XML 61 R7.htm IDEA: XBRL DOCUMENT v2.4.0.6
Organization, Nature of Operations and Basis of Presentation
 12 Months Ended
Dec. 31, 2012
Organization, Nature of Operations and Basis of Presentation [Abstract]  
Organization, Nature of Operations and Basis of Presentation

1. Organization, Nature of Operations and Basis of Presentation

U.S. Physical Therapy, Inc. and its subsidiaries (the “Company”) operate outpatient physical therapy clinics that provide pre-and post-operative care and treatment for orthopedic-related disorders, sports-related injuries, preventative care, rehabilitation of injured workers and neurological-related injuries. As of December 31, 2012 the Company owned and operated 431 clinics in 43 states including the physician services facility described below. The clinics’ business primarily originates from physician referrals. The principal sources of payment for the clinics’ services are managed care programs, commercial health insurance, Medicare/Medicaid, workers’ compensation insurance and proceeds from personal injury cases. In addition to the Company’s ownership of outpatient physical therapy clinics, it also operates a physician services facility which provides services related to intra articular joint and lumbar osteoarthritis programs as well as electro-diagnostic analysis and manages physical therapy facilities for third parties, primarily physicians, with 15 such third-party facilities under management as of December 31, 2012.

The consolidated financial statements include the accounts of U.S. Physical Therapy, Inc. and its subsidiaries. All significant intercompany transactions and balances have been eliminated. The Company primarily operates through subsidiary clinic partnerships in which the Company generally owns a 1% general partnership interest and a 64% limited partnership interest. The managing therapist of each clinic owns the remaining limited partnership interest in the majority of the clinics (hereinafter referred to as “Clinic Partnership”). To a lesser extent, the Company operates some clinics through wholly-owned subsidiaries under profit sharing arrangements with therapists (hereinafter referred to as “Wholly-Owned Facilities”).

During the last three years, the Company completed the following multi-clinic acquisitions:

 

             

Acquisition

   Date   % Interest
Acquired		   Number of
Clinics
       
    2012        

May 2012 Acquisition

   May 22   70%   7
       
    2011        

July 2011 Acquisition

   July 25   51%   20
       
    2010        

February 2010 Acquisition

   February 26   70%   5

December 21, 2010 Acquisition

   December 21   70%   6

December 31, 2010 Acquisition

   December 31   65%   14

In addition to the 7 clinics in the May 2012 Acquisition, in 2012, the Company acquired 7 clinic practices in 7 separate transactions. Two of the acquired clinic practices will operate in two separate partnerships and the remaining 5 will operate as satellites of existing partnerships. In 2010, the Company acquired two clinic practices in separate transactions. Both practices were consolidated into existing Company clinics.

Clinic Partnerships

For Clinic Partnerships, the earnings and liabilities attributable to the noncontrolling interest, typically owned by the managing therapist, directly or indirectly, are recorded within the statements of net income and balance sheets as noncontrolling interests.

Wholly-Owned Facilities

For Wholly-Owned Facilities with profit sharing arrangements, an appropriate accrual is recorded for the amount of profit sharing due the clinic partners/directors. The amount is expensed as compensation and included in clinic operating costs—salaries and related costs. The respective liability is included in current liabilities—accrued expenses on the balance sheet.

Physician Services Revenues

Revenues from physician services are generated by franchisee arrangements with third parties, pursuant to which there are multiple deliverables—training and ongoing services—as well as through a physician services facility. Each component can be purchased separately. Revenue is recognized over the period the respective services are provided. Physician service revenue are included in “other revenues” in the accompanying Consolidated Statements of Net Income.

Management Contract Revenues

Management contract revenues are derived from contractual arrangements whereby the Company manages a clinic for third party owners. The Company does not have any ownership interest in these clinics. Typically, revenues are determined based on the number of visits conducted at the clinic and recognized when services are performed. Costs, typically salaries for the Company’s employees, are recorded when incurred. Management contract revenues are included in “other revenues” in the accompanying Consolidated Statements of Net Income.