Select Medical Holdings Corporation Announces Results For Its Fourth Quarter and Year Ended December 31, 2024, Its 2025 Business Outlook, and Cash Dividend

Select Medical Holdings Corporation (“Select Medical,” “we,” “us,” or “our”) (NYSE: SEM) today announced results for its fourth quarter and year ended December31, 2024, its 2025 business outlook, and the declaration of a cash dividend.

On November 25, 2024, we completed a tax-free distribution of 104,093,503 shares of common stock of Concentra Group Holdings Parent, Inc. (“Concentra”) to our stockholders. Holders of our common stock received 0.806971 shares of Concentra common stock for each outstanding share of our common stock owned as of November 18, 2024. Following the completion of the distribution, we no longer own any shares of Concentra's common stock. The results of Concentra, and related transaction costs, have been reflected as discontinued operations in the consolidated statements of operations, and prior periods have been recast to reflect this presentation.

Forthe fourth quarter ended December31, 2024, revenue increased 7.8% to $1,312.6 million, compared to $1,218.1 million for the same quarter, prior year. Income from continuing operations before other income and expense was $21.1 million for the fourth quarter ended December 31, 2024, compared to $64.9 million for the same quarter, prior year. Loss from continuing operations, net of tax, was $10.5 million for the fourth quarter ended December 31, 2024, compared to income from continuing operations, net of tax, of $30.3 million for the same quarter, prior year. In connection with the distribution of Concentra, there was a one-time acceleration of $45.9 million of stock compensation expense, which reduced income (loss) from continuing operations for the quarter ended December 31, 2024. Additionally, during the quarter ended December 31, 2024, we recognized a loss on early retirement of debt of $17.9 million as a result of the debt refinancing transactions described below. Adjusted EBITDA increased 3.8% to $116.0 million for the fourth quarter ended December 31, 2024, compared to $111.8 million for the same quarter, prior year. Diluted loss per common share from continuing operations was $0.19 for the fourth quarter ended December 31, 2024, compared to earnings per common share from continuing operations of $0.12 for the same quarter, prior year. Adjusted earnings per common share from continuing operations, net of tax, which excludes the one-time acceleration of stock compensation expense, the loss on early retirement of debt, and certain reclassified transaction costs associated with the Concentra transaction, increased 50.0%to$0.18 for the fourth quarter ended December31, 2024, compared to $0.12 for the same quarter, prior year. The definition of Adjusted EBITDA and a reconciliation of income from continuing operations, net of tax, to Adjusted EBITDA are presented in table IX of this release. A reconciliation of earnings per common share from continuing operations, net of tax, to adjusted earnings per common share from continuing operations, net of tax, is presented in table X of this release.

For the year ended December31, 2024, revenue increased 7.5% to $5,187.1 million, compared to $4,826.0 million for the prior year. Income from continuing operations before other income and expense increased 0.4% to $268.3 million for the year ended December31, 2024, compared to $267.2 million for the prior year. Income from continuing operations, net of tax, increased 17.7% to $130.0 million for the year ended December31, 2024, compared to $110.5 million for the prior year. In connection with the distribution of Concentra, there was a one-time acceleration of $45.9 million of stock compensation expense, which reduced income from continuing operations for the year ended December 31, 2024. Additionally, during the year ended December 31, 2024, we recognized a loss on early retirement of debt of $28.8 million. Adjusted EBITDA increased 14.4% to $510.4 million for the year ended December31, 2024, compared to $446.1 million for the prior year. Earnings per common share from continuing operations, net of tax, increased 10.9% to $0.51 for the year ended December31, 2024, compared to $0.46 for the prior year. Adjusted earnings per common share from continuing operations, net of tax, which excludes the one-time acceleration of stock compensation expense and the loss on early retirement of debt, increased 74.1% to $0.94 for the year ended December31, 2024, compared to $0.54 for the prior year. The definition of Adjusted EBITDA and a reconciliation of income from continuing operations, net of tax, to Adjusted EBITDA are presented in table IX of this release. A reconciliation of earnings per common share from continuing operations, net of tax, to adjusted earnings per common share from continuing operations, net of tax, is presented in table X of this release.

Company Overview

Select Medical is one of the largest operators of critical illness recovery hospitals, rehabilitation hospitals, and outpatient rehabilitation clinics in the United States based on number of facilities. Select Medical's reportable segments include the critical illness recovery hospital segment, the rehabilitation hospital segment, and the outpatient rehabilitation segment. As of December 31, 2024, Select Medical operated 104 critical illness recovery hospitals in 29 states, 35 rehabilitation hospitals in 14 states, and 1,914 outpatient rehabilitation clinics in 39 states and the District of Columbia. At December 31, 2024, Select Medical had operations in 40 states and the District of Columbia. Information about Select Medical is available at www.selectmedical.com.

Critical Illness Recovery Hospital Segment

For the fourth quarter ended December 31, 2024, revenue for the critical illness recovery hospital segment increased 5.9% to $600.4 million, compared to $567.1 million for the same quarter, prior year. Adjusted EBITDA for the critical illness recovery hospital segment increased 10.0% to $63.1 million for the fourth quarter ended December 31, 2024, compared to $57.4 million for the same quarter, prior year. The Adjusted EBITDA margin for the critical illness recovery hospital segment was 10.5% for the fourth quarter ended December 31, 2024, compared to 10.1% for the same quarter, prior year. Certain critical illness recovery hospital key statistics are presented in table VII of this release for the fourth quarters ended December 31, 2024 and 2023.

For the year ended December 31, 2024, revenue for the critical illness recovery hospital segment increased 6.3% to $2,444.2 million, compared to $2,299.8 million for the prior year. Adjusted EBITDA for the critical illness recovery hospital segment increased 22.6% to $301.6 million for the year ended December 31, 2024, compared to $246.0 million for the prior year. The Adjusted EBITDA margin for the critical illness recovery hospital segment was 12.3% for the year ended December 31, 2024, compared to 10.7% for the prior year. Certain critical illness recovery hospital key statistics are presented in table VIII of this release for the years ended December 31, 2024 and 2023.

Rehabilitation Hospital Segment

For the fourth quarter ended December 31, 2024, revenue for the rehabilitation hospital segment increased 13.1% to $294.4 million, compared to $260.2 million for the same quarter, prior year. Adjusted EBITDA for the rehabilitation hospital segment was $62.3 million for the fourth quarter ended December 31, 2024, compared to $66.3 million for the same quarter, prior year. The Adjusted EBITDA margin for the rehabilitation hospital segment was 21.2% for the fourth quarter ended December 31, 2024, compared to 25.5% for the same quarter, prior year. Certain rehabilitation hospital key statistics are presented in table VII of this release for both the fourth quarters ended December 31, 2024 and 2023.

For the year ended December 31, 2024, revenue for the rehabilitation hospital segment increased 13.4% to $1,110.6 million, compared to $979.6 million for the prior year. Adjusted EBITDA for the rehabilitation hospital segment increased 10.8% to $245.7 million for the year ended December 31, 2024, compared to $221.9 million for the prior year. The Adjusted EBITDA margin for the rehabilitation hospital segment was 22.1% for the year ended December 31, 2024, compared to 22.6% for the prior year. Certain rehabilitation hospital key statistics are presented in table VIII of this release for the years ended December 31, 2024 and 2023.

Outpatient Rehabilitation Segment

For the fourth quarter ended December 31, 2024, revenue for the outpatient rehabilitation segment increased 7.2% to $319.6 million, compared to $298.2 million for the same quarter, prior year. Adjusted EBITDA for the outpatient rehabilitation segment increased 18.2% to $26.6 million for the fourth quarter ended December 31, 2024, compared to $22.5 million for the same quarter, prior year. The Adjusted EBITDA margin for the outpatient rehabilitation segment was 8.3% for the fourth quarter ended December 31, 2024, compared to 7.5% for the same quarter, prior year. Certain outpatient rehabilitation key statistics are presented in table VII of this release for the fourth quarters ended December 31, 2024 and 2023.

For the year ended December 31, 2024, revenue for the outpatient rehabilitation segment increased 5.2% to $1,250.3 million, compared to $1,188.9 million for the prior year. Adjusted EBITDA for the outpatient rehabilitation segment was $108.6 million for the year ended December 31, 2024, compared to $111.9 million for the prior year. The Adjusted EBITDA margin for the outpatient rehabilitation segment was 8.7% for the year ended December 31, 2024, compared to 9.4% for the prior year. Certain outpatient rehabilitation key statistics are presented in table VIII of this release for the years ended December 31, 2024 and 2023.

Dividend

On February13, 2025, Select Medical's board of directors declared a cash dividend of $0.0625 per share. The dividend will be payable on or about March13, 2025 to stockholders of record as of the close of business on March3, 2025.

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

Stock Repurchase Program

The board of directors of Select Medical has authorized a common stock repurchase program to repurchase up to $1.0 billion worth of shares of its common stock. The common stock repurchase program will remain in effect until December 31, 2025, unless further extended or earlier terminated by the board of directors. Stock repurchases under this program may be made in the open market or through privately negotiated transactions, and at times and in such amounts as Select Medical deems appropriate. Select Medical funds this program with cash on hand and borrowings under its revolving credit facility.

Select Medical did not repurchase shares under its authorized stock repurchase program during the year ended December31, 2024. Since the inception of the common stock repurchase program through December31, 2024, Select Medical has repurchased 48,234,823 shares at a cost of approximately $600.3 million, or $12.45 per share, which includes transaction costs.

Financing Transactions

On December 3, 2024, we entered into Amendment No. 11 to our credit agreement. Amendment No. 11 established a new incremental term loan in the aggregate amount of $1,050.0 million. The maturity date of the term loan is December 3, 2031. In addition, Amendment No. 11 extended the maturity date of the revolving credit facility to December 3, 2029 and increased the revolving credit facility commitments from $550.0million to $600.0million. The interest rate on the term loan is equal to Term SOFR plus 2.00%, or the Alternative Base Rate (as defined in the credit agreement) plus 1.00%. The interest rate on the revolving facility is equal to Adjusted Term SOFR plus a percentage ranging from 2.25% to 2.50%, or the Alternative Base Rate (as defined in the credit agreement) plus a percentage ranging from 1.25% to 1.50%, in each case subject to a specified leverage ratio.

On December 3, 2024, Select issued and sold $550.0 million aggregate principal amount of 6.250% senior notes due December 1, 2032. Select used the net proceeds of the 6.250% senior notes due 2032, together with the proceeds from the incremental term loan borrowings (as described above) and cash on hand, to redeem in full the $1,225.0million senior notes due 2026, repay the existing term loans, and pay related fees and expenses associated with the financing. Interest on the 2032 senior notes accrues at the rate of 6.250% per annum and is payable semi-annually in arrears on June 1 and December 1 of each year, beginning on June 1, 2025.

Business Outlook

Select Medical is issuing its business outlook for 2025. Select Medical expects revenue to be in the range of $5.4 billion to $5.6 billion, Adjusted EBITDA to be in the range of $520.0 million to $540.0 million, and fully diluted earnings per share to be in the range of $1.09 to $1.19. A reconciliation of full year 2025 Adjusted EBITDA expectations to income from continuing operations, net of tax, is presented in table XI of this release.

Conference Call

Select Medical will host a conference call regarding its results for the fourth quarter and full year ended December31, 2024, and its business outlook on Friday, February 21, 2025, at 9:00am ET. The conference call will be a live webcast and can be accessed at Select Medical Holdings Corporation's website at www.selectmedicalholdings.com. A replay of the webcast will be available shortly after the call through the same link.

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

* * * * *

Certain statements contained herein that are not descriptions of historical facts are “forward-looking” statements (as such term is defined in the Private Securities Litigation Reform Act of 1995), including statements related to Select Medical's 2025 long-term business outlook. Because such statements include risks and uncertainties, actual results may differ materially from those expressed or implied by such forward-looking statements due to factors including the following:

— 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 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;

— 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;

— failure to complete or achieve some or all the expected benefits of the potential separation of Concentra;

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

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

— 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 Securities and Exchange Commission (the “SEC”), including factors discussed under the heading “Risk Factors” of the annual report on Form 10-K for the year ended December 31, 2024.

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

Investor inquiries:

Joel T. Veit Senior Vice President and Treasurer 717-972-1100 ir@selectmedical.com

I. Condensed Consolidated Statements of OperationsFor the Three Months Ended December 31, 2023 and 2024(In thousands, except per share amounts, unaudited) 2023 2024 % ChangeRevenue $ 1,218,116 $ 1,312,564 7.8%Costs and expenses:Cost of services, exclusive of depreciation and amortization 1,074,062 1,175,099 9.4General and administrative 44,090 80,197 81.9Depreciation and amortization 35,485 36,283 2.2Total costs and expenses 1,153,637 1,291,579 12.0Other operating income 458 106 (76.9)Income from continuing operations before other income and 64,937 21,091 (67.5)expenseOther income and expense:Loss on early retirement of debt – (17,906) N/MEquity in earnings of unconsolidated subsidiaries 10,195 10,423 2.2Interest expense (40,263) (28,551) (29.1)Income (loss) from continuing operations before income taxes 34,869 (14,943) N/MIncome tax expense (benefit) from continuing operations 4,618 (4,487) N/MIncome (loss) from continuing operations, net of tax 30,251 (10,456) N/MDiscontinued operations:Income from discontinued business 38,779 24,669 (36.4)Income tax expense from discontinued business 7,232 10,457 44.6Income from discontinued operations, net of tax 31,547 14,212 (54.9)Net income 61,798 3,756 (93.9)Less: Net income attributable to non-controlling interests 15,529 19,806 27.5Net income (loss) attributable to Select Medical $ 46,269 $ (16,050) N/MNet income (loss) attributable to Select Medical's commonstockholders:Income (loss) from continuing operations, net of tax $ 15,743 $ (23,664)Income from discontinued operations, net of tax 30,526 7,614Net income (loss) attributable to Select Medical's common $ 46,269 $ (16,050)stockholdersBasic earnings (loss) per common share:Continuing operations $ 0.12 $ (0.18)Discontinued operations 0.24 0.06Total basic earnings (loss) per common share $ 0.36 $ (0.12)Diluted earnings (loss) per common share:Continuing operations $ 0.12 $ (0.19)Discontinued operations 0.24 0.06Total diluted earnings (loss) per common share $ 0.36 $ (0.13)

_______________________________________________________________________________(1) Refer to table III for calculation of earnings per common share.N/M Not meaningful.

II. Condensed Consolidated Statements of OperationsFor the Years Ended December31, 2023 and 2024(In thousands, except per share amounts, unaudited) 2023 2024 % ChangeRevenue $ 4,825,977 $ 5,187,105 7.5%Costs and expenses:Cost of services, exclusive of depreciation and amortization 4,254,369 4,553,461 7.0General and administrative 170,193 225,869 32.7Depreciation and amortization 135,691 142,866 5.3Total costs and expenses 4,560,253 4,922,196 7.9Other operating income 1,518 3,406 124.4Income from continuing operations before other income and 267,242 268,315 0.4expenseOther income and expense:Loss on early retirement of debt (14,692) (28,845) 96.3Equity in earnings of unconsolidated subsidiaries 41,339 63,904 54.6Interest expense (154,165) (128,605) (16.6)Income from continuing operations before income taxes 139,724 174,769 25.1Income tax expense from continuing operations 29,253 44,782 53.1Income from continuing operations, net of tax 110,471 129,987 17.7Discontinued operations:Income from discontinued business 242,632 223,414 (7.9)Income tax expense from discontinued business 53,372 56,697 6.2Income from discontinued operations, net of tax 189,260 166,717 (11.9)Net income 299,731 296,704 (1.0)Less: Net income attributable to non-controlling interests 56,240 82,666 47.0Net income attributable to Select Medical $ 243,491 $ 214,038 (12.1)%Net income attributable to Select Medical's commonstockholders:Income from continuing operations, net of tax $ 59,027 $ 65,473Income from discontinued operations, net of tax 184,464 148,565Net income attributable to Select Medical's common $ 243,491 $ 214,038stockholders:Earnings per common share:Continuing operations – basic and diluted $ 0.46 $ 0.51Discontinued operations – basic and diluted 1.44 1.15Basic and diluted earnings per common share:(1) $ 1.91 (2) $ 1.66

_______________________________________________________________________________(1) Refer to table III for calculation of earnings per common share.(2) Does not total due to rounding.N/M Not meaningful.

III. Earnings per ShareFor the Three Months and Years Ended December 31, 2023 and 2024(In thousands, except per share amounts, unaudited)

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

The following table sets forth the income from continuing operations, net of tax, attributable to Select Medical's common stockholders, its common shares outstanding, and its participating securities outstanding for the three months and years ended December 31, 2023 and 2024:

Basic EPS Three Months Ended Years Ended December 31, December 31, 2023 2024 2023 2024Income (loss) from continuing operations, net of tax $ 30,251 $ (10,456) $ 110,471 $ 129,987Less: Net income attributable to non-controlling interests 14,508 13,208 51,444 64,514Income (loss) from continuing operations, net of tax, 15,743 (23,664) 59,027 65,473attributable to Select Medical's common stockholdersLess: distributed and undistributed net income (loss) 556 (597) 2,127 2,319attributable to participating securities(1)Income (loss) from continuing operations, net of tax, $ 15,187 $ (23,067) $ 56,900 $ 63,154attributable to common shares

The following tables set forth the computation of EPS for the three months and years ended December 31, 2023 and 2024:

Three Months Ended December 31, 2023 Income from Shares(1) Basic and Diluted Continuing EPS Operations, Net of Tax, Allocation (in thousands, except for per share amounts)Common shares $ 15,187 123,817 $ 0.12Participating securities 556 4,530 $ 0.12Total $ 15,743

Three Months Ended December 31, 2024 Loss from Basic Basic EPS Loss from Diluted Diluted EPS Continuing Shares(1) Continuing Shares(1) Operations, Operations, Net of Tax, Net of Tax, Allocation – Allocation – Basic Diluted (in thousands, except for per share amounts)Common shares $ (23,067) 125,923 $ (0.18) $ (23,664) 127,535 $ (0.19)Participating securities (597) 3,261 $ (0.18)Total $ (23,664)

Year Ended December 31, 2023 2024 Income from Shares(1) Basic and Income from Shares(1) Basic and Continuing Diluted EPS Continuing Diluted EPS Operations, Operations, Net of Tax, Net of Tax, Allocation Allocation (in thousands, except for per share amounts)Common shares $ 56,900 123,105 $ 0.46 $ 63,154 124,614 $ 0.51Participating securities 2,127 4,601 $ 0.46 2,319 4,576 $ 0.51Total $ 59,027 $ 65,473

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

IV. Condensed Consolidated Balance Sheets(In thousands, unaudited) December 31, 2023 2024AssetsCurrent Assets:Cash and cash equivalents $ 52,632 $ 59,694Accounts receivable 724,141 821,385Current assets of discontinued operations 291,064 -Other current assets 189,809 138,698Total Current Assets 1,257,646 1,019,777Operating lease right-of-use assets 790,764 908,095Property and equipment, net 845,191 872,185Goodwill 2,283,425 2,331,898Identifiable intangible assets, net 105,147 103,183Non-current assets of discontinued operations 2,039,142 -Other assets 368,316 372,813Total Assets $ 7,689,631 $ 5,607,951Liabilities and EquityCurrent Liabilities:Payables and accruals $ 735,857 $ 777,781Current operating lease liabilities 172,454 179,601Current portion of long-term debt and notes payable 68,874 20,269Current liabilities of discontinued operations 271,280 -Total Current Liabilities 1,248,465 977,651Non-current operating lease liabilities 668,557 787,124Long-term debt, net of current portion 3,584,384 1,691,546Non-current deferred tax liability 119,942 81,497Non-current liabilities of discontinued operations 411,487 -Other non-current liabilities 82,781 73,038Total Liabilities 6,115,616 3,610,856Redeemable non-controlling interests 26,297 10,167Total Equity 1,547,718 1,986,928Total Liabilities and Equity $ 7,689,631 $ 5,607,951

V. Condensed Consolidated Statements of Cash FlowsFor the Three Months Ended December31, 2023 and 2024(In thousands, unaudited) 2023 2024Operating activitiesNet income $ 61,798 $ 3,756Adjustments to reconcile net income to net cash provided by operatingactivities:Distributions from unconsolidated subsidiaries 13,521 8,742Depreciation and amortization 53,984 45,743Provision for expected credit losses (71) 2,620Equity in earnings of unconsolidated subsidiaries (10,195) (10,423)Loss on extinguishment of debt – 8,099(Gain) loss on sale of assets and businesses (50) 48Stock compensation expense 11,818 61,271Amortization of debt discount, premium and issuance costs 748 684Deferred income taxes 930 2,507Changes in operating assets and liabilities, net of effects of businesscombinations:Accounts receivable 4,170 20,916Other current assets (12,098) 10,216Other assets 3,003 (1,009)Accounts payable and accrued expenses 51,884 (27,738)Net cash provided by operating activities 179,442 125,432Investing activitiesBusiness combinations, net of cash acquired (9,085) (10,786)Purchases of property and equipment (60,603) (63,429)Proceeds from sale of assets and businesses 104 22Net cash used in investing activities (69,584) (74,193)Financing activitiesBorrowings on revolving facilities 270,000 290,000Payments on revolving facilities (330,000) (195,000)Proceeds from term loans, net of issuance costs – 1,043,355Payments on term loans (5,258) (372,982)Payment on senior notes, including call premium – (1,237,764)Proceeds from senior notes, net of issuance costs – 539,261Borrowings of other debt 550 4,086Principal payments on other debt (8,648) (29,498)Dividends paid to common stockholders (16,048) (16,124)Repurchase of common stock (1,709) (19,981)Increase in overdrafts 280 11,630Proceeds from issuance of non-controlling interests 2,472 6,300Distributions to and purchases of non-controlling interests (14,931) (24,201)Cash transferred to Concentra at separation – (182,095)Net cash used in financing activities (103,292) (183,013)Net increase (decrease) in cash and cash equivalents 6,566 (131,774)Cash and cash equivalents at beginning of period 77,440 191,468Cash and cash equivalents at end of period(1) $ 84,006 $ 59,694Supplemental information:Cash paid for interest, excluding amounts received of $22,465 under the $ 50,564 $ 39,472interest rate cap contract in 2023Cash paid for taxes 10,008 30,491

__________________________________________(1) Discontinued operations at December 31, 2023, includes $31.4million of cash and cash equivalents.

VI. Condensed Consolidated Statements of Cash FlowsFor the Years Ended December31, 2023 and 2024(In thousands, unaudited) 2023 2024Operating activitiesNet income $ 299,731 $ 296,704Adjustments to reconcile net income to net cash provided by operatingactivities:Distributions from unconsolidated subsidiaries 23,417 39,178Depreciation and amortization 208,742 203,894Provision for expected credit losses 1,030 4,279Equity in earnings of unconsolidated subsidiaries (40,813) (60,228)Loss on extinguishment of debt 175 19,038Gain on sale of assets and businesses (57) (1,063)Stock compensation expense 43,809 100,670Amortization of debt discount, premium and issuance costs 2,647 2,963Deferred income taxes (16,119) (32,434)Changes in operating assets and liabilities, net of effects of businesscombinations:Accounts receivable 1,156 (95,845)Other current assets (29,374) 18,072Other assets 10,031 12,933Accounts payable and accrued expenses 77,683 9,703Net cash provided by operating activities 582,058 517,864Investing activitiesBusiness combinations, net of cash acquired (29,567) (13,097)Purchases of property, equipment, and other assets (229,200) (222,177)Investment in businesses (9,873) -Proceeds from sale of assets and businesses 163 4,263Net cash used in investing activities (268,477) (231,011)Financing activitiesBorrowings on revolving facilities 905,000 1,240,000Payments on revolving facilities (1,070,000) (1,415,000)Proceeds from term loans, net of issuance costs 2,092,232 1,880,052Payments on term loans (2,113,952) (2,092,485)Payment on senior notes – (1,237,764)Proceeds from senior notes, net of issuance costs – 1,176,598Borrowings of other debt 31,399 24,892Principal payments on other debt (46,946) (65,280)Dividends paid to common stockholders (63,904) (64,617)Repurchase of common stock (12,759) (37,905)Decrease in overdrafts (1,687) (4,471)Proceeds from issuance of non-controlling interests 22,935 15,713Distributions to and purchases of non-controlling interests (63,531) (60,001)Purchase of membership interests of Concentra Group Holdings Parent (6,268) -Proceeds from Concentra initial public offering – 511,198Cash transferred to Concentra at separation – (182,095)Net cash used in financing activities (327,481) (311,165)Net decrease in cash and cash equivalents (13,900) (24,312)Cash and cash equivalents at beginning of period 97,906 84,006Cash and cash equivalents at end of period(1) $ 84,006 $ 59,694Supplemental information:Cash paid for interest, excluding amounts received of $82,818 and $68,069 $ 272,261 $ 256,229under the interest rate cap contract in 2023 and 2024, respectivelyCash paid for taxes 88,510 133,187

______________________________________________________________(1) Discontinued operations at December 31, 2023, includes $31.4million of cash and cash equivalents.

VII. Key StatisticsFor the Three Months Ended December31, 2023 and 2024(unaudited) 2023 2024 % ChangeCritical Illness Recovery HospitalNumber of hospitals operated – end of period(a) 107 104Revenue (,000) $ 567,128 $ 600,445 5.9%Number of patient days(b)(c) 277,470 274,134 (1.2)%Number of admissions(b)(d) 9,126 8,691 (4.8)%Revenue per patient day(b)(e) $ 2,037 $ 2,183 7.2%Occupancy rate(b)(f) 66% 67% 1.5%Adjusted EBITDA (,000) $ 57,384 $ 63,098 10.0%Adjusted EBITDA margin 10.1% 10.5%Rehabilitation HospitalNumber of hospitals operated – end of period(a) 33 35Revenue (,000) $ 260,166 $ 294,352 13.1%Number of patient days(b)(c) 116,003 119,870 3.3%Number of admissions(b)(d) 8,264 8,626 4.4%Revenue per patient day(b)(e) $ 2,063 $ 2,177 5.5%Occupancy rate(b)(f) 85% 81% (4.7)%Adjusted EBITDA (,000) $ 66,344 $ 62,277 (6.1)%Adjusted EBITDA margin 25.5% 21.2%Outpatient RehabilitationNumber of clinics operated – end of period(a) 1,933 1,914Working days(g) 63 64Revenue (,000) $ 298,235 $ 319,598 7.2%Number of visits(b)(h) 2,672,936 2,811,704 5.2%Revenue per visit(b)(i) $ 100 $ 102 2.0%Adjusted EBITDA (,000) $ 22,473 $ 26,561 18.2%Adjusted EBITDA margin 7.5% 8.3%

_______________________________________________________________________________(a) Includes managed locations.(b) Excludes managed locations.(c) Each patient day represents one patient occupying one bed for one day during the periods presented.(d) Represents the number of patients admitted to Select Medical's hospitals during the periods presented.(e) Represents the average amount of revenue recognized for each patient day. Revenue per patient day is calculated by dividing patient service revenues, excluding revenues from certain other ancillary and outpatient services provided at Select Medical's hospitals, by the total number of patient days.(f) Represents the portion of our hospitals being utilized for patient care during the periods presented. Occupancy rate is calculated using the number of patient days, as presented above, divided by the total number of bed days available during the period. Bed days available is derived by adding the daily number of available licensed beds for each of the periods presented.(g) Represents the number of days in which normal business operations were conducted during the periods presented.(h) Represents the number of visits in which patients were treated at Select Medical's outpatient rehabilitation clinics during the periods presented.(i) Represents the average amount of revenue recognized for each patient visit. Revenue per visit is calculated by dividing patient service revenue, excluding revenues from certain other ancillary services, by the total number of visits.

VIII. Key StatisticsFor the Years Ended December31, 2023 and 2024(unaudited) 2023 2024 % ChangeCritical Illness Recovery HospitalNumber of hospitals operated – end of period(a) 107 104Revenue (,000) $ 2,299,773 $ 2,444,196 6.3%Number of patient days(b)(c) 1,108,492 1,118,757 0.9%Number of admissions(b)(d) 36,225 35,784 (1.2)%Revenue per patient day(b)(e) $ 2,067 $ 2,177 5.3%Occupancy rate(b)(f) 68% 68% 0.0%Adjusted EBITDA (,000) $ 246,015 $ 301,634 22.6%Adjusted EBITDA margin 10.7% 12.3%Rehabilitation HospitalNumber of hospitals operated – end of period(a) 33 35Revenue (,000) $ 979,585 $ 1,110,592 13.4%Number of patient days(b)(c) 446,145 470,594 5.5%Number of admissions(b)(d) 31,627 33,665 6.4%Revenue per patient day(b)(e) $ 2,017 $ 2,134 5.8%Occupancy rate(b)(f) 85% 84% (1.2)%Adjusted EBITDA (,000) $ 221,875 $ 245,748 10.8%Adjusted EBITDA margin 22.6% 22.1%Outpatient RehabilitationNumber of clinics operated – end of period(a) 1,933 1,914Working days(g) 254 256Revenue (,000) $ 1,188,914 $ 1,250,294 5.2%Number of visits(b)(h) 10,657,558 11,147,920 4.6%Revenue per visit(b)(i) $ 100 $ 101 1.0%Adjusted EBITDA (,000) $ 111,868 $ 108,577 (2.9)%Adjusted EBITDA margin 9.4% 8.7%

IX. Income from Continuing Operations, Net of Tax, to Adjusted EBITDA ReconciliationFor the Three Months and Years Ended December 31, 2023 and 2024(In thousands, unaudited)

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

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

Three Months Ended Years Ended December 31, December 31, 2023 2024 2023 2024Income (loss) from continuing operations, net of tax $ 30,251 $ (10,456) $ 110,471 $ 129,987Income tax expense (benefit) 4,618 (4,487) 29,253 44,782Interest expense 40,263 28,551 154,165 128,605Equity in earnings of unconsolidated subsidiaries (10,195) (10,423) (41,339) (63,904)Loss on early retirement of debt – 17,906 14,692 28,845Income from continuing operations before other income $ 64,937 $ 21,091 $ 267,242 $ 268,315and expenseStock compensation expense:Included in general and administrative 9,658 47,414 36,041 79,931Included in cost of services 1,688 12,902 7,117 19,283Depreciation and amortization 35,485 36,283 135,691 142,866Concentra separation transaction costs(b) – (1,698) – -Adjusted EBITDA $ 111,768 $ 115,992 $ 446,091 $ 510,395Critical illness recovery hospital $ 57,384 $ 63,098 $ 246,015 $ 301,634Rehabilitation hospital 66,344 62,277 221,875 245,748Outpatient rehabilitation 22,473 26,561 111,868 108,577Other(a) (34,433) (35,944) (133,667) (145,564)Adjusted EBITDA $ 111,768 $ 115,992 $ 446,091 $ 510,395

_______________________________________________________________________________(a) Other primarily includes general and administrative costs and other operating income, as discussed further above.(b) During the three months ended December 31, 2024, transaction costs of $1.7 million recognized in previous periods were reclassified from income from continuing operations to income from discontinued operations. Total Concentra separation transaction costs of $16.3 million were recognized during the year ended December 31, 2024 and included in income from discontinued business.

X. Reconciliation of Earnings per Common Share from Continuing Operations, Net of Tax, to Adjusted Earnings per Common Share from Continuing Operations, Net of TaxFor the Years Ended December 31, 2023 and 2024(In thousands, except per share amounts, unaudited)

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

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

Three Months Ended December31, 2023 Per Share(a) 2024 Per Share(a)Income from continuing operations, net of tax, $ 15,187 $ 0.12 $ (23,664) (0.19)attributable to common shares(a)Adjustments:(b)Loss on early retirement of debt, net of tax – – 12,885 0.10Concentra separation transaction costs, net of tax – – (1,241) (0.01)Stock compensation expense due to accelerated – – 34,645 0.28vesting, net of taxAdjusted income from continuing operations, net of $ 15,187 $ 0.12 $ 22,625 $ 0.18tax, attributable to common shares

Years Ended December31, 2023 Per Share(a) 2024 Per Share(a)Income from continuing operations, net of tax, $ 56,900 $ 0.46 $ 63,154 $ 0.51attributable to common shares(a)Adjustments:(b)Loss on early retirement of debt, net of tax 10,019 0.08 20,311 0.16Stock compensation expense due to accelerated – – 33,846 0.27vesting, net of taxAdjusted income from continuing operations, net of $66,919 $ 0.54 $ 117,311 $ 0.94tax, attributable to common shares

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

XI. Income from Continuing Operations, Net of Tax, to Adjusted EBITDA ReconciliationBusiness Outlook for the Year Ending December 31, 2025(In millions, unaudited)

The following is a reconciliation of full year 2025 Adjusted EBITDA expectations as computed at the low and high points of the range to the closest comparable GAAP financial measure. Refer to table IX for the definition of Adjusted EBITDA and a discussion of Select Medical's use of Adjusted EBITDA in evaluating financial performance. Each item presented in the below table is an estimation of full year 2025 expectations.

RangeNon-GAAP Measure Reconciliation Low HighIncome from continuing operations, net of tax, attributable to Select Medical $ 142 $ 155Net income attributable to non-controlling interests 75 78Income from continuing operations, net of tax 217 233Income tax expense 79 84Interest expense 107 107Equity in earnings of unconsolidated subsidiaries (47) (48)Income from continuing operations before other income and expense 356 376Stock compensation expense 18 18Depreciation and amortization 146 146Adjusted EBITDA $ 520 $ 540

https://c212.net/c/img/favicon.png?sn=PH23759&sd=2025-02-20

View original content:https://www.prnewswire.com/news-releases/select-medical-holdings-corporation-announces-results-for-its-fourth-quarter-and-year-ended-december-31-2024-its-2025-business-outlook-and-cash-dividend-302381884.html

SOURCE Select Medical Holdings Corporation

https://rt.newswire.ca/rt.gif?NewsItemId=PH23759&Transmission_Id=202502201634PR_NEWS_USPR_____PH23759&DateId=20250220