# SELECT MEDICAL HOLDINGS CORP (SEM) Informational only - not investment advice. CIK: 0001320414 SIC: 8060 Services-Hospitals SIC breadcrumb: [Services](/division/I/) > [SIC Major Group 80](/major-group/80/) > [SIC 8060 Services-Hospitals](/industry/8060/) Latest 10-K filed: 2026-02-19 SEC page: https://www.sec.gov/edgar/browse/?CIK=1320414 Filing source: https://www.sec.gov/Archives/edgar/data/1320414/000132041426000007/sem-20251231.htm ## Selected Fundamentals | Metric | Value | Unit | FY | Filed | | --- | ---: | --- | ---: | --- | | Revenue | 5452830000 | USD | 2025 | 2026-02-19 | | Net income | 146219000 | USD | 2025 | 2026-02-19 | | Assets | 5851589000 | USD | 2025 | 2026-02-19 | ## Financials Annual standardized facts from SEC companyfacts as of latest extracted filing date 2026-02-19. Source: https://data.sec.gov/api/xbrl/companyfacts/CIK0001320414.json. Derived margins are computed from the extracted annual SEC facts. | Metric | 2016 | 2017 | 2018 | 2019 | 2020 | 2021 | 2022 | 2023 | 2024 | 2025 | | --- | ---: | ---: | ---: | ---: | ---: | ---: | ---: | ---: | ---: | ---: | | Revenue | 4,217,460,000 | 4,365,245,000 | 5,081,258,000 | 5,453,922,000 | 5,531,713,000 | 6,204,515,000 | 4,609,179,000 | 4,825,977,000 | 5,187,105,000 | 5,452,830,000 | | Net income | 115,411,000 | 177,184,000 | 137,840,000 | 148,449,000 | 258,995,000 | 402,225,000 | 158,994,000 | 243,491,000 | 214,038,000 | 146,219,000 | | Operating income | 299,847,000 | 355,878,000 | 417,279,000 | 471,881,000 | 567,657,000 | 713,774,000 | 144,754,000 | 267,242,000 | 268,315,000 | 336,170,000 | | Diluted EPS | 0.87 | 1.33 | 1.02 | 1.10 | 1.93 | 2.98 | 1.23 | 1.91 | 1.66 | 1.16 | | Assets | 4,920,626,000 | 5,127,166,000 | 5,964,265,000 | 7,340,288,000 | 7,655,399,000 | 7,360,171,000 | 7,665,293,000 | 7,689,631,000 | 5,607,951,000 | 5,851,589,000 | | Liabilities | 3,592,566,000 | 3,553,744,000 | 4,267,537,000 | 5,436,712,000 | 6,004,255,000 | 5,995,236,000 | 6,274,686,000 | 6,115,616,000 | 3,610,856,000 | 3,815,850,000 | | Stockholders' equity | 815,725,000 | 823,368,000 | 803,042,000 | 770,972,000 | 1,060,480,000 | 1,109,981,000 | 1,121,922,000 | 1,288,304,000 | 1,681,355,000 | 1,705,584,000 | | Cash and cash equivalents | 99,029,000 | 122,549,000 | 175,178,000 | 335,882,000 | 577,061,000 | 74,310,000 | 97,906,000 | 52,632,000 | 59,694,000 | 26,523,000 | | Net margin | 2.74% | 4.06% | 2.71% | 2.72% | 4.68% | 6.48% | 3.45% | 5.05% | 4.13% | 2.68% | | Operating margin | 7.11% | 8.15% | 8.21% | 8.65% | 10.26% | 11.50% | 3.14% | 5.54% | 5.17% | 6.17% | ## Quarterly Quarterly standardized facts from SEC companyfacts as of latest extracted filing date 2026-04-30. Source: https://data.sec.gov/api/xbrl/companyfacts/CIK0001320414.json. Flow metrics use discrete quarter-length periods from 10-Q/10-Q/A filings. Q4 revenue and net income are derived only when annual FY and nine-month YTD facts exist for the same fiscal year; derived Q4 values are labeled. EPS Q4 is not derived. | Quarter | End date | Revenue | Net income | Diluted EPS | Method | | --- | --- | ---: | ---: | ---: | --- | | 2022-Q2 | 2022-06-30 | | | 0.43 | reported discrete quarter | | 2022-Q3 | 2022-09-30 | | | 0.21 | reported discrete quarter | | 2023-Q2 | 2023-03-31 | | 70,805,000 | | reported discrete quarter | | 2023-Q1 | 2023-03-31 | 1,664,980,000 | | 0.56 | reported discrete quarter | | 2023-Q2 | 2023-06-30 | 1,674,528,000 | | 0.61 | reported discrete quarter | | 2023-Q3 | 2023-06-30 | | 78,237,000 | | reported discrete quarter | | 2023-Q3 | 2023-09-30 | 1,665,694,000 | | 0.38 | reported discrete quarter | | 2023-Q4 | 2023-12-31 | 1,658,856,000 | 46,269,000 | | derived Q4 = FY annual - nine-month YTD | | 2024-Q1 | 2024-03-31 | 1,788,809,000 | 96,897,000 | 0.75 | reported discrete quarter | | 2024-Q2 | 2024-03-31 | | 96,897,000 | | reported discrete quarter | | 2024-Q3 | 2024-06-30 | | 77,563,000 | | reported discrete quarter | | 2024-Q2 | 2024-06-30 | 1,759,663,000 | | 0.60 | reported discrete quarter | | 2024-Q3 | 2024-09-30 | 1,761,220,000 | | 0.43 | reported discrete quarter | | 2024-Q4 | 2024-12-31 | | -16,050,000 | | derived Q4 = FY annual - nine-month YTD | | 2025-Q1 | 2025-03-31 | 1,353,172,000 | 56,681,000 | 0.44 | reported discrete quarter | | 2025-Q2 | 2025-03-31 | | 56,681,000 | | reported discrete quarter | | 2025-Q3 | 2025-06-30 | | 40,571,000 | | reported discrete quarter | | 2025-Q2 | 2025-06-30 | 1,339,579,000 | | 0.32 | reported discrete quarter | | 2025-Q3 | 2025-09-30 | 1,363,445,000 | | 0.23 | reported discrete quarter | | 2025-Q4 | 2025-12-31 | 1,396,634,000 | 20,174,000 | | derived Q4 = FY annual - nine-month YTD | | 2026-Q1 | 2026-03-31 | 1,421,476,000 | 43,995,000 | 0.35 | reported discrete quarter | ## Macro Cross-References - [CPIAUCSL](/indicator/CPIAUCSL/): Consumer Price Index for All Urban Consumers: All Items in U.S. City Average - [UNRATE](/indicator/UNRATE/): Unemployment Rate - [FEDFUNDS](/indicator/FEDFUNDS/): Federal Funds Effective Rate - [CES0500000003](/indicator/CES0500000003/): Average Hourly Earnings of All Employees, Total Private - [DFEDTARU](/indicator/DFEDTARU/): Federal Funds Target Range - Upper Limit - [DFEDTARL](/indicator/DFEDTARL/): Federal Funds Target Range - Lower Limit - [DGS3MO](/indicator/DGS3MO/): Market Yield on U.S. Treasury Securities at 3-Month Constant Maturity - [DGS2](/indicator/DGS2/): Market Yield on U.S. Treasury Securities at 2-Year Constant Maturity - [DGS10](/indicator/DGS10/): Market Yield on U.S. Treasury Securities at 10-Year Constant Maturity - [DGS30](/indicator/DGS30/): Market Yield on U.S. Treasury Securities at 30-Year Constant Maturity - [T10Y2Y](/indicator/T10Y2Y/): 10-Year Treasury Constant Maturity Minus 2-Year Treasury Constant Maturity - [CPILFESL](/indicator/CPILFESL/): Consumer Price Index for All Urban Consumers: All Items Less Food and Energy - [CPIUFDSL](/indicator/CPIUFDSL/): Consumer Price Index for All Urban Consumers: Food - [CPIENGSL](/indicator/CPIENGSL/): Consumer Price Index for All Urban Consumers: Energy - [CUSR0000SAH1](/indicator/CUSR0000SAH1/): Consumer Price Index for All Urban Consumers: Shelter - [PCEPI](/indicator/PCEPI/): Personal Consumption Expenditures: Chain-type Price Index - [PCEPILFE](/indicator/PCEPILFE/): Personal Consumption Expenditures Excluding Food and Energy: Chain-type Price Index - [PPIACO](/indicator/PPIACO/): Producer Price Index by Commodity: All Commodities - [T10YIE](/indicator/T10YIE/): 10-Year Breakeven Inflation Rate - [U6RATE](/indicator/U6RATE/): Total Unemployed, Plus All Marginally Attached Workers Plus Total Employed Part Time for Economic Reasons - [PAYEMS](/indicator/PAYEMS/): All Employees, Total Nonfarm - [CIVPART](/indicator/CIVPART/): Labor Force Participation Rate - [EMRATIO](/indicator/EMRATIO/): Employment-Population Ratio - [UNEMPLOY](/indicator/UNEMPLOY/): Unemployed - [CE16OV](/indicator/CE16OV/): Employment Level - [ICSA](/indicator/ICSA/): Initial Claims - [JTSJOL](/indicator/JTSJOL/): Job Openings: Total Nonfarm - [JTSQUR](/indicator/JTSQUR/): Quits: Total Nonfarm - [GDPC1](/indicator/GDPC1/): Real Gross Domestic Product - [A191RL1Q225SBEA](/indicator/A191RL1Q225SBEA/): Real Gross Domestic Product: Percent Change from Preceding Period - [INDPRO](/indicator/INDPRO/): Industrial Production: Total Index - [TCU](/indicator/TCU/): Capacity Utilization: Total Index - [HOUST](/indicator/HOUST/): New Privately-Owned Housing Units Started: Total Units - [PERMIT](/indicator/PERMIT/): New Privately-Owned Housing Units Authorized in Permit-Issuing Places: Total Units - [RSAFS](/indicator/RSAFS/): Advance Retail Sales: Retail Trade - [PCE](/indicator/PCE/): Personal Consumption Expenditures - [DSPIC96](/indicator/DSPIC96/): Real Disposable Personal Income - [PSAVERT](/indicator/PSAVERT/): Personal Saving Rate - [M2SL](/indicator/M2SL/): M2 - [BOPGSTB](/indicator/BOPGSTB/): U.S. International Trade in Goods and Services: Balance - [MSPUS](/indicator/MSPUS/): Median Sales Price of Houses Sold for the United States - [HSN1F](/indicator/HSN1F/): New One Family Houses Sold: United States - [RHORUSQ156N](/indicator/RHORUSQ156N/): Homeownership Rate in the United States - [TTLCONS](/indicator/TTLCONS/): Total Construction Spending: Total Construction in the United States - [RRVRUSQ156N](/indicator/RRVRUSQ156N/): Rental Vacancy Rate in the United States - [TOTALSL](/indicator/TOTALSL/): Total Consumer Credit Owned and Securitized - [REVOLSL](/indicator/REVOLSL/): Revolving Consumer Credit Owned and Securitized - [DRCCLACBS](/indicator/DRCCLACBS/): Delinquency Rate on Credit Card Loans, All Commercial Banks - [GDP](/indicator/GDP/): Gross Domestic Product - [GPDI](/indicator/GPDI/): Gross Private Domestic Investment - [GCE](/indicator/GCE/): Government Consumption Expenditures and Gross Investment - [PCEC](/indicator/PCEC/): Personal Consumption Expenditures - [NETEXP](/indicator/NETEXP/): Net Exports of Goods and Services - [GFDEBTN](/indicator/GFDEBTN/): Federal Debt: Total Public Debt - [GFDEGDQ188S](/indicator/GFDEGDQ188S/): Federal Debt: Total Public Debt as Percent of Gross Domestic Product - [FYFSD](/indicator/FYFSD/): Federal Surplus or Deficit - [FGRECPT](/indicator/FGRECPT/): Federal Government Current Receipts - [FGEXPND](/indicator/FGEXPND/): Federal Government: Current Expenditures - [MANEMP](/indicator/MANEMP/): All Employees, Manufacturing - [USCONS](/indicator/USCONS/): All Employees, Construction - [USTRADE](/indicator/USTRADE/): All Employees, Retail Trade - [USFIRE](/indicator/USFIRE/): All Employees, Financial Activities - [USGOVT](/indicator/USGOVT/): All Employees, Government - [AWHAETP](/indicator/AWHAETP/): Average Weekly Hours of All Employees, Total Private - [DGORDER](/indicator/DGORDER/): Manufacturers' New Orders: Durable Goods - [NEWORDER](/indicator/NEWORDER/): Manufacturers' New Orders: Nondefense Capital Goods Excluding Aircraft - [BUSINV](/indicator/BUSINV/): Total Business Inventories - [EXPGS](/indicator/EXPGS/): Exports of Goods and Services - [IMPGS](/indicator/IMPGS/): Imports of Goods and Services - [IR](/indicator/IR/): Import Price Index (End Use): All Commodities - [PPIFIS](/indicator/PPIFIS/): Producer Price Index by Commodity: Final Demand ## Latest quarter (10-Q) Latest 10-Q source: https://www.sec.gov/Archives/edgar/data/1320414/000132041426000011/sem-20260331.htm Extracted between Part I Item 2 and the next Item 3/4 or Part II heading after HTML sanitization. Confidence: high Filing date: 2026-04-30 Report date: 2026-03-31 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: •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; •adverse economic conditions including an inflationary environment, and changes to United States tariff and import/export regulations, could cause us to continue to experience increases in the prices of labor and other costs of doing business resulting in a negative impact on our business, operating results, cash flows, and financial condition; •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; •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; •the negative impact of public threats such as a global pandemic or widespread outbreak of an infectious disease similar to the COVID-19 pandemic; •political instability, conflicts (such as the ongoing war between Russia and Ukraine, conflicts in the Middle East, tensions between China and Taiwan, and recent U.S. military action in Venezuela), and government shutdowns, civil disturbances, and international events; •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; •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; •a government investigation or assertion that we have violated applicable regulations may result in sanctions or reputational harm and increased costs; •acquisitions or joint ventures may prove difficult or unsuccessful, use significant resources, or expose us to unforeseen liabilities; •our plans and expectations related to our acquisitions and our ability to realize anticipated synergies; •private third-party payors for our services may adopt payment policies that could limit our future revenue and profitability; 17 Table of Contents •the failure to maintain established relationships with the physicians in the areas we serve could reduce our revenue and profitability; •the proposed Merger, including the ability of the parties to consummate the proposed Merger, if at all, on the anticipated terms and timing, including obtaining the stockholder and regulatory approvals, and the satisfaction of other conditions to the completion of the proposed Merger; •potential payment of the termination fees under specified circumstances if the Merger Agreement is terminated; •the outcome of any current or potential litigation against us, and members of our Board of Directors relating to the proposed Merger; •competition may limit our ability to grow and result in a decrease in our revenue and profitability; •the loss of key members of our management team could significantly disrupt our operations; •the effect of claims asserted against us could subject us to substantial uninsured liabilities; •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 •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, 2025, 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. 18 Table of Contents 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 March 31, 2026, we had operations in 38 states and the District of Columbia. We operated 103 critical illness recovery hospitals in 28 states, 41 rehabilitation hospitals in 15 states, and 1,912 outpatient rehabilitation clinics in 37 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 $1,421.5 million for the three months ended March 31, 2026. Of this total, we earned approximately 45% of our revenue from our critical illness recovery hospital segment, approximately 25% from our rehabilitation hospital segment, and approximately 23% 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 March 2, 2026, the Company entered into an agreement and plan of merger, by and among the Company, Stallion Intermediate Corporation, a Delaware corporation (“Parent”), and Stallion MergerSub Corporation, a Delaware corporation and a wholly-owned subsidiary of Parent (“Merger Sub”) (as may be amended from time to time, the “Merger Agreement”), pursuant to which and subject to the terms and conditions therein, at the effective time of the Merger (the “Effective Time”), Merger Sub will merge with and into the Company, with the Company surviving as a wholly-owned subsidiary of Parent (the “Merger”). Parent is a wholly-owned subsidiary of WCAS XIV, L.P., an investment fund affiliated with Welsh, Carson, Anderson & Stowe and a member of a consortium led by Robert A. Ortenzio, our Executive Chairman, Co-Founder and Director and Martin F. Jackson, our Senior Executive Vice President of Strategic Finance and Operations. Upon completion of the Merger, each issued and outstanding share of Company common stock, par value $0.001 per share (subject to certain exceptions, including Rollover Shares, shares held by Parent or the Company as treasury stock or otherwise, and shares for which appraisal rights have been properly demanded), will be converted into the right to receive $16.50 per share in cash, without interest (the “Merger Consideration”). Immediately prior to the Effective Time, each share of common stock that is subject to forfeiture conditions (other than any such shares that are Rollover Shares (as defined in the Merger Agreement)) will vest in full and be treated the same as all other shares of common stock, entitling the holder thereof to receive the Merger Consideration. Concurrently with the execution of the Merger Agreement, WCAS XIV, L.P. (in such capacity, the “Equity Investor”) committed to provide equity financing of up to $880.0 million to fund a portion of the Merger Consideration and related fees and expenses, on the terms and subject to the conditions set forth in an equity commitment letter. In addition, Parent has obtained committed debt financing pursuant to a debt commitment letter to fund the remaining portion of the amounts required to consummate the Merger. The Equity Investor (in such capacity, the “Guarantor”) also entered into a limited guaranty in favor of the Company, guaranteeing certain payment obligations of Parent and Merger Sub under the Merger Agreement, including payment of the termination fee that may be owed by Parent. The completion of the Merger is subject to the receipt of required regulatory approvals, including certain healthcare regulatory approvals, the approval of the Company’s stockholders (including a separate majority vote of shares not beneficially owned by Parent, Merger Sub, the Rollover Holders (as defined in the Merger Agreement) or their respective affiliates), and other customary closing conditions. The applicable waiting period under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended, expired on April 27, 2026. The Merger Agreement does not contain any financing condition. The Company currently expects to complete the Merger in the middle of 2026, although there can be no assurance that the Merger will occur in accordance with the expected plans or anticipated timeline, or at all. The Merger Agreement contains certain customary termination rights f [Excerpt truncated for page length; source filing is linked above.] ## Latest 10-K MD&A Extracted between Item 7 and the next Item 7A/8 heading after HTML sanitization. Confidence: high Item 7.    Management’s Discussion and Analysis of Financial Condition and Results of Operations. You should read this discussion together with the consolidated financial statements and accompanying notes included elsewhere herein. This section of this 10-K generally discusses 2025 and 2024 items and year-to-year comparisons between 2025 and 2024. Discussions of 2023 items and year-to-year comparisons between 2024 and 2023 that are not included in this Form 10-K can be found in “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in Part II, Item 7 of the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2024. 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 December 31, 2025, we had operations in 39 states and the District of Columbia. We operated 104 critical illness recovery hospitals in 28 states, 38 rehabilitation hospitals in 15 states, and 1,917 outpatient rehabilitation clinics in 39 states and the District of Columbia as of December 31, 2025. Our reportable segments include the critical illness recovery hospital segment, the rehabilitation hospital segment, and the outpatient rehabilitation segment. We had revenue of $5,452.8 million for the year ended December 31, 2025. Of this total, we earned approximately 45% of our revenue from our critical illness recovery hospital segment, approximately 24% 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 November 25, 2024, Select completed a tax-free distribution of 104,093,503 shares of common stock of Concentra Group Holdings Parent, Inc. (“Concentra”), a previously wholly-owned subsidiary of Select, to its stockholders. 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 years ended December 31, 2023, 2024, and 2025. On November 24, 2025, the Company received a non-binding indication of interest from Robert A. Ortenzio, our Executive Chairman, Co-Founder and Director, to acquire all of the Company’s outstanding shares for cash consideration of $16.00 to $16.20 per share of our common stock (the “Proposal” and such transaction, the “Take Private Transaction”). Mr. Ortenzio publicly announced the Proposal on November 24, 2025 in a Schedule 13D filing with the SEC. On November 25, 2025, in connection with the Proposal, the disinterested members of the Board of Directors met and voted to form an independent special committee of the Board of Directors (the “Special Committee”). The Special Committee is carefully reviewing and evaluating the Proposal in consultation with their advisors and will determine the appropriate course of action in the best interests of the Company and its stockholders. In connection therewith, the Special Committee is evaluating other potential strategic alternatives to maximize stockholder value. 60 Table of Contents 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 accounting principles generally accepted in the United States of America (“GAAP”). Items excluded from Adjusted EBITDA are significant components in understanding and assessing financial performance. Adjusted EBITDA should not be considered in isolation, or as an alternative to, or substitute for, income from continuing operations, income from continuing operations before other income and expense, cash flows generated by operations, investing or financing activities, or other financial statement data presented in the consolidated financial statements as indicators of financial performance or liquidity. Because Adjusted EBITDA is not a measurement determined in accordance with GAAP and is thus susceptible to varying definitions, Adjusted EBITDA as presented may not be comparable to other similarly titled measures of other companies. 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, 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. For the Year Ended December 31, 2023 2024 2025 (in thousands) Income from continuing operations, net of tax $ 110,471  $ 129,987  $ 214,533  Income tax expense from continuing operations 29,253  44,782  58,216  Interest expense 154,165  128,605  117,942  Equity in earnings of unconsolidated subsidiaries (41,339) (63,904) (54,521) Loss on early retirement of debt 14,692  28,845  —  Income from continuing operations before other income and expense 267,242  268,315  336,170  Stock compensation expense: Included in general and administrative 36,041  79,931  13,285  Included in cost of services 7,117  19,283  3,417  Depreciation and amortization 135,691  142,866  140,303  Adjusted EBITDA $ 446,091  $ 510,395  $ 493,175  61 Table of Contents Summary Financial Results Income from continuing operations, net of tax, was $214.5 million, $130.0 million, and $110.5 million for the years ended December 31, 2025, 2024, and 2023, respectively. Income from continuing operations, net of tax, included losses on early retirement of debt of $28.8 million and $14.7 million during the years ended December 31, 2024 and 2023, respectively. The following tables reconcile our segment performance measures to our consolidated operating results for the years ended December 31, 2025, 2024, and 2023: For the Year Ended December 31, 2025 Critical Illness Recovery Hospital Rehabilitation Hospital Outpatient Rehabilitation Other Total (in thousands) Revenue $ 2,477,814  $ 1,288,954  $ 1,284,873  $ 401,189  $ 5,452,830  Operating expenses (2,213,887) (1,010,332) (1,194,710) (559,020) (4,977,949) Depreciation and amortization (66,909) (30,319) (36,357) (6,718) (140,303) Other operating income 1,520  —  —  72  1,592  Income from continuing operations before other income and expense 198,538  248,303  53,806  (164,477) 336,170  Depreciation and amortization 66,909  30,319  36,357  6,718  140,303  Stock compensation expense —  —  —  16,702  16,702  Adjusted EBITDA $ 265,447  $ 278,622  $ 90,163  $ (141,057) $ 493,175  Adjusted EBITDA margin 10.7  % 21.6  % 7.0  % N/M 9.0  % For the Year Ended December 31, 2024 Critical Illness Recovery Hospital Rehabilitation Hospital Outpatient Rehabilitation Other Total (in thousands) Revenue $ 2,444,196  $ 1,110,592  $ 1,250,294  $ 382,023  $ 5,187,105  Operating expenses (2,145,595) (864,844) (1,141,715) (627,176) (4,779,330) Depreciation and amortization (69,842) (28,442) (36,579) (8,003) (142,866) Other operating income 3,033  —  (2) 375  3,406  Income from continuing operations before other income and expense 231,792  217,306  71,998  (252,781) 268,315  Depreciation and amortization 69,842  28,442  36,579  8,003  142,866  Stock compensation expense —  —  —  99,214  99,214  Adjusted EBITDA $ 301,634  $ 245,748  $ 108,577  $ (145,564) $ 510,395  Adjusted EBITDA margin 12.3  % 22.1  % 8.7  % N/M 9.8  % For the Year Ended December 31, 2023 Critical Illness Recovery Hospital Rehabilitation Hospital Outpatient Rehabilitation Other Total (in thousands) Revenue $ 2,299,773  $ 979,585  $ 1,188,914  $ 357,705  $ 4,825,977  Operating expenses (2,053,758) (758,466) (1,077,322) (535,016) (4,424,562) Depreciation and amortization (63,865) (28,055) (35,210) (8,561) (135,691) Other operating income —  756  276  486  1,518  Income from continuing operations before other income and expense 182,150  193,820  76,658  (185,386) 267,242  Depreciation and amortization 63,865  28,055  35,210  8,561  135,691  Stock compensation expense —  —  —  43,158  43,158  Adjusted EBITDA $ 246,015  $ 221,875  $ 111,868  $ (133,667) $ 446,091  Adjusted EBITDA margin 10.7  % 22.6  % 9.4  % N/M 9.2  % 62 Table of Contents The following tables summarize the changes in our segment performance measures for the year-to-date periods specified below. 2025 Compared to 2024 Critical Illness Recovery Hospital Rehabilitation Hospital Outpatient Rehabilitation Other Total Change in revenue 1.4  % 16.1  % 2.8  % 5.0  % 5.1  % Change in income from continuing operations before other income and expense (14.3) % 14.3  % (25.3) % N/M 25.3  % Change in Adjusted EBITDA (12.0) % 13.4  % (17.0) % N/M (3.4) % 2024 Compared to 2023 Critical Illness Recovery Hospital Rehabilitation Hospital Outpatient Rehabilitation Other Total Change in revenue 6.3  % 13.4  % 5.2  % 6.8  % 7.5  % Change in income from continuing operations before other income and expense 27.3  % 12.1  % (6.1) % N/M 0.4  % Change in Adjusted EBITDA 22.6  % 10.8  % (2.9) % N/M 14.4  % _______________________________________________________________________________ N/M    Not meaningful. 63 Table of Contents Regulatory Changes 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 and CMS. Revenues from providing services to patients covered under the Medicare program represented approximately 31%, 29%, and 29% of our revenue for the years ended December 31, 2023, 2024, and 2025, respectively. The Medicare program reimburses various types of providers using different payment methodologies. Those payment methodologies are complex and are described elsewhere in this report under “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. One Big Beautiful Bill Act On July 4, 2025, President Trump signed OBBBA into law. OBBBA made several significant changes to Medicaid funding and coverage requirements that will impact many health care providers. The 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 changes to Medicaid provider taxes, provider tax waivers, and state directed payments. On January 29, 2026, CMS issued a final rule titled "Preserving Medicaid Funding for Vulnerable Populations - Closing a Health Care-Related Tax Loophole.” Effective April 3, 2026, the rule finalizes and codifies proposed regulations under the OBBBA to close a loophole that currently allows some health care-related taxes, especially taxes on managed care organizations, to be imposed at higher tax rates on Medicaid taxable units than non-Medicaid taxable units. It is likely that many states will need to reform their Medicaid programs to account for the reduced federal funding under the OBBBA. 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 PAYGO Act cuts to government spending through a sequestration provision. A sequestration cut under the BCA currently reduces Medicare payments to all providers and suppliers by 2%. Medicare payments would have been reduced by an additional 4% as a result of a PAYGO sequestration order, without relief from Congress. However, the Continuing Appropriations, Agriculture, Legislative Branch, Military Construction and Veterans Affairs, and Extensions Act, 2026 (Pub. L. No. 119-37) reset the PAYGO scorecards to zero at the end of 2025. This eliminated the 4% PAYGO sequestration cut to Medicare payments in 2026. The 2% BCA sequestration cut to Medicare payments will continue to apply. 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. One of the blanket waivers expanded the types of health care professionals who could furnish telehealth services to include all those who are eligible to bill Medicare for their professional services. This allowed health care professionals who were previously ineligible to furnish and bill for Medicare telehealth services, including physical therapists, occupational therapists, speech language pathologists, and others, to receive payment for Medicare telehealth services. Pursuant to the Coronavirus Preparedness and Response Supplemental Appropriations Act, Public Law 116-123, CMS also waived Medicare telehealth payment requirements during the emergency so that beneficiaries in all areas of the country (not just rural areas) 64 Table of Contents could receive telehealth services, including in their homes. In the Health Extenders, Improving Access to Medicare, Medicaid, and CHIP, and Strengthening Public Health Act of 2022, Congress extended to December 31, 2024, several telehealth flexibilities that were scheduled to expire 151 days after the end of the COVID-19 public health emergency, including the expansion of permitted originating sites for telehealth, expansion of eligible practitioners for furnishing telehealth, and coverage of audio-only telehealth services. The American Relief Act, 2025, Full-Year Continuing Appropriations and Extensions Act, 2025, and Continuing Appropriations, Agriculture, Legislative Branch, Military Construction and Veterans Affairs, and Extensions Act, 2026 further extended certain telehealth waivers to March 31, 2025, September 30, 2025, and January 30, 2026, respectively. CMS issued additional waivers to permit more than 150 other 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 MPFS final rule, CMS extended some of the telehealth flexibilities through December 31, 2025, including regulations that allow (1) the use of real-time audio and visual interactive telecommunications for compliance with the direct supervision requirement, and (2) a distant site practitioner to provide telehealth services from their home using their currently enrolled practice location. CMS also made a permanent change to the telehealth rules in the calendar year 2025 MPFS final rule to allow telehealth to be provided for any service using an audio-only communication technology in certain situations when the patient is not able to use video technology. In the calendar year 2026 MPFS final rule, CMS permanently adopted a definition of direct supervision that allows the physician or supervising practitioner to provide supervision through real-time audio and visual interactive telecommunications. 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 LTCH-PPS. Fiscal Year 2024. 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. Fiscal Year 2025. 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. Fiscal Year 2026. 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 2025 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. See high cost outlier risk factor within “Item 1A. Risk Factors”. 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, 65 Table of Contents 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 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. 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. CMS added a new requirement that every new LTCH will be subject to outlier reconciliation. The revised policy was scheduled to be effective for cost reporting periods beginning on or after October 1, 2024. However, CMS issued Transmittal 13428 on September 22, 2025, 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 IRF-PPS. Fiscal Year 2024. 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 2022 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. Fiscal Year 2025. 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. Fiscal Year 2026. On August 5, 2025, CMS published the 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). Certain errors in the final rule were corrected in a document published on December 17, 2025. The standard payment conversion factor for discharges for fiscal year 2026 was set at $19,371, an increase from the standard payment conversion 66 Table of Contents 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 $10,141 from $12,043 established in the final rule for fiscal year 2025. Medicare Reimbursement of Outpatient Rehabilitation Clinic Services The Medicare program reimburses outpatient rehabilitation providers based on the MPFS. Outpatient rehabilitation providers may enroll in Medicare as institutional outpatient rehabilitation facilities (i.e., rehab agencies) or individual physical or occupational therapists in private practice. The majority of our providers are reimbursed through enrolled rehab agencies while the remaining balance of our clinicians are enrolled as individual physical or occupational therapists in private practice. The following is a summary of significant regulatory changes which have affected our results of operations as well as the policies and payment rates that may affect our future results of operations. For calendar year 2024, CMS expected that its final policies for 2024 would result in a 3% decrease in Medicare payments for the therapy specialty. In the calendar year 2025 MPFS final rule, CMS calculated the payment rates without the one-time increases provided for in legislation. CMS expected that its policies for 2025 would not result in any increase or decrease in Medicare payments for the therapy specialty. However, the policies CMS announced in 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 final rule, CMS implemented this OBBBA statutory 2.5% increase to the conversion factor for calendar year 2026, along with the two separate conversion factors based on APM participation required under 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 policies for 2026 will result in a 1% decrease in Medicare 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%. The increase to the conversion factors is mitigated by a new -2.5% efficiency adjustment applied to certain work RVUs for certain non-time-based services and an update to the practice expense RVU methodology. The efficiency adjustment reduces PFS payments for certain non-time-based codes, some of which are used by our physical and occupational therapists. The new practice expense methodology reduces certain facility practice expense RVUs allocated based on work RVUs. Modifiers to Identify Services of Physical Therapy Assistants or Occupational Therapy Assistants In the final 2020 MPFS rule, CMS clarified that when the physical therapist is involved for the entire duration of the service and the PTA provides skilled therapy alongside the physical therapist, the CQ modifier is not required. Also, when the same service (code) is furnished separately by the physical therapist and PTA, CMS applies the de minimis standard to each 15-minute unit of codes, not on the total physical therapist and PTA time of the service. For dates of service on and after January 1, 2022, CMS pays for physical therapy and occupational therapy services provided by PTAs and OTAs at 85% of the otherwise applicable Part B payment amount. CMS allows a timed service to be billed without the CQ or CO modifier when a PTA or OTA participates in providing care, but the physical therapist or occupational therapist meets the Medicare billing requirements without including the PTA’s or OTA’s minutes. This occurs when the physical therapist or occupational therapist provides more minutes than the 15-minute midpoint. The calendar year 2026 MPFS final rule did not contain any policy changes concerning the modifiers for services provided by physical therapy and occupational therapy assistants. 67 Table of Contents Critical Accounting Estimates Revenue Recognition and Accounts Receivable Our principal revenue source comes from providing healthcare services to patients. Patient service revenues are recognized at an amount equal to the consideration we expect to be entitled to in exchange for providing healthcare services to our patients. Revenue earned from these services is variable in nature, as we are required to make judgments that impact the transaction price. We determine the transaction price for services provided to patients who are Medicare beneficiaries using Medicare’s prospective payment systems and other payment methods. The expected payment is determined by the level of clinical services provided and is sensitive to the patient’s length of stay. Additionally, we are paid by various other non-Medicare payor sources including, but not limited to, insurance companies (including Medicare Advantage plans), state Medicaid programs, workers’ compensation programs, health maintenance organizations, preferred provider organizations, other managed care companies and employers, as well as patients themselves. The transaction price for services provided to non-Medicare patients include amounts prescribed by state and federal fee schedules, negotiated contracted amounts, or usual and customary amounts associated with the specific payor or based on the service provided. We apply a portfolio approach in determining revenues for certain homogeneous non-Medicare patient populations. There is variability in the transaction price for services provided to our patients, as the transaction price is impacted by several factors, such as the patient’s condition and length of stay, which in turn impact the payment we expect to receive for providing such services. Variable consideration included in the transaction price is inclusive of our estimates of implicit discounts and other adjustments related to timely filing and documentation denials, out of network adjustments, and medical necessity denials, which are estimated using our historical experience. We are also subject to regular post-payment inquiries, investigations, and audits of the claims we submit for services provided. Some claims can take several years for resolution and may result in adjustments to the transaction price. Management includes in its estimates of the transaction price its expectations for these types of adjustments such that the amount of cumulative revenue recognized will not be subject to significant reversal in future periods. Historically, adjustments arising from a change in the transaction price have not been significant. Our accounts receivable is reported at an amount equal to the amount we expect to collect for providing healthcare services to our patients. Because our accounts receivable is typically paid for by highly-solvent, creditworthy payors, such as Medicare, other governmental programs, and highly-regulated commercial insurers on behalf of the patient, our credit losses are infrequent and insignificant in nature; as such, we generally do not recognize allowances for expected credit losses. Insurance Risk Programs Under a number of our insurance programs, which include our employee health insurance, workers’ compensation, and professional malpractice liability, we are liable for a portion of our losses before we can attempt to recover from the applicable insurance carrier. We accrue for losses under an occurrence-based approach, whereby we estimate the losses that will be incurred in a respective accounting period. The estimate of losses includes actuarial loss projections of both known claims and incurred but not reported claims. These estimates are based on specific claim facts, claim frequency and severity, payment patterns for historical claims, and estimates of fees for outside counsel. In addition to the actuarial loss projections, insurance premiums and out-of-pocket expenses for the administration and analysis of claims are included in the estimate of losses accrued in a respective accounting period. We monitor these programs quarterly and revise our estimates as necessary to take into account additional information. We recorded a liability of $143.6 million and $141.6 million for our estimated losses under these insurance programs at December 31, 2025 and 2024, respectively. We also recorded insurance proceeds receivable of $7.0 million and $8.5 million, respectively, at December 31, 2025 and 2024, for liabilities which exceed our deductibles and self-insured retention limits and are recoverable through our insurance policies. 68 Table of Contents Goodwill We operate three reporting units which include the critical illness recovery hospital reporting unit, the rehabilitation hospital reporting unit, and the outpatient rehabilitation reporting unit. We assign goodwill to our reporting units based upon the specific nature of the business acquired or, when a business combination contains business components related to more than one reporting unit, goodwill is assigned to each reporting unit based upon an allocation determined by the relative fair values of the business acquired. When we dispose of a business, we allocate a portion of the reporting unit’s goodwill to that business based on the relative fair values of the portion of the reporting unit being disposed of and the portion of the reporting unit remaining. We evaluate our reporting units on an annual basis and, if our reporting units are reorganized, we reassign goodwill based on the relative fair values of the new reporting units. We have elected to perform our annual goodwill impairment assessments as of October 1. We also test goodwill for impairment when events or conditions occur that might suggest a possible impairment. These events or conditions could include a significant change in the business environment, the regulatory environment, or legal factors; a current period operating or cash flow loss combined with a history of such losses or a projection of continuing losses; or a sale or disposition of a significant portion of a reporting unit. As of October 1, 2025, we performed a qualitative impairment assessment for the rehabilitation hospital reporting unit and the outpatient rehabilitation reporting unit. When performing the qualitative assessment, we apply judgment in determining the events and circumstances that most affect the fair value of the reporting unit and in evaluating the significance of those identified events and circumstances in order to determine whether it is more likely than not that the fair value of the reporting unit is less than its carrying amount. As part of our qualitative assessments, we considered (i) the magnitude of the reporting unit’s excess fair value over its carrying amount from the most recent quantitative impairment test, (ii) industry and market conditions, including the impacts of the interest rate environment, (iii) historical financial performance, including revenue, earnings, and operating cash flow growth trends, (iv) our forecasts of revenue, earnings, and operating cash flows, (v) cost factors, including the effects of inflation and rising prices, (vi) the regulatory environment, including reimbursement and compliance requirements such as those that exist under the Medicare program, (vii) other factors specific to each reporting unit, such as a change in strategy, a change in management, or acquisitions and divestitures affecting the composition of the reporting unit and its future operating results, and (viii) consideration of changes in our market capitalization. Historically, each reporting unit’s fair value has significantly exceeded its carrying amount. We performed a quantitative impairment assessment for the critical illness recovery hospital reporting unit as of October 1, 2025, to assess the impact of Medicare reimbursement rates and current operating performance on the estimated fair value of the reporting unit. We used both the income and market approaches in determining the fair value of the critical illness recovery hospital reporting unit. Included in these approaches are assumptions regarding revenue growth rates, future Adjusted EBITDA margin estimates, future capital expenditure requirements, the industry’s weighted average cost of capital, and industry specific, market observable implied Adjusted EBITDA multiples. We also include estimated residual values at the end of the forecast period. In establishing our assumptions, we consider current industry and market conditions; historical financial performance, including our revenue, earnings, and operating cash flow growth trends; cost factors, including the effects of inflation and rising prices; and the regulatory environment, including reimbursement and compliance requirements such as those that exist under the Medicare program. Our annual assessment did not indicate that goodwill impairment was likely for any of our reporting units. We did not identify any goodwill impairment events during the quarter ended December 31, 2025. If any assumptions or judgments relied upon when performing our quantitative and qualitative assessments fail to materialize, the resulting decline in our fair value estimates could result in an impairment charge to goodwill. We have recorded total goodwill of $2.4 billion at December 31, 2025, of which $1.2 billion related to our critical illness recovery hospital reporting unit, $517.6 million related to our rehabilitation hospital reporting unit, and $669.7 million related to our outpatient rehabilitation reporting unit. 69 Table of Contents 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. For the Year Ended December 31, 2023 2024 2025 Critical illness recovery hospital data: Number of consolidated hospitals—start of period(1) 103  107  104  Number of hospitals acquired 2  —  2  Number of hospital start-ups 4  1  —  Number of hospitals closed/sold (2) (4) (2) Number of consolidated hospitals—end of period(1) 107  104  104  Available licensed beds(3) 4,538  4,450  4,420  Admissions(3)(4) 36,225  35,784  36,126  Patient days(3)(5) 1,108,492  1,118,757  1,107,387  Average length of stay (days)(3)(6) 31  31  31  Revenue per patient day(3)(7) $ 2,067  $ 2,177  $ 2,230  Occupancy rate(3)(8) 68  % 68  % 69  % Percent patient days—Medicare(3)(9) 38  % 35  % 35  % Rehabilitation hospital data: Number of consolidated hospitals—start of period(1) 20  21  23  Number of hospitals acquired 1  1  1  Number of hospital start-ups —  1  2  Number of hospitals closed/sold —  —  —  Number of consolidated hospitals—end of period(1) 21  23  26  Number of unconsolidated hospitals managed—end of period(2) 12  12  12  Total number of hospitals (all)—end of period 33  35  38  Available licensed beds - consolidated hospitals(3) 1,479  1,639  1,826  Available licensed beds - unconsolidated hospitals managed(12) 632  662  662  Admissions(3)(4) 31,627  33,665  36,787  Patient days(3)(5) 446,145  470,594  510,127  Average length of stay (days)(3)(6) 14  14  14  Revenue per patient day(3)(7) $ 2,017  $ 2,134  $ 2,260  Occupancy rate(3)(8) 85  % 84  % 82  % Percent patient days—Medicare(3)(9) 49  % 48  % 50  % Outpatient rehabilitation data: Number of consolidated clinics—start of period 1,622  1,633  1,617  Number of clinics acquired 16  11  5  Number of clinic start-ups 37  17  27  Number of clinics closed/sold (42) (44) (32) Number of consolidated clinics—end of period 1,633  1,617  1,617  Number of unconsolidated clinics managed—end of period 300  297  300  Total number of clinics (all)—end of period 1,933  1,914  1,917  Number of visits(3)(10) 10,657,558  11,147,920  11,517,388  Revenue per visit(3)(11) $ 100  $ 101  $ 100  70 Table of Contents _______________________________________________________________________________ (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. 71 Table of Contents Results of Operations The following table outlines selected operating data as a percentage of revenue for the periods indicated: For the Year Ended December 31, 2023 2024 2025 Revenue 100.0  % 100.0  % 100.0  % Costs and expenses: Cost of services, exclusive of depreciation and amortization(1) 88.2  87.8  88.5  General and administrative 3.5  4.4  2.8  Depreciation and amortization 2.8  2.8  2.6  Total costs and expenses 94.5  95.0  93.9  Other operating income —  0.2  0.1  Income from continuing operations before other income and expense 5.5  5.2  6.2  Loss on early retirement of debt (0.3) (0.6) —  Equity in earnings of unconsolidated subsidiaries 0.9  1.2  1.0  Interest expense (3.2) (2.4) (2.2) Income from continuing operations before income taxes 2.9  3.4  5.0  Income tax expense from continuing operations 0.6  0.9  1.1  Income from continuing operations, net of tax 2.3  2.5  3.9  Discontinued operations: Income from discontinued business 5.0  4.3  —  Income tax expense from discontinued business 1.1  1.1  —  Income from discontinued operations, net of tax 3.9  3.2  —  Net income 6.2  5.7  3.9  Net income attributable to non-controlling interests 1.2  1.6  1.2  Net income attributable to Select Medical Holdings Corporation 5.0  % 4.1  % 2.7  % _______________________________________________________________________________ (1)Cost of services includes personnel expense, facilities expense, and other operating costs. 72 Table of Contents The following table summarizes selected financial data by segment for the periods indicated: Year Ended December 31, 2023 2024 2025 % Change 2023 – 2024 % Change 2024 – 2025 (in thousands, except percentages) Revenue: Critical illness recovery hospital $ 2,299,773  $ 2,444,196  $ 2,477,814  6.3  % 1.4  % Rehabilitation hospital 979,585  1,110,592  1,288,954  13.4  16.1  Outpatient rehabilitation 1,188,914  1,250,294  1,284,873  5.2  2.8  Other(1) 357,705  382,023  401,189  6.8  5.0  Total Company $ 4,825,977  $ 5,187,105  $ 5,452,830  7.5  % 5.1  % Income (loss) from continuing operations before other income and expense: Critical illness recovery hospital $ 182,150  $ 231,792  $ 198,538  27.3  % (14.3) % Rehabilitation hospital 193,820  217,306  248,303  12.1  14.3  Outpatient rehabilitation 76,658  71,998  53,806  (6.1) (25.3) Other(1) (185,386) (252,781) (164,477) N/M N/M Total Company $ 267,242  $ 268,315  $ 336,170  0.4  % 25.3  % Adjusted EBITDA: Critical illness recovery hospital $ 246,015  $ 301,634  $ 265,447  22.6  % (12.0) % Rehabilitation hospital 221,875  245,748  278,622  10.8  13.4  Outpatient rehabilitation 111,868  108,577  90,163  (2.9) (17.0) Other(1) (133,667) (145,564) (141,057) N/M N/M Total Company $ 446,091  $ 510,395  $ 493,175  14.4  % (3.4) % Adjusted EBITDA margins: Critical illness recovery hospital 10.7  % 12.3  % 10.7  % Rehabilitation hospital 22.6  22.1  21.6  Outpatient rehabilitation 9.4  8.7  7.0  Other(1) N/M N/M N/M Total Company 9.2  % 9.8  % 9.0  % Total assets: Critical illness recovery hospital $ 2,496,886  $ 2,654,474  $ 2,669,940  Rehabilitation hospital 1,233,888  1,366,922  1,602,879  Outpatient rehabilitation 1,380,447  1,404,379  1,399,975  Other(1) 248,204  182,176  178,795  Total Company $ 5,359,425  $ 5,607,951  $ 5,851,589  Purchases of property and equipment: Critical illness recovery hospital $ 93,036  $ 65,861  $ 76,412  Rehabilitation hospital 21,922  53,620  112,550  Outpatient rehabilitation 38,776  36,142  37,250  Other(1) 6,126  3,285  3,013  Total Company $ 159,860  $ 158,908  $ 229,225  _______________________________________________________________________________ (1)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     Not meaningful. 73 Table of Contents Year Ended December 31, 2025 Compared to Year Ended December 31, 2024 For the year ended December 31, 2025, we had revenue of $5,452.8 million and income from continuing operations before other income and expense of $336.2 million, as compared to revenue of $5,187.1 million and income from continuing operations before other income and expense of $268.3 million for the year ended December 31, 2024. For the year ended December 31, 2025, Adjusted EBITDA was $493.2 million, with an Adjusted EBITDA margin of 9.0%, as compared to Adjusted EBITDA of $510.4 million and an Adjusted EBITDA margin of 9.8% in the prior year. Revenue Critical Illness Recovery Hospital Segment. Revenue increased 1.4% to $2,477.8 million for the year ended December 31, 2025, compared to $2,444.2 million for the year ended December 31, 2024. The increase was attributable to revenue per patient day, which increased 2.4% to $2,230 for the year ended December 31, 2025, compared to $2,177 for the year ended December 31, 2024. Our patient days were 1,107,387 for the year ended December 31, 2025, compared to 1,118,757 patient days for the year ended December 31, 2024. Occupancy in our critical illness recovery hospitals was 69% for the year ended December 31, 2025, compared to 68% for the year ended December 31, 2024. Rehabilitation Hospital Segment. Revenue increased 16.1% to $1,289.0 million for the year ended December 31, 2025, compared to $1,110.6 million for the year ended December 31, 2024. The increase in revenue was attributable to increases in our patient days and our revenue per patient day. Our patient days increased 8.4% to 510,127 days for the year ended December 31, 2025, compared to 470,594 days for the year ended December 31, 2024. Our revenue per patient day increased 5.9% to $2,260 for the year ended December 31, 2025, compared to $2,134 for the year ended December 31, 2024. Occupancy in our rehabilitation hospitals was 82% for the year ended December 31, 2025, compared to 84% for the year ended December 31, 2024. Outpatient Rehabilitation Segment. Revenue increased 2.8% to $1,284.9 million for the year ended December 31, 2025, compared to $1,250.3 million for the year ended December 31, 2024. The increase in revenue was attributable to patient visits, which increased 3.3% to 11,517,388 for the year ended December 31, 2025, compared to 11,147,920 visits for the year ended December 31, 2024. Our revenue per visit was $100 for the year ended December 31, 2025, compared to $101 for the year ended December 31, 2024. Operating Expenses Our operating expenses consist principally of cost of services and general and administrative expenses. Our operating expenses were $4,977.9 million, or 91.3% of revenue, for the year ended December 31, 2025, compared to $4,779.3 million, or 92.2% of revenue, for the year ended December 31, 2024. Our cost of services, a major component of which is labor expense, was $4,823.5 million, or 88.5% of revenue, for the year ended December 31, 2025, compared to $4,553.5 million, or 87.8% of revenue, for the year ended December 31, 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, as explained further within the “Adjusted EBITDA” discussion. General and administrative expenses were $154.4 million, or 2.8% of revenue, for the year ended December 31, 2025, compared to $225.9 million, or 4.4% of revenue, for the year ended December 31, 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 year ended December 31, 2025, we had other operating income of $1.6 million, compared to $3.4 million for the year ended December 31, 2024. Adjusted EBITDA Critical Illness Recovery Hospital Segment. Adjusted EBITDA was $265.4 million for the year ended December 31, 2025, compared to $301.6 million for the year ended December 31, 2024. Our Adjusted EBITDA margin for the critical illness recovery hospital segment was 10.7% for the year ended December 31, 2025, compared to 12.3% for the year ended December 31, 2024. The decreases in our Adjusted EBITDA and Adjusted EBITDA margin during the year ended December 31, 2025, as compared to the year ended December 31, 2024, were principally attributable an increase in our operating expenses, partially offset by an increase in revenue. Rehabilitation Hospital Segment. Adjusted EBITDA increased 13.4% to $278.6 million for the year ended December 31, 2025, compared to $245.7 million for the year ended December 31, 2024. Our Adjusted EBITDA margin for the rehabilitation hospital segment was 21.6% for the year ended December 31, 2025, compared to 22.1% for the year ended December 31, 2024. The increase in Adjusted EBITDA was principally due to an increase in revenue. 74 Table of Contents Outpatient Rehabilitation Segment. Adjusted EBITDA was $90.2 million for the year ended December 31, 2025, compared to $108.6 million for the year ended December 31, 2024. Our Adjusted EBITDA margin for the outpatient rehabilitation segment was 7.0% for the year ended December 31, 2025, compared to 8.7% for the year ended December 31, 2024. The decreases in our Adjusted EBITDA and Adjusted EBITDA margin for the year ended December 31, 2025, as compared to the year ended December 31, 2024, were principally attributable to an increase in personnel expense, partially offset by an increase in revenue. Depreciation and Amortization Depreciation and amortization expense was $140.3 million for the year ended December 31, 2025, compared to $142.9 million for the year ended December 31, 2024. Income from Continuing Operations before Other Income and Expense For the year ended December 31, 2025, we had income from operations from continuing operations before other income and expense of $336.2 million, compared to $268.3 million for the year ended December 31, 2024. The increase in income from continuing operations before other income and expense is 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. Loss on Early Retirement of Debt For the year ended December 31, 2024, we had a loss on early retirement of debt of $28.8 million related to the prepayment on our term loan, the amendments to the Select credit agreement, and the refinancing of our senior notes. Equity in Earnings of Unconsolidated Subsidiaries For the year ended December 31, 2025, we had equity in earnings of unconsolidated subsidiaries of $54.5 million, compared to $63.9 million for the year ended December 31, 2024. The decrease in equity in earnings of unconsolidated subsidiaries is principally due to a non-recurring gain recognized during the year ended December 31, 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 $117.9 million for the year ended December 31, 2025, compared to $128.6 million for the year ended December 31, 2024. The decrease in interest expense was principally due to a reduction in our average debt balance during the year ended December 31, 2025, compared to the year ended December 31, 2024, 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 $58.2 million for the year ended December 31, 2025, which represented an effective tax rate of 21.3%. We recorded income tax expense of $44.8 million for the year ended December 31, 2024, which represented an effective tax rate of 25.6%. 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 year ended December 31, 2024, we had income from discontinued operations, net of tax, of $166.7 million, which represents the operations of Concentra. 75 Table of Contents Liquidity and Capital Resources Cash Flows for the Years Ended December 31, 2023, 2024, and 2025 In the following, we discuss cash flows from operating activities, investing activities, and financing activities. For the Year Ended December 31, 2023 2024 2025 Cash flows provided by operating activities $ 582,058  $ 517,864  $ 346,467  Cash flows used in investing activities (268,477) (231,011) (216,486) Cash flows used in financing activities (327,481) (311,165) (163,152) Net decrease in cash and cash equivalents (13,900) (24,312) (33,171) Cash and cash equivalents at beginning of period 97,906  84,006  59,694  Cash and cash equivalents at end of period (1) $ 84,006  $ 59,694  $ 26,523  ______________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________ (1)    The Company had $31.4 million of cash and cash equivalents from discontinued operations at December 31, 2023. Operating activities provided $346.5 million, $517.9 million, and $582.1 million of cash flows during the years ended December 31, 2025, 2024, and 2023, respectively. The decrease in cash flows from operating activities for the year ended December 31, 2025, as compared to the year ended December 31, 2024, was principally driven by a decrease in cash flows from our discontinued operations, partially offset by increases in our Income from continuing operations, net of tax. The decrease in cash flows from operating activities for the year ended December 31, 2024, as compared to the year ended December 31, 2023, was principally due to a increase in accounts receivable, which was principally driven by an increase in revenue and an increase in days sales outstanding, and partially offset by an increase in cash flows from operating performance. Our days sales outstanding was 57 days at December 31, 2025, 58 days at December 31, 2024, and 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 $216.5 million, $231.0 million, and $268.5 million of cash flows for the years ended December 31, 2025, 2024, and 2023, respectively. For the year ended December 31, 2025, the principal uses of cash were $229.2 million for purchases of property and equipment, and $10.7 million for investments in and acquisitions of businesses. The principal source of cash was proceeds from sales and exchanges of assets of $23.4 million. For the year ended December 31, 2024, the principal uses of cash were $222.2 million for purchases of property and equipment, and $13.1 million for investments in and acquisitions of businesses. For the year ended December 31, 2023, the principal uses of cash were $229.2 million for purchases of property, equipment, and other assets, and $39.4 million for investments in and acquisitions of businesses. Financing activities used $163.2 million of cash flows for the year ended December 31, 2025. The principal uses of cash were $100.1 million for repurchases of common stock, $89.9 million for distributions to and purchases of non-controlling interests, and $31.4 million of dividend payments to common stockholders. The principal sources of cash were net borrowings on other debt of $66.9 million and proceeds of $15.9 million from the issuance of non-controlling interests. Financing activities used $311.2 million of cash flows for the year ended December 31, 2024. The principal uses of cash were net payments of $212.4 million on our term loans, $182.1 million of cash transferred to Concentra upon separation, net payments of $175.0 million under our revolving facility, $64.6 million of dividend payments to common stockholders, $61.2 million of net payments as a result of the payoff of our 6.250% senior notes due 2026, and subsequent issuance of our 6.250% senior notes due 2032, and $60.0 million for distributions to and purchases of non-controlling interests. The cash outflows were partially offset by proceeds from the Concentra IPO of $511.2 million. Financing activities used $327.5 million of cash flows for the year ended December 31, 2023. The principal uses of cash were net payments of $165.0 million under our revolving facility, $63.9 million of dividend payments to common stockholders, and $63.5 million for distributions to and purchases of non-controlling interests. 76 Table of Contents Capital Resources Working capital.  We had net working capital of $40.8 million at December 31, 2025, compared to a net working capital of $42.1 million at December 31, 2024. A significant component of our net working capital is our accounts receivable. Collection of these accounts receivable is our primary source of cash and is critical to our liquidity and capital resources. Most of our patients are subject to healthcare coverage through third-party payor arrangements, including Medicare and Medicaid. It is our general policy to verify healthcare coverage prior to providing services. We have credit risk associated with our accounts receivable; however, we believe there is a remote possibility of default with these payors. Credit facilities.  At December 31, 2025, Select had outstanding borrowings under its credit facilities consisting of a $1,039.5 million term loan (excluding unamortized original issue discounts and debt issuance costs of $7.1 million) and borrowings of $100.0 million under its revolving facility. At December 31, 2025, Select had $469.1 million of availability under its revolving facility after giving effect to $100.0 million of outstanding borrowings and $30.9 million of outstanding letters of credit. Each calendar quarter, Select is required to pay each lender a commitment fee in respect of any unused commitments under the revolving facility, which is currently 0.375% per annum and subject to adjustment based on Select’s leverage ratio, as specified in the credit agreement. As of December 31, 2025, Select’s leverage ratio (its ratio of total indebtedness to consolidated EBITDA for the prior four consecutive fiscal quarters), which is required to be maintained at less than 7.00 to 1.00 under the terms of the revolving facility, was 3.67 to 1.00. Our credit facilities also contain a number of other affirmative and restrictive covenants, including limitations on mergers, consolidations and dissolutions; sales of assets; investments and acquisitions; indebtedness; liens; affiliate transactions; and dividends and restricted payments. Our credit facilities contain events of default for non-payment of principal and interest when due (subject, as to interest, to a grace period), cross-default and cross-acceleration provisions and an event of default that would be triggered by a change of control. 6.250% senior notes. At December 31, 2025, Select had $550.0 million of 6.250% senior notes outstanding (excluding debt issuance costs of $9.3 million). The terms of the senior notes contains covenants that, among other things, limit Select’s ability and the ability of certain of Select’s subsidiaries to (i) grant liens on its assets, (ii) make dividend payments, other distributions or other restricted payments, (iii) incur restrictions on the ability of Select’s restricted subsidiaries to pay dividends or make other payments, (iv) enter into sale and leaseback transactions, (v) merge, consolidate, transfer or dispose of substantially all of their assets, (vi) incur additional indebtedness, (vii) make investments, (viii) sell assets, including capital stock of subsidiaries, (ix) use the proceeds from sales of assets, including capital stock of restricted subsidiaries, and (x) enter into transactions with affiliates. These covenants are subject to a number of exceptions, limitations and qualifications. 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. The common stock repurchase program will remain in effect until December 31, 2027, unless further extended or earlier terminated by the Board of Directors. Stock repurchases under this program may be made in the open market or through privately negotiated transactions, and at times and in such amounts as Holdings deems appropriate. Holdings funds this program with cash on hand and borrowings under its revolving facility. During the year ended December 31, 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 December 31, 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. For the year ended December 31, 2025, $0.8 million has been accrued for the 1% excise tax as a cost of the stock repurchase. 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. 77 Table of Contents 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 December 31, 2025, we had cash and cash equivalents of $26.5 million and $469.1 million of availability under our revolving facility, after giving effect to $100.0 million of outstanding borrowings and $30.9 million of outstanding letters of credit. Our material cash requirements from known contractual and other obligations include: i.Debt payments, including finance lease payments – Our expected principal payments total $1,845.4 million, with $24.2 million payable within the next twelve months. Refer to Note 12 – Long-Term Debt and Notes Payable of the notes to our consolidated financial statements included herein for additional information. ii.Interest payments – Our expected interest payments on the 6.250% senior notes, term loan, revolving facility, and other debt facilities total $685.1 million, with $110.8 million payable within the next twelve months. Interest payments for the 6.250% senior notes were calculated using the stated interest rate. Interest payments for the term loan and revolving facility were calculated using interest rates of 6.3% and 6.8%, respectively. Interest payments on our other debt facilities were calculated using a blended rate of 5.7%. iii.Operating lease payments – Our expected operating lease payments total $1,505.2 million, with $244.6 million payable within the next twelve months. Refer to Note 4 – Leases of the notes to our consolidated financial statements included herein for additional information. iv.Purchase, construction, and other commitments – Our expected payments related to purchase, construction, and other obligations total $216.8 million, with $165.4 million payable within the next twelve months. Our purchase obligations primarily relate to software licensing and support agreements which specify all significant contractual terms and are legally binding and enforceable. Our construction commitments are described further in Note 19 – Commitments and Contingencies. v.Insurance liabilities – Our expected payments related to our insurance liabilities, including those for workers’ compensation and professional malpractice liabilities, total $143.6 million, with $67.4 million payable within the next twelve months. The amounts payable within the next twelve months are recorded in accrued other in the consolidated balance sheet as of December 31, 2025. The remaining amounts are recorded in other non-current liabilities. vi.Other current liabilities recorded in the consolidated balance sheet as of December 31, 2025, such as accounts payable and accrued expenses, which are not specifically identified above. 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, July 30, 2025, and October 29, 2025, our Board of Directors declared a cash dividend of $0.0625 per share. On March 13, 2025, May 29, 2025, August 28, 2025, and November 25, 2025, cash dividends totaling $8.1 million, $7.9 million, $7.7 million, and $7.8 million were paid. On February 12, 2026, our Board of Directors declared a cash dividend of $0.0625 per share. The dividend will be payable on or about March 12, 2026, to stockholders of record as of the close of business on March 2, 2026. 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 the current 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. Recent Accounting Pronouncements Refer to Note 1 – Organization and Significant Accounting Policies of the notes to our consolidated financial statements included herein for information regarding recent accounting pronouncements. 78 Table of Contents