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2. SIGNIFICANT ACCOUNTING POLICIES (Tables)

6 Months Ended

Jun. 30, 2018

Accounting Policies [Abstract]

Service Fee Revenue

The Company’s total net revenues during the three and six months ended June 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								Six Months Ended
		June 30,								June 30,
		2018				2017				2018				2017
Commercial insurance		$	145,538			$	142,691			$	281,981			$	283,683
Medicare			50,302				47,611				95,867				95,291
Medicaid			6,928				6,525				13,179				13,259
Workers' compensation/personal injury			8,660				8,867				17,407				17,925
Other (1)			7,988				8,362				15,150				16,648
Service fee revenue, net of contractual allowances and discounts			219,416				214,056				423,584				426,806
Provision for bad debts			–				(11,854	)			–				(23,500	)
Net service fee revenue			219,416				202,202				423,584				403,306
Revenue under capitation arrangements			24,979				27,812				52,203				55,721
Total net revenue		$	244,395			$	230,014			$	475,787			$	459,027

___________________

(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 six months ended June 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
Balance as of June 30, 2018		$	275,272

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 June 30, 2018

Account

April 1, 2018 Balance

Amount of gain recognized on derivative

June 30, 2018 Balance

Location

Other Comprehensive Income

2,725

1,199

3,924

Current Assets & Equity

For the six months ended June 30, 2018

Account

Jan 1, 2018 Balance

Amount of gain recognized on derivative

June 30, 2018 Balance

Location

Other Comprehensive Income

(370

)

4,294

3,924

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 June 30, 2018
		Level 1				Level 2				Level 3				Total
Current and other non-current liabilities
Interest Rate Contracts		$	–			$	5,159			$	–			$	5,159

			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 June 30, 2018
		Level 1				Level 2				Level 3				Total Fair Value				Total Face Value
First Lien Term Loans		$	–			$	605,240			$	–			$	605,240			$	603,731

		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								Six Months Ended
		June 30,								June 30,
		2018				2017				2018				2017
Net income (loss) attributable to RadNet, Inc.'s common stockholders		$	5,406			$	5,310			$	(1,932	)		$	4,100
BASIC NET INCOME (LOSS) PER SHARE ATTRIBUTABLE TO RADNET, INC.'S COMMON STOCKHOLDERS
Weighted average number of common shares outstanding during the period			47,969,003				46,756,276				47,896,216				46,662,420
Basic net income (loss) per share attributable to RadNet, Inc.'s common stockholders		$	0.11			$	0.11			$	(0.04	)		$	0.09
DILUTED NET INCOME (LOSS) PER SHARE ATTRIBUTABLE TO RADNET, INC.'S COMMON STOCKHOLDERS
Weighted average number of common shares outstanding during the period			47,969,003				46,756,276				47,896,216				46,662,420
Add nonvested restricted stock subject only to service vesting			409,162				250,153				–				198,477
Add additional shares issuable upon exercise of stock options and warrants			147,868				189,469				–				207,666
Weighted average number of common shares used in calculating diluted net income per share			48,526,033				47,195,898				47,896,216				47,068,563
Diluted net income (loss) per share attributable to RadNet, Inc.'s common stockholders		$	0.11			$	0.11			$	(0.04	)		$	0.09
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			–				165,000				–				325,575

Investment in joint ventures

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

Balance as of December 31, 2017		$	52,435
Equity in earnings in these joint ventures			6,725
Distribution of earnings			(7,083	)
Equity contributions in existing and purchase of interest in joint ventures			2,000
Balance as of June 30, 2018		$	54,077

Joint venture investment and financial information

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

Balance Sheet Data:		June 30, 2018				December 31, 2017
Current assets		$	42,880			$	47,813
Noncurrent assets			106,758				107,481
Current liabilities			(14,324	)			(16,655	)
Noncurrent liabilities			(37,745	)			(42,072	)
Total net assets		$	97,569			$	96,567
Book value of RadNet joint venture interests		$	45,964			$	45,935
Cost in excess of book value of acquired joint venture interests			8,113				6,500
Total value of Radnet joint venture interests		$	54,077			$	52,435
Total book value of other joint venture partner interests		$	51,605			$	50,632
Income statement data for the six months ended June 30,			2018				2017
Net revenue		$	91,559			$	86,981
Net income		$	14,174			$	10,285

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