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6. INVESTMENT IN JOINT VENTURES

9 Months Ended

Sep. 30, 2016

Equity Method Investments and Joint Ventures [Abstract]

INVESTMENT IN JOINT VENTURES

We have twelve 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, since RadNet does not have a controlling financial interest in such ventures.

Acquisition of new facilities

On August 15, 2016 our joint venture, Franklin Imaging, LLC, acquired a single multi-modality imaging center located in Rosedale, Maryland for cash consideration of $1.0 million and the assumption of capital lease debt of $241,000. Franklin Imaging, LLC made a fair value determination of the acquired assets and approximately $600,000 of fixed assets, $30,000 of other assets and goodwill of $648,000 was recorded in respect to the transaction.

Formation of new joint ventures

On April 1, 2016, Community Imaging Partners Inc., a wholly owned subsidiary of RadNet, entered into a joint venture with Mt. Airy Health Services, LLC, a partnership of Frederick Memorial Hospital and Carroll Hospital Center. On August 31, 2016, Community Imaging Partners Inc. contributed $200,000 for a 40% economic interest in the partnership and funded an additional $440,000 in relation to a capital call. Mt. Airy Health Services, LLC, contributed $300,000 for a 60% economic interest and an additional $660,000 in relation to the capital call.

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 summary of our investment in joint ventures during the nine months ended September 30, 2016 (in thousands):

Balance as of December 31, 2015		$	33,584
Equity in earnings in these joint ventures			8,129
Distribution of earnings			(2,929	)
Equity contributions in existing joint ventures			3,084
Balance as of September 30, 2016		$	41,868

We earned management service fees from the centers underlying these joint ventures of approximately $2.9 million and $2.6 million for the three months ended September 30, 2016 and 2015, respectively, and $8.7 million and $6.4 million for the nine months ended September 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 September 30, 2016 and for the nine months ended September 30, 2016 and 2015 (in thousands):

Balance Sheet Data:		September 30, 2016				December 31, 2015
Current assets		$	33,452			$	28,186
Noncurrent assets			96,766				91,660
Current liabilities			(9,786	)			(15,258	)
Noncurrent liabilities			(42,633	)			(44,059	)
Total net assets		$	77,799			$	60,529
Book value of RadNet joint venture interests		$	36,873			$	28,397
Cost in excess of book value of acquired joint venture interests			4,995				4,970
Elimination of intercompany profit remaining on Radnet's consolidated balance sheet							217
Total value of Radnet joint venture interests		$	41,868			$	33,584
Total book value of other joint venture partner interests		$	40,926			$	32,132

Income statement data for the nine months ended September 30,		2016				2015
Net revenue		$	119,920			$	85,305
Net income		$	18,001			$	13,489

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- References

No definition available.

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- Definition

The entire disclosure for equity method investments and joint ventures. Equity method investments are investments that give the investor the ability to exercise significant influence over the operating and financial policies of an investee. Joint ventures are entities owned and operated by a small group of businesses as a separate and specific business or project for the mutual benefit of the members of the group.

+ References

Reference 1: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 323
-SubTopic 10
-Section 50
-Paragraph 3
-URI http://asc.fasb.org/extlink&oid=66011266&loc=d3e33918-111571

Reference 2: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 323
-SubTopic 10
-Section 35
-Paragraph 35
-URI http://asc.fasb.org/extlink&oid=64825282&loc=d3e32847-111569

Reference 3: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 210
-SubTopic 10
-Section S99
-Paragraph 1
-Subparagraph (SX 210.5-02.12)
-URI http://asc.fasb.org/extlink&oid=6877327&loc=d3e13212-122682

Reference 4: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 323
-SubTopic 10
-Section 35
-Paragraph 32
-URI http://asc.fasb.org/extlink&oid=64825282&loc=d3e32787-111569

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