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6. INVESTMENT IN JOINT VENTURES
 6 Months Ended
Jun. 30, 2016
Equity Method Investments and Joint Ventures [Abstract]  
INVESTMENT IN JOINT VENTURES

We have eleven unconsolidated joint ventures with ownership interests ranging from 35% to 55%. These joint ventures represent partnerships with hospitals, health systems or radiology practices and were formed for the purpose of owning and operating diagnostic imaging centers.  Professional services at the joint venture diagnostic imaging centers are performed by contracted radiology practices or a radiology practice that participates in the joint venture.  Our investment in these joint ventures is accounted for under the equity method.

 

Formation of new joint venture

 

On May 9, 2016, RadNet, through a newly formed subsidiary, Glendale Advanced Imaging LLC, entered into a joint venture with Dignity Health, a California nonprofit public benefit corporation.  On June 1, 2016, RadNet contributed net assets of $2.2 million for a 55% economic interest and Dignity Health contributed net assets of$1.8 million for a 45% economic interest.

 

Joint Venture investment and financial information

 

The following table is a roll forward of our investment in joint ventures during the six months ended June 30, 2016 (in thousands):

 

Balance as of December 31, 2015  $33,584 
Equity in earnings in these joint ventures   5,553 
Distribution of earnings   (2,098)
Equity contributions in existing joint ventures   2,444 
Balance as of June 30, 2016  $39,483 

  

We earned management service fees from the centers underlying these joint ventures of approximately $3.0 million and $1.4 million for the three months ended June 30, 2016 and 2015, respectively, and $5.9 million and $3.8 million for the six months ended June 30, 2016 and 2015 respectively. At the end of the period we eliminate from total fees recorded the uncollected portion of these fees that are associated with our ownership interests and offset this with an increase to our equity earnings.

 

The following table is a summary of key financial data for these joint ventures as of June 30, 2016 and for the six months ended June 30 2016 and 2015 (in thousands):

 

Balance Sheet Data:  June 30, 2016 
Current assets  $26,189 
Noncurrent assets   92,604 
Current liabilities   (5,051)
Noncurrent liabilities   (40,743)
   Total net assets  $72,999 
      
Book value of RadNet joint venture interests  $34,513 
Cost in excess of book value of acquired joint venture interests   4,970 
   Total value of Radnet joint venture interests  $39,483 
      
   Total book value of other joint venture partner interests  $38,486 
      

Income statement data for the six months ended June 30,  2016   2015 
Net revenue  $80,917   $56,639 
Net income  $13,044   $9,476