SIGNIFICANT ACCOUNTING POLICIES (Tables)

6 Months Ended

Jun. 30, 2019

total revenues during the three and six months ended June 30, 2019 and 2018 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 June 30,				Six Months Ended June 30,
	2019		2018		2019		2018
Commercial insurance	$	160,185	$	135,479	$	311,899	$	261,751
Medicare	60,151		49,079		114,280		93,107
Medicaid	7,295		6,760		14,423		12,800
Workers' compensation/personal injury	11,014		8,450		22,062		16,906
Other patient revenue	6,017		6,521		11,858		12,112
Management fee revenue	1,753		3,945		3,870		7,621
Teleradiology and Software revenue	4,063		4,000		8,449		7,816
Other	7,693		5,182		14,003		11,471
Service fee revenue	258,171		219,416		500,844		423,584
Revenue under capitation arrangements	30,926		24,979		59,803		52,203
Total revenue	$	289,097	$	244,395	$	560,647	$	475,787

Schedule of goodwill and other intangible assets

Activity in goodwill for the six months ended June 30, 2019 is provided below (in thousands):



Balance as of December 31, 2018	$	418,093
Adjustments to our preliminary allocation of the purchase price of Medical Arts Radiological Group, P.C.	722
Goodwill acquired through the acquisition of certain assets of Dignity Health	1
Goodwill acquired through the acquisition of certain assets of West Valley Imaging Center, LLC	2,490
Goodwill disposed through sale of assets	(123		)
Goodwill acquired by Lenox Hill Radiology through the membership purchase of HVRA	3,125
Goodwill acquired through the acquisition of certain assets of Kern Radiology, Inc.	11,156
Goodwill acquired through the acquisition of certain assets of Zilkha Radiology, Inc.	2,245
Goodwill acquired through the acquisition of certain assets of Ramic Mahwah, LLC	231
Balance as of June 30, 2019	$	437,940

Effect of derivative instruments on comprehensive income

A tabular presentation of the effect of derivative instruments on our consolidated statement of comprehensive loss of the 2019 SWAPS is as follows (amounts in thousands):



For the three months ended June 30, 2019
Account	April 1, 2019 Balance	Amount of comprehensive loss recognized on derivative		June 30, 2019 Balance		Location
Accumulated Other Comprehensive Loss	—	(5,924	)	(5,924	)	Liabilities and Equity

A tabular presentation of the effect of derivative instruments on our consolidated statement of comprehensive loss of the 2016 Caps is as follows (amounts in thousands):



For the three months ended June 30, 2019
Account	April 1, 2019 Balance	Amount of comprehensive loss recognized on derivative		June 30, 2019 Balance		Location
Accumulated Other Comprehensive Income (Loss)	1,310	(2,078	)	(768	)	Liabilities and Equity



For the six months ended June 30, 2019
Account	January 1, 2019 Balance	Amount of comprehensive loss recognized on derivative		June 30, 2019 Balance		Location
Accumulated Other Comprehensive Income (Loss)	2,506	(3,274	)	(768	)	Liabilities and Equity

Schedule of fair value of assets and liabilities

The tables 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, 2019
	Level 1		Level 2		Level 3		Total
Current and long term liabilities
2016 Caps - Interest Rate Contracts	$	—	$	547	$	—	$	547
2019 SWAPS - Interest Rate Contracts	$	—	$	8,630	$	—	$	8,630



	As of December 31, 2018
	Level 1		Level 2		Level 3		Total
Current assets
2016 Caps - Interest Rate Contracts	$	—	$	3,316	$	—	$	3,316

The table below summarizes the estimated fair value compared to our face value of our long-term debt as follows (in thousands):



	As of June 30, 2019
	Level 1		Level 2		Level 3		Total Fair Value		Total Face Value
First Lien Term Loans and SunTrust Term Loan	$	—	$	725,299	$	—	$	725,299	$	726,972



	As of December 31, 2018
	Level 1		Level 2		Level 3		Total		Total Face Value
First Lien Term Loans and SunTrust Term Loan	$	—	$	633,229	$	—	$	633,229	$	646,441

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 June 30,				Six Months Ended June 30,
	2019		2018		2019		2018
Net income (loss) attributable to RadNet, Inc.'s common stockholders	$	4,899	$	5,406	$	1,165	$	(1,932	)

BASIC NET INCOME (LOSS) PER SHARE ATTRIBUTABLE TO RADNET, INC.'S COMMON STOCKHOLDERS
Weighted average number of common shares outstanding during the period	49,702,869		47,969,003		49,490,234		47,896,216
Basic net income (loss) per share attributable to RadNet, Inc.'s common stockholders	$	0.10	$	0.11	$	0.02	$	(0.04	)

DILUTED NET INCOME (LOSS) PER SHARE ATTRIBUTABLE TO RADNET, INC.'S COMMON STOCKHOLDERS
Weighted average number of common shares outstanding during the period	49,702,869		47,969,003		49,490,234		47,896,216
Add nonvested restricted stock subject only to service vesting	134,260		147,868		186,779		—
Add additional shares issuable upon exercise of stock options and warrants	307,411		409,162		311,023		—
Weighted average number of common shares used in calculating diluted net income per share	50,144,540		48,526,033		49,988,036		47,896,216
Diluted net income (loss) per share attributable to RadNet, Inc.'s common stockholders	$	0.10	$	0.11	$	0.02	$	(0.04	)

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	—		—		—		—

Investment in joint ventures

The following table is a summary of our investment in joint ventures during the six months ended June 30, 2019 (in thousands):



Balance as of December 31, 2018	$	37,973
Equity in earnings in these joint ventures	4,117
Distribution of earnings	(3,438		)
Sale of ownership interest	(134		)
Equity contributions in existing joint ventures	103
Balance as of June 30, 2019	$	38,621

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, 2019 and December 31, 2018 and income statement data for the six months ended June 30, 2019 and 2018 (in thousands):



Balance Sheet Data:	June 30, 2019			December 31, 2018
Current assets	$	29,707		$	28,317
Noncurrent assets	67,608			45,912
Current liabilities	(9,038		)	(4,300		)
Noncurrent liabilities	(22,037		)	(4,898		)
Total net assets	$	66,240		$	65,031

Book value of RadNet joint venture interests	$	30,634		$	30,030
Cost in excess of book value of acquired joint venture interests	7,987			7,943
Total value of Radnet joint venture interests	$	38,621		$	37,973

Total book value of other joint venture partner interests	$	35,606		$	35,001



Income statement data for the six months ended June 30,	2019		2018
Net revenue	$	55,624	$	91,559
Net income	$	8,723	$	14,174