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Presentation

Operator: Good morning, and thank you for joining us today for Select Medical Holdings Corporation’s Earnings Conference Call to discuss the third quarter 2025 results and the company’s business outlook. Presenting today are the company’s Executive Chairman and Co-Founder, Robert Ortenzio; the company’s Chief Executive Officer, Thomas Mullin; and the company’s Executive Vice President and Chief Financial Officer, Michael Malatesta. Also on the conference line is the company’s Senior Executive Vice President of Strategic Finance and Operations, Martin Jackson. Management will give you an overview of the quarter and then open the call for questions. Before we get started, we would like to remind you that this conference call may contain forward-looking statements regarding future events or the future financial performance of the company, including, without limitation, statements regarding operating results, growth opportunities and other statements that refer to Select Medical’s plans, expectations, strategies, intentions and beliefs.

These forward-looking statements are based on the information available to management of Select Medical today, and the company assumes no obligation to update these statements as circumstances change. At this time, I will turn the conference over to Mr. Robert Ortenzio. Please go ahead.

Robert Ortenzio: Thanks. thank you, operator. Good morning, everyone. Welcome to Select Medical’s Third Quarter 2025 Earnings Call. As our custom, I’ll provide some overview of the quarter and comment on our development efforts, and then I’ll turn the call over to our CEO, Tom Mullin. Let me begin with the regulatory update that affects our critical illness recovery hospital segment. On September 22, CMS announced the deferment of its expanded Medicare outlier reconciliation criteria, what we commonly refer to — have referred to as the 20% transmittal rule. It was originally slated to apply to cost reporting periods beginning on or after October 1, 2024. This rule will now be effective for periods beginning on or after October 1, 2025.

The rules deferral resulted in a favorable revenue adjustment recorded this quarter. We are pleased with the delay of the transmittal and expect the rule to have much less of an impact as labor costs are more stabilized in the cost years now affected by the change. This should result in fewer of our hospitals subjected to an outlier payment reconciliation. While we are pleased with CMS’ decision to delay the implementation of the 20% transmittal rule, we believe further reform is needed to ensure Medicare policy supports treatment of high-acuity patients in our long-term acute care hospitals. We will continue to actively advocate for policies that enable us to provide critical care for these patients. I would now like to turn to an update on development.

During the third quarter, we acquired a 30-bed critical illness recovery hospital in Memphis, Tennessee and grew our outpatient portfolio by 3 clinics. Future development efforts remain focused on our inpatient rehabilitation segment. Between now and the first half of 2027, we expect to add 395 inpatient rehabilitation beds through a combination of new openings and strategic bed additions. This month, we opened our fourth rehab hospital with our joint venture partners, the Cleveland Clinic that operates 32 new beds. By year-end, we expect to open a 45-bed rehabilitation hospital in Temple, Texas and a 32-bed acute rehab unit in Orlando, Florida. We also anticipate adding 10 beds to an existing rehab hospital with our joint venture partner, Riverside in Virginia.

Moving to 2026, we expect to open 3 new inpatient rehab hospitals, including a 58-bed facility in Tucson, Arizona in partnership with Banner Health, a 63-bed hospital in Ozark, Missouri with Cox Health and a 60-bed hospital with AtlantiCare in New Jersey. Additionally, we plan to add 2 acute rehab units and 2 neuro transitional units to further enhance our continuum of care rehabilitation. Looking ahead to 2027, we are preparing to launch a 76-bed rehab hospital in Jersey City, New Jersey under the Kessler brand. Beyond these projects, our pipeline remains active and promising with additional opportunities under various stages of development. As we advance these initiatives, we will remain focused on strategic investments that drive sustainable growth and long-term value for our shareholders.

In addition to development, we continue to evaluate opportunities to increase the return on capital to our shareholders through share repurchase and cash dividends. This quarter, the Board of Directors approved a cash dividend of $0.0625 per share, which is payable on November 25, 2025 to stockholders of record as of November 12, 2025. These actions reflect our ongoing commitment to enhancing shareholder value and positioning the company for continued success. This concludes my remarks, and I’ll now turn the call over to Tom Mullin for additional remarks regarding financial performance for the quarter of each of our segments.

Thomas Mullin: Thank you, Bob, and good morning, everyone. On a consolidated basis, revenue grew over 7% to $1.36 billion compared to $1.27 billion in the prior year. Adjusted EBITDA also increased over 7% to $111.7 million, up from $103.9 million. Earnings per common share from continuing operations rose over 21% to $0.23 compared to $0.19 per share in the same quarter last year. Moving into our segment results. We will start with the inpatient rehab hospital division, where we delivered another strong quarter. Revenue increased 16% year-over-year to $328.6 million and adjusted EBITDA was up 13% to $68 million. Our revenue per patient day increased nearly 5% and our average daily census rose 11%. Occupancy improved to 83% from 82% with same-store occupancy rising to 86% from 85%.

Our adjusted EBITDA margin declined slightly to 20.7% from 21.3%. In our outpatient rehab division, revenue increased 4% to $325.4 million, which was driven by over 5% growth in our patient visits. Net revenue per visit decreased to $100 from $101 in the same quarter last year. The decrease in net revenue per visit was driven by a reduction in our Medicare reimbursement and an unfavorable shift in payer mix. Adjusted EBITDA decreased over 14% to $24.2 million, with margin declining from 9.1% to 7.4%. In our critical illness recovery hospital division, our revenue increased over 4% to $609.9 million, while adjusted EBITDA rose over 10% to $56.1 million, up from $50.8 million in the same quarter of last year. Our adjusted EBITDA margin increased to 9.2% from 8.7%.

Occupancy remained steady at 65% with our admissions up 2.1%. That concludes my remarks, and I will turn the call over to Mike Malatesta for additional financial details before we open the call up for questions.

Michael Malatesta: Thank you, Tom, and good morning, everyone. At the end of the quarter, we had $1.8 billion of debt outstanding and $60.1 million of cash on the balance sheet. Our debt at quarter end includes $1.04 billion in term loans, $150 million in revolving loans, $550 million in 6.25% senior notes due 2032 and $47.1 million of other miscellaneous debt. We ended the quarter with net leverage of 3.4x under our senior secured credit agreement and have $419.1 million of availability on our revolving loans. Our term loan carries an interest rate of SOFR plus 200 basis points and matures on December 3, 2031. Interest expense was $30 million compared to $31.4 million in the same quarter last year. For the quarter, cash flow from operating activities was $175.3 million.

Our days sales outstanding or DSO from continuing operations was 56 days at September 30, 2025, compared to 60 days at September 30, 2024, and 58 days at December 31, 2024. Investing activities used $32.6 million, which includes $53.1 million used for purchases of property and equipment, offset by $22.1 million of proceeds from the sale of interest in one of our hospitals. Financing activities used $135 million, including $100 million in net repayments on our revolving line of credit, $7.7 million in dividends, $17 million in net distributions to noncontrolling interest and $2.6 million in term loan repayments. We are reaffirming our business outlook for both revenue and adjusted EBITDA for 2025. We expect revenue to be in the range of $5.3 billion to $5.5 billion and adjusted EBITDA to be in the range of $510 million to $530 million.

We are increasing our estimate for earnings per common share to be in the range of $1.14 to $1.24. Excluding capital expenditures subsequently contributed to nonconsolidating joint ventures, we still expect capital expenditures to be in the range of $180 million to $200 million. This concludes our prepared remarks. At this time, we’d like to turn the call back to the operator to open the line for questions.

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Operator: The first question for today will be coming from the line of Ben Hendrix of RBC Capital Markets.

Benjamin Hendrix: I appreciate the opening commentary about the 20% transmittal delay. I wanted to see if you could focus a little bit on the ongoing impact of the high-cost outlier. What it’s doing to the admission volume, occupancy and kind of what types of mitigation tactics you guys can employ to help offset that? And then just close with any development conversations in Washington.

Thomas Mullin: Ben, this is Tom Mullin. I’ll start with your question. To your point about the high-cost outlier and the fixed loss threshold continuing to increase at a pretty dramatic rate over the last 4 years and now sitting at just under 79,000. It does have a negative impact on our LTAC business because whenever you think of how our LTACs are positioned across the country, many of our LTACs are with some of the largest academic medical centers that carry the highest case mix index and most acute patients across the country. So as we see that fixed loss threshold continue to go up, we are unable to accommodate as many of those very acutely ill patients just because there’s so much more loss to get to any outlier reimbursement.

So it has had an effect on our ADC and some of the mitigation efforts that we have, we’re fortunate that we have inpatient rehab hospitals in those shared markets in most of our shared markets with the large academic medical centers that we partner with. And we’re able to use those as downstream opportunities to get some of the patients moved from the LTAC to the inpatient rehab as they’re able to take more acutely ill patients, and we get our rehabs able to do that. So we’ve seen year-over-year, our patient days or our length of stay on some of these — on those patients has decreased by 1.5 days on our patients. As a result of that, our ADC is down slightly, but our admissions are up. So obviously, we’re going to continue to focus on that high-cost outlier threshold.

And I’ll let Bob comment on what we’re doing in D.C. to try and combat some of those efforts.

Robert Ortenzio: The environment in D.C. is one that I think I characterize it as better than it’s been historically. We — I think we have more open channels with both CMS and the committees of jurisdiction in the House and Senate. Our energy most recently has been to try to get the deferment of the 20% transmittal so that it would be applied a bit more fairly because of the nature of our cost reports and the high labor costs coming out of the pandemic. So as I mentioned in my earlier comments, we are pleased with that. However, it does not solve really more of the long-term challenges that we have. Just to point out that, that fixed loss threshold in the last 4 years has gone from $38,000 to $59,000 then to $77,000. And then we did get, I think, a bit of a break with it being at $79,000, still quite an increase, but a bit more modest when you consider that the proposed rule had the fixed loss threshold of being $91,000, which would have been extremely punitive had that been implemented in the last proposed rule.

So as always in this industry, we are holding our breath for the proposed rules to come out, and then that is an avenue for us to comment. But it is true that while the regulatory environment is difficult because the outlier pool is supposed to stay at a little bit below 8% and the mechanism that CMS has is to continue to push up the fixed loss threshold to try to come within that legislative mandate of the 8%. But on the other hand, it works against the policy for LTACs, the overreaching policy for LTACs, which is to have them take the higher acuity patient. So there is a push and pull there that I think is difficult to reconcile. And the only thing that we can do is continue to advocate on behalf of the sickest of the sick patients that go into the — particularly to our LTACs. I hope that answers your question.

But if you have a follow-up, please ask.

Benjamin Hendrix: No, I think that covers it.

Operator: Our next question will be coming from the line of Justin Bowers of DB.

Justin Bowers: So I’ll just stick with 2 quick ones on LTAC. So number one, Bob and Tom, is there — has there been any discussion with CMS or in D.C. about raising the targeted amount of payments or that 8% threshold to something higher in terms of like percentage of outlier patients? And then two, there’s a lot of moving parts with reimbursement, but you did get an increase for 2026 and a modest increase for the HCO. Are the trends that we’re seeing now as it relates to like length of stay in ADC, is it just — is that a good way to think about sort of like how the business should trend on the go forward, absent any other big changes?

Robert Ortenzio: It’s a great question. And I think the best way for me to respond is to say this, there are lots of levers in a very complicated reimbursement system. As I’ve said before on this call, the LTAC reimbursement has become mind-numbingly complicated. And I think we see — we hear that from our shareholders and from the analyst community because there are — if you go with the fixed loss threshold, you go with site neutral, you look at the compliance requirement of 20-day length — 25-day length of stay, you look at an 8% outlier pool. These are all levers that can be pulled for us, for Select. And I think for most of the industry, we’d be happy for relief to come from any of those levers. And for me, just from a — strategically, I’d like to propose to policymakers ranges of options that they could do to help the industry that is no secret over the last 4, 5 years has struggled as an industry.

And so we’re putting all options on the table for relief. And it’s hard oftentimes for us to know either from a legislative or regulatory standpoint, what are the paths of least resistance for regulators. So sometimes we don’t always know from a transparency standpoint of what they feel they can do more easily. Sometimes the regulatory CMS feels that they’re restricted by some legislative constraints. And the legislative branch doesn’t want to oftentimes impose too much on what they view as a regulatory playing field and encroach upon that. So we’re — we try to work with the rest of the industry to put as many options on the table. Obviously, you hear about the ones that are most difficult for us. I mean it is trying when the fixed loss threshold has been going up as dramatically as it has over the last couple of years.

So that’s obviously an easy one, but that may not be the easiest one for CMS to solve for. So we obviously put other options on the table.

Justin Bowers: Appreciate that. And then just pivoting, there’s a lot of development activity, especially on the IRF side over the next couple of years. Can you help us understand how much of the CapEx this year is maintenance versus growth?

Michael Malatesta: I’ll take that question on maintenance. Maintenance for this year, we’re projecting overall $180 million to $200 million. Maintenance is going to range in that $100 million to $105 million range. The remainder is related to…

Operator: And our next question will be coming from the line of Ann Hynes of Mizuho Securities.

Ann Hynes: I know you said in the prepared remarks that you had a revenue benefit from the delay of the 20% transmittal rule. What was the impact in the quarter from a revenue and EBITDA perspective?

Michael Malatesta: So Ann, the net impact when we take into account the revenue and some expense reversals was in the $12 million to $15 million range.

Ann Hynes: For EBITDA?

Michael Malatesta: EBITDA for the quarter.

Ann Hynes: Okay. And then what about for the year? Because you didn’t raise — like I would assume this would have been a benefit to guidance. Is there something else going on that you didn’t raise guidance for the positive change?

Michael Malatesta: Well, as you saw, we had some softness in our outpatient segment this quarter. So while we’re comfortable raising EPS guidance, we thought it was prudent just to maintain EBITDA guidance.

Ann Hynes: Okay. And then — and just from a year impact, like what was the delay? I know that was the quarter, the 12% to 15%, but what impact did it have on your guidance for the total year?

Michael Malatesta: So for the year, we really did not — we had just a negligible, not a de minimis impact for Q4 because I think as we — as Bob alluded to earlier, that as the time line progressed, it had less of a significant impact to 20% transmittal rule because we had more labor periods to compare against.

Ann Hynes: And maybe you mentioned outpatient. Maybe can you give us some more detail on what type of softness you’re seeing and the impact? And what you think driving it?

Michael Malatesta: We did have a nice increase in volume of approximately 5%, but we did have pressure on rate. And Medicare has been a headwind that we’ve had to deal with for all of 2025 and actually the last few years significantly. But we also did see a deterioration in our mix for this quarter. We look to get that back on track, but just not the mix within categories, but sometimes the mix within the mix of certain geographic areas and certain managed care commercial payers.

Ann Hynes: Okay. And then maybe focusing on 2026. I know you’re not giving guidance today, but are there any high-level headwinds and tailwinds that you want to call out?

Michael Malatesta: What — I think the one thing with outpatient that we have not experienced in the last 5 years is, even though it’s modest, there will be an increase for Medicare — and our Medicare Advantage payers. So that is — I consider that some type of a slight tailwind. And also, I think Tom can speak to this too, the significant development that we’ve communicated going into next year.

Thomas Mullin: Yes. I think starting just with LTAC briefly, we’ll have the 20% transmittal back in place starting this October 1 and rolling in by cost year. So that will be a bit of a headwind, but far less because of the point Mike just made about the labor markets and being further from the pandemic labor costs. So we will be able to mitigate that far more than what we would have experienced in the past year. And as it relates to inpatient rehab, there is a fair amount of development that to get started in 2026 with new hospitals. And there’s also consideration for converting more of our LTAC beds in markets where there’s rehab demand to add an ARU within our LTACs. So you’ll see a fair amount of rehab growth in the next year.

Ann Hynes: All right. Maybe one more question, just on rehab. Can you remind us like when you build a development hospital, how long to break even and how long do you get to your like peak margin profile?

Michael Malatesta: It’s — Ann, it’s Mike Malatesta again. It’s approximately 6 months until we get to about breakeven. For full maturity, it’s around 3-year — hospital that we’re at that 85% occupancy that we have for our core hospitals.

Operator: Our next question will come from the line of Joanna Gajuk Of Bank of America.

Joanna Gajuk: A couple of follow-ups. So on the 20% transmittal goal delay in implementation. So because of the more recent cost reports will be used, should we think about the, I guess, the headwind much smaller than that $12 million to $15 million you saw in first half of ’25?

Michael Malatesta: Joanna, I think your question is that is for next year, we project the impact to be much less in ’26 than it would have been if it was implemented for ’25. Yes. And we think the impact will maybe approximately a 1/3 of what we would have anticipated if it was put in place for this year and not rescinded.

Joanna Gajuk: Okay. That’s super helpful. And I guess, to Bob’s commentary around D.C. environment, maybe a little bit warming up or at least open channel, so that’s positive. And I guess as we think about heading into next year and the proposal for fiscal ’27, so any indication whether the CMS would propose again to increase the outlier threshold to $90,000? Or you think that’s kind of off the table? How should we think about that?

Robert Ortenzio: Well, the short answer is no idea. There is — these proposals are just absolutely blacked out. I mean this is why they become such a big event for us every year because there is literally no discussion ever that comes out of CMS on the proposed rules for reasons which you can appreciate. Those things are locked down. They get drafted, they circulate around the administration before then they’re released under, I think, the most extreme confidentiality.

Joanna Gajuk: Okay. So I guess we’ll just have to wait and see. All right. That’s fine. I was just checking. And if I may, a couple of more follow-ups. On the outpatient rehab, so you said that the weakness in that segment was because of the — it sounds like a payer mix. So what exactly is happening? Is it just — like you said, there’s something with different markets growing differently or there’s some sort of like managed care denying care or not paying or anything else that’s going on there?

Michael Malatesta: Well, the first part is with Medicare, there’s over a 3% [increase] this year. So that’s the challenge that our operation had to face the entire year. For this particular quarter, though, we did see a slight shift in mix to Medicare, Medicare Advantage. And also, it depends with — which — geographically, which areas have comprised a little more of your volume. And also within managed care commercial, that’s a wide basket. Certain payers pay different rates higher and lower than others. So this quarter, we did have, as we say, a shift in our mix, but along with our sustained Medicare cut that we’ve had to endure all year. And again, that is going away next year where we’ll have a modest increase.

Joanna Gajuk: Right. Because that was my other follow-up. But before I ask that, on this payer mix. So should we think this is something that could persist in terms of these margins all the way down to 7%? And is there something you can do to kind of mitigate that headwind?

Michael Malatesta: Well, we don’t think this is something that’s going to persist. Again, with Medicare, that’s going to help with Medicare and Medicare Advantage with an increase. But on our — we’ve also talked about in the past, putting investments into our systems. And this is where going into next year, with our investment in our scheduling module, that should facilitate it. Plus there is a focus to kind of rectify the deterioration of mix.

Joanna Gajuk: And then my follow-up on the outpatient rehab Medicare rate next year. So we don’t have the final — why I guess, might be delayed. But based on the proposal it says, the proposal is finalized as proposed without any changes, but what will be the rate update for your rehab therapy codes? I mean we were estimating, it’s got to be 2.6% to 2.8%, but any estimate that you can share for us?

Michael Malatesta: Actually, with the mix of codes, and there’s just a few codes that predominantly make up the base of revenue over 95% of your revenue mix for therapy codes. We’re a little more modest. We’re around that 1.8%, 1.75% increase for next year when you take all factors into account for Medicare.

Joanna Gajuk: But it’s still better than the cost, so I guess.

Michael Malatesta: [We’re happy]. Yes.

Joanna Gajuk: Yes. And if I may, just very last question. Just talking about how the segment did versus your internal expectations. So you said the outpatient was a little worse. And then the LTAC business or the critical illness hospitals, it sounds like were better because of this reversal. But outside of the reversal, how were the trends in the critical illness hospitals? And also, how did the IRF segment did versus your internal?

Michael Malatesta: Well, I think — and Tom can maybe elaborate on critical illness, but I think we’re all in agreement for inpatient rehab, it just continues to exceed our expectations this year.

Thomas Mullin: And in critical illness, we did see occupancy increase compared to prior year. But as everyone on this call knows, in the critical illness business, there’s a fair amount of seasonality, and we’re always going to see a decrease in the third quarter. And then we start to really pick back up as we enter October and the fourth quarter as the season start to change and we start to see respiratory volumes start to pick up. So we saw the normal trend that we see every year in critical illness. But compared to the prior year same period, occupancy was ahead, admissions were ahead and revenue was ahead. But obviously, the 20% transmittal deferment played into the rate increase.

Operator: And our next question will be coming from the line of A.J. Rice of UBS.

Albert Rice: First, maybe just to ask you on the rehab IRF development pipeline. Do you have a sense of what the relative start-up costs that you experienced this year and how that might compare to next year? Is that number going to be a tailwind — headwind for you? And your biggest peer in that segment is talking about potentially changing the footprint model a little bit, smaller facilities, et cetera, to go into a new market. Are you — anything going on in your approach to the sizing of these development locations that’s worth calling out?

Michael Malatesta: A.J., it’s Mike. In regards to losses, we’ve had a pretty consistent cadence from last year and projecting into next year, we’re projecting approximately $15 million to $20 million of start-up losses per annum. So that’s going to be fairly consistent. Tom is going to speak to our strategy on the size of the hospitals.

Thomas Mullin: Our focus will remain partnership focused and looking to expand partnerships with the larger health systems across the country. So you’ll see more new partners added in the coming year or 2 across the country. You’ll also see us in our markets where we’re running at or near capacity with existing partners, we’ll be adding new hospitals, like Bob spoke to in his opening remarks where we added a fourth rehab hospital with Cleveland Clinic that just opened earlier this week. So there will be additions in our existing markets, but we’ll be looking to add large new academic medical centers with inpatient rehab as well. We typically build 60-bed rehab hospitals, but we’re considering 80 to 100 bed rehab hospitals in future markets where the demand deems it necessary.

Albert Rice: Okay. Interesting. Any thoughts on labor? I think you’ve sort of tangentially commented on a couple of times across different business lines. But what are you seeing there as you think about ’26? It sounds like it’s probably a more stable labor environment than you’ve seen in a number of years, but I just don’t want to put words in your mouth. What’s sort of the cost trend on labor that you’re seeing this year and for the different business lines? And do you see it being pretty stable going into next year?

Michael Malatesta: So A.J., I mean, if we’re going to go back to what we call the agency crisis or challenges we had in ’22 and the first half of ’23. Agency within our critical illness division has — utilization has been consistently around 15%. So that’s been very stable. Our agency rates, again, are back to pre-COVID levels. And full time, I think with full-time increases for full-time equivalents across all 3 business lines, it’s been fairly consistent and actually a little under 3%. So it’s a much more stable environment than we encountered a couple of years ago.

Albert Rice: Okay. Interesting. The last question on leverage, you’re down to 3.4x now at this point. Is — how should we think about that going forward from here? Is that sort of a stable area roughly that’s comfortable? And as you sort of debt pay down maybe is less of a priority, does it change your thinking about capital allocation in any way?

Robert Ortenzio: No, A.J., this is Bob. The 3.4 is a stable, comfortable leverage. We can take it down. But as you’ve heard Marty and I in the past talk about it, it’s opportunistic. I mean, divided by the CapEx for development is obviously our #1 priority. And then you’ve got dividends, you’ve got stock buybacks and you’ve got debt reduction is then on the list, and we’ll take advantage of the one that is the most advantageous to us, and we’ll take the one the market gives us.

Operator: And we now have a follow-up question from Justin Bowers of DB.

Justin Bowers: I just wanted to follow up on PT. So Mike, what percentage of your MA rates are pegged to the Medicare fee schedule? And then the follow-up to that would be, do you have a sense of — I mean, Medicare has been a headwind for quite a few years now. Any sense of what kind of drag that’s been on EBITDA in the division over the last few years? And then what can you do to get this back to double-digit margins?

Michael Malatesta: Okay. So let me take — I think there’s 3 questions there, Justin. So the first question is approximately 80% of our Medicare Advantage is linked directly to the Part B fee schedule. So — and then I think your next question, I remember, was — what — I’m sorry, Justin, can you repeat your 2 questions again, your last 2?

Justin Bowers: Yes. So it was just — there’s been — I think there’s been — what a decrease in the — there’s been headwinds for, what, 4 or 5 years now…

Michael Malatesta: 4, 5 years — the decrease in the last 4 or 5 years, and the metric we look at is if we just had a 2% increase, a modest increase over the last 5 years versus the cuts that we had, we calculate as almost $65 million directly to our bottom line.

Justin Bowers: And then is this — the rate increase is going to help. Any other levers that you can pull to sort of like to get this thing back to double-digit margins?

Michael Malatesta: Well, the focus and the focus going into ’26 is going to be on productivity. So that’s where we’ve invested in our systems and the scheduling module. But just minor increases in productivity will have a large impact on our bottom line. So that productivity and enhancements of our systems — our front-end system is going to be a focus for outpatient in the year to come.

Operator: And this does conclude today’s Q&A session. I would like to go ahead and turn the call back over to Mr. Ortenzio for closing remarks. Please go ahead, sir.

Robert Ortenzio: Thank you, operator. There are no closing remarks. We look forward to updating you next quarter.

Operator: This concludes today’s program. You may all disconnect.

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