2. SIGNIFICANT ACCOUNTING POLICIES (Tables)

9 Months Ended

Sep. 30, 2018

Accounting Policies [Abstract]

Service Fee Revenue

The Company’s total net revenues during the three and nine months ended September 30, 2018 and 2017 are presented in the table below based on an allocation of the estimated transaction price with the patient between the primary patient classification of insurance coverage (in thousands):

	Three Months Ended					Nine Months Ended
	September 30,					September 30,
	2018		2017			2018		2017
Commercial insurance	$	144,731	$	140,956		$	426,710	$	424,639
Medicare		49,292		47,941			145,158		143,234
Medicaid		6,461		6,233			19,645		19,491
Workers' compensation/personal injury		9,002		8,626			26,407		26,550
Other (1)		8,066		7,557			23,216		24,205
Service fee revenue, net of contractual allowances and discounts		217,552		211,313			641,136		638,119
Provision for bad debts		–		(11,687	)		–		(35,187	)
Net service fee revenue		217,552		199,626			641,136		602,932
Revenue under capitation arrangements		24,596		27,981			76,799		83,702
Total net revenue	$	242,148	$	227,607		$	717,935	$	686,634

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(1) Other consists of revenue from teleradiology services, consulting fees and software revenue.

Schedule of goodwill and other intangible assets

Activity in goodwill for the nine months ended September 30, 2018 is provided below (in thousands):

Balance as of December 31, 2017	$	256,776
Goodwill acquired through the acquisition of Imaging Services Company of New York, LLC		2,692
Goodwill acquired through the acquisition of certain assets of MemorialCare Medical Foundation		10,158
Goodwill transferred to assets held for sale		(1,059	)
Goodwill acquired through the acquisition of Women's Imaging Specialists in Healthcare		4,089
Goodwill acquired through the acquisition of Valley Metabolic Imaging		1,469
Goodwill acquired through the acquisition of Sierra Imaging Associates		1,147
Adjustment to our preliminary allocation of the purchase price of Women's Imaging Specilists in Healthcare		179
Adjustment to our preliminary allocation of purchase price of MemorialCare Medical Foundation		(3,313	)
Goodwill disposed through the sale of plastic surgery unit		(80	)
Goodwill acquired through the acquisition of Washington Heights Medical Management		2,303
Balance as of September 30, 2018	$	274,361

Effect of derivative instruments on comprehensive income

A tabular presentation of the effect of derivative instruments on our consolidated statement of comprehensive loss is as follows (amounts in thousands):

For the three months ended September 30, 2018
Account	July 1, 2018 Balance		Amount of gain recognized on derivative		September 30, 2018 Balance		Location
Other Comprehensive Income		3,924		595		4,519	Current Assets & Equity

For the nine months ended September 30, 2018
Account	Jan 1, 2018 Balance		Amount of gain recognized on derivative	September 30, 2018 Balance	Location
Other Comprehensive Income	(370	)	4,889	4,519	Current Assets & Equity

Schedule of fair value of assets and liabilities

The table below summarizes the estimated fair values of certain of our financial assets that are subject to fair value measurements, and the classification of these assets on our consolidated balance sheets, as follows (in thousands):

	As of September 30, 2018
	Level 1		Level 2		Level 3		Total
Current assets
Interest Rate Contracts	$	–	$	5,954	$	–	$	5,954

	As of December 31, 2017
	Level 1		Level 2			Level 3		Total
Current assets
Interest Rate Contracts	$	–	$	(595	)	$	–	$	(595	)

Schedule of fair value and carrying amount of our long-term debt

The table below summarizes the estimated fair value and carrying amount of our long-term debt as follows (in thousands):

	As of September 30, 2018
	Level 1		Level 2		Level 3		Total Fair Value		Total Face Value
First Lien Term Loans	$	–	$	599,927	$	–	$	599,927	$	595,461

		As of December 31, 2017
		Level 1		Level 2		Level 3		Total		Total Face Value
First Lien Term Loans	$	–	$	628,801	$	–	$	628,801	$	620,272

Earnings per share

Earnings per share is based upon the weighted average number of shares of common stock and common stock equivalents outstanding, net of common stock held in treasury, as follows (in thousands except share and per share data):

	Three Months Ended				Nine Months Ended
	September 30,				September 30,
	2018		2017		2018		2017
Net income (loss) attributable to RadNet, Inc.'s common stockholders	$	5,039	$	3,226	$	3,107	$	7,326
BASIC NET INCOME (LOSS) PER SHARE ATTRIBUTABLE TO RADNET, INC.'S COMMON STOCKHOLDERS
Weighted average number of common shares outstanding during the period		48,010,726		46,953,705		47,937,215		46,760,583
Basic net income (loss) per share attributable to RadNet, Inc.'s common stockholders	$	0.10	$	0.07	$	0.06	$	0.16
DILUTED NET INCOME (LOSS) PER SHARE ATTRIBUTABLE TO RADNET, INC.'S COMMON STOCKHOLDERS
Weighted average number of common shares outstanding during the period		48,010,726		46,953,705		47,937,215		46,760,583
Add nonvested restricted stock subject only to service vesting		424,397		315,830		372,462		237,595
Add additional shares issuable upon exercise of stock options and warrants		180,269		308,216		171,627		241,183
Weighted average number of common shares used in calculating diluted net income per share		48,615,392		47,577,750		48,481,305		47,239,360
Diluted net income (loss) per share attributable to RadNet, Inc.'s common stockholders	$	0.10	$	0.07	$	0.06	$	0.16
Stock options excluded from the computation of diluted per share amounts:
Weighted average shares for which the exercise price exceeds average market price of common stock		–		–		8,333		225,050

Investment in joint ventures

The following table is a summary of our investment in joint ventures during the nine months ended September 30, 2018 (in thousands):

Balance as of December 31, 2017	$	52,435
Equity in earnings in these joint ventures		9,547
Distribution of earnings		(21,783	)
Equity contributions in existing and purchase of interest in joint ventures		2,000
Balance as of September 30, 2018	$	42,199

Joint venture investment and financial information

The following table is a summary of key balance sheet data for these joint ventures as of September 30, 2018 and December 31, 2017 and income statement data for the nine months ended September 2018 and 2017 (in thousands):

Balance Sheet Data:	September 30, 2018			December 31, 2017
Current assets	$	45,345		$	47,813
Noncurrent assets		107,228			107,481
Current liabilities		(13,220	)		(16,655	)
Noncurrent liabilities		(65,686	)		(42,072	)
Total net assets	$	73,667		$	96,567
Book value of RadNet joint venture interests	$	34,210		$	45,935
Cost in excess of book value of acquired joint venture interests		7,989			6,500
Total value of Radnet joint venture interests	$	42,199		$	52,435
Total book value of other joint venture partner interests	$	39,457		$	50,632

Income statement data for the nine months ended September 30,		2018		2017
Net revenue	$	136,413	$	133,108
Net income	$	20,271	$	16,034