Document and Entity Information
Document and Entity Information - USD ($) | 12 Months Ended | ||
Dec. 31, 2017 | Mar. 01, 2018 | Jun. 30, 2017 | |
Document and Entity Information Abstract | |||
Entity Registrant Name | Internap Corp | ||
Entity Central Index Key | 1,056,386 | ||
Trading Symbol | inap | ||
Current Fiscal Year End Date | --12-31 | ||
Entity Filer Category | Accelerated Filer | ||
Document Type | 10-K | ||
Document Period End Date | Dec. 31, 2017 | ||
Document Fiscal Year Focus | 2,017 | ||
Document Fiscal Period Focus | FY | ||
Amendment Flag | false | ||
Entity Common Stock, Shares Outstanding | 20,061,006 | ||
Entity Well-known Seasoned Issuer | No | ||
Entity Voluntary Filers | No | ||
Entity Current Reporting Status | Yes | ||
Entity Public Float | $ 209,984,478 |
CONSOLIDATED STATEMENTS OF OPER
CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS - USD ($) shares in Thousands | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Revenues: | |||
Revenues | $ 280,718,000 | $ 298,297,000 | $ 318,293,000 |
Costs of sales and services, exclusive of depreciation and amortization, shown below: | |||
Direct costs of network, sales and services, exclusive of depreciation and amortization | 106,217,000 | 124,255,000 | 131,440,000 |
Costs of customer support | 25,757,000 | 32,184,000 | 36,475,000 |
Sales, general and administrative | 62,728,000 | 70,639,000 | 81,340,000 |
Depreciation and amortization | 74,993,000 | 76,948,000 | 92,655,000 |
Goodwill impairment | 0 | 80,105,000 | 0 |
Exit activities, restructuring and impairments | 6,249,000 | 7,236,000 | 2,278,000 |
Total operating costs and expenses | 275,944,000 | 391,367,000 | 344,188,000 |
Income (loss) from operations | 4,774,000 | (93,070,000) | (25,895,000) |
Non-operating expenses (income): | |||
Interest expense | 50,476,000 | 30,909,000 | 27,596,000 |
Loss (gain) on foreign currency, net | 525,000 | 485,000 | (771,000) |
Other income, net | 0 | (82,000) | (417,000) |
Total non-operating expenses (income) | 51,001,000 | 31,312,000 | 26,408,000 |
Loss from continuing operations before income taxes, non-controlling interest and equity in (earnings) of equity-method investment | (46,227,000) | (124,382,000) | (52,303,000) |
Provision (benefit) for income taxes | 253,000 | 530,000 | (3,660,000) |
Equity in earnings of equity-method investment, net of taxes | (1,207,000) | (170,000) | (200,000) |
Net loss | (45,273,000) | (124,742,000) | (48,443,000) |
Less net income attributable to non-controlling interest | (70,000) | 0 | 0 |
Net loss attributable to INAP stockholders | (45,343,000) | (124,742,000) | (48,443,000) |
Other comprehensive income (loss): | |||
Foreign currency translation adjustment | 23,000 | (39,000) | (197,000) |
Unrealized gain (loss) on foreign currency contracts | 145,000 | 600,000 | (745,000) |
Unrealized gain on interest rate swap | 0 | 728,000 | 84,000 |
Total other comprehensive income (loss) | 168,000 | 1,289,000 | (858,000) |
Comprehensive loss | $ (45,175,000) | $ (123,453,000) | $ (49,301,000) |
Basic and diluted net loss per share (in dollars per share) | $ (2.39) | $ (9.54) | $ (3.73) |
Weighted average shares outstanding used in computing basic and diluted net loss per share (in shares) | 18,993 | 13,083 | 12,975 |
INAP COLO | |||
Revenues: | |||
Revenues | $ 209,580,000 | $ 221,678,000 | $ 234,859,000 |
Costs of sales and services, exclusive of depreciation and amortization, shown below: | |||
Direct costs of network, sales and services, exclusive of depreciation and amortization | 89,240,000 | 105,620,000 | 111,765,000 |
INAP CLOUD | |||
Revenues: | |||
Revenues | 71,138,000 | 76,619,000 | 83,434,000 |
Costs of sales and services, exclusive of depreciation and amortization, shown below: | |||
Direct costs of network, sales and services, exclusive of depreciation and amortization | $ 16,977,000 | $ 18,635,000 | $ 19,675,000 |
CONSOLIDATED BALANCE SHEETS
CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands | Dec. 31, 2017 | Dec. 31, 2016 |
Current assets: | ||
Cash and cash equivalents | $ 14,603 | $ 10,389 |
Accounts receivable, net of allowance for doubtful accounts of $1,487 and $1,246, respectively | 17,794 | 18,044 |
Prepaid expenses and other assets | 8,673 | 10,055 |
Total current assets | 41,070 | 38,488 |
Property and equipment, net | 458,565 | 302,680 |
Investment in joint venture | 0 | 3,002 |
Intangible assets, net | 25,666 | 27,978 |
Goodwill | 50,209 | 50,209 |
Deposits and other assets | 11,015 | 8,258 |
Total assets | 586,525 | 430,615 |
Current liabilities: | ||
Accounts payable | 20,388 | 20,875 |
Accrued liabilities | 15,908 | 10,603 |
Deferred revenues | 4,861 | 5,746 |
Capital lease obligations | 11,711 | 10,030 |
Revolving credit facility | 5,000 | 0 |
Term loan, less discount and prepaid costs of $2,133 and $2,243, respectively | 867 | 757 |
Exit activities and restructuring liability | 4,152 | 3,177 |
Other current liabilities | 1,707 | 3,171 |
Total current liabilities | 64,594 | 54,359 |
Deferred revenues | 4,761 | 5,144 |
Capital lease obligations | 223,749 | 43,876 |
Revolving credit facility | 0 | 35,500 |
Term loan, less discount and prepaid costs of $7,655 and $4,579, respectively | 287,845 | 283,421 |
Exit activities and restructuring liability | 664 | 1,526 |
Deferred rent | 1,310 | 4,642 |
Deferred tax liability | 1,651 | 1,513 |
Other long-term liabilities | 2,983 | 4,358 |
Total liabilities | 587,557 | 434,339 |
Commitments and contingencies (note 10) | ||
Stockholders’ deficit: | ||
Preferred stock, $0.001 par value; 5,000 shares authorized; no shares issued or outstanding | ||
Common stock, $0.001 par value; 30,000 shares authorized; 20,804 and 14,450 shares outstanding, respectively | 21 | 14 |
Additional paid-in capital | 1,327,084 | 1,283,376 |
Treasury stock, at cost, 293 and 268 shares, respectively | (7,159) | (6,923) |
Accumulated deficit | (1,323,723) | (1,278,699) |
Accumulated items of other comprehensive loss | (1,324) | (1,492) |
Total INAP stockholders’ deficit | (5,101) | (3,724) |
Non-controlling interest | 4,069 | 0 |
Total stockholder's deficit | (1,032) | (3,724) |
Total liabilities and stockholders’ deficit | $ 586,525 | $ 430,615 |
CONSOLIDATED BALANCE SHEETS (Pa
CONSOLIDATED BALANCE SHEETS (Parentheticals) - USD ($) $ in Thousands | Dec. 31, 2017 | Dec. 31, 2016 |
Accounts receivable, allowance for doubtful accounts | $ 1,487 | $ 1,246 |
Preferred stock, par value (in dollars per share) | $ 0.001 | $ 0.001 |
Preferred stock, shares authorized (in shares) | 5,000,000 | 5,000,000 |
Preferred stock, shares issued (in shares) | 0 | 0 |
Preferred stock, shares outstanding (in shares) | 0 | 0 |
Common stock, par value (in dollars per share) | $ 0.001 | $ 0.001 |
Common stock, shares authorized (in shares) | 30,000,000 | 30,000,000 |
Common stock, shares outstanding (in shares) | 20,804,000 | 14,450,000 |
Treasury stock, shares (in shares) | 293,000 | 268,000 |
Term Loan Current | ||
Term loan, unamortized discount and prepaid costs | $ 2,133 | $ 2,243 |
Term Loan Noncurrent | ||
Term loan, unamortized discount and prepaid costs | $ 7,655 | $ 4,579 |
CONSOLIDATED STATEMENTS OF STOC
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY (DEFICIT) - USD ($) shares in Thousands, $ in Thousands | Total | Common Stock | Additional Paid-In Capital | Treasury Stock | Accumulated Deficit | Accumulated Items of Comprehensive Loss | Non-Controlling Interest |
Balance at Dec. 31, 2014 | $ 150,336 | $ 14 | $ 1,262,442 | $ (4,683) | $ (1,105,514) | $ (1,923) | $ 0 |
Balance (in shares) at Dec. 31, 2014 | 13,603 | ||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||
Net loss | (48,443) | (48,443) | |||||
Net income attributable to non-controlling interest | 0 | ||||||
Foreign currency translation | (197) | (197) | |||||
Interest rate swap | 84 | 84 | |||||
Foreign currency contracts | (745) | (745) | |||||
Stock-based compensation | 9,063 | 9,063 | |||||
Proceeds from exercise of stock options, net | 4,338 | 6,048 | (1,710) | ||||
Proceeds from exercise of stock options, net (in shares) | 390 | ||||||
Balance at Dec. 31, 2015 | 114,436 | $ 14 | 1,277,553 | (6,393) | (1,153,957) | (2,781) | 0 |
Balance (in shares) at Dec. 31, 2015 | 13,993 | ||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||
Net loss | (124,742) | (124,742) | |||||
Net income attributable to non-controlling interest | 0 | ||||||
Foreign currency translation | (39) | (39) | |||||
Interest rate swap | 728 | 728 | |||||
Foreign currency contracts | 600 | 600 | |||||
Stock-based compensation | 5,148 | 5,148 | |||||
Proceeds from exercise of stock options, net | 145 | 675 | (530) | ||||
Proceeds from exercise of stock options, net (in shares) | 457 | ||||||
Balance at Dec. 31, 2016 | $ (3,724) | $ 14 | 1,283,376 | (6,923) | (1,278,699) | (1,492) | 0 |
Balance (in shares) at Dec. 31, 2016 | 14,450 | 14,450 | |||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||
Adoption of ASU 2016-16 | $ 319 | 319 | |||||
Net loss | (45,273) | (45,273) | |||||
Net income attributable to non-controlling interest | (70) | (70) | 70 | ||||
Foreign currency translation | 23 | 23 | |||||
Interest rate swap | 0 | ||||||
Foreign currency contracts | 145 | 145 | |||||
INAP Japan | 3,999 | 3,999 | |||||
Common stock issuance | 40,163 | $ 7 | 40,156 | ||||
Common stock issuance (in shares) | 5,951 | ||||||
Stock-based compensation | 3,121 | 3,121 | |||||
Proceeds from exercise of stock options, net | 195 | 431 | (236) | ||||
Proceeds from exercise of stock options, net (in shares) | 403 | ||||||
Balance at Dec. 31, 2017 | $ (1,032) | $ 21 | $ 1,327,084 | $ (7,159) | $ (1,323,723) | $ (1,324) | $ 4,069 |
Balance (in shares) at Dec. 31, 2017 | 20,804 | 20,804 |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Cash Flows from Operating Activities: | |||
Net loss | $ (45,273) | $ (124,742) | $ (48,443) |
Adjustments to reconcile net loss to net cash provided by operating activities: | |||
Depreciation and amortization | 74,993 | 76,948 | 92,655 |
Loss on disposal of property and equipment, net | (353) | 8 | 674 |
Impairments | 503 | 83,377 | 232 |
Amortization of debt discount and issuance costs | 2,519 | 2,534 | 2,017 |
Stock-based compensation expense, net of capitalized amount | 3,040 | 4,997 | 8,781 |
Equity in earnings of equity-method investment | (1,207) | (170) | (200) |
Provision for doubtful accounts | 1,049 | 1,093 | 1,354 |
Non-cash change in capital lease obligations | 520 | 223 | (1,437) |
Non-cash change in exit activities and restructuring liability | 6,291 | 4,409 | 2,241 |
Non-cash change in deferred rent | (3,554) | (2,152) | (1,704) |
Deferred taxes | 355 | 325 | (3,966) |
Payment of debt lender fees | (2,583) | (1,716) | 0 |
Loss on extinguishment and modification of debt | 6,785 | 0 | 0 |
Other, net | 304 | 179 | 261 |
Changes in operating assets and liabilities: | |||
Accounts receivable | (207) | 1,476 | (2,211) |
Prepaid expenses, deposits and other assets | 2,051 | 2,297 | 1,099 |
Accounts payable | (1,167) | 1,568 | (4,814) |
Accrued and other liabilities | 3,359 | 81 | (4,206) |
Deferred revenues | (1,297) | (476) | 758 |
Exit activities and restructuring liability | (6,178) | (3,584) | (2,873) |
Asset retirement obligation | (825) | (174) | 0 |
Other liabilities | 40 | (52) | (10) |
Net cash flows provided by operating activities | 39,165 | 46,449 | 40,208 |
Cash Flows from Investing Activities: | |||
Proceeds from sale of building | 0 | 542 | 0 |
Purchases of property and equipment | (35,714) | (44,364) | (55,695) |
Additions to acquired and developed technology | (735) | (1,828) | (1,462) |
Proceeds from disposal of property and equipment | 402 | 0 | 0 |
Acquisition, net of cash received | 3,838 | 0 | 0 |
Net cash flows used in investing activities | (32,209) | (45,650) | (57,157) |
Cash Flows from Financing Activities: | |||
Proceeds from credit agreements | 316,900 | 4,500 | 21,000 |
Proceeds from stock issuance | 40,195 | 0 | 0 |
Principal payments on credit agreements | (339,900) | (3,000) | (3,000) |
Payment of debt issuance costs | (10,194) | 0 | 0 |
Payments on capital lease obligations | (9,714) | (9,472) | (7,879) |
Proceeds from exercise of stock options | 421 | 673 | 6,046 |
Acquisition of common stock for income tax withholdings | (235) | (530) | (1,710) |
Other, net | (345) | (289) | 833 |
Net cash flows (used in) provided by financing activities | (2,872) | (8,118) | 15,290 |
Effect of exchange rates on cash and cash equivalents | 130 | (64) | (653) |
Net increase (decrease) in cash and cash equivalents | 4,214 | (7,383) | (2,312) |
Cash and cash equivalents at beginning of period | 10,389 | 17,772 | 20,084 |
Cash and cash equivalents at end of period | 14,603 | 10,389 | 17,772 |
Supplemental disclosure of cash flow information: | |||
Cash paid for interest | 37,692 | 29,561 | 26,427 |
Non-cash acquisition of property and equipment under capital leases | 189,679 | 6,042 | 6,377 |
Additions to property and equipment included in accounts payable | $ 1,932 | $ 1,873 | $ 5,170 |
DESCRIPTION OF THE COMPANY AND
DESCRIPTION OF THE COMPANY AND NATURE OF OPERATIONS | 12 Months Ended |
Dec. 31, 2017 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
DESCRIPTION OF THE COMPANY AND NATURE OF OPERATIONS | DESCRIPTION OF THE COMPANY AND NATURE OF OPERATIONS Internap Corporation (“we,” “us,” “our,” “INAP,” or “the Company”) provides Internet infrastructure through both Colocation Business and Enterprise Services (including colocation, network connectivity, IP, bandwidth, and managed services and hosting), and Cloud Services (including enterprise-grade AgileCLOUD, bare-metal servers, and SMB iWeb platforms). INAP operates in Tier 3-type data centers in 21 metropolitan markets, primarily in North America, with 56 data centers and 97 POPs around the world. Currently, INAP has approximately one million gross square feet under lease, with 500,000 square feet of data center space. INAP operates a premium business model that provides high-power density colocation, low-latency bandwidth, and public and private cloud platforms in an expanding Internet infrastructure industry. We have a history of quarterly and annual period net losses. As of December 31, 2017 , our accumulated deficit was $1.3 billion and our working capital deficit was $22.4 million . We may not be able to achieve profitability on a quarterly basis, and our failure to do so may adversely affect our business, including our ability to raise additional funds. Our sources of capital include, but are not limited to, funds derived from selling our services and results of our operations, sales of assets, borrowings under our credit arrangement, the issuance of debt or equity securities or other possible recapitalization transactions. Our short term and long term liquidity depend primarily upon the funds derived from selling our services, working capital management (cash, accounts receivable, accounts payable and other liabilities), bank borrowings, reducing costs and bookings net of churn. In an effort to increase liquidity and generate cash, we may pursue sales of non-strategic assets, reduce our expenses, amend our credit facility, pursue sales of debt or equity securities or other recapitalization transactions, or seek other external sources of funds. |
SUMMARY OF SIGNIFICANT ACCOUNTI
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 12 Months Ended |
Dec. 31, 2017 | |
Accounting Policies [Abstract] | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Accounting Principles We prepare our consolidated financial statements and accompanying notes in accordance with accounting principles generally accepted in the United States (“GAAP”). The consolidated financial statements include our accounts and those of our wholly-owned subsidiaries. We have eliminated inter-company transactions and balances in consolidation. Certain prior year amounts have been reclassified to conform to the current year presentation. Estimates and Assumptions The preparation of these financial statements requires us to make estimates and judgments that affect the reported amounts of assets, liabilities, revenue and expense and related disclosure of contingent assets and liabilities. On an ongoing basis, we evaluate our estimates, including those related to revenue recognition, doubtful accounts, goodwill and intangible assets, accruals, stock-based compensation, income taxes, restructuring charges, leases, long-term service contracts, contingencies and litigation. We base our estimates on historical experience and on various other assumptions that we believe to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ materially from these estimates. Cash and Cash Equivalents We consider all highly-liquid investments purchased with an original maturity of three months or less at the date of purchase and money market mutual funds to be cash equivalents. We maintain our cash and cash equivalents at major financial institutions and may at times exceed federally insured limits. We believe that the risk of loss is minimal. To date, we have not experienced any losses related to cash and cash equivalents. Accounts Receivable and Allowance for Doubtful Accounts Accounts receivable consist of amounts due to the Company from normal business activities. The Company maintains an allowance for estimated losses resulting from the inability of its customers to make required payments. The Company estimates uncollectible amounts based upon historical bad debts, current customer receivable balances, the age of customer receivable balances, the customer’s financial condition and current economic trends. Investment in Joint Venture In previous years, INAP invested $4.1 million in Internap Japan Co., Ltd., our joint venture with NTT-ME Corporation and Nippon Telegraph and Telephone Corporation. Through August 15, 2017, we qualified and accounted for this investment using the equity method. We recorded our proportional share of the income and losses of INAP Japan one month in arrears on the accompanying consolidated balance sheets as a long-term investment and our share of INAP Japan's income and losses, net of taxes, as a separate caption in our accompanying consolidated statements of operations and comprehensive loss. On August 15, 2017, INAP exercised certain rights to obtain a controlling interest in Internap Japan Co., Ltd. Upon obtaining control of the venture, we recognized INAP Japan’s assets and liabilities at fair value resulting in a gain of $1.1 million which is reflected in "Equity in earnings of equity-method investment, net of taxes" in the accompanying consolidated statements of operations and comprehensive loss. See Note 5 for further information. Noncontrolling Interest Noncontrolling interests ("NCI") are evaluated by the Company and are shown as either a liability, temporary equity (shown between liabilities and equity) or as permanent equity depending on the nature of the redeemable features at amounts based on formulas specific to each entity. Generally, mandatorily redeemable NCIs are classified as liabilities and non-mandatorily redeemable NCIs are classified outside of stockholders' equity in the consolidated balance sheets as temporary equity under the caption, redeemable noncontrolling interests, and are measured at their redemption values at the end of each period. If the redemption value is greater than the carrying value, an adjustment is recorded in retained earnings to record the NCI at its redemption value. Redeemable NCIs that are mandatorily redeemable are classified as a liability in the consolidated balance sheets under either other current liabilities or other long-term liabilities, depending on the remaining duration until settlement, and are measured at the amount of cash that would be paid if settlement occurred at the balance sheet date with any change from the prior period recognized as interest expense. If the NCI is not currently redeemable yet probable of becoming redeemable, we are required to either (1) accrete changes in the redemption value over the period from the date of issuance to the earliest redemption date of the instrument using an appropriate methodology, usually the interest method, or (2) recognize changes in the redemption value immediately as they occur and adjust the carrying value of the security to equal the redemption value at the end of each reporting period. We have elected to recognize changes in the redemption value immediately as they occur and adjust the carrying value of the NCI to the greater of the estimated redemption value, which approximates fair value, at the end of each reporting period or the initial carrying amount. Net income attributable to NCIs reflects the portion of the net loss of consolidated entities applicable to the NCI stockholders in the accompanying consolidated statements of operations. The net income attributable to NCI is classified in the consolidated statements of operations as part of consolidated net loss and deducted from total consolidated net loss to arrive at the net loss attributable to the Company. Fair Value of Financial Instruments The carrying amounts of our financial instruments, including cash and cash equivalents, accounts receivable and other current liabilities, approximate fair value due to the short-term nature of these assets and liabilities. As of December 31, 2017 , the carrying value of our debt was $303.5 million and the fair value was $306.5 million . We measure and report certain financial assets and liabilities at fair value on a recurring basis, including cash equivalents. The major categories of nonfinancial assets and liabilities that we measure at fair value include reporting units measured at fair value in step one of our goodwill impairment test. Financial Instrument Credit Risk Financial instruments that potentially subject us to a concentration of credit risk principally consist of cash, cash equivalents, marketable securities and trade receivables. Given the needs of our business, we may invest our cash and cash equivalents in money market funds. Property and Equipment We carry property and equipment at original acquisition cost less accumulated depreciation and amortization. We calculate depreciation and amortization on a straight-line basis over the estimated useful lives of the assets. Estimated useful lives used for network equipment are generally five years ; furniture, equipment and software are three to seven years ; and leasehold improvements are the shorter of the lease term or their estimated useful lives . We capitalize additions and improvements that increase the value or extend the life of an asset. We expense maintenance and repairs as incurred. We charge gains or losses from disposals of property and equipment to operations. Leases We record leases in which we have substantially all of the benefits and risks of ownership as capital leases and all other leases as operating leases. For leases determined to be capital leases, we record the assets held under capital lease and related obligations at the lesser of the present value of aggregate future minimum lease payments or the fair value of the assets held under capital lease. We amortize the asset over its estimated useful life or over the lease term, depending on the nature of the asset. The duration of lease obligations and commitments ranges from three years for equipment to 25 years for facilities. For leases determined to be operating leases, we record lease expense on a straight-line basis over the lease term. Certain leases include renewal options that, at the inception of the lease, are considered reasonably assured of being renewed. The lease term begins when we control the leased property, which is typically before lease payments begin under the terms of the lease. We record the difference between the expense in our consolidated statements of operations and comprehensive loss and the amount we pay as deferred rent, which we include in our consolidated balance sheets. Costs of Internal-Use Computer Software Development We capitalize software development costs incurred during the application development stage. Amortization begins once the software is ready for its intended use and is computed based on the straight-line method over the estimated useful life, which was five years for 2017 , 2016 and 2015 . Judgment is required in determining which software projects are capitalized and the resulting economic life. We capitalized $4.4 million , $4.3 million and $4.6 million in internal-use software costs during the years ended December 31, 2017 , 2016 and 2015 , respectively. As of December 31, 2017 and 2016 , the balance of unamortized internal-use software costs was $17.9 million and $20.0 million , respectively. During the years ended December 31, 2017 , 2016 and 2015 , amortization expense was $7.2 million , $8.3 million and $6.6 million , respectively. Valuation of Long-Lived Assets We periodically evaluate the carrying value of our long-lived assets, including, but not limited to, property and equipment. We consider the carrying value of a long-lived asset impaired when the undiscounted cash flows from such asset are separately identifiable and we estimate them to be less than its carrying value. In that event, we would recognize a loss based on the amount by which the carrying value exceeds the fair value of the long-lived asset. We determine fair value based on either market quotes, if available, or discounted cash flows using a discount rate commensurate with the risk inherent in our current business model for the specific asset being valued. We would determine losses on long-lived assets to be disposed of in a similar manner, except that we would reduce fair values by the cost of disposal. We charge losses due to impairment of long-lived assets to operations during the period in which we identify the impairment. Goodwill and Other Intangible Assets As of January 1, 2017, we changed our operating segments, as discussed in Note 11 “Operating Segment and Geographic Information,” and, subsequently, our reporting units. We now have six reporting units: IP services, IP products, data center services (“DCS”), managed hosting, cloud, and Ubersmith. We allocated goodwill to our new reporting units using a relative fair value approach. In addition, we completed an assessment of any potential goodwill impairment for all reporting units immediately prior to and after the reallocation and determined that no impairment existed. We performed our annual impairment review as of August 1, 2017, and concluded that goodwill attributed to each of our reporting units was not impaired as the fair value of each reporting unit exceeded the carrying value, including goodwill. To determine the estimated fair value of our reporting units, we utilized the discounted cash flow and market methods. We have consistently utilized both methods in our goodwill impairment assessments and weighted both as appropriate based on relevant factors for each reporting unit. The discounted cash flow method is specific to our anticipated future results of the reporting unit, while the market method is based on our market sector including our competitors. We determined the assumptions supporting the discounted cash flow method, including the discount rate and using our estimates as of the date of the impairment review. To determine the reasonableness of these assumptions, we considered our past performance and empirical trending of results and looked to market and industry expectations, such as forecasted revenues and discount rate. We used reasonable judgment in developing our estimates and assumptions. The market method estimates fair value based on market multiples of revenue and earnings derived from comparable companies with similar operating and investment characteristics as the reporting unit. The assumptions, inputs and judgments used in performing the valuation analysis are inherently subjective and reflect estimates based on known facts and circumstances at the time we perform the valuation. These estimates and assumptions primarily include, but are not limited to, discount rates; terminal growth rates; projected revenues and costs; earnings before interest, taxes, depreciation and amortization for expected cash flows; market comparables and capital expenditure forecasts. The use of different assumptions, inputs and judgments, or changes in circumstances, could materially affect the results of the valuation. Due to inherent uncertainty involved in making these estimates, actual results could differ from our estimates and could result in additional non-cash impairment charges in the future. Other intangible assets have finite lives and we record these assets at cost less accumulated amortization. We record amortization of acquired and developed technologies to be sold using the greater of (a) the ratio of current revenues to total and anticipated future revenues for the applicable technology or (b) the straight-line method over the remaining estimated economic life, which is five to eight years. We amortize the cost of customer relationship and trade names over their useful lives of 10 to 15 years. During the years ended December 31, 2017 , 2016 and 2015 amortization expense for acquired and developed technologies was $2.1 million , $3.0 million and $ 3.4 million , respectively. We assess other intangible assets on a quarterly basis whenever any events have occurred or circumstances have changed that would indicate that impairment could exist. Our assessment is based on estimated future cash flows directly associated with the asset or asset group. If we determine that the carrying value is not recoverable, we may record an impairment charge, reduce the estimated remaining useful life or both. Derivatives We use derivatives only to reduce exposure to specific identified risks including managing the overall cost of capital and translational and transactional exposure arising from foreign transactions and ensuring the certainty of outcome as it relates to commodity pricing exposure. We do not use derivatives for any other purpose. Exit Activities and Restructuring When circumstances warrant, we may elect to exit certain business activities or change the manner in which we conduct ongoing operations. If we make such a change, we will estimate the costs to exit a business, location, service contract or restructure ongoing operations. The components of the estimates may include estimates and assumptions regarding the timing and costs of future events and activities that represent our best expectations based on known facts and circumstances at the time of estimation. If circumstances warrant, we will adjust our previous estimates to reflect what we then believe to be a more accurate representation of expected future costs. Because our estimates and assumptions regarding exit activities and restructuring charges include probabilities of future events, such as our ability to find a sublease tenant within a reasonable period of time or the rate at which a sublease tenant will pay for the available space, such estimates are inherently vulnerable to changes due to unforeseen circumstances that could materially and adversely affect our results of operations. We monitor market conditions at each period end reporting date and will continue to assess our key assumptions and estimates used in the calculation of our exit activities and restructuring accrual. Taxes We account for income taxes under the liability method. We determine deferred tax assets and liabilities based on differences between financial reporting and tax bases of assets and liabilities, and we measure the tax assets and liabilities using the enacted tax rates and laws that will be in effect when we expect the differences to reverse. We maintain a valuation allowance to reduce our deferred tax assets to their estimated realizable value. We may recognize deferred tax assets in future periods if and when we estimate them to be realizable and supported by historical trends of profitability and future expectations within each tax jurisdiction. We evaluate liabilities for uncertain tax positions, and we recognized $0.2 million for associated liabilities during the years ended December 31, 2017 and 2016 . We recorded nominal interest and penalties arising from the underpayment of income taxes in “Provision (benefit) for income taxes” in our accompanying consolidated statements of operations and comprehensive loss. We account for telecommunication, sales and other similar taxes on a net basis in “General and administrative” expense in our accompanying consolidated statements of operations and comprehensive loss. Stock-Based Compensation We measure stock-based compensation cost at the grant date based on the calculated fair value of the award. We recognize the expense over the employee’s requisite service period, generally the vesting period of the award. The fair value of restricted stock is the market value on the date of grant. The fair value of stock options is estimated at the grant date using the Black-Scholes option pricing model with weighted average assumptions for the activity under our stock plans. Option pricing model input assumptions, such as expected term, expected volatility and risk-free interest rate, impact the fair value estimate. Further, the forfeiture rate impacts the amount of aggregate compensation. These assumptions are subjective and generally require significant analysis and judgment to develop. The expected term represents the weighted average period of time that we expect granted options to be outstanding, considering the vesting schedules and our historical exercise patterns. Because our options are not publicly traded, we assume volatility based on the historical volatility of our stock. The risk-free interest rate is based on the U.S. Treasury yield curve in effect at the time of grant for periods corresponding to the expected option term. We have also used historical data to estimate option exercises, employee termination and stock option forfeiture rates. Changes in any of these assumptions could materially impact our results of operations in the period the change is made. We do not recognize a deferred tax asset for unrealized tax benefits associated with the tax deductions in excess of the compensation recorded (excess tax benefit). We apply the “with and without” approach for utilization of tax attributes upon realization of net operating losses in the future. This method allocates stock-based compensation benefits last among other tax benefits recognized. In addition, we apply the “direct only” method of calculating the amount of windfalls or shortfalls. Treasury Stock As permitted by our stock-based compensation plans, we acquire shares of treasury stock as payment of statutory minimum payroll taxes due from employees for stock-based compensation. However, we do not use shares of treasury stock acquired from employees in this manner to issue new equity awards under our stock-based compensation plans. Revenue Recognition We generate revenues primarily from the sale of data center services, including colocation, hosting and cloud, and IP services. Our revenues typically consist of monthly recurring revenues from contracts with terms of one year or more. We recognize the monthly minimum as revenue each month provided that we have entered into an enforceable contract, we have delivered the service to the customer, the fee for the service is fixed or determinable and collection is reasonably assured. We record installation fees as deferred revenue and recognize the revenue ratably over the estimated customer life. For our data center services revenue, we determine colocation revenues by occupied square feet and both allocated and variable-based usage, which includes both physical space for hosting customers’ network and other equipment plus associated services such as power and network connectivity, environmental controls and security. We determine hosting revenues by the number of servers utilized (physical or virtual) and cloud revenues by the amount of processing and storage consumed. We recognize IP services revenues on fixed-commitment or usage-based pricing. IP service contracts usually have fixed minimum commitments based on a certain level of bandwidth usage with additional charges for any usage over a specified limit. If a customer’s usage of our services exceeds the monthly minimum, we recognize revenue for such excess in the period of the usage. We use contracts and sales or purchase orders as evidence of an arrangement. We test for availability or connectivity to verify delivery of our services. We assess whether the fee is fixed or determinable based on the payment terms associated with the transaction and whether the sales price is subject to refund or adjustment. We determine third-party evidence based on the prices charged by our competitors for a similar deliverable when sold separately. It is difficult for us to obtain sufficient information on competitor pricing to substantiate third-party evidence and therefore we may not always be able to use this measure. If we are unable to establish selling price using vendor-specific objective evidence or third-party evidence, we use best estimated selling price in our allocation of arrangement consideration. The objective of best estimated selling price is to determine the price at which we would transact if we sold the service on a standalone basis. Our determination of best estimated selling price involves a weighting of several factors including, but not limited to, pricing practices and market conditions. We analyze the selling prices used in our allocation of arrangement consideration on an annual basis at a minimum. We will analyze selling prices on a more frequent basis if a significant change in our business necessitates a more timely analysis or if we experience significant variances in our selling prices. Deferred revenue consists of revenue for services to be delivered in the future and consists primarily of advance billings, which we amortize over the respective service period. We defer and amortize revenues associated with billings for installation of customer network equipment over the estimated life of the customer relationship, which was, on average, approximately five years for 2017, five years for 2016, and six years for 2015. We defer and amortize revenues for installation services because the installation service is integral to our primary service offering and does not have value to customers on a stand-alone basis. We also defer and amortize the associated incremental direct costs. We routinely review the collectability of our accounts receivable and payment status of our customers. If we determine that collection of revenue is uncertain, we do not recognize revenue until collection is reasonably assured. Additionally, we maintain an allowance for doubtful accounts resulting from the inability of our customers to make required payments on accounts receivable. We base the allowance for doubtful accounts on our historical write-offs as a percentage of revenue. We assess the payment status of customers by reference to the terms under which we provide services or goods, with any payments not made on or before their due date considered past-due. Once we have exhausted all collection efforts, we write the uncollectible balance off against the allowance for doubtful accounts. We routinely perform credit checks for new and existing customers and require deposits or prepayments for customers that we perceive as being a credit risk. In addition, we record a reserve amount for potential credits to be issued under our service level agreements and other sales adjustments. Research and Development Costs We include research and development costs in general and administrative costs and we expense them as incurred. These costs primarily relate to our development and enhancement of IP routing technology, hosting and cloud technologies and network engineering costs associated with changes to the functionality of our services. Research and development costs were $1.5 million , $1.1 million and $2.2 million during the years ended December 31, 2017 , 2016 and 2015 , respectively. These costs do not include $5.2 million , $6.3 million and $6.5 million of internal-use and available for sale software costs capitalized during the years ended December 31, 2017 , 2016 and 2015 , respectively. Advertising Costs We expense all advertising costs as incurred. Advertising costs during the years ended December 31, 2017 , 2016 and 2015 were $1.9 million , $2.1 million and $4.9 million , respectively. Net Loss Per Share We compute basic net loss per share by dividing net loss attributable to our common stockholders by the weighted average number of shares of common stock outstanding during the period. We exclude all outstanding options and unvested restricted stock as such securities are anti-dilutive for all periods presented. Basic and diluted net loss per share is calculated as follows (in thousands, except per share amounts): Year Ended December 31, 2017 2016 2015 Net loss and net loss available to common stockholders $ (45,343 ) $ (124,742 ) $ (48,443 ) Weighted average shares outstanding, basic and diluted 18,993 13,083 12,975 Net loss per share, basic and diluted $ (2.39 ) $ (9.54 ) $ (3.73 ) Anti-dilutive securities excluded from diluted net loss per share calculation for stock-based compensation plans 1,076 1,350 1,664 Segment Information and Operating Costs and Expenses We align our reportable segments with the internal reporting that management uses for making operating decisions and assessing performance. Effective January 1, 2017 and as further described in note 11, we operate in two business segments: INAP COLO and INAP CLOUD. The prior year reclassifications, which did not affect total revenues, total direct costs of sales and services, operating loss or net loss, are summarized as follows (in thousands): Year Ended December 31, 2016 As Previously Reported Reclassification As Reported Revenues: Data center and network services $ 200,660 $ (200,660 ) $ — Cloud and hosting services 97,637 (97,637 ) — INAP COLO — 221,678 221,678 INAP CLOUD — 76,619 76,619 Costs of sales and services, exclusive of depreciation and amortization: Data center and network services $ 98,351 $ (98,351 ) $ — Cloud and hosting services 25,904 (25,904 ) — INAP COLO — 105,620 105,620 INAP CLOUD — 18,635 18,635 Year Ended December 31, 2015 As Previously Reported Reclassification As Reported Revenues: Data center and network services $ 213,040 $ (213,040 ) $ — Cloud and hosting services 105,253 (105,253 ) — INAP COLO — 234,859 234,859 INAP CLOUD — 83,434 83,434 Costs of sales and services, exclusive of depreciation and amortization: Data center and network services $ 104,105 $ (104,105 ) — Cloud and hosting services 27,335 (27,335 ) — INAP COLO — 111,765 111,765 INAP CLOUD — 19,675 19,675 Recent Accounting Pronouncements Adoption of New Accounting Standards In January 2017, the FASB issued ASU No. 2017-04, "Intangibles Goodwill and Other (Topic 350): Simplifying the Accounting for Goodwill Impairment" ("ASU 2017-04"), which simplifies the subsequent measurement of goodwill by eliminating “Step 2” from the goodwill impairment test. The guidance is effective for public companies’ annual or interim goodwill impairment tests in fiscal years beginning after December 15, 2019. We adopted ASU 2017-04 in the first quarter of 2017 and it did not impact our consolidated financial statements. In October 2016, the FASB issued ASU No. 2016-16, "Income Taxes (Topic 740): Intra-Entity Transfers of Assets Other Than Inventory ("ASU 2016-16"), which allows the recognition of current and deferred income taxes for an intra-entity asset transfer, other than inventory, when the transfer occurs. Historically, recognition of the income tax consequence was not recognized until the asset was sold to an outside party. This guidance should be applied on a modified retrospective basis through a cumulative-effect adjustment directly to retained earnings as of the beginning of the period of adoption. There are no new disclosure requirements. The guidance is effective for fiscal years and interim periods within those years beginning after December 15, 2017. Early adoption is permitted, and the Company adopted the provisions of ASU 2016-16 as of January 1, 2017. Relating to the adoption of the standard, the Company recorded a $2.2 million deferred tax asset and corresponding $1.9 million valuation allowance with the net difference going to retained earnings. In March 2016, the FASB issued ASU No. 2016-09, "Compensation - Stock Compensation (Topic 718): Improvements to Employee Share-Based Payment Accounting" ("ASU 2016-09"), which includes multiple amendments intended to simplify aspects of share-based payment accounting, and was effective for us at January 1, 2017. We have elected to account for forfeitures as they occur, rather than estimate expected forfeitures. In connection with the adoption of the standard, the Company recorded a $10.8 million deferred tax asset and a corresponding $10.8 million valuation allowance. Accounting Pronouncements Issued But Not Yet Effective In August 2016, the FASB issued ASU No. 2016-15, "Statement of Cash Flow (Topic 230): Classification of Certain Cash Receipts and Cash Payments" which amends Accounting Standards Codification 230, to clarify guidance on the classification of certain cash receipts and payments in the statement of cash flows ("ASU 2016-15"). The FASB issued ASU 2016-15 with the intent of reducing diversity in practice with respect to eight types of cash flows. This guidance is effective for fiscal years beginning after December 15, 2017, with early adoption permitted. We are currently evaluating the impact that adoption will have on the presentation of our consolidated statements of cash flow. In May 2014, the FASB issued ASU No. 2014-09 (Topic 606)-Revenue from Contracts with Customers (“ASU 2014-09”) which provides a new five-step model for revenue recognition. This ASU affects all contracts that we enter into with customers to transfer goods and services or for the transfer of nonfinancial assets. This ASU will supersede the revenue recognition requirements in Topic 605, and most industry specific guidance. This ASU also supersedes the cost guidance included in Subtopic 605-35, Revenue Recognition-Construction-Type and Production-Type Contracts and provides new cost guidance under Sub Topic 340-40. An entity has the option to apply the provisions of ASU 2014-09 either retrospectively to each prior reporting period presented (the “full retrospective method”) or retrospectively with the cumulative effect of initially applying this standard recognized at the date of initial application (the “modified retrospective method”). We will adopt the new revenue guidance effective January 1, 2018, using the modified retrospective method by recognizing the cumulative effect of initially applying the new standard as an increase to the opening balance of retained earnings. We currently expect to record an adoption adjustment on the effective date to be $23.6 million , which will be reflected in retained earnings. The most significant impact of the adoption of the new standard is the requirement for incremental costs to obtain a customer, such as commissions, which previously were expensed as incurred, to be deferred and amortized over the period of contract performance or a longer period if renewals are expected and the renewal commission is not commensurate with the initial commission. In addition, upon adoption of the new standard, installation revenues are expected to be recognized over the initial contract life rather than over the estimated customer life. We believe that most performance obligations, with the exception of certain sale |
FAIR VALUE MEASUREMENTS
FAIR VALUE MEASUREMENTS | 12 Months Ended |
Dec. 31, 2017 | |
Fair Value Disclosures [Abstract] | |
FAIR VALUE MEASUREMENTS | FAIR VALUE MEASUREMENTS We account for certain assets and liabilities at fair value. The hierarchy below lists three levels of fair value based on the extent to which inputs used in measuring fair value are observable in the market. We categorize each of our fair value measurements in one of these three levels based on the lowest level input that is significant to the fair value measurement in its entirety. These levels are: • Level 1: Quoted prices in active markets for identical assets or liabilities; • Level 2: Inputs other than Level 1 that are observable, either directly or indirectly, such as quoted prices for similar assets or liabilities; quoted prices in markets that are not active or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities; and • Level 3: Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities. Assets and liabilities measured at fair value on a recurring basis are summarized as follows (in thousands): Level 1 Level 2 Level 3 Total December 31, 2017: Cash and cash equivalents $ 14,603 $ — $ — $ — Asset retirement obligations (1) (note 10) — — 1,936 1,936 December 31, 2016: Cash and cash equivalents $ 10,389 $ — $ — $ — Foreign currency contracts (note 9) — 195 — 195 Asset retirement obligations (1) (note 10) — — 2,810 2,810 (1) We calculate the fair value of asset retirement obligations by discounting the estimated amount using the current Treasury bill rate adjusted for our credit non-performance. The following table provides a summary of changes in our Level 3 asset retirement obligations (in thousands): December 31, 2017 2016 2015 Balance, January 1 $ 2,810 $ 2,803 $ 2,471 Accretion (1) 197 207 262 Subsequent revision of estimated obligation 449 — 70 Payments (1,520 ) (200 ) — Balance, December 31 $ 1,936 $ 2,810 $ 2,803 (1) Included in INAP COLO "Costs of sales and services" in the accompanying consolidated statements of operations and comprehensive loss. The fair values of our other Level 3 debt liabilities, estimated using discount cash flow analysis based on incremental borrowing rates for similar types of borrowing arrangements, are as follows (in thousands): December 31, 2017 2016 Carrying Amount Fair Value Carrying Amount Fair Value Term loan $ 298,500 $ 301,485 $ 291,000 $ 267,700 Revolving credit facility 5,000 5,050 35,500 32,600 |
PROPERTY AND EQUIPMENT
PROPERTY AND EQUIPMENT | 12 Months Ended |
Dec. 31, 2017 | |
Property, Plant and Equipment [Abstract] | |
PROPERTY AND EQUIPMENT | PROPERTY AND EQUIPMENT Property and equipment consisted of the following (in thousands): December 31, 2017 2016 Network equipment $ 247,190 $ 231,579 Network equipment under capital lease 14,206 14,231 Furniture and equipment 26,246 18,300 Software 43,930 48,011 Leasehold improvements 412,631 396,891 Buildings under capital lease 227,482 63,117 Property and equipment, gross 971,685 772,129 Less: accumulated depreciation and amortization ($50,253 and $40,218 related to capital leases at December 31, 2016 and 2015, respectively) (513,120 ) (469,449 ) $ 458,565 $ 302,680 We disposed or retired $9.2 million of property and equipment with accumulated depreciation of $7.3 million during the year ended December 31, 2017 , $5.0 million of assets with accumulated depreciation of $4.4 million during the year ended December 31, 2016 and $33.3 million of assets with accumulated depreciation of $32.6 million during the year ended December 31, 2015 . We capitalized an immaterial amount of interest for each of the three years ended December 31, 2017 . Also, during the year ended December 31, 2017, we determined that we would not use certain leasehold improvements from our recently exited data center property and recorded an impairment of $0.5 million . At the time of disposal, the leasehold improvements had a cost of $22.4 million with accumulated depreciation of $22.4 million . During the year ended December 31, 2016, we determined that we would not use certain internally-developed software related to our quoting and billing system and recorded an impairment of $ 1.6 million . At the time of disposal, the software had a cost of $ 2.4 million with accumulated depreciation of $ 0.8 million . Depreciation and amortization of property and equipment consisted of the following (in thousands): Year ended December 31, 2017 2016 2015 Costs of sales and services $ 70,368 $ 71,626 $ 70,080 Other depreciation and amortization 2,478 2,274 19,125 Subtotal 72,846 73,900 89,205 Amortization of acquired and developed technologies 2,147 3,048 3,450 Total depreciation and amortization $ 74,993 $ 76,948 $ 92,655 |
INAP JAPAN JOINT VENTURE
INAP JAPAN JOINT VENTURE | 12 Months Ended |
Dec. 31, 2017 | |
Business Combinations [Abstract] | |
INAP JAPAN JOINT VENTURE | INAP JAPAN JOINT VENTURE In previous years, INAP invested $4.1 million in Internap Japan Co., Ltd, ("INAP Japan") a joint venture with NTT-ME Corporation and Nippon Telegraph and Telephone Corporation. INAP Japan is a provider of high performance infrastructure services. We accounted for this investment using the equity method. On August 15, 2017, INAP exercised certain rights to obtain a controlling interest in INAP Japan, which will allow us to recognize the economic benefits. Upon obtaining control of the venture, we recognized INAP Japan's assets and liabilities at fair value resulting in a gain of $1.1 million which is reflected in "Equity in earnings of equity-method investment, net of taxes" in the accompanying consolidated statements of operations and comprehensive loss. We determined the preliminary fair value of the net assets as follows (in thousands): Preliminary Purchase Price Allocation Weighted Average Cash $ 3,838 Property and equipment 725 Customer relationships 1,231 21 years License 634 Other assets 2,322 Total assets acquired 8,750 Other liabilities 446 Noncontrolling interest 3,999 Net assets acquired $ 4,305 The fair value of customer relationships was estimated by applying the multi-period excess earnings method. The fair value was determined by calculating the present value of estimated future operating cash flows generated from existing customers less costs to realize the revenue. The Company applied a discount rate of 8.5% , which reflected the nature of the assets as they relate to the risk and uncertainty of the estimated future operating cash flows. Other significant assumptions used to estimate the fair value of customer relationships include projected revenue growth, customer attrition rates, sales and marketing expenses and operating margins. The fair value measurements were based on significant inputs that are not observable in the market and thus represent Level 3 measurements as defined in the accounting standard for fair value measurements. The fair value of property and equipment was estimated by applying the cost approach. The cost approach is to use the replacement or reproduction cost as an indicator of fair value. The premise of the cost approach is that a market participant would pay no more for an asset than the amount for which the asset could be replaced or reproduced. The key assumptions of the cost approach include replacement cost new, physical deterioration, functional and economic obsolescence, economic useful life, remaining useful life, age and effective age. Unaudited Pro-Forma Financial Information The following unaudited pro forma financial information presents the combined results of operations of INAP and INAP Japan as if the acquisition had occurred on January 1, 2016. The unaudited pro forma financial information is not intended to represent or be indicative of our consolidated results of operations that would have been reported had the INAP and INAP Japan acquisition been completed as of January 1, 2016, and should not be taken as indicative of our future consolidated results of operations. (in thousands, except per share amounts) Year Ended December 31, 2017 2016 Revenue $ 286,570 $ 305,733 Net loss attributable to INAP stockholders (45,240 ) (124,722 ) Basic and diluted net loss per share (2.38 ) (9.53 ) |
GOODWILL AND OTHER INTANGIBLE A
GOODWILL AND OTHER INTANGIBLE ASSETS | 12 Months Ended |
Dec. 31, 2017 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
GOODWILL AND OTHER INTANGIBLE ASSETS | GOODWILL AND OTHER INTANGIBLE ASSETS Goodwill As of January 1, 2017, we changed our operating segments, as discussed in Note 11, and, subsequently, our reporting units. We now have six reporting units: IP services, IP products, data center services (“DCS”), cloud, hosting services and hosting products. We allocated goodwill to our new reporting unit using a relative fair value approach. In addition, we completed an assessment of any potential goodwill impairment for all reporting units immediately prior to and after the reallocation and determined that no impairment existed. We performed our annual impairment review as of August 1, 2017. To determine the estimated fair value of our reporting units, we utilized the discounted cash flow and market methods. We have consistently utilized both methods in our goodwill impairment assessments and weighted both as appropriate based on relevant factors for each reporting unit. The discounted cash flow method is specific to our anticipated future results of the reporting unit, while the market method is based on our market sector including our competitors. We determined the assumptions supporting the discounted cash flow method, including the discount rate, using our estimates as of the date of the impairment review. To determine the reasonableness of these assumptions, we considered our past performance and empirical trending of results, looked to market and industry expectations used in the discounted cash flow method, such as forecasted revenues and discount rate. We used reasonable judgment in developing our estimates and assumptions. The market method estimates fair value based on market multiples of revenue and earnings derived from comparable companies with similar operating and investment characteristics as the reporting unit. The assumptions, inputs and judgments used in performing the valuation analysis are inherently subjective and reflect estimates based on known facts and circumstances at the time we perform the valuation. These estimates and assumptions primarily include, but are not limited to, discount rates; terminal growth rates; projected revenues and costs; earnings before interest, taxes, depreciation and amortization for expected cash flows; market comparables and capital expenditure forecasts. The use of different assumptions, inputs and judgments, or changes in circumstances, could materially affect the results of the valuation. Due to inherent uncertainty involved in making these estimates, actual results could differ from our estimates and could result in additional non-cash impairment charges in the future. The Company determined, after performing the fair value analysis above, that all reporting units’ fair values were in excess of its carrying value. No impairment of goodwill has been identified during the year ended December 31, 2017. During the years ended December 31, 2017 and 2016, our goodwill activity is as follows (in thousands): January 1, 2016 Re-allocations Impairment December 31, 2016 Re-allocations December 31, 2017 Reportable segments: Data center services $ 90,849 $ (90,849 ) $ — $ — $ — $ — IP services 39,464 (39,464 ) — — — — Data center and network services — 80,105 (80,105 ) — — Cloud and hosting services — 50,209 — 50,209 (50,209 ) — INAP COLO — 6,003 6,003 INAP CLOUD — 44,206 44,206 Total $ 130,313 $ — $ (80,105 ) $ 50,209 $ — $ 50,209 Other Intangible Assets During the year ended December 31, 2017, we concluded that no impairment indicators existed to cause us to reassess our other intangible assets. The estimated useful lives range from 5 years to 15 years . The components of our amortizing intangible assets, including capitalized software, are as follows (in thousands): December 31, 2017 December 31, 2016 Gross Carrying Amount Accumulated Amortization Gross Carrying Amount Accumulated Amortization Acquired and developed technology $ 52,825 (48,063 ) $ 52,195 $ (45,995 ) Customer relationships and trade names 71,116 (50,212 ) 69,698 (47,920 ) $ 123,941 (98,275 ) $ 121,893 $ (93,915 ) Amortization expense for intangible assets during the years ended December 31, 2017 , 2016 and 2015 was $5.1 million , $5.3 million and $20.3 million , respectively. As of December 31, 2017 , remaining amortization expense is as follows (in thousands): 2018 $ 4,649 2019 4,146 2020 3,236 2021 2,753 2022 1,794 Thereafter 9,088 $ 25,666 |
ACCRUED LIABILITIES
ACCRUED LIABILITIES | 12 Months Ended |
Dec. 31, 2017 | |
Payables and Accruals [Abstract] | |
ACCRUED LIABILITIES | ACCRUED LIABILITIES Accrued liabilities consist of the following (in thousands): December 31, 2017 2016 Compensation and benefits payable $ 6,673 $ 5,396 Property, sales, and other taxes 2,636 1,627 Customer credit balances 1,616 1,256 Accrued interest 1,690 — Other 3,293 2,324 $ 15,908 $ 10,603 |
EXIT ACTIVITIES AND RESTRUCTURI
EXIT ACTIVITIES AND RESTRUCTURING | 12 Months Ended |
Dec. 31, 2017 | |
Restructuring and Related Activities [Abstract] | |
EXIT ACTIVITIES AND RESTRUCTURING | EXIT ACTIVITIES AND RESTRUCTURING During the year ended December 31, 2017, we recorded initial exit activity charges due to ceasing use of data center space. Payments for the data center space are expected through 2019. During the year ended December 31, 2016, our new management team launched a series of turnaround initiatives designed to improve profitable growth. This included an initial round of cost cuts which resulted in restructuring charges for severance due to reduction in headcount. We also incurred initial restructuring charges for ceasing use of office facilities. Payments for severance are substantially complete and payments for the office facilities are expected through 2020. During the year ended December 31, 2015, we recorded initial exit activity charges primarily due to the termination of contracts, with payments expected primarily through 2020, and subsequent plan adjustments in sublease income assumptions for properties included in our previously-disclosed plans, with payments expected through 2019. The following table displays the transactions and balances for exit activities and restructuring charges (in thousands). We include initial charges and plan adjustments in “Exit activities, restructuring and impairments” in the accompanying statements of operations and comprehensive loss for the years ended December 31, 2017 , 2016 and 2015. Our real estate obligations are substantially related to our INAP COLO segment. Severance is spread across both reportable segments. Balance December 31, 2016 Initial Charges Plan Adjustments Cash Payments Balance December 31, 2017 Activity for 2017 restructuring charge: Real estate obligations $ — $ 3,359 $ 1,741 $ (1,720 ) $ 3,380 Activity for 2016 restructuring charge: Severance 1,911 — 957 (2,822 ) 46 Real estate obligations 933 — 82 (768 ) 247 Activity for 2015 restructuring charge: Real estate obligation 111 — — (47 ) 64 Service contracts 565 — 21 (198 ) 388 Activity for 2014 restructuring charge: Real estate obligations 1,183 — 131 (623 ) 691 $ 4,703 $ 3,359 $ 2,932 $ (6,178 ) $ 4,816 Balance December 31, 2015 Initial Charges Plan Adjustments Cash Payments Balance December 31, 2016 Activity for 2016 restructuring charge: Severance $ — $ 2,444 $ — $ (533 ) $ 1,911 Real estate obligations — 1,082 14 (163 ) 933 Service contracts — 42 (21 ) (21 ) — Activity for 2015 restructuring charge: Real estate obligation 164 — (13 ) (40 ) 111 Service contracts 843 — 9 (287 ) 565 Activity for 2014 restructuring charge: Real estate obligations 1,701 — 104 (622 ) 1,183 Activity for 2007 restructuring charge: Real estate obligation 1,170 — 747 (1,917 ) — $ 3,878 $ 3,568 $ 840 $ (3,583 ) $ 4,703 Balance December 31, 2014 Initial Charges Plan Adjustments Cash Payments Balance December 31, 2015 Activity for 2015 restructuring charge: Real estate obligations $ — $ 270 $ — $ (106 ) $ 164 Service contracts — 1,268 — (425 ) 843 Activity for 2014 restructuring charge: Real estate obligation 2,010 — 244 (553 ) 1,701 Activity for 2007 restructuring charge: Real estate obligation 2,325 — 660 (1,815 ) 1,170 Other 175 — (6 ) (169 ) — $ 4,510 $ 1,538 $ 898 $ (3,068 ) $ 3,878 |
DERIVATIVES
DERIVATIVES | 12 Months Ended |
Dec. 31, 2017 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
DERIVATIVES | DERIVATIVES Foreign Currency Contracts During 2015, we entered into foreign currency contracts to mitigate the risk of a portion of our Canadian employee benefit expense. These contracts hedge foreign exchange variations between the United States and Canadian dollar and committed us to purchase a total of $6.0 million Canadian dollars at an exchange rate of 1.268 through June 2016 and $12.0 million Canadian dollars at 1.2855 through June 2017. As of December 31, 2017 , there were no open foreign currency contracts. As of December 31, 2016 , the fair value of our foreign currency contracts was $ 0.2 million and was included in “Other current liabilities” in the accompanying consolidated balance sheets. The fair value was calculated as the present value of the estimated future cash flows using an appropriate interest rate curve with adjustment for counterparty credit risk. The activity of the foreign currency contracts was as follows (in thousands): December 31, 2017 2016 Unrealized gain, net of less than $0.1 million and $0.2 million income tax, included in “Accumulated items of other comprehensive loss” in the accompanying consolidated balance sheets $ 145 $ 600 Realized loss on effective portion, included as compensation expense primarily in “Direct costs of customer support” and “Sales, general and administrative” in the accompanying consolidated statements of operations and comprehensive loss (171 ) 328 Interest Rate Swap In a prior year, we entered into an interest rate swap to add stability to interest expense and to manage exposure to interest rate movements of our credit agreement. Our interest rate swap, which was designated and qualified as a cash flow hedge, involved the receipt of variable rate amounts from a counterparty in exchange for us making fixed-rate, over 1.5% , payments over the life of the agreement without exchange of the underlying notional amount. The cash flow hedge had a notional amount starting at $150.0 million and expired December 31, 2016. During the year ended December 31, 2016 , we recorded the effective portion of the change in fair value of our interest rate swap in “Accumulated items of other comprehensive loss” in the accompanying consolidated balance sheets. We did not recognize any hedge ineffectiveness during the year ended December 31, 2016. We reclassified amounts reported in “Accumulated items of other comprehensive loss” related to our interest rate swaps to “Interest expense” in our accompanying consolidated statements of operations and comprehensive loss as we accrued interest payments on our variable-rate debt. During the year ended December 31, 2016, the activity of our interest rate swap is summarized as follows (in thousands): Gain recorded as the effective portion of the change in fair value $ 728 Interest payments reclassified as an increase to interest expense 790 During the year ended December 31, 2017, there were no interest rate swap agreements or activity. |
COMMITMENTS, CONTINGENCIES AND
COMMITMENTS, CONTINGENCIES AND LITIGATION | 12 Months Ended |
Dec. 31, 2017 | |
Commitments and Contingencies Disclosure [Abstract] | |
COMMITMENTS, CONTINGENCIES AND LITIGATION | COMMITMENTS, CONTINGENCIES AND LITIGATION New Credit Agreement On April 6, 2017, we entered into a new Credit Agreement (the “2017 Credit Agreement”), which provides for a $300 million term loan facility ("2017 term loan") and a $25 million revolving credit facility (" 2017 revolving credit facility"). The proceeds of the term loan were used to refinance the Company’s existing credit facility and to pay costs and expenses associated with the 2017 Credit Agreement. Certain potions of refinancing transaction were considered an extinguishment of debt and certain portions were considered a modification. A total of $5.7 million was paid for debt issuance costs related to the 2017 Credit Agreement. Of the $5.7 million in costs paid, $1.9 million related to the exchange of debt and was expensed, $3.3 million related to term loan third party costs and will be amortized over the term of the loan and $0.4 million are prepaid debt issuance costs related to the revolving credit facility and will be amortized over the term of the revolving credit facility. In addition, $4.8 million of debt discount and debt issuance costs related to the previous credit facility were expensed due to the extinguishment of that credit facility. The maturity date of the term loan is April 6, 2022 and the maturity date of the 2017 revolving credit facility is October 6, 2021. As of December 31, 2017, the balance of the term loan and the revolver was $298.5 million and $5.0 million , respectively. As of December 31, 2017, the interest rate on the 2017 term loan and the revolver was 8.4% and 10.3% , respectively. Borrowings under the amended credit agreement bear interest at a rate per annum equal to an applicable margin plus, at our option, a base rate or an adjusted LIBOR rate. The applicable margin for loans under the revolving credit facility is 4.5% for loans bearing interest calculated using the base rate (“Base Rate Loans”) and 5.50% for loans bearing interest calculated using the adjusted LIBOR rate (“Adjusted LIBOR Loans”). The applicable margin for loans under the term loan is 5.00% for Base Rate Loans and 6.00% for Adjusted LIBOR Rate loans. The base rate is equal to the highest of (a) the adjusted U.S. Prime Lending Rate as published in the Wall Street Journal, (b) with respect to term loans issued on the closing date, 2.00%, (c) the federal funds effective rate from time to time, plus 0.50%, and (d) the adjusted LIBOR rate, as defined below, for a one-month interest period, plus 1.00%. The adjusted LIBOR rate is equal to the rate per annum (adjusted for statutory reserve requirements for Eurocurrency liabilities) at which Eurodollar deposits are offered in the interbank Eurodollar market for the applicable interest period (one, two, three or six months), as quoted on Reuters screen LIBOR (or any successor page or service). The financing commitments of the Lenders extending the revolving credit facility are subject to various conditions, as set forth in the credit agreement. First Amendment On June 28, 2017, the Company entered into an amendment to the 2017 Credit Agreement (“First Amendment”), by and among the Company, each of the lenders party thereto, and Jefferies Finance LLC, as Administrative Agent. The First Amendment clarified that for all purposes the Company’s liabilities pursuant to any lease that was treated as rental and lease expense, and not as a capital lease obligation or indebtedness on the closing date of the 2017 Credit Agreement, would continue to be treated as a rental and lease expense, and not as a capital lease obligations or indebtedness, for all purposes of the 2017 Credit Agreement, notwithstanding any amendment of the lease that results in the treatment of such lease as a capital lease obligation or indebtedness for financial reporting purposes. Previous Credit Agreement During 2013, we entered into a $350 million credit agreement (the “previous credit agreement”), which provides for a senior secured first lien term loan facility of an initial $300 million (“term loan”) and a second secured first lien revolving credit facility of $50 million (“revolving credit facility”). The revolving credit facility is due November 26, 2018. The term loan is due in installments of $750,000 on the last day of each fiscal quarter, with the remaining unpaid balance due November 26, 2019. Second Amendment During the three months ended June 30, 2016, we entered into an amendment to our credit agreement (the “Second Amendment”), which among other things, amended the interest coverage ratio and leverage ratio covenants to make them less restrictive and increased the applicable margin for revolving credit facility and term loan by 1.0% . We paid a one-time aggregate fee of $1.7 million to the lenders for the Second Amendment. Absent the Second Amendment we would not have been able to comply with our covenants in the credit agreement. Third Amendment During the three months ended March 31, 2017, we entered into an amendment to our previous credit agreement, which, among other things, amended the credit agreement (i) to make each of the interest coverage ratio and leverage ratio covenants less restrictive and (ii) to decrease the maximum level of permitted capital expenditures. We paid a one-time aggregate fee of $2.6 million to the lenders for the Third Amendment, which we recorded as a debt discount of $2.2 million related to the term loan and prepaid debt issuance costs of $0.4 million related to the revolving credit facility. In addition, we paid $0.3 million in third-party fees, which we recorded as expense of $0.3 million related to the term loan and as prepaid debt issuance costs of less than $0.1 million related to the previous revolving credit facility. The Third Amendment was effective on February 28, 2017, upon the closing of the equity sale, which is described in note 15 "Equity" below. The effectiveness of the covenant amendments was conditioned on the Company completing one or more equity offerings on or before June 30, 2017 for gross cash proceeds of not less than $40 million , and net cash proceeds of not less than $37 million and the application of the net cash proceeds to the repayment of indebtedness under the previous agreement. The Company paid a fee of approximately $0.9 million to the lenders on January 26, 2017 and paid an additional fee of $1.6 million on February 28, 2017. Absent the Third Amendment, we may not have been able to comply with our covenants in the previous agreement. A summary of our credit agreement as of December 31, 2017 and December 31, 2016 is as follows (dollars in thousands): December 31, 2017 2016 Outstanding principal balance on the term loan, less unamortized discount and prepaid costs of $9.8 million and $6.8 million, respectively $ 288,712 $ 284,178 Outstanding balance on the revolving credit facility 5,000 35,500 Letters of credit issued with proceeds from revolving credit facility 5,361 4,209 Borrowing capacity 14,639 10,291 Interest rate – term loan 8.4 % 7.0 % Interest rate – revolving credit facility 10.3 % 6.1 % Maturities of the term loan are as follows: $ 3,000 2019 3,000 2020 3,000 2021 3,000 2022 286,500 $ 298,500 The terms of our 2017 Credit Agreement specify certain events which would be considered an event of default. These events include if we do not comply with the financial covenants, a failure to make a payment under the credit agreement, a change of control of the Company or other proceedings related to insolvency. Upon the occurrence and continuation of an event of default, after completion of any applicable grace or cure period, lenders may demand immediate payment in full of all indebtedness outstanding under the credit facility, terminate their obligations to make any loans or advances or issue any letter of credit, set off and apply any and all deposits held by any lender for the credit or account of any borrower. The credit agreement, as amended, includes customary representations, warranties, negative and affirmative covenants, including certain financial covenants relating to maximum total leverage ratio, minimum consolidated interest coverage ratio and limitation on capital expenditures. The table below sets forth information with respect to the current financial covenants as of December 31, 2017 . Covenants Requirements Maximum total leverage ratio (the ratio of Consolidated Indebtedness to Consolidated EBITDA as defined in the 2017 Credit Agreement) should be equal to or less than: 5.9 (1) Minimum consolidated interest coverage ratio (the ratio of Consolidated EBITDA to Consolidated Interest Expense as defined in the 2017 Credit Agreement) should be equal to or greater than: 2.0 (2) 2017 Annual Limit Twelve Months Ended Limitation on capital expenditures No limit $36 million (1) The maximum total leverage ratio decreases to 5.9 to 1 as of March 1, 2018, 5.9 to 1 as of June 30, 2018, 5.9 to 1 as of September 30, 2018, 5.9 to 1 as of December 31, 2018, 5.9 to 1 as of March 31, 2019, 5.9 to 1 as of June 30, 2019, 5.5 to 1 as of September 30, 2019, 5.5 to 1 as of December 31, 2019, 5.5 to 1 March 31, 2020, 5.25 to 1 as of June 30, 2020, 5.25 to 1 September 30, 2020, 4.75 to 1 as of December 31, 2020, 4.75 to 1 as of March 31, 2021, 4.75 to 1 as of June 30, 2021 and 4.5 to 1 as of September 30, 2021 and thereafter. (2) The minimum consolidated interest coverage ratio increases to 2.00 to 1 as of March 31, 2018, 2.00 to 1 as of June 30, 2018, 2.00 to 1 as of September 30, 2018, 2.00 to 1 as of December 31, 2018, 2.00 to 1 as of March 31, 2019, 2.00 to 1 as of June 30, 2019, 2.00 to 1 September 30, 2019, 2.00 to 1 as of December 31, 2019, 2.00 to 1 as of March 31, 2020, 2.00 to 1 as of June 30, 2020, 2.00 to 1 as of September 30, 2020, 2.25 to 1 December 31, 2020, 2.25 to 1 as of March 31, 2021, 2.25 to 1 as of June 30, 2021, 2.25 to 1 as of September 30, 2021 and thereafter. Asset Retirement Obligations In prior years, we recorded asset retirement obligations (“ARO”) related to future estimated removal costs of leasehold improvements for certain data center leased properties. We were able to reasonably estimate the liabilities on these properties in order to record the ARO and the corresponding asset retirement cost in our data center services segment at its fair value. We calculated the fair value by discounting the estimated amount to present value using the applicable Treasury bill rate adjusted for our credit non-performance risk. As of December 31, 2017 and 2016 , the balance of the present value ARO was $1.9 million and $2.8 million . For the balance at December 31, 2017, $0.2 million and $1.7 million were included in "Other current liabilities" and “Other long-term liabilities,” respectively, in the consolidated balance sheets. At December 31, 2016, the entire balance was included in "Other long-term liabilities." We included all asset retirement costs in “Property and equipment, net” in the consolidated balance sheets as of December 31, 2017 and 2016 , and depreciated those costs using the straight-line method over the remaining term of the related lease. We have other capital lease agreements that require us to decommission physical space for which we have not yet recorded an ARO. Due to the uncertainty of specific decommissioning obligations, timing and related costs, we cannot reasonably estimate an ARO for these properties and we have not recorded a liability at this time for such properties. Capital Leases We record capital lease obligations and leased property and equipment at the lesser of the present value of future lease payments based upon the terms of the related lease or the fair value of the assets held under capital leases. As of December 31, 2017 , our capital leases had expiration dates ranging from 2017 to 2039. Future minimum capital lease payments and the present value of the minimum lease payments for all capital leases as of December 31, 2017 , are as follows (in thousands): 2018 $ 32,511 2019 31,021 2020 26,754 2021 26,350 2022 24,346 Thereafter 434,947 Remaining capital lease payments 575,929 Less: amounts representing imputed interest (340,469 ) Present value of minimum lease payments 235,460 Less: current portion (11,711 ) $ 223,749 Operating Leases We have entered into leases for data center, private network access points (“POPS”) and office space that are classified as operating leases. Initial lease terms range from three to 25 years and contain various periods of free rent and renewal options. However, we record rent expense on a straight-line basis over the initial lease term and any renewal periods that are reasonably assured. Certain leases require that we maintain letters of credit. Future minimum lease payments on non-cancelable operating leases having terms in excess of one year were as follows at December 31, 2017 (in thousands): 2018 $ 11,700 2019 5,077 2020 2,538 2021 2,467 2022 2,523 Thereafter 3,492 $ 27,797 Rent expense was $15.6 million , $21.8 million and $21.6 million during the years ended December 31, 2017 , 2016 and 2015 , respectively. Other Commitments We have entered into commitments primarily related to IP, telecommunications and data center services. Future minimum payments under these service commitments having terms in excess of one year were as follows at December 31, 2017 (in thousands): 2018 $ 2,357 2019 1,221 2020 131 2021 — 2022 — Thereafter — $ 3,709 Litigation and Other Regulatory Inquiries In August 2016, the Company received a request for information as part of a broad-based inquiry regarding the Company’s use of non-GAAP measures from the Securities and Exchange Commission (the “SEC”). The Company is cooperating with the SEC. At this time, the Company is unable to predict the likely outcome. We are subject to other legal proceedings, claims and litigation arising in the ordinary course of business. Although the outcome of these matters is currently not determinable, we do not expect that the ultimate costs to resolve these matters will have a material adverse impact on our financial condition, results of operations or cash flows. |
OPERATING SEGMENT AND GEOGRAPHI
OPERATING SEGMENT AND GEOGRAPHIC INFORMATION | 12 Months Ended |
Dec. 31, 2017 | |
Segment Reporting [Abstract] | |
OPERATING SEGMENT AND GEOGRAPHIC INFORMATION | OPERATING SEGMENT AND GEOGRAPHIC INFORMATION Operating Segment Information Effective January 1, 2017, we changed our organizational structure in an effort to create more effective and efficient business operations and to improve customer and product focus. In that regard, we revised the information that our chief executive officer, who is also our chief operating decision maker, regularly reviews for purposes of allocating resources and assessing performance. As a result, we now report our financial performance based on our two new reportable segments, INAP COLO and INAP CLOUD, as follows: INAP COLO Our Colocation segment consists of colocation, managed services and hosting, and network services. Colocation Colocation involves providing physical space within data centers and associated services such as power, interconnection, environmental controls, monitoring and security while allowing our customers to deploy and manage their servers, storage and other equipment in our secure data centers. Managed Services and Hosting Managed Services and Hosting consists of leasing dedicated servers as well as storage and network equipment along with other associated hardware to our customers. We configure and administer the hardware and operating system, provide technical support, patch management, monitoring and updates. We offer managed hosting around the globe, including North America, Europe and the Asia-Pacific region. Network Services Network services includes our patented Performance IP™ service, content delivery network services, IP routing hardware and software platform and Managed Internet Route Optimizer™ Controller. By intelligently routing traffic with redundant, high-speed connections over multiple, major Internet backbones, our network services provides high-performance and highly-reliable delivery of content, applications and communications to end users globally. INAP CLOUD Cloud services involve providing compute and storage services via an integrated platform that includes servers, storage and network. We built our next generation cloud platform with our high-density colocation, Performance IP service and OpenStack, a leading open source technology for cloud services. In conjunction with our change in segments we changed the measure for determining the results of our segments to business unit contribution which includes the direct costs of sales and services, customer support and sales and marketing, exclusive of depreciation and amortization. In addition, during the three months ended June 30, 2017, management changed its measure of profitability to exclude corporate facilities allocation cost which are now reflected in "Sales, general and administrative," in the accompanying consolidated income statements. The following table provides segment results, with prior period amounts reclassified to conform to the current presentation (in thousands): Year Ended December 31, 2017 2016 2015 Revenues: INAP COLO $ 209,580 $ 221,678 $ 234,859 INAP CLOUD 71,138 76,619 83,434 Total revenues 280,718 298,297 318,293 Costs of sales and services, exclusive of depreciation and amortization: INAP COLO 89,240 105,620 111,765 INAP CLOUD 16,977 18,635 19,675 Total costs of sales and services, exclusive of depreciation and amortization 106,217 124,255 131,440 Segment profit: INAP COLO 120,340 116,058 123,094 INAP CLOUD 54,161 57,984 63,759 Total segment profit 174,501 174,042 186,853 Goodwill impairment — 80,105 — Exit activities, restructuring and impairments 6,249 7,236 2,278 Other operating expenses, including direct costs of customer support, depreciation and amortization 163,478 179,770 210,470 Income (loss) from operations 4,774 (93,070 ) (25,895 ) Non-operating expenses 51,001 31,312 26,408 Loss before income taxes, non-controlling interest and equity in earnings of equity-method investment $ (46,227 ) $ (124,382 ) $ (52,303 ) Total assets by segment are as follows (in thousands): December 31, 2017 2016 INAP COLO $ 398,231 $ 224,540 INAP CLOUD 173,691 192,684 Corporate 14,603 13,391 $ 586,525 $ 430,615 We present goodwill by segment in Note 6, and as discussed in that note, we did no t record an impairment charge during the year ended December 31, 2017 . However, we did record an impairment charge during the year ended December 31, 2016 . Geographic Information Revenues are allocated to countries based on location of services. Revenues, by country with revenues over 10% of total revenues, are as follows (in thousands): Year Ended December 31, 2017 2016 2015 Revenues: United States $ 220,018 $ 231,943 $ 245,853 Canada 38,750 44,206 47,021 Other countries 21,950 22,148 25,419 $ 280,718 $ 298,297 $ 318,293 Net property and equipment, by country with assets over 10% of total property and equipment, is as follows (in thousands): December 31, 2017 2016 United States $ 417,936 $ 260,788 Canada 34,296 36,495 Other countries 6,333 5,397 $ 458,565 $ 302,680 |
STOCK-BASED COMPENSATION PLANS
STOCK-BASED COMPENSATION PLANS | 12 Months Ended |
Dec. 31, 2017 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
STOCK-BASED COMPENSATION PLANS | STOCK-BASED COMPENSATION PLANS We have granted employees options to purchase shares of our common stock and issued shares of restricted common stock subject to vesting. We measure stock-based compensation cost at the grant date based on the calculated fair value of the option or award. We recognize the expense over the employees’ requisite service period, generally the vesting period of the option or award. We estimate the fair value of stock options at the grant date using the Black-Scholes option pricing model . Stock option pricing model input assumptions such as expected term, expected volatility and risk-free interest rate, impact the fair value estimate. Further, the forfeiture rate impacts the amount of aggregate compensation. These assumptions are subjective and generally require significant analysis and judgment to develop. The following table summarizes the amount of stock-based compensation, net of estimated forfeitures, included in the consolidated statements of operations and comprehensive loss (in thousands): Year Ended December 31, 2017 2016 2015 Costs of customer support $ 167 $ 1,159 $ 1,901 Sales, general and administrative 2,873 3,838 6,880 $ 3,040 $ 4,997 $ 8,781 We have not recognized any tax benefits associated with stock-based compensation due to our tax net operating losses. During the year ended December 31, 2017, an immaterial amount of stock-based compensation was capitalized. During the years ended December 31, 2016 and 2015 , we capitalized $0.2 million and $0.3 million , respectively, of stock-based compensation. During the year ended December 31, 2017, there was no option grants under our stock-based compensation plans. The significant weighted average assumptions used for estimating the fair value of the option grants under our stock-based compensation plans during the years ended December 31, 2016 and 2015 , were expected terms of 4.7 and 4.5 years, respectively; historical volatilities of 45% and 40% , respectively; risk free interest rates of 1.2% and 1.4% , respectively and no dividend yield. The weighted average estimated fair value per share of our stock options at grant date was $3.13 and $12.93 during the years ended December 31, 2016 and 2015 , respectively. The expected term represents the weighted average period of time that the stock options are expected to be outstanding, giving consideration to the vesting schedules and our historical exercise patterns. Because our stock options are not publicly traded, assumed volatility is based on the historical volatility of our stock. The risk-free interest rate is based on the U.S. Treasury yield curve in effect at the time of grant for periods corresponding to the expected term of the options. We have also used historical data to estimate stock option exercises, employee terminations and forfeiture rates. Under our 2017 Stock Incentive Plan (the “2017 Plan”), we may issue restricted stock and restricted stock units to eligible employees and directors to promote interest of the Company. The compensation committee of our board of directors administers the 2017 Plan. As of December 31, 2017 , 0.8 million shares of stock were available for issuance. Conditions, if any, under which stock will be issued under stock grants or cash or stock will be paid under restricted stock units and the conditions under which the interest in any stock that has been issued will become non-forfeitable are determined at the grant date by the compensation committee. All awards under the 2017 Plan are subject to minimum vesting requirements unless otherwise determined by the compensation committee. The minimum vesting period over which stock award shall vest is one year from the date the award is granted. If awards are performance-based, unless otherwise determined by the compensation committee, stock awards to covered employees will be designed to comply with the performance goals. In such case, the level of vesting of the award will depend on the attainment of one or more performance goals. No participant in any calendar year shall be granted stock awards with respect to more than 350,000 shares of stock. Under the 2017 Plan only full value shares in the form of restricted stock and restricted stock units will be available for grant. Shares of common stock that are delivered by the grantee or withheld by us as payment of the tax withholding obligation in connection with any award will not be returned to the share reserve and will not be available for future awards. Shares subject to awards that have been canceled, forfeited or otherwise not issued under an award and shares subject to awards settled in cash would not count as shares issued under the 2017 Plan. During 2017 , 2016 and 2015 , the total value of the equity grants received by all non-employee directors was $1.1 million, $0.4 million and $0.6 million, respectively, in the form of restricted stock that vests on the date of our annual meeting of stockholders in the year following grant. Stock option activity during the year ended December 31, 2017 under all of our stock-based compensation plans was as follows (shares in thousands): Shares Weighted Average Exercise Price Balance, December 31, 2016 795 $ 27.80 Granted — — Exercised (49 ) 8.80 Forfeitures and post-vesting cancellations (430 ) 31.72 Balance, December 31, 2017 316 25.40 Exercisable, December 31, 2017 277 26.25 Fully vested and exercisable stock options and stock options expected to vest as of December 31, 2017 are further summarized as follows (shares in thousands): Fully Vested and Exercisable Expected to Vest Total shares 277 316 Weighted-average exercise price $ 26.25 $ 25.40 Aggregate intrinsic value $ — $ — Weighted-average remaining contractual term (in years) 3.9 4.4 The total intrinsic value of stock options exercised was $0.4 million , $0.1 million and $2.1 million during the years ended December 31, 2017 , 2016 and 2015 , respectively. None of our stock options or the underlying shares are subject to any right to repurchase by us. Restricted stock activity during the year ended December 31, 2017 was as follows (shares in thousands): Shares Weighted- Average Grant Date Fair Value Unvested balance, December 31, 2016 555 $ 4.52 Granted 483 $ 6.20 Vested (172 ) $ 8.63 Forfeited (106 ) $ 9.00 Unvested balance, December 31, 2017 760 $ 4.03 The total fair value of restricted stock vested during the years ended December 31, 2017 , 2016 and 2015 was $2.6 million , $1.5 million and $4.6 million , respectively. At December 31, 2017 , the total intrinsic value of all unvested restricted stock was $11.9 million . Total unrecognized compensation costs related to unvested stock-based compensation as of December 31, 2017 is as follows (dollars in thousands): Stock Options Restricted Stock Total Unrecognized compensation $ 241 $ 2,972 $ 3,213 Weighted-average remaining recognition period (in years) 2.51 1.87 1.92 |
EMPLOYEE RETIREMENT PLAN
EMPLOYEE RETIREMENT PLAN | 12 Months Ended |
Dec. 31, 2017 | |
Retirement Benefits [Abstract] | |
EMPLOYEE RETIREMENT PLAN | EMPLOYEE RETIREMENT PLAN We sponsor a defined contribution retirement savings plan that qualifies under Section 401(k) of the Internal Revenue Code. Plan participants may elect to have a portion of their pre-tax compensation contributed to the plan, subject to certain guidelines issued by the Internal Revenue Service. Employer contributions are discretionary and were $0.4 million for the year ended December 31, 2017 and $0.8 million for the years ended December 31, 2016 and 2015 . |
INCOME TAXES
INCOME TAXES | 12 Months Ended |
Dec. 31, 2017 | |
Income Tax Disclosure [Abstract] | |
INCOME TAXES | INCOME TAXES The loss from continuing operations before income taxes, non-controlling interest and equity in (earnings) of equity-method investment is as follows (in thousands): Year Ended December 31, 2017 2016 2015 United States $ (46,648 ) $ (120,553 ) $ (31,572 ) Foreign 421 (3,829 ) (20,731 ) Loss from continuing operations before income taxes, non-controlling interest and equity in (earnings) of equity-method investment $ (46,227 ) $ (124,382 ) $ (52,303 ) The current and deferred income tax benefit is as follows (in thousands): Year Ended December 31, 2017 2016 2015 Current: Federal $ (730 ) $ (15 ) $ — State 123 155 152 Foreign 507 61 158 (100 ) 201 310 Deferred: Federal — — — State — — — Foreign 353 329 (3,970 ) 353 329 (3,970 ) Provision (benefit) for income taxes $ 253 $ 530 $ (3,660 ) A reconciliation of the effect of applying the federal statutory rate and the effective income tax rate on our income tax benefit is as follows: Year Ended December 31, 2017 2016 2015 Federal income tax at statutory rates (34.0 )% (34.0 )% (34.0 )% Foreign income tax 0.5 0.7 4.0 State income tax (5.0 ) (5.0 ) (4.0 ) Other permanent differences 0.4 0.2 — Statutory tax rate change - Deferred - Tax Reform Act (128.4 ) (3.2 ) — Statutory tax rate change - Valuation Allowance - Tax Reform Act 128.4 — — Compensation — 3.0 3.0 Goodwill impairment — 25.2 — Refundable AMT credit (1.5 ) — Change in valuation allowance 40.1 13.5 24.0 Effective tax rate 0.5 % 0.4 % (7.0 )% Temporary differences between the financial statement carrying amounts and tax bases of assets and liabilities that give rise to significant portions of deferred taxes related to the following (in thousands): December 31, 2017 2016 Long-term deferred income tax (liabilities) assets: Property and equipment $ 43,554 $ 57,161 Goodwill 1,392 2,525 Intangible assets (22,021 ) (22,958 ) Deferred revenue, less current portion 1,834 2,809 Restructuring liability, less current portion 1,282 1,839 Refinance (374 ) (3,054 ) Deferred rent 639 2,737 Stock-based compensation 911 3,079 Provision for doubtful accounts 1,772 1,449 U.S. net operating loss carryforwards 89,117 102,408 Foreign net operating loss carryforwards, less current portion 8,053 9,324 Tax credit carryforwards 2,812 3,616 Other 2,090 2,417 Long-term deferred income tax assets 131,061 163,352 Less: valuation allowance (132,712 ) (164,865 ) Net long-term deferred income tax (liabilities) assets (1,651 ) (1,513 ) Net deferred tax liabilities $ 1,651 $ 1,513 As of December 31, 2017 , we have U.S. net operating loss carryforwards for federal tax purposes of $334.6 million that will expire in tax years 2018 through 2037. Of the total U.S. net operating loss carryforwards, $27.7 million of net operating losses related to the deduction of stock-based compensation. This amount was included in the financial statement balance of U.S net operating loss carryforwards upon the adoption of ASU 2016-09 related to employee share-based payments. In addition, research and development tax, foreign tax and state and local tax credits carryforwards of approximately $0.5 million . Research and development credits will begin to expire in 2027. Finally, we have foreign net operating loss carryforwards of approximately $37.8 million that are currently subject to annual expiration. We determined that through December 31, 2017 , no further ownership changes have occurred since 2001 pursuant to Section 382 of the Internal Revenue Code (“Section 382”). Therefore, as of December 31, 2017 , no additional material limitations existed on the U.S. net operating losses related to Section 382. However, if we experience subsequent changes in stock ownership as defined by Section 382, we may have additional limitations on the future utilization of our U.S. net operating losses. On December 22, 2017, the United States enacted tax reform legislation commonly known as the H.R.1 (the "Act”) resulting in significant modifications to existing law. The Company follows the guidance in SEC Staff Accounting Bulletin 118 (“SAB 118”), which provides additional clarification regarding the application of ASC Topic 740 in situations where the Company does not have the necessary information available, prepared, or analyzed in reasonable detail to complete the accounting for certain income tax effects of the Act for the reporting period in which the Act was enacted. SAB 118 provides for a measurement period beginning in the reporting period that includes the Act’s enactment date and ending when the Company has obtained, prepared, and analyzed the information needed in order to complete the accounting requirements but in no circumstances should the measurement period extend beyond one year from the enactment date. The Company has substantially completed the accounting for the effects of the Act during the period ended December 31, 2017 except for the potential impact of the taxation of global intangible low-taxed income. The Company believes that an adjustment is not required related to the one-timed deemed repatriation transition tax on unrepatriated foreign earnings. The Company’s position is based on information currently available, including tax earnings and profits from foreign investments. The FASB Staff also provided additional guidance to address the accounting for the taxation of global intangible low-taxed income (“GILTI”). FASB determined that companies should make an accounting policy election to recognize deferred taxes for temporary basis differences expected to reverse as GILTI in future years or to include the GILTI tax expense in the year it is incurred. We have not completed our analysis of the effects of the GILTI provisions and will finalize our accounting policy election within the measurement period provided under SAB 118. Accounting for the remaining income tax effects of the Act which impact our tax provision has been completed as of the current year and included in the Company’s financial statements as of December 31, 2017. As a result of the Act, the Company has recorded the impact of the remeasurement of deferred tax assets and liabilities from 35% to 21%, along with the offsetting adjustment to our valuation allowance including a decrease to the valuation allowance of $.7 million related to the Alternative Minimum Tax credit carryforwards that are expected to be refundable. We periodically evaluate the recoverability of the deferred tax assets and the appropriateness of the valuation allowance. As of December 31, 2017 , we continued to maintain a valuation allowance of $127.2 million against the U.S. deferred tax asset and $5.5 million against the foreign deferred tax asset that we do not believe are more likely than not to be realized. We will continue to assess the requirement for a valuation allowance on a quarterly basis and, at such time when we determine that it is more likely than not that the deferred tax assets will be realized, we will reduce the valuation allowance accordingly. Changes in our deferred tax asset valuation allowance are summarized as follows (in thousands): Year Ended December 31, 2017 2016 2015 Balance, January 1, $ 164,865 $ 148,310 $ 136,017 Increase in deferred tax assets 27,183 16,555 12,293 Remeasurement in deferred tax assets (59,336 ) — — Balance, December 31, $ 132,712 $ 164,865 $ 148,310 We intend to reinvest future earnings indefinitely within each country. Accordingly, we have not recorded deferred taxes for the difference between our financial and tax basis investment in foreign entities. Based on negative cumulative earnings from foreign operations, we estimate that we will not incur incremental tax costs in the hypothetical instance of a repatriation and thus no deferred asset or liability would be recorded in our consolidated financial statements. Our accounting for uncertainty in income taxes requires us to determine whether it is more likely than not that a tax position will be sustained upon examination based upon the technical merits of the position. If the more-likely-than-not threshold is met, we must measure the tax position to determine the amount to recognize in the financial statements. Changes in our unrecognized tax benefits are summarized as follows (in thousands): Year Ended December 31, 2017 2016 2015 Unrecognized tax benefits balance, January 1, $ 187 $ — $ 408 Addition for tax positions taken in a prior year 162 187 — Deduction for tax positions taken in a prior year (187 ) — (408 ) Unrecognized tax benefits balance, December 31, $ 162 $ 187 $ — During 2017 , we recorded $0.2 million of additional unrecognized tax benefits related to foreign exchange losses. During 2013, we recorded $0.4 million of additional unrecognized tax benefits through purchase accounting from the iWeb acquisition related to participation interest deducted in a prior year. No uncertain tax positions were recorded during 2014. During 2015, the statute of limitation for the iWeb uncertain tax position expired. Accordingly, this amount was removed from the uncertain tax position balance. During 2017, the statute of limitation for the 2016 tax benefit for Internap Network Services B.V. expired. Also during 2017, an uncertain tax position was recorded for Internap Network Services Canada for withholding tax required for annual intercompany royalty charges from Internap Corporation. We classify interest and penalties arising from the underpayment of income taxes in the consolidated statements of operations and comprehensive loss as a component of “Provision (benefit) for income taxes.” As of December 31, 2017 and 2016, we had an accrual of less than $0.1 million for interest and penalties related to uncertain tax positions and zero at December 31, 2015 . Our U.S. federal and state income tax returns remain open to examination for the tax years 2015 through 2016; however, tax authorities have the right to adjust the net operating loss carryovers for years prior to 2016. Returns filed in other jurisdictions are generally subject to examination for years prior to 2016. |
EQUITY
EQUITY | 12 Months Ended |
Dec. 31, 2017 | |
Equity [Abstract] | |
EQUITY | EQUITY Securities Purchase Agreement On February 22, 2017, we into a securities purchase agreement (the “Securities Purchase Agreement”) with certain purchasers (the “Purchasers”), pursuant to which the Company issued to the Purchasers an aggregate of 5,950,712 shares of the Company’s common stock at a price of $7.24 per share, for the aggregate purchase price of $43.1 million , which closed on February 27, 2017. Conditions for the Securities Purchase Agreement included the following: (i) a requirement for the Company to use the funds of the sale of such common stock to repay indebtedness under the Credit Agreement, (ii) a 90 -day “lock-up” period whereby the Company is restricted from certain sales of equity securities and (iii) a requirement for the Company to pay certain transaction expenses of the Purchasers up to $100,000 . The Company used $39.2 million of the proceeds to pay down our debt, as described in Note 10. Registration Rights Agreement On February 22, 2017, the Company entered into a registration rights agreement (the “Registration Rights Agreement”) with the Purchasers, which provides the Purchasers under the Securities Purchase Agreement the ability to request registration of such securities. Pursuant to the Registration Rights Agreement, the Company filed a registration statement in March 2017 that was declared effective during April 2017. Reverse Stock Split On November 16, 2017, the Company filed a Certificate of Amendment of the Restated Certificate of Incorporation (the “Certificate of Amendment”) with the Secretary of State of Delaware to effect a 1-for-4 reverse stock split of the shares of our common stock, either issued and outstanding or held by the Company as treasury stock, effective as of 5:00 p.m. (Delaware time) on November 20, 2017 (the “Reverse Stock Split”). As a result of the Reverse Stock Split, every four shares of issued and outstanding Common Stock was automatically combined into one issued and outstanding share of Common Stock, without any change in the par value per share. All prior year share amounts and per share calculations included herein have been restated to reflect the impact of the Reverse Stock Split and to provide data on a comparable basis. Such restatements include calculations regarding the Company's weighted-average shares and loss per share, as well as disclosures regarding the Company's stock-based compensation plan and share repurchase. In addition, proportionate adjustments were made to the per share exercise price and the number of shares of Common Stock that may be purchased upon exercise of outstanding stock options and restricted stock granted by the Company, and the number of shares of Common Stock reserved for future issuance under the Company’s 2017 Stock Incentive Plan. |
RELATED PARTY TRANSACTION
RELATED PARTY TRANSACTION | 12 Months Ended |
Dec. 31, 2017 | |
Related Party Transactions [Abstract] | |
RELATED PARTY TRANSACTION | RELATED PARTY TRANSACTION Effective November 1, 2016, INAP leases office space in VA from Broad Valley Capital, LLC, a company 50% owned by Mr. Aquino and 50% by Mr. Diegnan. The lease is at-cost from Broad Valley Capital to INAP and total payment for rent, plus furniture, copier, office supplies, broadband and other in 2017 was $138,371 . |
SUBSEQUENT EVENT
SUBSEQUENT EVENT | 12 Months Ended |
Dec. 31, 2017 | |
Subsequent Events [Abstract] | |
SUBSEQUENT EVENT | SUBSEQUENT EVENTS On February 28, 2018, we acquired SingleHop, LLC, a provider of high-performance data center services including colocation, managed hosting, cloud and network services for $132.0 million in cash. The transaction was funded with an incremental term loan and cash from the balance sheet. As part of the financing, INAP obtained an amendment to its credit agreement to allow for the incremental term loan and to provide further operational flexibility under the covenants. On February 6, 2018, the Company, the Lenders party thereto and Jefferies Finance LLC, as Administrative Agent , entered into a Second Amendment to 2017 Credit Agreement. The 2018 Second Amendment, among other things, amends the 2017 Credit Agreement (i) to permit the Company to incur incremental term loans under the 2017 Credit Agreement of up to $135 million to finance the Company’s pending acquisition of SingleHop LLC and to pay related fees, costs and expenses and (ii) to revise the maximum total net leverage ratio and minimum consolidated interest coverage ratio covenants . The Financial Covenant Amendments became effective upon the consummation of the SingleHop Acquisition, while the other provisions of the 2018 Second Amendment became effective upon the execution and delivery of the Second Amendment. The Company paid a fee of approximately $0.8 million to the lenders who are parties to the 2018 Second Amendment. In 2018, INAP reorganized into a geographic-based structure and the necessary changes have taken place effective January 1, 2018. Beginning with our first quarter, we report in two major segments (US and International) instead of the current segments (Colo and Cloud). We made this change to better serve our customers with our product offerings and to enable a more efficient sales approach across our global footprint. |
UNAUDITED QUARTERLY RESULTS
UNAUDITED QUARTERLY RESULTS | 12 Months Ended |
Dec. 31, 2017 | |
Quarterly Financial Information Disclosure [Abstract] | |
UNAUDITED QUARTERLY RESULTS | UNAUDITED QUARTERLY RESULTS The following table sets forth selected unaudited quarterly data during the years ended December 31, 2017 and 2016 . The quarterly operating results below are not necessarily indicative of those in future periods (in thousands, except for share data). 2017 Quarter Ended March 31 June 30 September 30 December 31 Revenues $ 72,133 $ 69,642 $ 68,907 $ 70,035 Costs of sales and services, exclusive of depreciation and amortization 29,045 26,429 24,945 25,798 Costs of customer support 7,264 6,133 6,237 6,122 Exit activities, restructuring and impairments 1,023 4,628 745 (148 ) Net loss attributable to INAP stockholders (8,230 ) (19,283 ) (10,895 ) (6,934 ) Basic and diluted net loss per share $ (0.51 ) $ (0.97 ) $ (0.55 ) $ (0.35 ) 2016 Quarter Ended March 31 June 30 September 30 December 31 Revenues $ 75,924 $ 74,315 $ 73,940 $ 74,117 Costs of sales and services, exclusive of depreciation and amortization 31,077 31,370 31,562 30,246 Costs of customer support 8,804 7,919 7,985 7,475 Goodwill impairment — — 78,169 1,936 Exit activities, restructuring and impairments 201 152 1,670 5,213 Net loss attributable to INAP stockholders (9,644 ) (10,693 ) (91,297 ) (13,110 ) Basic and diluted net loss per share $ (0.75 ) $ (0.82 ) $ (7.01 ) $ (1.01 ) |
SCHEDULE II - VALUATION AND QUA
SCHEDULE II - VALUATION AND QUALIFYING ACCOUNTS AND RESERVES | 12 Months Ended |
Dec. 31, 2017 | |
Valuation and Qualifying Accounts [Abstract] | |
SCHEDULE II - VALUATION AND QUALIFYING ACCOUNTS AND RESERVES | SCHEDULE II VALUATION AND QUALIFYING ACCOUNTS AND RESERVES (IN THOUSANDS) Balance at Beginning of Fiscal Period Charges to Costs and Expense Deductions Balance at End of Fiscal Period Year ended December 31, 2015 Allowance for doubtful accounts $ 2,121 $ 1,354 $ (1,724 ) (1) $ 1,751 Year ended December 31, 2016 Allowance for doubtful accounts 1,751 1,093 (1,598 ) (1) 1,246 Year ended December 31, 2017 Allowance for doubtful accounts 1,246 1,049 (808 ) (1) 1,487 (1) Deductions in the allowance for doubtful accounts represent write-offs of uncollectible accounts net of recoveries. |
SUMMARY OF SIGNIFICANT ACCOUN26
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies) | 12 Months Ended |
Dec. 31, 2017 | |
Accounting Policies [Abstract] | |
Accounting Principles | Accounting Principles We prepare our consolidated financial statements and accompanying notes in accordance with accounting principles generally accepted in the United States (“GAAP”). The consolidated financial statements include our accounts and those of our wholly-owned subsidiaries. We have eliminated inter-company transactions and balances in consolidation. |
Reclassifications | Certain prior year amounts have been reclassified to conform to the current year presentation. |
Estimates and Assumptions | Estimates and Assumptions The preparation of these financial statements requires us to make estimates and judgments that affect the reported amounts of assets, liabilities, revenue and expense and related disclosure of contingent assets and liabilities. On an ongoing basis, we evaluate our estimates, including those related to revenue recognition, doubtful accounts, goodwill and intangible assets, accruals, stock-based compensation, income taxes, restructuring charges, leases, long-term service contracts, contingencies and litigation. We base our estimates on historical experience and on various other assumptions that we believe to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ materially from these estimates. |
Cash and Cash Equivalents | Cash and Cash Equivalents We consider all highly-liquid investments purchased with an original maturity of three months or less at the date of purchase and money market mutual funds to be cash equivalents. We maintain our cash and cash equivalents at major financial institutions and may at times exceed federally insured limits. We believe that the risk of loss is minimal. To date, we have not experienced any losses related to cash and cash equivalents. |
Accounts Receivable and Allowance for Doubtful Accounts | Accounts Receivable and Allowance for Doubtful Accounts Accounts receivable consist of amounts due to the Company from normal business activities. The Company maintains an allowance for estimated losses resulting from the inability of its customers to make required payments. The Company estimates uncollectible amounts based upon historical bad debts, current customer receivable balances, the age of customer receivable balances, the customer’s financial condition and current economic trends. |
Investment in Joint Venture | Investment in Joint Venture In previous years, INAP invested $4.1 million in Internap Japan Co., Ltd., our joint venture with NTT-ME Corporation and Nippon Telegraph and Telephone Corporation. Through August 15, 2017, we qualified and accounted for this investment using the equity method. We recorded our proportional share of the income and losses of INAP Japan one month in arrears on the accompanying consolidated balance sheets as a long-term investment and our share of INAP Japan's income and losses, net of taxes, as a separate caption in our accompanying consolidated statements of operations and comprehensive loss. On August 15, 2017, INAP exercised certain rights to obtain a controlling interest in Internap Japan Co., Ltd. Upon obtaining control of the venture, we recognized INAP Japan’s assets and liabilities at fair value resulting in a gain of $1.1 million which is reflected in "Equity in earnings of equity-method investment, net of taxes" in the accompanying consolidated statements of operations and comprehensive loss. See Note 5 for further information. |
Noncontrolling Interest | Noncontrolling Interest Noncontrolling interests ("NCI") are evaluated by the Company and are shown as either a liability, temporary equity (shown between liabilities and equity) or as permanent equity depending on the nature of the redeemable features at amounts based on formulas specific to each entity. Generally, mandatorily redeemable NCIs are classified as liabilities and non-mandatorily redeemable NCIs are classified outside of stockholders' equity in the consolidated balance sheets as temporary equity under the caption, redeemable noncontrolling interests, and are measured at their redemption values at the end of each period. If the redemption value is greater than the carrying value, an adjustment is recorded in retained earnings to record the NCI at its redemption value. Redeemable NCIs that are mandatorily redeemable are classified as a liability in the consolidated balance sheets under either other current liabilities or other long-term liabilities, depending on the remaining duration until settlement, and are measured at the amount of cash that would be paid if settlement occurred at the balance sheet date with any change from the prior period recognized as interest expense. If the NCI is not currently redeemable yet probable of becoming redeemable, we are required to either (1) accrete changes in the redemption value over the period from the date of issuance to the earliest redemption date of the instrument using an appropriate methodology, usually the interest method, or (2) recognize changes in the redemption value immediately as they occur and adjust the carrying value of the security to equal the redemption value at the end of each reporting period. We have elected to recognize changes in the redemption value immediately as they occur and adjust the carrying value of the NCI to the greater of the estimated redemption value, which approximates fair value, at the end of each reporting period or the initial carrying amount. Net income attributable to NCIs reflects the portion of the net loss of consolidated entities applicable to the NCI stockholders in the accompanying consolidated statements of operations. The net income attributable to NCI is classified in the consolidated statements of operations as part of consolidated net loss and deducted from total consolidated net loss to arrive at the net loss attributable to the Company. |
Fair Value of Financial Instruments | Fair Value of Financial Instruments The carrying amounts of our financial instruments, including cash and cash equivalents, accounts receivable and other current liabilities, approximate fair value due to the short-term nature of these assets and liabilities. As of December 31, 2017 , the carrying value of our debt was $303.5 million and the fair value was $306.5 million . We measure and report certain financial assets and liabilities at fair value on a recurring basis, including cash equivalents. The major categories of nonfinancial assets and liabilities that we measure at fair value include reporting units measured at fair value in step one of our goodwill impairment test. |
Financial Instrument Credit Risk | Financial Instrument Credit Risk Financial instruments that potentially subject us to a concentration of credit risk principally consist of cash, cash equivalents, marketable securities and trade receivables. Given the needs of our business, we may invest our cash and cash equivalents in money market funds. |
Property and Equipment | Property and Equipment We carry property and equipment at original acquisition cost less accumulated depreciation and amortization. We calculate depreciation and amortization on a straight-line basis over the estimated useful lives of the assets. Estimated useful lives used for network equipment are generally five years ; furniture, equipment and software are three to seven years ; and leasehold improvements are the shorter of the lease term or their estimated useful lives . We capitalize additions and improvements that increase the value or extend the life of an asset. We expense maintenance and repairs as incurred. We charge gains or losses from disposals of property and equipment to operations. |
Leases | Leases We record leases in which we have substantially all of the benefits and risks of ownership as capital leases and all other leases as operating leases. For leases determined to be capital leases, we record the assets held under capital lease and related obligations at the lesser of the present value of aggregate future minimum lease payments or the fair value of the assets held under capital lease. We amortize the asset over its estimated useful life or over the lease term, depending on the nature of the asset. The duration of lease obligations and commitments ranges from three years for equipment to 25 years for facilities. For leases determined to be operating leases, we record lease expense on a straight-line basis over the lease term. Certain leases include renewal options that, at the inception of the lease, are considered reasonably assured of being renewed. The lease term begins when we control the leased property, which is typically before lease payments begin under the terms of the lease. We record the difference between the expense in our consolidated statements of operations and comprehensive loss and the amount we pay as deferred rent, which we include in our consolidated balance sheets. |
Costs of Internal-Use Computer Software Development | Costs of Internal-Use Computer Software Development We capitalize software development costs incurred during the application development stage. Amortization begins once the software is ready for its intended use and is computed based on the straight-line method over the estimated useful life, which was five years for 2017 , 2016 and 2015 . Judgment is required in determining which software projects are capitalized and the resulting economic life. We capitalized $4.4 million , $4.3 million and $4.6 million in internal-use software costs during the years ended December 31, 2017 , 2016 and 2015 , respectively. As of December 31, 2017 and 2016 , the balance of unamortized internal-use software costs was $17.9 million and $20.0 million , respectively. During the years ended December 31, 2017 , 2016 and 2015 , amortization expense was $7.2 million , $8.3 million and $6.6 million , respectively. |
Valuation of Long-Lived Assets | Valuation of Long-Lived Assets We periodically evaluate the carrying value of our long-lived assets, including, but not limited to, property and equipment. We consider the carrying value of a long-lived asset impaired when the undiscounted cash flows from such asset are separately identifiable and we estimate them to be less than its carrying value. In that event, we would recognize a loss based on the amount by which the carrying value exceeds the fair value of the long-lived asset. We determine fair value based on either market quotes, if available, or discounted cash flows using a discount rate commensurate with the risk inherent in our current business model for the specific asset being valued. We would determine losses on long-lived assets to be disposed of in a similar manner, except that we would reduce fair values by the cost of disposal. We charge losses due to impairment of long-lived assets to operations during the period in which we identify the impairment. |
Goodwill and Other Intangible Assets | Goodwill and Other Intangible Assets As of January 1, 2017, we changed our operating segments, as discussed in Note 11 “Operating Segment and Geographic Information,” and, subsequently, our reporting units. We now have six reporting units: IP services, IP products, data center services (“DCS”), managed hosting, cloud, and Ubersmith. We allocated goodwill to our new reporting units using a relative fair value approach. In addition, we completed an assessment of any potential goodwill impairment for all reporting units immediately prior to and after the reallocation and determined that no impairment existed. We performed our annual impairment review as of August 1, 2017, and concluded that goodwill attributed to each of our reporting units was not impaired as the fair value of each reporting unit exceeded the carrying value, including goodwill. To determine the estimated fair value of our reporting units, we utilized the discounted cash flow and market methods. We have consistently utilized both methods in our goodwill impairment assessments and weighted both as appropriate based on relevant factors for each reporting unit. The discounted cash flow method is specific to our anticipated future results of the reporting unit, while the market method is based on our market sector including our competitors. We determined the assumptions supporting the discounted cash flow method, including the discount rate and using our estimates as of the date of the impairment review. To determine the reasonableness of these assumptions, we considered our past performance and empirical trending of results and looked to market and industry expectations, such as forecasted revenues and discount rate. We used reasonable judgment in developing our estimates and assumptions. The market method estimates fair value based on market multiples of revenue and earnings derived from comparable companies with similar operating and investment characteristics as the reporting unit. The assumptions, inputs and judgments used in performing the valuation analysis are inherently subjective and reflect estimates based on known facts and circumstances at the time we perform the valuation. These estimates and assumptions primarily include, but are not limited to, discount rates; terminal growth rates; projected revenues and costs; earnings before interest, taxes, depreciation and amortization for expected cash flows; market comparables and capital expenditure forecasts. The use of different assumptions, inputs and judgments, or changes in circumstances, could materially affect the results of the valuation. Due to inherent uncertainty involved in making these estimates, actual results could differ from our estimates and could result in additional non-cash impairment charges in the future. Other intangible assets have finite lives and we record these assets at cost less accumulated amortization. We record amortization of acquired and developed technologies to be sold using the greater of (a) the ratio of current revenues to total and anticipated future revenues for the applicable technology or (b) the straight-line method over the remaining estimated economic life, which is five to eight years. We amortize the cost of customer relationship and trade names over their useful lives of 10 to 15 years. During the years ended December 31, 2017 , 2016 and 2015 amortization expense for acquired and developed technologies was $2.1 million , $3.0 million and $ 3.4 million , respectively. We assess other intangible assets on a quarterly basis whenever any events have occurred or circumstances have changed that would indicate that impairment could exist. Our assessment is based on estimated future cash flows directly associated with the asset or asset group. If we determine that the carrying value is not recoverable, we may record an impairment charge, reduce the estimated remaining useful life or both. |
Derivatives | Derivatives We use derivatives only to reduce exposure to specific identified risks including managing the overall cost of capital and translational and transactional exposure arising from foreign transactions and ensuring the certainty of outcome as it relates to commodity pricing exposure. We do not use derivatives for any other purpose. |
Exit Activities and Restructuring | Exit Activities and Restructuring When circumstances warrant, we may elect to exit certain business activities or change the manner in which we conduct ongoing operations. If we make such a change, we will estimate the costs to exit a business, location, service contract or restructure ongoing operations. The components of the estimates may include estimates and assumptions regarding the timing and costs of future events and activities that represent our best expectations based on known facts and circumstances at the time of estimation. If circumstances warrant, we will adjust our previous estimates to reflect what we then believe to be a more accurate representation of expected future costs. Because our estimates and assumptions regarding exit activities and restructuring charges include probabilities of future events, such as our ability to find a sublease tenant within a reasonable period of time or the rate at which a sublease tenant will pay for the available space, such estimates are inherently vulnerable to changes due to unforeseen circumstances that could materially and adversely affect our results of operations. We monitor market conditions at each period end reporting date and will continue to assess our key assumptions and estimates used in the calculation of our exit activities and restructuring accrual. |
Taxes | Taxes We account for income taxes under the liability method. We determine deferred tax assets and liabilities based on differences between financial reporting and tax bases of assets and liabilities, and we measure the tax assets and liabilities using the enacted tax rates and laws that will be in effect when we expect the differences to reverse. We maintain a valuation allowance to reduce our deferred tax assets to their estimated realizable value. We may recognize deferred tax assets in future periods if and when we estimate them to be realizable and supported by historical trends of profitability and future expectations within each tax jurisdiction. We evaluate liabilities for uncertain tax positions, and we recognized $0.2 million for associated liabilities during the years ended December 31, 2017 and 2016 . We recorded nominal interest and penalties arising from the underpayment of income taxes in “Provision (benefit) for income taxes” in our accompanying consolidated statements of operations and comprehensive loss. We account for telecommunication, sales and other similar taxes on a net basis in “General and administrative” expense in our accompanying consolidated statements of operations and comprehensive loss. |
Stock-Based Compensation | Stock-Based Compensation We measure stock-based compensation cost at the grant date based on the calculated fair value of the award. We recognize the expense over the employee’s requisite service period, generally the vesting period of the award. The fair value of restricted stock is the market value on the date of grant. The fair value of stock options is estimated at the grant date using the Black-Scholes option pricing model with weighted average assumptions for the activity under our stock plans. Option pricing model input assumptions, such as expected term, expected volatility and risk-free interest rate, impact the fair value estimate. Further, the forfeiture rate impacts the amount of aggregate compensation. These assumptions are subjective and generally require significant analysis and judgment to develop. The expected term represents the weighted average period of time that we expect granted options to be outstanding, considering the vesting schedules and our historical exercise patterns. Because our options are not publicly traded, we assume volatility based on the historical volatility of our stock. The risk-free interest rate is based on the U.S. Treasury yield curve in effect at the time of grant for periods corresponding to the expected option term. We have also used historical data to estimate option exercises, employee termination and stock option forfeiture rates. Changes in any of these assumptions could materially impact our results of operations in the period the change is made. We do not recognize a deferred tax asset for unrealized tax benefits associated with the tax deductions in excess of the compensation recorded (excess tax benefit). We apply the “with and without” approach for utilization of tax attributes upon realization of net operating losses in the future. This method allocates stock-based compensation benefits last among other tax benefits recognized. In addition, we apply the “direct only” method of calculating the amount of windfalls or shortfalls. |
Treasury Stock | Treasury Stock As permitted by our stock-based compensation plans, we acquire shares of treasury stock as payment of statutory minimum payroll taxes due from employees for stock-based compensation. However, we do not use shares of treasury stock acquired from employees in this manner to issue new equity awards under our stock-based compensation plans. |
Revenue Recognition | Revenue Recognition We generate revenues primarily from the sale of data center services, including colocation, hosting and cloud, and IP services. Our revenues typically consist of monthly recurring revenues from contracts with terms of one year or more. We recognize the monthly minimum as revenue each month provided that we have entered into an enforceable contract, we have delivered the service to the customer, the fee for the service is fixed or determinable and collection is reasonably assured. We record installation fees as deferred revenue and recognize the revenue ratably over the estimated customer life. For our data center services revenue, we determine colocation revenues by occupied square feet and both allocated and variable-based usage, which includes both physical space for hosting customers’ network and other equipment plus associated services such as power and network connectivity, environmental controls and security. We determine hosting revenues by the number of servers utilized (physical or virtual) and cloud revenues by the amount of processing and storage consumed. We recognize IP services revenues on fixed-commitment or usage-based pricing. IP service contracts usually have fixed minimum commitments based on a certain level of bandwidth usage with additional charges for any usage over a specified limit. If a customer’s usage of our services exceeds the monthly minimum, we recognize revenue for such excess in the period of the usage. We use contracts and sales or purchase orders as evidence of an arrangement. We test for availability or connectivity to verify delivery of our services. We assess whether the fee is fixed or determinable based on the payment terms associated with the transaction and whether the sales price is subject to refund or adjustment. We determine third-party evidence based on the prices charged by our competitors for a similar deliverable when sold separately. It is difficult for us to obtain sufficient information on competitor pricing to substantiate third-party evidence and therefore we may not always be able to use this measure. If we are unable to establish selling price using vendor-specific objective evidence or third-party evidence, we use best estimated selling price in our allocation of arrangement consideration. The objective of best estimated selling price is to determine the price at which we would transact if we sold the service on a standalone basis. Our determination of best estimated selling price involves a weighting of several factors including, but not limited to, pricing practices and market conditions. We analyze the selling prices used in our allocation of arrangement consideration on an annual basis at a minimum. We will analyze selling prices on a more frequent basis if a significant change in our business necessitates a more timely analysis or if we experience significant variances in our selling prices. Deferred revenue consists of revenue for services to be delivered in the future and consists primarily of advance billings, which we amortize over the respective service period. We defer and amortize revenues associated with billings for installation of customer network equipment over the estimated life of the customer relationship, which was, on average, approximately five years for 2017, five years for 2016, and six years for 2015. We defer and amortize revenues for installation services because the installation service is integral to our primary service offering and does not have value to customers on a stand-alone basis. We also defer and amortize the associated incremental direct costs. We routinely review the collectability of our accounts receivable and payment status of our customers. If we determine that collection of revenue is uncertain, we do not recognize revenue until collection is reasonably assured. Additionally, we maintain an allowance for doubtful accounts resulting from the inability of our customers to make required payments on accounts receivable. We base the allowance for doubtful accounts on our historical write-offs as a percentage of revenue. We assess the payment status of customers by reference to the terms under which we provide services or goods, with any payments not made on or before their due date considered past-due. Once we have exhausted all collection efforts, we write the uncollectible balance off against the allowance for doubtful accounts. We routinely perform credit checks for new and existing customers and require deposits or prepayments for customers that we perceive as being a credit risk. In addition, we record a reserve amount for potential credits to be issued under our service level agreements and other sales adjustments. |
Research and Development Costs | Research and Development Costs We include research and development costs in general and administrative costs and we expense them as incurred. These costs primarily relate to our development and enhancement of IP routing technology, hosting and cloud technologies and network engineering costs associated with changes to the functionality of our services. Research and development costs were $1.5 million , $1.1 million and $2.2 million during the years ended December 31, 2017 , 2016 and 2015 , respectively. These costs do not include $5.2 million , $6.3 million and $6.5 million of internal-use and available for sale software costs capitalized during the years ended December 31, 2017 , 2016 and 2015 , respectively. |
Advertising Costs | Advertising Costs We expense all advertising costs as incurred. Advertising costs during the years ended December 31, 2017 , 2016 and 2015 were $1.9 million , $2.1 million and $4.9 million , respectively. |
Net Loss Per Share | Net Loss Per Share We compute basic net loss per share by dividing net loss attributable to our common stockholders by the weighted average number of shares of common stock outstanding during the period. We exclude all outstanding options and unvested restricted stock as such securities are anti-dilutive for all periods presented. |
Segment Information and Operating Costs and Expenses | Segment Information and Operating Costs and Expenses We align our reportable segments with the internal reporting that management uses for making operating decisions and assessing performance. Effective January 1, 2017 and as further described in note 11, we operate in two business segments: INAP COLO and INAP CLOUD. |
Recent Accounting Pronouncements | Recent Accounting Pronouncements Adoption of New Accounting Standards In January 2017, the FASB issued ASU No. 2017-04, "Intangibles Goodwill and Other (Topic 350): Simplifying the Accounting for Goodwill Impairment" ("ASU 2017-04"), which simplifies the subsequent measurement of goodwill by eliminating “Step 2” from the goodwill impairment test. The guidance is effective for public companies’ annual or interim goodwill impairment tests in fiscal years beginning after December 15, 2019. We adopted ASU 2017-04 in the first quarter of 2017 and it did not impact our consolidated financial statements. In October 2016, the FASB issued ASU No. 2016-16, "Income Taxes (Topic 740): Intra-Entity Transfers of Assets Other Than Inventory ("ASU 2016-16"), which allows the recognition of current and deferred income taxes for an intra-entity asset transfer, other than inventory, when the transfer occurs. Historically, recognition of the income tax consequence was not recognized until the asset was sold to an outside party. This guidance should be applied on a modified retrospective basis through a cumulative-effect adjustment directly to retained earnings as of the beginning of the period of adoption. There are no new disclosure requirements. The guidance is effective for fiscal years and interim periods within those years beginning after December 15, 2017. Early adoption is permitted, and the Company adopted the provisions of ASU 2016-16 as of January 1, 2017. Relating to the adoption of the standard, the Company recorded a $2.2 million deferred tax asset and corresponding $1.9 million valuation allowance with the net difference going to retained earnings. In March 2016, the FASB issued ASU No. 2016-09, "Compensation - Stock Compensation (Topic 718): Improvements to Employee Share-Based Payment Accounting" ("ASU 2016-09"), which includes multiple amendments intended to simplify aspects of share-based payment accounting, and was effective for us at January 1, 2017. We have elected to account for forfeitures as they occur, rather than estimate expected forfeitures. In connection with the adoption of the standard, the Company recorded a $10.8 million deferred tax asset and a corresponding $10.8 million valuation allowance. Accounting Pronouncements Issued But Not Yet Effective In August 2016, the FASB issued ASU No. 2016-15, "Statement of Cash Flow (Topic 230): Classification of Certain Cash Receipts and Cash Payments" which amends Accounting Standards Codification 230, to clarify guidance on the classification of certain cash receipts and payments in the statement of cash flows ("ASU 2016-15"). The FASB issued ASU 2016-15 with the intent of reducing diversity in practice with respect to eight types of cash flows. This guidance is effective for fiscal years beginning after December 15, 2017, with early adoption permitted. We are currently evaluating the impact that adoption will have on the presentation of our consolidated statements of cash flow. In May 2014, the FASB issued ASU No. 2014-09 (Topic 606)-Revenue from Contracts with Customers (“ASU 2014-09”) which provides a new five-step model for revenue recognition. This ASU affects all contracts that we enter into with customers to transfer goods and services or for the transfer of nonfinancial assets. This ASU will supersede the revenue recognition requirements in Topic 605, and most industry specific guidance. This ASU also supersedes the cost guidance included in Subtopic 605-35, Revenue Recognition-Construction-Type and Production-Type Contracts and provides new cost guidance under Sub Topic 340-40. An entity has the option to apply the provisions of ASU 2014-09 either retrospectively to each prior reporting period presented (the “full retrospective method”) or retrospectively with the cumulative effect of initially applying this standard recognized at the date of initial application (the “modified retrospective method”). We will adopt the new revenue guidance effective January 1, 2018, using the modified retrospective method by recognizing the cumulative effect of initially applying the new standard as an increase to the opening balance of retained earnings. We currently expect to record an adoption adjustment on the effective date to be $23.6 million , which will be reflected in retained earnings. The most significant impact of the adoption of the new standard is the requirement for incremental costs to obtain a customer, such as commissions, which previously were expensed as incurred, to be deferred and amortized over the period of contract performance or a longer period if renewals are expected and the renewal commission is not commensurate with the initial commission. In addition, upon adoption of the new standard, installation revenues are expected to be recognized over the initial contract life rather than over the estimated customer life. We believe that most performance obligations, with the exception of certain sales of equipment or hardware, will continue to be satisfied over time as the customer consumes the benefits as we perform. For equipment and hardware sales, the performance obligation is satisfied when control transfers to the customer. We are required to exercise more judgment in deferring installation revenue as well as expense fulfillment and commission costs over the appropriate life. With the exception of the revenues noted above, we expect revenue recognition to remain materially consistent with historical practice. Additionally the standard will require us to implement new revenue accounting processes that will change internal controls over financial reporting for revenue recognition. Based on currently available information, we estimate the following impacts on 2018 (all amounts are approximate): 2018 Opening Balance Sheet Impact (in millions): Pretax Retained Earnings Increase (Decrease): Commissions $ 23.6 Deferred revenue $ 5.4 Deferred costs $ (6.3 ) 2018 Pretax Income Statement Impacts (in millions): Total Revenue Change $ 0.7 Total Expense Reduction $ (2.1 ) We do not anticipate the new standard to modify our current business practices nor do we expect to have an impact on our debt covenants. As we implement the new standard, we will develop internal controls to ensure that we adequately evaluate our portfolio of contracts under the five-step model and accurately compute the cumulative adjustment to operating results under ASU 2014-09. In February 2016, the FASB issued ASU No. 2016-02, "Leases (Topic 842)" ("ASU 2016-02"), which requires all leases in excess of 12 months to be recognized on the balance sheet as lease assets and lease liabilities. For operating leases, a lessee is required to recognize a right-of-use asset and lease liability, initially measured at the present value of the lease payment; recognize a single lease cost over the lease term generally on a straight-line basis; and classify all cash payments within operating activities on the cash flow statement. The guidance is effective for annual and interim periods beginning after December 15, 2018. Earlier adoption is permitted. We are currently evaluating the impact that adoption will have on our consolidated financial statements and related disclosures. |
SUMMARY OF SIGNIFICANT ACCOUN27
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Accounting Policies [Abstract] | |
Schedule of basic and diluted net loss per share | Basic and diluted net loss per share is calculated as follows (in thousands, except per share amounts): Year Ended December 31, 2017 2016 2015 Net loss and net loss available to common stockholders $ (45,343 ) $ (124,742 ) $ (48,443 ) Weighted average shares outstanding, basic and diluted 18,993 13,083 12,975 Net loss per share, basic and diluted $ (2.39 ) $ (9.54 ) $ (3.73 ) Anti-dilutive securities excluded from diluted net loss per share calculation for stock-based compensation plans 1,076 1,350 1,664 |
Schedule of reclassifications, which did not affect total revenues, total direct costs of sales and services, operating loss or net loss | The prior year reclassifications, which did not affect total revenues, total direct costs of sales and services, operating loss or net loss, are summarized as follows (in thousands): Year Ended December 31, 2016 As Previously Reported Reclassification As Reported Revenues: Data center and network services $ 200,660 $ (200,660 ) $ — Cloud and hosting services 97,637 (97,637 ) — INAP COLO — 221,678 221,678 INAP CLOUD — 76,619 76,619 Costs of sales and services, exclusive of depreciation and amortization: Data center and network services $ 98,351 $ (98,351 ) $ — Cloud and hosting services 25,904 (25,904 ) — INAP COLO — 105,620 105,620 INAP CLOUD — 18,635 18,635 Year Ended December 31, 2015 As Previously Reported Reclassification As Reported Revenues: Data center and network services $ 213,040 $ (213,040 ) $ — Cloud and hosting services 105,253 (105,253 ) — INAP COLO — 234,859 234,859 INAP CLOUD — 83,434 83,434 Costs of sales and services, exclusive of depreciation and amortization: Data center and network services $ 104,105 $ (104,105 ) — Cloud and hosting services 27,335 (27,335 ) — INAP COLO — 111,765 111,765 INAP CLOUD — 19,675 19,675 |
Schedule of new accounting pronouncements and changes in accounting principles | Based on currently available information, we estimate the following impacts on 2018 (all amounts are approximate): 2018 Opening Balance Sheet Impact (in millions): Pretax Retained Earnings Increase (Decrease): Commissions $ 23.6 Deferred revenue $ 5.4 Deferred costs $ (6.3 ) 2018 Pretax Income Statement Impacts (in millions): Total Revenue Change $ 0.7 Total Expense Reduction $ (2.1 ) |
FAIR VALUE MEASUREMENTS (Tables
FAIR VALUE MEASUREMENTS (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Fair Value Disclosures [Abstract] | |
Schedule of fair value hierarchy for financial assets measured at fair value on a recurring basis | Assets and liabilities measured at fair value on a recurring basis are summarized as follows (in thousands): Level 1 Level 2 Level 3 Total December 31, 2017: Cash and cash equivalents $ 14,603 $ — $ — $ — Asset retirement obligations (1) (note 10) — — 1,936 1,936 December 31, 2016: Cash and cash equivalents $ 10,389 $ — $ — $ — Foreign currency contracts (note 9) — 195 — 195 Asset retirement obligations (1) (note 10) — — 2,810 2,810 (1) We calculate the fair value of asset retirement obligations by discounting the estimated amount using the current Treasury bill rate adjusted for our credit non-performance. |
Schedule of changes in asset retirement obligations | The following table provides a summary of changes in our Level 3 asset retirement obligations (in thousands): December 31, 2017 2016 2015 Balance, January 1 $ 2,810 $ 2,803 $ 2,471 Accretion (1) 197 207 262 Subsequent revision of estimated obligation 449 — 70 Payments (1,520 ) (200 ) — Balance, December 31 $ 1,936 $ 2,810 $ 2,803 (1) Included in INAP COLO "Costs of sales and services" in the accompanying consolidated statements of operations and comprehensive loss. |
Schedule of fair value of term loan and revolving credit facility | The fair values of our other Level 3 debt liabilities, estimated using discount cash flow analysis based on incremental borrowing rates for similar types of borrowing arrangements, are as follows (in thousands): December 31, 2017 2016 Carrying Amount Fair Value Carrying Amount Fair Value Term loan $ 298,500 $ 301,485 $ 291,000 $ 267,700 Revolving credit facility 5,000 5,050 35,500 32,600 |
PROPERTY AND EQUIPMENT (Tables)
PROPERTY AND EQUIPMENT (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Property, Plant and Equipment [Abstract] | |
Schedule of property and equipment | Property and equipment consisted of the following (in thousands): December 31, 2017 2016 Network equipment $ 247,190 $ 231,579 Network equipment under capital lease 14,206 14,231 Furniture and equipment 26,246 18,300 Software 43,930 48,011 Leasehold improvements 412,631 396,891 Buildings under capital lease 227,482 63,117 Property and equipment, gross 971,685 772,129 Less: accumulated depreciation and amortization ($50,253 and $40,218 related to capital leases at December 31, 2016 and 2015, respectively) (513,120 ) (469,449 ) $ 458,565 $ 302,680 |
Schedule of summary of depreciation and amortization of property and equipment associated with direct costs | Depreciation and amortization of property and equipment consisted of the following (in thousands): Year ended December 31, 2017 2016 2015 Costs of sales and services $ 70,368 $ 71,626 $ 70,080 Other depreciation and amortization 2,478 2,274 19,125 Subtotal 72,846 73,900 89,205 Amortization of acquired and developed technologies 2,147 3,048 3,450 Total depreciation and amortization $ 74,993 $ 76,948 $ 92,655 |
INAP JAPAN JOINT VENTURE (Table
INAP JAPAN JOINT VENTURE (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Business Combinations [Abstract] | |
Schedule of Business Acquisitions | We determined the preliminary fair value of the net assets as follows (in thousands): Preliminary Purchase Price Allocation Weighted Average Cash $ 3,838 Property and equipment 725 Customer relationships 1,231 21 years License 634 Other assets 2,322 Total assets acquired 8,750 Other liabilities 446 Noncontrolling interest 3,999 Net assets acquired $ 4,305 |
Pro-Forma Financial Information | The unaudited pro forma financial information is not intended to represent or be indicative of our consolidated results of operations that would have been reported had the INAP and INAP Japan acquisition been completed as of January 1, 2016, and should not be taken as indicative of our future consolidated results of operations. (in thousands, except per share amounts) Year Ended December 31, 2017 2016 Revenue $ 286,570 $ 305,733 Net loss attributable to INAP stockholders (45,240 ) (124,722 ) Basic and diluted net loss per share (2.38 ) (9.53 ) |
GOODWILL AND OTHER INTANGIBLE31
GOODWILL AND OTHER INTANGIBLE ASSETS (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of re-allocations and impairment of goodwill | During the years ended December 31, 2017 and 2016, our goodwill activity is as follows (in thousands): January 1, 2016 Re-allocations Impairment December 31, 2016 Re-allocations December 31, 2017 Reportable segments: Data center services $ 90,849 $ (90,849 ) $ — $ — $ — $ — IP services 39,464 (39,464 ) — — — — Data center and network services — 80,105 (80,105 ) — — Cloud and hosting services — 50,209 — 50,209 (50,209 ) — INAP COLO — 6,003 6,003 INAP CLOUD — 44,206 44,206 Total $ 130,313 $ — $ (80,105 ) $ 50,209 $ — $ 50,209 |
Schedule of components of amortizing intangible assets, including capitalized software | The components of our amortizing intangible assets, including capitalized software, are as follows (in thousands): December 31, 2017 December 31, 2016 Gross Carrying Amount Accumulated Amortization Gross Carrying Amount Accumulated Amortization Acquired and developed technology $ 52,825 (48,063 ) $ 52,195 $ (45,995 ) Customer relationships and trade names 71,116 (50,212 ) 69,698 (47,920 ) $ 123,941 (98,275 ) $ 121,893 $ (93,915 ) |
Schedule of finite-lived intangible assets, future amortization expense | As of December 31, 2017 , remaining amortization expense is as follows (in thousands): 2018 $ 4,649 2019 4,146 2020 3,236 2021 2,753 2022 1,794 Thereafter 9,088 $ 25,666 |
ACCRUED LIABILITIES (Tables)
ACCRUED LIABILITIES (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Payables and Accruals [Abstract] | |
Schedule of Accrued Liabilities | Accrued liabilities consist of the following (in thousands): December 31, 2017 2016 Compensation and benefits payable $ 6,673 $ 5,396 Property, sales, and other taxes 2,636 1,627 Customer credit balances 1,616 1,256 Accrued interest 1,690 — Other 3,293 2,324 $ 15,908 $ 10,603 |
EXIT ACTIVITIES AND RESTRUCTU33
EXIT ACTIVITIES AND RESTRUCTURING (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Restructuring and Related Activities [Abstract] | |
Schedule of Transactions and Balances for Exit Activities and Restructuring Charges | The following table displays the transactions and balances for exit activities and restructuring charges (in thousands). We include initial charges and plan adjustments in “Exit activities, restructuring and impairments” in the accompanying statements of operations and comprehensive loss for the years ended December 31, 2017 , 2016 and 2015. Our real estate obligations are substantially related to our INAP COLO segment. Severance is spread across both reportable segments. Balance December 31, 2016 Initial Charges Plan Adjustments Cash Payments Balance December 31, 2017 Activity for 2017 restructuring charge: Real estate obligations $ — $ 3,359 $ 1,741 $ (1,720 ) $ 3,380 Activity for 2016 restructuring charge: Severance 1,911 — 957 (2,822 ) 46 Real estate obligations 933 — 82 (768 ) 247 Activity for 2015 restructuring charge: Real estate obligation 111 — — (47 ) 64 Service contracts 565 — 21 (198 ) 388 Activity for 2014 restructuring charge: Real estate obligations 1,183 — 131 (623 ) 691 $ 4,703 $ 3,359 $ 2,932 $ (6,178 ) $ 4,816 Balance December 31, 2015 Initial Charges Plan Adjustments Cash Payments Balance December 31, 2016 Activity for 2016 restructuring charge: Severance $ — $ 2,444 $ — $ (533 ) $ 1,911 Real estate obligations — 1,082 14 (163 ) 933 Service contracts — 42 (21 ) (21 ) — Activity for 2015 restructuring charge: Real estate obligation 164 — (13 ) (40 ) 111 Service contracts 843 — 9 (287 ) 565 Activity for 2014 restructuring charge: Real estate obligations 1,701 — 104 (622 ) 1,183 Activity for 2007 restructuring charge: Real estate obligation 1,170 — 747 (1,917 ) — $ 3,878 $ 3,568 $ 840 $ (3,583 ) $ 4,703 Balance December 31, 2014 Initial Charges Plan Adjustments Cash Payments Balance December 31, 2015 Activity for 2015 restructuring charge: Real estate obligations $ — $ 270 $ — $ (106 ) $ 164 Service contracts — 1,268 — (425 ) 843 Activity for 2014 restructuring charge: Real estate obligation 2,010 — 244 (553 ) 1,701 Activity for 2007 restructuring charge: Real estate obligation 2,325 — 660 (1,815 ) 1,170 Other 175 — (6 ) (169 ) — $ 4,510 $ 1,538 $ 898 $ (3,068 ) $ 3,878 |
DERIVATIVES (Tables)
DERIVATIVES (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Schedule of the activity of the foreign currency contracts | The activity of the foreign currency contracts was as follows (in thousands): December 31, 2017 2016 Unrealized gain, net of less than $0.1 million and $0.2 million income tax, included in “Accumulated items of other comprehensive loss” in the accompanying consolidated balance sheets $ 145 $ 600 Realized loss on effective portion, included as compensation expense primarily in “Direct costs of customer support” and “Sales, general and administrative” in the accompanying consolidated statements of operations and comprehensive loss (171 ) 328 |
Schedule of activity of interest rate swaps | During the year ended December 31, 2016, the activity of our interest rate swap is summarized as follows (in thousands): Gain recorded as the effective portion of the change in fair value $ 728 Interest payments reclassified as an increase to interest expense 790 |
COMMITMENTS, CONTINGENCIES AN35
COMMITMENTS, CONTINGENCIES AND LITIGATION (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Commitments and Contingencies Disclosure [Abstract] | |
Schedule of credit agreements | A summary of our credit agreement as of December 31, 2017 and December 31, 2016 is as follows (dollars in thousands): December 31, 2017 2016 Outstanding principal balance on the term loan, less unamortized discount and prepaid costs of $9.8 million and $6.8 million, respectively $ 288,712 $ 284,178 Outstanding balance on the revolving credit facility 5,000 35,500 Letters of credit issued with proceeds from revolving credit facility 5,361 4,209 Borrowing capacity 14,639 10,291 Interest rate – term loan 8.4 % 7.0 % Interest rate – revolving credit facility 10.3 % 6.1 % Maturities of the term loan are as follows: $ 3,000 2019 3,000 2020 3,000 2021 3,000 2022 286,500 $ 298,500 |
Schedule of information with respect to financial covenants | The table below sets forth information with respect to the current financial covenants as of December 31, 2017 . Covenants Requirements Maximum total leverage ratio (the ratio of Consolidated Indebtedness to Consolidated EBITDA as defined in the 2017 Credit Agreement) should be equal to or less than: 5.9 (1) Minimum consolidated interest coverage ratio (the ratio of Consolidated EBITDA to Consolidated Interest Expense as defined in the 2017 Credit Agreement) should be equal to or greater than: 2.0 (2) 2017 Annual Limit Twelve Months Ended Limitation on capital expenditures No limit $36 million (1) The maximum total leverage ratio decreases to 5.9 to 1 as of March 1, 2018, 5.9 to 1 as of June 30, 2018, 5.9 to 1 as of September 30, 2018, 5.9 to 1 as of December 31, 2018, 5.9 to 1 as of March 31, 2019, 5.9 to 1 as of June 30, 2019, 5.5 to 1 as of September 30, 2019, 5.5 to 1 as of December 31, 2019, 5.5 to 1 March 31, 2020, 5.25 to 1 as of June 30, 2020, 5.25 to 1 September 30, 2020, 4.75 to 1 as of December 31, 2020, 4.75 to 1 as of March 31, 2021, 4.75 to 1 as of June 30, 2021 and 4.5 to 1 as of September 30, 2021 and thereafter. (2) The minimum consolidated interest coverage ratio increases to 2.00 to 1 as of March 31, 2018, 2.00 to 1 as of June 30, 2018, 2.00 to 1 as of September 30, 2018, 2.00 to 1 as of December 31, 2018, 2.00 to 1 as of March 31, 2019, 2.00 to 1 as of June 30, 2019, 2.00 to 1 September 30, 2019, 2.00 to 1 as of December 31, 2019, 2.00 to 1 as of March 31, 2020, 2.00 to 1 as of June 30, 2020, 2.00 to 1 as of September 30, 2020, 2.25 to 1 December 31, 2020, 2.25 to 1 as of March 31, 2021, 2.25 to 1 as of June 30, 2021, 2.25 to 1 as of September 30, 2021 and thereafter. |
Schedule of future minimum capital lease payments and the present value of the minimum lease payments for all capital leases | Future minimum capital lease payments and the present value of the minimum lease payments for all capital leases as of December 31, 2017 , are as follows (in thousands): 2018 $ 32,511 2019 31,021 2020 26,754 2021 26,350 2022 24,346 Thereafter 434,947 Remaining capital lease payments 575,929 Less: amounts representing imputed interest (340,469 ) Present value of minimum lease payments 235,460 Less: current portion (11,711 ) $ 223,749 |
Schedule of future minimum rental payments for operating leases | Future minimum lease payments on non-cancelable operating leases having terms in excess of one year were as follows at December 31, 2017 (in thousands): 2018 $ 11,700 2019 5,077 2020 2,538 2021 2,467 2022 2,523 Thereafter 3,492 $ 27,797 |
Schedule of future minimum payments under service commitments | Future minimum payments under these service commitments having terms in excess of one year were as follows at December 31, 2017 (in thousands): 2018 $ 2,357 2019 1,221 2020 131 2021 — 2022 — Thereafter — $ 3,709 |
OPERATING SEGMENT AND GEOGRAP36
OPERATING SEGMENT AND GEOGRAPHIC INFORMATION (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Segment Reporting [Abstract] | |
Schedule of operating results for business segments, along with reconciliations from segment profit to loss before income taxes and equity in (earnings) of equity-method investment | The following table provides segment results, with prior period amounts reclassified to conform to the current presentation (in thousands): Year Ended December 31, 2017 2016 2015 Revenues: INAP COLO $ 209,580 $ 221,678 $ 234,859 INAP CLOUD 71,138 76,619 83,434 Total revenues 280,718 298,297 318,293 Costs of sales and services, exclusive of depreciation and amortization: INAP COLO 89,240 105,620 111,765 INAP CLOUD 16,977 18,635 19,675 Total costs of sales and services, exclusive of depreciation and amortization 106,217 124,255 131,440 Segment profit: INAP COLO 120,340 116,058 123,094 INAP CLOUD 54,161 57,984 63,759 Total segment profit 174,501 174,042 186,853 Goodwill impairment — 80,105 — Exit activities, restructuring and impairments 6,249 7,236 2,278 Other operating expenses, including direct costs of customer support, depreciation and amortization 163,478 179,770 210,470 Income (loss) from operations 4,774 (93,070 ) (25,895 ) Non-operating expenses 51,001 31,312 26,408 Loss before income taxes, non-controlling interest and equity in earnings of equity-method investment $ (46,227 ) $ (124,382 ) $ (52,303 ) |
Schedule of total assets by segment | Total assets by segment are as follows (in thousands): December 31, 2017 2016 INAP COLO $ 398,231 $ 224,540 INAP CLOUD 173,691 192,684 Corporate 14,603 13,391 $ 586,525 $ 430,615 |
Schedule of revenues by country | Revenues are allocated to countries based on location of services. Revenues, by country with revenues over 10% of total revenues, are as follows (in thousands): Year Ended December 31, 2017 2016 2015 Revenues: United States $ 220,018 $ 231,943 $ 245,853 Canada 38,750 44,206 47,021 Other countries 21,950 22,148 25,419 $ 280,718 $ 298,297 $ 318,293 |
Schedule of net property and equipment by country | Net property and equipment, by country with assets over 10% of total property and equipment, is as follows (in thousands): December 31, 2017 2016 United States $ 417,936 $ 260,788 Canada 34,296 36,495 Other countries 6,333 5,397 $ 458,565 $ 302,680 |
STOCK-BASED COMPENSATION PLANS
STOCK-BASED COMPENSATION PLANS (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Schedule of stock-based compensation, net of estimated forfeitures | The following table summarizes the amount of stock-based compensation, net of estimated forfeitures, included in the consolidated statements of operations and comprehensive loss (in thousands): Year Ended December 31, 2017 2016 2015 Costs of customer support $ 167 $ 1,159 $ 1,901 Sales, general and administrative 2,873 3,838 6,880 $ 3,040 $ 4,997 $ 8,781 |
Schedule of stock option activity of stock-based compensation plans | Stock option activity during the year ended December 31, 2017 under all of our stock-based compensation plans was as follows (shares in thousands): Shares Weighted Average Exercise Price Balance, December 31, 2016 795 $ 27.80 Granted — — Exercised (49 ) 8.80 Forfeitures and post-vesting cancellations (430 ) 31.72 Balance, December 31, 2017 316 25.40 Exercisable, December 31, 2017 277 26.25 |
Schedule of fully vested and exercisable stock options and stock options expected to vest | Fully vested and exercisable stock options and stock options expected to vest as of December 31, 2017 are further summarized as follows (shares in thousands): Fully Vested and Exercisable Expected to Vest Total shares 277 316 Weighted-average exercise price $ 26.25 $ 25.40 Aggregate intrinsic value $ — $ — Weighted-average remaining contractual term (in years) 3.9 4.4 |
Schedule of restricted stock activity | Restricted stock activity during the year ended December 31, 2017 was as follows (shares in thousands): Shares Weighted- Average Grant Date Fair Value Unvested balance, December 31, 2016 555 $ 4.52 Granted 483 $ 6.20 Vested (172 ) $ 8.63 Forfeited (106 ) $ 9.00 Unvested balance, December 31, 2017 760 $ 4.03 |
Schedule of unrecognized compensation costs related to unvested stock-based compensation | Total unrecognized compensation costs related to unvested stock-based compensation as of December 31, 2017 is as follows (dollars in thousands): Stock Options Restricted Stock Total Unrecognized compensation $ 241 $ 2,972 $ 3,213 Weighted-average remaining recognition period (in years) 2.51 1.87 1.92 |
INCOME TAXES (Tables)
INCOME TAXES (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Income Tax Disclosure [Abstract] | |
Schedule of loss from continuing operations before income taxes and equity in (earnings) of equity-method investment | The loss from continuing operations before income taxes, non-controlling interest and equity in (earnings) of equity-method investment is as follows (in thousands): Year Ended December 31, 2017 2016 2015 United States $ (46,648 ) $ (120,553 ) $ (31,572 ) Foreign 421 (3,829 ) (20,731 ) Loss from continuing operations before income taxes, non-controlling interest and equity in (earnings) of equity-method investment $ (46,227 ) $ (124,382 ) $ (52,303 ) |
Schedule of current and deferred income tax (benefit) provision | The current and deferred income tax benefit is as follows (in thousands): Year Ended December 31, 2017 2016 2015 Current: Federal $ (730 ) $ (15 ) $ — State 123 155 152 Foreign 507 61 158 (100 ) 201 310 Deferred: Federal — — — State — — — Foreign 353 329 (3,970 ) 353 329 (3,970 ) Provision (benefit) for income taxes $ 253 $ 530 $ (3,660 ) |
Schedule of effective income tax rate reconciliation | A reconciliation of the effect of applying the federal statutory rate and the effective income tax rate on our income tax benefit is as follows: Year Ended December 31, 2017 2016 2015 Federal income tax at statutory rates (34.0 )% (34.0 )% (34.0 )% Foreign income tax 0.5 0.7 4.0 State income tax (5.0 ) (5.0 ) (4.0 ) Other permanent differences 0.4 0.2 — Statutory tax rate change - Deferred - Tax Reform Act (128.4 ) (3.2 ) — Statutory tax rate change - Valuation Allowance - Tax Reform Act 128.4 — — Compensation — 3.0 3.0 Goodwill impairment — 25.2 — Refundable AMT credit (1.5 ) — Change in valuation allowance 40.1 13.5 24.0 Effective tax rate 0.5 % 0.4 % (7.0 )% |
Schedule of deferred tax assets and liabilities | Temporary differences between the financial statement carrying amounts and tax bases of assets and liabilities that give rise to significant portions of deferred taxes related to the following (in thousands): December 31, 2017 2016 Long-term deferred income tax (liabilities) assets: Property and equipment $ 43,554 $ 57,161 Goodwill 1,392 2,525 Intangible assets (22,021 ) (22,958 ) Deferred revenue, less current portion 1,834 2,809 Restructuring liability, less current portion 1,282 1,839 Refinance (374 ) (3,054 ) Deferred rent 639 2,737 Stock-based compensation 911 3,079 Provision for doubtful accounts 1,772 1,449 U.S. net operating loss carryforwards 89,117 102,408 Foreign net operating loss carryforwards, less current portion 8,053 9,324 Tax credit carryforwards 2,812 3,616 Other 2,090 2,417 Long-term deferred income tax assets 131,061 163,352 Less: valuation allowance (132,712 ) (164,865 ) Net long-term deferred income tax (liabilities) assets (1,651 ) (1,513 ) Net deferred tax liabilities $ 1,651 $ 1,513 |
Schedule of summary of changes in deferred tax asset valuation allowance | Changes in our deferred tax asset valuation allowance are summarized as follows (in thousands): Year Ended December 31, 2017 2016 2015 Balance, January 1, $ 164,865 $ 148,310 $ 136,017 Increase in deferred tax assets 27,183 16,555 12,293 Remeasurement in deferred tax assets (59,336 ) — — Balance, December 31, $ 132,712 $ 164,865 $ 148,310 |
Schedule of changes in unrecognized tax benefits | Changes in our unrecognized tax benefits are summarized as follows (in thousands): Year Ended December 31, 2017 2016 2015 Unrecognized tax benefits balance, January 1, $ 187 $ — $ 408 Addition for tax positions taken in a prior year 162 187 — Deduction for tax positions taken in a prior year (187 ) — (408 ) Unrecognized tax benefits balance, December 31, $ 162 $ 187 $ — |
UNAUDITED QUARTERLY RESULTS (Ta
UNAUDITED QUARTERLY RESULTS (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Quarterly Financial Information Disclosure [Abstract] | |
Schedule of unaudited quarterly financial information | The quarterly operating results below are not necessarily indicative of those in future periods (in thousands, except for share data). 2017 Quarter Ended March 31 June 30 September 30 December 31 Revenues $ 72,133 $ 69,642 $ 68,907 $ 70,035 Costs of sales and services, exclusive of depreciation and amortization 29,045 26,429 24,945 25,798 Costs of customer support 7,264 6,133 6,237 6,122 Exit activities, restructuring and impairments 1,023 4,628 745 (148 ) Net loss attributable to INAP stockholders (8,230 ) (19,283 ) (10,895 ) (6,934 ) Basic and diluted net loss per share $ (0.51 ) $ (0.97 ) $ (0.55 ) $ (0.35 ) 2016 Quarter Ended March 31 June 30 September 30 December 31 Revenues $ 75,924 $ 74,315 $ 73,940 $ 74,117 Costs of sales and services, exclusive of depreciation and amortization 31,077 31,370 31,562 30,246 Costs of customer support 8,804 7,919 7,985 7,475 Goodwill impairment — — 78,169 1,936 Exit activities, restructuring and impairments 201 152 1,670 5,213 Net loss attributable to INAP stockholders (9,644 ) (10,693 ) (91,297 ) (13,110 ) Basic and diluted net loss per share $ (0.75 ) $ (0.82 ) $ (7.01 ) $ (1.01 ) |
DESCRIPTION OF THE COMPANY AN40
DESCRIPTION OF THE COMPANY AND NATURE OF OPERATIONS - Narrative (Details) $ in Thousands, ft² in Millions | 12 Months Ended | |
Dec. 31, 2017USD ($)ft²Service_PointData_Centerpoint_of_presence | Dec. 31, 2016USD ($) | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | ||
Number of metropolitan markets (market) | Data_Center | 21 | |
Number of datacenters (datacenter) | Service_Point | 56 | |
Number of POPs (point of presence) | point_of_presence | 97 | |
Area under lease (sqft) | ft² | 1 | |
Area of data centers (sqft) | ft² | 0.5 | |
Accumulated deficit | $ | $ 1,323,723 | $ 1,278,699 |
Working capital deficit | $ | $ 22,400 |
SUMMARY OF SIGNIFICANT ACCOUN41
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Narrative (Details) $ in Thousands | Aug. 15, 2017USD ($) | Dec. 31, 2017USD ($) | Dec. 31, 2017USD ($) | Dec. 31, 2017USD ($)reporting_unit | Dec. 31, 2017USD ($)Segment | Dec. 31, 2017USD ($)segment | Dec. 31, 2016USD ($) | Dec. 31, 2015USD ($) | Aug. 14, 2017USD ($) | Dec. 31, 2014USD ($) |
Summary Of Significant Accounting Policy [Line Items] | ||||||||||
Carrying value of debt | $ 303,500 | $ 303,500 | $ 303,500 | $ 303,500 | $ 303,500 | |||||
Fair value of debt | 306,500 | 306,500 | 306,500 | 306,500 | 306,500 | |||||
Capitalized cost of internal-use software | 4,400 | $ 4,300 | $ 4,600 | |||||||
Unamortized software costs | 17,900 | 17,900 | $ 17,900 | 17,900 | 17,900 | 20,000 | ||||
Amortization expense capitalized | 7,200 | 8,300 | 6,600 | |||||||
Number of reporting units | reporting_unit | 6 | |||||||||
Amortization of intangible assets | 2,147 | 3,048 | 3,450 | |||||||
Uncertain tax positions | 200 | 200 | $ 200 | $ 200 | $ 200 | 200 | ||||
Research and development costs | 1,500 | 1,100 | 2,200 | |||||||
Excluded capitalized cost of internal-use software | 5,200 | 6,300 | 6,500 | |||||||
Advertising costs | 1,900 | 2,100 | 4,900 | |||||||
Number of operating segments | 2 | 2 | ||||||||
Deferred tax assets | 131,061 | 131,061 | 131,061 | $ 131,061 | $ 131,061 | 163,352 | ||||
Deferred tax asset, Valuation allowance | 132,712 | 132,712 | 132,712 | 132,712 | 132,712 | 164,865 | $ 148,310 | $ 136,017 | ||
Retained earnings | $ (1,323,723) | (1,323,723) | (1,323,723) | (1,323,723) | (1,323,723) | $ (1,278,699) | ||||
Customer Relationships | ||||||||||
Summary Of Significant Accounting Policy [Line Items] | ||||||||||
Amortized period of assets | 5 years | 5 years | 6 years | |||||||
Network equipment | ||||||||||
Summary Of Significant Accounting Policy [Line Items] | ||||||||||
Estimated useful lives of assets (in years) | 5 years | |||||||||
Minimum | ||||||||||
Summary Of Significant Accounting Policy [Line Items] | ||||||||||
Amortized period of assets | 5 years | |||||||||
Minimum | Acquired technology | ||||||||||
Summary Of Significant Accounting Policy [Line Items] | ||||||||||
Amortized period of assets | 5 years | |||||||||
Minimum | Customer relationships and trade names | ||||||||||
Summary Of Significant Accounting Policy [Line Items] | ||||||||||
Amortized period of assets | 10 years | |||||||||
Minimum | Furniture Equipment and Software | ||||||||||
Summary Of Significant Accounting Policy [Line Items] | ||||||||||
Estimated useful lives of assets (in years) | 3 years | |||||||||
Minimum | Leasehold improvements | ||||||||||
Summary Of Significant Accounting Policy [Line Items] | ||||||||||
Duration of lease obligations and commitments | 3 years | |||||||||
Maximum | ||||||||||
Summary Of Significant Accounting Policy [Line Items] | ||||||||||
Amortized period of assets | 15 years | |||||||||
Maximum | Acquired technology | ||||||||||
Summary Of Significant Accounting Policy [Line Items] | ||||||||||
Amortized period of assets | 8 years | |||||||||
Maximum | Customer relationships and trade names | ||||||||||
Summary Of Significant Accounting Policy [Line Items] | ||||||||||
Amortized period of assets | 15 years | |||||||||
Maximum | Furniture Equipment and Software | ||||||||||
Summary Of Significant Accounting Policy [Line Items] | ||||||||||
Estimated useful lives of assets (in years) | 7 years | |||||||||
Maximum | Leasehold improvements | ||||||||||
Summary Of Significant Accounting Policy [Line Items] | ||||||||||
Duration of lease obligations and commitments | 25 years | |||||||||
Internap Japan Investment | ||||||||||
Summary Of Significant Accounting Policy [Line Items] | ||||||||||
Investment in joint venture | $ 4,100 | |||||||||
Internap Japan | ||||||||||
Summary Of Significant Accounting Policy [Line Items] | ||||||||||
Gain recognized | $ 1,100 | |||||||||
Accounting Standards Update 2016-16 | ||||||||||
Summary Of Significant Accounting Policy [Line Items] | ||||||||||
Deferred tax assets | $ 2,200 | |||||||||
Deferred tax asset, Valuation allowance | 1,900 | |||||||||
Accounting Standards Update 2016-09 | ||||||||||
Summary Of Significant Accounting Policy [Line Items] | ||||||||||
Deferred tax assets | 10,800 | |||||||||
Deferred tax asset, Valuation allowance | $ 10,800 | |||||||||
Pro Forma | Difference Between Revenue Guidance In Effect Before And After Topic 606 | Accounting Standards Update 2014-09 | ||||||||||
Summary Of Significant Accounting Policy [Line Items] | ||||||||||
Retained earnings | $ 23,600 | $ 23,600 | $ 23,600 | $ 23,600 | $ 23,600 |
SUMMARY OF SIGNIFICANT ACCOUN42
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Summary of Basic and Diluted Net Loss Per Share (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2017 | Sep. 30, 2017 | Jun. 30, 2017 | Mar. 31, 2017 | Dec. 31, 2016 | Sep. 30, 2016 | Jun. 30, 2016 | Mar. 31, 2016 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Accounting Policies [Abstract] | |||||||||||
Net loss and net loss available to common stockholders | $ (6,934) | $ (10,895) | $ (19,283) | $ (8,230) | $ (13,110) | $ (91,297) | $ (10,693) | $ (9,644) | $ (45,343) | $ (124,742) | $ (48,443) |
Weighted average shares outstanding, basic and diluted (in shares) | 18,993 | 13,083 | 12,975 | ||||||||
Net loss per share, basic and diluted (in dollars per share) | $ (0.35) | $ (0.55) | $ (0.97) | $ (0.51) | $ (1.01) | $ (7.01) | $ (0.82) | $ (0.75) | $ (2.39) | $ (9.54) | $ (3.73) |
Anti-dilutive securities excluded from diluted net loss per share calculation for stock-based compensation plans (in shares) | 1,076 | 1,350 | 1,664 |
SUMMARY OF SIGNIFICANT ACCOUN43
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Summary of Reclassifications (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2017 | Sep. 30, 2017 | Jun. 30, 2017 | Mar. 31, 2017 | Dec. 31, 2016 | Sep. 30, 2016 | Jun. 30, 2016 | Mar. 31, 2016 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Revenues: | |||||||||||
Revenues | $ 70,035 | $ 68,907 | $ 69,642 | $ 72,133 | $ 74,117 | $ 73,940 | $ 74,315 | $ 75,924 | $ 280,718 | $ 298,297 | $ 318,293 |
Costs of sales and services, exclusive of depreciation and amortization, shown below: | |||||||||||
Costs of sales and services, exclusive of depreciation and amortization | $ 25,798 | $ 24,945 | $ 26,429 | $ 29,045 | $ 30,246 | $ 31,562 | $ 31,370 | $ 31,077 | 106,217 | 124,255 | 131,440 |
Data center and network services | |||||||||||
Revenues: | |||||||||||
Revenues | 0 | 0 | |||||||||
Costs of sales and services, exclusive of depreciation and amortization, shown below: | |||||||||||
Costs of sales and services, exclusive of depreciation and amortization | 0 | 0 | |||||||||
Cloud and hosting services | |||||||||||
Revenues: | |||||||||||
Revenues | 0 | 0 | |||||||||
Costs of sales and services, exclusive of depreciation and amortization, shown below: | |||||||||||
Costs of sales and services, exclusive of depreciation and amortization | 0 | 0 | |||||||||
INAP COLO | |||||||||||
Revenues: | |||||||||||
Revenues | 209,580 | 221,678 | 234,859 | ||||||||
Costs of sales and services, exclusive of depreciation and amortization, shown below: | |||||||||||
Costs of sales and services, exclusive of depreciation and amortization | 89,240 | 105,620 | 111,765 | ||||||||
INAP CLOUD | |||||||||||
Revenues: | |||||||||||
Revenues | 71,138 | 76,619 | 83,434 | ||||||||
Costs of sales and services, exclusive of depreciation and amortization, shown below: | |||||||||||
Costs of sales and services, exclusive of depreciation and amortization | $ 16,977 | 18,635 | 19,675 | ||||||||
As Previously Reported | Data center and network services | |||||||||||
Revenues: | |||||||||||
Revenues | 200,660 | 213,040 | |||||||||
Costs of sales and services, exclusive of depreciation and amortization, shown below: | |||||||||||
Costs of sales and services, exclusive of depreciation and amortization | 98,351 | 104,105 | |||||||||
As Previously Reported | Cloud and hosting services | |||||||||||
Revenues: | |||||||||||
Revenues | 97,637 | 105,253 | |||||||||
Costs of sales and services, exclusive of depreciation and amortization, shown below: | |||||||||||
Costs of sales and services, exclusive of depreciation and amortization | 25,904 | 27,335 | |||||||||
As Previously Reported | INAP COLO | |||||||||||
Revenues: | |||||||||||
Revenues | 0 | 0 | |||||||||
Costs of sales and services, exclusive of depreciation and amortization, shown below: | |||||||||||
Costs of sales and services, exclusive of depreciation and amortization | 0 | 0 | |||||||||
As Previously Reported | INAP CLOUD | |||||||||||
Revenues: | |||||||||||
Revenues | 0 | 0 | |||||||||
Costs of sales and services, exclusive of depreciation and amortization, shown below: | |||||||||||
Costs of sales and services, exclusive of depreciation and amortization | 0 | 0 | |||||||||
Reclassification | Data center and network services | |||||||||||
Revenues: | |||||||||||
Revenues | (200,660) | (213,040) | |||||||||
Costs of sales and services, exclusive of depreciation and amortization, shown below: | |||||||||||
Costs of sales and services, exclusive of depreciation and amortization | (98,351) | (104,105) | |||||||||
Reclassification | Cloud and hosting services | |||||||||||
Revenues: | |||||||||||
Revenues | (97,637) | (105,253) | |||||||||
Costs of sales and services, exclusive of depreciation and amortization, shown below: | |||||||||||
Costs of sales and services, exclusive of depreciation and amortization | (25,904) | (27,335) | |||||||||
Reclassification | INAP COLO | |||||||||||
Revenues: | |||||||||||
Revenues | 221,678 | 234,859 | |||||||||
Costs of sales and services, exclusive of depreciation and amortization, shown below: | |||||||||||
Costs of sales and services, exclusive of depreciation and amortization | 105,620 | 111,765 | |||||||||
Reclassification | INAP CLOUD | |||||||||||
Revenues: | |||||||||||
Revenues | 76,619 | 83,434 | |||||||||
Costs of sales and services, exclusive of depreciation and amortization, shown below: | |||||||||||
Costs of sales and services, exclusive of depreciation and amortization | $ 18,635 | $ 19,675 |
SUMMARY OF SIGNIFICANT ACCOUN44
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Schedule of New Accounting Pronouncement Impact (Details) - USD ($) | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2017 | Sep. 30, 2017 | Jun. 30, 2017 | Mar. 31, 2017 | Dec. 31, 2016 | Sep. 30, 2016 | Jun. 30, 2016 | Mar. 31, 2016 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Summary Of Significant Accounting Policies [Line Items] | |||||||||||
Deferred revenues | $ 4,861,000 | $ 5,746,000 | $ 4,861,000 | $ 5,746,000 | |||||||
Total Revenue Change | 70,035,000 | $ 68,907,000 | $ 69,642,000 | $ 72,133,000 | $ 74,117,000 | $ 73,940,000 | $ 74,315,000 | $ 75,924,000 | 280,718,000 | 298,297,000 | $ 318,293,000 |
Total Expense Reduction | 275,944,000 | $ 391,367,000 | $ 344,188,000 | ||||||||
Difference Between Revenue Guidance In Effect Before And After Topic 606 | Accounting Standards Update 2014-09 | Pro Forma | |||||||||||
Summary Of Significant Accounting Policies [Line Items] | |||||||||||
Commissions | 23,600 | 23,600 | |||||||||
Deferred revenues | 5,400 | 5,400 | |||||||||
Deferred costs | $ (6,300) | (6,300) | |||||||||
Total Revenue Change | 0.70 | ||||||||||
Total Expense Reduction | $ (2,100) |
FAIR VALUE MEASUREMENTS - Summa
FAIR VALUE MEASUREMENTS - Summary of Assets and Liabilities Measured at Fair Value on Recurring Basis (Details) - Recurring basis - USD ($) $ in Thousands | Dec. 31, 2017 | Dec. 31, 2016 |
Total | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Cash and cash equivalents | $ 0 | $ 0 |
Level 1 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Cash and cash equivalents | 14,603 | 10,389 |
Level 2 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Cash and cash equivalents | 0 | 0 |
Level 3 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Cash and cash equivalents | 0 | 0 |
Foreign currency contracts | Total | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Liabilities, fair value | 195 | |
Foreign currency contracts | Level 1 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Liabilities, fair value | 0 | |
Foreign currency contracts | Level 2 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Liabilities, fair value | 195 | |
Foreign currency contracts | Level 3 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Liabilities, fair value | 0 | |
Asset retirement obligations | Total | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Liabilities, fair value | 1,936 | 2,810 |
Asset retirement obligations | Level 1 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Liabilities, fair value | 0 | 0 |
Asset retirement obligations | Level 2 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Liabilities, fair value | 0 | 0 |
Asset retirement obligations | Level 3 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Liabilities, fair value | $ 1,936 | $ 2,810 |
FAIR VALUE MEASUREMENTS - Sum46
FAIR VALUE MEASUREMENTS - Summary of Changes of Level 3 Financial Assets (Details) - Asset retirement obligations - Level 3 - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | |||
Balance, January 1 | $ 2,810 | $ 2,803 | $ 2,471 |
Accretion | 197 | 207 | 262 |
Subsequent revision of estimated obligation | 449 | 0 | 70 |
Payments | (1,520) | (200) | 0 |
Balance, December 31 | $ 1,936 | $ 2,810 | $ 2,803 |
FAIR VALUE MEASUREMENTS - Sum47
FAIR VALUE MEASUREMENTS - Summary of Fair Value Level 3 Debt Instruments (Details) - USD ($) $ in Thousands | Dec. 31, 2017 | Dec. 31, 2016 |
Carrying Amount | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Term loan | $ 298,500 | $ 291,000 |
Revolving credit facility | 5,000 | 35,500 |
Fair Value | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Term loan | 301,485 | 267,700 |
Revolving credit facility | $ 5,050 | $ 32,600 |
PROPERTY AND EQUIPMENT - Summar
PROPERTY AND EQUIPMENT - Summary of Property and Equipment (Details) - USD ($) $ in Thousands | Dec. 31, 2017 | Dec. 31, 2016 |
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | $ 971,685 | $ 772,129 |
Less: accumulated depreciation and amortization ($50,253 and $40,218 related to capital leases at December 31, 2016 and 2015, respectively) | (513,120) | (469,449) |
Accumulated depreciation and amortization related to capital leases | 50,253 | 40,218 |
Property and equipment, net | 458,565 | 302,680 |
Network equipment | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | 247,190 | 231,579 |
Network equipment under capital lease | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | 14,206 | 14,231 |
Furniture and equipment | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | 26,246 | 18,300 |
Software | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | 43,930 | 48,011 |
Leasehold improvements | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | 412,631 | 396,891 |
Buildings under capital lease | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | $ 227,482 | $ 63,117 |
PROPERTY AND EQUIPMENT - Narrat
PROPERTY AND EQUIPMENT - Narrative (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Property, Plant and Equipment [Line Items] | |||
Asset retired | $ 9,200 | $ 5,000 | $ 33,300 |
Asset retired accumulated depreciation | 7,300 | 4,400 | $ 32,600 |
Property and equipment, gross | 971,685 | 772,129 | |
Accumulated depreciation | 513,120 | 469,449 | |
Leasehold improvements | |||
Property, Plant and Equipment [Line Items] | |||
Property and equipment, gross | 412,631 | 396,891 | |
Software | |||
Property, Plant and Equipment [Line Items] | |||
Property and equipment, gross | 43,930 | 48,011 | |
Disposal Group, Disposed of by Means Other than Sale, Not Discontinued Operations, Abandonment | Leasehold improvements | |||
Property, Plant and Equipment [Line Items] | |||
Impairment charges | 500 | ||
Property and equipment, gross | 22,400 | ||
Accumulated depreciation | $ 22,400 | ||
Disposal Group, Disposed of by Means Other than Sale, Not Discontinued Operations, Abandonment | Software | |||
Property, Plant and Equipment [Line Items] | |||
Impairment charges | 1,600 | ||
Property and equipment, gross | 2,400 | ||
Accumulated depreciation | $ 800 |
PROPERTY AND EQUIPMENT - Summ50
PROPERTY AND EQUIPMENT - Summary of Depreciation and Amortization of Property and Equipment (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Property, Plant and Equipment [Abstract] | |||
Costs of sales and services | $ 70,368 | $ 71,626 | $ 70,080 |
Other depreciation and amortization | 2,478 | 2,274 | 19,125 |
Subtotal | 72,846 | 73,900 | 89,205 |
Amortization of acquired and developed technologies | 2,147 | 3,048 | 3,450 |
Total depreciation and amortization | $ 74,993 | $ 76,948 | $ 92,655 |
INAP JAPAN JOINT VENTURE - Narr
INAP JAPAN JOINT VENTURE - Narrative (Details) - USD ($) $ in Millions | Aug. 15, 2017 | Aug. 14, 2017 |
Internap Japan | ||
Schedule of Equity Method Investments [Line Items] | ||
Gain recognized | $ 1.1 | |
Fair value inputs, discount rate | 8.50% | |
Internap Japan Investment | ||
Schedule of Equity Method Investments [Line Items] | ||
Investment in joint venture | $ 4.1 |
INAP JAPAN JOINT VENTURE - Fair
INAP JAPAN JOINT VENTURE - Fair Value of Net Assets (Details) - Internap Japan $ in Thousands | Aug. 15, 2017USD ($) |
Schedule of Equity Method Investments [Line Items] | |
Cash | $ 3,838 |
Property and equipment | 725 |
Customer relationships | 1,231 |
License | 634 |
Other assets | 2,322 |
Total assets acquired | 8,750 |
Other liabilities | 446 |
Noncontrolling interest | 3,999 |
Net assets acquired | $ 4,305 |
Weighted average useful life | 21 years |
INAP JAPAN JOINT VENTURE - Unau
INAP JAPAN JOINT VENTURE - Unaudited Pro-Forma Financial Information (Details) - Internap Japan - USD ($) | 12 Months Ended | |
Dec. 31, 2017 | Dec. 31, 2016 | |
Schedule of Equity Method Investments [Line Items] | ||
Revenue | $ 286,570,000 | $ 305,733,000 |
Net loss attributable to INAP stockholders | $ (45,240,000) | $ (124,722,000) |
Basic and diluted net loss per share (in dollars per share) | $ (2.38) | $ (9.53) |
GOODWILL AND OTHER INTANGIBLE54
GOODWILL AND OTHER INTANGIBLE ASSETS - Narrative (Details) | 3 Months Ended | 12 Months Ended | |||||
Dec. 31, 2016USD ($) | Sep. 30, 2016USD ($) | Jun. 30, 2016USD ($) | Mar. 31, 2016USD ($) | Dec. 31, 2017USD ($)Segment | Dec. 31, 2016USD ($) | Dec. 31, 2015USD ($) | |
Goodwill [Line Items] | |||||||
Number of reportable segments (segment) | Segment | 6 | ||||||
Goodwill impairment | $ 1,936,000 | $ 78,169,000 | $ 0 | $ 0 | $ 0 | $ 80,105,000 | $ 0 |
Amortization expense for intangible assets | $ 5,100,000 | $ 5,300,000 | $ 20,300,000 | ||||
Minimum | |||||||
Goodwill [Line Items] | |||||||
Estimated useful live of other intangible assets | 5 years | ||||||
Maximum | |||||||
Goodwill [Line Items] | |||||||
Estimated useful live of other intangible assets | 15 years |
GOODWILL AND OTHER INTANGIBLE55
GOODWILL AND OTHER INTANGIBLE ASSETS - Summary of Re-Allocations of Goodwill (Details) - USD ($) | 3 Months Ended | 12 Months Ended | |||||
Dec. 31, 2016 | Sep. 30, 2016 | Jun. 30, 2016 | Mar. 31, 2016 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Goodwill [Roll Forward] | |||||||
Goodwill, beginning of period | $ 130,313,000 | $ 50,209,000 | $ 130,313,000 | ||||
Re-allocations | 0 | 0 | |||||
Impairment | $ (1,936,000) | $ (78,169,000) | $ 0 | 0 | 0 | (80,105,000) | $ 0 |
Goodwill, end of period | 50,209,000 | 50,209,000 | 50,209,000 | 130,313,000 | |||
Data center services | |||||||
Goodwill [Roll Forward] | |||||||
Goodwill, beginning of period | 90,849,000 | 0 | 90,849,000 | ||||
Re-allocations | 0 | (90,849,000) | |||||
Impairment | 0 | ||||||
Goodwill, end of period | 0 | 0 | 0 | 90,849,000 | |||
IP services | |||||||
Goodwill [Roll Forward] | |||||||
Goodwill, beginning of period | 39,464,000 | 0 | 39,464,000 | ||||
Re-allocations | 0 | (39,464,000) | |||||
Impairment | 0 | ||||||
Goodwill, end of period | 0 | 0 | 0 | 39,464,000 | |||
Data center and network services | |||||||
Goodwill [Roll Forward] | |||||||
Goodwill, beginning of period | 0 | 0 | |||||
Re-allocations | 0 | 80,105,000 | |||||
Impairment | (80,105,000) | ||||||
Goodwill, end of period | 0 | 0 | |||||
Cloud and hosting services | |||||||
Goodwill [Roll Forward] | |||||||
Goodwill, beginning of period | $ 0 | 50,209,000 | 0 | ||||
Re-allocations | (50,209,000) | 50,209,000 | |||||
Impairment | 0 | ||||||
Goodwill, end of period | 50,209,000 | 0 | 50,209,000 | $ 0 | |||
INAP COLO | |||||||
Goodwill [Roll Forward] | |||||||
Goodwill, beginning of period | 0 | ||||||
Re-allocations | 6,003,000 | ||||||
Goodwill, end of period | 0 | 6,003,000 | 0 | ||||
INAP CLOUD | |||||||
Goodwill [Roll Forward] | |||||||
Goodwill, beginning of period | 0 | ||||||
Re-allocations | 44,206,000 | ||||||
Goodwill, end of period | $ 0 | $ 44,206,000 | $ 0 |
GOODWILL AND OTHER INTANGIBLE56
GOODWILL AND OTHER INTANGIBLE ASSETS - Summary of Components of Amortizing Intangible Assets, Including Capitalized Software (Details) - USD ($) $ in Thousands | Dec. 31, 2017 | Dec. 31, 2016 |
Finite-Lived Intangible Assets [Line Items] | ||
Gross Carrying Amount | $ 123,941 | $ 121,893 |
Accumulated Amortization | (98,275) | (93,915) |
Acquired and developed technology | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross Carrying Amount | 52,825 | 52,195 |
Accumulated Amortization | (48,063) | (45,995) |
Customer relationships and trade names | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross Carrying Amount | 71,116 | 69,698 |
Accumulated Amortization | $ (50,212) | $ (47,920) |
GOODWILL AND OTHER INTANGIBLE57
GOODWILL AND OTHER INTANGIBLE ASSETS - Summary of Remaining Amortization Expense (Details) $ in Thousands | Dec. 31, 2017USD ($) |
Goodwill and Intangible Assets Disclosure [Abstract] | |
2,018 | $ 4,649 |
2,019 | 4,146 |
2,020 | 3,236 |
2,021 | 2,753 |
2,022 | 1,794 |
Thereafter | 9,088 |
Finite-lived intangible assets, Total | $ 25,666 |
ACCRUED LIABILITIES - Summary o
ACCRUED LIABILITIES - Summary of Accrued Liabilities (Details) - USD ($) $ in Thousands | Dec. 31, 2017 | Dec. 31, 2016 |
Payables and Accruals [Abstract] | ||
Compensation and benefits payable | $ 6,673 | $ 5,396 |
Property, sales, and other taxes | 2,636 | 1,627 |
Customer credit balances | 1,616 | 1,256 |
Accrued interest | 1,690 | 0 |
Other | 3,293 | 2,324 |
Accrued liabilities, current, total | $ 15,908 | $ 10,603 |
EXIT ACTIVITIES AND RESTRUCTU59
EXIT ACTIVITIES AND RESTRUCTURING - Schedule of Exit Activities and Restructuring Charges (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Restructuring Reserve [Roll Forward] | |||
Balance | $ 4,703 | $ 3,878 | $ 4,510 |
Initial Charges | 3,359 | 3,568 | 1,538 |
Plan Adjustments | 2,932 | 840 | 898 |
Cash Payments | (6,178) | (3,583) | (3,068) |
Balance | 4,816 | 4,703 | 3,878 |
Activity of 2017 Restructuring | Real estate obligations | |||
Restructuring Reserve [Roll Forward] | |||
Balance | 0 | ||
Initial Charges | 3,359 | ||
Plan Adjustments | 1,741 | ||
Cash Payments | (1,720) | ||
Balance | 3,380 | 0 | |
Activity of 2016 Restructuring | Real estate obligations | |||
Restructuring Reserve [Roll Forward] | |||
Balance | 933 | 0 | |
Initial Charges | 0 | 1,082 | |
Plan Adjustments | 82 | 14 | |
Cash Payments | (768) | (163) | |
Balance | 247 | 933 | 0 |
Activity of 2016 Restructuring | Severance | |||
Restructuring Reserve [Roll Forward] | |||
Balance | 1,911 | 0 | |
Initial Charges | 0 | 2,444 | |
Plan Adjustments | 957 | 0 | |
Cash Payments | (2,822) | (533) | |
Balance | 46 | 1,911 | 0 |
Activity of 2016 Restructuring | Service contracts | |||
Restructuring Reserve [Roll Forward] | |||
Balance | 0 | 0 | |
Initial Charges | 42 | ||
Plan Adjustments | (21) | ||
Cash Payments | (21) | ||
Balance | 0 | 0 | |
Activity of 2015 Restructuring | Real estate obligations | |||
Restructuring Reserve [Roll Forward] | |||
Balance | 111 | 164 | 0 |
Initial Charges | 0 | 0 | 270 |
Plan Adjustments | 0 | (13) | 0 |
Cash Payments | (47) | (40) | (106) |
Balance | 64 | 111 | 164 |
Activity of 2015 Restructuring | Service contracts | |||
Restructuring Reserve [Roll Forward] | |||
Balance | 565 | 843 | 0 |
Initial Charges | 0 | 0 | 1,268 |
Plan Adjustments | 21 | 9 | 0 |
Cash Payments | (198) | (287) | (425) |
Balance | 388 | 565 | 843 |
Activity of 2014 Restructuring | Real estate obligations | |||
Restructuring Reserve [Roll Forward] | |||
Balance | 1,183 | 1,701 | 2,010 |
Initial Charges | 0 | 0 | 0 |
Plan Adjustments | 131 | 104 | 244 |
Cash Payments | (623) | (622) | (553) |
Balance | 691 | 1,183 | 1,701 |
Activity of 2007 Restructuring | Real estate obligations | |||
Restructuring Reserve [Roll Forward] | |||
Balance | $ 0 | 1,170 | 2,325 |
Initial Charges | 0 | 0 | |
Plan Adjustments | 747 | 660 | |
Cash Payments | (1,917) | (1,815) | |
Balance | 0 | 1,170 | |
Other | |||
Restructuring Reserve [Roll Forward] | |||
Balance | $ 0 | 175 | |
Initial Charges | 0 | ||
Plan Adjustments | (6) | ||
Cash Payments | (169) | ||
Balance | $ 0 |
DERIVATIVES - Narrative (Detail
DERIVATIVES - Narrative (Details) - Designated as Hedging Instrument - Cash Flow Hedging $ in Millions | Dec. 31, 2017USD ($) | Dec. 31, 2017CAD ($) | Dec. 31, 2016USD ($) |
Interest rate swap | |||
Derivative [Line Items] | |||
Notional amount of cash flow hedge instruments | $ 150,000,000 | ||
Fixed-rate payments | 1.50% | 1.50% | |
Foreign currency contracts | June 2016 | |||
Derivative [Line Items] | |||
Notional amount of cash flow hedge instruments | $ 6 | ||
Foreign currency contracts exchange rate | 1.268 | 1.268 | |
Foreign currency contracts | June 2017 | |||
Derivative [Line Items] | |||
Notional amount of cash flow hedge instruments | $ 12 | ||
Foreign currency contracts exchange rate | 1.2855 | 1.2855 | |
Foreign currency contracts | Other Current Liabilities | |||
Derivative [Line Items] | |||
Fair value of derivatives | $ 0 | $ 200,000 |
DERIVATIVES - Schedule of Activ
DERIVATIVES - Schedule of Activity of Foreign Currency Contracts (Details) - Foreign currency contracts - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2017 | Dec. 31, 2016 | |
Derivative [Line Items] | ||
Unrealized gain, net of less than $0.1 million and $0.2 million income tax, included in “Accumulated items of other comprehensive loss” in the accompanying consolidated balance sheets | $ 145 | $ 600 |
Realized loss on effective portion, included as compensation expense primarily in “Direct costs of customer support” and “Sales, general and administrative” in the accompanying consolidated statements of operations and comprehensive loss | (171) | 328 |
Cash Flow Hedging | Designated as Hedging Instrument | ||
Derivative [Line Items] | ||
Tax on unrealized gain arising from foreign currency contracts | $ 100 | $ 200 |
DERIVATIVES - Schedule of Act62
DERIVATIVES - Schedule of Activity of Interest Rate Swaps (Details) - Interest rate swap $ in Thousands | 12 Months Ended |
Dec. 31, 2016USD ($) | |
Derivative [Line Items] | |
Gain recorded as the effective portion of the change in fair value | $ 728 |
Interest payments reclassified as an increase to interest expense | $ 790 |
COMMITMENTS, CONTINGENCIES AN63
COMMITMENTS, CONTINGENCIES AND LITIGATION - Narrative (Details) - USD ($) | Apr. 06, 2017 | Feb. 28, 2017 | Mar. 31, 2017 | Jun. 30, 2016 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | Jan. 26, 2017 | Dec. 31, 2013 |
Commitment Contingencies and Litigation [Line Items] | |||||||||
Credit limit | $ 350,000,000 | ||||||||
Loss on extinguishment and modification of debt | $ 6,785,000 | $ 0 | $ 0 | ||||||
Asset retirement obligation | 1,900,000 | 2,800,000 | |||||||
Rent expense | $ 15,600,000 | 21,800,000 | $ 21,600,000 | ||||||
Revolving credit facility | |||||||||
Commitment Contingencies and Litigation [Line Items] | |||||||||
Credit limit | 50,000,000 | ||||||||
Increased applicable margin for credit agreement percentage | 1.00% | ||||||||
Fee amount | $ 1,700,000 | ||||||||
Revolving credit facility | Base rate | |||||||||
Commitment Contingencies and Litigation [Line Items] | |||||||||
Interest rate during period for the credit agreement | 4.50% | ||||||||
Revolving credit facility | LIBOR | |||||||||
Commitment Contingencies and Litigation [Line Items] | |||||||||
Interest rate during period for the credit agreement | 5.50% | ||||||||
Term Loan | |||||||||
Commitment Contingencies and Litigation [Line Items] | |||||||||
Credit limit | $ 300,000,000 | ||||||||
Debt balance | $ 298,500,000 | ||||||||
Repayment of loan | 750,000 | ||||||||
Term loan, unamortized discount and prepaid costs | $ 9,800,000 | $ 6,800,000 | |||||||
Term Loan | Base rate | |||||||||
Commitment Contingencies and Litigation [Line Items] | |||||||||
Interest rate during period for the credit agreement | 5.00% | ||||||||
Term Loan | LIBOR | |||||||||
Commitment Contingencies and Litigation [Line Items] | |||||||||
Interest rate during period for the credit agreement | 6.00% | ||||||||
Other Current Liabilities | |||||||||
Commitment Contingencies and Litigation [Line Items] | |||||||||
Asset retirement obligation | $ 200,000 | ||||||||
Other Noncurrent Liabilities | |||||||||
Commitment Contingencies and Litigation [Line Items] | |||||||||
Asset retirement obligation | $ 1,700,000 | ||||||||
Minimum | |||||||||
Commitment Contingencies and Litigation [Line Items] | |||||||||
Initial lease terms | 3 years | ||||||||
Maximum | |||||||||
Commitment Contingencies and Litigation [Line Items] | |||||||||
Initial lease terms | 25 years | ||||||||
Credit Agreement 2017 | Revolving credit facility | |||||||||
Commitment Contingencies and Litigation [Line Items] | |||||||||
Credit limit | $ 25,000,000 | ||||||||
Debt issuance costs | 400,000 | ||||||||
Debt balance | $ 5,000,000 | ||||||||
Interest rate during period for the term loan and revolver | 10.30% | ||||||||
Credit Agreement 2017 | Term Loan | |||||||||
Commitment Contingencies and Litigation [Line Items] | |||||||||
Credit limit | 300,000,000 | ||||||||
Debt issuance costs | 3,300,000 | ||||||||
Debt balance | $ 298,500,000 | ||||||||
Interest rate during period for the term loan and revolver | 8.40% | ||||||||
Credit Agreement | |||||||||
Commitment Contingencies and Litigation [Line Items] | |||||||||
Loss on extinguishment and modification of debt | 4,800,000 | ||||||||
Minimum gross cash proceeds from equity offering (not less than) | $ 40,000,000 | ||||||||
Minimum net cash proceeds from equity offering (not less than) | 37,000,000 | ||||||||
Credit Agreement | LIBOR | |||||||||
Commitment Contingencies and Litigation [Line Items] | |||||||||
Basis spread on variable rate | 1.00% | ||||||||
Credit Agreement | Prime Rate | |||||||||
Commitment Contingencies and Litigation [Line Items] | |||||||||
Basis spread on variable rate | 2.00% | ||||||||
Credit Agreement | Federal Funds Effective Rate | |||||||||
Commitment Contingencies and Litigation [Line Items] | |||||||||
Basis spread on variable rate | 0.50% | ||||||||
Credit Agreement | Revolving credit facility | |||||||||
Commitment Contingencies and Litigation [Line Items] | |||||||||
Debt issuance costs paid | $ 400,000 | ||||||||
Fee amount | $ 1,600,000 | $ 900,000 | |||||||
Prepaid debt issuance cost | 100,000 | ||||||||
Credit Agreement | Term Loan | |||||||||
Commitment Contingencies and Litigation [Line Items] | |||||||||
Fee amount | 2,600,000 | ||||||||
Term loan, unamortized discount and prepaid costs | 2,200,000 | ||||||||
Third party fees | 300,000 | ||||||||
Interest expense, debt | $ 300,000 | ||||||||
Line of Credit | Credit Agreement 2017 | |||||||||
Commitment Contingencies and Litigation [Line Items] | |||||||||
Debt issuance costs paid | 5,700,000 | ||||||||
Line of Credit | Credit Agreement 2017 | Term Loan | |||||||||
Commitment Contingencies and Litigation [Line Items] | |||||||||
Loss on extinguishment and modification of debt | $ 1,900,000 |
COMMITMENTS, CONTINGENCIES AN64
COMMITMENTS, CONTINGENCIES AND LITIGATION - Summary of Credit Agreement (Details) - USD ($) $ in Thousands | Dec. 31, 2017 | Dec. 31, 2016 |
Line of Credit Facility [Line Items] | ||
Borrowing capacity | $ 14,639 | $ 10,291 |
Term Loan | ||
Line of Credit Facility [Line Items] | ||
Outstanding principal balance | 288,712 | 284,178 |
Term loan, unamortized discount and prepaid costs | $ 9,800 | $ 6,800 |
Interest rate | 8.40% | 7.00% |
Maturities of the term loan are as follows: | ||
2,018 | $ 3,000 | |
2,019 | 3,000 | |
2,020 | 3,000 | |
2,021 | 3,000 | |
2,022 | 286,500 | |
Total term loan | 298,500 | |
Revolving Credit Facility | ||
Line of Credit Facility [Line Items] | ||
Outstanding principal balance | 5,000 | $ 35,500 |
Letters of credit issued with proceeds from revolving credit facility | $ 5,361 | $ 4,209 |
Interest rate | 10.30% | 6.10% |
COMMITMENTS, CONTINGENCIES AN65
COMMITMENTS, CONTINGENCIES AND LITIGATION - Financial Covenants (Details) | 12 Months Ended |
Dec. 31, 2017USD ($) | |
Other Commitments [Line Items] | |
Maximum total leverage ratio (the ratio of Consolidated Indebtedness to Consolidated EBITDA as defined in the credit agreement) should be equal to or less than: | 5.9 |
Minimum consolidated interest coverage ratio (the ratio of Consolidated EBITDA to Consolidated Interest Expense as defined in the credit agreement) should be equal to or greater than: | 2 |
Limitation on capital expenditure | $ 36,000,000 |
March 1, 2018 Through September 30, 2019 | |
Other Commitments [Line Items] | |
Maximum total leverage ratio (the ratio of Consolidated Indebtedness to Consolidated EBITDA as defined in the credit agreement) should be equal to or less than: | 5,900 |
September 30, 2019 Through June 30, 2020 | |
Other Commitments [Line Items] | |
Maximum total leverage ratio (the ratio of Consolidated Indebtedness to Consolidated EBITDA as defined in the credit agreement) should be equal to or less than: | 5,500 |
June 30, 2020 Through December 31, 2020 | |
Other Commitments [Line Items] | |
Maximum total leverage ratio (the ratio of Consolidated Indebtedness to Consolidated EBITDA as defined in the credit agreement) should be equal to or less than: | 5,250 |
December 31, 2020 Through September 30, 2021 | |
Other Commitments [Line Items] | |
Maximum total leverage ratio (the ratio of Consolidated Indebtedness to Consolidated EBITDA as defined in the credit agreement) should be equal to or less than: | 4,750 |
September 30, 2021 And Thereafter | |
Other Commitments [Line Items] | |
Maximum total leverage ratio (the ratio of Consolidated Indebtedness to Consolidated EBITDA as defined in the credit agreement) should be equal to or less than: | 4,500 |
March 31, 2018 Through December 31, 2020 | |
Other Commitments [Line Items] | |
Minimum consolidated interest coverage ratio (the ratio of Consolidated EBITDA to Consolidated Interest Expense as defined in the credit agreement) should be equal to or greater than: | 2,000 |
December 31, 2020 And Thereafter | |
Other Commitments [Line Items] | |
Minimum consolidated interest coverage ratio (the ratio of Consolidated EBITDA to Consolidated Interest Expense as defined in the credit agreement) should be equal to or greater than: | 2,250 |
COMMITMENTS, CONTINGENCIES AN66
COMMITMENTS, CONTINGENCIES AND LITIGATION - Capital Leases (Details) - USD ($) $ in Thousands | Dec. 31, 2017 | Dec. 31, 2016 |
Commitments and Contingencies Disclosure [Abstract] | ||
2,018 | $ 32,511 | |
2,019 | 31,021 | |
2,020 | 26,754 | |
2,021 | 26,350 | |
2,022 | 24,346 | |
Thereafter | 434,947 | |
Remaining capital lease payments | 575,929 | |
Less: amounts representing imputed interest | (340,469) | |
Present value of minimum lease payments | 235,460 | |
Less: current portion | (11,711) | |
Capital lease obligations | $ 223,749 | $ 43,876 |
COMMITMENTS, CONTINGENCIES AN67
COMMITMENTS, CONTINGENCIES AND LITIGATION - Operating Lease (Details) $ in Thousands | Dec. 31, 2017USD ($) |
Commitments and Contingencies Disclosure [Abstract] | |
2,018 | $ 11,700 |
2,019 | 5,077 |
2,020 | 2,538 |
2,021 | 2,467 |
2,022 | 2,523 |
Thereafter | 3,492 |
Operating leases, future minimum payments due, Total | $ 27,797 |
COMMITMENTS, CONTINGENCIES AN68
COMMITMENTS, CONTINGENCIES AND LITIGATION - Other Commitments (Details) - IP, Telecommunications and Data Center Services $ in Thousands | Dec. 31, 2017USD ($) |
Schedule Of Commitments And Contingencies [Line Items] | |
2,018 | $ 2,357 |
2,019 | 1,221 |
2,020 | 131 |
2,021 | 0 |
2,022 | 0 |
Thereafter | 0 |
Total contractual commitments future minimum payments due | $ 3,709 |
OPERATING SEGMENT AND GEOGRAP69
OPERATING SEGMENT AND GEOGRAPHIC INFORMATION - Narrative (Details) | 3 Months Ended | 12 Months Ended | |||||||
Dec. 31, 2016USD ($) | Sep. 30, 2016USD ($) | Jun. 30, 2016USD ($) | Mar. 31, 2016USD ($) | Dec. 31, 2017USD ($) | Dec. 31, 2017Segment | Dec. 31, 2017segment | Dec. 31, 2016USD ($) | Dec. 31, 2015USD ($) | |
Segment Reporting [Abstract] | |||||||||
Goodwill impairment | $ 1,936,000 | $ 78,169,000 | $ 0 | $ 0 | $ 0 | $ 80,105,000 | $ 0 | ||
Number of operating segments | 2 | 2 |
OPERATING SEGMENT AND GEOGRAP70
OPERATING SEGMENT AND GEOGRAPHIC INFORMATION - Summary of Operating Results for Business Segments (Details) - USD ($) | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2017 | Sep. 30, 2017 | Jun. 30, 2017 | Mar. 31, 2017 | Dec. 31, 2016 | Sep. 30, 2016 | Jun. 30, 2016 | Mar. 31, 2016 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Revenues: | |||||||||||
Revenues | $ 70,035,000 | $ 68,907,000 | $ 69,642,000 | $ 72,133,000 | $ 74,117,000 | $ 73,940,000 | $ 74,315,000 | $ 75,924,000 | $ 280,718,000 | $ 298,297,000 | $ 318,293,000 |
Costs of sales and services, exclusive of depreciation and amortization: | |||||||||||
Costs of sales and services, exclusive of depreciation and amortization | 25,798,000 | 24,945,000 | 26,429,000 | 29,045,000 | 30,246,000 | 31,562,000 | 31,370,000 | 31,077,000 | 106,217,000 | 124,255,000 | 131,440,000 |
Segment profit: | |||||||||||
Segment profit | 174,501,000 | 174,042,000 | 186,853,000 | ||||||||
Goodwill impairment | 1,936,000 | 78,169,000 | 0 | 0 | 0 | 80,105,000 | 0 | ||||
Exit activities, restructuring and impairments | $ (148,000) | $ 745,000 | $ 4,628,000 | $ 1,023,000 | $ 5,213,000 | $ 1,670,000 | $ 152,000 | $ 201,000 | 6,249,000 | 7,236,000 | 2,278,000 |
Other operating expenses, including direct costs of customer support, depreciation and amortization | 163,478,000 | 179,770,000 | 210,470,000 | ||||||||
Income (loss) from operations | 4,774,000 | (93,070,000) | (25,895,000) | ||||||||
Non-operating expenses | 51,001,000 | 31,312,000 | 26,408,000 | ||||||||
Loss from continuing operations before income taxes, non-controlling interest and equity in (earnings) of equity-method investment | (46,227,000) | (124,382,000) | (52,303,000) | ||||||||
INAP COLO | |||||||||||
Revenues: | |||||||||||
Revenues | 209,580,000 | 221,678,000 | 234,859,000 | ||||||||
Costs of sales and services, exclusive of depreciation and amortization: | |||||||||||
Costs of sales and services, exclusive of depreciation and amortization | 89,240,000 | 105,620,000 | 111,765,000 | ||||||||
Segment profit: | |||||||||||
Segment profit | 120,340,000 | 116,058,000 | 123,094,000 | ||||||||
INAP CLOUD | |||||||||||
Revenues: | |||||||||||
Revenues | 71,138,000 | 76,619,000 | 83,434,000 | ||||||||
Costs of sales and services, exclusive of depreciation and amortization: | |||||||||||
Costs of sales and services, exclusive of depreciation and amortization | 16,977,000 | 18,635,000 | 19,675,000 | ||||||||
Segment profit: | |||||||||||
Segment profit | $ 54,161,000 | $ 57,984,000 | $ 63,759,000 |
OPERATING SEGMENT AND GEOGRAP71
OPERATING SEGMENT AND GEOGRAPHIC INFORMATION - Summary of Total Assets by Segment (Details) - USD ($) $ in Thousands | Dec. 31, 2017 | Dec. 31, 2016 |
Segment Reporting, Asset Reconciling Item [Line Items] | ||
Total assets | $ 586,525 | $ 430,615 |
Operating Segments | INAP COLO | ||
Segment Reporting, Asset Reconciling Item [Line Items] | ||
Total assets | 398,231 | 224,540 |
Operating Segments | INAP CLOUD | ||
Segment Reporting, Asset Reconciling Item [Line Items] | ||
Total assets | 173,691 | 192,684 |
Corporate, Non-Segment | ||
Segment Reporting, Asset Reconciling Item [Line Items] | ||
Total assets | $ 14,603 | $ 13,391 |
OPERATING SEGMENT AND GEOGRAP72
OPERATING SEGMENT AND GEOGRAPHIC INFORMATION - Summary of Revenues by Country (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2017 | Sep. 30, 2017 | Jun. 30, 2017 | Mar. 31, 2017 | Dec. 31, 2016 | Sep. 30, 2016 | Jun. 30, 2016 | Mar. 31, 2016 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Segment Reporting Information [Line Items] | |||||||||||
Revenues | $ 70,035 | $ 68,907 | $ 69,642 | $ 72,133 | $ 74,117 | $ 73,940 | $ 74,315 | $ 75,924 | $ 280,718 | $ 298,297 | $ 318,293 |
United States | |||||||||||
Segment Reporting Information [Line Items] | |||||||||||
Revenues | 220,018 | 231,943 | 245,853 | ||||||||
Canada | |||||||||||
Segment Reporting Information [Line Items] | |||||||||||
Revenues | 38,750 | 44,206 | 47,021 | ||||||||
Other countries | |||||||||||
Segment Reporting Information [Line Items] | |||||||||||
Revenues | $ 21,950 | $ 22,148 | $ 25,419 |
OPERATING SEGMENT AND GEOGRAP73
OPERATING SEGMENT AND GEOGRAPHIC INFORMATION - Summary of Net Property and Equipment by Country (Details) - USD ($) $ in Thousands | Dec. 31, 2017 | Dec. 31, 2016 |
Segment Reporting Information [Line Items] | ||
Property and equipment, net | $ 458,565 | $ 302,680 |
United States | ||
Segment Reporting Information [Line Items] | ||
Property and equipment, net | 417,936 | 260,788 |
Canada | ||
Segment Reporting Information [Line Items] | ||
Property and equipment, net | 34,296 | 36,495 |
Other countries | ||
Segment Reporting Information [Line Items] | ||
Property and equipment, net | $ 6,333 | $ 5,397 |
STOCK-BASED COMPENSATION PLAN74
STOCK-BASED COMPENSATION PLANS - Narrative (Details) - USD ($) $ / shares in Units, $ in Millions | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Capitalized stock-based compensation | $ 0.2 | $ 0.3 | |
Stock granted (in shares) | 0 | ||
Stock options | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Expected terms | 4 years 8 months 12 days | 4 years 6 months | |
Volatility rate | 45.00% | 40.00% | |
Risk free interest rate | 1.20% | 1.40% | |
Dividend yield | 0.00% | 0.00% | |
Weighted average grant date fair value per share (in dollars per share) | $ 3.13 | $ 12.93 | |
Options, exercises in period, intrinsic value | $ 0.4 | $ 0.1 | $ 2.1 |
Vested in period, fair value | 2.6 | 1.5 | 4.6 |
Nonvested total intrinsic value | $ 11.9 | ||
2017 Stock Incentive Plan | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Number of shares authorized (in shares) | 800,000 | ||
Incentive Stock Plan | Stock options | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Maximum grants authorized per each participant (in shares) | 350,000 | ||
Minimum | Incentive Stock Plan | Time Based Stock Options | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Award vesting period | 1 year | ||
Minimum | Incentive Stock Plan | Stock options | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Award vesting period | 1 year | ||
Director | Restricted Stock | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Maximum value of shares per employee | $ 1.1 | $ 0.4 | $ 0.6 |
STOCK-BASED COMPENSATION PLAN75
STOCK-BASED COMPENSATION PLANS - Summary of Amount of Stock-Based Compensation, Net of Estimated Forfeitures (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | |||
Stock-based compensation | $ 3,040 | $ 4,997 | $ 8,781 |
Costs of customer support | |||
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | |||
Stock-based compensation | 167 | 1,159 | 1,901 |
Sales, general and administrative | |||
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | |||
Stock-based compensation | $ 2,873 | $ 3,838 | $ 6,880 |
STOCK-BASED COMPENSATION PLAN76
STOCK-BASED COMPENSATION PLANS - Summary of Stock Option Activity (Details) | 12 Months Ended |
Dec. 31, 2017$ / sharesshares | |
Shares | |
Granted (in shares) | 0 |
Stock options | |
Shares | |
Balance, December 31, 2016 (in shares) | 795,000 |
Granted (in shares) | 0 |
Exercised (in shares) | (49,000) |
Forfeitures and post-vesting cancellations (in shares) | (430,000) |
Balance, December 31, 2017 (in shares) | 316,000 |
Exercisable, December 31, 2017 (in shares) | 277,000 |
Weighted Average Exercise Price | |
Balance, December 31, 2016 (in dollars per share) | $ / shares | $ 27.80 |
Granted (in dollars per share) | $ / shares | 0 |
Exercised (in dollars per share) | $ / shares | 8.80 |
Forfeitures and post-vesting cancellations (in dollars per share) | $ / shares | 31.72 |
Balance, December 31, 2017 (in dollars per share) | $ / shares | 25.40 |
Exercisable, December 31, 2017 (in dollars per share) | $ / shares | $ 26.25 |
STOCK-BASED COMPENSATION PLAN77
STOCK-BASED COMPENSATION PLANS - Summary of Fully Vested and Exercisable Stock Options and Stock Options Expected to Vest (Details) - Stock options $ / shares in Units, shares in Thousands, $ in Thousands | 12 Months Ended |
Dec. 31, 2017USD ($)$ / sharesshares | |
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | |
Fully vested and exercisable, total shares (in shares) | shares | 277 |
Fully vested and exercisable, weighted-average exercise price (in dollars per share) | $ / shares | $ 26.25 |
Fully vested and exercisable, aggregate intrinsic value | $ | $ 0 |
Fully vested and exercisable, weighted-average remaining contractual term (in years) | 3 years 10 months 24 days |
Expected to vest, total shares (in shares) | shares | 316 |
Expected to vest, weighted-average exercise price (in dollars per share) | $ / shares | $ 25.40 |
Expected to vest, aggregate intrinsic value | $ | $ 0 |
Expected to vest, weighted-average remaining contractual term (in years) | 4 years 4 months 24 days |
STOCK-BASED COMPENSATION PLAN78
STOCK-BASED COMPENSATION PLANS - Summary of Restricted Stock Activity (Details) - Restricted stock shares in Thousands | 12 Months Ended |
Dec. 31, 2017$ / sharesshares | |
Shares | |
Unvested balance, December 31, 2016 (in shares) | shares | 555 |
Granted (in shares) | shares | 483 |
Vested (in shares) | shares | (172) |
Forfeited (in shares) | shares | (106) |
Unvested balance, December 31, 2017 (in shares) | shares | 760 |
Weighted-Average Grant Date Fair Value | |
Unvested balance, December 31, 2016 (in dollars per share) | $ / shares | $ 4.52 |
Granted (in dollars per share) | $ / shares | 6.20 |
Vested (in dollars per share) | $ / shares | 8.63 |
Forfeited (in dollars per share) | $ / shares | 9 |
Unvested balance, December 31, 2017 (in dollars per share) | $ / shares | $ 4.03 |
STOCK-BASED COMPENSATION PLAN79
STOCK-BASED COMPENSATION PLANS - Summary of Total Unrecognized Compensation Costs Related to Unvested Stock-Based Compensation (Details) $ in Thousands | 12 Months Ended |
Dec. 31, 2017USD ($) | |
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | |
Unrecognized compensation | $ 3,213 |
Weighted-average remaining recognition period (in years) | 1 year 11 months 1 day |
Stock options | |
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | |
Unrecognized compensation | $ 241 |
Weighted-average remaining recognition period (in years) | 2 years 6 months 3 days |
Restricted stock | |
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | |
Unrecognized compensation | $ 2,972 |
Weighted-average remaining recognition period (in years) | 1 year 10 months 13 days |
EMPLOYEE RETIREMENT PLAN - Narr
EMPLOYEE RETIREMENT PLAN - Narrative (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Retirement Benefits [Abstract] | |||
Employer contributions | $ 0.4 | $ 0.8 | $ 0.8 |
INCOME TAXES - Loss from Contin
INCOME TAXES - Loss from Continuing Operations Before Income Taxes (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Income Tax Disclosure [Abstract] | |||
United States | $ (46,648) | $ (120,553) | $ (31,572) |
Foreign | 421 | (3,829) | (20,731) |
Loss from continuing operations before income taxes, non-controlling interest and equity in (earnings) of equity-method investment | $ (46,227) | $ (124,382) | $ (52,303) |
INCOME TAXES - Summary of Curre
INCOME TAXES - Summary of Current and Deferred Income Tax Provision (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Current: | |||
Federal | $ (730) | $ (15) | $ 0 |
State | 123 | 155 | 152 |
Foreign | 507 | 61 | 158 |
Total current income tax provision | (100) | 201 | 310 |
Deferred: | |||
Federal | 0 | 0 | 0 |
State | 0 | 0 | 0 |
Foreign | 353 | 329 | (3,970) |
Total deferred income tax provision | 353 | 329 | (3,970) |
Provision (benefit) for income taxes | $ 253 | $ 530 | $ (3,660) |
INCOME TAXES - Summary of Effec
INCOME TAXES - Summary of Effective Income Tax Rate Reconciliation (Details) | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Income Tax Disclosure [Abstract] | |||
Federal income tax at statutory rates | (34.00%) | (34.00%) | (34.00%) |
Foreign income tax | 0.50% | 0.70% | 4.00% |
State income tax | (5.00%) | (5.00%) | (4.00%) |
Other permanent differences | 0.40% | 0.20% | 0.00% |
Statutory tax rate change - Deferred - Tax Reform Act | (128.40%) | (3.20%) | 0.00% |
Statutory tax rate change - Valuation Allowance - Tax Reform Act | 128.40% | 0.00% | 0.00% |
Compensation | 0.00% | 3.00% | 3.00% |
Goodwill impairment | 0.00% | 25.20% | 0.00% |
Refundable AMT credit | (1.50%) | 0.00% | |
Change in valuation allowance | 40.10% | 13.50% | 24.00% |
Effective tax rate | 0.50% | 0.40% | (7.00%) |
INCOME TAXES - Summary of Defer
INCOME TAXES - Summary of Deferred Tax Assets and Liabilities (Details) - USD ($) $ in Thousands | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 |
Long-term deferred income tax (liabilities) assets: | ||||
Property and equipment | $ 43,554 | $ 57,161 | ||
Goodwill | 1,392 | 2,525 | ||
Intangible assets | (22,021) | (22,958) | ||
Deferred revenue, less current portion | 1,834 | 2,809 | ||
Restructuring liability, less current portion | 1,282 | 1,839 | ||
Refinance | (374) | (3,054) | ||
Deferred rent | 639 | 2,737 | ||
Stock-based compensation | 911 | 3,079 | ||
Provision for doubtful accounts | 1,772 | 1,449 | ||
U.S. net operating loss carryforwards | 89,117 | 102,408 | ||
Foreign net operating loss carryforwards, less current portion | 8,053 | 9,324 | ||
Tax credit carryforwards | 2,812 | 3,616 | ||
Other | 2,090 | 2,417 | ||
Long-term deferred income tax assets | 131,061 | 163,352 | ||
Less: valuation allowance | (132,712) | (164,865) | $ (148,310) | $ (136,017) |
Net deferred tax liabilities | $ (1,651) | $ (1,513) |
INCOME TAXES - Narrative (Detai
INCOME TAXES - Narrative (Details) - USD ($) | 12 Months Ended | ||||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Income Tax [Line Items] | |||||
Unrecognized tax positions | $ 162,000 | $ 187,000 | $ 0 | $ 0 | $ 400,000 |
Minimum tax and research and development tax credit carryforwards | 500,000 | ||||
Tax reform, decrease to valuation allowance | 700,000 | ||||
Deferred tax asset, Valuation allowance | 132,712,000 | 164,865,000 | 148,310,000 | $ 136,017,000 | |
Interest and penalties accrued (less than) | 100,000 | $ 100,000 | $ 0 | ||
U.S. Tax Authority | |||||
Income Tax [Line Items] | |||||
Net operating loss carryforwards | 334,600,000 | ||||
Operating loss carryforwards deduction of stock-based compensation | 27,700,000 | ||||
Deferred tax asset, Valuation allowance | 127,200,000 | ||||
Foreign Tax Authority | |||||
Income Tax [Line Items] | |||||
Net operating loss carryforwards | 37,800,000 | ||||
Deferred tax asset, Valuation allowance | $ 5,500,000 |
INCOME TAXES - Summary of Chang
INCOME TAXES - Summary of Changes in Deferred Tax Asset Valuation Allowance (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Deferred Tax Assets [Roll Forward] | |||
Balance, January 1, | $ 164,865 | $ 148,310 | $ 136,017 |
Increase in deferred tax assets | 27,183 | 16,555 | 12,293 |
Remeasurement in deferred tax assets | (59,336) | 0 | 0 |
Balance, December 31, | $ 132,712 | $ 164,865 | $ 148,310 |
INCOME TAXES - Summary of Cha87
INCOME TAXES - Summary of Changes in Unrecognized Tax Benefits (Details) - USD ($) | 12 Months Ended | ||||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Reconciliation of Unrecognized Tax Benefits, Excluding Amounts Pertaining to Examined Tax Returns [Roll Forward] | |||||
Unrecognized tax benefits balance, January 1, | $ 187,000 | $ 0 | $ 408,000 | ||
Addition for tax positions taken in a prior year | 162,000 | 187,000 | 0 | $ 0 | $ 400,000 |
Deduction for tax positions taken in a prior year | (187,000) | 0 | (408,000) | ||
Unrecognized tax benefits balance, December 31, | $ 162,000 | $ 187,000 | $ 0 | $ 408,000 |
EQUITY (Details)
EQUITY (Details) | Nov. 16, 2017 | Feb. 22, 2017USD ($)$ / sharesshares | Dec. 31, 2017USD ($) |
Class of Stock [Line Items] | |||
Common stock issuance | $ 40,163,000 | ||
Stock split ratio | 0.25 | ||
Securities purchase agreement | |||
Class of Stock [Line Items] | |||
Aggregate shares issued (in shares) | shares | 5,950,712 | ||
Sale of stock, price per share (in dollars per share) | $ / shares | $ 7.24 | ||
Common stock issuance | $ 43,100,000 | ||
Lock-up period, restricted to sell certain sales of equity securities | 90 days | ||
Issuance of stock, transaction expenses | $ 100,000 | ||
Proceeds used to pay down credit facitlity | $ 39,200,000 |
RELATED PARTY TRANSACTION (Deta
RELATED PARTY TRANSACTION (Details) - USD ($) | Nov. 01, 2016 | Dec. 31, 2017 |
Payment For Leased Office Space | ||
Related Party Transaction [Line Items] | ||
Payment for leased office space | $ 138,371 | |
Broad Valley Capital, LLC | Mr. Aquino | ||
Related Party Transaction [Line Items] | ||
Ownership interest | 50.00% | |
Broad Valley Capital, LLC | Mr. Diegnan | ||
Related Party Transaction [Line Items] | ||
Ownership interest | 50.00% |
SUBSEQUENT EVENT - Narrative (D
SUBSEQUENT EVENT - Narrative (Details) | Feb. 28, 2018USD ($) | Mar. 31, 2018segment | Dec. 31, 2017Segment | Feb. 06, 2018USD ($) | Dec. 31, 2013USD ($) |
Subsequent Event [Line Items] | |||||
Credit limit | $ 350,000,000 | ||||
Number of reportable segments (segment) | Segment | 6 | ||||
Subsequent Event | |||||
Subsequent Event [Line Items] | |||||
Number of reportable segments (segment) | segment | 2 | ||||
SingleHop, LLC | Subsequent Event | |||||
Subsequent Event [Line Items] | |||||
Payment to acquire business | $ 132,000,000 | ||||
Incremental Term Loan | Credit Agreement 2017 | Subsequent Event | |||||
Subsequent Event [Line Items] | |||||
Credit limit | $ 135,000,000 | ||||
Fee amount | $ 800,000 |
UNAUDITED QUARTERLY RESULTS - S
UNAUDITED QUARTERLY RESULTS - Summary of Unaudited Quarterly Data (Details) - USD ($) | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2017 | Sep. 30, 2017 | Jun. 30, 2017 | Mar. 31, 2017 | Dec. 31, 2016 | Sep. 30, 2016 | Jun. 30, 2016 | Mar. 31, 2016 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Quarterly Financial Information Disclosure [Abstract] | |||||||||||
Revenues | $ 70,035,000 | $ 68,907,000 | $ 69,642,000 | $ 72,133,000 | $ 74,117,000 | $ 73,940,000 | $ 74,315,000 | $ 75,924,000 | $ 280,718,000 | $ 298,297,000 | $ 318,293,000 |
Costs of sales and services, exclusive of depreciation and amortization | 25,798,000 | 24,945,000 | 26,429,000 | 29,045,000 | 30,246,000 | 31,562,000 | 31,370,000 | 31,077,000 | 106,217,000 | 124,255,000 | 131,440,000 |
Costs of customer support | 6,122,000 | 6,237,000 | 6,133,000 | 7,264,000 | 7,475,000 | 7,985,000 | 7,919,000 | 8,804,000 | 25,757,000 | 32,184,000 | 36,475,000 |
Goodwill impairment | 1,936,000 | 78,169,000 | 0 | 0 | 0 | 80,105,000 | 0 | ||||
Exit activities, restructuring and impairments | (148,000) | 745,000 | 4,628,000 | 1,023,000 | 5,213,000 | 1,670,000 | 152,000 | 201,000 | 6,249,000 | 7,236,000 | 2,278,000 |
Net loss | $ (6,934,000) | $ (10,895,000) | $ (19,283,000) | $ (8,230,000) | $ (13,110,000) | $ (91,297,000) | $ (10,693,000) | $ (9,644,000) | $ (45,343,000) | $ (124,742,000) | $ (48,443,000) |
Basic and diluted net loss per share (in dollars per share) | $ (0.35) | $ (0.55) | $ (0.97) | $ (0.51) | $ (1.01) | $ (7.01) | $ (0.82) | $ (0.75) | $ (2.39) | $ (9.54) | $ (3.73) |
SCHEDULE II - VALUATION AND Q92
SCHEDULE II - VALUATION AND QUALIFYING ACCOUNTS AND RESERVES (Details) - Allowance for doubtful accounts - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Valuation and Qualifying Accounts Disclosure [Line Items] | |||
Balance at Beginning of Fiscal Period | $ 1,246 | $ 1,751 | $ 2,121 |
Charges to Costs and Expense | 1,049 | 1,093 | 1,354 |
Deductions | (808) | (1,598) | (1,724) |
Balance at End of Fiscal Period | $ 1,487 | $ 1,246 | $ 1,751 |