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2. SIGNIFICANT ACCOUNTING POLICIES (Tables)

3 Months Ended

Mar. 31, 2018

Accounting Policies [Abstract]

Service Fee Revenue

The Company’s total net revenues during the three months ended March 31, 2018 and 2017 have been presented in the table 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
		March 31,
		2018				2017

Commercial insurance		$	136,415			$	140,995
Medicare			45,609				47,678
Medicaid			6,258				6,733
Workers' compensation/personal injury			8,724				9,057
Other ⁽¹⁾			7,162				8,287
Service fee revenue, net of contractual allowances and discounts			204,168				212,750
Provision for bad debts			–				(11,646	)
Net service fee revenue			204,168				201,104
Revenue under capitation arrangements			27,224				27,909
Total net revenue		$	231,392			$	229,013

_____________________

⁽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 three months ended March 31, 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 MemorialCare Medical Foundation			10,158
Goodwill transferred to assets held for sale			(1,059	)
Balance as of March 31, 2018		$	268,567

Fair value of derivatives

The fair value of derivative instruments as of March 31, 2018 is as follows (amounts in thousands):

For the three months ended March 31, 2018

Derivatives		Balance Sheet Location		Fair Value – Asset Derivatives
Interest rate contracts		Current assets		$	3,552

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 March 31, 2018

Account

Jan 1 2018 Balance

Amount of gain recognized on derivative

March 31 2018 Balance

Location

Other Comprehensive (Loss) Income

(370

)

3,095

2,725

Liabilities & Equity

For the twelve months ended December 31, 2017

Account		Jan 1 2017 Balance				Amount of loss recognized on derivative				Dec 31 2017 Balance				Location
Other Comprehensive Income (Loss)			510				(880	)			(370	)		Liabilities & 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 March 31, 2018
		Level 1				Level 2				Level 3				Total
Current and other non-current liabilities
Interest Rate Contracts		$	–			$	3,552			$	–			$	3,552

			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 March 31, 2018
		Level 1				Level 2				Level 3				Total Fair Value				Total Face Value
First Lien Term Loans		$	–			$	620,417			$	–			$	620,417			$	612,002

		As of December 31, 2017
		Level 1				Level 2				Level 3				Total Fair Value				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 March 31,
		2018				2017

Net loss attributable to RadNet, Inc. common stockholders		$	(7,338	)		$	(1,210	)

BASIC AND DILUTED NET LOSS PER SHARE ATTRIBUTABLE TO RADNET, INC. COMMON STOCKHOLDERS
Weighted average number of common shares outstanding during the period			47,822,618				46,560,017
Basic and diluted net loss per share attributable to RadNet, Inc. common stockholders		$	(0.15	)		$	(0.03

Investment in joint ventures

The following table is a summary of our investment in joint ventures during the quarter ended March 31, 2018 (in thousands):

Balance as of December 31, 2017		$	52,435
Equity in earnings in these joint ventures			2,977
Distribution of earnings			(2,821	)
Balance as of March 31, 2018		$	52,591

Joint venture investment and financial information

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

Balance Sheet Data:			March 31, 2018				December 31, 2017
Current assets		$	45,486			$	47,813
Noncurrent assets			107,001				107,481
Current liabilities			(16,162	)			(16,655	)
Noncurrent liabilities			(39,836	)			(42,072	)
Total net assets		$	96,489			$	96,567

Book value of RadNet joint venture interests		$	46,091			$	45,935
Cost in excess of book value of acquired joint venture interests			6,500				6,500
Total value of Radnet joint venture interests		$	52,591			$	52,435

Total book value of other joint venture partner interests		$	50,398			$	50,632

Income statement data for the three months ended March 31,			2018				2017

Net revenue		$	44,546			$	41,251
Net income		$	6,250			$	4,130