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Here are 1-2 brief analogies for Select Medical (SEM):

• Like HCA Healthcare, but specializing in rehabilitation hospitals and long-term acute care.
• Like DaVita for specialized medical rehabilitation and long-term recovery.

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• Long-Term Acute Care Hospitals: Provide comprehensive medical care for critically ill patients requiring extended hospital stays.
• Inpatient Rehabilitation Hospitals: Offer intensive physical, occupational, and speech therapy for patients recovering from severe injuries or illnesses.
• Outpatient Rehabilitation Clinics: Deliver physical, occupational, and speech therapy services on anaker outpatient basis.
• Occupational Health Centers: Through its Concentra subsidiary, provides workplace injury care, urgent care, physical therapy, and other employer-focused health services.

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Thomas P. Mullin, Chief Executive Officer

Thomas P. Mullin was appointed Chief Executive Officer of Select Medical on September 2, 2025. He joined Select Medical in 2008 and previously served as co-president, overseeing 140 critical illness recovery and inpatient rehabilitation hospitals, and driving the growth of both divisions nationwide. Over his 17 years with the company, Mr. Mullin has held executive leadership roles of increasing responsibility, including executive vice president from 2020-2023, president of specialty hospitals from 2018-2020, and chief operating officer of specialty hospitals from 2016-2018. Earlier in his career at Select Medical, he held various operational positions at the hospital level within the Critical Illness Recovery Hospital Division, including senior vice president of business and market development, and regional vice president.

Michael F. Malatesta, Executive Vice President & Chief Financial Officer

Michael F. Malatesta has served as Executive Vice President and Chief Financial Officer since October 2023. He is a 24-year veteran of Select Medical, having served as senior vice president of finance since November 2013, and holding various senior finance and accounting positions within the Outpatient Rehabilitation Division. Prior to that, he was Vice President of Outpatient Finance from October 2010 to November 2013, Outpatient Controller from 2002 to 2010, and Director of Outpatient Revenue Accounting from 2000 to 2002. Mr. Malatesta began his career at Select Medical in 1999 as an Accounting Manager for NovaCare Rehabilitation. Before joining the company, he held financial roles at Tenet Healthcare, Health Partners Insurance of Philadelphia, and the Graduate Health System. He is a certified public accountant and started his career in public accounting at Deloitte & Touche LLP.

Robert A. Ortenzio, Executive Chairman & Co-Founder

Robert A. Ortenzio co-founded Select Medical in 1996 with his father, Rocco A. Ortenzio, and has served as a director since February 1997. He was appointed Executive Chairman and Co-Founder on January 1, 2014, and previously served as the company's Chief Executive Officer from January 2005 to December 2013, and as President and Chief Executive Officer from September 2001 to January 2005. From February 1997 to September 2001, Mr. Ortenzio served as President and Chief Operating Officer. In 1986, Mr. Ortenzio co-founded Continental Medical Systems, Inc., where he held various capacities including Senior Vice President, Chief Operating Officer, President, and Chief Executive Officer until August 1996, and the company was sold in 1995. Before co-founding Continental Medical Systems, Inc., he was a Vice President of Rehab Hospital Services Corporation, which was acquired by National Medical Enterprises Inc. in 1985. He also co-founded Select Capital Ventures LLC in 2001. Mr. Ortenzio currently serves on the board of directors of Concentra Group Holdings, LLC.

David S. Chernow, Vice Chairman

David S. Chernow has served as Vice Chairman since September 2025. He previously served as Chief Executive Officer from October 2023 to September 2025, and as President and Chief Executive Officer from January 2014 to October 2023. Prior to joining Select Medical's board in 2002, Mr. Chernow was President and Chief Executive Officer of Oncure Medical Corp., a national network of cancer treatment centers. From 2001 to 2007, he was President and Chief Executive Officer of JA Worldwide (formerly Junior Achievement, Inc.). From 1999 to 2001, he was President of the Physician Services Group at US Oncology, Inc. Mr. Chernow co-founded American Oncology Resources in 1992 and served as its Chief Development Officer until its merger with Physician Reliance Network, Inc., which created US Oncology, Inc. in 1999.

John A. Saich, President

John A. Saich began serving as the sole President of Select Medical on September 2, 2025, having previously held the position of co-president since 2023. A 27-year veteran of Select Medical, Mr. Saich most recently served as executive vice president and chief administrative officer from 2018-2023. In this role, he oversaw outpatient rehabilitation and shared services operations. During his tenure, Mr. Saich has guided the company through successful growth and transition, serving in a variety of senior operational and human resources leadership roles.

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The key risks to Select Medical's (SEM) business operations include a significant debt burden, the impact of changes in government reimbursement policies and regulations, and intense competition within the healthcare industry.

1. Significant Debt Burden: Select Medical carries a substantial amount of debt, with a net debt/EBITDA ratio that has been around 6x. The company reported $3.66 billion in debt and $1.67 billion in leases as of March 2024, with cash and equivalents not reaching $100 million. This high level of leverage could limit financial flexibility, particularly in a high-interest rate environment, and poses a risk if the company struggles to meet its obligations.
2. Changes in Government Reimbursement Policies and Regulations: The healthcare sector is heavily regulated, and Select Medical's revenue and profitability are susceptible to changes in government reimbursement policies, particularly from Medicare and Medicaid. There has been noted margin pressure from regulatory changes in the critical illness recovery segment. A failure to maintain Medicare certifications for its long-term acute care hospitals or inpatient rehabilitation facilities could also lead to a decline in revenue and profitability.
3. Intense Competition: Select Medical operates in a competitive post-acute care market, facing rivals such as Encompass Health. This competition from large, well-capitalized entities can constrain Select Medical's ability to grow and may lead to a decrease in revenue and overall profitability.

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• The accelerating shift towards digital musculoskeletal (MSK) and virtual physical therapy platforms. Companies offering these services directly to employers and payers are gaining traction, potentially diverting patients from Select Medical's extensive network of outpatient rehabilitation clinics for certain conditions.
• Increasing payer and regulatory pressure to transition post-acute care to lower-cost settings. There is an ongoing trend, reinforced by value-based care initiatives, to reduce lengths of stay and encourage discharges to home-based care or less intensive environments, which could impact patient volumes and reimbursement for Select Medical's critical illness recovery hospitals and inpatient rehabilitation facilities.

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• Critical Illness Recovery Hospitals (Long-Term Acute Care - LTAC): The global long-term acute care market was valued at approximately USD 1.23 billion in 2024 and is projected to reach around USD 2.21 billion by 2034, with North America expected to dominate this market.
• Inpatient Rehabilitation Hospitals: The U.S. skilled nursing facility and rehabilitation market was valued at USD 244.43 billion in 2024 and is projected to reach approximately USD 365.31 billion by 2034.
• Outpatient Rehabilitation Centers (Physical and Occupational Therapy Services): The U.S. occupational and physical therapy services market size was valued at USD 59.43 billion in 2024 and is projected to grow to USD 128.17 billion by 2032. Separately, the United States occupational health market was valued at USD 1.187 billion in 2024 and is estimated to reach USD 2.146 billion by 2033.

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Select Medical (SEM) is expected to drive future revenue growth over the next 2-3 years through several key strategies and market trends:

1. Expansion of Inpatient Rehabilitation Hospitals and Outpatient Clinics: Select Medical is actively pursuing the development of new inpatient rehabilitation hospitals and the expansion of its outpatient network. The company plans to add 395 inpatient rehabilitation beds by the first half of 2027. Recent activities include the acquisition of a 30-bed critical illness recovery hospital and plans to open new facilities, such as a 45-bed hospital in Temple, Texas, and a 32-bed acute rehab unit in Orlando, Florida.
2. Strategic Partnerships and Joint Ventures: The company is leveraging strategic partnerships and joint ventures to broaden its market reach and access new patient populations. An example of this strategy is the equity interest acquisition in Banner Rehabilitation, LLC, and plans to open a fourth hospital in partnership with Banner Health in Tucson during 2026.
3. Increasing Demand for Post-Acute Care Services: Demographic shifts, particularly the aging U.S. population, are contributing to a growing demand for specialized post-acute care services, including inpatient rehabilitation. The rising prevalence of chronic conditions like strokes, neurological disorders, orthopedic injuries, diabetes, heart disease, and cancer also necessitates comprehensive rehabilitation programs, providing a stable base for Select Medical's long-term growth.
4. Expansion of Clinical Programs and Technology Integration: Select Medical is expanding its range of specialized clinical programs to address a broader spectrum of patient needs, including neurological, stroke, and orthopedic rehabilitation. Additionally, the company is investing in technology, such as telehealth, remote patient monitoring, and data analytics, to enhance patient care and improve operational efficiency.

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Capital Allocation Decisions of Select Medical (SEM) Over the Last 3-5 Years

Share Repurchases

• Select Medical has an authorized common stock repurchase program of up to $1.0 billion, which is set to remain in effect until December 31, 2025, unless extended or terminated earlier by the Board of Directors.
• From the program's inception through March 31, 2025, the company repurchased approximately 48.9 million shares at a cost of about $611.7 million, averaging $12.51 per share.
• During the first quarter ended March 31, 2025, Select Medical repurchased 649,804 shares for approximately $11.4 million.

Outbound Investments

• Select Medical has engaged in acquisitions, including one in 2023 and another in 2021.
• In April 2023, Select Medical acquired Vibra Hospital of Richmond, a long-term acute care hospital, which now operates as Select Specialty Hospital – Richmond.
• The company also pursues joint ventures, such as the one in March 2023 with Lutheran Health Network of Indiana to expand critical illness recovery care, and plans to construct a specialty hospital in Florida.

Capital Expenditures

• Expected capital expenditures for 2024 are projected to be in the range of $225 million to $275 million.
• For 2025, capital expenditures are narrowed to an expected range of $180 million to $200 million.
• These expenditures are primarily focused on strategic investments like the development of a new 63-bed inpatient rehabilitation hospital in Missouri, and additional expansions in Florida and Ohio, accelerating inpatient rehab growth.