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SIGNIFICANT ACCOUNTING POLICIES (Tables) | 9 Months Ended
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Sep. 30, 2022
Accounting Policies [Abstract] |
Schedule of Service Fee Revenue | Our total service fee revenues during the three and nine months ended September 30, 2022 and 2021 are presented in the table below. Our imaging center revenue is displayed as the estimated service fee, broken down by classification of insurance coverage type. Additional revenues are earned from our management services provided to joint ventures and our software and AI subsidiaries.
In Thousands | Three Months Ended September 30, |  | Nine Months Ended September 30,
2022 |  | 2021 |  | 2022 |  | 2021
Commercial insurance | $ | 189,634 |  |  | $ | 185,723 |  |  | $ | 573,259 |  |  | $ | 555,355 |
Medicare | 78,034 |  |  | 73,163 |  |  | 226,827 |  |  | 207,977 |
Medicaid | 9,669 |  |  | 8,707 |  |  | 28,456 |  |  | 26,198 |
Workers' compensation/personal injury | 13,200 |  |  | 11,554 |  |  | 38,785 |  |  | 32,507 |
Other patient revenue | 7,646 |  |  | 4,800 |  |  | 22,334 |  |  | 14,766 |
Management fee revenue | 6,099 |  |  | 5,255 |  |  | 17,199 |  |  | 16,007 |
Software revenue | 3,430 |  |  | 2,068 |  |  | 9,849 |  |  | 7,115 |
Other | 3,431 |  |  | 3,641 |  |  | 12,054 |  |  | 10,058 |
Revenue under capitation arrangements | 38,001 |  |  | 37,283 |  |  | 114,366 |  |  | 111,449 |
Imaging Center Segment Revenue | 349,144 |  |  | 332,194 |  |  | 1,043,129 |  |  | 981,432 |
AI Segment Revenue | 900 |  |  | 496 |  |  | 3,056 |  |  | 496 |
Total service revenue | $ | 350,044 |  |  | $ | 332,690 |  |  | $ | 1,046,185 |  |  | $ | 981,928 |
Schedule of Goodwill and Other Intangible Assets | Activity in goodwill for the nine months ended September 30, 2022 is provided below (in thousands):
Balance as of December 31, 2021 | $ | 513,820 |
Goodwill from acquisitions | 67,979 |
Valuation adjustment | (338) |
Currency translation | (6,369) |
Balance as of September 30, 2022 | $ | 575,092 |
Schedule of Effect of Derivative Instruments on Comprehensive Loss | A tabular presentation of the effect of derivative instruments on our consolidated statement of comprehensive loss of the 2019 Swaps which remain ineffective is as follows (amounts in thousands):
For the three months ended September 30, 2022
Account |  | June 30, 2022 Balance |  | Amount of comprehensive loss recognized on derivative net of taxes |  | Amount of loss reclassified out of accumulated OCI into income (prior period effective portion), net of taxes |  | September 30, 2022 Balance |  | Location
Accumulated Other Comprehensive Loss, net of taxes |  | $ | (17,039) |  |  | $ | — |  |  | $ | 924 |  |  | $ | (16,115) |  |  | Equity
For the nine months ended September 30, 2022
Account |  | December 31, 2021 Balance |  | Amount of comprehensive loss recognized on derivative net of taxes |  | Amount of loss reclassified out of accumulated OCI into income (prior period effective portion), net of taxes |  | September 30, 2022 Balance |  | Location
Accumulated Other Comprehensive Loss, net of taxes |  | $ | (18,886) |  |  | $ | — |  |  | $ | 2,771 |  |  | $ | (16,115) |  |  | Equity
A tabular presentation of the effect of derivative instruments on our statement of operations of the 2019 Swaps which remain ineffective is as follows (amounts in thousands):
For the three months ended September 30, 2022
Ineffective interest rate swap |  | Amount of gain recognized in income on derivative (current period ineffective portion) |  | Location of gain recognized in Income on derivative (current period ineffective portion) |  | Gross amount of loss reclassified from accumulated OCI into income (prior period effective portion) |  | Location of loss reclassified from accumulated OCI into income (prior period effective portion)
Interest rate contracts |  | $ | 12,451 |  |  | Non-cash change in fair value of interest rate swaps |  | $ | (1,245) |  |  | Interest Expense
For the nine months ended September 30, 2022
Ineffective interest rate swap |  | Amount of gain recognized in income on derivative (current period ineffective portion) |  | Location of gain recognized in Income on derivative (current period ineffective portion) |  | Gross amount of loss reclassified from accumulated OCI into income (prior period effective portion) |  | Location of loss reclassified from accumulated OCI into income (prior period effective portion)
Interest rate contracts |  | $ | 39,576 |  |  | Non-cash change in fair value of interest rate swaps |  | $ | (3,735) |  |  | Interest Expense
Schedule of Business Acquisitions by Acquisition, Contingent Consideration | A tabular presentation of the effect of the combined Aidence and Quantib contingent consideration on our condensed consolidated balance sheet is as follows (amounts in thousands):
For the three months ended September 30, 2022
Account |  | June 30, 2022 Balance |  | Amount of other non operating income recognized on contingent consideration | Currency Translation | September 30, 2022 Balance |  | Location
Other Long Term Liabilities |  | $ | 8,437 |  |  | $ | 958 |  | $ | 833 |  | $ | 10,228 |  |  | Liabilities and Non Operating Income
For the nine months ended September 30, 2022
Account |  | January 1, 2022 Balance |  | Issuance of contingent consideration |  | Amount of other non operating income recognized on contingent consideration | Currency Translation | September 30, 2022 Balance |  | Location
Other Long Term Liabilities |  | $ | — |  |  | $ | 10,459 |  |  | $ | (329) |  | $ | 98 |  | $ | 10,228 |  |  | Liabilities and Non Operating Income
Schedule of Fair Value of Assets and Liabilities | The tables below summarize 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 condensed consolidated balance sheets, as follows (in thousands):
| As of September 30, 2022
Level 1 |  | Level 2 |  | Level 3 |  | Total
Current and long term assets |  |  |  |  |  |  |
2019 Swaps - Interest Rate Contracts | $ | — |  |  | $ | 23,258 |  |  | $ | — |  |  | $ | 23,258 |
| As of December 31, 2021
Level 1 |  | Level 2 |  | Level 3 |  | Total
Current and long term liabilities |  |  |  |  |  |  |
2019 Swaps - Interest Rate Contracts | $ | — |  |  | $ | 16,319 |  |  | $ | — |  |  | $ | 16,319 |
The table below summarizes the estimated fair values of contingencies and holdback relating to our Aidence Holding B.V. and Quantib B.V. acquisitions on January 20, 2022, that are subject to fair value measurements and the classification of these liabilities on our condensed consolidated balance sheets, as follows (in thousands):
| As of September 30, 2022
Level 1 |  | Level 2 |  | Level 3 |  | Total
Long term liabilities |  |  |  |  |  |  |
Aidence Holding B.V. milestone consideration | $ | — |  |  | $ | — |  |  | $ | 7,922 |  |  | $ | 7,922 |
Quantib B.V. holdback of 113,303 shares of RadNet common stock | $ | — |  |  | $ | — |  |  | $ | 2,306 |  |  | $ | 2,306 |
The table below summarizes the estimated fair value compared to our face value of our long-term debt as follows (in thousands):
| As of September 30, 2022
Level 1 |  | Level 2 |  | Level 3 |  | Total Fair Value |  | Total Face Value
First Lien Term Loans and SunTrust Term Loan | $ | — |  |  | $ | 727,510 |  |  | $ | — |  |  | $ | 727,510 |  |  | $ | 757,938 |
| As of December 31, 2021
Level 1 |  | Level 2 |  | Level 3 |  | Total Fair Value |  | Total Face Value
First Lien Term Loans and SunTrust Term Loan | $ | — |  |  | $ | 766,973 |  |  | $ | — |  |  | $ | 766,973 |  |  | $ | 767,875 |
Schedule of 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 September 30, |  | Nine Months Ended September 30,
2022 |  | 2021 |  | 2022 |  | 2021
Net income attributable to RadNet, Inc.'s common stockholders | $ | 668 |  |  | $ | 16,220 |  |  | $ | 11,585 |  |  | $ | 28,550 |
BASIC NET INCOME PER SHARE ATTRIBUTABLE TO RADNET, INC.'S COMMON STOCKHOLDERS |  |  |  |  |  |  |
Weighted average number of common shares outstanding during the period | 56,744,419 |  |  | 52,810,644 |  |  | 56,041,017 |  |  | 52,323,360 |
Basic net income per share attributable to RadNet, Inc.'s common stockholders | $ | 0.01 |  |  | $ | 0.31 |  |  | $ | 0.21 |  |  | $ | 0.55 |
DILUTED NET INCOME PER SHARE ATTRIBUTABLE TO RADNET, INC.'S COMMON STOCKHOLDERS |  |  |  |  |  |  |
Weighted average number of common shares outstanding during the period | 56,744,419 |  |  | 52,810,644 |  |  | 56,041,017 |  |  | 52,323,360 |
Add nonvested restricted stock subject only to service vesting | 179,268 |  |  | 271,964 |  |  | 141,492 |  |  | 242,523 |
Add additional shares issuable upon exercise of stock options and contingently issuable shares | 728,074 |  |  | 735,232 |  |  | 853,908 |  |  | 683,815 |
Weighted average number of common shares used in calculating diluted net income per share | 57,651,761 |  |  | 53,817,840 |  |  | 57,036,417 |  |  | 53,249,698 |
Changes in FV associated with contingently issuable shares | $ | — |  |  | $ | — |  |  | $ | (586) |  |  | $ | — |
Net income attributable to RadNet, Inc's common stockholders for diluted share calculation | $ | 668 |  |  | $ | — |  |  | $ | 10,999 |  |  | $ | — |
Diluted net income per share attributable to RadNet, Inc.'s common stockholders | $ | 0.01 |  |  | $ | 0.30 |  |  | $ | 0.19 |  |  | $ | 0.54 |
Fair value change for contingently available shares excluded from the computation of diluted per share amounts as its effect would be antidilutive | $ | 278 |  |  | $ | — |  |  | $ | — |  |  | $ | — |
Stock options and other non vested shares excluded from the computation of diluted per share amounts as their effect would be antidilutive: |  |  |  |  |  |  |
Shares issuable subject to satisfaction of certain contingencies | 113,303 |  |  | — |  |  | — |  |  | — |
Shares issuable upon the exercise of stock options: | 84,885 |  |  | — |  |  | 67,289 |  |  | — |
Weighted average shares for which the exercise price exceeds average market price of common stock | 83,972 |  |  | — |  |  | 73,094 |  |  | — |
Schedule of Business Acquisitions | We made a fair value determination of the acquired assets and assumed liabilities and the following were recorded (in thousands):
Entity | Date Acquired | Total Consideration | Property & Equipment | Right of Use Assets | Goodwill |  |  | Right of Use Liabilities
IFRC LLC *^ | 1/1/2022 | 3,922 | 2,121 | 1,295 | 1,801 |  |  | (1,295)
*Fair Value Determination is Final ^ IFRC LLC acquisitions consisted of three subsidiaries of IFRC, two of which were purchased separately by wholly owned RadNet subsidiaries. We made a fair value determination of the acquired assets and assumed liabilities and the following were recorded (in thousands):
Entity | Date Acquired | Total Consideration | Property & Equipment | Right of Use Assets | Goodwill |  | Other Assets | Right of Use Liabilities
IFRC LLC*^ | 1/1/2022 | 4,800 | 2,103 | 857 | 2,697 |  | — | (857)
IFRC LLC*^ | 1/1/2022 | 8,200 | 2,910 | 1,703 | 5,271 |  | 19 | (1,703)
Total |  | 13,000 | 5,013 | 2,560 | 7,968 |  | 19 | (2,560)
*Fair Value Determination is Final ^ IFRC LLC acquisitions consisted of three subsidiaries of IFRC, one of which was purchased separately by a joint venture with Calvert Medical Imaging Centers, LLC.
Schedule of Investment in Joint Ventures | The following table is a summary of our investment in joint ventures during the nine months ended September 30, 2022 (in thousands):
Balance as of December 31, 2021 | $ | 42,229 |
Equity in earnings in these joint ventures | 8,350 |
Equity contributions in existing joint ventures | 1,441 |
Balance as of September 30, 2022 | $ | 52,020 |
Schedule of Joint Venture Investment and Financial Information | The following table is a summary of key balance sheet data for these joint ventures as of September 30, 2022 and December 31, 2021 and income statement data for the nine months ended September 30, 2022 and 2021 (in thousands):
Balance Sheet Data: | September 30, 2022 |  | December 31, 2021
Current assets | $ | 48,154 |  |  | $ | 37,186 |
Noncurrent assets | 86,123 |  |  | 73,592 |
Current liabilities | (12,211) |  |  | (12,919) |
Noncurrent liabilities | (26,619) |  |  | (22,370) |
Total net assets | $ | 95,447 |  |  | $ | 75,489 |
Book value of RadNet joint venture interests | $ | 43,947 |  |  | $ | 34,930 |
Cost in excess of book value of acquired joint venture interests and other | 8,073 |  |  | 7,299 |
Total value of RadNet joint venture interests | $ | 52,020 |  |  | $ | 42,229 |
Income statement data for the nine months ended September 30, | 2022 |  | 2021
Net revenue | $ | 107,241 |  |  | $ | 98,193 |
Net income | $ | 17,034 |  |  | $ | 16,007 |

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