INVESTOR PRESENTATION December 9, 2015. 22 Forward Looking Statements This presentation contains forward-looking statements, which involve numerous risks

INVESTOR PRESENTATION

December 9, 2015

22

Forward Looking Statements

This presentation contains forward-looking statements, which involve numerous risks and uncertainties. Included are statements relating to opening of new clinics, availability of personnel and reimbursement environment. The forward-looking statements are based on the Company’s current views and assumptions and the Company’s actual results could differ materially from those anticipated as a result of certain risks, uncertainties, and factors, which include, but are not limited to: general economic, business, and regulatory conditions; competition; reimbursement conditions; federal and state regulation; acquisitions; clinic closures, availability, terms, and use of capital; availability and cost of skilled physical and occupational therapists; and weather.

2

Investment Highlights

• 506 outpatient physical and occupational therapy clinics across 42 states

• 4th largest owner/operator of clinics• Only publicly-traded, pure play provider

Proven Business Model

Solid Financial Position

• Diversified payor mix, only 25% of revs from Medicare• Strong cash flow and balance sheet

• Driven by organic growth and acquisitions• Approximately 60% of clinics are de novo start-ups• Partner with experienced physical therapists

3

Attractive Market Dynamics

• US rehab market > $15B in annual revenue• Highly fragmented; No company with >6% market share• Favorable demographics – aging and active population

Established Company

National Footprint

4

Growth Strategy

Drive organic growth through de novo PT/OT clinic openings, utilize true partnership model

Maximize profits of existing facilities by growing patient volume; realize efficiencies through higher clinical productivity

Augment organic growth through strategic acquisitions

5

Large and Growing Market Opportunity

• $15B+ U.S. rehab market with 3-4% projected annual growth

• Favorable demographics – physically active, aging and obese population segments

• Healthcare delivery shifting towards lower cost, high quality outpatient providers

“Demand for physical therapy is projected to be one of the fastest growing sectors in the U.S. economy through 2016.”

- Wall Street Journal, July 14, 2009“Jobs in healthcare support…are projected to experience even faster growth. The increased demand in this area stems largely from an aging population…occupations that will likely grow in importance are physical therapists, physical therapist assistants…”

− Report from Executive Office of the President’s Council of Economic Advisors, July 2009

6

Competitive Landscape

• Highly fragmented U.S. outpatient rehab market with ~16,000 clinics

• No company with >6% market share

• USPh ranks third nationally– Select Medical 881 Clinics

– ATI 600 Clinics

– Physiotherapy Associates 550 Clinics

– USPh 506 Clinics

Note: Owned Clinics

7

Focused Business Model

• Specialize in trauma, sports, work-related and pre and post surgical cases

• Partner with experienced physical therapists – Drive volume via referrals

– Augment sales with marketing reps

• Historical focus on organic growth via lower cost de novo (start-up) clinics

• Strategic acquisitions structured like de novos as partnerships with significant ownership retained by founders

8

USPH Partnership Advantages

Accounting HR Real Estate Construction Purchasing Marketing Compliance Legal IT

Less Administrative

Burden Access to Capital for

Development of Additional Clinics

No Personal Financial Risk Unlimited Earnings Potential Full Benefit Package Ongoing Guidance within

Semi-Autonomous Work Environment

More Resources

9

10

10

Video Placeholder

New Clinics / Brands 2015

11

Acquisition Strategy

• Completed 21 clinic group acquisitions since 2005

• Range in size from 3 to 52 clinics

• Acquisition criteria: Owner therapists continue to operate clinics

and retain significant equity interest

Immediately accretive to earnings

Further de novo growth opportunities

12

Executive Management

• Chris Reading – Chief Executive Officer– Joined USPh as COO in November 2003

– Promoted to CEO and Board in November 2004

– Previously Senior Vice President of Operations with HealthSouth, managed over 200 facilities including OP, ASC, DX Imaging and rehab hospital operations.

– BS & Physical Therapist

• Larry McAfee – Chief Financial Officer– Joined USPh as CFO in September 2003

– Promoted to EVP and Board in November 2004

– Previously served as CFO and President of both public and private companies

– BBA & MBA

• Glenn McDowell – Chief Operating Officer– Joined USPh as Vice President - West Region in October 2003

– Promoted to COO in January 2005

– Previously Vice President of Operations with HealthSouth, managed 165 facilities including ASC, DX Imaging, OP and occupational medicine facilities.

– BS & Masters Physical Therapy

13

Diversified Payor Mix

14

50%

25%

19%

6%

Percentage of 2015 Net Patient Revenue (Through September 30, 2015)

Private Insurance & Managed Care

Medicare & Medicaid

Workers Comp

Other

Worker’s Comp Push

15

• Both internally and through acquisition, USPh has expanded its industrially focused worker’s comp business.• Grown to approximately 20% of Company’s patient revenue• Treat, educate, assess and prevent work related injuries• National approach with local care delivery, 1-800-centralized

scheduling-fast, easy and convenient.

• Services provided: job specific rehabilitation work hardening/conditioning physical work qualifications assessment post-offer pre-employment screening functional capacity evaluations (“FCE”) fitness programs ergonomic assessments onsite trainers and therapists

Strong Cash Flow and Balance Sheet

• Both de novo clinics and acquisitions financed primarily through free cash flow

• USPH trailing twelve months ended September 2015 adjusted EBITDA(1) of $48.1 million; an increase of 8% from the preceding twelve months

(1) Adjusted EBITDA is defined as earnings before interest, taxes, depreciation, amortization and equity compensation expense.

16

Dividend

• In 2011 initiated quarterly dividend

• Increased dividend in 2012, 2013 and 2014

• Paid special dividend in December 2012

• Increased dividend in March 2015 by 25%

• Dividends do not impact ability to continue to grow internally through de novo clinic development and externally through acquisitions

• Dividend seen as additional way to increase returns to shareholders as Company is under leveraged and has excellent net free cash flow

17

Average Annual Rate of Return to Shareholders 23.1% Per Year

18

* Current Management Team joined Company in Fall of 2003.

Total Cumulative Return through December 31, 2014 including dividends is $31.71.Total Cumlative Return Percentage is 259.7%.Average Annual Return - 23.1%.

$0.00

$5.00

$10.00

$15.00

$20.00

$25.00

$30.00

$35.00

$40.00

$45.00

Increase in Stock Value & Dividends

Revenue

Gross Margin

Operating Income

Net Income

EPS

Adjusted EBITDA

Year Results*

19

$ 305.1 M

$ 76.2 M

$ 45.8 M

$ 20.9 M

$ 1.71

$ 46.3 M

December 31, 2013

$ 264.1 M

$ 64.7 M

$ 38.8 M

$ 17.5 M

$ 1.45

$ 38.6 M

15.5%

December 31, 2014

17.7%

18.0%

19.4%

17.9%

20.0%

• From continuing operations

• ** Adjusted EBITDA is defined as earnings before interest, taxes, depreciation, amortization and equity compensation expense.

First Nine MonthsResults

20

Revenue

Gross Margin

Operating Income

Net Income

EPS

Adjusted EBITDA

$ 244.6 M

$ 56.9 M

$ 34.7 M

$ 16.3 M

$ 1.32

$ 36.7 M

YTD September

2014

$ 225.7 M

$ 57.2 M

$ 35.0 M

$ 15.9 M

$ 1.30

$ 34.9M

Adjusted EBITDA is defined as earnings before interest, taxes, depreciation, amortization and equity compensation expense.

8.3%

0.1%

0.1%

2.5%

1.5%

5.2%

YTD September

2015

Third Quarter Results

21

Revenue

Gross Margin

Operating Income

Net Income

EPS

Adjusted EBITDA

$ 84.0 M

$ 18.9 M

$ 11.9 M

$ 5.8 M

$ .47

$ 12.8 M

Q32014

$ 77.7 M

$ 18.7 M

$ 11.3 M

$ 5.2 M

$ .43

$ 11.8M

Q32015


8.1%

1.1%

5.3%

11.5%

9.3%

8.5%

Summary

22

Only publicly-traded, pure play operator of rehab clinics

Proven business model, driven by organic growth and acquisitions

Significant scale with national footprint

Large and growing market/favorable demographics

Strong cash flow and balance sheet

Reconciliation of Non-GAAP Financial Measures – Adjusted EBITDA


23

From Continuing Operations

Trailing Twelve Months Ended

September 30(amounts in 000’s)

2015 2014

Net revenues $ 323,968 $ 294,289

Net Income attributable to U.S. Physical Therapy 21,265 19,779

Depreciation & amortization 7,714 6,063

Interest, net (income) / expense 968 957

Non-controlling interests 9,330 9,178

Equity/stock option expense 4,275 3,107

Provision for income taxes 13,875 14,471

Adjusted EBITDA before noncontrolling interests 57,427 53,555

Noncontrolling interests (9,330) (9,178)

Adjusted EBITDA $ 48,097 $ 44,377



24

From Continuing Operations

Three Months Ended

September 30(amounts in 000’s)

2015 2014

Net revenues $ 84,049 $ 77,716





Equity/stock option expense 1,162 863


Adjusted EBITDA before noncontrolling interests 15,093 13,998





25

From Continued Operations

Nine Months Ended September 30(amounts in 000’s)

2015 2014

Net revenues $ 244,578 $ 225,684





Equity/grant expense 3,368 2,456


Adjusted EBITDA before non-controlling interests 43,707 42,151



NYSE: USPH

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INVESTOR PRESENTATION December 9, 2015. 22 Forward Looking Statements This presentation contains forward-looking statements, which involve numerous risks