# EDGAR Filing Document

**Accession Number:** 0001320414
**File Stem:** 0001320414-25-000015
**Filing Date:** 2025-10
**Character Count:** 253427
**Document Hash:** 42513067c108dfb06d80ba066a369e77
**Contains OCR:** False
**Source Format:** 

## Filing Content

## Filing Summary
**0001320414-25-000015.hdr.sgml**: 20251030

**ACCESSION NUMBER**: 0001320414-25-000015

**CONFORMED SUBMISSION TYPE**: 10-Q

**PUBLIC DOCUMENT COUNT**: 76

**CONFORMED PERIOD OF REPORT**: 20250930

**FILED AS OF DATE**: 20251030

**DATE AS OF CHANGE**: 20251030

**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:** 10-Q
- **SEC ACT:** 1934 Act
- **SEC FILE NUMBER:** 001-34465
- **FILM NUMBER:** 251436220

**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'? sem-20250930

**UNITED STATES**

**SECURITIES AND EXCHANGE COMMISSION**

**Washington, D.C. 20549**

**FORM 10-Q** 

**(Mark One)**

☒ **QUARTERLY REPORT PURSUANT TO SECTION 13 or 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934**

**For the Quarterly Period Ended September 30, 2025** 

**OR**

☐ **TRANSITION REPORT PURSUANT TO SECTION 13 or 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934**

**For the transition period from&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; to&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;** 

**Commission file numbers: 001-34465**

**SELECT MEDICAL HOLDINGS CORPORATION** 

(Exact name of Registrant as specified in its Charter)

---

| | |
|:---|:---|
| **Delaware** | **20-1764048** |
| (State or Other Jurisdiction of Incorporation or Organization) | (I.R.S. Employer Identification Number) |

---

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

**Mechanicsburg, PA 17055**

(Address of Principal Executive Offices and 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) |

---

Indicate by check mark whether the Registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter periods as such Registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the Registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the Registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the Registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of "large accelerated filer," "accelerated filer," "smaller reporting company," and "emerging growth company" in Rule 12b-2 of the Exchange Act. (Check one):

---

| | | | |
|:---|:---|:---|:---|
| Large accelerated filer | ☒ | Accelerated filer | ☐ |
| Non-accelerated filer | ☐ | Smaller reporting company | ☐ |
| | | Emerging Growth Company | ☐ |

---

If an emerging growth company, indicate by check mark if the 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. ☐

Indicate by check mark whether the Registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

As of September 30, 2025, Select Medical Holdings Corporation had outstanding 123,817,591 shares of common stock.

Unless the context indicates otherwise, any reference in this report to "Holdings" refers to Select Medical Holdings Corporation and any reference to "Select" refers to Select Medical Corporation, the wholly owned operating subsidiary of Holdings, and any of Select's subsidiaries. References to the "Company," "we," "us," and "our" refer collectively to Holdings and Select.

------

<u>[**Table of Contents**](#i948f3857c2a048ceb9af5d29fa9d0633_7)</u>

**TABLE OF CONTENTS**

---

| | | |
|:---|:---|:---|
| <u>[PART I](#i948f3857c2a048ceb9af5d29fa9d0633_10)</u> | <u>[FINANCIAL INFORMATION](#i948f3857c2a048ceb9af5d29fa9d0633_10)</u> | <u>[3](#i948f3857c2a048ceb9af5d29fa9d0633_10)</u> |
| <u>[ITEM 1.](#i948f3857c2a048ceb9af5d29fa9d0633_13)</u> | <u>[CONDENSED CONSOLIDATED FINANCIAL STATEMENTS](#i948f3857c2a048ceb9af5d29fa9d0633_13)</u> | |
| | <u>[Condensed consolidated balance sheets](#i948f3857c2a048ceb9af5d29fa9d0633_16)</u> | <u>[3](#i948f3857c2a048ceb9af5d29fa9d0633_16)</u> |
| | <u>[Condensed consolidated statements of operations](#i948f3857c2a048ceb9af5d29fa9d0633_19)</u> | <u>[4](#i948f3857c2a048ceb9af5d29fa9d0633_19)</u> |
| | <u>[Condensed consolidated statements of comprehensive income](#i948f3857c2a048ceb9af5d29fa9d0633_22)</u> | <u>[5](#i948f3857c2a048ceb9af5d29fa9d0633_22)</u> |
| | <u>[Condensed consolidated statements of changes in equity and income](#i948f3857c2a048ceb9af5d29fa9d0633_25)</u> | <u>[6](#i948f3857c2a048ceb9af5d29fa9d0633_25)</u> |
| | <u>[Condensed consolidated statements of cash flows](#i948f3857c2a048ceb9af5d29fa9d0633_28)</u> | <u>[8](#i948f3857c2a048ceb9af5d29fa9d0633_28)</u> |
| | <u>[Notes to condensed consolidated financial statements](#i948f3857c2a048ceb9af5d29fa9d0633_31)</u> | <u>[9](#i948f3857c2a048ceb9af5d29fa9d0633_31)</u> |
| <u>[ITEM 2.](#i948f3857c2a048ceb9af5d29fa9d0633_115)</u> | <u>[MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS](#i948f3857c2a048ceb9af5d29fa9d0633_115)</u> | <u>[21](#i948f3857c2a048ceb9af5d29fa9d0633_115)</u> |
| <u>[ITEM 3.](#i948f3857c2a048ceb9af5d29fa9d0633_160)</u> | <u>[QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK](#i948f3857c2a048ceb9af5d29fa9d0633_160)</u> | <u>[42](#i948f3857c2a048ceb9af5d29fa9d0633_160)</u> |
| <u>[ITEM 4.](#i948f3857c2a048ceb9af5d29fa9d0633_163)</u> | <u>[CONTROLS AND PROCEDURES](#i948f3857c2a048ceb9af5d29fa9d0633_163)</u> | <u>[42](#i948f3857c2a048ceb9af5d29fa9d0633_163)</u> |
| <u>[PART II](#i948f3857c2a048ceb9af5d29fa9d0633_166)</u> | <u>[OTHER INFORMATION](#i948f3857c2a048ceb9af5d29fa9d0633_166)</u> | <u>[43](#i948f3857c2a048ceb9af5d29fa9d0633_166)</u> |
| <u>[ITEM 1.](#i948f3857c2a048ceb9af5d29fa9d0633_169)</u> | <u>[LEGAL PROCEEDINGS](#i948f3857c2a048ceb9af5d29fa9d0633_169)</u> | <u>[43](#i948f3857c2a048ceb9af5d29fa9d0633_169)</u> |
| <u>[ITEM 1A.](#i948f3857c2a048ceb9af5d29fa9d0633_172)</u> | <u>[RISK FACTORS](#i948f3857c2a048ceb9af5d29fa9d0633_172)</u> | <u>[43](#i948f3857c2a048ceb9af5d29fa9d0633_172)</u> |
| <u>[ITEM 2.](#i948f3857c2a048ceb9af5d29fa9d0633_175)</u> | <u>[UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS](#i948f3857c2a048ceb9af5d29fa9d0633_175)</u> | <u>[43](#i948f3857c2a048ceb9af5d29fa9d0633_175)</u> |
| <u>[ITEM 3.](#i948f3857c2a048ceb9af5d29fa9d0633_181)</u> | <u>[DEFAULTS UPON SENIOR SECURITIES](#i948f3857c2a048ceb9af5d29fa9d0633_181)</u> | <u>[43](#i948f3857c2a048ceb9af5d29fa9d0633_181)</u> |
| <u>[ITEM 4.](#i948f3857c2a048ceb9af5d29fa9d0633_184)</u> | <u>[MINE SAFETY DISCLOSURES](#i948f3857c2a048ceb9af5d29fa9d0633_184)</u> | <u>[43](#i948f3857c2a048ceb9af5d29fa9d0633_184)</u> |
| <u>[ITEM 5.](#i948f3857c2a048ceb9af5d29fa9d0633_187)</u> | <u>[OTHER INFORMATION](#i948f3857c2a048ceb9af5d29fa9d0633_187)</u> | <u>[43](#i948f3857c2a048ceb9af5d29fa9d0633_187)</u> |
| <u>[ITEM 6.](#i948f3857c2a048ceb9af5d29fa9d0633_193)</u> | <u>[EXHIBITS](#i948f3857c2a048ceb9af5d29fa9d0633_193)</u> | <u>[44](#i948f3857c2a048ceb9af5d29fa9d0633_193)</u> |
| <u>[SIGNATURES](#i948f3857c2a048ceb9af5d29fa9d0633_196)</u> | <u>[SIGNATURES](#i948f3857c2a048ceb9af5d29fa9d0633_196)</u> | |

---

------

<u>[**Table of Contents**](#i948f3857c2a048ceb9af5d29fa9d0633_7)</u>

**PART I: FINANCIAL INFORMATION**

 **ITEM 1. CONDENSED CONSOLIDATED FINANCIAL STATEMENTS**

**Select Medical Holdings Corporation**

**Condensed Consolidated Balance Sheets**

**(unaudited)**

**(in thousands, except share and per share amounts)**

---

| | | |
|:---|:---|:---|
| | **December 31, 2024** | **September 30, 2025** |
| **ASSETS** | | |
| Current Assets: |  |  |
| &nbsp;&nbsp;&nbsp;Cash and cash equivalents | $59694 | $60054 |
| &nbsp;&nbsp;&nbsp;Accounts receivable | 821385 | 825811 |
| &nbsp;&nbsp;&nbsp;Prepaid income taxes | 26601 | 10719 |
| &nbsp;&nbsp;&nbsp;Other current assets | 112097 | 123880 |
| Total Current Assets | 1019777 | 1020464 |
| Operating lease right-of-use assets | 908095 | 939083 |
| Property and equipment, net | 872185 | 903242 |
| Goodwill | 2331898 | 2333143 |
| Identifiable intangible assets, net | 103183 | 101425 |
| Other assets | 372813 | 388366 |
| **Total Assets** | $5607951 | $5685723 |
| **LIABILITIES AND EQUITY** |  |  |
| Current Liabilities: |  |  |
| &nbsp;&nbsp;&nbsp;Overdrafts | $25803 | $— |
| &nbsp;&nbsp;&nbsp;Current operating lease liabilities | 179601 | 184215 |
| &nbsp;&nbsp;&nbsp;Current portion of long-term debt and notes payable | 20269 | 28778 |
| &nbsp;&nbsp;&nbsp;Accounts payable | 142157 | 167102 |
| &nbsp;&nbsp;&nbsp;Accrued and other liabilities | 609821 | 559483 |
| Total Current Liabilities | 977651 | 939578 |
| Non-current operating lease liabilities | 787124 | 818586 |
| Long-term debt, net of current portion | 1691546 | 1743371 |
| Non-current deferred tax liability | 81497 | 88311 |
| Other non-current liabilities | 73038 | 76021 |
| Total Liabilities | 3610856 | 3665867 |
| Commitments and contingencies (Note 14) |  |  |
| Redeemable non-controlling interests | 10167 | 8651 |
| Stockholders' Equity: |  |  |
| &nbsp;&nbsp;Common stock, $0.001 par value, 700,000,000 shares authorized, 128,962,850 and 123,817,591 shares issued and outstanding at 2024 and 2025, respectively | 129 | 124 |
| &nbsp;&nbsp;&nbsp;Capital in excess of par | 911080 | 870575 |
| &nbsp;&nbsp;&nbsp;Retained earnings | 770146 | 824813 |
| &nbsp;&nbsp;&nbsp;Accumulated other comprehensive loss |  | (6242) |
| Total Stockholders' Equity | 1681355 | 1689270 |
| Non-controlling interests | 305573 | 321935 |
| Total Equity | 1986928 | 2011205 |
| **Total Liabilities and Equity** | $5607951 | $5685723 |

---

*The accompanying notes are an integral part of these condensed consolidated financial statements.*

------

<u>[**Table of Contents**](#i948f3857c2a048ceb9af5d29fa9d0633_7)</u>

**Select Medical Holdings Corporation**

**Condensed Consolidated Statements of Operations**

**(unaudited)**

**(in thousands, except per share amounts)**

---

| | | | | |
|:---|:---|:---|:---|:---|
| | **For the Three Months Ended September 30,** | **For the Three Months Ended September 30,** | **For the Nine Months Ended September 30,** | **For the Nine Months Ended September 30,** |
| | **2024** | **2025** | **2024** | **2025** |
| Revenue | $1271582 | $1363445 | $3874541 | $4056196 |
| Costs and expenses: |  |  |  |  |
| &nbsp;&nbsp;&nbsp;Cost of services, exclusive of depreciation and amortization | 1135708 | 1215995 | 3378362 | 3572735 |
| &nbsp;&nbsp;&nbsp;General and administrative | 47347 | 40050 | 145672 | 108721 |
| &nbsp;&nbsp;&nbsp;Depreciation and amortization | 34930 | 34442 | 106583 | 104098 |
| Total costs and expenses | 1217985 | 1290487 | 3630617 | 3785554 |
| Other operating income | 1302 |  | 3300 | 1592 |
| Income from continuing operations before other income and expense | 54899 | 72958 | 247224 | 272234 |
| Other income and expense: |  |  |  |  |
| &nbsp;&nbsp;Loss on early retirement of debt | (10939) |  | (10939) |  |
| &nbsp;&nbsp;&nbsp;Equity in earnings of unconsolidated subsidiaries | 33069 | 12992 | 53481 | 39122 |
| &nbsp;&nbsp;&nbsp;Interest expense | (31379) | (30021) | (100054) | (89071) |
| Income from continuing operations before income taxes | 45650 | 55929 | 189712 | 222285 |
| Income tax expense from continuing operations | 4374 | 11749 | 49269 | 45494 |
| Income from continuing operations, net of tax | 41276 | 44180 | 140443 | 176791 |
| Discontinued operations: |  |  |  |  |
| &nbsp;&nbsp;&nbsp;Income from discontinued business | 62174 |  | 198745 |  |
| &nbsp;&nbsp;&nbsp;Income tax expense from discontinued business | 22435 |  | 46240 |  |
| Income from discontinued operations, net of tax | 39739 |  | 152505 |  |
| Net income | 81015 | 44180 | 292948 | 176791 |
| Less: Net income attributable to non-controlling interests | 25387 | 15387 | 62860 | 50746 |
| Net income attributable to Select Medical Holdings Corporation | $55628 | $28793 | $230088 | $126045 |
| Net income attributable to Select Medical Holdings Corporation's common stockholders: |  |  |  |  |
| &nbsp;&nbsp;&nbsp;Income from continuing operations, net of tax | 24798 | 28793 | 89137 | 126045 |
| &nbsp;&nbsp;&nbsp;Income from discontinued operations, net of tax | 30830 |  | 140951 |  |
| Net income attributable to Select Medical Holdings Corporation's common stockholders | $55628 | $28793 | $230088 | $126045 |
| Earnings per common share (Note 13): |  |  |  |  |
| &nbsp;&nbsp;&nbsp;Continuing operations - basic and diluted | $0.19 | $0.23 | $0.69 | $1.00 |
| &nbsp;&nbsp;&nbsp;Discontinued operations - basic and diluted | 0.24 |  | 1.09 |  |
| Total earnings per common share - basic and diluted | $0.43 | $0.23 | $1.78 | $1.00 |

---

*The accompanying notes are an integral part of these condensed consolidated financial statements.*

------

<u>[**Table of Contents**](#i948f3857c2a048ceb9af5d29fa9d0633_7)</u>

**Select Medical Holdings Corporation**

**Condensed Consolidated Statements of Comprehensive Income**

**(unaudited)**

**(in thousands)**

---

| | | | | |
|:---|:---|:---|:---|:---|
| | **For the Three Months Ended September 30,** | **For the Three Months Ended September 30,** | **For the Nine Months Ended September 30,** | **For the Nine Months Ended September 30,** |
| | **2024** | **2025** | **2024** | **2025** |
| Net income | $81015 | $44180 | $292948 | $176791 |
| Other comprehensive loss, net of tax: |  |  |  |  |
| &nbsp;&nbsp;Gain (loss) on interest rate cap contract | 30 | (1163) | 5723 | (6334) |
| &nbsp;&nbsp;Reclassification adjustment for (gains) losses included in net income | (5812) | 78 | (48630) | 92 |
| &nbsp;&nbsp;Net change, net of tax benefit of $1,826, $343, $13,550, and $1,971 | (5782) | (1085) | (42907) | (6242) |
| Comprehensive income | 75233 | 43095 | 250041 | 170549 |
| Less: Comprehensive income attributable to non-controlling interests | 25387 | 15387 | 62860 | 50746 |
| Comprehensive income attributable to Select Medical Holdings Corporation | $49846 | $27708 | $187181 | $119803 |

---

*The accompanying notes are an integral part of these condensed consolidated financial statements.*

------

<u>[**Table of Contents**](#i948f3857c2a048ceb9af5d29fa9d0633_7)</u>

**Select Medical Holdings Corporation**

**Condensed Consolidated Statements of Changes in Equity and Income**

**(unaudited)**

**(in thousands)**

---

| | | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|:---|
| | **For the Nine Months Ended September 30, 2025** | **For the Nine Months Ended September 30, 2025** | **For the Nine Months Ended September 30, 2025** | **For the Nine Months Ended September 30, 2025** | **For the Nine Months Ended September 30, 2025** | **For the Nine Months Ended September 30, 2025** | **For the Nine Months Ended September 30, 2025** | **For the Nine Months Ended September 30, 2025** |
| | | **Total Stockholders' Equity** | **Total Stockholders' Equity** | **Total Stockholders' Equity** | **Total Stockholders' Equity** | **Total Stockholders' Equity** | | |
| |<br>**Common<br>Stock<br>Issued** | **Common<br>Stock<br>Par Value** | **Capital in<br>Excess<br>of Par** | **Retained<br>Earnings** | **Accumulated Other Comprehensive Loss** | **Total Stockholders' Equity** |<br>**Non-controlling<br>Interests** |<br>**Total<br>Equity** |
| Balance at December 31, 2024 | 128963 | $129 | $911080 | $770146 | $— | $1681355 | $305573 | $1986928 |
| &nbsp;&nbsp;&nbsp;Net income attributable to Select Medical Holdings Corporation |  |  |  | 56681 |  | 56681 |  | 56681 |
| &nbsp;&nbsp;&nbsp;Net income attributable to non-controlling interests |  |  |  |  |  |  | 16288 | 16288 |
| &nbsp;&nbsp;Cash dividends declared for common stockholders ($0.0625 per share) |  |  |  | (8060) |  | (8060) |  | (8060) |
| &nbsp;&nbsp;&nbsp;Issuance of restricted stock | 1 | 0 | 0 |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;Vesting of restricted stock |  |  | 3892 |  |  | 3892 |  | 3892 |
| &nbsp;&nbsp;&nbsp;Repurchase of common shares | (650) | (1) | (6104) | (5284) |  | (11389) |  | (11389) |
| &nbsp;&nbsp;&nbsp;Issuance of non-controlling interests |  |  |  |  |  |  | 7944 | 7944 |
| &nbsp;&nbsp;&nbsp;Distributions to and purchases of non-controlling interests |  |  |  |  |  |  | (12183) | (12183) |
| &nbsp;&nbsp;&nbsp;Redemption value adjustment on non-controlling interests |  |  |  | 21 |  | 21 |  | 21 |
| &nbsp;&nbsp;&nbsp;Other comprehensive loss |  |  |  |  | (3106) | (3106) |  | (3106) |
| Balance at March 31, 2025 | 128314 | $128 | $908868 | $813504 | $(3106) | $1719394 | $317622 | $2037016 |
| &nbsp;&nbsp;&nbsp;Net income attributable to Select Medical Holdings Corporation |  |  |  | 40571 |  | 40571 |  | 40571 |
| &nbsp;&nbsp;&nbsp;Net income attributable to non-controlling interests |  |  |  |  |  |  | 16116 | 16116 |
| &nbsp;&nbsp;Cash dividends declared for common stockholders ($0.0625 per share) |  |  |  | (7885) |  | (7885) |  | (7885) |
| &nbsp;&nbsp;&nbsp;Issuance of restricted stock | 256 | 0 | 0 |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;Vesting of restricted stock |  |  | 4032 |  |  | 4032 |  | 4032 |
| &nbsp;&nbsp;&nbsp;Repurchase of common shares | (5794) | (5) | (45609) | (41462) |  | (87076) |  | (87076) |
| &nbsp;&nbsp;&nbsp;Issuance of non-controlling interests |  |  |  |  |  |  | 2962 | 2962 |
| &nbsp;&nbsp;&nbsp;Distributions to and purchases of non-controlling interests |  |  | 56 |  |  | 56 | (12972) | (12916) |
| &nbsp;&nbsp;&nbsp;Other comprehensive loss |  |  |  |  | (2051) | (2051) |  | (2051) |
| Balance at June 30, 2025 | 122776 | $123 | $867347 | $804728 | $(5157) | $1667041 | $323728 | $1990769 |
| &nbsp;&nbsp;&nbsp;Net income attributable to Select Medical Holdings Corporation |  |  |  | 28793 |  | 28793 |  | 28793 |
| &nbsp;&nbsp;&nbsp;Net income attributable to non-controlling interests |  |  |  |  |  |  | 14656 | 14656 |
| &nbsp;&nbsp;Cash dividends declared for common stockholders ($0.0625 per share) |  |  |  | (7739) |  | (7739) |  | (7739) |
| &nbsp;&nbsp;&nbsp;Issuance of restricted stock | 1214 | 1 | (1) |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;Forfeitures of unvested restricted stock | (15) | 0 | 0 | 7 |  | 7 |  | 7 |
| &nbsp;&nbsp;&nbsp;Vesting of restricted stock |  |  | 4248 |  |  | 4248 |  | 4248 |
| &nbsp;&nbsp;&nbsp;Repurchase of common shares | (157) | 0 | (1019) | (951) |  | (1970) |  | (1970) |
| &nbsp;&nbsp;&nbsp;Issuance of non-controlling interests |  |  |  |  |  |  | 2058 | 2058 |
| &nbsp;&nbsp;&nbsp;Distributions to and purchases of non-controlling interests |  |  |  |  |  |  | (18507) | (18507) |
| &nbsp;&nbsp;&nbsp;Redemption value adjustment on non-controlling interests |  |  |  | (25) |  | (25) |  | (25) |
| &nbsp;&nbsp;&nbsp;Other comprehensive loss |  |  |  |  | (1085) | (1085) |  | (1085) |
| Balance at September 30, 2025 | 123818 | $124 | $870575 | $824813 | $(6242) | $1689270 | $321935 | $2011205 |

---

------

<u>[**Table of Contents**](#i948f3857c2a048ceb9af5d29fa9d0633_7)</u>

---

| | | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|:---|
| | **For the Nine Months Ended September 30, 2024** | **For the Nine Months Ended September 30, 2024** | **For the Nine Months Ended September 30, 2024** | **For the Nine Months Ended September 30, 2024** | **For the Nine Months Ended September 30, 2024** | **For the Nine Months Ended September 30, 2024** | **For the Nine Months Ended September 30, 2024** | **For the Nine Months Ended September 30, 2024** |
| | | **Total Stockholders' Equity** | **Total Stockholders' Equity** | **Total Stockholders' Equity** | **Total Stockholders' Equity** | **Total Stockholders' Equity** | | |
| |<br>**Common<br>Stock<br>Issued** | **Common<br>Stock<br>Par Value** | **Capital in<br>Excess<br>of Par** | **Retained<br>Earnings** | **Accumulated Other Comprehensive Income** | **Total Stockholders' Equity** |<br>**Non-controlling<br>Interests** |<br>**Total<br>Equity** |
| Balance at December 31, 2023 | 128369 | $128 | $493413 | $751856 | $42907 | $1288304 | $259414 | $1547718 |
| &nbsp;&nbsp;&nbsp;Net income attributable to Select Medical Holdings Corporation |  |  |  | 96897 |  | 96897 |  | 96897 |
| &nbsp;&nbsp;&nbsp;Net income attributable to non-controlling interests |  |  |  |  |  |  | 17845 | 17845 |
| &nbsp;&nbsp;Cash dividends declared for common stockholders ($0.125 per share) |  |  |  | (16045) |  | (16045) |  | (16045) |
| &nbsp;&nbsp;&nbsp;Issuance of restricted stock | 1 | 0 | 0 |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;Forfeitures of unvested restricted stock | (12) | 0 | 0 | 14 |  | 14 |  | 14 |
| &nbsp;&nbsp;&nbsp;Vesting of restricted stock |  |  | 11596 |  |  | 11596 |  | 11596 |
| &nbsp;&nbsp;&nbsp;Issuance of non-controlling interests |  |  |  |  |  |  | 4002 | 4002 |
| &nbsp;&nbsp;&nbsp;Distributions to and purchases of non-controlling interests |  |  | 394 |  |  | 394 | (10900) | (10506) |
| &nbsp;&nbsp;&nbsp;Redemption value adjustment on non-controlling interests |  |  |  | (1901) |  | (1901) |  | (1901) |
| &nbsp;&nbsp;&nbsp;Other comprehensive loss |  |  |  |  | (11977) | (11977) |  | (11977) |
| Balance at March 31, 2024 | 128358 | $128 | $505403 | $830821 | $30930 | $1367282 | $270361 | $1637643 |
| &nbsp;&nbsp;&nbsp;Net income attributable to Select Medical Holdings Corporation |  |  |  | 77563 |  | 77563 |  | 77563 |
| &nbsp;&nbsp;&nbsp;Net income attributable to non-controlling interests |  |  |  |  |  |  | 14863 | 14863 |
| &nbsp;&nbsp;Cash dividends declared for common stockholders ($0.125 per share) |  |  |  | (16254) |  | (16254) |  | (16254) |
| &nbsp;&nbsp;&nbsp;Issuance of restricted stock | 1725 | 2 | (2) |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;Forfeitures of unvested restricted stock | (6) | 0 | 0 | 6 |  | 6 |  | 6 |
| &nbsp;&nbsp;&nbsp;Vesting of restricted stock |  |  | 14408 |  |  | 14408 |  | 14408 |
| &nbsp;&nbsp;&nbsp;Repurchase of common shares | (51) |  | (529) | (871) |  | (1400) |  | (1400) |
| &nbsp;&nbsp;&nbsp;Issuance of non-controlling interests |  |  |  |  |  |  | 9750 | 9750 |
| &nbsp;&nbsp;&nbsp;Distributions to and purchases of non-controlling interests |  |  |  |  |  |  | (4598) | (4598) |
| &nbsp;&nbsp;&nbsp;Redemption value adjustment on non-controlling interests |  |  |  | 132 |  | 132 |  | 132 |
| &nbsp;&nbsp;&nbsp;Other comprehensive loss |  |  |  |  | (25148) | (25148) |  | (25148) |
| Balance at June 30, 2024 | 130026 | $130 | $519280 | $891397 | $5782 | $1416589 | $290376 | $1706965 |
| &nbsp;&nbsp;&nbsp;Net income attributable to Select Medical Holdings Corporation |  |  |  | 55628 |  | 55628 |  | 55628 |
| &nbsp;&nbsp;&nbsp;Net income attributable to non-controlling interests |  |  |  |  |  |  | 22886 | 22886 |
| &nbsp;&nbsp;Cash dividends declared for common stockholders ($0.125 per share) |  |  |  | (16194) |  | (16194) |  | (16194) |
| &nbsp;&nbsp;&nbsp;Issuance of restricted stock | 1 | 0 | 0 |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;Forfeitures of unvested restricted stock | (21) | 0 | 0 | 21 |  | 21 |  | 21 |
| &nbsp;&nbsp;&nbsp;Vesting of restricted stock |  |  | 13354 |  |  | 13354 |  | 13354 |
| &nbsp;&nbsp;&nbsp;Repurchase of common shares | (466) |  | (8745) | (7779) |  | (16524) |  | (16524) |
| &nbsp;&nbsp;&nbsp;Issuance of non-controlling interests |  |  |  |  |  |  | 3662 | 3662 |
| &nbsp;&nbsp;&nbsp;Non-controlling interests acquired in business combination |  |  |  |  |  |  | 10465 | 10465 |
| &nbsp;&nbsp;&nbsp;Distributions to and purchases of non-controlling interests |  |  |  |  |  |  | (15819) | (15819) |
| &nbsp;&nbsp;&nbsp;Concentra initial public offering |  |  | 334852 | 133118 |  | 467970 | 43228 | 511198 |
| &nbsp;&nbsp;&nbsp;Other comprehensive loss |  |  |  |  | (5782) | (5782) |  | (5782) |
| &nbsp;&nbsp;&nbsp;Other |  |  |  | 129 |  | 129 |  | 129 |
| Balance at September 30, 2024 | 129540 | $130 | $858741 | $1056320 | $— | $1915191 | $354798 | $2269989 |

---

*The accompanying notes are an integral part of these condensed consolidated financial statements.*

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<u>[**Table of Contents**](#i948f3857c2a048ceb9af5d29fa9d0633_7)</u>

**Select Medical Holdings Corporation**

**Condensed Consolidated Statements of Cash Flows**

**(unaudited)** 

**(in thousands)**

---

| | | |
|:---|:---|:---|
| | **For the Nine Months Ended September 30,** | **For the Nine Months Ended September 30,** |
| | **2024** | **2025** |
| **Operating activities** |  |  |
| Net income | $292948 | $176791 |
| Adjustments to reconcile net income to net cash provided by operating activities: |  |  |
| &nbsp;&nbsp;&nbsp;Distributions from unconsolidated subsidiaries | 30436 | 42815 |
| &nbsp;&nbsp;&nbsp;Depreciation and amortization | 158151 | 104098 |
| &nbsp;&nbsp;&nbsp;Provision for expected credit losses | 1659 | 2061 |
| &nbsp;&nbsp;&nbsp;Equity in earnings of unconsolidated subsidiaries | (49805) | (39122) |
| &nbsp;&nbsp;&nbsp;Loss on extinguishment of debt | 10939 |  |
| &nbsp;&nbsp;&nbsp;Gain on sale or disposal of assets | (1111) | (47) |
| &nbsp;&nbsp;&nbsp;Stock compensation expense | 39399 | 12179 |
| &nbsp;&nbsp;&nbsp;Amortization of debt discount, premium, and issuance costs | 2279 | 2353 |
| &nbsp;&nbsp;&nbsp;Deferred income taxes | (34941) | 10547 |
| &nbsp;&nbsp;&nbsp;Changes in operating assets and liabilities, net of effects of business combinations: |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Accounts receivable | (116761) | (6487) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Other current assets | 7856 | (7498) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Other assets | 13942 | 5056 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Accounts payable | (2056) | 17772 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Accrued expenses | 39497 | (38376) |
| Net cash provided by operating activities | 392432 | 282142 |
| **Investing activities** |  |  |
| Business combinations, net of cash acquired | (2311) | (1601) |
| Purchases of property and equipment | (158748) | (170125) |
| Proceeds from sales and exchange of assets | 4241 | 22132 |
| Net cash used in investing activities | (156818) | (149594) |
| **Financing activities** |  |  |
| Borrowings on revolving facilities | 950000 | 970000 |
| Payments on revolving facilities | (1220000) | (925000) |
| Proceeds from term loans, net of issuance costs | 836697 |  |
| Payments on term loans | (1719503) | (7875) |
| Proceeds from 6.875% senior notes, net of issuance costs | 637337 |  |
| Borrowings of other debt | 20806 | 41522 |
| Principal payments on other debt | (35782) | (25965) |
| Dividends paid to common stockholders | (48493) | (23684) |
| Repurchases of common stock | (17924) | (99535) |
| Decrease in overdrafts | (16101) | (25803) |
| Proceeds from issuance of non-controlling interests | 9413 | 12964 |
| Distributions to and purchases of non-controlling interests | (35800) | (48812) |
| Proceeds from Concentra initial public offering (Note 4) | 511198 |  |
| Net cash used in financing activities | (128152) | (132188) |
| Net increase in cash and cash equivalents | 107462 | 360 |
| Cash and cash equivalents at beginning of period | 84006 | 59694 |
| Cash and cash equivalents at end of period | $191468 | $60054 |
| **Supplemental information** |  |  |
| &nbsp;&nbsp;Cash paid for interest, excluding amounts received of $68,069 under the interest rate cap contract during the nine months ended September 30, 2024 | $216757 | $84002 |
| &nbsp;&nbsp;&nbsp;Cash paid for taxes | 102696 | 22118 |

---

*The accompanying notes are an integral part of these condensed consolidated financial statements.*

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<u>[**Table of Contents**](#i948f3857c2a048ceb9af5d29fa9d0633_7)</u>

**SELECT MEDICAL HOLDINGS CORPORATION**

**NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)**

**1.**&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; &nbsp;&nbsp;&nbsp;&nbsp;**Basis of Presentation**

The unaudited condensed consolidated financial statements of Select Medical Holdings Corporation ("Holdings") include the accounts of its wholly owned subsidiary, Select Medical Corporation ("Select"). Holdings conducts substantially all of its business through Select and its subsidiaries. Holdings, Select, and Select's subsidiaries are collectively referred to as the "Company." The unaudited condensed consolidated financial statements of the Company as of September 30, 2025, and for the three and nine month periods ended September 30, 2024 and 2025, have been prepared pursuant to the rules and regulations of the Securities and Exchange Commission (the "SEC") for interim reporting and the accounting principles generally accepted in the United States of America ("GAAP"). Accordingly, certain information and disclosures required by GAAP, which are normally included in the notes to the consolidated financial statements, have been condensed or omitted pursuant to those rules and regulations, although the Company believes the disclosure is adequate to make the information presented not misleading. In the opinion of management, such information contains all adjustments, which are normal and recurring in nature, necessary for a fair statement of the financial position, results of operations and cash flow for such periods. All significant intercompany transactions and balances have been eliminated.

The results of operations for the three and nine months ended September 30, 2025, are not necessarily indicative of the results to be expected for the full fiscal year ending December 31, 2025. These unaudited condensed consolidated financial statements should be read in conjunction with the consolidated financial statements and notes thereto for the year ended December 31, 2024, contained in the Company's Annual Report on Form 10-K filed with the SEC on February 20, 2025.

See Note 4. Dispositions for discussion on the distribution of Concentra Group Holdings Parent, Inc. ("Concentra") that occurred in the fourth quarter of 2024.

**2.&nbsp;&nbsp;&nbsp;&nbsp;Accounting Policies**

***Recent Accounting Guidance Not Yet Adopted***

*Income Taxes*

In December 2023, FASB issued ASU 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures, which is intended to improve the transparency and decision usefulness of income tax disclosures. The ASU requires disclosure of a tabular rate reconciliation using specified categories and additional information for reconciling items that exceed a quantitative threshold. The amendments in the update also require annual disclosure of income taxes paid, disaggregated by federal, state, and foreign taxes, as well as any individual jurisdictions in which income taxes paid is greater than 5% of total income taxes paid.

The ASU should be applied prospectively, though retrospective application is permitted. The Company will adopt ASU 2023-09 beginning with our annual reporting period ending December 31, 2025. The adoption of ASU 2023-09 will result in expanded disclosures within the income tax footnote.

*Expense Disaggregation*

In November 2024, FASB issued ASU 2024-03, *Income Statement - Reporting Comprehensive Income - Expense Disaggregation Disclosures (Subtopic 220-40)*, which is intended to improve the disclosures of expenses by providing more detailed information about the types of expenses in commonly presented expense captions. The ASU requires entities to disclose the amounts of purchases of inventory, employee compensation, depreciation and intangible asset amortization included in each relevant expense caption; as well as a qualitative description of the amounts remaining in relevant expense captions that are not separately disaggregated quantitatively. The amendment also requires disclosure of the total amount of selling expense and, in annual reporting periods, an entity's definition of selling expenses.

The ASU is effective for annual periods beginning after December 15, 2026, and interim periods beginning after December 15, 2027; however early adoption is permitted. The ASU can be applied either prospectively or retrospectively. The Company is currently reviewing the impact that ASU 2024-03 will have on the disclosures in our consolidated financial statements.

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***Use of Estimates***

The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenues, and expenses. Actual results could differ from those estimates.

**3.&nbsp;&nbsp;&nbsp;&nbsp;Equity Method Investments**

On September 26, 2025, a wholly-owned subsidiary of the Company contributed a recently constructed hospital to BHSM Rehabilitation, LLC ("Banner") in exchange for an equity interest in Banner. The carrying value and fair value of the building was $45.8 million. As part of this transaction, Banner made a special distribution to each of its equity holders based on their respective ownership interest. The Company's distribution was $23.3 million, $22.1 million of which is included in Proceeds from sales and exchange of assets on the Condensed Consolidated Statement of Cash Flows, and $1.3 million of which is a distribution receivable and is included in Other current assets on the Condensed Consolidated Balance Sheet. Our equity method investments are included in Other assets on the Condensed Consolidated Balance Sheets.

**4. &nbsp;&nbsp;&nbsp;&nbsp;Dispositions**

On July 26, 2024, Concentra, a then wholly-owned subsidiary of Select, completed an initial public offering ("IPO") of 22,500,000 shares of its common stock, par value $0.01 per share, at an initial public offering price of $23.50 per share for net proceeds of $499.7 million after deducting underwriting discounts and commission of $29.1 million. In addition, the underwriters exercised the option to purchase an additional 750,000 shares of Concentra's common stock for net proceeds of $16.7 million after deducting discounts and commission of $1.0 million. On November 25, 2024, Select completed a tax-free distribution of 104,093,503 shares of common stock of Concentra to its stockholders. Following the completion of the distribution, the Company no longer owns any shares of Concentra common stock.

In connection with the separation and distribution of Concentra's common stock, the Company and Concentra also entered into several agreements to provide a framework of our ongoing relationship with Concentra, including a transition services agreement ("TSA"), a separation agreement, a tax matters agreement and an employee matters agreement. The services under the TSA generally are a continuation of the support services provided by Select to Concentra prior to the IPO. The fee for support services provided to Concentra was $2.7 million and $9.9 million for the three and nine months ended September 30, 2025, respectively. The income from the support services fees, as well as the cost to provide these services, are included within General and Administrative expense on the condensed consolidated statements of operations. The provision of services under the TSA will terminate no later than November 26, 2026.

The results of Concentra are presented as discontinued operations and, as such, have been excluded from both continuing operations and segment results for the three and nine months ended September 30, 2024.

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Certain key selected financial information included in Income from discontinued operations, net of tax, for Concentra is as follows:

---

| | | |
|:---|:---|:---|
| | **For the Three Months Ended September 30, 2024** | **For the Nine Months Ended September 30, 2024** |
| Revenue | $489638 | $1435151 |
| Costs and expenses: |  |  |
| &nbsp;&nbsp;&nbsp;Cost of services, exclusive of depreciation and amortization | 388191 | 1138191 |
| &nbsp;&nbsp;&nbsp;Depreciation and amortization | 15213 | 51568 |
| Total costs and expenses | 403404 | 1189759 |
| Other operating income |  | 284 |
| Income from operations | 86234 | 245676 |
| Other income and expense: |  |  |
| &nbsp;&nbsp;&nbsp;Equity in earnings of unconsolidated subsidiaries |  | (3676) |
| &nbsp;&nbsp;Interest expense<sup>(1)</sup> | (24060) | (43255) |
| Income from discontinued operations before income taxes | 62174 | 198745 |
| Income tax expense | 22435 | 46240 |
| Income from discontinued operations, net of tax | 39739 | 152505 |
| Less: Net income attributable to non-controlling interests | 8909 | 11554 |
| Income from discontinued operations, net of tax, attributable to Select Medical Holdings Corporation's common stockholders | $30830 | $140951 |

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_______________________________________________________________________________

(1)&nbsp;&nbsp;&nbsp;&nbsp;For the three and nine months ended September 30, 2024, interest expense includes allocated interest expense of $2.7 million and $22.0 million, respectively. Interest was allocated in accordance with the terms of an intercompany promissory note in place between the Company and Concentra prior to the separation.

The following is selected financial information included on the Condensed Consolidated Statements of Cash Flows for Concentra:

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| | |
|:---|:---|
| | **For the Nine Months Ended September 30, 2024** |
| Depreciation and amortization | $51568 |
| Cash flows from investing activities: |  |
| &nbsp;&nbsp;&nbsp;Purchases of property and equipment | $47639 |

---

**5. &nbsp;&nbsp;&nbsp;&nbsp;Credit Risk Concentrations**

Financial instruments that potentially subject the Company to concentrations of credit risk consist primarily of cash balances and accounts receivable. The Company's excess cash is held with large financial institutions. The Company grants unsecured credit to its patients, most of whom reside in the service area of the Company's facilities and are insured under third-party payor agreements.

Because of the diversity in the Company's non-governmental third-party payor base, as well as their geographic dispersion, accounts receivable due from the Medicare program represent the Company's only significant concentration of credit risk. Approximately 21% of the Company's accounts receivable is due from Medicare at both December 31, 2024, and September 30, 2025.

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**6. &nbsp;&nbsp;&nbsp;&nbsp;Leases**

The Company's total lease cost is as follows:

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| | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|
| | **Three Months Ended September 30, 2024** | **Three Months Ended September 30, 2024** | **Three Months Ended September 30, 2024** | **Three Months Ended September 30, 2025** | **Three Months Ended September 30, 2025** | **Three Months Ended September 30, 2025** |
| | **Unrelated Parties** | **Related Parties** | **Total** | **Unrelated Parties** | **Related Parties** | **Total** |
| | **(in thousands)** | **(in thousands)** | **(in thousands)** | **(in thousands)** | **(in thousands)** | **(in thousands)** |
| Operating lease cost | $58016 | $1834 | $59850 | $60703 | $1834 | $62537 |
| Finance lease cost: |  |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;Amortization of right-of-use assets | 143 |  | 143 | 143 |  | 143 |
| &nbsp;&nbsp;&nbsp;Interest on lease liabilities | 248 |  | 248 | 235 |  | 235 |
| Variable lease cost | 12083 |  | 12083 | 12813 |  | 12813 |
| Sublease income | (1718) |  | (1718) | (1920) |  | (1920) |
| &nbsp;&nbsp;&nbsp;Total lease cost | $68772 | $1834 | $70606 | $71974 | $1834 | $73808 |

---

---

| | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|
| | **Nine Months Ended September 30, 2024** | **Nine Months Ended September 30, 2024** | **Nine Months Ended September 30, 2024** | **Nine Months Ended September 30, 2025** | **Nine Months Ended September 30, 2025** | **Nine Months Ended September 30, 2025** |
| | **Unrelated Parties** | **Related Parties** | **Total** | **Unrelated Parties** | **Related Parties** | **Total** |
| | **(in thousands)** | **(in thousands)** | **(in thousands)** | **(in thousands)** | **(in thousands)** | **(in thousands)** |
| Operating lease cost | $168436 | $5501 | $173937 | $179402 | $5501 | $184903 |
| Finance lease cost: |  |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;Amortization of right-of-use assets | 429 |  | 429 | 429 |  | 429 |
| &nbsp;&nbsp;&nbsp;Interest on lease liabilities | 741 |  | 741 | 709 |  | 709 |
| Variable lease cost | 35785 | 16 | 35801 | 38160 |  | 38160 |
| Sublease income | (5159) |  | (5159) | (5445) |  | (5445) |
| &nbsp;&nbsp;&nbsp;Total lease cost | $200232 | $5517 | $205749 | $213255 | $5501 | $218756 |

---

**7. &nbsp;&nbsp;&nbsp;&nbsp;Accrued and other liabilities** 

The following table sets forth the components of accrued and other liabilities on the Condensed Consolidated Balance Sheets:

---

| | | |
|:---|:---|:---|
| | **December 31, 2024** | **September 30, 2025** |
| Accrued payroll | $183045 | $170180 |
| Accrued vacation | 122376 | 125059 |
| Accrued interest | 9075 | 13169 |
| Accrued other | 288681 | 247563 |
| Income taxes payable | 6644 | 3512 |
| &nbsp;&nbsp;&nbsp;Accrued and other liabilities | $609821 | $559483 |

---

**8. &nbsp;&nbsp;&nbsp;&nbsp;Interest Rate Cap** 

The Company is subject to market risk exposure arising from changes in interest rates on the Select term loan, which bears interest at a rate that is indexed to one-month Term Secured Overnight Financing Rate ("SOFR"). The Company's objective in using an interest rate derivative is to mitigate its exposure to increases in interest rates. The Company had an interest rate cap which matured on September 30, 2024. During the three months ended March 31, 2025, the Company entered into a new interest rate cap with a scheduled maturity of March 31, 2028. The interest rate cap limits the Company's exposure to increases in the variable rate index to 4.5% on $1.0 billion of principal outstanding under the term loan, as the interest rate cap provides for payments from the counterparty when interest rates rise above 4.5%. The interest rate cap has a deferred premium that the Company will pay monthly over the term of the agreement. The annual premium is equal to 0.3300% of the notional amount, or approximately $3.3 million.

The interest rate cap has been designated as a cash flow hedge and is highly effective at offsetting the changes in cash outflows when the variable rate index exceeds 4.5%. Changes in the fair value of the interest rate cap, net of tax, are recognized in other comprehensive loss and reclassified out of accumulated other comprehensive loss and into interest expense when the hedged interest obligations affected earnings.

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The following table outlines the changes in accumulated other comprehensive income (loss), net of tax, during the periods presented:

---

| | | |
|:---|:---|:---|
| | **Nine Months Ended September 30,** | **Nine Months Ended September 30,** |
| | **2024** | **2025** |
| | **(in thousands)** | **(in thousands)** |
| Balance as of January 1 | $42907 | $— |
| &nbsp;&nbsp;Gain (loss) on interest rate cap cash flow hedge | 4370 | (3106) |
| &nbsp;&nbsp;Amounts reclassified from accumulated other comprehensive income (loss) | (16347) |  |
| Balance as of March 31 | $30930 | $(3106) |
| &nbsp;&nbsp;Gain (loss) on interest rate cap cash flow hedge | 1323 | (2065) |
| &nbsp;&nbsp;Amounts reclassified from accumulated other comprehensive income (loss) | (16071) | 14 |
| &nbsp;&nbsp;Amounts reclassified from accumulated other comprehensive income (loss) - forecasted transactions probable not to occur | (10400) |  |
| Balance as of June 30 | $5782 | $(5157) |
| &nbsp;&nbsp;Gain (loss) on interest rate cap cash flow hedge | 30 | (1163) |
| &nbsp;&nbsp;Amounts reclassified from accumulated other comprehensive income (loss) | (5812) | 78 |
| Balance as of September 30 | $— | $(6242) |

---

The effects on net income of amounts reclassified from accumulated other comprehensive income (loss) are as follows:

---

| | | | | |
|:---|:---|:---|:---|:---|
| | **Three Months Ended September 30,** | **Three Months Ended September 30,** | **Nine Months Ended September 30,** | **Nine Months Ended September 30,** |
|<br>**Statement of Operations** | **2024** | **2025** | **2024** | **2025** |
|  | **(in thousands)** | **(in thousands)** | **(in thousands)** | **(in thousands)** |
| Gains (losses) included in interest expense | $7647 | $(103) | $63987 | $(121) |
| Income tax benefit (expense) | (1835) | 25 | (15357) | 29 |
| &nbsp;&nbsp;Amounts reclassified from accumulated other comprehensive income (loss) | $5812 | $(78) | $48630 | $(92) |

---

The Company expects that approximately $2.0 million of estimated pre-tax losses will be reclassified from accumulated other comprehensive loss into interest expense within the next twelve months.

Refer to Note 9 – Fair Value of Financial Instruments for information on the fair value of the Company's interest rate cap contract and its balance sheet classification.

**9. &nbsp;&nbsp;&nbsp;&nbsp;Fair Value of Financial Instruments**

Financial instruments which are measured at fair value, or for which a fair value is disclosed, are classified in the fair value hierarchy, as outlined below, on the basis of the observability of the inputs used in the fair value measurement:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Level 1 – inputs are based upon quoted prices for identical instruments in active markets.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Level 2 – inputs are based upon quoted prices for similar instruments in active markets, quoted prices for identical or similar instruments in markets that are not active, and model-based valuation techniques for which all significant inputs are observable in the market or can be corroborated by observable market data.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Level 3 – inputs are generally unobservable and typically reflect management's estimates of assumptions that market participants would use in pricing the instrument.

The Company's interest rate cap contract is recorded at its fair value in the condensed consolidated balance sheets on a recurring basis. The fair value of the interest rate cap contract is based upon a model-derived valuation using observable market inputs, such as interest rates and interest rate volatility, and the strike price.

---

| | | | |
|:---|:---|:---|:---|
| **Financial Instrument** | **Balance Sheet Classification** | **Level** | **September 30, 2025** |
| **Liability:** | | | **(in thousands)** |
| &nbsp;&nbsp;Interest rate cap contract, current portion | Accrued other | Level 2 | $3207 |
| &nbsp;&nbsp;Interest rate cap contract, non-current portion | Other non-current liabilities | Level 2 | 3450 |

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The Company does not measure its indebtedness at fair value in its condensed consolidated balance sheets. The fair value of the credit facilities are based on quoted market prices for this debt in the syndicated loan market. The fair values of the senior notes are based on quoted market prices. The carrying value of the Company's other debt, as disclosed in Note 10 – Long-Term Debt and Notes Payable, approximates fair value.

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| | | | | | |
|:---|:---|:---|:---|:---|:---|
| | | **December 31, 2024** | **December 31, 2024** | **September 30, 2025** | **September 30, 2025** |
|<br>**Financial Instrument** |<br>**Level** | **Carrying Value** | **Fair Value** | **Carrying Value** | **Fair Value** |
| | | **(in thousands)** | **(in thousands)** | **(in thousands)** | **(in thousands)** |
| &nbsp;&nbsp;6.250% senior notes | Level 2 | $539363 | $528000 | $540362 | $550275 |
| &nbsp;&nbsp;Credit facilities: |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Revolving facility | Level 2 | 105000 | 102900 | 150000 | 147750 |
| &nbsp;&nbsp;&nbsp;&nbsp;Term loan | Level 2 | 1041661 | 1051313 | 1034717 | 1043428 |

---

The Company's other financial instruments, which primarily consist of cash and cash equivalents, accounts receivable, and accounts payable, approximate fair value because of the short-term maturities of these instruments.

**10.**&nbsp;&nbsp;&nbsp;&nbsp; **Long-Term Debt and Notes Payable**

As of September 30, 2025, the Company's long-term debt and notes payable are as follows:

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| | | | | | |
|:---|:---|:---|:---|:---|:---|
| | **Principal<br>Outstanding** | **Unamortized Premium (Discount)** | **Unamortized<br>Issuance Costs** | **Carrying Value** | **Fair Value** |
| | **(in thousands)** | **(in thousands)** | **(in thousands)** | **(in thousands)** | **(in thousands)** |
| 6.250% senior notes | $550000 | $— | $(9638) | $540362 | $550275 |
| Credit facilities: |  |  |  |  |  |
| &nbsp;&nbsp;Revolving facility | 150000 |  |  | 150000 | 147750 |
| &nbsp;&nbsp;Term loan | 1042125 | (2392) | (5016) | 1034717 | 1043428 |
| Other debt, including finance leases | 47506 |  | (436) | 47070 | 47070 |
| Total debt | $1789631 | $(2392) | $(15090) | $1772149 | $1788523 |

---

Principal maturities of the Company's long-term debt and notes payable are approximately as follows:

---

| | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|
| | **2025** | **2026** | **2027** | **2028** | **2029** | **Thereafter** | **Total** |
| | **(in thousands)** | **(in thousands)** | **(in thousands)** | **(in thousands)** | **(in thousands)** | **(in thousands)** | **(in thousands)** |
| 6.250% senior notes | $— | $— | $— | $— | $— | $550000 | $550000 |
| Credit facilities: |  |  |  |  |  |  |  |
| &nbsp;&nbsp;Revolving facility |  |  |  |  | 150000 |  | 150000 |
| &nbsp;&nbsp;Term loan | 2625 | 10500 | 10500 | 10500 | 10500 | 997500 | 1042125 |
| Other debt, including finance leases | 8686 | 11034 | 1637 | 54 | 58 | 26037 | 47506 |
| Total debt | $11311 | $21534 | $12137 | $10554 | $160558 | $1573537 | $1789631 |

---

As of December 31, 2024, the Company's long-term debt and notes payable are as follows:

---

| | | | | | |
|:---|:---|:---|:---|:---|:---|
| | **Principal<br>Outstanding** | **Unamortized Premium (Discount)** | **Unamortized<br>Issuance Costs** | **Carrying Value** | **Fair Value** |
| | **(in thousands)** | **(in thousands)** | **(in thousands)** | **(in thousands)** | **(in thousands)** |
| 6.250% senior notes | $550000 | $— | $(10637) | $539363 | $528000 |
| Credit facilities: |  |  |  |  |  |
| &nbsp;&nbsp;Revolving facility | 105000 |  |  | 105000 | 102900 |
| &nbsp;&nbsp;Term loan | 1050000 | (2693) | (5646) | 1041661 | 1051313 |
| Other debt, including finance leases | 26282 |  | (491) | 25791 | 25791 |
| Total debt | $1731282 | $(2693) | $(16774) | $1711815 | $1708004 |

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**11. &nbsp;&nbsp;&nbsp;&nbsp;Segment Information**

The Company identifies its segments according to how the chief operating decision maker evaluates financial performance and allocates resources. The Company's reportable segments consist of the critical illness recovery hospital segment, rehabilitation hospital segment, and outpatient rehabilitation segment. Other activities include the Company's corporate shared services, certain investments, and employee leasing services with non-consolidating subsidiaries.

The Company's chief operating decision maker is its Executive Chairman. The chief operating decision maker uses Adjusted EBITDA in the annual budgeting and forecasting process. The chief operating decision maker considers budget-to-actual variances when making decisions about the allocation of operating and capital resources to each segment. The chief operating decision maker also uses segment Adjusted EBITDA to assess the performance of each segment by comparing the results of each segment to one another and to each segment's budget. 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. The Company has provided additional information regarding its reportable segments, such as total assets, which contributes to the understanding of the Company and provides useful information to the users of the consolidated financial statements.

The following tables summarize selected financial data for the Company's reportable segments.

---

| | | | | | |
|:---|:---|:---|:---|:---|:---|
| | **Three Months Ended September 30, 2024** | **Three Months Ended September 30, 2024** | **Three Months Ended September 30, 2024** | **Three Months Ended September 30, 2024** | **Three Months Ended September 30, 2024** |
| | **Critical Illness Recovery Hospital** | **Rehabilitation Hospital** | **Outpatient<br>Rehabilitation** | **Other** | **Total** |
| | **(in thousands)** | **(in thousands)** | **(in thousands)** | **(in thousands)** | **(in thousands)** |
| Revenue | $582950 | $282709 | $312042 | $93881 | $1271582 |
| Personnel expense | 341219 | 161892 | 221446 |  |  |
| Other segment items <sup>(1)</sup> | 190968 | 60700 | 62277 |  |  |
| Adjusted EBITDA | 50763 | 60117 | 28319 |  |  |
| Total assets | 2658301 | 1294125 | 1414009 | 162937 | 5529372 |
| Capital expenditures | 16208 | 10595 | 8402 | 333 | 35538 |

---

---

| | | | | | |
|:---|:---|:---|:---|:---|:---|
| | **Three Months Ended September 30, 2025** | **Three Months Ended September 30, 2025** | **Three Months Ended September 30, 2025** | **Three Months Ended September 30, 2025** | **Three Months Ended September 30, 2025** |
| | **Critical Illness Recovery Hospital** | **Rehabilitation Hospital** | **Outpatient<br>Rehabilitation** | **Other** | **Total** |
| | **(in thousands)** | **(in thousands)** | **(in thousands)** | **(in thousands)** | **(in thousands)** |
| Revenue | $609929 | $328607 | $325383 | $99526 | $1363445 |
| Personnel expense | 350015 | 186452 | 234666 |  |  |
| Other segment items <sup>(1)</sup> | 203812 | 74199 | 66519 |  |  |
| Adjusted EBITDA | 56102 | 67956 | 24198 |  |  |
| Total assets | 2631998 | 1478363 | 1415655 | 159707 | 5685723 |
| Capital expenditures | 18186 | 25608 | 8959 | 349 | 53102 |

---

---

| | | | | | |
|:---|:---|:---|:---|:---|:---|
| | **Nine Months Ended September 30, 2024** | **Nine Months Ended September 30, 2024** | **Nine Months Ended September 30, 2024** | **Nine Months Ended September 30, 2024** | **Nine Months Ended September 30, 2024** |
| | **Critical Illness Recovery Hospital** | **Rehabilitation Hospital** | **Outpatient<br>Rehabilitation** | **Other** | **Total** |
| | **(in thousands)** | **(in thousands)** | **(in thousands)** | **(in thousands)** | **(in thousands)** |
| Revenue | $1843751 | $816240 | $930696 | $283854 | $3874541 |
| Personnel expense | 1032664 | 459827 | 659024 |  |  |
| Other segment items <sup>(1)</sup> | 572551 | 172942 | 189656 |  |  |
| Adjusted EBITDA | 238536 | 183471 | 82016 |  |  |
| Total assets | 2658301 | 1294125 | 1414009 | 162937 | 5529372 |
| Capital expenditures | 49765 | 32514 | 26064 | 2766 | 111109 |

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---

| | | | | | |
|:---|:---|:---|:---|:---|:---|
| | **Nine Months Ended September 30, 2025** | **Nine Months Ended September 30, 2025** | **Nine Months Ended September 30, 2025** | **Nine Months Ended September 30, 2025** | **Nine Months Ended September 30, 2025** |
| | **Critical Illness Recovery Hospital** | **Rehabilitation Hospital** | **Outpatient<br>Rehabilitation** | **Other** | **Total** |
| | **(in thousands)** | **(in thousands)** | **(in thousands)** | **(in thousands)** | **(in thousands)** |
| Revenue | $1848098 | $949770 | $960309 | $298019 | $4056196 |
| Personnel expense | 1047408 | 532703 | 685793 |  |  |
| Other segment items <sup>(1)</sup> | 601656 | 207640 | 195532 |  |  |
| Adjusted EBITDA | 199034 | 209427 | 78984 |  |  |
| Total assets | 2631998 | 1478363 | 1415655 | 159707 | 5685723 |
| Capital expenditures | 58096 | 82878 | 27850 | 1301 | 170125 |

---

_______________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________

(1)&nbsp;&nbsp;&nbsp;&nbsp;Other segment items consist of facilities expense, other operating expenses, and other operating income.

A reconciliation of Adjusted EBITDA to income from continuing operations before income taxes is as follows:

---

| | | | | |
|:---|:---|:---|:---|:---|
| | **Three Months Ended September 30,** | **Three Months Ended September 30,** | **Nine Months Ended September 30,** | **Nine Months Ended September 30,** |
| | **2024** | **2025** | **2024** | **2025** |
| | **(in thousands)** | **(in thousands)** | **(in thousands)** | **(in thousands)** |
| Adjusted EBITDA - Critical Illness Recovery Hospital Segment | $50763 | $56102 | $238536 | $199034 |
| Adjusted EBITDA - Rehabilitation Hospital Segment | 60117 | 67956 | 183471 | 209427 |
| Adjusted EBITDA - Outpatient Rehabilitation Segment | 28319 | 24198 | 82016 | 78984 |
| Other revenue | 93881 | 99526 | 283854 | 298019 |
| Other cost of services <sup>(1)</sup>  | (93881) | (99526) | (283854) | (298019) |
| Other general and administrative expenses <sup>(1)</sup> | (35570) | (36601) | (109890) | (99006) |
| Other other operating income | 269 |  | 269 | 72 |
| Depreciation and amortization | (34930) | (34442) | (106583) | (104098) |
| Stock compensation expense | (13208) | (4255) | (38899) | (12179) |
| Concentra separation transaction costs | (861) |  | (1696) |  |
| Loss on early retirement of debt | (10939) |  | (10939) |  |
| Equity in earnings of unconsolidated subsidiaries | 33069 | 12992 | 53481 | 39122 |
| Interest expense | (31379) | (30021) | (100054) | (89071) |
| Income from continuing operations before income taxes | $45650 | $55929 | $189712 | $222285 |

---

_______________________________________________________________________________

(1)&nbsp;&nbsp;&nbsp;&nbsp;Exclusive of depreciation, amortization and stock compensation expense.

**12. &nbsp;&nbsp;&nbsp;&nbsp;Revenue from Contracts with Customers**

The following tables disaggregate the Company's revenue for the three and nine months ended September 30, 2024 and 2025:

---

| | | | | | |
|:---|:---|:---|:---|:---|:---|
| | **Three Months Ended September 30, 2024** | **Three Months Ended September 30, 2024** | **Three Months Ended September 30, 2024** | **Three Months Ended September 30, 2024** | **Three Months Ended September 30, 2024** |
| | **Critical Illness Recovery Hospital** | **Rehabilitation Hospital** | **Outpatient<br>Rehabilitation** | **Other** | **Total** |
| | **(in thousands)** | **(in thousands)** | **(in thousands)** | **(in thousands)** | **(in thousands)** |
| Patient service revenue: |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;Medicare | $182952 | $124386 | $48804 | $— | $356142 |
| &nbsp;&nbsp;&nbsp;Non-Medicare | 399091 | 145536 | 245064 |  | 789691 |
| &nbsp;&nbsp;&nbsp;&nbsp;Total patient services revenues | 582043 | 269922 | 293868 |  | 1145833 |
| Other revenue | 907 | 12787 | 18174 | 93881 | 125749 |
| Total revenue | $582950 | $282709 | $312042 | $93881 | $1271582 |

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---

| | | | | | |
|:---|:---|:---|:---|:---|:---|
| | **Three Months Ended September 30, 2025** | **Three Months Ended September 30, 2025** | **Three Months Ended September 30, 2025** | **Three Months Ended September 30, 2025** | **Three Months Ended September 30, 2025** |
| | **Critical Illness Recovery Hospital** | **Rehabilitation Hospital** | **Outpatient<br>Rehabilitation** | **Other** | **Total** |
| | **(in thousands)** | **(in thousands)** | **(in thousands)** | **(in thousands)** | **(in thousands)** |
| Patient service revenue: |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;Medicare | $196245 | $143749 | $48549 | $— | $388543 |
| &nbsp;&nbsp;&nbsp;Non-Medicare | 412675 | 171653 | 257136 |  | 841464 |
| &nbsp;&nbsp;&nbsp;&nbsp;Total patient services revenues | 608920 | 315402 | 305685 |  | 1230007 |
| Other revenue | 1009 | 13205 | 19698 | 99526 | 133438 |
| Total revenue | $609929 | $328607 | $325383 | $99526 | $1363445 |

---

---

| | | | | | |
|:---|:---|:---|:---|:---|:---|
| | **Nine Months Ended September 30, 2024** | **Nine Months Ended September 30, 2024** | **Nine Months Ended September 30, 2024** | **Nine Months Ended September 30, 2024** | **Nine Months Ended September 30, 2024** |
| | **Critical Illness Recovery Hospital** | **Rehabilitation Hospital** | **Outpatient<br>Rehabilitation** | **Other** | **Total** |
| | **(in thousands)** | **(in thousands)** | **(in thousands)** | **(in thousands)** | **(in thousands)** |
| Patient service revenue: |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;Medicare | $603981 | $370216 | $142658 | $— | $1116855 |
| &nbsp;&nbsp;&nbsp;Non-Medicare | 1237023 | 408024 | 732895 |  | 2377942 |
| &nbsp;&nbsp;&nbsp;&nbsp;Total patient services revenues | 1841004 | 778240 | 875553 |  | 3494797 |
| Other revenue | 2747 | 38000 | 55143 | 283854 | 379744 |
| Total revenue | $1843751 | $816240 | $930696 | $283854 | $3874541 |

---

---

| | | | | | |
|:---|:---|:---|:---|:---|:---|
| | **Nine Months Ended September 30, 2025** | **Nine Months Ended September 30, 2025** | **Nine Months Ended September 30, 2025** | **Nine Months Ended September 30, 2025** | **Nine Months Ended September 30, 2025** |
| | **Critical Illness Recovery Hospital** | **Rehabilitation Hospital** | **Outpatient<br>Rehabilitation** | **Other** | **Total** |
| | **(in thousands)** | **(in thousands)** | **(in thousands)** | **(in thousands)** | **(in thousands)** |
| Patient service revenue: |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;Medicare | $588356 | $429463 | $142587 | $— | $1160406 |
| &nbsp;&nbsp;&nbsp;Non-Medicare | 1256765 | 480481 | 760184 |  | 2497430 |
| &nbsp;&nbsp;&nbsp;&nbsp;Total patient services revenues | 1845121 | 909944 | 902771 |  | 3657836 |
| Other revenue | 2977 | 39826 | 57538 | 298019 | 398360 |
| Total revenue | $1848098 | $949770 | $960309 | $298019 | $4056196 |

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**13.&nbsp;&nbsp;&nbsp;&nbsp;Earnings per Share**

The Company's capital structure includes common stock and unvested restricted stock awards. To compute earnings per share ("EPS"), the Company applies the two-class method because the Company's unvested restricted stock awards are participating securities which are entitled to participate equally with the Company's common stock in undistributed earnings. Application of the Company's two-class method is as follows:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i)Income attributable to the Company from continuing operations, net of tax, is reduced by the amount of dividends declared and by the contractual amount of dividends that must be paid for the current period for each class of stock. There were no contractual dividends paid for the three and nine months ended September 30, 2024 and 2025.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii)The remaining undistributed income of the Company from continuing operations, net of tax, is then equally allocated to its common stock and unvested restricted stock awards, as if all of the earnings for the period had been distributed. The total net income allocated to each security is determined by adding both distributed and undistributed net income for the period.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iii)The income from continuing operations, net of tax, allocated to each security is then divided by the weighted average number of outstanding shares for the period to determine the EPS for each security considered in the two-class method.

The following table sets forth the income attributable to the Company from continuing operations, net of tax, and the Company's common shares outstanding, and its participating securities outstanding.

---

| | | | | |
|:---|:---|:---|:---|:---|
| | **Basic and Diluted EPS** | **Basic and Diluted EPS** | **Basic and Diluted EPS** | **Basic and Diluted EPS** |
| | **Three Months Ended September 30,** | **Three Months Ended September 30,** | **Nine Months Ended September 30,** | **Nine Months Ended September 30,** |
| | **2024** | **2025** | **2024** | **2025** |
| | **(in thousands)** | **(in thousands)** | **(in thousands)** | **(in thousands)** |
| Income from continuing operations, net of tax | $41276 | $44180 | $140443 | $176791 |
| Less: net income attributable to non-controlling interests | 16478 | 15387 | 51306 | 50746 |
| Income from continuing operations, net of tax, attributable to Select Medical Holdings Corporation's common stockholders | 24798 | 28793 | 89137 | 126045 |
| Less: distributed and undistributed net income attributable to participating securities | 956 | 706 | 3462 | 2727 |
| Distributed and undistributed income from continuing operations, net of tax, attributable to common shares | $23842 | $28087 | $85675 | $123318 |

---

The following tables set forth the computation of EPS under the two-class method:

---

| | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|
| | **Three Months Ended September 30,** | **Three Months Ended September 30,** | **Three Months Ended September 30,** | **Three Months Ended September 30,** | **Three Months Ended September 30,** | **Three Months Ended September 30,** |
| | **2024** | **2024** | **2024** | **2025** | **2025** | **2025** |
| | **Income from Continuing Operations, Net of Tax, Allocation** | **Shares**<sup>(1)</sup> | **Basic and Diluted EPS** | **Income from Continuing Operations, Net of Tax, Allocation** | **Shares**<sup>(1)</sup> | **Basic and Diluted EPS** |
| | **(in thousands, except for per share amounts)** | **(in thousands, except for per share amounts)** | **(in thousands, except for per share amounts)** | **(in thousands, except for per share amounts)** | **(in thousands, except for per share amounts)** | **(in thousands, except for per share amounts)** |
| Common shares | $23842 | 124714 | $0.19 | $28087 | 120476 | $0.23 |
| Participating securities | 956 | 5001 | $0.19 | 706 | 3030 | $0.23 |
| Total Company | $24798 |  |  | $28793 |  |  |

---

---

| | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|
| | **Nine Months Ended September 30,** | **Nine Months Ended September 30,** | **Nine Months Ended September 30,** | **Nine Months Ended September 30,** | **Nine Months Ended September 30,** | **Nine Months Ended September 30,** |
| | **2024** | **2024** | **2024** | **2025** | **2025** | **2025** |
| | **Income from Continuing Operations, Net of Tax, Allocation** | **Shares**<sup>(1)</sup> | **Basic and Diluted EPS** | **Income from Continuing Operations, Net of Tax, Allocation** | **Shares**<sup>(1)</sup> | **Basic and Diluted EPS** |
| | **(in thousands, except for per share amounts)** | **(in thousands, except for per share amounts)** | **(in thousands, except for per share amounts)** | **(in thousands, except for per share amounts)** | **(in thousands, except for per share amounts)** | **(in thousands, except for per share amounts)** |
| Common shares | $85675 | 124175 | $0.69 | $123318 | 123326 | $1.00 |
| Participating securities | 3462 | 5017 | $0.69 | 2727 | 2727 | $1.00 |
| Total Company | $89137 |  |  | $126045 |  |  |

---

_______________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________

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

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**14.&nbsp;&nbsp;&nbsp;&nbsp;Commitments and Contingencies**

***Litigation***

The Company is a party to various legal actions, proceedings, and claims (some of which are not insured), and regulatory and other governmental audits and investigations in the ordinary course of its business. The Company cannot predict the ultimate outcome of pending litigation, proceedings, and regulatory and other governmental audits and investigations. These matters could potentially subject the Company to sanctions, damages, recoupments, fines, and other penalties. The Department of Justice, Centers for Medicare & Medicaid Services ("CMS"), or other federal and state enforcement and regulatory agencies may conduct additional investigations related to the Company's businesses in the future that may, either individually or in the aggregate, have a material adverse effect on the Company's business, financial position, results of operations, and liquidity.

To address claims arising out of the Company's operations, the Company maintains professional malpractice liability insurance and general liability insurance coverages through a number of different programs that are dependent upon such factors as the state where the Company is operating and whether the operations are wholly owned or are operated through a joint venture. For the Company's wholly owned hospital and outpatient clinic operations, the Company currently maintains insurance coverages under a combination of policies with a total annual aggregate limit of up to $42.0 million for professional malpractice liability insurance and $45.0 million for general liability insurance. The Company's insurance for the professional liability coverage is written on a "claims-made" basis, and its commercial general liability coverage is maintained on an "occurrence" basis. These coverages apply after a self-insured retention limit is exceeded. For the Company's joint venture operations, the Company has designed a separate insurance program that responds to the risks of specific joint ventures. Most of the Company's joint ventures are insured under a master program with an annual aggregate limit of up to $80.0 million, subject to a sublimit aggregate ranging from $23.0 million to $33.0 million for most joint ventures. The policies are generally written on a "claims-made" basis. Each of these programs has either a deductible or self-insured retention limit. The Company also maintains additional types of liability insurance covering claims which, due to their nature or amount, are not covered by or not fully covered by the applicable professional malpractice and general liability insurance policies, including workers compensation, property and casualty, directors and officers, cyber liability insurance, and employment practices liability insurance coverages. Our insurance policies generally are silent with respect to punitive damages so coverage is available to the extent insurable under the law of any applicable jurisdiction, and are subject to various deductibles and policy limits. The Company reviews its insurance program annually and may make adjustments to the amount of insurance coverage and self-insured retentions in future years. Significant legal actions, as well as the cost and possible lack of available insurance, could subject the Company to substantial uninsured liabilities. In the Company's opinion, the outcome of these actions, individually or in the aggregate, will not have a material adverse effect on its financial position, results of operations, or cash flows.

Healthcare providers are subject to lawsuits under the qui tam provisions of the federal False Claims Act. Qui tam lawsuits typically remain under seal (hence, usually unknown to the defendant) for some time while the government decides whether or not to intervene on behalf of a private qui tam plaintiff (known as a relator) and take the lead in the litigation. These lawsuits can involve significant monetary damages and penalties and award bounties to private plaintiffs who successfully bring the suits. The Company is and has been a defendant in these cases in the past, and may be named as a defendant in similar cases from time to time in the future.

*Oklahoma City Investigation.* On August 24, 2020, the Company and Select Specialty Hospital – Oklahoma City, Inc. ("SSH–Oklahoma City") received civil investigative demands ("CIDs") from the U.S. Attorney's Office for the Western District of Oklahoma seeking responses to interrogatories and the production of various documents principally relating to the documentation, billing and reviews of medical services furnished to patients at SSH-Oklahoma City. The Company understands that the investigation arose from a qui tam lawsuit alleging billing fraud related to charges for respiratory therapy services at SSH–Oklahoma City and Select Specialty Hospital – Wichita, Inc. The Company has produced documents in response to the CIDs and is fully cooperating with this investigation. At this time, the Company is unable to predict the timing and outcome of this matter.

*Physical Therapy Billing.* On October 7, 2021, the Company received a letter from a Trial Attorney at the U.S. Department of Justice, Civil Division, Commercial Litigation Branch, Fraud Section ("DOJ") stating that the DOJ, in conjunction with the U.S. Department of Health and Human Services ("HHS"), is investigating the Company in connection with potential violations of the False Claims Act, 31 U.S.C. § 3729, et seq. The letter specified that the investigation relates to the Company's billing for physical therapy services, and indicated that the DOJ would be requesting certain records from the Company. In October and December 2021, the DOJ requested, and the Company furnished, records relating to six of the Company's outpatient therapy clinics in Florida. In 2022 and 2023, the DOJ requested certain data relating to all of the Company's outpatient therapy clinics nationwide, and sought information about the Company's ability to produce additional data relating to the physical therapy services furnished by the Company's outpatient therapy clinics and Concentra. The Company has produced data and other documents requested by the DOJ and is fully cooperating on this investigation. In May

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2024, by order of the U.S. District Court for the Middle District of Florida (the "Court"), a qui tam lawsuit that is related to the DOJ's investigation was unsealed after the U.S. filed a notice declining to intervene in the case, but stating that its investigation is continuing and reserving its right to intervene at a later date. The lawsuit, filed in May 2021 and amended by a first amended complaint in October 2021 and by a second amended complaint in July 2024, was brought by Kathleen Kane, a physical therapist formerly employed in the Company's outpatient division, against Select Medical Corporation, Select Physical Therapy Holdings, Inc., and Select Employment Services, Inc. The second amended complaint alleged that the defendants billed Federally funded health programs for one-on-one therapy services when group therapy was performed or overbilled for one-on-one therapy services, and billed for unreimbursable unskilled physical therapy services. In June 2025, the Court granted the Company's motion to dismiss the second amended complaint, and allowed Ms. Kane a final opportunity to amend her lawsuit. In July 2025, Ms. Kane filed her third amended complaint, which contains substantially the same allegations as the second amended complaint. In August 2025, the Company filed a motion to dismiss the third amended complaint on multiple grounds. At this time, the Company is unable to predict the timing and outcome of this matter.

**15. &nbsp;&nbsp;&nbsp;&nbsp;Subsequent Events** 

On October 29, 2025, the Company's Board of Directors declared a cash dividend of $0.0625 per share. The dividend will be payable on or about November 25, 2025, to stockholders of record as of the close of business on November 12, 2025.

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**ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS**

*You should read this discussion together with our unaudited condensed consolidated financial statements and accompanying notes.*

***Forward-Looking Statements***

This report on Form 10-Q contains forward-looking statements within the meaning of the federal securities laws. Statements that are not historical facts, including statements about our beliefs and expectations, are forward-looking statements. Forward-looking statements include statements preceded by, followed by or that include the words "may," "could," "would," "should," "believe," "expect," "anticipate," "plan," "target," "estimate," "project," "intend," and similar expressions. These statements include, among others, statements regarding our expected business outlook, anticipated financial and operating results, including our business strategy and means to implement our strategy, our objectives, the amount and timing of capital expenditures, the likelihood of our success in expanding our business, financing plans, budgets, working capital needs, and sources of liquidity.

Forward-looking statements are only predictions and are not guarantees of performance. These statements are based on our management's beliefs and assumptions, which in turn are based on currently available information. Important assumptions relating to the forward-looking statements include, among others, assumptions regarding our services, the expansion of our services, competitive conditions, and general economic conditions. These assumptions could prove inaccurate. Forward-looking statements also involve known and unknown risks and uncertainties, which could cause actual results to differ materially from those contained in any forward-looking statement. Many of these factors are beyond our ability to control or predict. Such factors include, but are not limited to, the following:

&nbsp;&nbsp;&nbsp;&nbsp;&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;&nbsp;&nbsp;&nbsp;&nbsp;• adverse economic conditions including an inflationary environment 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;&nbsp;&nbsp;&nbsp;&nbsp;• changes to United States tariff and import/export regulations and the impact on global economic conditions may have a negative effect on our business, financial condition, and results of operations;

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

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

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

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

&nbsp;&nbsp;&nbsp;&nbsp;&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;&nbsp;&nbsp;&nbsp;&nbsp;• other factors discussed from time to time in our filings with the SEC, including factors discussed under the heading "Risk Factors" in our Annual Report on Form 10-K for the year ended December 31, 2024 and in our Quarterly Report on Form 10-Q.

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.

Investors should also be aware that while we do, from time to time, communicate with securities analysts, it is against our policy to disclose to securities analysts any material non-public information or other confidential commercial information. Accordingly, stockholders should not assume that we agree with any statement or report issued by any securities analyst irrespective of the content of the statement or report. Thus, to the extent that reports issued by securities analysts contain any projections, forecasts or opinions, such reports are not the responsibility of the Company.

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**Overview**

We began operations in 1997 and, based on number of facilities, are one of the largest operators of critical illness recovery hospitals, rehabilitation hospitals, and outpatient rehabilitation clinics in the United States. As of September 30, 2025, we had operations in 40 states and the District of Columbia. We operated 105 critical illness recovery hospitals in 29 states, 36 rehabilitation hospitals in 14 states, and 1,922 outpatient rehabilitation clinics in 39 states and the District of Columbia.

Our reportable segments include the critical illness recovery hospital segment, the rehabilitation hospital segment, and the outpatient rehabilitation segment. We had revenue of $4,056.2 million for the nine months ended September 30, 2025. Of this total, we earned approximately 46% of our revenue from our critical illness recovery hospital segment, approximately 23% from our rehabilitation hospital segment, and approximately 24% from our outpatient rehabilitation segment. Our critical illness recovery hospital segment consists of hospitals designed to serve the needs of patients recovering from critical illnesses, often with complex medical needs, and our rehabilitation hospital segment consists of hospitals designed to serve patients that require intensive physical rehabilitation care. Patients are typically admitted to our critical illness recovery hospitals and rehabilitation hospitals from general acute care hospitals. Our outpatient rehabilitation segment consists of clinics that provide physical, occupational, and speech rehabilitation services.

On July 26, 2024, Concentra Group Holdings Parent, Inc. ("Concentra"), a then wholly-owned subsidiary of Select, completed an initial public offering of 22,500,000 shares of its common stock, par value $0.01 per share, at an initial public offering price of $23.50 per share for net proceeds of $499.7 million after deducting underwriting discounts and commission of $29.1 million. In addition, the underwriters exercised the option to purchase an additional 750,000 shares of Concentra's common stock for net proceeds of $16.7 million after deducting discounts and commission of $1.0 million. On November 25, 2024, Select completed a tax-free distribution of 104,093,503 shares of common stock of Concentra to its stockholders. Following the completion of the distribution, the Company no longer owns any shares of Concentra common stock. The results of Concentra are presented as discontinued operations and, as such, have been excluded from both continuing operations and segment results for the three and nine months ended September 30, 2024.

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**Non-GAAP Measure** 

We believe that the presentation of Adjusted EBITDA, as defined below, 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 our segments. Adjusted EBITDA is not a measure of financial performance under 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.

We define Adjusted EBITDA 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. We will refer to Adjusted EBITDA throughout the remainder of Management's Discussion and Analysis of Financial Condition and Results of Operations.

The following table reconciles income from continuing operations, net of tax, to Adjusted EBITDA and should be referenced when we discuss Adjusted EBITDA:

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| | | | | |
|:---|:---|:---|:---|:---|
| | **Three Months Ended September 30,** | **Three Months Ended September 30,** | **Nine Months Ended September 30,** | **Nine Months Ended September 30,** |
| | **2024** | **2025** | **2024** | **2025** |
| | **(in thousands)** | **(in thousands)** | **(in thousands)** | **(in thousands)** |
| Income from continuing operations, net of tax | $41276 | $44180 | $140443 | $176791 |
| Income tax expense from continuing operations | 4374 | 11749 | 49269 | 45494 |
| Interest expense | 31379 | 30021 | 100054 | 89071 |
| Equity in earnings of unconsolidated subsidiaries | (33069) | (12992) | (53481) | (39122) |
| Loss on early retirement of debt | 10939 |  | 10939 |  |
| Income from continuing operations before other income and expense | 54899 | 72958 | 247224 | 272234 |
| Stock compensation expense: |  |  |  |  |
| &nbsp;&nbsp;&nbsp;Included in general and administrative | 10961 | 3448 | 32517 | 9714 |
| &nbsp;&nbsp;&nbsp;Included in cost of services | 2247 | 807 | 6382 | 2465 |
| Depreciation and amortization | 34930 | 34442 | 106583 | 104098 |
| Concentra separation transaction costs | 861 |  | 1696 |  |
| Adjusted EBITDA | $103898 | $111655 | $394402 | $388511 |

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**Summary Financial Results**

***Three Months Ended September 30, 2025***

The following tables reconcile our segment performance measures to our consolidated operating results:

---

| | | | | | |
|:---|:---|:---|:---|:---|:---|
| | **Three Months Ended September 30, 2025** | **Three Months Ended September 30, 2025** | **Three Months Ended September 30, 2025** | **Three Months Ended September 30, 2025** | **Three Months Ended September 30, 2025** |
| | **Critical Illness Recovery Hospital** | **Rehabilitation Hospital** | **Outpatient<br>Rehabilitation** | **Other** | **Total** |
| | **(in thousands)** | **(in thousands)** | **(in thousands)** | **(in thousands)** | **(in thousands)** |
| Revenue | $609929 | $328607 | $325383 | $99526 | $1363445 |
| Operating expenses | (553827) | (260651) | (301185) | (140382) | (1256045) |
| Depreciation and amortization | (16146) | (7571) | (9082) | (1643) | (34442) |
| Income (loss) from continuing operations before other income and expense | $39956 | $60385 | $15116 | $(42499) | $72958 |
| Depreciation and amortization | 16146 | 7571 | 9082 | 1643 | 34442 |
| Stock compensation expense |  |  |  | 4255 | 4255 |
| Adjusted EBITDA | $56102 | $67956 | $24198 | $(36601) | $111655 |
| Adjusted EBITDA margin | 9.2% | 20.7% | 7.4% | N/M | 8.2% |

---

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| | | | | | |
|:---|:---|:---|:---|:---|:---|
| | **Three Months Ended September 30, 2024** | **Three Months Ended September 30, 2024** | **Three Months Ended September 30, 2024** | **Three Months Ended September 30, 2024** | **Three Months Ended September 30, 2024** |
| | **Critical Illness Recovery Hospital** | **Rehabilitation Hospital** | **Outpatient<br>Rehabilitation** | **Other** | **Total** |
| | **(in thousands)** | **(in thousands)** | **(in thousands)** | **(in thousands)** | **(in thousands)** |
| Revenue | $582950 | $282709 | $312042 | $93881 | $1271582 |
| Operating expenses | (533220) | (222592) | (283723) | (143520) | (1183055) |
| Depreciation and amortization | (17032) | (6829) | (9121) | (1948) | (34930) |
| Other operating income | 1033 |  |  | 269 | 1302 |
| Income (loss) from continuing operations before other income and expense | $33731 | $53288 | $19198 | $(51318) | $54899 |
| Depreciation and amortization | 17032 | 6829 | 9121 | 1948 | 34930 |
| Concentra separation transaction costs |  |  |  | 861 | 861 |
| Stock compensation expense |  |  |  | 13208 | 13208 |
| Adjusted EBITDA | $50763 | $60117 | $28319 | $(35301) | $103898 |
| Adjusted EBITDA margin | 8.7% | 21.3% | 9.1% | N/M | 8.2% |

---

Income from continuing operations, net of tax, was $44.2 million for the three months ended September 30, 2025, compared to $41.3 million for the three months ended September 30, 2024.

The following table summarizes changes in segment performance measures for the three months ended September 30, 2025, compared to the three months ended September 30, 2024:

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| | | | | | |
|:---|:---|:---|:---|:---|:---|
| | **Critical Illness Recovery Hospital** | **Rehabilitation Hospital** | **Outpatient<br>Rehabilitation** | **Other** | **Total** |
| Change in revenue | 4.6% | 16.2% | 4.3% | 6.0% | 7.2% |
| Change in income from continuing operations before other income and expense | 18.5% | 13.3% | (21.3)% | N/M | 32.9% |
| Change in Adjusted EBITDA | 10.5% | 13.0% | (14.6)% | N/M | 7.5% |

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N/M&nbsp;&nbsp;&nbsp;&nbsp;Not meaningful.

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***Nine Months Ended September 30, 2025***

The following tables reconcile our segment performance measures to our consolidated operating results:

---

| | | | | | |
|:---|:---|:---|:---|:---|:---|
| | **Nine Months Ended September 30, 2025** | **Nine Months Ended September 30, 2025** | **Nine Months Ended September 30, 2025** | **Nine Months Ended September 30, 2025** | **Nine Months Ended September 30, 2025** |
| | **Critical Illness Recovery Hospital** | **Rehabilitation Hospital** | **Outpatient<br>Rehabilitation** | **Other** | **Total** |
| | **(in thousands)** | **(in thousands)** | **(in thousands)** | **(in thousands)** | **(in thousands)** |
| Revenue | $1848098 | $949770 | $960309 | $298019 | $4056196 |
| Operating expenses | (1650584) | (740343) | (881325) | (409204) | (3681456) |
| Depreciation and amortization | (49415) | (22441) | (27191) | (5051) | (104098) |
| Other operating income | 1520 |  |  | 72 | 1592 |
| Income (loss) from continuing operations before other income and expense | $149619 | $186986 | $51793 | $(116164) | $272234 |
| Depreciation and amortization | 49415 | 22441 | 27191 | 5051 | 104098 |
| Stock compensation expense |  |  |  | 12179 | 12179 |
| Adjusted EBITDA | $199034 | $209427 | $78984 | $(98934) | $388511 |
| Adjusted EBITDA margin | 10.8% | 22.1% | 8.2% | N/M | 9.6% |

---

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| | | | | | |
|:---|:---|:---|:---|:---|:---|
| | **Nine Months Ended September 30, 2024** | **Nine Months Ended September 30, 2024** | **Nine Months Ended September 30, 2024** | **Nine Months Ended September 30, 2024** | **Nine Months Ended September 30, 2024** |
| | **Critical Illness Recovery Hospital** | **Rehabilitation Hospital** | **Outpatient<br>Rehabilitation** | **Other** | **Total** |
| | **(in thousands)** | **(in thousands)** | **(in thousands)** | **(in thousands)** | **(in thousands)** |
| Revenue | $1843751 | $816240 | $930696 | $283854 | $3874541 |
| Operating expenses | (1608248) | (632769) | (848678) | (434339) | (3524034) |
| Depreciation and amortization | (51779) | (21185) | (27441) | (6178) | (106583) |
| Other operating income (loss) | 3033 |  | (2) | 269 | 3300 |
| Income (loss) from continuing operations before other income and expense | $186757 | $162286 | $54575 | $(156394) | $247224 |
| Depreciation and amortization | 51779 | 21185 | 27441 | 6178 | 106583 |
| Concentra separation transaction costs |  |  |  | 1696 | 1696 |
| Stock compensation expense |  |  |  | 38899 | 38899 |
| Adjusted EBITDA | $238536 | $183471 | $82016 | $(109621) | $394402 |
| Adjusted EBITDA margin | 12.9% | 22.5% | 8.8% | N/M | 10.2% |

---

Income from continuing operations, net of tax, was $176.8 million for the nine months ended September 30, 2025, compared to $140.4 million for the nine months ended September 30, 2024.

The following table summarizes the changes in our segment performance measures for the nine months ended September 30, 2025, compared to the nine months ended September 30, 2024:

---

| | | | | | |
|:---|:---|:---|:---|:---|:---|
| | **Critical Illness Recovery Hospital** | **Rehabilitation Hospital** | **Outpatient<br>Rehabilitation** | **Other** | **Total** |
| Change in revenue | 0.2% | 16.4% | 3.2% | 5.0% | 4.7% |
| Change in income from continuing operations before other income and expense | (19.9)% | 15.2% | (5.1)% | N/M | 10.1% |
| Change in Adjusted EBITDA | (16.6)% | 14.1% | (3.7)% | N/M | (1.5)% |

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N/M&nbsp;&nbsp;&nbsp;&nbsp;Not meaningful.

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**Regulatory Changes**

Our Annual Report on Form 10-K for the year ended December 31, 2024, filed with the SEC on February 20, 2025, contains a detailed discussion of the regulations that affect our business in Part I — Business — Government Regulations. The following is a discussion of some of the more significant healthcare regulatory changes that have affected our financial performance in the periods covered by this report, or are likely to affect our financial performance and financial condition in the future. The information below should be read in conjunction with the more detailed discussion of regulations contained in our Form 10-K.

***Medicare Reimbursement***

The Medicare program reimburses healthcare providers for services furnished to Medicare beneficiaries, which are generally persons age 65 and older, those who are chronically disabled, and those suffering from end stage renal disease. The program is governed by the Social Security Act of 1965 and is administered primarily by the Department of Health and Human Services ("HHS") and CMS. Revenue generated directly from the Medicare program represented approximately 29% of our revenue for both the nine months ended September 30, 2025, and for the year ended December 31, 2024.

***Federal Health Care Program Changes in Response to the COVID-19 Pandemic***

On January 31, 2020, HHS declared a public health emergency under section 319 of the Public Health Service Act, 42 U.S.C. § 247d, in response to the COVID-19 outbreak in the United States. The HHS Secretary subsequently renewed the public health emergency determination for 90-day periods through May 11, 2023, the end of the public health emergency.

On March 13, 2020, President Trump declared a national emergency due to the COVID-19 pandemic and the HHS Secretary authorized the waiver or modification of certain requirements under Medicare, Medicaid, and the CHIP program pursuant to section 1135 of the Social Security Act. Under this authority, CMS issued a number of blanket waivers that excused health care providers and suppliers from specific program requirements. Our Annual Report on Form 10-K for the year ended December 31, 2023 contains a detailed discussion of blanket waivers and other actions by CMS in response to the COVID-19 pandemic that affected our operations in Part II — Management's Discussion and Analysis of Financial Condition and Results of Operations — Regulatory Changes.

The American Relief Act, 2025 and Full-Year Continuing Appropriations and Extensions Act, 2025, further extended certain telehealth waivers to March 31, 2025 and September 30, 2025, respectively. CMS issued additional waivers to permit more than 150 additional services to be furnished by telehealth, allow physicians to monitor patient services remotely, and fulfill face-to-face requirements in IRFs. In the calendar year 2025 Medicare physician fee schedule ("MPFS") final rule, CMS extended some of the telehealth flexibilities through December 31, 2025.

***One Big Beautiful Bill Act***

On July 4, 2025, President Trump signed the One Big Beautiful Bill Act (Pub. L. No. 119-21) ("OBBBA") into law. OBBBA made several significant changes to Medicaid funding and coverage requirements beginning in 2027 that will impact many health care providers. The Congressional Budget Office ("CBO") estimates that OBBBA will reduce federal funding for Medicaid and the Children's Health Insurance Program by approximately $1 trillion over the next 10 years. The OBBBA includes significant proposed changes to Medicaid provider taxes, provider tax waivers and state directed payments ("SDPs"), including new limits on SDPs for inpatient hospital services, outpatient hospital services, and nursing facility services. Under OBBBA, SDP rates will now be capped and will reduce federal Medicaid spending by approximately $149 billion over 10 years. The passage of OBBBA will likely result in many states needing to reform their Medicaid programs to account for the reduced federal funding. Responses by individual states could include adjustments to provider tax assessments, cuts to their Medicaid reimbursement rates for providers, and eliminating Medicaid coverage for certain optional services or patient populations. At this time, we cannot estimate the OBBBA's impact, nor can we predict the timing of that impact, on our future financial condition or results of operations; however, we may experience decreased reimbursement from governmental health care programs as a result. Additionally, as discussed below under the "Medicare Reimbursement of Outpatient Rehabilitation Clinic Services," the OBBBA requires CMS to implement a statutory increase of 2.5% to the calendar year 2026 MPFS conversion factor.

The CBO sent an August 15, 2025 letter to Democratic budget and finance committee leaders in Congress estimating that OBBBA will increase the federal deficit by $2.1 trillion from 2025 to 2029 and by $3.4 trillion from 2025 to 2034, triggering Pay-As-You-Go ("PAYGO") Act cuts to government spending through a sequestration provision. For Medicare spending, the cuts would be capped at 4%, an estimated $45 billion for fiscal year 2026. Sequestration currently reduces Medicare payments to all providers and suppliers by 2% but the cut will likely rise to 4% without relief from Congress. Congress has passed legislation to prevent PAYGO cuts in every other prior instance and would need to do so again to prevent a 4% cut in 2026.

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***Medicare Reimbursement of LTCH Services***

The following is a summary of significant regulatory changes to the Medicare prospective payment system for our critical illness recovery hospitals, which are certified by Medicare as LTCHs, which have affected our results of operations, as well as the policies and payment rates that may affect our future results of operations. Medicare payments to our critical illness recovery hospitals are made in accordance with the long-term care hospital prospective payment system ("LTCH-PPS").

<u>Fiscal Year 2024.</u> On August 28, 2023, CMS published the final rule updating policies and payment rates for the LTCH-PPS for fiscal year 2024 (affecting discharges and cost reporting periods beginning on or after October 1, 2023, through September 30, 2024). Certain errors in the final rule were corrected in documents published October 4, 2023 and November 9, 2023. The standard federal rate for fiscal year 2024 was set at $48,117, an increase from the standard federal rate applicable during fiscal year 2023 of $46,433. The update to the standard federal rate for fiscal year 2024 included a market basket increase of 3.5%, less a productivity adjustment of 0.2%. The standard federal rate also included an area wage budget neutrality factor of 1.0031599. The fixed-loss amount for high cost outlier cases paid under LTCH-PPS was set at $59,873, an increase from the fixed-loss amount in the 2023 fiscal year of $38,518. The fixed-loss amount for high cost outlier cases paid under the site-neutral payment rate was set at $42,750, an increase from the fixed-loss amount in the 2023 fiscal year of $38,788.

<u>Fiscal Year 2025.</u> On August 28, 2024, CMS published a final rule updating policies and payment rates for the LTCH-PPS for fiscal year 2025 (affecting discharges and cost reporting periods beginning on or after October 1, 2024, through September 30, 2025). Certain errors in the final rule were corrected in a document published on October 2, 2024. In an interim final action document published on October 3, 2024, CMS also made modifications to the fiscal year 2025 policies and payment rates as a result of a recent decision issued by the United States Court of Appeals for the District of Columbia Circuit. The standard federal rate for fiscal year 2025 was set at $49,383, an increase from the standard federal rate applicable during fiscal year 2024 of $48,117. The update to the standard federal rate for fiscal year 2025 included a market basket increase of 3.5%, less a productivity adjustment of 0.5%. The standard federal rate also included an area wage budget neutrality factor of 0.9964315. The fixed-loss amount for high cost outlier cases paid under LTCH-PPS was set at $77,048, an increase from the fixed-loss amount in the 2024 fiscal year of $59,873. The fixed-loss amount for high cost outlier cases paid under the site-neutral payment rate was set at $46,217, an increase from the fixed-loss amount in the 2024 fiscal year of $42,750.

<u>Fiscal Year 2026.</u> On August 4, 2025, CMS published a final rule updating policies and payment rates for the LTCH-PPS for fiscal year 2026 (affecting discharges and cost reporting periods beginning on or after October 1, 2025, through September 30, 2026). The standard federal rate for fiscal year 2026 is $50,825, an increase from the standard federal rate applicable during fiscal year 2025 of $49,383. The update to the standard federal rate for fiscal year 2026 includes a market basket increase of 3.4%, less a productivity adjustment of 0.7%. The standard federal rate also includes an area wage budget neutrality factor of 1.0021275. The fixed-loss amount for high cost outlier cases paid under LTCH-PPS is $78,936, an increase from the fixed-loss amount in the 2025 fiscal year of $77,048. The fixed-loss amount for high cost outlier cases paid under the site-neutral payment rate is $40,397, a decrease from the fixed-loss amount in the 2025 fiscal year of $46,217.

***Criteria for Reconciliation of Outlier Payments***

Under the LTCH PPS, CMS makes two types of outlier payments to LTCHs. First, CMS makes additional payments to LTCHs for high cost outlier cases that have extraordinarily high costs relative to the costs of most discharges. For these cases, CMS sets a fixed loss amount each year that represents the maximum loss an LTCH will incur for a case before qualifying for a high cost outlier payment. A high cost outlier threshold equal to the LTCH PPS adjusted Federal payment for the case plus the fixed loss amount determines when Medicare pays a high cost outlier payment. Such payments are based on 80% of the estimated cost of the case above the high cost outlier threshold. Second, CMS reduces payments to LTCHs for patients with a relatively short stay, which is defined as a length of stay less than or equal to five-sixths of the geometric average length of stay for that particular MS-LTC-DRG. Short stay outlier cases are paid using a per diem rate based on 120% of the MS-LTC-DRG specific per diem amount and an IPPS per diem amount.

Outlier payments made to LTCHs during the cost reporting year may be reconciled at cost report settlement by the Medicare Administrative Contractor ("MAC") if certain criteria are met. According to CMS, the reconciliation of outlier payments is intended to account for the fact that the LTCH's cost-to-charge ratio ("CCR") used to pay Medicare claims during the cost reporting year may differ from the LTCH's final CCR for the year calculated by the MAC at cost report settlement. The outlier reconciliation criteria were: (1) a change in the LTCH's CCR of 10 percentage points or more when comparing the actual CCR to the CCR used during the cost reporting period to make outlier payments; and (2) the LTCH received at least $500,000 in outlier payments during the cost reporting period. If the criteria for outlier reconciliation are met, the MAC will conduct an outlier reconciliation to determine whether the LTCH was overpaid or underpaid for outlier cases. If the LTCH was overpaid, the LTCH must repay Medicare in the amount of the overpayment plus the time value of money (*i.e.*, interest). If the LTCH was underpaid, Medicare must pay the LTCH in the amount of the underpayment plus the time value of money.

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On April 26, 2024, CMS issued new guidance in Transmittal 12594 changing the criteria for LTCH outlier reconciliations. CMS modified the first criterion to a change in the LTCH's CCR of 20 percent or more from the CCR used to make outlier payments during the cost reporting period. CMS did not change the second criterion for reconciliation that the LTCH must have received at least $500,000 in outlier payments during the cost reporting period. The revised policy was scheduled to be effective for cost reporting periods beginning on or after October 1, 2024. However, CMS recently issued Transmittal 13428 to delay the effective date by one year, for cost reporting periods beginning on or after October 1, 2025. MACs would receive the first cost reports subject to the revised policy in March 2027.

Setting the threshold at 20 percent for changes in the hospital's CCR will result in more outlier reconciliations. This increases the likelihood that LTCHs will have a portion of their outlier payments recouped by the MAC at cost report settlement. Because outlier reconciliations often delay the final settlement of cost reports, and providers cannot appeal disputed reimbursement amounts until the cost report is settled, this new policy will likely result in additional delays of reimbursement appeals related to LTCH cost reports.

***Medicare Reimbursement of IRF Services***

The following is a summary of significant regulatory changes to the Medicare prospective payment system for our rehabilitation hospitals, which are certified by Medicare as IRFs, which have affected our results of operations, as well as the policies and payment rates that may affect our future results of operations. Medicare payments to our rehabilitation hospitals are made in accordance with the inpatient rehabilitation facility prospective payment system ("IRF-PPS").

<u>Fiscal Year 2024.</u> On August 2, 2023, CMS published the final rule updating policies and payment rates for the IRF-PPS for fiscal year 2024 (affecting discharges and cost reporting periods beginning on or after October 1, 2023, through September 30, 2024). Certain errors in the final rule were corrected in a document published on October 4, 2023. The standard payment conversion factor for discharges for fiscal year 2024 was set at $18,541, an increase from the standard payment conversion factor applicable during fiscal year 2023 of $17,878. The update to the standard payment conversion factor for fiscal year 2024 included a market basket increase of 3.6%, less a productivity adjustment of 0.2%. CMS decreased the outlier threshold amount for fiscal year 2024 to $10,423 from $12,526 established in the final rule for fiscal year 2023.

<u>Fiscal Year 2025.</u> On August 6, 2024, CMS published the final rule to update policies and payment rates for the IRF-PPS for fiscal year 2025 (affecting discharges and cost reporting periods beginning on or after October 1, 2024, through September 30, 2025). Certain errors in the final rule were corrected in a document published on October 2, 2024. The standard payment conversion factor for discharges for fiscal year 2025 was set at $18,907, an increase from the standard payment conversion factor applicable during fiscal year 2024 of $18,541. The update to the standard payment conversion factor for fiscal year 2025 included a market basket increase of 3.5%, less a productivity adjustment of 0.5%. CMS increased the outlier threshold amount for fiscal year 2025 to $12,043 from $10,423 established in the final rule for fiscal year 2024.

<u>Fiscal Year 2026.</u> On August 5, 2025, CMS published a final rule to update policies and payment rates for the IRF-PPS for fiscal year 2026 (affecting discharges and cost reporting periods beginning on or after October 1, 2025, through September 30, 2026). The standard payment conversion factor for discharges for fiscal year 2026 was set at $19,371, an increase from the standard payment conversion factor applicable during fiscal year 2025 of $18,907. The update to the standard payment conversion factor for fiscal year 2026 included a market basket increase of 3.3%, less a productivity adjustment of 0.7%. CMS decreased the outlier threshold amount for fiscal year 2026 to $10,062 from $12,043 established in the final rule for fiscal year 2025.

***Medicare Reimbursement of Outpatient Rehabilitation Clinic Services***

Our Annual Report on Form 10-K for the year ended December 31, 2024 contains a detailed discussion of Medicare reimbursement that affects our outpatient rehabilitation clinic operations in Part I — Business — Government Regulations. Outpatient rehabilitation providers enroll in Medicare as a rehabilitation agency, a clinic, or a public health agency. The Medicare program reimburses outpatient rehabilitation providers based on the Medicare physician fee schedule.

For calendar year 2024, CMS expected that its final policies would result in a 3% decrease in Medicare payments for the therapy specialty. The policies CMS announced for the calendar year 2025 MPFS final rule reduced Medicare payments for the physical and occupational therapy services we provide by approximately 3%. Congress directed the Secretary to increase calendar year 2026 MPFS payments by 2.5% in section 71202 of OBBBA. In the calendar year 2026 MPFS proposed rule, CMS proposes to implement this OBBBA statutory 2.5% increase to the conversion factor for calendar year 2026, along with the two separate conversion factors based on alternative payment model ("APM") participation as required under the Medicare Access and CHIP Reauthorization Act ("MACRA"). Starting in 2026 as required by MACRA, eligible professionals participating in an APM who meet certain criteria will receive an annual update of 0.75%, while all other professionals will receive an annual update of 0.25%. CMS expects that its proposed policies for 2026 will result in a 1% decrease in Medicare

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payments for the therapy specialty but it did not consider the statutory increases to the conversion factor and APM in its therapy specialty estimated impact. After factoring in these statutory increases, the calendar year 2026 MPFS final rule will increase Medicare payments for the physical and occupational therapy services we provide by approximately 2%.

CMS also proposes changes to the quality payment program, including changes to support the transition from the Merit-Based Incentive Payment System ("MIPS") to the MIPS Value Pathways ("MVPs"). First, CMS proposes revisions to the existing 21 MVPs that were adopted in the calendar years 2022-2025 final rules. CMS would remove certain measures and improvement activities from these MVPs and add other quality measures for MVP participants to choose from for data reporting. This proposal includes a new "Advancing Health and Wellness" subcategory with new measures to report under the improvement activities performance category. For the rehabilitative support for musculoskeletal care MVP, which is most applicable to clinicians who specialize in rehabilitation support for musculoskeletal care (including physical therapists and occupational therapists), CMS proposes to add two quality measures and three improvement activities, and remove one quality measure. CMS is also considering modifications to four qualified clinical data registry measures for this MVP. Finally, CMS proposes to add six new MVPs. If finalized, these new MVPs would be available for voluntary reporting for the calendar year 2026 performance period.

***Modifiers to Identify Services of Physical Therapy Assistants or Occupational Therapy Assistants***

Our Annual Report on Form 10-K for the year ended December 31, 2024, contains a detailed discussion of Medicare regulations concerning services provided by physical therapy assistants and occupational therapy assistants in Part I — Business — Government Regulations and in Part II — Management's Discussion and Analysis of Financial Condition and Results of Operations — Regulatory Changes. There have been no significant updates to these regulations subsequently.

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**Operating Statistics**

The following table sets forth operating statistics for each of our segments for the periods presented. The operating statistics reflect data for the period of time we managed these operations. Our operating statistics include metrics we believe provide relevant insight about the number of facilities we operate, volume of services we provide to our patients, and average payment rates for services we provide. These metrics are utilized by management to monitor trends and performance in our businesses and therefore may be important to investors because management may assess our performance based in part on such metrics. Other healthcare providers may present similar statistics, and these statistics are susceptible to varying definitions. Our statistics as presented may not be comparable to other similarly titled statistics of other companies.

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|:---|:---|:---|:---|:---|
| | **Three Months Ended September 30,** | **Three Months Ended September 30,** | **Nine Months Ended September 30,** | **Nine Months Ended September 30,** |
| | **2024** | **2025** | **2024** | **2025** |
| **Critical illness recovery hospital data:** |  |  |  |  |
| Number of consolidated hospitals—start of period<sup>(1)</sup> | 107 | 104 | 107 | 104 |
| &nbsp;&nbsp;&nbsp;Number of hospitals acquired |  | 1 |  | 1 |
| &nbsp;&nbsp;&nbsp;Number of hospital start-ups |  |  | 1 |  |
| &nbsp;&nbsp;Number of hospitals closed/sold | (1) |  | (2) |  |
| Number of consolidated hospitals—end of period<sup>(1)</sup> | 106 | 105 | 106 | 105 |
| Available licensed beds<sup>(3)</sup> | 4512 | 4451 | 4512 | 4451 |
| Admissions<sup>(3)(4)</sup> | 8676 | 8859 | 27093 | 27176 |
| Patient days<sup>(3)(5)</sup> | 270760 | 265730 | 844623 | 835970 |
| Average length of stay (days)<sup>(3)(6)</sup> | 31 | 30 | 31 | 31 |
| Revenue per patient day<sup>(3)(7)</sup> | $2145 | $2287 | $2175 | $2203 |
| Occupancy rate<sup>(3)(8)</sup> | 65% | 65% | 68% | 69% |
| Percent patient days—Medicare<sup>(3)(9)</sup> | 35% | 34% | 35% | 35% |
| **Rehabilitation hospital data:** |  |  |  |  |
| Number of consolidated hospitals—start of period<sup>(1)</sup> | 21 | 24 | 21 | 23 |
| &nbsp;&nbsp;&nbsp;Number of hospitals acquired |  |  |  |  |
| &nbsp;&nbsp;&nbsp;Number of hospital start-ups | 1 |  | 1 | 1 |
| &nbsp;&nbsp;Number of hospitals closed/sold |  |  |  |  |
| Number of consolidated hospitals—end of period<sup>(1)</sup> | 22 | 24 | 22 | 24 |
| Number of unconsolidated hospitals managed—end of period<sup>(2)</sup> | 12 | 12 | 12 | 12 |
| Total number of hospitals (all)—end of period | 34 | 36 | 34 | 36 |
| Available licensed beds - consolidated hospitals<sup>(3)</sup> | 1589 | 1696 | 1589 | 1696 |
| Available licensed beds - unconsolidated hospitals managed<sup>(12)</sup> | 632 | 652 | 632 | 652 |
| Admissions<sup>(3)(4)</sup> | 8439 | 9385 | 25039 | 27335 |
| Patient days<sup>(3)(5)</sup> | 116835 | 129787 | 350724 | 378536 |
| Average length of stay (days)<sup>(3)(6)</sup> | 14 | 14 | 14 | 14 |
| Revenue per patient day<sup>(3)(7)</sup> | $2148 | $2254 | $2119 | $2242 |
| Occupancy rate<sup>(3)(8)</sup> | 82% | 83% | 84% | 82% |
| Percent patient days—Medicare<sup>(3)(9)</sup> | 48% | 50% | 48% | 50% |
| **Outpatient rehabilitation data:** |  |  |  |  |
| Number of consolidated clinics—start of period | 1625 | 1620 | 1633 | 1617 |
| &nbsp;&nbsp;&nbsp;Number of clinics acquired | 1 | 4 | 7 | 4 |
| &nbsp;&nbsp;&nbsp;Number of clinic start-ups | 5 | 4 | 14 | 20 |
| &nbsp;&nbsp;&nbsp;Number of clinics closed/sold | (4) | (5) | (27) | (18) |
| Number of consolidated clinics—end of period | 1627 | 1623 | 1627 | 1623 |
| Number of unconsolidated clinics managed—end of period | 298 | 299 | 298 | 299 |
| Total number of clinics (all)—end of period | 1925 | 1922 | 1925 | 1922 |
| Number of visits<sup>(3)(10)</sup> | 2773465 | 2924794 | 8336216 | 8568784 |
| Revenue per visit<sup>(3)(11)</sup> | $101 | $100 | $100 | $101 |

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(1)Represents the number of hospitals included in our consolidated financial results at the end of each period presented.

(2)Represents the number of hospitals which are managed by us at the end of each period presented. We have minority ownership interests in these businesses.

(3)Data excludes locations managed by the Company.

(4)Represents the number of patients admitted to our hospitals during the periods presented.

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

(6)Represents the average number of days in which patients were admitted to our hospitals. Average length of stay is calculated by dividing the number of patient days, as presented above, by the number of patients discharged from our hospitals during the periods presented.

(7)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 our hospitals, by the total number of patient days.

(8)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.

(9)Represents the portion of our patient days which are paid by Medicare. The Medicare patient day percentage is calculated by dividing the total number of patient days which are paid by Medicare by the total number of patient days, as presented above.

(10)Represents the number of visits in which patients were treated at our outpatient rehabilitation clinics during the periods presented.

(11)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.

(12)Represents the number of available licensed beds at hospitals which are managed by us at the end of each period presented. We own a minority interest in these businesses.

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**Results of Operations**

The following table outlines selected operating data as a percentage of revenue for the periods indicated:

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|:---|:---|:---|:---|:---|
| | **Three Months Ended September 30,** | **Three Months Ended September 30,** | **Nine Months Ended September 30,** | **Nine Months Ended September 30,** |
| | **2024** | **2025** | **2024** | **2025** |
| Revenue | 100.0% | 100.0% | 100.0% | 100.0% |
| Costs and expenses: |  |  |  |  |
| &nbsp;&nbsp;Cost of services, exclusive of depreciation and amortization<sup>(1)</sup> | 89.3 | 89.2 | 87.2 | 88.1 |
| &nbsp;&nbsp;General and administrative | 3.7 | 2.9 | 3.8 | 2.7 |
| &nbsp;&nbsp;Depreciation and amortization | 2.7 | 2.5 | 2.8 | 2.6 |
| Total costs and expenses | 95.7 | 94.6 | 93.8 | 93.4 |
| Other operating income | 0.0 |  | 0.2 | 0.1 |
| Income from continuing operations before other income and expense | 4.3 | 5.4 | 6.4 | 6.7 |
| Loss on early retirement of debt | (0.9) |  | (0.3) |  |
| Equity in earnings of unconsolidated subsidiaries | 2.6 | 1.0 | 1.4 | 1.0 |
| Interest expense | (2.4) | (2.3) | (2.6) | (2.2) |
| Income from continuing operations before income taxes | 3.6 | 4.1 | 4.9 | 5.5 |
| Income tax expense from continuing operations | 0.4 | 0.9 | 1.3 | 1.1 |
| Income from continuing operations, net of tax | 3.2 | 3.2 | 3.6 | 4.4 |
| Discontinued operations: |  |  |  |  |
| &nbsp;&nbsp;Income from discontinued business | 4.9 |  | 5.1 |  |
| &nbsp;&nbsp;Income tax expense from discontinued business | 1.8 |  | 1.2 |  |
| Income from discontinued operations, net of tax | 3.1 |  | 3.9 |  |
| Net income | 6.3 | 3.2 | 7.5 | 4.4 |
| Net income attributable to non-controlling interests | 1.9 | 1.1 | 1.6 | 1.3 |
| Net income attributable to Select Medical Holdings Corporation | 4.4% | 2.1% | 5.9% | 3.1% |

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(1)Cost of services includes personnel expense, facilities expense, and other operating costs.

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The following table summarizes selected financial data by segment for the periods indicated:

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|:---|:---|:---|:---|:---|:---|:---|
| | **Three Months Ended September 30,** | **Three Months Ended September 30,** | **Three Months Ended September 30,** | **Nine Months Ended September 30,** | **Nine Months Ended September 30,** | **Nine Months Ended September 30,** |
| | **2024** | **2025** | **% Change** | **2024** | **2025** | **% Change** |
| | **(in thousands, except percentages)** | **(in thousands, except percentages)** | **(in thousands, except percentages)** | **(in thousands, except percentages)** | **(in thousands, except percentages)** | **(in thousands, except percentages)** |
| Revenue: |  |  |  |  |  |  |
| &nbsp;&nbsp;Critical illness recovery hospital | $582950 | $609929 | 4.6% | $1843751 | $1848098 | 0.2% |
| &nbsp;&nbsp;Rehabilitation hospital | 282709 | 328607 | 16.2 | 816240 | 949770 | 16.4 |
| &nbsp;&nbsp;Outpatient rehabilitation | 312042 | 325383 | 4.3 | 930696 | 960309 | 3.2 |
| &nbsp;&nbsp;Other<sup>(1)</sup> | 93881 | 99526 | 6.0 | 283854 | 298019 | 5.0 |
| &nbsp;&nbsp;&nbsp;&nbsp;Total Company | $1271582 | $1363445 | 7.2% | $3874541 | $4056196 | 4.7% |
| Income (loss) from continuing operations before other income and expense: |  |  |  |  |  |  |
| &nbsp;&nbsp;Critical illness recovery hospital | $33731 | $39956 | 18.5% | $186757 | $149619 | (19.9)% |
| &nbsp;&nbsp;Rehabilitation hospital | 53288 | 60385 | 13.3 | 162286 | 186986 | 15.2 |
| &nbsp;&nbsp;Outpatient rehabilitation | 19198 | 15116 | (21.3) | 54575 | 51793 | (5.1) |
| &nbsp;&nbsp;Other<sup>(1)</sup> | (51318) | (42499) | N/M | (156394) | (116164) | N/M |
| &nbsp;&nbsp;&nbsp;&nbsp;Total Company | $54899 | $72958 | 32.9% | $247224 | $272234 | 10.1% |
| Adjusted EBITDA: |  |  |  |  |  |  |
| &nbsp;&nbsp;Critical illness recovery hospital | $50763 | $56102 | 10.5% | $238536 | $199034 | (16.6)% |
| &nbsp;&nbsp;Rehabilitation hospital | 60117 | 67956 | 13.0 | 183471 | 209427 | 14.1 |
| &nbsp;&nbsp;Outpatient rehabilitation | 28319 | 24198 | (14.6) | 82016 | 78984 | (3.7) |
| &nbsp;&nbsp;Other<sup>(1)</sup> | (35301) | (36601) | N/M | (109621) | (98934) | N/M |
| &nbsp;&nbsp;&nbsp;&nbsp;Total Company | $103898 | $111655 | 7.5% | $394402 | $388511 | (1.5)% |
| Adjusted EBITDA margins: |  |  |  |  |  |  |
| &nbsp;&nbsp;Critical illness recovery hospital | 8.7% | 9.2% |  | 12.9% | 10.8% |  |
| &nbsp;&nbsp;Rehabilitation hospital | 21.3 | 20.7 |  | 22.5 | 22.1 |  |
| &nbsp;&nbsp;Outpatient rehabilitation | 9.1 | 7.4 |  | 8.8 | 8.2 |  |
| &nbsp;&nbsp;Other<sup>(1)</sup> | N/M | N/M |  | N/M | N/M |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Total Company | 8.2% | 8.2% |  | 10.2% | 9.6% |  |
| Total assets: |  |  |  |  |  |  |
| &nbsp;&nbsp;Critical illness recovery hospital | $2658301 | $2631998 |  | $2658301 | $2631998 |  |
| &nbsp;&nbsp;Rehabilitation hospital | 1294125 | 1478363 |  | 1294125 | 1478363 |  |
| &nbsp;&nbsp;Outpatient rehabilitation | 1414009 | 1415655 |  | 1414009 | 1415655 |  |
| &nbsp;&nbsp;Other<sup>(1)</sup> | 162937 | 159707 |  | 162937 | 159707 |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Total Company | $5529372 | $5685723 |  | $5529372 | $5685723 |  |
| Purchases of property and equipment: |  |  |  |  |  |  |
| &nbsp;&nbsp;Critical illness recovery hospital | $16208 | $18186 |  | $49765 | $58096 |  |
| &nbsp;&nbsp;Rehabilitation hospital | 10595 | 25608 |  | 32514 | 82878 |  |
| &nbsp;&nbsp;Outpatient rehabilitation | 8402 | 8959 |  | 26064 | 27850 |  |
| &nbsp;&nbsp;Other<sup>(1)</sup> | 333 | 349 |  | 2766 | 1301 |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Total Company | $35538 | $53102 |  | $111109 | $170125 |  |

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(1)&nbsp;&nbsp;&nbsp;&nbsp;Other includes our corporate administration and shared services, as well as employee leasing services with our non-consolidating subsidiaries. Total assets include certain non-consolidating joint ventures and minority investments in other healthcare related businesses.

N/M&nbsp;&nbsp;&nbsp;&nbsp;Not meaningful.

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**Three Months Ended September 30, 2025, Compared to Three Months Ended September 30, 2024**

For the three months ended September 30, 2025, we had revenue of $1,363.4 million and income from continuing operations before other income and expense of $73.0 million, as compared to revenue of $1,271.6 million and income from continuing operations before other income and expense of $54.9 million for the three months ended September 30, 2024. For the three months ended September 30, 2025, Adjusted EBITDA was $111.7 million, with an Adjusted EBITDA margin of 8.2%, as compared to Adjusted EBITDA of $103.9 million and an Adjusted EBITDA margin of 8.2% for the three months ended September 30, 2024.

***Revenue***

*Critical Illness Recovery Hospital Segment.*&nbsp;&nbsp;&nbsp;&nbsp;Revenue increased 4.6% to $609.9 million for the three months ended September 30, 2025, compared to $583.0 million for the three months ended September 30, 2024. The increase in revenue was attributable to revenue per patient day, which increased 6.6% to $2,287 for the three months ended September 30, 2025, compared to $2,145 for the three months ended September 30, 2024. The increase in revenue per patient day was partially driven by the deferral of the implementation of the 20 percent transmittal rule, as discussed further in *Regulatory Changes,* which resulted in a change in revenue estimates made in prior periods. Our patient days were 265,730 for the three months ended September 30, 2025, compared to 270,760 days for the three months ended September 30, 2024. Occupancy in our critical illness recovery hospitals was 65% for both the three months ended September 30, 2025 and 2024.

*Rehabilitation Hospital Segment.*&nbsp;&nbsp;&nbsp;&nbsp;Revenue increased 16.2% to $328.6 million for the three months ended September 30, 2025, compared to $282.7 million for the three months ended September 30, 2024. The increase in revenue was principally attributable to our patient days, which increased 11.1% to 129,787 days for the three months ended September 30, 2025, compared to 116,835 days for the three months ended September 30, 2024. Revenue per patient day increased 4.9% to $2,254 for the three months ended September 30, 2025, compared to $2,148 for the three months ended September 30, 2024. Occupancy in our rehabilitation hospitals was 83% and 82% for the three months ended September 30, 2025 and 2024, respectively.

*Outpatient Rehabilitation Segment.* Revenue increased 4.3% to $325.4 million for the three months ended September 30, 2025, compared to $312.0 million for the three months ended September 30, 2024. The increase in revenue was attributable to patient visits, which increased 5.5% to 2,924,794 visits for the three months ended September 30, 2025, compared to 2,773,465 visits for the three months ended September 30, 2024. Our revenue per visit was $100 for the three months ended September 30, 2025, compared to $101 for the three months ended September 30, 2024. The decrease in revenue per visit was primarily driven by a reduction in Medicare reimbursement and an unfavorable shift in payor mix.

***Operating Expenses***

Our operating expenses consist principally of cost of services and general and administrative expenses. Our operating expenses were $1,256.0 million, or 92.1% of revenue, for the three months ended September 30, 2025, compared to $1,183.1 million, or 93.0% of revenue, for the three months ended September 30, 2024. Our cost of services, a major component of which is labor expense, was $1,216.0 million, or 89.2% of revenue, for the three months ended September 30, 2025, compared to $1,135.7 million, or 89.3% of revenue, for the three months ended September 30, 2024. General and administrative expenses were $40.1 million, or 2.9% of revenue, for the three months ended September 30, 2025, compared to $47.3 million, or 3.7% of revenue, for the three months ended September 30, 2024. The decrease in general and administrative expenses was principally attributable to lower stock compensation expense as a result of modifications to our restricted stock awards which occurred in November 2024 in connection with the Company's spin-off of Concentra.

***Other Operating Income***

For the three months ended September 30, 2024, we had other operating income of $1.3 million.

***Adjusted EBITDA***

*Critical Illness Recovery Hospital Segment.* Adjusted EBITDA increased 10.5% to $56.1 million for the three months ended September 30, 2025, compared to $50.8 million for the three months ended September 30, 2024. Our Adjusted EBITDA margin for the critical illness recovery hospital segment was 9.2% for the three months ended September 30, 2025, compared to 8.7% for the three months ended September 30, 2024. The increases in our Adjusted EBITDA and Adjusted EBITDA margin during the three months ended September 30, 2025, as compared to the three months ended September 30, 2024, were principally attributable to an increase in revenue.

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*Rehabilitation Hospital Segment.* Adjusted EBITDA increased 13.0% to $68.0 million for the three months ended September 30, 2025, compared to $60.1 million for the three months ended September 30, 2024. Our Adjusted EBITDA margin for the rehabilitation hospital segment was 20.7% for the three months ended September 30, 2025, compared to 21.3% for the three months ended September 30, 2024. The increase in Adjusted EBITDA for the three months ended September 30, 2025, as compared to the three months ended September 30, 2024, was principally attributable to an increase in revenue.

*Outpatient Rehabilitation Segment.* Adjusted EBITDA was $24.2 million for the three months ended September 30, 2025, compared to $28.3 million for the three months ended September 30, 2024. Our Adjusted EBITDA margin for the outpatient rehabilitation segment was 7.4% for the three months ended September 30, 2025, compared to 9.1% for the three months ended September 30, 2024. The decreases in our Adjusted EBITDA and Adjusted EBITDA margin for the three months ended September 30, 2025, as compared to the three months ended September 30, 2024, were principally attributable to an increase in operating expenses, primarily personnel expense, and partially offset by an increase in revenue.

***Depreciation and Amortization***

Depreciation and amortization expense was $34.4 million for the three months ended September 30, 2025, compared to $34.9 million for the three months ended September 30, 2024.

***Income from Continuing Operations before Other Income and Expense***

For the three months ended September 30, 2025, we had income from continuing operations before other income and expense of $73.0 million, compared to $54.9 million for the three months ended September 30, 2024. The increase in income from continuing operations before other income and expense is principally attributable to the increase in revenue within our Rehabilitation Hospital segment and Critical Illness Recovery Hospital segment, as discussed above under "*Revenue*".

***Loss on Early Retirement of Debt***

For the three months ended September 30, 2024, we had a loss on early retirement of debt of $10.9 million related to the prepayment on our term loan and the amendment to the Select credit agreement.

***Equity in Earnings of Unconsolidated Subsidiaries***

For the three months ended September 30, 2025, we had equity in earnings of unconsolidated subsidiaries of $13.0 million, compared to $33.1 million for the three months ended September 30, 2024. The decrease in equity in earnings of unconsolidated subsidiaries is principally due to a gain recognized during the three months ended September 30, 2024, upon gaining a controlling financial interest in a previously unconsolidated subsidiary.

***Interest***

Interest expense was $30.0 million for the three months ended September 30, 2025, compared to $31.4 million for the three months ended September 30, 2024.

***Income Tax Expense from Continuing Operations***

We recorded income tax expense of $11.7 million for the three months ended September 30, 2025, which represented an effective tax rate of 21.0%. We recorded income tax expense of $4.4 million for the three months ended September 30, 2024, which represented an effective tax rate of 9.6%. Our income tax expense is computed based on annual estimates which we allocate throughout the year based on our projected income. Changes in our estimate of projected income can result in variability in our income tax expense and effective tax rate from period to period.

***Income from Discontinued Operations, Net of Tax***

For the three months ended September 30, 2024, we had income from discontinued operations, net of tax, of $39.7 million, which represents the operations of Concentra.

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**Nine Months Ended September 30, 2025, Compared to Nine Months Ended September 30, 2024**

For the nine months ended September 30, 2025, we had revenue of $4,056.2 million and income from continuing operations before other income and expense of $272.2 million, as compared to revenue of $3,874.5 million and income from continuing operations before other income and expense of $247.2 million for the nine months ended September 30, 2024. For the nine months ended September 30, 2025, Adjusted EBITDA was $388.5 million, with an Adjusted EBITDA margin of 9.6%, as compared to Adjusted EBITDA of $394.4 million and an Adjusted EBITDA margin of 10.2% for the nine months ended September 30, 2024, respectively.

***Revenue***

*Critical Illness Recovery Hospital Segment.* Revenue increased to $1,848.1 million for the nine months ended September 30, 2025, compared to $1,843.8 million for the nine months ended September 30, 2024. Our revenue per patient day increased 1.3% to $2,203 for the nine months ended September 30, 2025, compared to $2,175 for the nine months ended September 30, 2024. Our patient days were 835,970 for the nine months ended September 30, 2025, compared to 844,623 days for the nine months ended September 30, 2024. Occupancy in our critical illness recovery hospitals was 69% and 68% for the nine months ended September 30, 2025 and 2024, respectively.

*Rehabilitation Hospital Segment.* Revenue increased 16.4% to $949.8 million for the nine months ended September 30, 2025, compared to $816.2 million for the nine months ended September 30, 2024. The increase in revenue was attributable to an increase in patient days and an increase in revenue per patient day. Our patient days increased 7.9% to 378,536 days for the nine months ended September 30, 2025, compared to 350,724 days for the nine months ended September 30, 2024. Revenue per patient day increased 5.8% to $2,242 for the nine months ended September 30, 2025, compared to $2,119 for the nine months ended September 30, 2024. Occupancy in our rehabilitation hospitals was 82% and 84% for the nine months ended September 30, 2025 and 2024, respectively.

*Outpatient Rehabilitation Segment.* Revenue increased 3.2% to $960.3 million for the nine months ended September 30, 2025, compared to $930.7 million for the nine months ended September 30, 2024. The increase in revenue was principally attributable to patient visits, which increased 2.8% to 8,568,784 visits for the nine months ended September 30, 2025, compared to 8,336,216 visits for the nine months ended September 30, 2024. Our revenue per visit increased 1.0% to $101 for the nine months ended September 30, 2025, compared to $100 for the nine months ended September 30, 2024.

***Operating Expenses***

Our operating expenses consist principally of cost of services and general and administrative expenses. Our operating expenses were $3,681.5 million, or 90.8% of revenue, for the nine months ended September 30, 2025, compared to $3,524.0 million, or 91.0% of revenue, for the nine months ended September 30, 2024. Our cost of services, a major component of which is labor expense, was $3,572.7 million, or 88.1% of revenue, for the nine months ended September 30, 2025, compared to $3,378.4 million, or 87.2% of revenue, for the nine months ended September 30, 2024. The increase in our cost of services relative to our revenue was principally attributable to the operating performance of our Critical Illness Recovery Hospital segment and Outpatient Rehabilitation segment. General and administrative expenses were $108.7 million, or 2.7% of revenue, for the nine months ended September 30, 2025, compared to $145.7 million, or 3.8% of revenue, for the nine months ended September 30, 2024. The decrease in general and administrative expenses was principally attributable to lower stock compensation expense as a result of modifications to our restricted stock awards which occurred in November 2024 in connection with the Company's spin-off of Concentra and a reduction in personnel expense related to accrued bonus.

***Other Operating Income***

For the nine months ended September 30, 2025, we had other operating income of $1.6 million, compared to $3.3 million for the nine months ended September 30, 2024.

***Adjusted EBITDA***

*Critical Illness Recovery Hospital Segment.* Adjusted EBITDA was $199.0 million for the nine months ended September 30, 2025, compared to $238.5 million for the nine months ended September 30, 2024. Our Adjusted EBITDA margin for the critical illness recovery hospital segment was 10.8% for the nine months ended September 30, 2025, compared to 12.9% for the nine months ended September 30, 2024. The decreases in our Adjusted EBITDA and Adjusted EBITDA margin during the nine months ended September 30, 2025, as compared to the nine months ended September 30, 2024, were principally due to an increase in operating expenses.

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*Rehabilitation Hospital Segment.* Adjusted EBITDA increased 14.1% to $209.4 million for the nine months ended September 30, 2025, compared to $183.5 million for the nine months ended September 30, 2024. Our Adjusted EBITDA margin for the rehabilitation hospital segment was 22.1% for the nine months ended September 30, 2025, compared to 22.5% for the nine months ended September 30, 2024. The increase in our Adjusted EBITDA for the nine months ended September 30, 2025, as compared to the nine months ended September 30, 2024, was principally attributable to an increase in revenue.

*Outpatient Rehabilitation Segment.* Adjusted EBITDA was $79.0 million for the nine months ended September 30, 2025, compared to $82.0 million for the nine months ended September 30, 2024. Our Adjusted EBITDA margin for the outpatient rehabilitation segment was 8.2% for the nine months ended September 30, 2025, compared to 8.8% for the nine months ended September 30, 2024. The decreases in our Adjusted EBITDA and Adjusted EBITDA margin during the nine months ended September 30, 2025, as compared to the nine months ended September 30, 2024, was principally attributable to an increase in personnel expense, partially offset by an increase in revenue.

***Depreciation and Amortization***

Depreciation and amortization expense was $104.1 million for the nine months ended September 30, 2025, compared to $106.6 million for the nine months ended September 30, 2024.

***Income from Continuing Operations before Other Income and Expense***

For the nine months ended September 30, 2025, we had income from continuing operations before other income and expense of $272.2 million, compared to $247.2 million for the nine months ended September 30, 2024. The increase in income from continuing operations before other income and expense is attributable to an increase in revenue within our Rehabilitation Hospital segment, as well as a decrease in general and administrative expenses.

***Loss on Early Retirement of Debt***

For the nine months ended September 30, 2024, we had a loss on early retirement of debt of $10.9 million, related to the prepayment on our term loan and the amendment to the Select credit agreement.

***Equity in Earnings of Unconsolidated Subsidiaries***

For the nine months ended September 30, 2025, we had equity in earnings of unconsolidated subsidiaries of $39.1 million, compared to $53.5 million for the nine months ended September 30, 2024. The decrease in equity in earnings of unconsolidated subsidiaries is principally due to a gain recognized during the three months ended September 30, 2024, upon gaining a controlling financial interest in a previously unconsolidated subsidiary. This was partially offset by improved operating performance of our rehabilitation businesses in which we are a minority owner.

***Interest***

Interest expense was $89.1 million for the nine months ended September 30, 2025, compared to $100.1 million for the nine months ended September 30, 2024. The decrease in interest expense was principally due to a reduction in total debt, partially offset by an increase in our effective interest rate resulting from the impact of our interest rate cap.

***Income Tax Expense from Continuing Operations***

We recorded income tax expense of $45.5 million for the nine months ended September 30, 2025, which represented an effective tax rate of 20.5%. We recorded income tax expense of $49.3 million for the nine months ended September 30, 2024, which represented an effective tax rate of 26.0%. The decrease in our effective tax rate was primarily due to lower permanent differences and lower state and local taxes associated with reduced executive compensation.

***Income from Discontinued Operations, Net of Tax***

For the nine months ended September 30, 2024, we had income from discontinued operations, net of tax, of $152.5 million, which represents the operations of Concentra.

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**Liquidity and Capital Resources**

***Cash Flows for the Nine Months Ended September 30, 2025 and Nine Months Ended September 30, 2024***

In the following, we discuss cash flows from operating activities, investing activities, and financing activities.

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| | | |
|:---|:---|:---|
| | **Nine Months Ended September 30,** | **Nine Months Ended September 30,** |
| | **2024** | **2025** |
| | **(in thousands)** | **(in thousands)** |
| Net cash provided by operating activities | $392432 | $282142 |
| Net cash used in investing activities | (156818) | (149594) |
| Net cash used in financing activities | (128152) | (132188) |
| Net increase in cash and cash equivalents | 107462 | 360 |
| Cash and cash equivalents at beginning of period | 84006 | 59694 |
| Cash and cash equivalents at end of period | $191468 | $60054 |

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Operating activities provided $282.1 million of cash flows for the nine months ended September 30, 2025, compared to $392.4 million of cash flows provided by operating activities for the nine months ended September 30, 2024. The decrease in cash flows provided by operating activities year over year was principally driven by the decrease in cash flows from our discontinued operations, partially offset by increases in our Income from continuing operations, net of tax, and our net working capital.

Our days sales outstanding was 56 days at September 30, 2025, compared to 58 days at December 31, 2024. Our days sales outstanding was 60 days at September 30, 2024, compared to 55 days at December 31, 2023. Our days sales outstanding will fluctuate based upon variability in our collection cycles and patient volumes.

Investing activities used $149.6 million of cash flows for the nine months ended September 30, 2025, principally for the purchase of property and equipment. The principal source of cash was proceeds from sales and exchanges of assets of $22.1 million. Investing activities used $156.8 million of cash flows for the nine months ended September 30, 2024. The principal uses of cash were $158.7 million for purchases of property and equipment, and $2.3 million for investments in and acquisitions of businesses.

Financing activities used $132.2 million of cash flows for the nine months ended September 30, 2025. The principal uses of cash were $99.5 million for repurchases of common stock, $48.8 million for distributions to and purchases of non-controlling interests, a decrease in our overdrafts of $25.8 million, and $23.7 million of dividend payments to common stockholders. The principal sources of cash were net borrowings under our revolving facility of $45.0 million, net borrowings on other debt of $15.6 million, and proceeds of $13.0 million from the issuance of non-controlling interests. Financing activities used $128.2 million of cash flows for the nine months ended September 30, 2024. The principal uses of cash were payments of $1,719.5 million on our term loan, $270.0 million of net repayments under our revolving facilities, $48.5 million of dividend payments to common stockholders, and $35.8 million for distributions to and purchases of non-controlling interests. The principal sources of cash were net proceeds from Concentra's term loans of $836.7 million, net proceeds from the issuance of Concentra's 6.875% senior notes of $637.3 million, and net proceeds from Concentra's equity issuance of $511.2 million.

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***Capital Resources***

*Working capital.* We had net working capital of $80.9 million at September 30, 2025, compared to $42.1 million at December 31, 2024. The increase in net working capital was principally due to decreases in our accrued other and accrued payroll.

*Credit facilities.* At September 30, 2025, Select had outstanding borrowings under its credit facilities consisting of a $1,042.1 million term loan (excluding unamortized original issue discounts and debt issuance costs of $7.4 million) and borrowings of $150.0 million under its revolving facility. At September 30, 2025, Select had $419.1 million of availability under its revolving facility after giving effect to $30.9 million of outstanding letters of credit.

*Stock Repurchase Program.* Holdings' Board of Directors has authorized a common stock repurchase program to repurchase up to $1.0 billion worth of shares of its common stock. On October 29, 2025, the Board of Directors extended the common stock repurchase program from December 31, 2025, to December 31, 2027. The common stock repurchase program will remain in effect until then, 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 Holdings deems appropriate. Holdings funds this program with cash on hand and borrowings under its revolving facility. During the nine months ended September 30, 2025, Holdings repurchased 6,375,512 shares at a cost of approximately $96.5 million, or $15.13 per share, which includes transaction costs. Since the inception of the program through September 30, 2025, Holdings 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. As of September 30, 2025, $0.9 million has been accrued for the 1% excise tax as a cost of the stock repurchase.

*Use of Capital Resources.* We may from time to time pursue opportunities to develop new joint venture relationships with large, regional health systems and other healthcare providers. We also intend to open new outpatient rehabilitation clinics in local areas that we currently serve where we can benefit from existing referral relationships and brand awareness to produce incremental growth. In addition to our development activities, we may grow through opportunistic acquisitions.

***Liquidity***

We believe our internally generated cash flows and borrowing capacity under our revolving facility will allow us to finance our operations in both the short and long term. As of September 30, 2025, we had cash and cash equivalents of $60.1 million and $419.1 million of availability under our revolving facilities after giving effect to $150.0 million of outstanding borrowings and $30.9 million of outstanding letters of credit.

We may from time to time seek to retire or purchase our outstanding debt through cash purchases and/or exchanges for equity securities, in open market purchases, privately negotiated transactions, tender offers or otherwise. Such repurchases or exchanges, if any, may be funded from operating cash flows or other sources and will depend on prevailing market conditions, our liquidity requirements, contractual restrictions and other factors. The amounts involved may be material.

***Dividend***

On February 13, 2025, April 30, 2025, and July 30, 2025, our Board of Directors declared a cash dividend of $0.0625 per share. On March 13, 2025, May 29, 2025, and August 28, 2025, cash dividends totaling $8.1 million, $7.9 million, and $7.7 million were paid.

On October 29, 2025, our Board of Directors declared a cash dividend of $0.0625 per share. The dividend will be payable on or about November 25, 2025 to stockholders of record as of the close of business on November 12, 2025.

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

**Effects of Inflation**

The healthcare industry is labor intensive and our largest expenses are labor related costs. Wage and other expenses increase during periods of inflation and when labor shortages occur in the marketplace. We have recently experienced higher labor costs related to an inflationary environment and competitive labor market. In addition, suppliers have passed along rising costs to us in the form of higher prices. Higher prices could also result from the impact of proposed tariffs. We cannot predict our ability to pass along cost increases to our customers.

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**Recent Accounting Pronouncements**

Refer to Note 2 – Accounting Policies of the notes to our condensed consolidated financial statements included herein for information regarding recent accounting pronouncements.

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**ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK**

We are subject to interest rate risk in connection with our variable rate long-term indebtedness. Our principal interest rate exposure relates to the loans outstanding under our credit facilities, which bear interest rates that are indexed against Term SOFR.

At September 30, 2025, Select had outstanding borrowings under its Credit Facilities consisting of a $1,042.1 million term loan (excluding unamortized original issue discounts and debt issuance costs of $7.4 million) and $150.0 million of borrowings under its revolving facility, which bear interest at variable rates.

In order to mitigate our exposure to rising interest rates, we entered into an interest rate cap effective on March 31, 2025, which limits the Term SOFR rate to 4.5% on $1.0 billion of principal outstanding under our term loan. The agreement applies to interest payments through March 31, 2028. As of September 30, 2025, the Term SOFR rate was 4.13%. As of September 30, 2025, we had $42.1 million of term loan borrowings which would be subject to variable interest rates if the Term SOFR rate were to exceed 4.5%.

As of September 30, 2025, the first 0.25% increase in market interest rates will impact the annual interest expense on our variable rate debt by $3.0 million. The next 0.25% increase in market interest rates will impact the annual interest expense on our variable rate debt by $1.7 million, as it would be partially hedged by our interest rate cap. Each subsequent 0.25% increase in market interest rates will be mitigated by our interest rate cap, and will impact the annual interest expense on our variable rate debt by $0.5 million.

**ITEM 4. CONTROLS AND PROCEDURES**

**Evaluation of Disclosure Controls and Procedures**

We carried out an evaluation, under the supervision and with the participation of our principal executive officer and principal financial officer, of the effectiveness of the design and operation of our disclosure controls and procedures (as defined in Rule 13a-15(e) of the Securities Exchange Act of 1934) as of the end of the period covered in this report. Based on this evaluation, as of September 30, 2025, our principal executive officer and principal financial officer concluded that our disclosure controls and procedures, including the accumulation and communication of disclosure to our principal executive officer and principal financial officer as appropriate to allow timely decisions regarding disclosure, are effective to provide reasonable assurance that material information required to be included in our periodic SEC reports is recorded, processed, summarized, and reported within the time periods specified in the relevant SEC rules and forms.

**Changes in Internal Control over Financial Reporting**

There was no change in our internal control over financial reporting (as defined in Rule 13a-15(f) of the Securities Exchange Act of 1934) identified in connection with the evaluation required by Rule 13a-15(d) of the Securities Exchange Act of 1934 that occurred during the third quarter ended September 30, 2025, that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

**Inherent Limitations on Effectiveness of Controls**

It should be noted that any system of controls, however well designed and operated, can provide only reasonable, and not absolute, assurance that the objectives of the system will be met. In addition, the design of any control system is based in part upon certain assumptions about the likelihood of future events. Because of these and other inherent limitations of control systems, there is only reasonable assurance that our controls will succeed in achieving their goals under all potential future conditions.

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**PART II: OTHER INFORMATION**

**ITEM 1. LEGAL PROCEEDINGS**

Refer to the "*Litigation*" section contained within Note 14 – Commitments and Contingencies of the notes to our condensed consolidated financial statements included herein.

**ITEM 1A. RISK FACTORS**

There have been no material changes from our risk factors set forth in our Annual Report on Form 10-K for the year ended December 31, 2024, and our Quarterly Report on Form 10-Q for the six months ended June 30, 2025.

**ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS**

***Purchases of Equity Securities by the Issuer***

Holdings' Board of Directors authorized a common stock repurchase program to repurchase up to $1.0 billion worth of shares of its common stock. On October 29, 2025, the Board of Directors extended the common stock repurchase program from December 31, 2025, to December 31, 2027. The common stock repurchase program will remain in effect until then, 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 Holdings deems appropriate.

The following table provides information regarding repurchases of our common stock during the three months ended September 30, 2025.

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| | | | | |
|:---|:---|:---|:---|:---|
| | **Total Number of Shares Purchased** | **Average Price Paid Per Share** | **Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs** | **Approximate Dollar Value of Shares that May Yet Be Purchased Under Plans or Programs** |
| July 1 - July 31, 2025 |  | $— |  | $303223970 |
| August 1 - August 31, 2025<sup>(1)</sup> | 156670 | 12.57 |  | 303223970 |
| September 1 - September 30, 2025 |  |  |  | 303223970 |
| Total | 156670 | $12.57 |  | $303223970 |

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_____________________________________________________________________________

(1)&nbsp;&nbsp;&nbsp;&nbsp;The shares purchased represent common stock surrendered to us to satisfy tax withholding obligations associated with the vesting of restricted shares issued to employees, pursuant to the provisions of our equity incentive plans.

**ITEM 3. DEFAULTS UPON SENIOR SECURITIES**

Not applicable.

**ITEM 4. MINE SAFETY DISCLOSURES**

Not applicable.

**ITEM 5. OTHER INFORMATION**

***Rule 10b5-1 Trading Plans***

On September 12, 2025, Robert Ortenzio, the Company's Executive Chairman and Co-Founder, terminated his trading plan intended to satisfy the affirmative defense conditions of Rule 10b5-1(c) under the Exchange Act. The plan was originally adopted on December 5, 2024 and provided for the potential sale, subject to certain price limits, of up to 600,000 shares of common stock for Robert Ortenzio and up to 125,000 shares for Robert A Ortenzio Descendants Trust DTD 12/23/2002, until March 14, 2026, or upon the earlier completion of all authorized transactions thereunder.

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**ITEM 6. EXHIBITS**

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| | |
|:---|:---|
| **Number** | **Description** |
| 10.1 | <u>[Form of Director and Officer Indemnification Agreement.](ex101-formxindemnification.htm)</u> |
| 10.2 | <u>[Offer Letter, by and between Select and Thomas P. Mullin, dated September 1, 2025.](ex102-offerletterxmullinxc.htm)</u> |
| 31.1 | <u>[Certification of Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.](sem-930202510qxex311.htm)</u> |
| 31.2 | <u>[Certification of Executive Vice President and Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.](sem-930202510qxex312.htm)</u> |
| 32.1 | <u>[Certification of Chief Executive Officer, and Executive Vice President and Chief Financial Officer pursuant to 18 U.S.C. Section 1350 as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.](sem-930202510qxex321.htm)</u> |
| 101.INS | XBRL Instance Document - the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document. |
| 101.SCH | Inline XBRL Taxonomy Extension Schema Document. |
| 101.CAL | Inline XBRL Taxonomy Extension Calculation Linkbase Document. |
| 101.DEF | Inline XBRL Taxonomy Extension Definition Linkbase Document. |
| 101.LAB | Inline XBRL Taxonomy Extension Label Linkbase Document. |
| 101.PRE | Inline XBRL Taxonomy Extension Presentation Linkbase Document. |
| 104 | Cover Page Interactive Data File - the cover page interactive data file does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document. |

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**SIGNATURES**

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.

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| | |
|:---|:---|
| SELECT MEDICAL HOLDINGS CORPORATION | SELECT MEDICAL HOLDINGS CORPORATION |
| By: | /s/ Michael F. Malatesta |
|  | Michael F. Malatesta |
|  | Executive Vice President and Chief Financial Officer |
|  | (Duly Authorized Officer) |
| By: | /s/ Christopher S. Weigl |
|  | Christopher S. Weigl |
|  | Senior Vice President, Controller & Chief Accounting Officer |
|  | (Principal Accounting Officer) |

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Dated: October 30, 2025

## Exhibit 10.1

**<u>INDEMNIFICATION AGREEMENT</u>**

This Indemnification Agreement (this "**<u>Agreement</u>**") is made and entered into this 1st day of July, 2025, by and between **SELECT MEDICAL HOLDINGS CORPORATION**, a Delaware corporation (the "**<u>Company</u>**," which term shall include, where appropriate, any Enterprise (as hereinafter defined) controlled directly or indirectly by the Company), and __________ (the "**<u>Indemnitee</u>**").

WHEREAS, the Company desires to attract and retain the services of highly qualified individuals, such as Indemnitee, to serve the Company;

WHEREAS, in order to induce Indemnitee to continue to provide services to the Company, the Company wishes to provide for the indemnification of, and advancement of expenses to, Indemnitee to the maximum extent permitted by law;

WHEREAS, the Amended and Restated Certificate of Incorporation (as it may be amended from time to time, the "**<u>Charter</u>**") currently authorizes, and the Amended and Restated Bylaws (as it may be amended from time to time, the "**<u>Bylaws</u>**") of the Company currently require, indemnification of the officers and directors of the Company, and Indemnitee may also be entitled to indemnification pursuant to the General Corporation Law of the State of Delaware (the "**<u>DGCL</u>**");

WHEREAS, the Charter, the Bylaws and the DGCL expressly provide that the indemnification provisions set forth therein are not exclusive, and thereby contemplate that contracts may be entered into between the Company and members of the board of directors, officers and other persons with respect to indemnification;

WHEREAS, the Board of Directors of the Company (the "**<u>Board</u>**") has determined that the increased difficulty in attracting and retaining highly qualified persons such as Indemnitee is detrimental to the best interests of the Company's stockholders;

WHEREAS, it is reasonable and prudent for the Company contractually to obligate itself to indemnify, and to advance expenses on behalf of, such persons to the fullest extent permitted by applicable law, regardless of any amendment or revocation of the Charter or the Bylaws, so that they will serve or continue to serve the Company free from undue concern that they will not be so indemnified; and

WHEREAS, this Agreement is a supplement to and in furtherance of the indemnification and advancement of expenses currently provided in the Charter and the Bylaws (as well as any indemnification or advancement of expenses as may hereafter be provided in any amendment to the Charter or Bylaws) and pursuant to any resolutions of the directors of the Company, and shall not be deemed a substitute therefor, nor to diminish or abrogate any rights of Indemnitee thereunder.

NOW, THEREFORE, in consideration of the premises and the covenants contained herein, the Company and Indemnitee do hereby covenant and agree as follows:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.<u>Services to the Company</u>*.* Indemnitee agrees to serve as an officer and/or director of the Company. Indemnitee may, at any time and for any reason, resign from such position or positions (subject to any other contractual obligation or any obligation imposed by operation of law), in which event the Company shall have no obligation to continue Indemnitee in such position. This Agreement shall not be deemed an employment contract between the Company (or any of its subsidiaries or any Enterprise) and Indemnitee. **Indemnitee specifically acknowledges that Indemnitee's employment with the Company** 

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**(or any of its subsidiaries or any Enterprise), if any, is at will, and the Indemnitee may be discharged at any time for any reason, with or without cause, except as may be otherwise provided in any written employment contract between Indemnitee and the Company (or any of its subsidiaries or any Enterprise), or other applicable formal severance policies duly adopted by the Board.** The foregoing notwithstanding, this Agreement shall continue in force after Indemnitee has ceased to serve as an officer and/or director of the Company, as provided in <u>Section 16</u> hereof.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.<u>Definitions</u>.

As used in this Agreement:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)"**Agent**" means any person who is or was a director, officer, or employee of the Company or a subsidiary of the Company or other person authorized by the Company to act for the Company, to include such person serving in such capacity as a director, officer, employee, fiduciary or other official of another corporation, partnership, limited liability company, joint venture, trust or other enterprise at the request of, for the convenience of, or to represent the interests of the Company or a subsidiary of the Company.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)A "**Change in Control**" shall be deemed to occur upon the earliest to occur after the date of this Agreement of any of the following events:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i)<u>Acquisition of Stock by Third Party</u>. Any Person (as defined below) is or becomes the Beneficial Owner (as defined below), directly or indirectly, of securities of the Company representing fifty percent (50%) or more of the combined voting power of the Company's then outstanding securities unless the change in relative Beneficial Ownership of the Company's securities by any Person results solely from a reduction in the aggregate number of outstanding shares of securities entitled to vote generally in the election of directors;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii)<u>Change in Board of Directors</u>. During any period of two (2) consecutive years (not including any period prior to the execution of this Agreement), individuals who at the beginning of such period constitute the Board, and any new director (other than a director designated by a person who has entered into an agreement with the Company to effect a transaction described in <u>Sections 2(b)(i)</u>, <u>2(b)(iii)</u> or <u>2(b)(iv)</u>) whose election by the Board or nomination for election by the Company's stockholders was approved by a vote of at least two-thirds of the directors then still in office who either were directors at the beginning of the period or whose election or nomination for election was so approved, cease for any reason to constitute at least a majority of the members of the Board;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iii)<u>Corporate Transactions</u>. The effective date of a merger or consolidation of the Company with any other entity, other than a merger or consolidation which would result in the voting securities of the Company outstanding immediately prior to such merger or consolidation continuing to represent (either by remaining outstanding or by being converted into voting securities of the surviving entity or its ultimate parent, as applicable) more than fifty percent (50%) of the combined voting power of the voting securities of the surviving entity or its ultimate parent, as applicable, outstanding immediately after such merger or consolidation and

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with the power to elect at least a majority of the board of directors or other governing body of such surviving entity or its ultimate parent, as applicable;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iv)<u>Liquidation or Sale</u>. The approval by the stockholders of the Company of a complete liquidation of the Company or the effective date of an agreement for the sale or disposition by the Company of all or substantially all of the Company's assets; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(v)<u>Other Events</u>. There occurs any other event of a nature that would be required to be reported in response to Item 6(e) of Schedule 14A of Regulation 14A (or a response to any similar item on any similar schedule or form) promulgated under the Exchange Act (as defined below), whether or not the Company is then subject to such reporting requirement.

For purposes of this <u>Section 2(b)</u>, the following terms shall have the following meanings:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(A) "**<u>Exchange Act</u>**" shall mean the Securities Exchange Act of 1934, as amended from time to time.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(B) "**<u>Person</u>**" shall have the meaning as set forth in Sections 13(d) and 14(d) of the Exchange Act; provided, however, that Person shall exclude (i) the Company, (ii) any trustee or other fiduciary holding securities of the Company under an employee benefit plan of the Company, and (iii) any corporation owned, directly or indirectly, by the stockholders of the Company in substantially the same proportions as their ownership of stock of the Company.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(C) "**<u>Beneficial Owner</u>**" shall have the meaning given to such term in Rule 13d-3 under the Exchange Act; provided, however, that Beneficial Owner shall exclude any Person otherwise becoming a Beneficial Owner by reason of the stockholders of the Company approving a merger of the Company with another entity.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c)"**Corporate Status**" describes the status of a person who is or was a director, officer, employee or agent of the Company or of any other corporation, limited liability company, partnership or joint venture, trust or other enterprise which such person is or was serving at the request of the Company.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d)"**Disinterested Director**" shall mean a director of the Company who is not and was not a party to the Proceeding in respect of which indemnification is sought by Indemnitee.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e)"**Enterprise**" shall mean the Company and any other corporation, limited liability company, partnership, joint venture, trust or other enterprise of which Indemnitee is or was serving at the request of the Company as a director, officer, trustee, partner, managing member, employee, agent or fiduciary.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(f)"**Expenses**" shall include all reasonable attorneys' fees, retainers, court costs, transcript costs, fees of experts and other professionals, witness fees, travel expenses, duplicating costs, printing and binding costs, telephone charges, postage, delivery service

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fees, ERISA excise taxes and penalties, and all other disbursements or expenses of the types customarily incurred in connection with prosecuting, defending, preparing to prosecute or defend, investigating, being or preparing to be a witness in, or otherwise participating in, a Proceeding. Expenses also shall include: (i) Expenses incurred in connection with any appeal resulting from any Proceeding, including without limitation the premium, security for, and other costs relating to any cost bond, supersedeas bond, or other appeal bond or its equivalent, and (ii) for purposes of Section 14(d) only, Expenses incurred by Indemnitee in connection with the interpretation, enforcement or defense of Indemnitee's rights under this Agreement, by litigation or otherwise (unless a court of competent jurisdiction determines that the assertions made by Indemnitee in such Proceeding or otherwise were not made in good faith or were frivolous). The parties agree that for the purposes of any advancement of Expenses for which Indemnitee has made written demand to the Company in accordance with this Agreement, all Expenses included in such demand that are certified by affidavit of Indemnitee's counsel as being reasonable shall be presumed to be reasonable. Expenses, however, shall not include amounts paid in settlement by Indemnitee or the amount of judgments or fines against Indemnitee.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(g)"**Independent Counsel**" shall mean a law firm, or a member of a law firm, that is experienced in matters of corporation law and neither presently is, nor in the past five years has been, retained to represent: (i) the Company or Indemnitee in any matter (other than with respect to matters concerning other indemnitees under similar indemnification agreements), or (ii) any other party to the Proceeding giving rise to a claim for indemnification hereunder. Notwithstanding the foregoing, the term "Independent Counsel" shall not include any person who, under the applicable standards of professional conduct then prevailing, would have a conflict of interest in representing either the Company or Indemnitee in an action to determine Indemnitee's rights under this Agreement. The Company agrees to pay the reasonable fees and expenses of the Independent Counsel referred to above and to fully indemnify such counsel against any and all Expenses, claims, liabilities and damages arising out of or relating to this Agreement or its engagement pursuant hereto.

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(h)"**Proceeding**" shall include any threatened, pending or completed action, suit, claim, counterclaim, cross claim, arbitration, mediation, alternate dispute resolution mechanism, investigation, inquiry, administrative hearing or any other actual, threatened or completed proceeding, whether brought in the right of the Company or otherwise and whether of a civil, criminal, administrative, legislative, arbitrative, or investigative (formal or informal) nature, including any appeal therefrom, in which Indemnitee was, is or will be involved as a party, potential party, non-party witness or otherwise by reason of the fact that Indemnitee is or was a director or officer of the Company or by reason of any action taken by him (or a failure to take action by him) or of any action (or failure to act) on his part while acting pursuant to his Corporate Status, in each case whether or not serving in such capacity at the time any liability or Expense is incurred for which indemnification, reimbursement, or advancement of Expenses can be provided under this Agreement. If the Indemnitee believes in good faith that a given situation may lead to or culminate in the institution of a Proceeding, this shall be considered a Proceeding under this paragraph.

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i)Reference to "other enterprise" shall include employee benefit plans; references to "fines" shall include any excise tax assessed with respect to any employee benefit plan; references to "serving at the request of the Company" shall include any service as a director, officer, employee or agent of the Company which imposes duties on, or involves services by, such director, officer, employee or agent with respect to an employee benefit plan, its participants or beneficiaries; and a person who acted in good faith and in a manner he reasonably believed to be in the best interests of the participants and beneficiaries of an employee benefit plan shall be deemed to have acted in manner "not opposed to the best interests of the Company" as referred to in this Agreement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3.<u>Indemnity in Third-Party Proceedings</u>. The Company shall indemnify Indemnitee in accordance with the provisions of this <u>Section 3</u> if Indemnitee is, or is threatened to be made, a party to or a participant in any Proceeding, other than a Proceeding by or in the right of the Company to procure a judgment in its favor. Pursuant to this <u>Section 3</u>, Indemnitee shall be indemnified to the fullest extent permitted by applicable law against all Expenses, judgments, fines and amounts paid in settlement (including all interest, assessments and other charges paid or payable in connection with or in respect of such Expenses, judgments, fines and amounts paid in settlement) actually and reasonably incurred by Indemnitee or on his behalf in connection with such Proceeding or any claim, issue or matter therein, if Indemnitee acted in good faith and in a manner he reasonably believed to be in or not opposed to the best interests of the Company and, in the case of a criminal Proceeding had no reasonable cause to believe that his conduct was unlawful. The parties hereto intend that this Agreement shall provide to the fullest extent permitted by applicable law for indemnification in excess of any indemnification provided by the Charter, the Bylaws, vote of its stockholders or disinterested directors or applicable law.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4.<u>Indemnity in Proceedings by or in the Right of the Company</u>. The Company shall indemnify Indemnitee in accordance with the provisions of this <u>Section 4</u> if Indemnitee is, or is threatened to be made, a party to or a participant in any Proceeding by or in the right of the Company to procure a judgment in its favor. Pursuant to this <u>Section 4</u>, Indemnitee shall be indemnified to the fullest extent permitted by applicable law against all Expenses actually and reasonably incurred by him or on his behalf in connection with such Proceeding or any claim, issue or matter therein, if Indemnitee acted in good faith and in a manner he reasonably believed to be in or not opposed to the best interests of the Company. No indemnification for Expenses shall be made under this <u>Section 4</u> in respect of any claim, issue or matter as to which Indemnitee shall have been finally adjudged by a court to be liable to the Company, unless and only to the extent that the Delaware Court (as hereinafter defined) or any court in which the Proceeding was brought shall determine upon application that, despite the adjudication of liability but in view of all the circumstances of the case, Indemnitee is fairly and reasonably entitled to indemnification.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5.<u>Indemnification for Expenses of a Party Who is Wholly or Partly Successful</u>. Notwithstanding any other provisions of this Agreement, to the fullest extent permitted by applicable law and to the extent that Indemnitee is a party to (or a participant in) and is successful, on the merits or otherwise, in any Proceeding or in defense of any claim, issue or matter therein, in whole or in part, the Company shall indemnify Indemnitee against all Expenses actually and reasonably incurred by him in connection therewith. If Indemnitee is not wholly successful in such Proceeding but is successful, on the merits or otherwise, as to one or more but less than all claims, issues or matters in such Proceeding, the Company shall indemnify Indemnitee against all Expenses actually and reasonably incurred by him or on his behalf in connection with or related to each successfully resolved claim, issue or matter to the fullest extent permitted by law. For purposes of this Section and without limitation, the termination of any claim,

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issue or matter in such a Proceeding by dismissal, with or without prejudice, shall be deemed to be a successful result as to such claim, issue or matter*.***

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;6.<u>Indemnification for Expenses of a Witness</u>. Notwithstanding any other provision of this Agreement, to the fullest extent permitted by applicable law and to the extent that Indemnitee is, by reason of his Corporate Status, a witness or otherwise asked to participate in any Proceeding to which Indemnitee is not a party, he shall be indemnified against all Expenses actually and reasonably incurred by him or on his behalf in connection therewith.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;7.<u>Partial Indemnification</u>. If Indemnitee is entitled under any provision of this Agreement to indemnification by the Company for some or a portion of Expenses, but not, however, for the total amount thereof, the Company shall nevertheless indemnify Indemnitee for the portion thereof to which Indemnitee is entitled.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;8.<u>Additional Indemnification</u>.<br>

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)Notwithstanding any limitation in Sections 3, 4, or 5, the Company shall indemnify Indemnitee to the fullest extent permitted by applicable law if Indemnitee is a party to or threatened to be made a party to any Proceeding (including a Proceeding by or in the right of the Company to procure a judgment in its favor) against all Expenses, judgments, fines and amounts paid in settlement (including all interest, assessments and other charges paid or payable in connection with or in respect of such Expenses, judgments, fines and amounts paid in settlement) actually and reasonably incurred by Indemnitee in connection with the Proceeding.<br>

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)For purposes of Section 8(a), the meaning of the phrase "to the fullest extent permitted by applicable law" shall include, but not be limited to:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i)to the fullest extent permitted by the provision of the DGCL that authorizes or contemplates additional indemnification by agreement, or the corresponding provision of any amendment to or replacement of the DGCL, and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii)to the fullest extent authorized or permitted by any amendments to or replacements of the DGCL adopted after the date of this Agreement that increase the extent to which a corporation may indemnify its officers and directors.<br>

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;9.<u>Exclusions</u>*.* Notwithstanding any provision in this Agreement, the Company shall not be obligated under this Agreement to make any indemnification payment:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)in connection with any claim for which payment has actually been made to or on behalf of Indemnitee under any insurance policy or other indemnity provision, except with respect to any excess beyond the amount paid under any insurance policy or other indemnity provision; or

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)for (i) an accounting of profits made from the purchase and sale (or sale and purchase) by Indemnitee of securities of the Company within the meaning of Section 16(b) of the Exchange Act or similar provisions of state statutory law or common law, or (ii) any reimbursement of the Company by the Indemnitee of any bonus or other incentive-based or equity-based compensation or of any profits realized by the Indemnitee from the sale of securities of the Company, as required in each case under the Exchange Act (including any such reimbursements that arise from an accounting

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restatement of the Company pursuant to Section 304 of the Sarbanes-Oxley Act of 2002 (the "**Sarbanes-Oxley Act**"), or the payment to the Company of profits arising from the purchase and sale by Indemnitee of securities in violation of Section 306 of the Sarbanes-Oxley Act); or

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c)except as provided in Section 14(d) of this Agreement, in connection with any Proceeding (or any part of any Proceeding) initiated by Indemnitee (by complaint, counterclaim or otherwise), including any Proceeding (or any part of any Proceeding) initiated by Indemnitee against the Company or its directors, officers, employees or other indemnitees, unless (i) the Board authorized the Proceeding (or any part of any Proceeding) prior to its initiation or (ii) the Company provides the indemnification, in its sole discretion, pursuant to the powers vested in the Company under applicable law.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d)to provide any indemnification or advancement of expenses that is prohibited by applicable law (as such law exists at the time payment would otherwise be required pursuant to this Agreement).

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;10.<u>Advances of Expenses</u>. &nbsp;&nbsp;&nbsp;&nbsp;Notwithstanding any provision of this Agreement to the contrary (other than <u>Section 14(d)</u>), the Company shall advance, to the extent not prohibited by law, the Expenses incurred by Indemnitee in connection with any Proceeding (or any part of any Proceeding) not initiated by Indemnitee, and such advancement shall be made within thirty (30) days after the receipt by the Company of a statement or statements requesting such advances from time to time, whether prior to or after final disposition of any Proceeding. Advances shall be unsecured and interest free. Advances shall be made without regard to Indemnitee's ability to repay the Expenses and without regard to Indemnitee's ultimate entitlement to indemnification under the other provisions of this Agreement. In accordance with <u>Section 14(d)</u>, advances shall include any and all reasonable Expenses incurred pursuing an action to enforce this right of advancement, including Expenses incurred preparing and forwarding statements to the Company to support the advances claimed (unless a court of competent jurisdiction determines that the assertions made by Indemnitee in such Proceeding or otherwise were not made in good faith or were frivolous). The Indemnitee shall qualify for advances upon the execution and delivery to the Company of this Agreement, which shall constitute an undertaking by the Indemnitee to repay the amounts advanced (without interest) to the extent that it is ultimately determined that Indemnitee is not entitled to be indemnified by the Company with respect to such applicable Proceeding or claim as to which the advancement of expenses was made. No other form of undertaking shall be required other than the execution of this Agreement. This <u>Section 10</u> shall not apply to any claim made by Indemnitee for which indemnity is excluded pursuant to <u>Section 9</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;11.<u>Procedure for Notification and Defense of Claim</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)Indemnitee shall notify the Company in writing of any matter with respect to which Indemnitee intends to seek indemnification or advancement of Expenses hereunder as soon as reasonably practicable following the receipt by Indemnitee of written notice thereof. The written notification to the Company shall include a reasonable description of the nature of the Proceeding and the facts underlying the Proceeding, based upon the information available to the Indemnitee. To obtain indemnification under this Agreement, Indemnitee shall submit to the Company a written request, including therein or therewith such documentation and information as is reasonably available to Indemnitee and is reasonably necessary to determine whether and to what extent Indemnitee is entitled to indemnification following the final disposition of such Proceeding, provided that documentation and information need not be so provided to the extent that the provision thereof would undermine or otherwise jeopardize attorney-client privilege. The omission

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by Indemnitee to notify the Company hereunder will not relieve the Company from any liability which it may have to Indemnitee hereunder or otherwise than under this Agreement unless (and then only to the extent) the Company's ability to participate in the defense of such claim was materially and adversely affected by such failure, and any delay in so notifying the Company shall not constitute a waiver by Indemnitee of any rights under this Agreement. The Secretary of the Company shall, promptly upon receipt of such a request for indemnification, advise the Board in writing that Indemnitee has requested indemnification.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)In the event that the Company shall be obligated hereunder to provide indemnification for or make any advancement of Expenses with respect to any Proceeding, the Company shall be entitled to assume the defense of such Proceeding, or any claim, issue or matter therein, with counsel approved by Indemnitee (which approval shall not be unreasonably withheld or delayed) upon the delivery to Indemnitee of written notice of the Company's election to do so. After delivery of such notice, approval of such counsel by Indemnitee and the retention of such counsel by the Company, the Company will not be liable to Indemnitee under this Agreement for any fees or expenses of separate counsel subsequently employed by or on behalf of Indemnitee with respect to the same Proceeding; provided that (i) Indemnitee shall have the right to employ separate counsel in any such Proceeding at Indemnitee's expense and (ii) if (A) the employment of separate counsel by Indemnitee has been previously authorized by the Company, (B) Indemnitee shall have reasonably concluded based on the advice of counsel that there may be a conflict of interest between the Company and Indemnitee in the conduct of such defense, or (C) the Company shall not continue to retain such counsel to defend such Proceeding, then the reasonable fees and expenses actually and reasonably incurred by Indemnitee with respect to his or her separate counsel shall be Expenses hereunder (but not for more than one law firm plus, if applicable, local counsel in respect of any such Proceeding).

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c)In the event that the Company does not assume the defense in a Proceeding pursuant to Section 11(b) above, then the Company will be entitled to participate in the Proceeding at its own expense.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d)The Company shall not be liable to indemnify Indemnitee under this Agreement for any amounts paid in settlement of any Proceeding effected without its prior written consent (which consent shall not be unreasonably withheld or delayed). The Company shall not, without the prior written consent of Indemnitee (which consent shall not be unreasonably withheld or delayed), enter into any settlement which (i) includes an admission of fault of Indemnitee, any non-monetary remedy imposed on Indemnitee or any monetary damages for which Indemnitee is not wholly and actually indemnified hereunder or (ii) with respect to any Proceeding with respect to which Indemnitee may be or is made a party or may be otherwise entitled to seek indemnification hereunder, does not include the full release of Indemnitee from all liability in respect of such Proceeding.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;12.<u>Procedure Upon Application for Indemnification</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)Upon written request by Indemnitee for indemnification pursuant to Section 11(a), a determination, if required by applicable law, with respect to Indemnitee's entitlement thereto shall be made in the specific case: (i) if a Change in Control shall

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have occurred, by Independent Counsel in a written opinion to the Board, a copy of which shall be delivered to Indemnitee; or (ii) if a Change in Control shall not have occurred, (A) by a majority vote of the Disinterested Directors, even though less than a quorum of the Board, (B) by a committee of Disinterested Directors designated by a majority vote of the Disinterested Directors, even though less than a quorum of the Board, (C) if there are no such Disinterested Directors or, if such Disinterested Directors so direct, by Independent Counsel in a written opinion to the Board, a copy of which shall be delivered to Indemnitee or (D) if there are no Disinterested Directors and if so directed by the Board, by the stockholders of the Company; and, if it is so determined that Indemnitee is entitled to indemnification, payment to Indemnitee shall be made within ten (10) days after such determination. Indemnitee shall cooperate with the person, persons or entity making such determination with respect to Indemnitee's entitlement to indemnification, including providing to such person, persons or entity upon reasonable advance request any documentation or information which is not privileged or otherwise protected from disclosure and which is reasonably available to Indemnitee and reasonably necessary to such determination. Any costs or Expenses (including attorneys' fees and disbursements) incurred by Indemnitee in so cooperating with the person, persons or entity making such determination shall be borne by the Company (irrespective of the determination as to Indemnitee's entitlement to indemnification) and the Company hereby indemnifies and agrees to hold Indemnitee harmless therefrom. The Company promptly will advise Indemnitee in writing with respect to any determination that Indemnitee is or is not entitled to indemnification, including a description of any reason or basis for which indemnification has been denied.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)In the event the determination of entitlement to indemnification is to be made by Independent Counsel pursuant to Section 12(a) hereof, the Independent Counsel shall be selected as provided in this Section 12(b). If a Change in Control shall not have occurred, the Independent Counsel shall be selected by the Board, and the Company shall give written notice to Indemnitee advising him of the identity of the Independent Counsel so selected. If a Change in Control shall have occurred, the Independent Counsel shall be selected by Indemnitee (unless Indemnitee shall request that such selection be made by the Board, in which event the preceding sentence shall apply), and Indemnitee shall give written notice to the Company advising it of the identity of the Independent Counsel so selected. In either event, Indemnitee or the Company, as the case may be, may, within ten (10) days after such written notice of selection shall have been given, deliver to the Company or to Indemnitee, as the case may be, a written objection to such selection; provided, however, that such objection may be asserted only on the ground that the Independent Counsel so selected does not meet the requirements of "Independent Counsel" as defined in Section 2 of this Agreement, and the objection shall set forth with particularity the factual basis of such assertion. Absent a proper and timely objection, the person so selected shall act as Independent Counsel. If such written objection is so made and substantiated, the Independent Counsel so selected may not serve as Independent Counsel unless and until such objection is withdrawn or the Delaware Court has determined that such objection is without merit. If, within twenty (20) days after the later of submission by Indemnitee of a written request for indemnification pursuant to Section 11(a) hereof and the final disposition of the Proceeding, no Independent Counsel shall have been selected and not objected to, either the Company or Indemnitee may petition the Delaware Court for resolution of any objection which shall have been made by the Company or Indemnitee to the other's selection of Independent Counsel and/or for

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the appointment as Independent Counsel of a person selected by such court or by such other person as such court shall designate, and the person with respect to whom all objections are so resolved or the person so appointed shall act as Independent Counsel under Section 12(a) hereof. Upon the due commencement of any judicial proceeding or arbitration pursuant to Section 14(a) of this Agreement, Independent Counsel shall be discharged and relieved of any further responsibility in such capacity (subject to the applicable standards of professional conduct then prevailing).

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;13.<u>Presumptions and Effect of Certain Proceedings</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)In making a determination with respect to entitlement to indemnification hereunder, the person or persons or entity making such determination shall, to the fullest extent not prohibited by law, presume that Indemnitee is entitled to indemnification under this Agreement if Indemnitee has submitted a request for indemnification in accordance with Section 11(a) of this Agreement, and the Company shall, to the fullest extent not prohibited by law, have the burden of proof to overcome that presumption in connection with the making by any person, persons or entity of any determination contrary to that presumption. Neither the failure of the Company (including by its directors or Independent Counsel) to have made a determination prior to the commencement of any action pursuant to this Agreement that indemnification is proper in the circumstances because Indemnitee has met the applicable standard of conduct, nor an actual determination by the Company (including by its directors or Independent Counsel) that Indemnitee has not met such applicable standard of conduct, shall be a defense to the action or create a presumption that Indemnitee has not met the applicable standard of conduct.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)Subject to Section 14(e), if the person, persons or entity empowered or selected under Section 12 of this Agreement to determine whether Indemnitee is entitled to indemnification shall not have made a determination within sixty (60) days after receipt by the Company of the request therefor, the requisite determination of entitlement to indemnification shall, to the fullest extent not prohibited by law, be deemed to have been made and Indemnitee shall be entitled to such indemnification, absent (i) a misstatement by Indemnitee of a material fact, or an omission of a material fact necessary to make Indemnitee's statement not materially misleading, in connection with the request for indemnification, or (ii) a prohibition of such indemnification under applicable law; provided, however, that such 60-day period may be extended for a reasonable time, not to exceed an additional thirty (30) days, if the person, persons or entity making the determination with respect to entitlement to indemnification in good faith requires such additional time for the obtaining or evaluating of documentation and/or information relating thereto; and provided, further, that the foregoing provisions of this Section 13(b) shall not apply (i) if the determination of entitlement to indemnification is to be made by the stockholders pursuant to Section 12(a) of this Agreement and if (A) within thirty (30) days after receipt by the Company of the request for such determination the Board has resolved to submit such determination to the stockholders for their consideration at an annual meeting thereof to be held within ninety (90) days after such receipt and such determination is made thereat, or (B) a special meeting of stockholders is called within thirty (30) days after such receipt for the purpose of making such determination, such meeting is held for such purpose within sixty (60) days after having been so called and such determination is made thereat, or (ii) if the determination of entitlement to

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indemnification is to be made by Independent Counsel pursuant to Section 12(a) of this Agreement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c)The termination of any Proceeding or of any claim, issue or matter therein, by judgment, order, settlement or conviction, or upon a plea of guilty, *nolo contendere* or its equivalent, shall not (except as otherwise expressly provided in this Agreement) of itself adversely affect the right of Indemnitee to indemnification or create a presumption that Indemnitee did not act in good faith and in a manner which he or she reasonably believed to be in or not opposed to the best interests of the Company or, with respect to any criminal Proceeding, that Indemnitee had reasonable cause to believe that his or her conduct was unlawful.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d)For purposes of any determination of good faith, Indemnitee shall be deemed to have acted in good faith if Indemnitee's action is based on the records or books of account of the Enterprise, including financial statements, or on information supplied to Indemnitee by the directors or officers of the Enterprise in the course of their duties, or on the advice of legal counsel for the Enterprise or on information or records given or reports made to the Enterprise by an independent certified public accountant or by an appraiser or other expert selected with the reasonable care by the Enterprise. The provisions of this Section 13(d) shall not be deemed to be exclusive or to limit in any way the other circumstances in which the Indemnitee may be deemed to have met the applicable standard of conduct set forth in this Agreement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e)The knowledge and/or actions, or failure to act, of any director, officer, trustee, partner, managing member, fiduciary, agent or employee of the Enterprise shall not be imputed to Indemnitee for purposes of determining the right to indemnification under this Agreement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;14.<u>Remedies of Indemnitee</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)Subject to Section 14(e), in the event that (i) a determination is made pursuant to Section 12 of this Agreement that Indemnitee is not entitled to indemnification under this Agreement, (ii) advancement of Expenses is not timely made pursuant to Section 10 of this Agreement, (iii) no determination of entitlement to indemnification shall have been made pursuant to Section 12(a) of this Agreement within ninety (90) days after receipt by the Company of the request for indemnification or, in the case of a determination to be made by the stockholders of the Company, within the time period provided therefor in Section 13(b), (iv) payment of indemnification is not made pursuant to Section 5, 6 or 7 or the last sentence of Section 12(a) of this Agreement within ten (10) days after receipt by the Company of a written request therefor, (v) payment of indemnification pursuant to Section 3, 4 or 8 of this Agreement is not made within ten (10) days after a determination has been made that Indemnitee is entitled to indemnification, or (vi) in the event that the Company or any other person takes or threatens to take any action to declare this Agreement void or unenforceable, or institutes any litigation or other action or Proceeding designed to deny, or to recover from, the Indemnitee the benefits provided or intended to be provided to the Indemnitee hereunder, Indemnitee shall be entitled to an adjudication by a court of his entitlement to such indemnification or advancement of Expenses. Alternatively, Indemnitee, at his option, may seek an award in arbitration to be conducted by a single arbitrator pursuant to the Commercial Arbitration Rules of the

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American Arbitration Association. Indemnitee shall commence such proceeding seeking an adjudication or an award in arbitration within 180 days following the date on which Indemnitee first has the right to commence such proceeding pursuant to this Section 14(a); provided, however, that the foregoing clause shall not apply in respect of a proceeding brought by Indemnitee to enforce his rights under Section 5 or 6 of this Agreement. The Company shall not oppose Indemnitee's right to seek any such adjudication or arbitration.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)In the event that a determination shall have been made pursuant to Section 12(a) of this Agreement that Indemnitee is not entitled to indemnification, any judicial proceeding or arbitration commenced pursuant to this Section 14 shall be conducted in all respects as a de novo trial, or arbitration, on the merits and Indemnitee shall not be prejudiced by reason of that adverse determination. In any judicial proceeding or arbitration commenced pursuant to this Section 14 the Company shall have the burden of proving Indemnitee is not entitled to indemnification or advancement of Expenses, as the case may be.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c)If a determination shall have been made pursuant to Section 12(a) of this Agreement that Indemnitee is entitled to indemnification, the Company shall be bound by such determination in any judicial proceeding or arbitration commenced pursuant to this Section 14, absent (i) a misstatement by Indemnitee of a material fact, or an omission of a material fact necessary to make Indemnitee's statement not materially misleading, in connection with the request for indemnification, or (ii) a prohibition of such indemnification under applicable law.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d)The Company shall, to the fullest extent not prohibited by law, be precluded from asserting in any judicial proceeding or arbitration commenced pursuant to this Section 14 that the procedures and presumptions of this Agreement are not valid, binding and enforceable and shall stipulate in any such court or before any such arbitrator that the Company is bound by all the provisions of this Agreement. It is the intent of the Company that, to the fullest extent permitted by law, the Indemnitee not be required to incur legal fees or other Expenses associated with the interpretation, enforcement or defense of Indemnitee's rights under this Agreement by litigation or otherwise (unless a court of competent jurisdiction determines that the assertions made by Indemnitee in such Proceeding or otherwise were not made in good faith or were frivolous) because the cost and expense thereof would substantially detract from the benefits intended to be extended to the Indemnitee hereunder. The Company shall, to the fullest extent permitted by law, indemnify Indemnitee against any and all Expenses and, if requested by Indemnitee, shall (within ten (10) days after receipt by the Company of a written request therefor) advance, to the extent not prohibited by law, such Expenses to Indemnitee, which are incurred by Indemnitee in connection with any action brought by Indemnitee for indemnification or advance of Expenses from the Company under this Agreement or under any directors' and officers' liability insurance policies maintained by the Company if, in the case of indemnification, Indemnitee is wholly successful on the underlying claims; if Indemnitee is not wholly successful on the underlying claims, then such indemnification shall be only to the extent Indemnitee is successful on such underlying claims or otherwise as permitted by applicable law (unless a court of competent jurisdiction determines that the

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assertions made by Indemnitee in such Proceeding or otherwise were not made in good faith or were frivolous), whichever is greater.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e)Notwithstanding anything in this Agreement to the contrary, no determination as to entitlement of Indemnitee to indemnification under this Agreement shall be required to be made prior to the final disposition of the Proceeding.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;15.<u>Non-exclusivity; Survival of Rights; Insurance; Subrogation</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)The rights of indemnification and to receive advancement of Expenses as provided by this Agreement shall not be deemed exclusive of any other rights to which Indemnitee may at any time be entitled under applicable law, the Charter, the Bylaws, any agreement, a vote of stockholders or a resolution of directors, or otherwise. No amendment, alteration or repeal of this Agreement or of any provision hereof shall limit or restrict any right of Indemnitee under this Agreement in respect of any action taken or omitted by such Indemnitee in his Corporate Status prior to such amendment, alteration or repeal. To the extent that a change in Delaware law, whether by statute or judicial decision, permits greater indemnification or advancement of Expenses than would be afforded currently under the Charter, the Bylaws or this Agreement, it is the intent of the parties hereto that Indemnitee shall enjoy by this Agreement the greater benefits so afforded by such change. No right or remedy herein conferred is intended to be exclusive of any other right or remedy, and every other right and remedy shall be cumulative and in addition to every other right and remedy given hereunder or now or hereafter existing at law or in equity or otherwise. The assertion or employment of any right or remedy hereunder, or otherwise, shall not prevent the concurrent assertion or employment of any other right or remedy.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)The Company currently has directors and officers liability insurance and will use all reasonable efforts to maintain such insurance coverage during the term of this Agreement, but if it is unable to do so, it will immediately notify Indemnitee of this fact.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c)To the extent that the Company maintains an insurance policy or policies providing liability insurance for directors, officers, employees, or agents of the Enterprise, Indemnitee shall be covered by such policy or policies in accordance with its or their terms to the maximum extent of the coverage available for any such director, officer, employee or agent under such policy or policies. If, at the time of the receipt of a notice of a claim pursuant to the terms hereof, the Company has director and officer liability insurance in effect, the Company shall give prompt notice of such claim or of the commencement of a Proceeding, as the case may be, to the insurers in accordance with the procedures set forth in the respective policies. The Company shall thereafter take all necessary or desirable action to cause such insurers to pay, on behalf of the Indemnitee, all amounts payable as a result of such Proceeding in accordance with the terms of such policies. The Company shall keep Indemnitee reasonably informed as to the status of all relevant insurance matters.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d)In the event of any payment under this Agreement, the Company shall be subrogated to the extent of such payment to all of the rights of recovery of Indemnitee, who shall execute all papers required and take all action necessary to secure such rights,

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including execution of such documents as are necessary to enable the Company to bring suit to enforce such rights.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e)The Company shall not be liable under this Agreement to make any payment of amounts otherwise indemnifiable (or for which advancement is provided hereunder) hereunder if and to the extent that Indemnitee has otherwise actually received such payment under any insurance policy, contract, agreement or otherwise.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(f)The Company's obligation to indemnify or advance Expenses hereunder to Indemnitee who is or was serving at the request of the Company as a director, officer, trustee, partner, managing member, fiduciary, employee or agent of any other corporation, limited liability company, partnership, joint venture, trust, employee benefit plan or other enterprise shall be reduced by any amount Indemnitee has actually received as indemnification or advancement of Expenses from such other corporation, limited liability company, partnership, joint venture, trust or other enterprise.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;16.<u>Duration of Agreement</u>. This Agreement shall continue until and terminate upon the later of: (a) ten (10) years after the date that Indemnitee shall have ceased to serve as officer and/or director, whichever is later, of the Company or (b) one (1) year after the final termination of any Proceeding then pending in respect of which Indemnitee has rights of indemnification or advancement of Expenses under this Agreement and of any proceeding commenced by Indemnitee pursuant to <u>Section 14</u> of this Agreement relating thereto. The indemnification and advancement of expenses rights provided by or granted pursuant to this Agreement shall be binding upon and be enforceable by the parties hereto and their respective successors and assigns (including any direct or indirect successor by purchase, merger, consolidation or otherwise to all or substantially all of the business or assets of the Company), shall continue as to an Indemnitee who has ceased to be a director, officer, employee or agent of the Company or of any other Enterprise, and shall inure to the benefit of Indemnitee and his or her spouse, assigns, heirs, devisees, executors and administrators and other legal representatives.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;17.<u>Severability</u>. If any provision or provisions of this Agreement shall be held to be invalid, illegal or unenforceable for any reason whatsoever: (a) the validity, legality and enforceability of the remaining provisions of this Agreement (including without limitation, each portion of any Section of this Agreement containing any such provision held to be invalid, illegal or unenforceable, that is not itself invalid, illegal or unenforceable) shall not in any way be affected or impaired thereby and shall remain enforceable to the fullest extent permitted by law; (b) such provision or provisions shall be deemed reformed to the extent necessary to conform to applicable law and to give the maximum effect to the intent of the parties hereto; and (c) to the fullest extent possible, the provisions of this Agreement (including, without limitation, each portion of any Section of this Agreement containing any such provision held to be invalid, illegal or unenforceable, that is not itself invalid, illegal or unenforceable) shall be construed so as to give effect to the intent manifested thereby.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;18.<u>Enforcement</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)The Company expressly confirms and agrees that it has entered into this Agreement and assumed the obligations imposed on it hereby in order to induce Indemnitee to serve as a director and/or officer of the Company, and the Company acknowledges that Indemnitee is relying upon this Agreement in serving as a director and/or officer of the Company.

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)This Agreement constitutes the entire agreement between the parties hereto with respect to the subject matter hereof and supersedes and replaces all prior agreements and understandings, oral, written and implied, between the parties hereto with respect to the subject matter hereof, including any indemnification agreement previously entered into between the Company and the Indemnitee; provided, however, that this Agreement is a supplement to and in furtherance of the Charter, the Bylaws and applicable law, and shall not be deemed a substitute therefor, nor to diminish or abrogate any rights of Indemnitee thereunder.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;19.<u>Modification and Waiver</u>. No supplement, modification or amendment, or waiver of any provision, of this Agreement shall be binding unless executed in writing by the parties thereto. No waiver of any of the provisions of this Agreement shall be deemed or shall constitute a waiver of any other provisions of this Agreement nor shall any waiver constitute a continuing waiver. No supplement, modification or amendment of this Agreement or of any provision hereof shall limit or restrict any right of Indemnitee under this Agreement in respect of any action taken or omitted by such Indemnitee prior to such supplement, modification or amendment.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;20.<u>Notice by Indemnitee</u>. Indemnitee agrees promptly to notify the Company in writing upon being served with any summons, citation, subpoena, complaint, indictment, information or other document relating to any Proceeding or matter which may be subject to indemnification or advancement of Expenses covered hereunder. The failure of Indemnitee to so notify the Company shall not relieve the Company of any obligation which it may have to the Indemnitee under this Agreement or otherwise.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;21.<u>Notices</u>. All notices, requests, demands and other communications under this Agreement shall be in writing and shall be deemed to have been duly given if (a) delivered by hand and receipted for by the party to whom said notice or other communication shall have been directed, (b) mailed by certified or registered mail with postage prepaid, on the third business day after the date on which it is so mailed, (c) mailed by reputable overnight courier and receipted for by the party to whom said notice or other communication shall have been directed or (d) sent by facsimile transmission, with receipt of confirmation that such transmission has been received:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)If to Indemnitee, at the address indicated on the signature page of this Agreement, or such other address as Indemnitee shall provide to the Company.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)If to the Company, to:

Select Medical Holdings Corporation

4714 Gettysburg Road

Mechanicsburg, PA 17055

Attn: General Counsel

or to any other address as may have been furnished to Indemnitee by the Company. Either party may change his or its address for purposes of receiving notice under this Agreement by providing such address change by notice under this <u>Section 21</u>, which notice shall be effective as provided above in this Section 21.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;22.<u>Contribution</u>. To the fullest extent permissible under applicable law, if the indemnification provided for in this Agreement is unavailable to Indemnitee for any reason whatsoever, the Company, in lieu of indemnifying Indemnitee, shall contribute to the amount incurred by Indemnitee,

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whether for judgments, fines, penalties, excise taxes, amounts paid or to be paid in settlement and/or for Expenses, in connection with any claim relating to an indemnifiable event under this Agreement, in such proportion as is deemed fair and reasonable in light of all of the circumstances of such Proceeding in order to reflect (i) the relative benefits received by the Company, on the one hand, and Indemnitee, on the other hand, as a result of the event(s) and/or transaction(s) giving cause to such Proceeding; and/or (ii) the relative fault of the Company (and its other directors, officers, employees and agents), on the one hand, and Indemnitee, on the other hand, in connection with such event(s) and/or transaction(s).

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;23.<u>Internal Revenue Code Section 409A</u>. The Company intends for this Agreement to comply with the Indemnification exception under Section 1.409A-1(b)(10) of the regulations promulgated under the Internal Revenue Code of 1986, as amended (the "**<u>Code</u>**"), which provides that indemnification of, or the purchase of an insurance policy providing for payments of, all or part of the expenses incurred or damages paid or payable by Indemnitee with respect to a bona fide claim against Indemnitee or the Company do not provide for a deferral of compensation, subject to Section 409A of the Code, where such claim is based on actions or failures to act by Indemnitee in his or her capacity as a service provider of the Company. The parties intend that this Agreement be interpreted and construed with such intent.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;24.<u>Applicable Law and Consent to Jurisdiction</u>. This Agreement and the legal relations among the parties shall be governed by, and construed and enforced in accordance with, the laws of the State of Delaware, without regard to its conflict of laws rules. Except with respect to any arbitration commenced by Indemnitee pursuant to <u>Section 14(a)</u> of this Agreement, the Company and Indemnitee hereby irrevocably and unconditionally (i) agree that any action or proceeding arising out of or in connection with this Agreement shall be brought only in the Chancery Court of the State of Delaware (the "**<u>Delaware Court</u>**"), and not in any other state or federal court in the United States of America or any court in any other country, (ii) consent to submit to the exclusive jurisdiction of the Delaware Court for purposes of any action or proceeding arising out of or in connection with this Agreement, (iii) appoint, to the extent such party is not otherwise subject to service of process in the State of Delaware, irrevocably Corporation Trust Company, 1209 Orange Street, City of Wilmington, County of New Castle, Delaware 19801 as its agent in the State of Delaware as such party's agent for acceptance of legal process in connection with any such action or proceeding against such party with the same legal force and validity as if served upon such party personally within the State of Delaware, (iv) waive any objection to the laying of venue of any such action or proceeding in the Delaware Court, and (v) waive, and agree not to plead or to make, any claim that any such action or proceeding brought in the Delaware Court has been brought in an improper or inconvenient forum.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;25.<u>Headings</u>. The headings of the paragraphs of this Agreement are inserted for convenience only and shall not be deemed to constitute part of this Agreement or to affect the construction thereof.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;26.<u>Identical Counterparts</u>. This Agreement may be executed in one or more counterparts, each of which shall for all purposes be deemed to be an original but all of which together shall constitute one and the same Agreement. Only one such counterpart signed by the party against whom enforceability is sought needs to be produced to evidence the existence of this Agreement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;27.<u>Miscellaneous</u>. Use of the masculine pronoun shall be deemed to include usage of the feminine pronoun where appropriate. The headings of this Agreement are inserted for convenience only and shall not be deemed to constitute part of this Agreement or to affect the construction thereof.

**[*Signature Page Follows.*]**

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IN WITNESS WHEREOF, the parties hereto have executed this Indemnification Agreement as of the day and year first above written.

**SELECT MEDICAL HOLDINGS CORPORATION**, a Delaware corporation

By: _________________________________

Name: Robert A. Ortenzio

Title: Executive Chairman & Co-Founder

**INDEMNITEE**

_______________________________________

Name:

&nbsp;&nbsp;&nbsp;&nbsp;Title:

&nbsp;&nbsp;&nbsp;&nbsp;Address:

[*Signature Page to Select Indemnification Agreement*]

## Exhibit 10.2

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;

September 1, 2025

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;

Mr. Thomas P. Mullin

215 St. James Court

Mechanicsburg, PA 17050

Dear Mr. Mullin:

We are pleased to outline the terms of your promotion with Select Medical Corporation and its subsidiaries or affiliates (collectively, the "Company") as follows:

&nbsp;&nbsp;&nbsp;&nbsp;

1. **Title:** Chief Executive Officer

2. **Employment Classification:** Full-time

3. **Reports to:** David S. Chernow, Vice Chairman

4. **Commencement:** September 1, 2025

5. **Base Salary:** <u>September 1, 2025 – January 1, 2026</u>: $618,000.00/Year (Gross) $51,500.00/Month (Gross) to be paid on a bi-weekly basis <br> <u>On and after January 2, 2026</u>: $700,000/Year (Gross) $58,333.33/Month (Gross) to be paid on a bi-weekly basis

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*Mr. Thomas P. Mullin*

*September 1, 2025*

*Page 2*

&nbsp;&nbsp;&nbsp;&nbsp;

6. **Annual Bonus Opportunity:** <u>Calendar Year 2025</u>: You will be eligible to participate in the Company's Executive Bonus Plan for CY 2025. Under the Executive Bonus Plan, your annual discretionary bonus for CY 2025 would be up to 80% of your base salary for CY 2025 times a multiplier ranging from 0 to 2.5 times. This means you could receive nothing or up to twice your annual base salary as a bonus. The payment and amount of bonuses, if any, under the Executive Bonus Plan will be determined solely at the discretion of the Company's Board of Directors and your supervisors. An employee must be actively employed at the time bonuses are paid to be eligible to receive the bonus. <br> <u>Calendar Year 2026 and Beyond</u>: Subject to the approval of the Human Capital and Compensation Committee (the "Committee") of the Board of Directors of the Company's parent company, Select Medical Holdings Corporation ("SMHC"), at its meeting to be held on October 28, 2025, you will be eligible to participate in the Company's Executive Bonus Plan for CY 2026 and subsequent calendar years. Under the Executive Bonus Plan, your annual discretionary bonus for CY 2026 would be up to 100% of your base salary for CY 2026 times a multiplier ranging from 0 to 2.5 times. This means you could receive nothing or up to 2.5 your annual base salary as a bonus. The payment and amount of bonuses, if any, under the Executive Bonus Plan will be determined solely at the discretion of the Company's Board of Directors and your supervisors. An employee must be actively employed at the time bonuses are paid to be eligible to receive the bonus.

7. **Equity Compensation:** Awards of restricted common stock of SMHC are made at the discretion of the Committee. All grants are subject to (1) the grantee's execution of a Restricted Stock Award Agreement, (2) all terms and conditions set forth in SMHC's 2020 Equity Incentive Plan, including adjustments for future stock splits, and (3) income taxation and withholdings at the time of vesting.

8. **Health/Vision/Pharmacy Benefits, Dental Benefits, PTO, Disability, Life Insurance and 401(k)** As described on SelectBenefits website.

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*Mr. Thomas P. Mullin*

*September 1, 2025*

*Page 3*

&nbsp;&nbsp;&nbsp;&nbsp;

9. **Non-Competition Agreement:** You and the Company entered into that certain restrictive covenant letter agreement (including confidentiality, non- competition and non-solicitation agreements) dated August 29, 2020, as amended by that certain first amendment dated August 29, 2023. The offer and benefits set forth in this letter are contingent upon, and are made in consideration of, your execution and delivery of a second amendment to your restrictive covenant agreement, by which you agree to reaffirm your existing restrictive covenants, in form and substance acceptable to the Company.

10. **Change of Control Agreement:** Your change of control letter agreement dated February 18, 2021 will remain in full force and effect.

As per our corporate HR Policies, employment at the Company is at will. Neither the employee nor the Company is bound to continue the employment relationship if either chooses, at its will, to end the relationship at any time.

As per our corporate HR Policies, the Company may verify all statements made by you or contained in your resume. You understand that such verification may incorporate an examination of educational credentials, criminal convictions and driving records as required by the responsibilities of your position.

As a condition of your employment, you agree to have your wages deposited directly into your bank account. This condition of employment is permitted under the laws of the Commonwealth of Pennsylvania and if you are unable to fulfill this requirement, this offer of employment may be rescinded without cause or liability.

If the foregoing terms are acceptable, please execute below and return one copy in the self-addressed envelope to me as soon as possible.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Sincerely,

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**SELECT MEDICAL CORPORATION**, a Delaware corporation, for itself and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;on behalf of its subsidiaries and affiliates

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;By: <u>_/s/ John A. Saich______________________________</u>

John A. Saich,

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;President

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;

By signing below, I also represent to the Company that I have disclosed information regarding the following:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i)any criminal complaint, indictment or criminal proceeding (involving other than a misdemeanor offense) in which I am named as a defendant;

------

*Mr. Thomas P. Mullin*

*September 1, 2025*

*Page 4*

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii)any investigation or proceeding, whether administrative, civil or criminal, relating to an allegation against me of filing false health care claims, violating anti-kickback laws, or engaging in other billing improprieties; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iii)any (past or present) threatened, proposed, or actual exclusion from any federally funded health care program, including Medicare and Medicaid.

Employee acknowledges that he will be subject to the Company's Code of Conduct and agrees to comply with its terms and to execute certifications of compliance relating thereto from time to time.

<u>/s/ Thomas P. Mullin________</u>

**Thomas P. Mullin**

Mullin, Thomas CEO Promotion Corporate offer letter 090125

Cc: Corporate Human Resources/Payroll – Mechanicsburg, PA

## Exhibit 31.1

**EXHIBIT 31.1**

**<u>SELECT MEDICAL HOLDINGS CORPORATION</u>**

**<u>CERTIFICATIONS PURSUANT TO SECTION 302 OF</u>**

**<u>THE SARBANES-OXLEY ACT OF 2002</u>**

**<u>CERTIFICATION</u>**

I, Thomas P. Mullin, certify that:

1.&nbsp;&nbsp;&nbsp;&nbsp;I have reviewed this quarterly report on Form 10-Q of Select Medical Holdings Corporation;

2.&nbsp;&nbsp;&nbsp;&nbsp;Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.&nbsp;&nbsp;&nbsp;&nbsp;Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4.&nbsp;&nbsp;&nbsp;&nbsp;The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;a)&nbsp;&nbsp;&nbsp;&nbsp;Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;b)&nbsp;&nbsp;&nbsp;&nbsp;Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;c)&nbsp;&nbsp;&nbsp;&nbsp;Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;d)&nbsp;&nbsp;&nbsp;&nbsp;Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and

5.&nbsp;&nbsp;&nbsp;&nbsp;The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;a)&nbsp;&nbsp;&nbsp;&nbsp;All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;b)&nbsp;&nbsp;&nbsp;&nbsp;Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.

---

| | |
|:---|:---|
| Date: October 30, 2025 | /s/ Thomas P. Mullin |
|  | Thomas P. Mullin |
|  | *Chief Executive Officer* |

---

## Exhibit 31.2

**EXHIBIT 31.2**

**<u>SELECT MEDICAL HOLDINGS CORPORATION</u>**

**<u>CERTIFICATIONS PURSUANT TO SECTION 302 OF</u>**

**<u>THE SARBANES-OXLEY ACT OF 2002</u>**

**<u>CERTIFICATION</u>**

I, Michael F. Malatesta, certify that:

1.&nbsp;&nbsp;&nbsp;&nbsp;I have reviewed this quarterly report on Form 10-Q of Select Medical Holdings Corporation;

2.&nbsp;&nbsp;&nbsp;&nbsp;Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.&nbsp;&nbsp;&nbsp;&nbsp;Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4.&nbsp;&nbsp;&nbsp;&nbsp;The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;a)&nbsp;&nbsp;&nbsp;&nbsp;Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;b)&nbsp;&nbsp;&nbsp;&nbsp;Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;c)&nbsp;&nbsp;&nbsp;&nbsp;Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;d)&nbsp;&nbsp;&nbsp;&nbsp;Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and

5.&nbsp;&nbsp;&nbsp;&nbsp;The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;a)&nbsp;&nbsp;&nbsp;&nbsp;All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;b)&nbsp;&nbsp;&nbsp;&nbsp;Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.

---

| | |
|:---|:---|
| Date: October 30, 2025 | /s/ Michael F. Malatesta |
|  | Michael F. Malatesta |
|  | *Executive Vice President and Chief Financial Officer* |

---

## Exhibit 32.1

**EXHIBIT 32.1**

**CERTIFICATION PURSUANT TO**

**18 U.S.C. SECTION 1350, AS ADOPTED PURSUANT TO**

**SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002**

In connection with the Quarterly Report on Form 10-Q of Select Medical Holdings Corporation (the "Company") for the period ended September 30, 2025 as filed with the Securities and Exchange Commission on the date hereof (the "Report"), we, Thomas P. Mullin and Michael F. Malatesta, Chief Executive Officer and Chief Financial Officer, respectively, of the Company, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that to our knowledge:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(1)&nbsp;&nbsp;&nbsp;&nbsp;The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(2)&nbsp;&nbsp;&nbsp;&nbsp;The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company as of the dates and for the periods expressed in the Report.

October 30, 2025

---

| |
|:---|
| /s/ Thomas P. Mullin |
| Thomas P. Mullin |
| *Chief Executive Officer* |
| /s/ Michael F. Malatesta |
| Michael F. Malatesta |
| *Executive Vice President and Chief Financial Officer* |

---

<br>