br> Net of Tax, <br> Allocation - <br> Diluted** | **Diluted <br> Shares<sup>(1)</sup>** | **Diluted EPS** |
| Common shares | $(23067) | 125923 | $(0.18) | $(23664) | 127535 | $(0.19) |
| Participating securities | (597) | 3261 | $(0.18) |  |  |  |
| Total | $(23664) |  |  |  |  |  |

---

---

| | | | |
|:---|:---|:---|:---|
|  | **Three Months Ended December 31,** | **Three Months Ended December 31,** | **Three Months Ended December 31,** |
|  | **2025** | **2025** | **2025** |
|  | **Income from<br> Continuing <br> Operations, Net of <br> Tax, Allocation** | **Shares<sup>(1)</sup>** | **Basic and Diluted EPS** |
| Common shares | $19632 | 120634 | $0.16 |
| Participating securities | 542 | 3331 | $0.16 |
| Total | $20174 |  |  |

---

---

| | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|
|  | **Year Ended December 31,** | **Year Ended December 31,** | **Year Ended December 31,** | **Year Ended December 31,** | **Year Ended December 31,** | **Year Ended December 31,** |
|  | **2024** | **2024** | **2024** | **2025** | **2025** | **2025** |
|  | **Income from<br> Continuing <br> Operations,<br> Net of Tax, <br> Allocation** | **Shares<sup>(1)</sup>** | **Basic and<br> Diluted EPS** | **Income from<br> Continuing <br> Operations, <br> Net of Tax, <br> Allocation** | **Shares<sup>(1)</sup>** | **Basic and<br> Diluted EPS** |
| Common shares | $63154 | 124614 | $0.51 | $142865 | 122647 | $1.16 |
| Participating securities | 2319 | 4576 | $0.51 | 3354 | 2879 | $1.16 |
| Total | $65473 |  |  | $146219 |  |  |

---

(1) Represents the weighted average share count outstanding during the period.

**IV. Condensed Consolidated Balance Sheets**

**(In thousands, unaudited)**

---

| | | |
|:---|:---|:---|
|  | **December 31,** | **December 31,** |
|  | **2024** | **2025** |
| **Assets** |  |  |
| Current Assets: |  |  |
| &nbsp;&nbsp;&nbsp;Cash and cash equivalents | $59694 | $26523 |
| &nbsp;&nbsp;&nbsp;Accounts receivable | 821385 | 864207 |
| &nbsp;&nbsp;&nbsp;Other current assets | 138698 | 134551 |
| Total Current Assets | 1019777 | 1025281 |
| Operating lease right-of-use assets | 908095 | 957904 |
| Property and equipment, net | 872185 | 992314 |
| Goodwill | 2331898 | 2360902 |
| Identifiable intangible assets, net | 103183 | 100800 |
| Other assets | 372813 | 414388 |
| **Total Assets** | $5607951 | $5851589 |
| **Liabilities and Equity** |  |  |
| Current Liabilities: |  |  |
| &nbsp;&nbsp;&nbsp;Payables and accruals | $777781 | $771872 |
| &nbsp;&nbsp;&nbsp;Current operating lease liabilities | 179601 | 188405 |
| &nbsp;&nbsp;&nbsp;Current portion of long-term debt and notes payable | 20269 | 24217 |
| Total Current Liabilities | 977651 | 984494 |
| Non-current operating lease liabilities | 787124 | 835362 |
| Long-term debt, net of current portion | 1691546 | 1803979 |
| Non-current deferred tax liability | 81497 | 112157 |
| Other non-current liabilities | 73038 | 79858 |
| Total Liabilities | 3610856 | 3815850 |
| Redeemable non-controlling interests | 10167 | 18808 |
| Total Equity | 1986928 | 2016931 |
| **Total Liabilities and Equity** | $5607951 | $5851589 |

---

**V. Condensed Consolidated Statements of Cash Flows** 

**For the Three Months Ended December 31, 2024 and 2025**

**(In thousands, unaudited)**

---

| | | |
|:---|:---|:---|
|  | **2024** | **2025** |
| **Operating activities** |  |  |
| Net income | $3756 | $37742 |
| Adjustments to reconcile net income to net cash provided by operating activities: |  |  |
| &nbsp;&nbsp;&nbsp;Distributions from unconsolidated subsidiaries | 8742 | 10155 |
| &nbsp;&nbsp;&nbsp;Depreciation and amortization | 45743 | 36205 |
| &nbsp;&nbsp;&nbsp;Provision for expected credit losses | 2620 | 301 |
| &nbsp;&nbsp;&nbsp;Equity in earnings of unconsolidated subsidiaries | (10423) | (15399) |
| &nbsp;&nbsp;&nbsp;Loss on extinguishment of debt | 8099 |  |
| &nbsp;&nbsp;&nbsp;Loss on sale of assets and businesses | 48 | 55 |
| &nbsp;&nbsp;&nbsp;Stock compensation expense | 61271 | 4523 |
| &nbsp;&nbsp;&nbsp;Amortization of debt discount, premium and issuance costs | 684 | 783 |
| &nbsp;&nbsp;&nbsp;Deferred income taxes | 2507 | 20105 |
| &nbsp;&nbsp;&nbsp;Changes in operating assets and liabilities, net of effects of business combinations: |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Accounts receivable | 20916 | (38698) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Other current assets | 10216 | 7911 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Other assets | (1009) | (13864) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Accounts payable and accrued expenses | (27738) | 14506 |
| Net cash provided by operating activities | 125432 | 64325 |
| **Investing activities** |  |  |
| Business combinations, net of cash acquired | (10786) | (7596) |
| Purchases of property and equipment | (63429) | (59100) |
| Investment in businesses |  | (1455) |
| Proceeds from sales and exchanges of assets and sale of business | 22 | 1259 |
| Net cash used in investing activities | (74193) | (66892) |
| **Financing activities** |  |  |
| Borrowings on revolving facilities | 290000 | 320000 |
| Payments on revolving facilities | (195000) | (370000) |
| Proceeds from term loans, net of issuance costs | 1043355 |  |
| Payments on term loans | (372982) | (2625) |
| Payment on senior notes, including call premium | (1237764) |  |
| Proceeds from senior notes, net of issuance costs | 539261 |  |
| Borrowings of other debt | 4086 | 59696 |
| Principal payments on other debt | (29498) | (8363) |
| Dividends paid to common stockholders | (16124) | (7751) |
| Repurchase of common stock | (19981) | (542) |
| Increase in overdrafts | 11630 | 16751 |
| Proceeds from issuance of non-controlling interests | 6300 | 2940 |
| Distributions to and purchases of non-controlling interests | (24201) | (41070) |
| Cash transferred to Concentra at separation | (182095) |  |
| Net cash used in financing activities | (183013) | (30964) |
| Net decrease in cash and cash equivalents | (131774) | (33531) |
| Cash and cash equivalents at beginning of period | 191468 | 60054 |
| Cash and cash equivalents at end of period | $59694 | $26523 |
| **Supplemental information:** |  |  |
| Cash paid for interest | $39472 | $36622 |
| Cash paid for taxes | 30491 | 3904 |

---

**VI. Condensed Consolidated Statements of Cash Flows** 

**For the Years Ended December 31, 2024 and 2025**

**(In thousands, unaudited)**

---

| | | |
|:---|:---|:---|
|  | **2024** | **2025** |
| **Operating activities** |  |  |
| Net income | $296704 | $214533 |
| Adjustments to reconcile net income to net cash provided by operating activities: |  |  |
| &nbsp;&nbsp;&nbsp;Distributions from unconsolidated subsidiaries | 39178 | 52970 |
| &nbsp;&nbsp;&nbsp;Depreciation and amortization | 203894 | 140303 |
| &nbsp;&nbsp;&nbsp;Provision for expected credit losses | 4279 | 2362 |
| &nbsp;&nbsp;&nbsp;Equity in earnings of unconsolidated subsidiaries | (60228) | (54521) |
| &nbsp;&nbsp;&nbsp;Loss on extinguishment of debt | 19038 |  |
| &nbsp;&nbsp;&nbsp;(Gain) loss on sale of assets and businesses | (1063) | 8 |
| &nbsp;&nbsp;&nbsp;Stock compensation expense | 100670 | 16702 |
| &nbsp;&nbsp;&nbsp;Amortization of debt discount, premium and issuance costs | 2963 | 3136 |
| &nbsp;&nbsp;&nbsp;Deferred income taxes | (32434) | 30652 |
| &nbsp;&nbsp;&nbsp;Changes in operating assets and liabilities, net of effects of business combinations: |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Accounts receivable | (95845) | (45185) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Other current assets | 18072 | 413 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Other assets | 12933 | (8808) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Accounts payable and accrued expenses | 9703 | (6098) |
| Net cash provided by operating activities | 517864 | 346467 |
| **Investing activities** |  |  |
| Business combinations, net of cash acquired | (13097) | (9197) |
| Purchases of property and equipment | (222177) | (229225) |
| Investment in businesses |  | (1455) |
| Proceeds from sales and exchanges of assets and sale of business | 4263 | 23391 |
| Net cash used in investing activities | (231011) | (216486) |
| **Financing activities** |  |  |
| Borrowings on revolving facilities | 1240000 | 1290000 |
| Payments on revolving facilities | (1415000) | (1295000) |
| Proceeds from term loans, net of issuance costs | 1880052 |  |
| Payments on term loans | (2092485) | (10500) |
| Payment on senior notes, including call premium | (1237764) |  |
| Proceeds from senior notes, net of issuance costs | 1176598 |  |
| Borrowings of other debt | 24892 | 101218 |
| Principal payments on other debt | (65280) | (34328) |
| Dividends paid to common stockholders | (64617) | (31435) |
| Repurchase of common stock | (37905) | (100077) |
| Decrease in overdrafts | (4471) | (9052) |
| Proceeds from issuance of non-controlling interests | 15713 | 15904 |
| Distributions to and purchases of non-controlling interests | (60001) | (89882) |
| Proceeds from Concentra initial public offering | 511198 |  |
| Cash transferred to Concentra at separation | (182095) |  |
| Net cash used in financing activities | (311165) | (163152) |
| Net decrease in cash and cash equivalents | (24312) | (33171) |
| Cash and cash equivalents at beginning of period | 84006 | 59694 |
| Cash and cash equivalents at end of period | $59694 | $26523 |
| **Supplemental information:** |  |  |
| Cash paid for interest, excluding amounts received of $68,069 under the interest rate cap contract in 2024 | $256229 | $120624 |
| Cash paid for taxes | 133187 | 26022 |

---

**VII. Key Statistics**

**For the Three Months Ended December 31, 2024 and 2025** 

**(unaudited)**

---

| | | | |
|:---|:---|:---|:---|
|  | **2024** | **2025** | **% Change** |
| **Critical Illness Recovery Hospital** |  |  |  |
| Number of hospitals operated – end of period<sup>(a)</sup> | 104 | 104 |  |
| Revenue (,000) | $600445 | $629716 | 4.9% |
| Number of patient days<sup>(b)(c)</sup> | 274134 | 271417 | (1.0)% |
| Number of admissions<sup>(b)(d)</sup> | 8691 | 8950 | 3.0% |
| Revenue per patient day<sup>(b)(e)</sup> | $2183 | $2312 | 5.9% |
| Occupancy rate<sup>(b)(f)</sup> | 67% | 67% | 0.0% |
| Adjusted EBITDA (,000) | $63098 | $66413 | 5.3% |
| Adjusted EBITDA margin | 10.5% | 10.5% |  |
| **Rehabilitation Hospital** |  |  |  |
| Number of hospitals operated – end of period<sup>(a)</sup> | 35 | 38 |  |
| Revenue (,000) | $294352 | $339184 | 15.2% |
| Number of patient days<sup>(b)(c)</sup> | 119870 | 131591 | 9.8% |
| Number of admissions<sup>(b)(d)</sup> | 8626 | 9452 | 9.6% |
| Revenue per patient day<sup>(b)(e)</sup> | $2177 | $2311 | 6.2% |
| Occupancy rate<sup>(b)(f)</sup> | 81% | 82% | 1.2% |
| Adjusted EBITDA (,000) | $62277 | $69195 | 11.1% |
| Adjusted EBITDA margin | 21.2% | 20.4% |  |
| **Outpatient Rehabilitation** |  |  |  |
| Number of clinics operated – end of period<sup>(a)</sup> | 1914 | 1917 |  |
| Working days<sup>(g)</sup> | 64 | 64 |  |
| Revenue (,000) | $319598 | $324564 | 1.6% |
| Number of visits<sup>(b)(h)</sup> | 2811704 | 2948604 | 4.9% |
| Revenue per visit<sup>(b)(i)</sup> | $102 | $98 | (3.9)% |
| Adjusted EBITDA (,000) | $26561 | $11179 | (57.9)% |
| Adjusted EBITDA margin | 8.3% | 3.4% |  |

---

(a) Includes managed locations.

(b) Excludes managed locations.

(c) Each patient day represents one patient occupying one bed for one day during the periods presented.

(d) Represents the number of patients admitted to Select Medical's hospitals during the periods presented.

(e) Represents the average amount of revenue recognized for each patient day. Revenue per patient day is calculated
by dividing patient service revenues, excluding revenues from certain other ancillary and outpatient services provided at Select Medical's
hospitals, by the total number of patient days.

(f) Represents the portion of our hospitals being utilized for patient care during the periods presented.
Occupancy rate is calculated using the number of patient days, as presented above, divided by the total number of bed days available during
the period. Bed days available is derived by adding the daily number of available licensed beds for each of the periods presented.

(g) Represents the number of days in which normal business operations were conducted during the periods presented.

(h) Represents the number of visits in which patients were treated at Select Medical's outpatient rehabilitation
clinics during the periods presented.

(i) Represents the average amount of revenue recognized for each patient visit. Revenue per visit is calculated
by dividing patient service revenue, excluding revenues from certain other ancillary services, by the total number of visits.

**VIII. Key Statistics<br> For the Years Ended December 31, 2024 and 2025** 

**(unaudited)**

---

| | | | |
|:---|:---|:---|:---|
|  | **2024** | **2025** | **% Change** |
| **Critical Illness Recovery Hospital** |  |  |  |
| Number of hospitals operated – end of period<sup>(a)</sup> | 104 | 104 |  |
| Revenue (,000) | $2444196 | $2477814 | 1.4% |
| Number of patient days<sup>(b)(c)</sup> | 1118757 | 1107387 | (1.0)% |
| Number of admissions<sup>(b)(d)</sup> | 35784 | 36126 | 1.0% |
| Revenue per patient day<sup>(b)(e)</sup> | $2177 | $2230 | 2.4% |
| Occupancy rate<sup>(b)(f)</sup> | 68% | 69% | 1.5% |
| Adjusted EBITDA (,000) | $301634 | $265447 | (12.0)% |
| Adjusted EBITDA margin | 12.3% | 10.7% |  |
| **Rehabilitation Hospital** |  |  |  |
| Number of hospitals operated – end of period<sup>(a)</sup> | 35 | 38 |  |
| Revenue (,000) | $1110592 | $1288954 | 16.1% |
| Number of patient days<sup>(b)(c)</sup> | 470594 | 510127 | 8.4% |
| Number of admissions<sup>(b)(d)</sup> | 33665 | 36787 | 9.3% |
| Revenue per patient day<sup>(b)(e)</sup> | $2134 | $2260 | 5.9% |
| Occupancy rate<sup>(b)(f)</sup> | 84% | 82% | (2.4)% |
| Adjusted EBITDA (,000) | $245748 | $278622 | 13.4% |
| Adjusted EBITDA margin | 22.1% | 21.6% |  |
| **Outpatient Rehabilitation** |  |  |  |
| Number of clinics operated – end of period<sup>(a)</sup> | 1914 | 1917 |  |
| Working days<sup>(g)</sup> | 256 | 255 |  |
| Revenue (,000) | $1250294 | $1284873 | 2.8% |
| Number of visits<sup>(b)(h)</sup> | 11147920 | 11517388 | 3.3% |
| Revenue per visit<sup>(b)(i)</sup> | $101 | $100 | (1.0)% |
| Adjusted EBITDA (,000) | $108577 | $90163 | (17.0)% |
| Adjusted EBITDA margin | 8.7% | 7.0% |  |

---

(a) Includes managed locations.

(b) Excludes managed locations.

(c) Each patient day represents one patient occupying one bed for one day during the periods presented.

(d) Represents the number of patients admitted to Select Medical's hospitals during the periods presented.

(e) Represents the average amount of revenue recognized for each patient day. Revenue per patient day is calculated
by dividing patient service revenues, excluding revenues from certain other ancillary and outpatient services provided at Select Medical's
hospitals, by the total number of patient days.

(f) Represents the portion of our hospitals being utilized for patient care during the periods presented.
Occupancy rate is calculated using the number of patient days, as presented above, divided by the total number of bed days available during
the period. Bed days available is derived by adding the daily number of available licensed beds for each of the periods presented.

(g) Represents the number of days in which normal business operations were conducted during the periods presented.

(h) Represents the number of visits in which patients were treated at Select Medical's outpatient rehabilitation
clinics during the periods presented.

(i) Represents the average amount of revenue recognized for each patient visit. Revenue per visit is calculated
by dividing patient service revenue, excluding revenues from certain other ancillary services, by the total number of visits.

**IX. Income from Continuing Operations, Net of Tax, to Adjusted EBITDA Reconciliation** 

**For the Three Months and Years Ended December 31, 2024 and 2025**

**(In thousands, unaudited)**

The presentation of Adjusted EBITDA is important to investors because Adjusted EBITDA is commonly used as an analytical indicator of performance by investors within the healthcare industry. Adjusted EBITDA is used by management to evaluate financial performance and determine resource allocation for each of Select Medical's segments. Adjusted EBITDA is not a measure of financial performance under accounting principles generally accepted in the United States of America ("GAAP"). Items excluded from Adjusted EBITDA are significant components in understanding and assessing financial performance. Adjusted EBITDA should not be considered in isolation or as an alternative to, or substitute for, income from continuing operations, income from continuing operations before other income and expense, cash flows generated by operations, investing or financing activities, or other financial statement data presented in the consolidated financial statements as indicators of financial performance or liquidity. Because Adjusted EBITDA is not a measurement determined in accordance with GAAP and is thus susceptible to varying definitions, Adjusted EBITDA as presented may not be comparable to other similarly titled measures of other companies.

The following table reconciles income from continuing operations, net of tax, to Adjusted EBITDA for Select Medical. Adjusted EBITDA is used by Select Medical to report its segment performance. Adjusted EBITDA is defined as earnings from continuing operations excluding interest, income taxes, depreciation and amortization, gain (loss) on early retirement of debt, stock compensation expense, transaction costs associated with the Concentra separation, gain (loss) on sale of businesses, and equity in earnings (losses) of unconsolidated subsidiaries.

---

| | | | | |
|:---|:---|:---|:---|:---|
|  | **Three Months Ended**<br> **December 31,** | **Three Months Ended**<br> **December 31,** | **Years Ended**<br> **December 31,** | **Years Ended**<br> **December 31,** |
|  | **2024** | **2025** | **2024** | **2025** |
| Income (loss) from continuing operations, net of tax | $(10456) | $37742 | $129987 | $214533 |
| Income tax expense (benefit) | (4487) | 12722 | 44782 | 58216 |
| Interest expense | 28551 | 28871 | 128605 | 117942 |
| Equity in earnings of unconsolidated subsidiaries | (10423) | (15399) | (63904) | (54521) |
| Loss on early retirement of debt | 17906 |  | 28845 |  |
| Income from continuing operations before other income and expense | $21091 | $63936 | $268315 | $336170 |
| Stock compensation expense: |  |  |  |  |
| &nbsp;&nbsp;&nbsp;Included in general and administrative | 47414 | 3571 | 79931 | 13285 |
| &nbsp;&nbsp;&nbsp;Included in cost of services | 12902 | 952 | 19283 | 3417 |
| Depreciation and amortization | 36283 | 36205 | 142866 | 140303 |
| Concentra separation transaction costs<sup>(b)</sup> | (1698) |  |  |  |
| Adjusted EBITDA | $115992 | $104664 | $510395 | $493175 |
| Critical illness recovery hospital | $63098 | $66413 | $301634 | $265447 |
| Rehabilitation hospital | 62277 | 69195 | 245748 | 278622 |
| Outpatient rehabilitation | 26561 | 11179 | 108577 | 90163 |
| Other<sup>(a)</sup> | (35944) | (42123) | (145564) | (141057) |
| Adjusted EBITDA | $115992 | $104664 | $510395 | $493175 |

---

(a) Other primarily includes general and administrative costs and other operating income, as discussed further
above.

(b) During the three months ended December 31, 2024, transaction costs of $1.7 million recognized in
previous periods were reclassified from income from continuing operations to income from discontinued operations. Total Concentra separation
transaction costs of $16.3 million were recognized during the year ended December 31, 2024 and included in income from discontinued
business.

**X. Reconciliation of Earnings per Common Share from Continuing Operations, Net of Tax, to Adjusted Earnings per Common Share from Continuing Operations, Net of Tax** 

**For the Years Ended December 31, 2024 and 2025**

**(In thousands, except per share amounts, unaudited)**

Adjusted income from continuing operations, net of tax, attributable to common shares and adjusted earnings per common share from continuing operations are not measures of financial performance under GAAP. Items excluded from adjusted income from continuing operations, net of tax, attributable to common shares and adjusted earnings per common share from continuing operations are significant components in understanding and assessing financial performance. Select Medical believes that the presentation of adjusted income from continuing operations, net of tax, attributable to common shares and adjusted earnings per common share from continuing operations are important to investors because they are reflective of the financial performance of Select Medical's ongoing operations and provide better comparability of its results of operations between periods. Adjusted income from continuing operations, net of tax, attributable to common shares and adjusted earnings per common share from continuing operations should not be considered in isolation or as alternatives to, or substitutes for, income from continuing operations, net of tax, cash flows generated by operations, investing or financing activities, or other financial statement data presented in the consolidated financial statements as indicators of financial performance or liquidity. Because adjusted income from continuing operations, net of tax, attributable to common shares and adjusted earnings per common share are not measurements determined in accordance with GAAP and are thus susceptible to varying calculations, adjusted income from continuing operations, net of tax, attributable to common shares and adjusted earnings per common share from continuing operations as presented may not be comparable to other similarly titled measures of other companies.

The following tables reconcile income from continuing operations, net of tax, attributable to common shares and earnings per common share from continuing operations on a fully diluted basis to adjusted income from continuing operations, net of tax, attributable to common shares and adjusted earnings per common share from continuing operations on a fully diluted basis.

---

| | | | | |
|:---|:---|:---|:---|:---|
|  | **Three Months Ended December 31,** | **Three Months Ended December 31,** | **Three Months Ended December 31,** | **Three Months Ended December 31,** |
|  | **2024** | **Per Share<sup>(a)</sup>** | **2025** | **Per Share<sup>(a)</sup>** |
| Income (loss) from continuing operations, net of tax, attributable to common shares<sup>(a)</sup> | $(23664) | $(0.19) | $19632 | 0.16 |
| Adjustments:<sup>(b)</sup> |  |  |  |  |
| &nbsp;&nbsp;&nbsp;Loss on early retirement of debt, net of tax | 12885 | 0.10 |  |  |
| &nbsp;&nbsp;&nbsp;Concentra separation transaction costs, net of tax | (1241) | (0.01) |  |  |
| &nbsp;&nbsp;&nbsp;Stock compensation expense due to accelerated vesting, net of tax | 34645 | 0.28 |  |  |
| Adjusted income from continuing operations, net of tax, attributable to common shares | $22625 | $0.18 | $19632 | $0.16 |

---

---

| | | | | |
|:---|:---|:---|:---|:---|
|  | **Years Ended December 31,** | **Years Ended December 31,** | **Years Ended December 31,** | **Years Ended December 31,** |
|  | **2024** | **Per Share<sup>(a)</sup>** | **2025** | **Per Share<sup>(a)</sup>** |
| Income from continuing operations, net of tax, attributable to common shares<sup>(a)</sup> | $63154 | $0.51 | $142865 | $1.16 |
| Adjustments:<sup>(b)</sup> |  |  |  |  |
| &nbsp;&nbsp;&nbsp;Loss on early retirement of debt, net of tax | 20311 | 0.16 |  |  |
| &nbsp;&nbsp;&nbsp;Stock compensation expense due to accelerated vesting, net of tax | 33846 | 0.27 |  |  |
| Adjusted income from continuing operations, net of tax, attributable to common shares | $117311 | $0.94 | $142865 | $1.16 |

---

(a) Income from continuing operations, net of tax, attributable to common shares and earnings per common share
from continuing operations are calculated based on the diluted weighted average common shares outstanding, as presented in table III.

(b) Adjustments to income from continuing operations, net of tax, attributable to common shares include estimated
income tax and non-controlling interest impacts and are calculated based on the diluted weighted average common shares outstanding. The
estimated income tax impact, which is determined using tax rates based on the nature of the adjustment and the jurisdiction in which the
adjustment occurred, includes both current and deferred income tax expense or benefit.

**XI. Income from Continuing Operations, Net of Tax, to Adjusted EBITDA Reconciliation** 

**Business Outlook for the Year Ending December 31, 2026**

**(In millions, unaudited)**

The following is a reconciliation of full year 2026 Adjusted EBITDA expectations as computed at the low and high points of the range to the closest comparable GAAP financial measure. Refer to table IX for the definition of Adjusted EBITDA and a discussion of Select Medical's use of Adjusted EBITDA in evaluating financial performance. Each item presented in the below table is an estimation of full year 2026 expectations.

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| | | |
|:---|:---|:---|
| | **Range** | **Range** |
| <br>**Non-GAAP Measure Reconciliation** | **Low** | **High** |
| Income from continuing operations, net of tax, attributable to Select Medical | $152 | $164 |
| Net income attributable to non-controlling interests | 76 | 80 |
| Income from continuing operations, net of tax | 228 | 244 |
| Income tax expense | 64 | 69 |
| Interest expense | 118 | 118 |
| Equity in earnings of unconsolidated subsidiaries | (57) | (58) |
| Income from continuing operations before other income and expense | 353 | 373 |
| Stock compensation expense | 21 | 21 |
| Depreciation and amortization | 146 | 146 |
| Adjusted EBITDA | $520 | $540 |

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