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SIGNIFICANT ACCOUNTING POLICIES (Tables)

3 Months Ended

Mar. 31, 2021

Our total service revenues during the three months ended March 31, 2021 and 2020 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 March 31,
	2021		2020
Commercial insurance	$	182,096	$	155,461
Medicare	63,589		57,749
Medicaid	8,451		6,628
Workers' compensation/personal injury	10,399		10,274
Other patient revenue	4,775		5,662
Management fee revenue	5,219		2,567
Teleradiology and Software revenue	2,426		3,770
Other	2,622		6,222
Service fee revenue	279,577		248,333
Revenue under capitation arrangements	35,742		33,231
Total service revenue	$	315,319	$	281,564

Schedule of goodwill and other intangible assets

Activity in goodwill for the three months ended March 31, 2021 is provided below (in thousands):


Balance as of December 31, 2020	$	472,879
Goodwill acquired through acquisitions	29,609
Goodwill attributable to formation of Simi Valley Imaging Group LLC	105
Other Adjustments	(27)










Balance as of March 31, 2021	$	502,566

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 which remain ineffective is as follows (amounts in thousands):


For the three months ended March 31, 2021
Account	January 1, 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		March 31, 2021 Balance		Location
Accumulated Other Comprehensive Loss, net of taxes	$	(22,581)	$	—	$	925	$	(21,656)	Equity


For the twelve months ended December 31, 2020
Account	January 1, 2020 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		December 31, 2020		Location
Accumulated Other Comprehensive Loss, net of taxes	$	(5,870)	$	(19,352)	$	2,641	$	(22,581)	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 March 31, 2021

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)

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

11,245

Other income (expense)

(925)

Interest Expense

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 March 31, 2021
	Level 1		Level 2		Level 3		Total
Current and long term liabilities

2019 Swaps - Interest Rate Contracts	$	—	$	26,744	$	—	$	26,744


	As of December 31, 2020
	Level 1		Level 2		Level 3		Total
Current and long term liabilities

2019 Swaps - Interest Rate Contracts	$	—	$	37,989	$	—	$	37,989

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


	As of March 31, 2021
	Level 1		Level 2		Level 3		Total Fair Value		Total Face Value
First Lien Term Loans and SunTrust Term Loan	$	—	$	652,331	$	—	$	652,331	$	651,580


	As of December 31, 2020
	Level 1		Level 2		Level 3		Total Fair Value		Total Face Value
First Lien Term Loans and SunTrust Term Loan	$	—	$	661,640	$	—	$	661,640	$	662,403

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,
	2021		2020
Net income (loss) attributable to RadNet, Inc.'s common stockholders	$	9,458	$	(16,358)

BASIC NET INCOME (LOSS) PER SHARE ATTRIBUTABLE TO RADNET, INC.'S COMMON STOCKHOLDERS
Weighted average number of common shares outstanding during the period	51,951,506		50,294,329
Basic net income (loss) per share attributable to RadNet, Inc.'s common stockholders	$	0.18	$	(0.33)

DILUTED NET INCOME (LOSS) PER SHARE ATTRIBUTABLE TO RADNET, INC.'S COMMON STOCKHOLDERS
Weighted average number of common shares outstanding during the period	51,951,506		50,294,329
Add nonvested restricted stock subject only to service vesting	253,265		—
Add additional shares issuable upon exercise of stock options and warrants	624,170		—
Weighted average number of common shares used in calculating diluted net income per share	52,828,941		50,294,329
Diluted net income (loss) per share attributable to RadNet, Inc.'s common stockholders	$	0.18	$	(0.33)

Stock options and non vested restricted awards excluded from the computation of diluted per share amounts as their effect would be antidilutive:
Nonvested restricted stock subject to service vesting	—		314,962
Shares issuable upon the exercise of stock options:	82,595		527,899

Investment in joint ventures

The following table is a summary of our investment in joint ventures during the three months ended March 31, 2021 (in thousands):


Balance as of December 31, 2020	$	34,528
Equity in earnings in these joint ventures	2,285





Balance as of March 31, 2021	$	36,813

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, 2021 and December 31, 2020 and income statement data for the three months ended March 31, 2021 and 2020 (in thousands):


Balance Sheet Data:	March 31, 2021		December 31, 2020
Current assets	$	33,265	$	27,085
Noncurrent assets	68,493		68,686
Current liabilities	(13,929)		(12,545)
Noncurrent liabilities	(21,371)		(21,582)
Total net assets	$	66,458	$	61,644

Book value of RadNet joint venture interests	$	30,351	$	28,079
Cost in excess of book value of acquired joint venture interests and other	6,462		6,449
Total value of RadNet joint venture interests	$	36,813	$	34,528


Income statement data for the three months ended March 31,	2021		2020
Net revenue	$	31,718	$	26,341
Net income	$	4,803	$	4,245