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NOTES PAYABLE, REVOLVING CREDIT FACILITY AND CAPITAL LEASES | 12 Months Ended
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Dec. 31, 2018
Debt Disclosure [Abstract] |
NOTES PAYABLE, REVOLVING CREDIT FACILITY AND CAPITAL LEASES | NOTES PAYABLE, REVOLVING CREDIT FACILITY AND CAPITAL LEASES Revolving credit facility, notes payable, and capital lease obligations:
| December 31, 2018 |  | December 31, 2017
First Lien Term Loans collateralized by RadNet's tangible and intangible assets | $ | 587,191 |  |  | $ | 620,272 |
Discount on First Lien Term Loans | (15,112 | ) |  | (18,470 | )
Term Loan Agreement collateralized by NJIN's tangible and intangible assets | 59,250 |  |  | — |
Revolving Credit Facility | 28,000 |  |  | — |
Promissory note payable to the former owner of a practice acquired at an interest rate of 1.5% due through 2019 | 199 |  |  | 592 |
Equipment notes payable at interest rates ranging from 3.3% to 5.6%, due through 2020, collateralized by medical equipment | 632 |  |  | 195 |
Obligations under capital leases at interest rates ranging from 4.3% to 11.2%, due through 2022, collateralized by medical and office equipment | 12,119 |  |  | 6,538 |
Total debt obligations | 672,279 |  |  | 609,127 |
Less current portion | (39,267 | ) |  | (34,090 | )
Long-term portion debt obligations | $ | 633,012 |  |  | $ | 575,037 |
The following is a listing of annual principal maturities of notes payable exclusive of all related discounts, capital leases and repayments on our revolving credit facilities for years ending December 31 (in thousands):
2019 | $ | 37,011 |
2020 | 37,857 |
2021 | 65,956 |
2022 | 39,081 |
2023 | 495,366 |
Total notes payable obligations | $ | 675,271 |
We lease equipment under capital lease arrangements. Future minimum lease payments under capital leases for years ending December 31 (in thousands) is as follows:
2019 | $ | 6,018 |
2020 | 3,481 |
2021 | 2,614 |
2022 | 692 |
Total minimum payments | 12,805 |
Amount representing interest | (686 | )
Present value of net minimum lease payments | 12,119 |
Less current portion | (5,614 | )
Long-term portion lease obligations | $ | 6,505 |
Term Loans, Revolving Credit Facility and Financing Activity Information: At December 31, 2018, our Barclays credit facilities were comprised of one tranche of term loans (“First Lien Term Loans”) and a revolving credit facility of $117.5 million (the “Barclays Revolving Credit Facility”). At December 31, 2018, our SunTrust credit facilities were comprised of one term loan ("Term Loan Agreement") and a revolving credit facility of $30.0 million (the "SunTrust Revolving Credit Facility") As of December 31, 2018, we were in compliance with all covenants under our credit facilities. Deferred financing costs at December 31, 2018, net of accumulated amortization, was $1.4 million and is specifically related to our Barclays Revolving Credit Facility. Included in our consolidated balance sheets at December 31, 2018 are $631.3 million of senior secured term loan debt (net of unamortized discounts of $15.1 million) in thousands:
| Face Value |  | Discount |  | Total Carrying Value
First Lien Term Loans | $ | 587,191 |  |  | $ | (15,112 | ) |  | $ | 572,079 |
Term Loan Agreement | 59,250 |  |  | — |  |  | 59,250 |
Total Term Loans | $ | 646,441 |  |  | $ | (15,112 | ) |  | $ | 631,329 |
We had a balance of $28.0 million under our $117.5 million Barclays Revolving Credit Facility at December 31, 2018. We had no balance under our $30.0 million SunTrust Revolving Credit Facility at December 31, 2018. The following describes our Barclays financing activities: Amendment No. 5, Consent and Incremental Joinder Agreement to Credit and Guaranty Agreement On August 22, 2017, we entered into Amendment No. 5, Consent and Incremental Joinder Agreement to Credit and Guaranty Agreement (the “Fifth Amendment”) with respect to our First Lien Credit Agreement. Pursuant to the Fifth Amendment, we issued $170.0 million in incremental First Lien Term Loans, the proceeds of which were used to repay in full all outstanding Second Lien Term Loans and all other obligations under the Second Lien Credit Agreement. Pursuant to the Fifth Amendment, we also changed the interest rate margin applicable to borrowings under the First Lien Credit Agreement. While borrowings under the First Lien Credit Agreement continue to bear interest at either an Adjusted Eurodollar Rate or a Base Rate (in each case, as more fully defined in the First Lien Credit Agreement) or a combination of both, at the election of the Company, plus an applicable margin. The applicable margin for Adjusted Eurodollar Rate borrowings and Base Rate borrowings was changed from 3.25% and 2.25%, respectively, to 3.75% and 2.75%, respectively, through an initial period which ends when financial reporting is delivered for the period ending September 30, 2017. Thereafter, the rates of the applicable margin for borrowing under the First Lien Credit Agreement will adjust depending on our leverage ratio, according to the following schedule:
First Lien Leverage Ratio | Eurodollar Rate Spread | Base Rate Spread
> 5.50x | 4.50% | 3.50%
> 4.00x but ≤ 5.50x | 3.75% | 2.75%
>3.50x but ≤ 4.00x | 3.50% | 2.50%
≤ 3.50x | 3.25% | 2.25%
At December 31, 2018 the effective Adjusted Eurodollar Rate and the Base Rate for the First Lien Term Loans was 2.44% and 5.50%, respectively and the applicable margin for Adjusted Eurodollar Rate and Base Rate borrowings remained at 3.75% and 2.75%, respectively. Pursuant to the Fifth Amendment, the First Lien Credit Agreement was amended so that we can elect to request 1) an increase to the existing Revolving Credit Facility and/or 2) additional First Lien Term Loans, provided that the aggregate amount of such increases and additions does not exceed (a) $100.0 million and (b) as long as the First Lien Leverage Ratio (as defined in the First Lien Credit Agreement) would not exceed 4.00:1.00 after giving effect to such incremental facilities, an uncapped amount of incremental facilities, in each case subject to the conditions and limitations set forth in the First Lien Credit Agreement. Each lender approached to provide all or a portion of any incremental facility may elect or decline, in its sole discretion, to provide an incremental commitment or loan. Pursuant to the Fifth Amendment, the First Lien Credit Agreement was also amended to (i) provide for quarterly payments of principal of the First Lien Term Loans in the amount of approximately $8.3 million, as compared to approximately $6.1 million prior to the Fifth Amendment, (ii) extend the call protection provided to the holders of the First Lien Term Loans for a period of twelve months following the date of the Fifth Amendment and (iii) provide us with additional operating flexibility, including the ability to incur certain additional debt and to make certain additional restricted payments, investments and dispositions, in each case as more fully set forth in the Fifth Amendment. Total issue costs for the Fifth Amendment aggregated to approximately $4.7 million. Of this amount, $4.1 million was identified and capitalized as discount on debt, $350,000 was capitalized as deferred financing costs and the remaining $235,000 was expensed. Amounts capitalized will be amortized over the remaining term of the agreement. Fourth Amendment to First Lien Credit Agreement On February 2, 2017, we entered into Amendment No. 4 to Credit and Guaranty Agreement (the “Fourth Amendment”) with respect to our First Lien Credit Agreement. Pursuant to the Fourth Amendment, the interest rate margin per annum on the First Lien Term Loans and the Revolving Credit Facility was reduced by 50 basis points, from 3.75% to 3.25%. Except for such reduction in the interest rate on credit extensions, the Fourth Amendment did not result in any other material modifications to the First Lien Credit Agreement. RadNet incurred expenses for the transaction in the amount of $543,000, which was recorded to discount on debt and will be amortized over the remaining term of the agreement. The following describes our applicable financing prior to giving effect to the Fourth Amendment and Fifth Amendment discussed above. First Lien Credit Agreement On July 1, 2016, we entered into the First Lien Credit Agreement pursuant to which we amended and restated our then existing first lien credit facilities. Pursuant to the First Lien Credit Agreement, we originally issued $485 million of First Lien Term Loans and established the $117.5 million Revolving Credit Facility. Proceeds from the First Lien Credit Agreement were used to repay the previously outstanding first lien loans under the First Lien Credit Agreement, make a $12.0 million principal payment of the Second Lien Term Loans, pay costs and expenses related to the First Lien Credit Agreement and provide approximately $10.0 million for general corporate purposes. Interest. The interest rates payable on the First Lien Term Loans were (a) the Adjusted Eurodollar Rate (as defined in the First Lien Credit Agreement) plus 3.75% per annum or (b) the Base Rate (as defined in the First Lien Credit Agreement) plus 2.75% per annum. As applied to the First Lien Term Loans, the Adjusted Eurodollar Rate has a minimum floor of 1.0%. Payments. The scheduled quarterly principal payment of the First Lien Term Loans was approximately $6.1 million, with the balance due at maturity. Maturity Date. The maturity date for the First Lien Term Loans shall be on the earliest to occur of (i) July 1, 2023, (ii) the date on which all First Lien Term Loans shall become due and payable in full under the First Lien Credit Agreement, whether by acceleration or otherwise, and (iii) September 25, 2020 if our indebtedness under the Second Lien Credit Agreement had not been repaid, refinanced or extended prior to such date. Revolving Credit Facility: The First Lien Credit Agreement provides for a $117.5 million Revolving Credit Facility. Revolving loans borrowed under the Revolving Credit Facility bear interest at either an Adjusted Eurodollar Rate or a Base Rate (in each case, as more fully defined in the First Lien Credit Agreement), plus an applicable margin. Pursuant to the Fifth Amendment, the applicable margin was amended to vary based on our leverage ratio in accordance with the following schedule:
First Lien Leverage Ratio | Eurodollar Rate Spread | Base Rate Spread
> 5.50x | 4.50% | 3.50%
> 4.00x but ≤ 5.50x | 3.75% | 2.75%
>3.50x but ≤ 4.00x | 3.50% | 2.50%
≤ 3.50x | 3.25% | 2.25%
For letters of credit issued under the Revolving Credit Facility, letter of credit fees accrue at the applicable margin (see table above) for Adjusted Eurodollar Rate revolving loans and fronting fees accrue at 0.25% per annum, in each case on the average aggregate daily maximum amount available to be drawn under all letters of credit issued under the First Lien Credit Agreement. In addition a commitment fee of 0.5% per annum accrues on the unused revolver commitments under the Revolving Credit Facility. As of December 31, 2018, the interest rate payable on revolving loans was 8.25% and the amount available to borrow under the Revolving Credit Facility was $83.2 million. The Revolving Credit Facility will terminate on the earliest to occur of (i) July 1, 2021, (ii) the date we voluntarily agree to permanently reduce the Revolving Credit Facility to zero pursuant to section 2.13(b) of the First Lien Credit Agreement, and (iii) the date the Revolving Credit Facility is terminated due to specific events of default pursuant to section 8.01 of the First Lien Credit Agreement. Second Lien Credit Agreement: On March 25, 2014, we entered into the Second Lien Credit and Guaranty Agreement (the “Second Lien Credit Agreement”) pursuant to which we issued $180 million of second lien term loans (the “Second Lien Term Loans”). The proceeds from the Second Lien Term Loans were used to redeem our 10 3/8% senior unsecured notes, due 2018, to pay the expenses related to the transaction and for general corporate purposes. On July 1, 2016, in conjunction with the restated First Lien Credit Agreement, a $12.0 million principal payment was made on the Second Lien Term Loans. On August 22, 2017 the Second Lien Credit Agreement was repaid in full with the proceeds of First Lien Term Loans issued under the Fifth Amendment, as described above. The following describes our SunTrust financing activities: Amended and Restated Revolving Credit and Term Loan Agreement On August 31, 2018, NJIN completed the Amended and Restated Revolving Credit and Term Loan Agreement (the "Restated Agreement") as borrower with SunTrust Bank, Santander, California Bank and Trust, and Manufacturers and Traders Trust as lenders for an additional aggregate of $48.1 million as categorized below: Revolving Credit Facility: The Restated Agreement establishes a $30.0 million revolving credit facility available to NJIN for funding requirements with a revolving commitment termination date of September 30, 2023. This represents an increase of $20.0 million over the original loan agreement of $10.0 million. The revolving credit line bears interest based on types of borrowings as follows: (i) unpaid principal at the Adjusted Eurodollar Rate (as defined in the Restated Agreement) plus 2.75% per annum or the Base Rate (as defined in the Restated Agreement) plus 1.75% per annum, (ii) letter of credit and fronting fees at 2.75% per annum, and (iii) commitment fee of 0.45% per annum on the unused revolver balance. NJIN has not borrowed against the revolving credit line. Term Loan: The Restated Agreement establishes a $60.0 million term loan facility with repayment in scheduled quarterly amounts with a maturity date of September 30, 2023. This increases the existing term loan facility by $28.1 million and extends the term of the loan from September 30, 2020 to September 30, 2023. Interest: The interest rates currently payable are (a) the Eurodollar Rate (as defined in the Restated Agreement) plus and applicable margin of 2.75% per annum or (b) the Base Rate (as defined in the Restated Agreement) plus an applicable margin of 1.75% per annum. The applicable margin for both the rates is based on a sliding scale of the current leverage ratio, with 2.75% per annum down to 1.50% per annum for Eurodollar loans and 1.75% per annum down to 0.50% per annum for Base Rate loans. The current election is a one month Eurodollar election. Payments: The scheduled amortization of the term loans under the Restated Agreement begin December 31, 2018 with quarterly payments of $750,000, representing 5% per annum of the total amount owed. At scheduled intervals, the quarterly amortization increases $375,000 over the prior year, with the remaining balance to be paid at maturity. Revolving Credit and Term Loan Agreement On September 30, 2015, the Company completed the Revolving Credit and Term Loan Agreement (the "Agreement") as borrower with SunTrust Bank, California Bank and Trust, and Manufacturers and Traders Trust as lenders for an aggregate of $50.0 million as categorized below: Revolving Credit Facility: The Agreement establishes a $10.0 million revolving credit facility available to the Company for needed funding requirements with a revolving commitment termination date of September 30, 2020. The revolving credit line bears interest based on types of borrowings as follows: (i) unpaid principal at the Adjusted Eurodollar Rate (as defined in the Agreement) plus 3.00% per annum or the Base Rate (as defined in the Agreement) plus 2.00% per annum, (ii) letter of credit and fronting fees at 3.00% per annum, and (iii) commitment fee of 0.45% per annum on the unused revolver balance. Term Loan: The agreement establishes a $40.0 million term loan facility with repayment in scheduled quarterly amounts with a maturity date of September 30, 2020. Interest:The interest rates currently payable are (a) the Eurodollar Rate (as defined in the Agreement) plus and applicable margin of 3% per annum or (b) the Base Rate (as defined in the Agreement) plus an applicable margin of 2% per annum. The applicable margin for both the rates is based on a sliding scale of the current leverage ratio, with 3% per annum down to 1.75% per annum for Eurodollar loans and 2% per annum down to 0.75% per annum for Base Rate loans. Payments: The scheduled amortization of the term loans under the Agreement begin December 31, 2015 with quarterly payments of $500,000, representing 5% per annum of the initial amount borrowed. Each December 31 for the years following, the scheduled quarterly amortization increases $250,000 over the prior year, with the remaining balance to be paid at maturity.

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- Definition The entire disclosure for debt and capital lease obligations can be reported. Information about short-term and long-term debt arrangements, which includes amounts of borrowings under each line of credit, note payable, commercial paper issue, bonds indenture, debenture issue, own-share lending arrangements and any other contractual agreement to repay funds, and about the underlying arrangements, rationale for a classification as long-term, including repayment terms, interest rates, collateral provided, restrictions on use of assets and activities, whether or not in compliance with debt covenants, and other matters important to users of the financial statements, such as the effects of refinancing and noncompliance with debt covenants. Also includes descriptions and amounts of capital leasing arrangements that consist of direct financing, sales type and leveraged leases. Disclosure may include the effect on the balance sheet and the income statement resulting from a change in lease classification for leases that at inception would have been classified differently had guidance been in effect at the inception of the original lease. + References Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 840 -URI http://asc.fasb.org/topic&trid=2208923 Reference 2: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 470 -URI http://asc.fasb.org/topic&trid=2208564 + Details
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