Document and Entity Information
Document and Entity Information - USD ($) | 12 Months Ended | ||
Dec. 31, 2018 | Mar. 13, 2019 | Jun. 30, 2018 | |
Document and Entity Information Abstract | |||
Entity Registrant Name | Internap Corp | ||
Entity Central Index Key | 0001056386 | ||
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, 2018 | ||
Document Fiscal Year Focus | 2018 | ||
Document Fiscal Period Focus | FY | ||
Amendment Flag | false | ||
Entity Common Stock, Shares Outstanding | 25,397,126 | ||
Entity Well-known Seasoned Issuer | No | ||
Entity Voluntary Filers | No | ||
Entity Current Reporting Status | Yes | ||
Entity Public Float | $ 151,640,134 | ||
Entity Small Business | true | ||
Entity Emerging Growth Company | false | ||
Entity Shell Company | false |
CONSOLIDATED STATEMENTS OF OPER
CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS - USD ($) shares in Thousands | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Income Statement [Abstract] | |||
Net revenues | $ 317,373,000 | $ 280,718,000 | $ 298,297,000 |
Operating costs and expenses: | |||
Costs of sales and services, exclusive of depreciation and amortization | 107,262,000 | 106,217,000 | 124,255,000 |
Costs of customer support | 32,517,000 | 25,757,000 | 32,184,000 |
Sales, general and administrative | 75,356,000 | 62,728,000 | 70,639,000 |
Depreciation and amortization | 90,676,000 | 74,993,000 | 76,948,000 |
Goodwill impairment | 0 | 0 | 80,105,000 |
Exit activities, restructuring and impairments | 5,406,000 | 6,249,000 | 7,236,000 |
Total operating costs and expenses | 311,217,000 | 275,944,000 | 391,367,000 |
Income (loss) from operations | 6,156,000 | 4,774,000 | (93,070,000) |
Interest expense | 68,132,000 | 50,476,000 | 30,909,000 |
(Gain) loss on foreign currency, net | (258,000) | 525,000 | 485,000 |
Other income, net | 0 | 0 | (82,000) |
Total non-operating expenses | 67,874,000 | 51,001,000 | 31,312,000 |
Loss from continuing operations before income taxes, non-controlling interest and equity in (earnings) of equity-method investment | (61,718,000) | (46,227,000) | (124,382,000) |
Provision for income taxes | 657,000 | 253,000 | 530,000 |
Equity in earnings of equity-method investment, net of taxes | 0 | (1,207,000) | (170,000) |
Net loss | (62,375,000) | (45,273,000) | (124,742,000) |
Less net income attributable to non-controlling interest | 125,000 | 70,000 | 0 |
Net loss attributable to INAP shareholders | (62,500,000) | (45,343,000) | (124,742,000) |
Other comprehensive income (loss): | |||
Foreign currency translation adjustment | 259,000 | 23,000 | (39,000) |
Unrealized gain on foreign currency contracts | 0 | 145,000 | 600,000 |
Unrealized gain on interest rate swap | 0 | 0 | 728,000 |
Total other comprehensive income | 259,000 | 168,000 | 1,289,000 |
Comprehensive loss | $ (62,241,000) | $ (45,175,000) | $ (123,453,000) |
Basic and diluted net loss per share (in dollars per share) | $ (3.01) | $ (2.39) | $ (9.54) |
Weighted average shares outstanding used in computing basic and diluted net loss per share (in shares) | 20,732 | 18,993 | 13,083 |
CONSOLIDATED BALANCE SHEETS
CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands | Dec. 31, 2018 | Dec. 31, 2017 |
Current assets: | ||
Cash and cash equivalents | $ 17,823 | $ 14,603 |
Accounts receivable, net of allowance for doubtful accounts of $1,547 and $1,487, respectively | 20,054 | 17,794 |
Contract assets | 8,844 | 0 |
Prepaid expenses and other assets | 7,377 | 8,673 |
Total current assets | 54,098 | 41,070 |
Property and equipment, net | 478,061 | 458,565 |
Intangible assets, net | 73,042 | 25,666 |
Goodwill | 116,217 | 50,209 |
Contract assets | 16,104 | 0 |
Deposits and other assets | 7,409 | 11,015 |
Total assets | 744,931 | 586,525 |
Current liabilities: | ||
Accounts payable | 23,435 | 20,388 |
Accrued liabilities | 15,540 | 15,908 |
Deferred revenues | 8,022 | 4,861 |
Capital lease obligations | 9,080 | 11,711 |
Revolving credit facility | 0 | 5,000 |
Term loan, less discount and prepaid costs of $4,036 and $2,133, respectively | 321 | 867 |
Exit activities and restructuring liability | 2,526 | 4,152 |
Other current liabilities | 1,063 | 1,707 |
Total current liabilities | 59,987 | 64,594 |
Deferred revenues | 511 | 4,761 |
Capital lease obligations | 262,382 | 223,749 |
Term loan, less discount and prepaid costs of $9,508 and $7,655, respectively | 415,278 | 287,845 |
Exit activities and restructuring liability | 75 | 664 |
Deferred rent | 957 | 1,310 |
Deferred tax liability | 2,211 | 1,651 |
Other long-term liabilities | 3,473 | 2,983 |
Total liabilities | 744,874 | 587,557 |
Commitments and contingencies (Note 10) | ||
Stockholders' equity (deficit): | ||
Preferred stock, $0.001 par value; 5,000 shares authorized; no shares issued or outstanding | 0 | 0 |
Common stock, $0.001 par value; 30,000 shares authorized; 25,455 and 20,804 shares outstanding, respectively | 25 | 21 |
Additional paid-in capital | 1,368,968 | 1,327,084 |
Treasury stock, at cost, 330 and 293 shares, respectively | (7,646) | (7,159) |
Accumulated deficit | (1,363,019) | (1,323,723) |
Accumulated items of other comprehensive loss | (1,065) | (1,324) |
Total INAP stockholders' deficit | (2,737) | (5,101) |
Non-controlling interest | 2,794 | 4,069 |
Total stockholders' equity (deficit) | 57 | (1,032) |
Total liabilities and stockholders' equity (deficit) | $ 744,931 | $ 586,525 |
CONSOLIDATED BALANCE SHEETS (Pa
CONSOLIDATED BALANCE SHEETS (Parentheticals) - USD ($) $ in Thousands | Dec. 31, 2018 | Dec. 31, 2017 |
Accounts receivable, allowance for doubtful accounts | $ 1,547 | $ 1,487 |
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) | 25,455,000 | 20,804,000 |
Treasury stock, shares (in shares) | 330,000 | 293,000 |
Term Loan Current | ||
Term loan, unamortized discount and prepaid costs | $ 4,036 | $ 2,133 |
Term Loan Noncurrent | ||
Term loan, unamortized discount and prepaid costs | $ 9,508 | $ 7,655 |
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 Other Comprehensive Loss | Non-Controlling Interest | 2017 Securities Purchase Agreement | 2017 Securities Purchase AgreementCommon Stock | 2017 Securities Purchase AgreementAdditional Paid-In Capital | 2018 Public Offering | 2018 Public OfferingCommon Stock | 2018 Public OfferingAdditional Paid-In Capital |
Balance (in shares) at Dec. 31, 2015 | 13,993 | ||||||||||||
Balance at Dec. 31, 2015 | $ 114,436 | $ 14 | $ 1,277,553 | $ (6,393) | $ (1,153,957) | $ (2,781) | $ 0 | ||||||
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 | |||||||||||
Common stock issuance (in shares) | 444 | ||||||||||||
Employee taxes paid on withholding shares (in shares) | (62) | ||||||||||||
Employee taxes paid on withholding shares | (530) | (530) | |||||||||||
Stock-based compensation | 5,148 | 5,148 | |||||||||||
Proceeds from exercise of stock options, net (in shares) | 75 | ||||||||||||
Proceeds from exercise of stock options, net | 675 | 675 | 0 | ||||||||||
Balance (in shares) at Dec. 31, 2016 | 14,450 | ||||||||||||
Balance at Dec. 31, 2016 | (3,724) | $ 14 | 1,283,376 | (6,923) | (1,278,699) | (1,492) | 0 | ||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||||||||
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 (in shares) | 379 | 5,951 | |||||||||||
Common stock issuance | $ 40,163 | $ 7 | $ 40,156 | ||||||||||
Employee taxes paid on withholding shares (in shares) | (25) | ||||||||||||
Employee taxes paid on withholding shares | (236) | (236) | |||||||||||
Stock-based compensation | 3,121 | 3,121 | |||||||||||
Proceeds from exercise of stock options, net (in shares) | 49 | ||||||||||||
Proceeds from exercise of stock options, net | $ 431 | 431 | |||||||||||
Balance (in shares) at Dec. 31, 2017 | 20,804 | 20,804 | |||||||||||
Balance at Dec. 31, 2017 | $ (1,032) | $ 21 | 1,327,084 | (7,159) | (1,323,723) | (1,324) | 4,069 | ||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||||||||
Net loss | (62,375) | (62,375) | |||||||||||
Net income attributable to non-controlling interest | (125) | (125) | 125 | ||||||||||
Foreign currency translation | 259 | 259 | |||||||||||
Interest rate swap | 0 | ||||||||||||
Foreign currency contracts | 0 | ||||||||||||
INAP Japan | (1,400) | (1,400) | |||||||||||
Common stock issuance (in shares) | 471 | 4,210 | |||||||||||
Common stock issuance | $ 37,103 | $ 4 | $ 37,099 | ||||||||||
Employee taxes paid on withholding shares (in shares) | (36) | ||||||||||||
Employee taxes paid on withholding shares | (487) | (487) | |||||||||||
Stock-based compensation | 4,737 | 4,737 | |||||||||||
Proceeds from exercise of stock options, net (in shares) | 6 | ||||||||||||
Proceeds from exercise of stock options, net | $ 48 | 48 | |||||||||||
Balance (in shares) at Dec. 31, 2018 | 25,455 | 25,455 | |||||||||||
Balance at Dec. 31, 2018 | $ 57 | $ 25 | $ 1,368,968 | $ (7,646) | $ (1,363,019) | $ (1,065) | $ 2,794 |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Cash Flows from Operating Activities: | |||
Net loss | $ (62,375) | $ (45,273) | $ (124,742) |
Adjustments to reconcile net loss to net cash provided by operating activities: | |||
Depreciation and amortization | 90,676 | 74,993 | 76,948 |
(Gain) loss on disposal of property and equipment, net | (115) | (353) | 8 |
Impairments | 0 | 503 | 83,377 |
Amortization of debt discount and issuance costs | 3,874 | 2,519 | 2,534 |
Stock-based compensation expense, net of capitalized amount | 4,678 | 3,040 | 4,997 |
Equity in earnings of equity-method investment | 0 | (1,207) | (170) |
Provision for doubtful accounts | 882 | 1,049 | 1,093 |
Non-cash change in capital lease obligations | 2,640 | 520 | 223 |
Non-cash change in exit activities and restructuring liability | 4,751 | 6,291 | 4,409 |
Non-cash change in deferred rent | (979) | (3,554) | (2,152) |
Deferred taxes | 262 | 355 | 325 |
Loss on extinguishment and modification of debt | 0 | 6,785 | 0 |
Other, net | (10) | 304 | 179 |
Changes in operating assets and liabilities: | |||
Accounts receivable | (1,352) | (207) | 1,476 |
Prepaid expenses, deposits and other assets | (1,232) | 2,051 | 2,297 |
Accounts payable | 1,339 | (1,167) | 1,568 |
Accrued and current other liabilities | (1,583) | 3,359 | 81 |
Deferred revenues | 435 | (1,297) | (476) |
Exit activities and restructuring liability | (6,966) | (6,178) | (3,584) |
Asset retirement obligation | (96) | (825) | (174) |
Other liabilities | (257) | 40 | (52) |
Net cash provided by operating activities | 34,572 | 41,748 | 48,165 |
Cash Flows from Investing Activities: | |||
Proceeds from sale of building | 0 | 0 | 542 |
Purchases of property and equipment | (38,298) | (35,714) | (44,364) |
Proceeds from disposal of property and equipment | 662 | 402 | 0 |
Business acquisition, net of cash acquired | (131,748) | 3,838 | 0 |
Acquisition of non-controlling interests | (1,130) | 0 | 0 |
Additions to acquired and developed technology | (3,523) | (735) | (1,828) |
Net cash used in investing activities | (174,037) | (32,209) | (45,650) |
Cash Flows from Financing Activities: | |||
Proceeds from credit agreements | 148,500 | 316,900 | 4,500 |
Proceeds from stock issuance, net | 37,151 | 40,195 | 0 |
Principal payments on credit agreements | (23,251) | (339,900) | (3,000) |
Debt issuance costs | (7,302) | (12,777) | (1,716) |
Payments on capital lease obligations | (12,040) | (9,714) | (9,472) |
Proceeds from exercise of stock options | 0 | 421 | 673 |
Acquisition of common stock for income tax withholdings | (488) | (235) | (530) |
Other, net | 110 | (345) | (289) |
Net cash provided by (used in) financing activities | 142,680 | (5,455) | (9,834) |
Effect of exchange rates on cash and cash equivalents | 5 | 130 | (64) |
Net increase in cash and cash equivalents | 3,220 | 4,214 | (7,383) |
Cash and cash equivalents at beginning of period | 14,603 | 10,389 | 17,772 |
Cash and cash equivalents at end of period | 17,823 | 14,603 | 10,389 |
Supplemental Disclosures of Cash Flow Information: | |||
Cash paid for interest | 60,329 | 37,692 | 29,561 |
Non-cash acquisition of property and equipment under capital leases | 43,909 | 189,679 | 6,042 |
Additions to property and equipment included in accounts payable | $ 2,459 | $ 1,932 | $ 1,873 |
DESCRIPTION OF THE COMPANY AND
DESCRIPTION OF THE COMPANY AND NATURE OF OPERATIONS | 12 Months Ended |
Dec. 31, 2018 | |
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") is a leading-edge provider of high-performance data center and cloud solutions with over 100 network Points of Presence ("POPs") worldwide. INAP's full-spectrum portfolio of high-density colocation, managed cloud hosting and network solutions supports evolving IT infrastructure requirements for customers ranging from the Fortune 500 to emerging start-ups. INAP operates in 21 metropolitan markets, primarily in North America, with data centers connected by a low-latency, high-capacity fiber network. INAP has over one million gross square feet in its portfolio, with approximately 600,000 square feet of sellable data center space. We have a history of quarterly and annual period net losses. As of December 31, 2018 , our accumulated deficit was $1.4 billion and our working capital deficit was $5.9 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, reduce capital expenditures, 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, 2018 | |
Accounting Policies [Abstract] | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Accounting Principles and Basis of Presentation We prepare our consolidated financial statements and accompanying notes in accordance with accounting principles generally accepted in the United States of America ("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 with GAAP 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, useful lives, 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 Affiliates and Other Entities In the normal course of business, INAP enters into various types of investment arrangements, each having unique terms and conditions. These investments may include equity interests held by INAP in business entities, including general or limited partnerships, contractual ventures, or other forms of equity participation. The Company determines whether such investments involve a variable interest entity ("VIE") based on the characteristics of the subject entity. If the entity is determined to be a VIE, then management determines if INAP is the primary beneficiary of the entity and whether or not consolidation of the VIE is required. The primary beneficiary consolidating the VIE must normally have both (i) the power to direct the activities of a VIE that most significantly affect the VIE's economic performance and (ii) the obligation to absorb losses of the VIE or the right to receive benefits from the VIE, in either case that could potentially be significant to the VIE. When INAP is deemed to be the primary beneficiary, the VIE is consolidated and the other party's equity interest in the VIE is accounted for as a noncontrolling interest. If an entity fails to meet the characteristics of a VIE, the Company then evaluates such entity under the voting model. Under the voting model, the Company consolidates the entity if they determine that they, directly or indirectly, have greater than 50% of the voting shares, and determine that other equity holders do not have substantive participating rights. In previous years, INAP invested $4.1 million in Internap Japan Co., Ltd., our joint venture with NTT-ME Corporation ("NTT-ME") 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 . Once INAP obtained control of the Internap Japan Co., Ltd. venture, the investment was consolidated with INAP using the voting model. At December 31, 2018, the controlling interest of Internap Japan Co., Ltd. Japan was at 66.63% . 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. 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 and cash equivalents, marketable securities, accounts receivable and accounts payable. 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 lease certain data centers, office space, partner sites and equipment. 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, whichever is shorter. The duration of lease obligations and commitments ranges from two years to 34 years for facilities. Equipment leases are included in this range. 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. See "Recent Accounting Pronouncements" in Note 2 for information about the new lease standard. Out of Period Adjustment In connection with the preparation, review and audit of the Company's consolidated financial statements required to be included in this Annual Report on Form 10-K for the year ended December 31, 2018, management identified certain errors in the Company's historical financial statements, resulting in a conclusion that certain corrections need to be made to the Company's unaudited quarters during 2018. The Company has revised its prior period consolidated financial statements accordingly and included such revisions herein. Based on an analysis of quantitative and qualitative factors, the Company concluded that these errors were not material to the consolidated financial position, results of operations or cash flows as presented in the Company’s quarterly financial statements that have been previously filed in the Company’s Quarterly Reports on Form 10-Q. As a result, amendment of such reports is not required. The revisions to correct errors relate to the correction of accounting for an amendment to a capital lease executed in February 2018. The adjustments to the Company’s previously issued quarterly financial statements are as follows: For the quarter ended March 31, 2018 As reported Adjustments As adjusted Costs of sales and services, exclusive of depreciation and amortization - QTD $ 25,037 $ 430 $ 25,467 Costs of sales and services, exclusive of depreciation and amortization - YTD 25,037 430 25,467 Depreciation and amortization - QTD 21,077 (81 ) 20,996 Depreciation and amortization - YTD 21,077 (81 ) 20,996 Interest expense - QTD 15,027 (577 ) 14,450 Interest expense - YTD 15,027 (577 ) 14,450 Net loss attributable to INAP shareholders - QTD (14,060 ) (228 ) (14,288 ) Net loss attributable to INAP shareholders - YTD (14,060 ) (228 ) (14,288 ) Property and equipment, net 461,314 10,438 471,752 Total assets 731,920 10,438 742,358 Capital lease obligations - non-current 223,549 10,470 234,019 Total liabilities 723,098 10,470 733,568 Accumulated deficit (1,313,598 ) (228 ) (1,313,826 ) Total stockholders' equity (deficit) $ 8,822 $ (228 ) $ 8,594 For the quarter ended June 30, 2018 As reported Adjustments As adjusted Costs of sales and services, exclusive of depreciation and amortization - QTD $ 27,976 $ 645 $ 28,621 Costs of sales and services, exclusive of depreciation and amortization - YTD 53,013 1,075 54,088 Depreciation and amortization - QTD 22,590 (122 ) 22,468 Depreciation and amortization - YTD 43,667 (203 ) 43,464 Interest expense - QTD 15,860 (879 ) 14,981 Interest expense - YTD 30,887 (1,456 ) 29,431 Net loss attributable to INAP shareholders - QTD (13,923 ) (356 ) (14,279 ) Net loss attributable to INAP shareholders - YTD (27,983 ) (584 ) (28,567 ) Property and equipment, net 452,958 10,315 463,273 Total assets 724,707 10,315 735,022 Capital lease obligations - non-current 220,721 10,694 231,415 Total liabilities 729,728 10,694 740,422 Accumulated deficit (1,328,502 ) (584 ) (1,329,086 ) Total stockholders' equity (deficit) $ (5,021 ) $ (584 ) $ (5,605 ) For the quarter ended September 30, 2018 As reported Adjustments As adjusted Costs of sales and services, exclusive of depreciation and amortization - QTD $ 28,866 $ 645 $ 29,511 Costs of sales and services, exclusive of depreciation and amortization - YTD 81,880 1,721 83,601 Depreciation and amortization - QTD 23,431 (122 ) 23,309 Depreciation and amortization - YTD 67,097 (326 ) 66,771 Interest expense - QTD 16,898 (895 ) 16,003 Interest expense - YTD 47,786 (2,351 ) 45,435 Net loss attributable to INAP Shareholders - QTD (15,106 ) (373 ) (15,479 ) Net loss attributable to INAP Shareholders - YTD (43,089 ) (957 ) (44,046 ) Property and equipment, net 477,423 10,193 487,616 Total assets 746,038 10,193 756,231 Capital lease obligations - non-current 252,599 10,945 263,544 Total liabilities 765,004 10,945 775,949 Accumulated deficit (1,343,609 ) (957 ) (1,344,566 ) Total stockholders' equity (deficit) $ (18,966 ) $ (957 ) $ (19,923 ) 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 5 years for 2018 , 2017 and 2016 . Judgment is required in determining which software projects are capitalized and the resulting economic life. We capitalized $3.5 million , $4.4 million and $4.3 million in internal-use software costs during the years ended December 31, 2018 , 2017 and 2016 , respectively. As of December 31, 2018 and 2017 , the balance of unamortized internal-use software costs was $12.7 million and $17.9 million , respectively. During the years ended December 31, 2018 , 2017 and 2016 , amortization expense was $7.6 million , $7.2 million and $8.3 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, 2018, we changed our operating segments, as discussed in Note 10, "Operating Segments and Geographic Information," and, subsequently, our reporting units. We now have seven reporting units: US Colocation, US Cloud, US Network, INTL Colocation, INTL Cloud, INTL Network, 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. The Company tests goodwill for impairment annually in the third quarter as of August 1, 2018, or when events occur or circumstances change that could potentially reduce the fair value of the reporting unit. See Note 6, "Goodwill and Other Intangible Assets," for further information. 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. 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 useful life. The intangible assets are being amortized over periods which reflect the pattern in which economic benefits of the assets are expected to be realized. We amortize the cost of the acquired technologies and noncompete agreements over their useful lives of 4 to 8 years and 8 to 15 years for trade names. Customer relationships are being amortized on an accelerated basis over their estimated useful life of 10 to 15 years. During the years ended December 31, 2018 , 2017 and 2016 , amortization expense for acquired and developed technologies was $4.0 million , $2.1 million and $3.0 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 $0.5 million and $0.2 million for associated liabilities during the years ended December 31, 2018 and 2017 . We recorded interest and penalties arising from the underpayment of income taxes in "Provision 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 "Sales, 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 and we typically recognize the monthly minimum as revenue each month. We recorded installation fees as deferred revenue and recognized the revenue ratably over the estimated customer life, which was approximately five years for 2017 and 2016 before the Company adopted Accounting Standards Update ("ASU") No. 2014-09, Revenue from Contracts with Customers (Topic 606) ("ASC 606") on January 1, 2018. 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: a. the parties to the contract have approved the contract (in writing, orally, or in accordance with other customary business practices) and are committed to perform their respective obligations. b. the Company can identify each party’s rights regarding the goods or services to be transferred. c. the Company can identify the payment terms for the goods or services to be transferred. d. the contract has commercial substance (that is, the risk, timing, or amount of the entity’s future cash flows is expected to change as a result of the contract). e. it is probable that the Company will collect substantially all of the consideration to which it will be entitled in exchange for the goods or services that will be transferred to the customer The transaction price reflects INAP’s expectations about the consideration it will be entitled to receive from the customer. The Company considers the terms of the contract and its customary business practices to determine the transaction price. The transaction price is the amount of consideration to which the Company expects to be entitled in exchange for transferring promised goods or services to a customer, excluding amounts collected on behalf of third parties (for example, some sales taxes). The consideration promised in a contract with a customer may include fixed amounts, variable amounts, or both. After contract inception, the transaction price can change for various reasons, including the resolution of uncertain events or other changes in circumstances that change the amount of consideration to which INAP expects to be entitled in exchange for the promised goods or services. Once the separate performance obligations are identified and the transaction price has been determined, the Company allocates the transaction price to the performance obligations in proportion to their standalone selling prices. When allocating on a relative standalone selling price basis, any discount within the contract generally is allocated proportionately to all of the performance obligations in the contract. To allocate the transaction price on a relative standalone selling price basis, the Company first determines the standalone selling price of the distinct good or service underlying each performance obligation. It is the price at which the Company would sell a good or service on a standalone (or separate) basis at contract inception. The observable price of a good or service sold separately provides the best evidence of standalone selling price. If a standalone selling price is not directly observable, the Company would estimate the standalone selling price. The Company will be able to consider its facts and circumstances in order to determine how frequently it will need to update the estimates. If the information used to estimate the standalone selling price for similar transactions has not changed, the Company can determine that it is reasonable to use the previously determined standalone selling price. Revenue is recognized to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. The Company enters into contracts that can include various combinations of products and services, which are generally capable of being distinct and accounted for as separate performance obligations. The Company's contracts with customers often include performance obligations to transfer multiple products and services to a customer. Common performance obligations of the Company include delivery of services. Determining whether products and services are considered distinct performance obligations that should be accounted for separately versus together requires significant judgment by the Company. A performance obligation is a promise in a contract to transfer a distinct good or service to the customer, and is the unit of account in ASC 606. A contracts transaction price is allocated to each distinct performance obligation and recognized as revenue when, or as, the performance obligation is satisfied. Total transaction price is estimated for impact of variable consideration, such as INAP's service level arrangements, additional usage and late fees, discounts and promotions, and customer care credits. The majority of our contracts have multiple performance obligations, as the promise to transfer individual goods or services is separately identifiable from other promises in the contracts and, therefore, is distinct. For contracts with multiple performance obligations, we allocate the contract's transaction price to each performance obligation based on its relative stand-alone selling price. The stand-alone selling price ("SSP") is determined based on observable price. In instances where the SSP is not directly observable, such as when the Company does not sell the product or service separately, INAP determines the SSP using information that may include market conditions and other observable inputs. The Company typically has more than one SSP for individual products and services due to th |
FAIR VALUE MEASUREMENTS
FAIR VALUE MEASUREMENTS | 12 Months Ended |
Dec. 31, 2018 | |
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, 2018: Available-for-sale securities $ — $ 2,309 $ — $ 2,309 Asset retirement obligations (1) — — 2,090 2,090 December 31, 2017: Available-for-sale securities — 2,271 — — Asset retirement obligations (1) $ — $ — $ 1,936 $ 1,936 (1) We calculate the fair value of asset retirement obligations ("ARO") by discounting the estimated amount using the current Treasury bill rate adjusted for our credit non-performance. At December 31, 2018, the balance is included in "Other long-term liabilities," in the accompanying consolidated balance sheets. 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 accompanying consolidated balance sheets. The following table provides a summary of changes in our Level 3 asset retirement obligations (in thousands): 2018 2017 2016 Balance, January 1 $ 1,936 $ 2,810 $ 2,803 Accretion 154 197 207 Subsequent revision of estimated obligation — 449 — Payments — (1,520 ) (200 ) Balance, December 31 $ 2,090 $ 1,936 $ 2,810 As of December 31, 2018, the Company held $2.3 million of available-for-sale debt securities which are reported at fair value on the Company's consolidated balance sheets in "Deposits and other assets." Unrealized holding gains and losses are reported within accumulated other comprehensive loss in the consolidated statements of operations and comprehensive loss. A decline in the fair value of a marketable security below the Company's cost basis is determined to be other than temporary, such marketable security is written down to its estimated fair value as a new cost basis and the amount of the write-down is included in earnings as an impairment charge. The Company may sell certain of its marketable securities prior to their stated maturities for strategic reasons including, but not limited to, anticipation of credit deterioration and maturity management. The fair values of our Level 2 available-for-sale debt securities, based upon quoted prices for similar items in active markets, are as follows (in thousands): December 31, 2018 Cost Unrealized Gain Unrealized Loss Fair Value Japanese Corporate Bonds $ 2,184 $ 144 $ (107 ) $ 2,221 Japanese Government Bonds 87 5 (4 ) 88 Total Bonds $ 2,271 $ 149 $ (111 ) $ 2,309 December 31, 2017 Cost Unrealized Gain Unrealized Loss Fair Value Japanese Corporate Bonds $ 2,267 $ 17 $ (100 ) $ 2,184 Japanese Government Bonds 87 1 (1 ) 87 Total Bonds $ 2,354 $ 18 $ (101 ) $ 2,271 The fair values of our other Level 2 debt liabilities, based upon quoted prices for similar items in active markets, are as follows (in thousands): December 31, 2018 2017 Carrying Amount Fair Value Carrying Amount Fair Value Term loan $ 429,143 $ 428,071 $ 298,500 $ 301,485 Revolving credit facility — — 5,000 5,050 |
PROPERTY AND EQUIPMENT
PROPERTY AND EQUIPMENT | 12 Months Ended |
Dec. 31, 2018 | |
Property, Plant and Equipment [Abstract] | |
PROPERTY AND EQUIPMENT | PROPERTY AND EQUIPMENT Property and equipment consisted of the following (in thousands): December 31, 2018 2017 Network equipment $ 274,322 $ 247,190 Network equipment under capital lease 14,206 14,206 Furniture and equipment 28,583 26,246 Software 66,924 43,930 Leasehold improvements 414,212 412,631 Buildings under capital lease 269,455 227,482 Property and equipment, gross 1,067,701 971,685 Less: accumulated depreciation and amortization ($55,198 and $50,253 related to capital leases at December 31, 2018 and 2017, respectively) (589,640 ) (513,120 ) $ 478,061 $ 458,565 During the year ended December 31, 2018, we disposed or retired $4.4 million of property and equipment with accumulated depreciation of $4.2 million during the year ended December 31, 2018. We disposed or retired $9.2 million of assets with accumulated depreciation of $7.3 million during the year ended December 31, 2017 and $5.0 million of assets with accumulated depreciation of $4.4 million during the year ended December 31, 2016 . During the year ended December 31, 2018, there were no impairments in leasehold improvements. 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 $21.9 million . Depreciation and amortization of property and equipment consisted of the following (in thousands): Year ended December 31, 2018 2017 2016 Costs of sales and services $ 75,998 $ 70,368 $ 71,626 Other depreciation and amortization 10,644 2,478 2,274 Subtotal 86,642 72,846 73,900 Amortization of acquired and developed technologies 4,034 2,147 3,048 Total depreciation and amortization $ 90,676 $ 74,993 $ 76,948 |
ACQUISITION
ACQUISITION | 12 Months Ended |
Dec. 31, 2018 | |
Business Combinations [Abstract] | |
ACQUISITION | ACQUISITION On February 28, 2018, the Company acquired SingleHop LLC ("SingleHop"), a provider of high-performance data center services including colocation, managed hosting, cloud and network services for $132.0 million net of working capital adjustments of approximately $0.4 million , liabilities assumed, and net of cash acquired. 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 credit agreement covenants. The amendments to the credit agreement are described in more detail in Note 9, "Commitments, Contingencies and Litigation." The following table summarizes the preliminary fair values of the assets acquired and liabilities assumed at the acquisition date and reflects purchase accounting adjustments subsequent to the acquisition date (in thousands): Preliminary Valuation as of March 31, 2018 Measurement Period Adjustments Final Valuation as of December 31, 2018 Cash $ 2,857 $ (34 ) $ 2,823 Prepaid expenses and other assets 1,683 544 2,227 Property, plant and equipment 14,885 (632 ) 14,253 Other long term assets 39 537 576 Intangible assets: Noncompete agreements 4,000 — 4,000 Trade names 1,700 — 1,700 Technology 15,100 — 15,100 Customer relationships 34,100 — 34,100 Goodwill 67,868 (1,860 ) 66,008 Total assets acquired 142,232 (1,445 ) 140,787 Accounts payable and accrued liabilities 5,098 (2,279 ) 2,819 Deferred revenue 1,600 834 2,434 Long term liabilities 534 — 534 Net assets acquired $ 135,000 $ — $ 135,000 The above estimated fair values of consideration transferred, assets acquired and liabilities assumed are provisional and are based on the information that was available as of the acquisition date. Measurement period adjustments reflect new information obtained about facts and circumstances that existed as of the acquisition date. The measurement period adjustments primarily related to working capital and ASC 606. The Company believes that information provides a reasonable basis for estimating the fair values of assets acquired and liabilities assumed. The Company finalized the fair value adjustments within one year from the acquisition date. The fair value assigned to identifiable intangible assets acquired was based on estimates and assumptions made by management. The intangible assets are being amortized over periods which reflect the pattern in which economic benefits of the assets are expected to be realized. The customer relationships are being amortized on an accelerated basis over an estimated useful life of ten years and the noncompete agreements, trade names, and technology are being amortized on a straight-line basis over four , eight , and seven years , respectively. Goodwill represents the excess of the consideration transferred over the aggregate fair values of assets acquired and liabilities assumed. The goodwill recorded in connection with this acquisition was based on operating synergies and other benefits expected to result from the combined operations and the assembled workforce acquired. The goodwill acquired is deductible for tax purposes. Acquisition-related costs recognized for the year ended December 31, 2018 including transaction costs such as legal, accounting, valuation and other professional services, were $2.9 million and are included in "Sales, general and administrative" expenses on the accompanying consolidated statements of operations and comprehensive loss. Pro Forma Financial Information The following unaudited pro forma financial information presents the combined results of operations of INAP and SingleHop as if the acquisition had occurred on January 1, 2017. 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 SingleHop acquisition been completed as of January 1, 2017, and should not be taken as indicative of our future consolidated results of operations. The pro forma results are as follows (in thousands except for per share amounts): Year Ended 2018 2017 Revenues $ 325,498 $ 328,572 Net loss (63,577 ) (47,391 ) Basic and diluted net loss per share $ (3.07 ) $ (2.50 ) Weighted average shares outstanding used in computing basic and diluted net loss per share 20,732 18,993 |
GOODWILL AND OTHER INTANGIBLE A
GOODWILL AND OTHER INTANGIBLE ASSETS | 12 Months Ended |
Dec. 31, 2018 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
GOODWILL AND OTHER INTANGIBLE ASSETS | GOODWILL AND OTHER INTANGIBLE ASSETS Goodwill General The Company tests goodwill for impairment annually in the third quarter as of August 1, 2018, or when events occur or circumstances change that could potentially reduce the fair value of the reporting unit. Additionally, the Company may perform interim tests if an event occurs or circumstances change that could potentially reduce the fair value of a reporting unit or indefinite lived intangible asset below its carrying amount. The carrying value of each reporting unit is determined by assigning the assets and liabilities, including the existing goodwill and intangible assets, to those reporting units. The Company tests goodwill for impairment by either performing a qualitative evaluation or a quantitative test. The qualitative evaluation is an assessment of factors, including reporting unit specific operating results as well as industry, market and general economic conditions, to determine whether it is more likely than not that the fair values of a reporting unit is less than its carrying amount, including goodwill. The Company may elect to bypass this qualitative assessment for some or all of its reporting units and perform a quantitative test. In order to determine the estimated fair value of our reporting units, the Company utilizes the discounted cash flow and market methods. INAP has consistently utilized both methods in its goodwill impairment assessments and weighted both as appropriate based on relevant factors for each reporting unit. The discounted cash flow method is specific to the anticipated future results of the reporting unit, while the market method is based on the market sector including our competitors. The Company determines the assumptions supporting the discounted cash flow method, including the discount rate, using estimates as of the date of the impairment review. To determine the reasonableness of these assumptions, the Company considered the 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. The Company used reasonable judgment in developing its 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. Goodwill is considered impaired if the carrying amount of the net assets exceeds the fair value of the reporting unit. Impairment, if any, would be recorded in operating income / (loss) and this could result in a material impact to net income / (loss) and income / (loss) per share. In 2017, the Company adopted the new guidance under ASU No. 2017-04: Intangibles - Goodwill and Other: Simplifying the Accounting for Goodwill Impairment (Topic 350) which eliminated step 2 of the goodwill impairment test, which required a hypothetical purchase price allocation to measure goodwill impairment loss as of January 1, 2018. A goodwill impairment loss under the new guidance is instead measured using a single step test based on the amount by which a reporting unit's carrying amount exceeds its fair value, not to exceed the carrying amount of goodwill. Based on the Company's impairment test, no impairment of goodwill has been identified during the year ended December 31, 2018 . Annual Testing 2018 Effective January 1, 2018, we changed our operating segments, as discussed in Note 10, "Operating Segments and Geographic Information," and, subsequently, our reporting units. We now have seven reporting units: US Colocation, US Cloud, US Network, INTL Colocation, INTL Cloud, INTL Network, 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. The Company performed its annual goodwill impairment test as of August 1, 2018 by evaluating its seven reporting units. In performing this test, the Company utilized long-term growth rates for its reporting units ranging from 0.0% to 2.5% in its estimation of fair value and discount rates ranging from 9.0% to 16.0% , which is an increase versus the prior year discount rates of 2.0% to 5.0% to reflect changes in market conditions. The assumptions used in evaluating goodwill for impairment are subject to change and are tracked against historical results by management. Changes in the key assumptions by management can change the results of testing. Year-end Testing 2018 During the fourth quarter of 2018, the Company identified a significant decrease in its share price which was considered an impairment indicator. Consequently, the Company performed another goodwill impairment test as of December 31, 2018. As a result of that test, the estimated fair value of these reporting units with goodwill on their balance sheets significantly exceed their carrying values. While management believes the assumptions used are reasonable and commensurate with the views of a market participant, changes in key assumptions for these reporting units, including increasing the discount rate, lowering revenue forecasts, lowering the operating margin or lowering long-term growth rate, could result in a future impairment. During the years ended December 31, 2018 and 2017, our goodwill activity is as follows (in thousands): January 1, 2017 Re-allocations December 31, 2017 Re-allocations SingleHop Acquisition December 31, 2018 Reportable segments: Data center and network services $ — $ — $ — $ — $ — $ — Cloud and hosting services 50,209 (50,209 ) — — — — INAP COLO — 6,003 6,003 (6,003 ) — — INAP CLOUD — 44,206 44,206 (44,206 ) — — INAP US — — — 28,118 66,008 94,126 INAP INTL — — — 22,091 — 22,091 Total $ 50,209 $ — $ 50,209 $ — $ 66,008 $ 116,217 Other Intangible Assets During the year ended December 31, 2018 , we concluded that no impairment indicators existed to cause us to reassess our other intangible assets. The estimated useful lives range from 4 years to 15 years . The components of our amortizing intangible assets, including capitalized software, are as follows (in thousands): December 31, 2018 December 31, 2017 Gross Carrying Amount Accumulated Amortization Gross Carrying Amount Accumulated Amortization Acquired and developed technology $ 71,586 $ (52,097 ) $ 52,825 $ (48,063 ) Customer relationships and trade names 110,785 (57,232 ) 71,116 (50,212 ) $ 182,371 $ (109,329 ) $ 123,941 $ (98,275 ) Amortization expense for intangible assets during the years ended December 31, 2018 , 2017 and 2016 was $11.1 million , $4.4 million and $4.5 million , respectively. As of December 31, 2018 , remaining amortization expense is as follows (in thousands): 2019 $ 13,080 2020 12,375 2021 11,234 2022 8,317 2023 7,995 Thereafter 20,041 $ 73,042 |
ACCRUED LIABILITIES
ACCRUED LIABILITIES | 12 Months Ended |
Dec. 31, 2018 | |
Payables and Accruals [Abstract] | |
ACCRUED LIABILITIES | ACCRUED LIABILITIES Accrued liabilities consist of the following (in thousands): December 31, 2018 2017 Compensation and benefits payable $ 7,523 $ 6,673 Property, sales, and other taxes 785 2,636 Customer credit balances 2,204 1,616 Accrued interest 1,762 1,690 Other 3,266 3,293 $ 15,540 $ 15,908 |
EXIT ACTIVITIES AND RESTRUCTURI
EXIT ACTIVITIES AND RESTRUCTURING | 12 Months Ended |
Dec. 31, 2018 | |
Restructuring and Related Activities [Abstract] | |
EXIT ACTIVITIES AND RESTRUCTURING | EXIT ACTIVITIES AND RESTRUCTURING During the year ended December 31, 2018, we recorded initial exit activity charges due to ceasing use of office and data center space as well as contract terminations. Payments for the office and data center space are expected through 2019. 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 reductions 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. 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, 2018 , 2017 and 2016 . Our real estate obligations and severance are substantially related to our INAP US segment. Balance December 31, 2017 Initial Charges Plan Adjustments Cash Payments Balance December 31, 2018 Activity for 2018 restructuring charge: Real estate obligations $ — $ 3,484 $ 1,023 $ (2,585 ) $ 1,922 Activity for 2017 restructuring charge: Real estate obligations 3,380 — 316 (3,596 ) 100 Activity for 2016 restructuring charge: Severance 46 — 34 (80 ) — Real estate obligations 247 — 39 (161 ) 125 Activity for 2015 restructuring charge: Real estate obligation 64 — 4 (41 ) 27 Service contracts 388 — 31 (198 ) 221 Activity for 2014 restructuring charge: Real estate obligation 691 — 240 (725 ) 206 $ 4,816 $ 3,484 $ 1,687 $ (7,386 ) $ 2,601 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 |
COMMITMENTS, CONTINGENCIES AND
COMMITMENTS, CONTINGENCIES AND LITIGATION | 12 Months Ended |
Dec. 31, 2018 | |
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 $300.0 million term loan facility ("2017 term loan") and a $25.0 million revolving credit facility (the "2017 Revolving Credit Facility"). The proceeds of the 2017 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 portions of the 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 2017 term loan third party costs and will be amortized over the 2017 term loan and $0.4 million prepaid debt issuance costs related to the 2017 revolving credit facility and will be amortized over the term of the 2017 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 2017 term loan is April 6, 2022 and the maturity date of the 2017 revolving credit facility is October 6, 2021. As of December 31, 2018, the balance and interest rate of the 2017 term loan were $415.6 million and 8.2% , respectively. The 2017 revolving credit facility had no balance outstanding at December 31, 2018. Borrowings under the 2017 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 2017 revolving credit facility is 6.0% for loans bearing interest calculated using the base rate ("Base Rate Loans") and 7.0% for loans bearing interest calculated using the adjusted LIBOR rate. The applicable margin for loans under the 2017 term loan is 4.75% for Base Rate Loans and 5.75% 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 2017 revolving credit facility are subject to various conditions, as set forth in the 2017 Credit Agreement. As of December 31, 2018, the Company has been in compliance with all covenants. 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. The table below sets forth information with respect to the current financial covenants as well as the calculation of our performance in relation to the covenant requirements at December 31, 2018 . Covenants Requirements Ratios at December 31, 2018 Maximum Total Net Leverage Ratio (the ratio of Consolidated Indebtedness to Consolidated EBITDA as defined in the Second Amendment to the 2017 Credit Agreement) should be equal to or less than: 5.9 (1) 5.4 Maximum Consolidated Interest Coverage Ratio (the ratio of Consolidated EBITDA to Consolidated Interest Expense as defined in the Second Amendment to the 2017 Credit Agreement) should be equal to or greater than: 2.0 (2) 2.1 (1) The maximum total leverage ratio decreases to 5.9 to 1 as of March 31, 2019 - June 30, 2019, 5.5 to 1 as of September 30, 2019 - March 31, 2020, 5.25 to 1 as of June 30, 2020 - September 30, 2020, 4.75 to 1 as of December 31, 2020 - 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, 2019 - September 30, 2020, and 2.25 to 1 December 31, 2020 - September 30, 2021 and thereafter. Second Amendment On February 6, 2018, the Company, the Lenders party thereto and Jefferies Finance LLC, as Administrative Agent, entered into a Second Amendment to Credit Agreement (the "Second Amendment") that amended the 2017 Credit Agreement. The Second Amendment, among other things, amends the 2017 Credit Agreement to (i) permit the Company to incur incremental term loans under the 2017 Credit Agreement of up to $135.0 million to finance the Company's acquisition of SingleHop and to pay related fees, costs and expenses, and (ii) 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 Second Amendment became effective upon the execution and delivery of the Second Amendment. This transaction was considered a modification. A total of $1.0 million was paid for debt issuance costs related to the Second Amendment. Of the $1.0 million in costs paid, $0.2 million related to the payment of legal and professional fees which were expensed, $0.8 million related to term loan lender fees and will be amortized over the term of the 2017 Credit Agreement. Third Amendment On February 28, 2018, INAP entered into the Incremental and Third Amendment to the Credit Agreement among the Company, the Lenders party thereto and Jefferies Finance LLC, as Administrative Agent (the "Third Amendment"). The Third Amendment provides for a funding of the new incremental term loan facility under the 2017 Credit Agreement of $135.0 million (the "Incremental Term Loan"). The Incremental Term Loan has terms and conditions identical to the existing loans under the 2017 Credit Agreement, as amended. Proceeds of the Incremental Term Loan were used to complete the acquisition of SingleHop and to pay fees, costs and expenses related to the acquisition, the Third Amendment and the Incremental Term Loan. This transaction was considered a modification. A total of $5.0 million was paid for debt issuance costs related to the Third Amendment. Of the $5.0 million in costs paid, $0.1 million related to the payment of legal and professional fees which were expensed, $4.9 million related to term loan lender fees and will be amortized over the term of the 2017 Credit Agreement. Fourth Amendment On April 9, 2018, the Company entered into the Fourth Amendment to 2017 Credit Agreement, among the Company, the Lenders party thereto and Jefferies Finance LLC, as Administrative Agent (the "Fourth Amendment"). The Fourth Amendment amends the 2017 Credit Agreement to lower the interest rate margins applicable to the outstanding term loans under the 2017 Credit Agreement by 1.25% . This transaction was considered a modification. A total of $1.7 million was paid for debt issuance costs related to the Fourth Amendment. Of the $1.7 million in costs paid, $0.1 million related to the payment of legal and professional fees which were expensed, $1.6 million related to term loan lender fees and will be amortized over the term of the 2017 Credit Agreement. Fifth Amendment On August 28, 2018, the Company entered into the Fifth Amendment to 2017 Credit Agreement, among the Company, the Lenders party thereto and Jefferies Finance LLC, as Administrative Agent (the "Fifth Amendment"). The Fifth Amendment amended the 2017 Credit Agreement by increasing the aggregate revolving commitment capacity by $10.0 million to $35.0 million . Refer to Note 9 in our accompanying consolidated financial statements for additional information about our credit agreement. A summary of our credit agreement as of December 31, 2018 and December 31, 2017 is as follows (dollars in thousands): December 31, 2018 2017 Outstanding principal balance on the term loan, less unamortized discount and prepaid costs of $13.5 million and $9.8 million, respectively $ 415,599 $ 288,712 Outstanding balance on the revolving credit facility — 5,000 Letters of credit issued with proceeds from revolving credit facility 4,187 5,361 Surety bonds issued with proceeds from revolving credit facility 131 — Borrowing capacity 30,682 14,639 Interest rate – term loan 8.2 % 8.4 % Interest rate – revolving credit facility — % 10.3 % Maturities of the term loan are as follows: 2019 $ 4,357 2020 4,357 2021 4,357 2022 416,072 2023 — $ 429,143 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 2017 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. Asset Retirement Obligations In prior years, we recorded AROs 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, 2018 and 2017 , the balance of the present value ARO was $2.1 million and $1.9 million , respectively. 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, 2018, 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, 2018 and 2017 , 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, 2018 , our capital leases had expiration dates ranging from 2019 to 2039. Future minimum capital lease payments and the present value of the minimum lease payments for all capital leases as of December 31, 2018 , are as follows (in thousands): 2019 $ 34,719 2020 33,901 2021 34,894 2022 33,637 2023 32,878 Thereafter 630,573 Remaining capital lease payments 800,602 Less: amounts representing imputed interest (529,140 ) Present value of minimum lease payments 271,462 Less: current portion (9,080 ) $ 262,382 Operating Leases We have entered into leases for data center, 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, 2018 (in thousands): 2019 $ 7,980 2020 7,616 2021 7,616 2022 7,108 2023 5,407 Thereafter 3,757 $ 39,484 Rent expense was $8.3 million , $14.0 million and $21.8 million during the years ended December 31, 2018 , 2017 and 2016 , 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, 2018 (in thousands): 2019 $ 3,981 2020 1,707 2021 655 2022 85 2023 19 Thereafter — $ 6,447 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. Disclosure Pursuant to Section 13(r) of the Exchange Act Under the Iran Threat Reduction and Syria Human Rights Act of 2012, which added Section 13(r) of the Securities Exchange Act of 1934, as amended, the Company is required to disclose in its periodic reports if it or any of its affiliates knowingly engaged in certain activities, transactions or dealings relating to Iran or with entities or individuals designated pursuant to certain Executive Orders. Disclosure is required even where the activities are conducted outside the U.S. by non-U.S. affiliates in compliance with applicable law, and even if the activities are not covered or prohibited by U.S. law. We determined that, between November 2012 and September 2018, our subsidiary iWeb provided information technology services to Pioneer Logistics Havacilik Turizm Yonetim Danismanlik Ithalat Ihracat San. Tic. Ltd. Sti, a Turkish company ("Pioneer Logistics"). On August 29, 2014, the Department of Commerce, Bureau of Industry and Security ("BIS") determined that Pioneer Logistics was part of a procurement ring which directly supported the operation of Mahan Airlines, an Iranian airline and entity on BIS's denied persons list. From August 2014 to September 2018, iWeb received approximately $8,855 in fees from Pioneer Logistics. We are unable to accurately calculate the net profit attributable to these transactions. We promptly terminated Pioneer Logistics as a customer upon learning of its designation and do not plan to provide services to Pioneer Logistics in the future. |
OPERATING SEGMENTS AND GEOGRAPH
OPERATING SEGMENTS AND GEOGRAPHIC INFORMATION | 12 Months Ended |
Dec. 31, 2018 | |
Segment Reporting [Abstract] | |
OPERATING SEGMENTS AND GEOGRAPHIC INFORMATION | OPERATING SEGMENTS AND GEOGRAPHIC INFORMATION Operating Segments Information The Company has two reportable segments: INAP US and INAP INTL. These segments are comprised of strategic businesses that are defined by the location of the service offerings. Our INAP US segment consists of US Colocation, US Cloud, and US Network services based in the United States. Our INAP INTL segment consists of these same services based in countries other than the United States, and Ubersmith. As of January 1, 2018, we changed our organizational structure in an effort to create more effective and efficient 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 ("CODM"), regularly reviews for purposes of allocating resources and assessing performance. As a result, we report our financial performance based on our revised segment structure. We have reclassified prior period amounts to conform to the current presentation. Each segment is managed as an operation with well-established strategic directions and performance requirements. Each segment is led by a separate General Manager who reports directly to the Company's CODM. Effective January 2019, both segments are led by the Chief Operating Officer, who reports directly to the Company's CODM. The CODM evaluates segment performance using business unit contribution which is defined as business unit revenues less direct costs of sales and services, customer support, and sales and marketing, exclusive of depreciation and amortization. Our services, which are included within both our reportable segments, are described as follows: Colocation Colocation involves providing conditioned power with back-up capacity and physical space within data centers along with associated services such as interconnection, remote hands, environmental controls, monitoring and security while allowing our customers to deploy and manage their servers, storage and other equipment in our secure data centers. We design the data center infrastructure, procure the capital equipment, deploy the infrastructure and are responsible for the operation and maintenance of the facility. Cloud Cloud services involve providing compute resources and storage services on demand via an integrated platform that includes our automated bare metal solutions. We offer our next generation cloud platforms in our high density colocation facilities and utilize the INAP performance IP for low latency connectivity. Network Network services includes our patented Performance IP™ service, content delivery network services, IP routing hardware and software platform. By intelligently routing traffic with redundant, high-speed connections over multiple, major Internet backbones, our IP connectivity provides high-performance and highly-reliable delivery of content, applications and communications to end users globally. We deliver our IP connectivity through more than 100 network POPs around the world. The following table provides segment results, with prior period amounts reclassified to conform to the current presentation (in thousands): Year Ended December 31, 2018 2017 2016 Revenues: INAP US $ 248,184 $ 215,770 $ 229,902 INAP INTL 69,189 64,948 68,395 Total revenues 317,373 280,718 298,297 Costs of sales and services, customer support and sales and marketing: INAP US 134,792 128,062 148,706 INAP INTL 45,124 37,829 41,900 Total costs of sales and services, customer support and sales and marketing 179,916 165,891 190,606 Segment profit: INAP US 113,392 87,708 81,196 INAP INTL 24,065 27,119 26,495 Total segment profit 137,457 114,827 107,691 Goodwill impairment — — 80,105 Exit activities, restructuring and impairments 5,406 6,249 7,236 Other operating expenses, including sales, general and administrative and depreciation and amortization expenses 125,895 103,804 113,420 Income (loss) from operations 6,156 4,774 (93,070 ) Non-operating expenses 67,874 51,001 31,312 Loss before income taxes and equity in earnings of equity-method investment $ (61,718 ) $ (46,227 ) $ (124,382 ) The CODM does not manage the operating segments based on asset allocations. Therefore, assets by operating segment have not been provided. We discuss goodwill by segment in Note 6, and as mentioned in that note, we did no t record an impairment charge during the years ended December 31, 2018 and December 31, 2017 , respectively. A goodwill impairment charge was recorded for the year ended December 31, 2016 of $80.1 million . Revenue by Source Revenue by source, with sales and usage-based taxes excluded, is as follows (in thousands): Year Ended December 31, 2018 2017 2016 Colocation $ 131,124 $ 124,083 $ 129,881 Network Services 64,111 67,435 70,779 Cloud 122,138 89,200 97,637 $ 317,373 $ 280,718 $ 298,297 In accordance with ASC 606, the Company disaggregates revenue from contracts with customers based on the timing of revenue recognition. The Company determined that disaggregating revenue into these categories depicts how the nature, amount, timing and uncertainty of revenue and cash flows are affected by economic factors. As discussed in this note, the Company business consists of INAP US and INAP INTL colocation, cloud and network services. The following table presents disaggregated revenues by category for the year ended December 31, 2018 (in thousands): Year Ended December 31, 2018 INAP US INAP INTL Colocation $ 125,282 $ 5,842 Network Services 52,748 11,363 Cloud 70,154 51,984 $ 248,184 $ 69,189 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, 2018 2017 2016 Revenues: United States $ 252,482 $ 220,018 $ 231,943 Canada 38,133 38,750 44,206 Other countries 26,758 21,950 22,148 $ 317,373 $ 280,718 $ 298,297 Net property and equipment, by country with assets over 10% of total property and equipment, is as follows (in thousands): December 31, 2018 2017 United States $ 433,508 $ 417,936 Canada 38,718 34,296 Other countries 5,835 6,333 $ 478,061 $ 458,565 |
STOCK-BASED COMPENSATION PLANS
STOCK-BASED COMPENSATION PLANS | 12 Months Ended |
Dec. 31, 2018 | |
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, 2018 2017 2016 Costs of customer support $ 165 $ 167 $ 1,159 Sales, general and administrative 4,513 2,873 3,838 $ 4,678 $ 3,040 $ 4,997 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, 2018, an immaterial amount of stock-based compensation was capitalized. During the years ended December 31, 2017 and 2016 , we capitalized $0.1 million and $0.2 million , respectively, of stock-based compensation. During the years ended December 31, 2018 and 2017, there were no options granted 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 year ended December 31, 2016, was expected term of 4.7 years ; historical volatilities of 45% ; risk free interest rates of 1.2% , and no dividend yield. The weighted average estimated fair value per share of our stock options at grant date was $3.13 during the year ended December 31, 2016. 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, 2018 , 1.3 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 the years ended December 31, 2018 , 2017 and 2016 , the total value of the equity grants received by all non-employee directors was $0.7 million, $1.1 million and $0.4 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, 2018 under all of our stock-based compensation plans was as follows (shares in thousands): Shares Weighted Average Exercise Price Balance, December 31, 2017 379 $ 21.17 Granted — — Exercised (6 ) 8.49 Forfeitures and post-vesting cancellations (150 ) 14.55 Balance, December 31, 2018 223 25.95 Exercisable, December 31, 2018 211 26.74 Fully vested and exercisable stock options and stock options expected to vest as of December 31, 2018 are further summarized as follows (shares in thousands): Fully Vested and Exercisable Expected to Vest Total shares 211 223 Weighted-average exercise price $ 26.74 $ 25.95 Aggregate intrinsic value $ — $ — Weighted-average remaining contractual term (in years) 3.8 4.0 For the year ended December 31, 2018, the total intrinsic value of stock options exercised was less than $0.1 million , and $0.4 million and $0.1 million during the years ended December 31, 2017 and 2016 , 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, 2018 was as follows (shares in thousands): Shares Weighted- Average Grant Date Fair Value Unvested balance, December 31, 2017 760 $ 4.03 Granted 608 $ 7.73 Vested (277 ) $ 6.95 Forfeited (133 ) $ 6.61 Unvested balance, December 31, 2018 958 $ 5.17 The total fair value of restricted stock vested during the years ended December 31, 2018 , 2017 and 2016 was $1.7 million , $2.6 million and $1.5 million , respectively. At December 31, 2018 , the total intrinsic value of all unvested restricted stock was $4.0 million . Total unrecognized compensation costs related to unvested stock-based compensation as of December 31, 2018 is as follows (dollars in thousands): Stock Options Restricted Stock Total Unrecognized compensation $ 53 $ 3,330 $ 3,383 Weighted-average remaining recognition period (in years) 1.03 2.90 2.90 |
EMPLOYEE RETIREMENT PLAN
EMPLOYEE RETIREMENT PLAN | 12 Months Ended |
Dec. 31, 2018 | |
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 $0.7 million for the year ended December 31, 2018 and $0.4 million and $0.8 million for the years ended December 31, 2017 and 2016 , respectively. |
INCOME TAXES
INCOME TAXES | 12 Months Ended |
Dec. 31, 2018 | |
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, 2018 2017 2016 United States $ (64,237 ) $ (46,648 ) $ (120,553 ) Foreign 2,519 421 (3,829 ) Loss from continuing operations before income taxes, non-controlling interest and equity in (earnings) of equity-method investment $ (61,718 ) $ (46,227 ) $ (124,382 ) The current and deferred income tax benefit is as follows (in thousands): Year Ended December 31, 2018 2017 2016 Current: Federal $ — $ (730 ) $ (15 ) State 118 123 155 Foreign 277 507 61 395 (100 ) 201 Deferred: Federal — — — State — — — Foreign 262 353 329 262 353 329 Provision for income taxes $ 657 $ 253 $ 530 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, 2018 2017 2016 Federal income tax at statutory rates (21.0 )% (34.0 )% (34.0 )% Foreign income tax (0.1 ) 0.5 0.7 State income tax (5.5 ) (5.0 ) (5.0 ) Other permanent differences 1.3 0.4 0.2 Statutory tax rate change 1.2 — (3.2 ) Statutory tax rate change - Deferred - Tax Reform Act — (128.4 ) — Statutory tax rate change - Valuation Allowance - Tax Reform Act — 128.4 — Compensation — — 3.0 Goodwill impairment — — 25.2 Refundable AMT credit — (1.5 ) — Change in valuation allowance 25.2 40.1 13.5 Effective tax rate 1.1 % 0.5 % 0.4 % 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, 2018 2017 Long-term deferred income tax (liabilities) assets: Property and equipment $ 50,405 $ 43,554 Goodwill 1,071 1,392 Intangible assets (26,534 ) (22,021 ) Deferred revenue, less current portion 1,358 1,834 Restructuring liability, less current portion 696 1,282 Refinance (4,130 ) (374 ) Deferred rent 285 639 Stock-based compensation 1,450 911 Provision for doubtful accounts 1,360 1,772 U.S. net operating loss carryforwards 99,026 89,117 Foreign net operating loss carryforwards, less current portion 7,631 8,053 Tax credit carryforwards 2,775 2,812 Interest limitation 9,403 — Impact of adoption of ASC 606 (6,666 ) — Other 2,408 2,090 Long-term deferred income tax assets 140,538 131,061 Less: valuation allowance (142,749 ) (132,712 ) Net long-term deferred income tax (liabilities) assets (2,211 ) (1,651 ) Net deferred tax liabilities $ 2,211 $ 1,651 As of December 31, 2018 , we have U.S. net operating loss carryforwards for federal tax purposes of $367.1 million of which, $331.7 million that will expire in tax years 2018 through 2037 and $35.4 million will not expire. 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 in 2017 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 $36.7 million that are currently subject to annual expiration. We determined that through December 31, 2018 , no further ownership changes have occurred since 2001 pursuant to Section 382 of the Internal Revenue Code ("Section 382"). Therefore, as of December 31, 2018 , 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 completed the accounting for the effects of the Act during the period ended December 31, 2018. There were no material adjustments as of result of the Act to the 2017 amounts recorded in the year end December 31, 2018. 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 completed our analysis of the effects of the GILTI provisions and have elected to expense GILTI tax as incurred. As a result of the Act, as of December 31, 2017, the Company recorded the impact of the remeasurement of deferred tax assets and liabilities from 35.0% to 21.0%, along with the offsetting adjustment to our valuation allowance including a decrease to the valuation allowance of $0.7 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, 2018 , we continued to maintain a valuation allowance of $137.1 million against the U.S. deferred tax asset and $5.6 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, 2018 2017 2016 Balance, January 1, $ 132,712 $ 164,865 $ 148,310 Increase in deferred tax assets 10,037 27,183 16,555 Remeasurement in deferred tax assets — (59,336 ) — Balance, December 31, $ 142,749 $ 132,712 $ 164,865 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. However, the tax impact of any unremitted foreign earnings that may be available for distribution would likely be immaterial to the 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, 2018 2017 2016 Unrecognized tax benefits balance, January 1, $ 162 $ 187 $ — Addition for tax positions taken in a prior year 300 162 187 Deduction for tax positions taken in a prior year — (187 ) — Unrecognized tax benefits balance, December 31, $ 462 $ 162 $ 187 During 2018 , we recorded $0.3 million increase to our unrecognized tax benefits. 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, 2018 and 2017, we had an accrual of $0.2 million and less than $0.1 million , respectively, for interest and penalties related to uncertain tax positions. Our U.S. federal and state income tax returns remain open to examination for the tax years 2015 through 2017; however, tax authorities have the right to adjust the net operating loss carryovers for years prior to 2017. Returns filed in other jurisdictions are generally subject to examination for years prior to 2017. |
EQUITY
EQUITY | 12 Months Ended |
Dec. 31, 2018 | |
Equity [Abstract] | |
EQUITY | EQUITY Authorization of Stock Repurchase In December 2018, INAP's Board of Directors authorized management to repurchase an initial $5.0 million of INAP common stock, as permitted under INAP's 2017 Credit Agreement. Repurchases of INAP's common stock may be made from time to time, subject to market conditions, in open market or through privately negotiated transactions. INAP has no obligation to repurchase shares under the authorization, and the timing, actual number and value of shares which are repurchased will depend on a number of factors, including the price of the Company's common stock. The Company may suspend or discontinue the repurchase program at any time. In the future, the Board of Directors may consider new authorizations based on a new credit facility's allowances should INAP shares remain significantly undervalued. As of December 31, 2018, there have been no shares repurchased under this program. Public Offering On October 23, 2018, the Company closed a public offering of 4,210,527 shares of common stock at $9.50 per share to the public and received net proceeds of approximately $37.1 million (net of underwriting discounts and commissions, and other offering expenses of $0.5 million ). Securities Purchase Agreement On February 22, 2017, the Company entered 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. 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 were 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 2017 Stock Plan. |
RELATED PARTY TRANSACTION
RELATED PARTY TRANSACTION | 12 Months Ended |
Dec. 31, 2018 | |
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 for the years ended December 31, 2018 and 2017 was $146,571 and $138,371 , respectively, and $24,000 |
SUBSEQUENT EVENT
SUBSEQUENT EVENT | 12 Months Ended |
Dec. 31, 2018 | |
Subsequent Events [Abstract] | |
SUBSEQUENT EVENT | SUBSEQUENT EVENTS On January 15, 2019, NTT-ME exercised its first put option that resulted in NTT-ME having an ownership of 15% and INAP of 85% . The put option was exercised at $1.0 million which represents the fair market value of the shares purchased. |
UNAUDITED QUARTERLY RESULTS
UNAUDITED QUARTERLY RESULTS | 12 Months Ended |
Dec. 31, 2018 | |
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, 2018 and 2017 . The quarterly operating results below are not necessarily indicative of those in future periods (in thousands, except for share data). 2018 Quarter Ended March 31 June 30 September 30 December 31 Net revenues $ 74,201 $ 81,962 $ 82,972 $ 78,238 Costs of sales and services, exclusive of depreciation and amortization 25,467 28,621 29,511 23,662 Costs of customer support 7,387 8,841 7,984 8,305 Exit activities, restructuring and impairments (33 ) 826 2,347 2,266 Net loss attributable to INAP shareholders (14,288 ) (14,279 ) (15,479 ) (18,454 ) Basic and diluted net loss per share $ (0.70 ) $ (0.69 ) $ (0.75 ) $ (0.82 ) 2017 Quarter Ended March 31 June 30 September 30 December 31 Net 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 shareholders (8,230 ) (19,283 ) (10,895 ) (6,934 ) Basic and diluted net loss per share $ (0.51 ) $ (0.97 ) $ (0.55 ) $ (0.35 ) |
SCHEDULE II - VALUATION AND QUA
SCHEDULE II - VALUATION AND QUALIFYING ACCOUNTS AND RESERVES | 12 Months Ended |
Dec. 31, 2018 | |
SEC Schedule, 12-09, 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, 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 Year ended December 31, 2018 Allowance for doubtful accounts $ 1,487 $ 882 $ (822 ) (1) $ 1,547 (1) Deductions in the allowance for doubtful accounts represent write-offs of uncollectible accounts net of recoveries. |
SUMMARY OF SIGNIFICANT ACCOUN_2
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies) | 12 Months Ended |
Dec. 31, 2018 | |
Accounting Policies [Abstract] | |
Accounting Principles | Accounting Principles and Basis of Presentation We prepare our consolidated financial statements and accompanying notes in accordance with accounting principles generally accepted in the United States of America ("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 with GAAP 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, useful lives, 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 Affiliates and Other Entities | Investment in Affiliates and Other Entities In the normal course of business, INAP enters into various types of investment arrangements, each having unique terms and conditions. These investments may include equity interests held by INAP in business entities, including general or limited partnerships, contractual ventures, or other forms of equity participation. The Company determines whether such investments involve a variable interest entity ("VIE") based on the characteristics of the subject entity. If the entity is determined to be a VIE, then management determines if INAP is the primary beneficiary of the entity and whether or not consolidation of the VIE is required. The primary beneficiary consolidating the VIE must normally have both (i) the power to direct the activities of a VIE that most significantly affect the VIE's economic performance and (ii) the obligation to absorb losses of the VIE or the right to receive benefits from the VIE, in either case that could potentially be significant to the VIE. When INAP is deemed to be the primary beneficiary, the VIE is consolidated and the other party's equity interest in the VIE is accounted for as a noncontrolling interest. If an entity fails to meet the characteristics of a VIE, the Company then evaluates such entity under the voting model. Under the voting model, the Company consolidates the entity if they determine that they, directly or indirectly, have greater than 50% of the voting shares, and determine that other equity holders do not have substantive participating rights. |
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. 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 and cash equivalents, marketable securities, accounts receivable and accounts payable. 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 lease certain data centers, office space, partner sites and equipment. 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, whichever is shorter. The duration of lease obligations and commitments ranges from two years to 34 years for facilities. Equipment leases are included in this range. 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. See "Recent Accounting Pronouncements" in Note 2 for information about the new lease standard. Out of Period Adjustment In connection with the preparation, review and audit of the Company's consolidated financial statements required to be included in this Annual Report on Form 10-K for the year ended December 31, 2018, management identified certain errors in the Company's historical financial statements, resulting in a conclusion that certain corrections need to be made to the Company's unaudited quarters during 2018. The Company has revised its prior period consolidated financial statements accordingly and included such revisions herein. Based on an analysis of quantitative and qualitative factors, the Company concluded that these errors were not material to the consolidated financial position, results of operations or cash flows as presented in the Company’s quarterly financial statements that have been previously filed in the Company’s Quarterly Reports on Form 10-Q. As a result, amendment of such reports is not required. The revisions to correct errors relate to the correction of accounting for an amendment to a capital lease executed in February 2018. The adjustments to the Company’s previously issued quarterly financial statements are as follows: For the quarter ended March 31, 2018 As reported Adjustments As adjusted Costs of sales and services, exclusive of depreciation and amortization - QTD $ 25,037 $ 430 $ 25,467 Costs of sales and services, exclusive of depreciation and amortization - YTD 25,037 430 25,467 Depreciation and amortization - QTD 21,077 (81 ) 20,996 Depreciation and amortization - YTD 21,077 (81 ) 20,996 Interest expense - QTD 15,027 (577 ) 14,450 Interest expense - YTD 15,027 (577 ) 14,450 Net loss attributable to INAP shareholders - QTD (14,060 ) (228 ) (14,288 ) Net loss attributable to INAP shareholders - YTD (14,060 ) (228 ) (14,288 ) Property and equipment, net 461,314 10,438 471,752 Total assets 731,920 10,438 742,358 Capital lease obligations - non-current 223,549 10,470 234,019 Total liabilities 723,098 10,470 733,568 Accumulated deficit (1,313,598 ) (228 ) (1,313,826 ) Total stockholders' equity (deficit) $ 8,822 $ (228 ) $ 8,594 For the quarter ended June 30, 2018 As reported Adjustments As adjusted Costs of sales and services, exclusive of depreciation and amortization - QTD $ 27,976 $ 645 $ 28,621 Costs of sales and services, exclusive of depreciation and amortization - YTD 53,013 1,075 54,088 Depreciation and amortization - QTD 22,590 (122 ) 22,468 Depreciation and amortization - YTD 43,667 (203 ) 43,464 Interest expense - QTD 15,860 (879 ) 14,981 Interest expense - YTD 30,887 (1,456 ) 29,431 Net loss attributable to INAP shareholders - QTD (13,923 ) (356 ) (14,279 ) Net loss attributable to INAP shareholders - YTD (27,983 ) (584 ) (28,567 ) Property and equipment, net 452,958 10,315 463,273 Total assets 724,707 10,315 735,022 Capital lease obligations - non-current 220,721 10,694 231,415 Total liabilities 729,728 10,694 740,422 Accumulated deficit (1,328,502 ) (584 ) (1,329,086 ) Total stockholders' equity (deficit) $ (5,021 ) $ (584 ) $ (5,605 ) |
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 5 years for 2018 , 2017 and 2016 . Judgment is required in determining which software projects are capitalized and the resulting economic life. |
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, 2018, we changed our operating segments, as discussed in Note 10, "Operating Segments and Geographic Information," and, subsequently, our reporting units. We now have seven reporting units: US Colocation, US Cloud, US Network, INTL Colocation, INTL Cloud, INTL Network, 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. The Company tests goodwill for impairment annually in the third quarter as of August 1, 2018, or when events occur or circumstances change that could potentially reduce the fair value of the reporting unit. See Note 6, "Goodwill and Other Intangible Assets," for further information. 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. 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 useful life. The intangible assets are being amortized over periods which reflect the pattern in which economic benefits of the assets are expected to be realized. We amortize the cost of the acquired technologies and noncompete agreements over their useful lives of 4 to 8 years and 8 to 15 years for trade names. Customer relationships are being amortized on an accelerated basis over their estimated useful life of 10 to 15 years. During the years ended December 31, 2018 , 2017 and 2016 , amortization expense for acquired and developed technologies was $4.0 million , $2.1 million and $3.0 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 $0.5 million and $0.2 million for associated liabilities during the years ended December 31, 2018 and 2017 . We recorded interest and penalties arising from the underpayment of income taxes in "Provision 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 "Sales, 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 and we typically recognize the monthly minimum as revenue each month. We recorded installation fees as deferred revenue and recognized the revenue ratably over the estimated customer life, which was approximately five years for 2017 and 2016 before the Company adopted Accounting Standards Update ("ASU") No. 2014-09, Revenue from Contracts with Customers (Topic 606) ("ASC 606") on January 1, 2018. 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: a. the parties to the contract have approved the contract (in writing, orally, or in accordance with other customary business practices) and are committed to perform their respective obligations. b. the Company can identify each party’s rights regarding the goods or services to be transferred. c. the Company can identify the payment terms for the goods or services to be transferred. d. the contract has commercial substance (that is, the risk, timing, or amount of the entity’s future cash flows is expected to change as a result of the contract). e. it is probable that the Company will collect substantially all of the consideration to which it will be entitled in exchange for the goods or services that will be transferred to the customer The transaction price reflects INAP’s expectations about the consideration it will be entitled to receive from the customer. The Company considers the terms of the contract and its customary business practices to determine the transaction price. The transaction price is the amount of consideration to which the Company expects to be entitled in exchange for transferring promised goods or services to a customer, excluding amounts collected on behalf of third parties (for example, some sales taxes). The consideration promised in a contract with a customer may include fixed amounts, variable amounts, or both. After contract inception, the transaction price can change for various reasons, including the resolution of uncertain events or other changes in circumstances that change the amount of consideration to which INAP expects to be entitled in exchange for the promised goods or services. Once the separate performance obligations are identified and the transaction price has been determined, the Company allocates the transaction price to the performance obligations in proportion to their standalone selling prices. When allocating on a relative standalone selling price basis, any discount within the contract generally is allocated proportionately to all of the performance obligations in the contract. To allocate the transaction price on a relative standalone selling price basis, the Company first determines the standalone selling price of the distinct good or service underlying each performance obligation. It is the price at which the Company would sell a good or service on a standalone (or separate) basis at contract inception. The observable price of a good or service sold separately provides the best evidence of standalone selling price. If a standalone selling price is not directly observable, the Company would estimate the standalone selling price. The Company will be able to consider its facts and circumstances in order to determine how frequently it will need to update the estimates. If the information used to estimate the standalone selling price for similar transactions has not changed, the Company can determine that it is reasonable to use the previously determined standalone selling price. Revenue is recognized to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. The Company enters into contracts that can include various combinations of products and services, which are generally capable of being distinct and accounted for as separate performance obligations. The Company's contracts with customers often include performance obligations to transfer multiple products and services to a customer. Common performance obligations of the Company include delivery of services. Determining whether products and services are considered distinct performance obligations that should be accounted for separately versus together requires significant judgment by the Company. A performance obligation is a promise in a contract to transfer a distinct good or service to the customer, and is the unit of account in ASC 606. A contracts transaction price is allocated to each distinct performance obligation and recognized as revenue when, or as, the performance obligation is satisfied. Total transaction price is estimated for impact of variable consideration, such as INAP's service level arrangements, additional usage and late fees, discounts and promotions, and customer care credits. The majority of our contracts have multiple performance obligations, as the promise to transfer individual goods or services is separately identifiable from other promises in the contracts and, therefore, is distinct. For contracts with multiple performance obligations, we allocate the contract's transaction price to each performance obligation based on its relative stand-alone selling price. The stand-alone selling price ("SSP") is determined based on observable price. In instances where the SSP is not directly observable, such as when the Company does not sell the product or service separately, INAP determines the SSP using information that may include market conditions and other observable inputs. The Company typically has more than one SSP for individual products and services due to the stratification of those products and services by customers and circumstances. In these instances, the Company may use information such as the size of the customer and geographic region in determining the SSP. 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, installation revenues are recognized over the initial contract life rather than over the estimated customer life, as they are not significant to the total contract and therefore do not represent a material right. Most performance obligations, with the exception of certain sales of equipment or hardware, are 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. In evaluating the treatment of certain contracts, the Company exercised heightened 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, revenue recognition remains materially consistent with historical practice. 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. Management expects that commission fees paid to sales representatives as a result of obtaining service contracts and contract renewals are recoverable and therefore the Company capitalized them as contract costs in the amount of $24.9 million at December 31, 2018. Capitalized commission fees are amortized on a straight-line basis over the determined life, which vary based on the customer segment. For the year ended December 31, 2018, amortization recognized was $9.6 million . There was no impairment loss recorded on capitalized contract costs for the year ended December 31, 2018. Applying the practical expedient pertaining to contract costs, the Company recognizes the incremental costs of obtaining contracts as an expense when incurred if the amortization period of the assets that the Company otherwise would have recognized is one year or less. These costs are included in "Sales, general and administrative" expenses in the accompanying consolidated statements of operations and comprehensive loss. |
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. |
Advertising Costs | Advertising Costs We expense all advertising costs as incurred. |
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 As of January 1, 2018, we changed our organizational structure in an effort to create more effective and efficient 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 ("CODM"), regularly reviews for purposes of allocating resources and assessing performance. As a result, we report our financial performance based on our revised segment structure. We have reclassified prior period amounts to conform to the current presentation. |
Recent Accounting Pronouncements | Recent Accounting Pronouncements Adoption of New Accounting Standards In May 2014, the Financial Accounting Standard Board ("FASB") issued Accounting Standards Update ("ASU") No. 2014-09, Revenue from Contracts with Customers (Topic 606) ("ASC 606"). This standard update, along with related subsequently issued updates, clarifies the principles for recognizing revenue and develops a common revenue standard for GAAP. The standard update also amends current guidance for the recognition of costs to obtain and fulfill contracts with customers such that incremental costs of obtaining and direct costs of fulfilling contracts with customers will be deferred and amortized consistent with the transfer of the related good or service. ASC 606 intends to provide a more robust framework for addressing revenue issues; improve comparability of revenue recognition practices across entities, industries, jurisdictions, and capital markets; and provide more useful information to users of financial statements through improved disclosure requirements. The Company adopted this guidance on January 1, 2018 using the modified retrospective method applying certain practical expedients. Following the adoption of this guidance, the revenue recognition for our sales arrangements remained materially consistent with our historical practice. The Company adopted the practical expedient for the portfolio approach of contracts with similar characteristics in which the Company reasonably expects that the effects on the financial statements of applying this practical expedient to the portfolio would not differ materially from applying this guidance to the individual contracts (or performance obligations) within that portfolio. The Company also adopted the practical expedient to not disclose the value of unsatisfied performance obligations for (i) contracts with an original expected length of one year or less, (ii) contracts for which INAP recognizes revenue at the amount to which the Company has the right to invoice for services performed, and (iii) the value for variable consideration that is applied to individual performance obligations in a series. The Company elected to exclude from the measurement of the transaction price all taxes assessed by a governmental authority that are both imposed on and concurrent with a specific revenue-producing transaction and collected by the entity from a customer (e.g., sales, use, and value added taxes). Adjustments to Reported Financial Statements from the Adoption The following table presents the effect of the adoption of ASC 606 on the Company's consolidated balance sheet as of January 1, 2018 (in thousands): December 31, 2017, as reported Adjustments January 1, 2018, as adjusted ASSETS Contract assets - current $ — $ 8,609 $ 8,609 Contract assets - non-current — 15,759 15,759 LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT) Deferred revenues - current 4,861 (749 ) 4,112 Deferred tax liability 1,651 209 1,860 Deferred revenues - non-current 4,761 (4,616 ) 145 Accumulated deficit $ (1,323,723 ) $ 23,204 $ (1,300,519 ) Current Impact from the Adoption In accordance with the new revenue standard requirements, the disclosure of the current period impact of adoption on our consolidated statement of operations and comprehensive loss and balance sheet is as follows (in thousands, except for per share amounts): Year Ended December 31, 2018 As Reported Balances without Adoption of ASC 606 Effect of Change Higher/ (Lower) Net revenues $ 317,373 $ 316,606 $ 767 Sales, general and administrative 75,356 75,120 236 Total operating costs and expenses 311,217 310,981 236 Income from operations 6,156 5,625 531 Loss before income taxes and equity in earnings of equity-method investment (61,718 ) (62,249 ) 531 Net loss (62,375 ) (62,906 ) 531 Less net income attributable to non-controlling interest 125 125 — Net loss attributable to INAP shareholders (62,500 ) (63,031 ) 531 Comprehensive loss $ (62,241 ) $ (62,772 ) $ 531 On August 2016, the FASB issued ASU No. 2016-15, Statement of Cash Flows (Topic 230): Classification of Certain Cash Receipts and Cash Payments, a consensus of the FASB's Emerging Issues Task Force. The new guidance is intended to reduce diversity in practice in how certain transactions are classified in the statement of cash flows. We adopted this guidance in the first quarter of 2018 and it did not have a significant impact on our consolidated financial statements. On January 2017, the FASB issued final guidance that revises the definition of a business, ASU No. 2017-01: Clarifying the Definition of a Business (Topic 805). The definition of a business affects many areas of accounting (e.g., acquisitions, disposals, goodwill impairment, or consolidation). The guidance requires an entity to evaluate if substantially all of the fair value of the gross assets acquired is concentrated in a single identifiable asset or a group of similar identifiable assets; if so, the set of transferred assets and activities is not a business. The guidance also requires a business to include at least one substantive process and narrows the definition of outputs by more closely aligning it with how outputs are described in ASC 606. We adopted this guidance in the first quarter of 2018 and it did not impact our consolidated financial statements. The guidance may have an impact on the Company as it pursues its strategy to develop its business. On May 2017, the FASB issued guidance ASU No. 2017-09: Scope of Modification Accounting (Topic 718), to clarify when to account for a change to the terms or conditions of a share-based payment award as a modification. Under the new guidance, modification accounting is required only if the fair value, the vesting conditions, or the classification of the award (as equity or liability) changes as a result of the change in terms or conditions. We adopted this guidance in the first quarter of 2018 and it did not impact our consolidated financial statements. Accounting Pronouncements Issued But Not Yet Effective In February 2016, the FASB issued ASU No. 2016-02, Leases (Topic 842), which states that a lessee should recognize the assets and liabilities that arise from leases. The guidance is effective for annual and interim periods beginning after December 15, 2018. Earlier adoption is permitted. We will adopt the new standard on January 1, 2019, the beginning of fiscal 2019. The new lease standard provides entities two options for applying the modified retrospective approach (1) retrospectively to each prior reporting period presented in the financial statements with the cumulative-effect adjustment recognized at the beginning of the earliest comparative period presented, or (2) at the beginning of the period of adoption (January 1, 2019) through a cumulative-effect adjustment recognized then. The Company will be adopting the standard by recognizing and measuring leases at the adoption date with a cumulative effect of initially applying the guidance recognized at the date of initial application. The Company believes the most significant impact relates to the recognition on the Company's balance sheet of right-of-use ("ROU") assets and lease liabilities for all operating leases. The Company does not believe the standard will materially affect the consolidated net earnings. Consistent with current guidance, the recognition, measurement, and presentation of expenses and cash flows arising from a lease by a lessee primarily will depend on its classification. For income statement purposes, operating leases will result in a straight-line expense while finance leases will result in a front-loaded expense pattern. The Company will be electing the package of practical expedients to not reassess prior conclusions related to contracts containing leases, lease classification and initial direct costs. The Company does not plan on separately recording lease components from non-lease components, and plan on accounting for them together as a single lease component. INAP will make an accounting policy election to not record leases with an initial term of 12 months or less on the balance sheet. The Company will recognize lease expense for these short-term leases on a straight-line basis over the lease term in the consolidated statements of operations and comprehensive loss. In preparation for adoption of the standard, INAP has implemented internal controls and key system functionality to enable the preparation of financial information. The Company primarily has capital leases which have been recorded on the consolidated balance sheets and as of the January 1, 2019 transition date, the capital leases became finance leases establishing the ROU asset and liability. The ROU asset and liability for operating leases were less than 5% of total Company assets and liabilities, respectively, as of January 1, 2019. We do not believe the new standard will have a notable impact on our liquidity. The new standard will not have a significant impact on our debt covenant compliance under our current agreements. In June 2016, the FASB issued ASU No. 2016-13, Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments . The ASU is intended to improve financial reporting by requiring timelier recording of credit losses on loans and other financial instruments held by financial institutions and other organizations. The ASU requires the measurement of all expected credit losses for financial assets including trade receivables held at the reporting date based on historical experience, current conditions, and reasonable and supportable forecasts. Financial institutions and other organizations will now use forward-looking information to better inform their credit loss estimates. The ASU is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2019. Early application will be permitted for all organizations for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2018. The Company is evaluating the impact, if any, that this pronouncement will have on its consolidated financial statements. In August 2018, the FASB issued ASU No. 2018-15, Intangibles - Goodwill and Other - Internal-Use Software (Subtopic 350-40) , relating to a customer's accounting for implementation, set-up, and other upfront costs incurred in a cloud computing arrangement that is hosted by a vendor (i.e., a service contract). Under the new guidance, a customer will apply the same criteria for capitalizing implementation costs as it would for an arrangement that has a software license. The new guidance also prescribes the balance sheet, income statement, and cash flow classification of the capitalized implementation costs and related amortization expense, and requires additional quantitative and qualitative disclosures. The ASU is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2019. Early application is permitted. The Company can choose to adopt the new guidance (1) prospectively to eligible costs incurred on or after the date this guidance is first applied, or (2) retrospectively. The Company is evaluating the impact, if any, that this pronouncement will have on its consolidated financial statements. In August 2018, the FASB issued ASU No. 2018-13, Fair Value Measurement (Topic 820): Disclosure Framework-Changes to the Disclosure Requirements for Fair Value Measurement , which removes, adds and modifies certain disclosure requirements for fair value measurements in Topic 820. The Company will no longer be required to disclose the amount of and reasons for transfers between Level 1 and Level 2 of the fair value hierarchy, and the valuation processes of Level 3 fair value measurements. However, the Company will be required to additionally disclose the changes in unrealized gains and losses included in other comprehensive income for recurring Level 3 fair value measurements, and the range and weighted average of assumptions used to develop significant unobservable inputs for Level 3 fair value measurements. The ASU is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2019. The amendments relating to additional disclosure requirements will be applied prospectively for only the most recent interim or annual period presented in the initial year of adoption. All other amendments will be applied retrospectively to all periods presented upon their effective date. The Company is permitted to early adopt either the entire ASU or only the provisions that eliminate or modify the requirements. The Company is evaluating the impact, if any, that this pronouncement will have on its consolidated financial statements. |
SUMMARY OF SIGNIFICANT ACCOUN_3
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Accounting Policies [Abstract] | |
Schedule of Error Corrections and Prior Period Adjustments | For the quarter ended March 31, 2018 As reported Adjustments As adjusted Costs of sales and services, exclusive of depreciation and amortization - QTD $ 25,037 $ 430 $ 25,467 Costs of sales and services, exclusive of depreciation and amortization - YTD 25,037 430 25,467 Depreciation and amortization - QTD 21,077 (81 ) 20,996 Depreciation and amortization - YTD 21,077 (81 ) 20,996 Interest expense - QTD 15,027 (577 ) 14,450 Interest expense - YTD 15,027 (577 ) 14,450 Net loss attributable to INAP shareholders - QTD (14,060 ) (228 ) (14,288 ) Net loss attributable to INAP shareholders - YTD (14,060 ) (228 ) (14,288 ) Property and equipment, net 461,314 10,438 471,752 Total assets 731,920 10,438 742,358 Capital lease obligations - non-current 223,549 10,470 234,019 Total liabilities 723,098 10,470 733,568 Accumulated deficit (1,313,598 ) (228 ) (1,313,826 ) Total stockholders' equity (deficit) $ 8,822 $ (228 ) $ 8,594 For the quarter ended June 30, 2018 As reported Adjustments As adjusted Costs of sales and services, exclusive of depreciation and amortization - QTD $ 27,976 $ 645 $ 28,621 Costs of sales and services, exclusive of depreciation and amortization - YTD 53,013 1,075 54,088 Depreciation and amortization - QTD 22,590 (122 ) 22,468 Depreciation and amortization - YTD 43,667 (203 ) 43,464 Interest expense - QTD 15,860 (879 ) 14,981 Interest expense - YTD 30,887 (1,456 ) 29,431 Net loss attributable to INAP shareholders - QTD (13,923 ) (356 ) (14,279 ) Net loss attributable to INAP shareholders - YTD (27,983 ) (584 ) (28,567 ) Property and equipment, net 452,958 10,315 463,273 Total assets 724,707 10,315 735,022 Capital lease obligations - non-current 220,721 10,694 231,415 Total liabilities 729,728 10,694 740,422 Accumulated deficit (1,328,502 ) (584 ) (1,329,086 ) Total stockholders' equity (deficit) $ (5,021 ) $ (584 ) $ (5,605 ) For the quarter ended September 30, 2018 As reported Adjustments As adjusted Costs of sales and services, exclusive of depreciation and amortization - QTD $ 28,866 $ 645 $ 29,511 Costs of sales and services, exclusive of depreciation and amortization - YTD 81,880 1,721 83,601 Depreciation and amortization - QTD 23,431 (122 ) 23,309 Depreciation and amortization - YTD 67,097 (326 ) 66,771 Interest expense - QTD 16,898 (895 ) 16,003 Interest expense - YTD 47,786 (2,351 ) 45,435 Net loss attributable to INAP Shareholders - QTD (15,106 ) (373 ) (15,479 ) Net loss attributable to INAP Shareholders - YTD (43,089 ) (957 ) (44,046 ) Property and equipment, net 477,423 10,193 487,616 Total assets 746,038 10,193 756,231 Capital lease obligations - non-current 252,599 10,945 263,544 Total liabilities 765,004 10,945 775,949 Accumulated deficit (1,343,609 ) (957 ) (1,344,566 ) Total stockholders' equity (deficit) $ (18,966 ) $ (957 ) $ (19,923 ) |
Contract with Customer, Asset and Liability | The Company includes only those incremental costs that would not have been incurred if the contracts had not been entered into: Current Non-current Balance at December 31, 2017 $ — $ — Adjustments resulting from adoption of ASC 606 9,035 16,313 Deferred customer acquisition costs incurred in the period 1,877 7,361 Amounts recognized as expense in the period (9,638 ) — Reclassification between short-term and long-term 7,570 (7,570 ) Balance at December 31, 2018 $ 8,844 $ 16,104 |
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, 2018 2017 2016 Net loss and net loss available to common stockholders $ (62,500 ) $ (45,343 ) $ (124,742 ) Weighted average shares outstanding, basic and diluted 20,732 18,993 13,083 Net loss per share, basic and diluted $ (3.01 ) $ (2.39 ) $ (9.54 ) Anti-dilutive securities excluded from diluted net loss per share calculation for stock-based compensation plans 1,509 1,076 1,350 |
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, 2017 As Previously Reported Reclassification As Reported Revenues: INAP COLO $ 209,580 $ (209,580 ) $ — INAP CLOUD 71,138 (71,138 ) — INAP US — 215,770 215,770 INAP INTL — 64,948 64,948 Costs of sales and services, exclusive of depreciation and amortization: INAP COLO $ 89,240 $ (89,240 ) $ — INAP CLOUD 16,977 (16,977 ) — INAP US — 82,997 82,977 INAP INTL — 23,220 23,220 Year Ended December 31, 2016 As Previously Reported Reclassification As Reported Revenues: INAP COLO $ 221,678 $ (221,678 ) $ — INAP CLOUD 76,619 (76,619 ) — INAP US — 229,902 229,902 INAP INTL — 68,395 68,395 Costs of sales and services, exclusive of depreciation and amortization: INAP COLO $ 105,620 $ (105,620 ) — INAP CLOUD 18,635 (18,635 ) — INAP US — 98,512 98,512 INAP INTL — 25,743 25,743 |
Schedule of new accounting pronouncements and changes in accounting principles | The following table presents the effect of the adoption of ASC 606 on the Company's consolidated balance sheet as of January 1, 2018 (in thousands): December 31, 2017, as reported Adjustments January 1, 2018, as adjusted ASSETS Contract assets - current $ — $ 8,609 $ 8,609 Contract assets - non-current — 15,759 15,759 LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT) Deferred revenues - current 4,861 (749 ) 4,112 Deferred tax liability 1,651 209 1,860 Deferred revenues - non-current 4,761 (4,616 ) 145 Accumulated deficit $ (1,323,723 ) $ 23,204 $ (1,300,519 ) Current Impact from the Adoption In accordance with the new revenue standard requirements, the disclosure of the current period impact of adoption on our consolidated statement of operations and comprehensive loss and balance sheet is as follows (in thousands, except for per share amounts): Year Ended December 31, 2018 As Reported Balances without Adoption of ASC 606 Effect of Change Higher/ (Lower) Net revenues $ 317,373 $ 316,606 $ 767 Sales, general and administrative 75,356 75,120 236 Total operating costs and expenses 311,217 310,981 236 Income from operations 6,156 5,625 531 Loss before income taxes and equity in earnings of equity-method investment (61,718 ) (62,249 ) 531 Net loss (62,375 ) (62,906 ) 531 Less net income attributable to non-controlling interest 125 125 — Net loss attributable to INAP shareholders (62,500 ) (63,031 ) 531 Comprehensive loss $ (62,241 ) $ (62,772 ) $ 531 |
FAIR VALUE MEASUREMENTS (Tables
FAIR VALUE MEASUREMENTS (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
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, 2018: Available-for-sale securities $ — $ 2,309 $ — $ 2,309 Asset retirement obligations (1) — — 2,090 2,090 December 31, 2017: Available-for-sale securities — 2,271 — — Asset retirement obligations (1) $ — $ — $ 1,936 $ 1,936 (1) We calculate the fair value of asset retirement obligations ("ARO") by discounting the estimated amount using the current Treasury bill rate adjusted for our credit non-performance. At December 31, 2018, the balance is included in "Other long-term liabilities," in the accompanying consolidated balance sheets. 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 accompanying consolidated balance sheets. |
Schedule of changes in asset retirement obligations | The following table provides a summary of changes in our Level 3 asset retirement obligations (in thousands): 2018 2017 2016 Balance, January 1 $ 1,936 $ 2,810 $ 2,803 Accretion 154 197 207 Subsequent revision of estimated obligation — 449 — Payments — (1,520 ) (200 ) Balance, December 31 $ 2,090 $ 1,936 $ 2,810 |
Fair Value, by Balance Sheet Grouping | The fair values of our Level 2 available-for-sale debt securities, based upon quoted prices for similar items in active markets, are as follows (in thousands): December 31, 2018 Cost Unrealized Gain Unrealized Loss Fair Value Japanese Corporate Bonds $ 2,184 $ 144 $ (107 ) $ 2,221 Japanese Government Bonds 87 5 (4 ) 88 Total Bonds $ 2,271 $ 149 $ (111 ) $ 2,309 December 31, 2017 Cost Unrealized Gain Unrealized Loss Fair Value Japanese Corporate Bonds $ 2,267 $ 17 $ (100 ) $ 2,184 Japanese Government Bonds 87 1 (1 ) 87 Total Bonds $ 2,354 $ 18 $ (101 ) $ 2,271 |
Schedule of fair value of term loan and revolving credit facility | The fair values of our other Level 2 debt liabilities, based upon quoted prices for similar items in active markets, are as follows (in thousands): December 31, 2018 2017 Carrying Amount Fair Value Carrying Amount Fair Value Term loan $ 429,143 $ 428,071 $ 298,500 $ 301,485 Revolving credit facility — — 5,000 5,050 |
PROPERTY AND EQUIPMENT (Tables)
PROPERTY AND EQUIPMENT (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Property, Plant and Equipment [Abstract] | |
Schedule of property and equipment | Property and equipment consisted of the following (in thousands): December 31, 2018 2017 Network equipment $ 274,322 $ 247,190 Network equipment under capital lease 14,206 14,206 Furniture and equipment 28,583 26,246 Software 66,924 43,930 Leasehold improvements 414,212 412,631 Buildings under capital lease 269,455 227,482 Property and equipment, gross 1,067,701 971,685 Less: accumulated depreciation and amortization ($55,198 and $50,253 related to capital leases at December 31, 2018 and 2017, respectively) (589,640 ) (513,120 ) $ 478,061 $ 458,565 |
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, 2018 2017 2016 Costs of sales and services $ 75,998 $ 70,368 $ 71,626 Other depreciation and amortization 10,644 2,478 2,274 Subtotal 86,642 72,846 73,900 Amortization of acquired and developed technologies 4,034 2,147 3,048 Total depreciation and amortization $ 90,676 $ 74,993 $ 76,948 |
ACQUISITION (Tables)
ACQUISITION (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Business Combinations [Abstract] | |
Schedule of Business Acquisitions | The following table summarizes the preliminary fair values of the assets acquired and liabilities assumed at the acquisition date and reflects purchase accounting adjustments subsequent to the acquisition date (in thousands): Preliminary Valuation as of March 31, 2018 Measurement Period Adjustments Final Valuation as of December 31, 2018 Cash $ 2,857 $ (34 ) $ 2,823 Prepaid expenses and other assets 1,683 544 2,227 Property, plant and equipment 14,885 (632 ) 14,253 Other long term assets 39 537 576 Intangible assets: Noncompete agreements 4,000 — 4,000 Trade names 1,700 — 1,700 Technology 15,100 — 15,100 Customer relationships 34,100 — 34,100 Goodwill 67,868 (1,860 ) 66,008 Total assets acquired 142,232 (1,445 ) 140,787 Accounts payable and accrued liabilities 5,098 (2,279 ) 2,819 Deferred revenue 1,600 834 2,434 Long term liabilities 534 — 534 Net assets acquired $ 135,000 $ — $ 135,000 |
Pro-Forma Financial Information | The pro forma results are as follows (in thousands except for per share amounts): Year Ended 2018 2017 Revenues $ 325,498 $ 328,572 Net loss (63,577 ) (47,391 ) Basic and diluted net loss per share $ (3.07 ) $ (2.50 ) Weighted average shares outstanding used in computing basic and diluted net loss per share 20,732 18,993 |
GOODWILL AND OTHER INTANGIBLE_2
GOODWILL AND OTHER INTANGIBLE ASSETS (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of Goodwill | During the years ended December 31, 2018 and 2017, our goodwill activity is as follows (in thousands): January 1, 2017 Re-allocations December 31, 2017 Re-allocations SingleHop Acquisition December 31, 2018 Reportable segments: Data center and network services $ — $ — $ — $ — $ — $ — Cloud and hosting services 50,209 (50,209 ) — — — — INAP COLO — 6,003 6,003 (6,003 ) — — INAP CLOUD — 44,206 44,206 (44,206 ) — — INAP US — — — 28,118 66,008 94,126 INAP INTL — — — 22,091 — 22,091 Total $ 50,209 $ — $ 50,209 $ — $ 66,008 $ 116,217 |
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, 2018 December 31, 2017 Gross Carrying Amount Accumulated Amortization Gross Carrying Amount Accumulated Amortization Acquired and developed technology $ 71,586 $ (52,097 ) $ 52,825 $ (48,063 ) Customer relationships and trade names 110,785 (57,232 ) 71,116 (50,212 ) $ 182,371 $ (109,329 ) $ 123,941 $ (98,275 ) |
Schedule of finite-lived intangible assets, future amortization expense | As of December 31, 2018 , remaining amortization expense is as follows (in thousands): 2019 $ 13,080 2020 12,375 2021 11,234 2022 8,317 2023 7,995 Thereafter 20,041 $ 73,042 |
ACCRUED LIABILITIES (Tables)
ACCRUED LIABILITIES (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Payables and Accruals [Abstract] | |
Schedule of Accrued Liabilities | Accrued liabilities consist of the following (in thousands): December 31, 2018 2017 Compensation and benefits payable $ 7,523 $ 6,673 Property, sales, and other taxes 785 2,636 Customer credit balances 2,204 1,616 Accrued interest 1,762 1,690 Other 3,266 3,293 $ 15,540 $ 15,908 |
EXIT ACTIVITIES AND RESTRUCTU_2
EXIT ACTIVITIES AND RESTRUCTURING (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
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, 2018 , 2017 and 2016 . Our real estate obligations and severance are substantially related to our INAP US segment. Balance December 31, 2017 Initial Charges Plan Adjustments Cash Payments Balance December 31, 2018 Activity for 2018 restructuring charge: Real estate obligations $ — $ 3,484 $ 1,023 $ (2,585 ) $ 1,922 Activity for 2017 restructuring charge: Real estate obligations 3,380 — 316 (3,596 ) 100 Activity for 2016 restructuring charge: Severance 46 — 34 (80 ) — Real estate obligations 247 — 39 (161 ) 125 Activity for 2015 restructuring charge: Real estate obligation 64 — 4 (41 ) 27 Service contracts 388 — 31 (198 ) 221 Activity for 2014 restructuring charge: Real estate obligation 691 — 240 (725 ) 206 $ 4,816 $ 3,484 $ 1,687 $ (7,386 ) $ 2,601 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 |
COMMITMENTS, CONTINGENCIES AN_2
COMMITMENTS, CONTINGENCIES AND LITIGATION (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Commitments and Contingencies Disclosure [Abstract] | |
Schedule of credit agreements | A summary of our credit agreement as of December 31, 2018 and December 31, 2017 is as follows (dollars in thousands): December 31, 2018 2017 Outstanding principal balance on the term loan, less unamortized discount and prepaid costs of $13.5 million and $9.8 million, respectively $ 415,599 $ 288,712 Outstanding balance on the revolving credit facility — 5,000 Letters of credit issued with proceeds from revolving credit facility 4,187 5,361 Surety bonds issued with proceeds from revolving credit facility 131 — Borrowing capacity 30,682 14,639 Interest rate – term loan 8.2 % 8.4 % Interest rate – revolving credit facility — % 10.3 % Maturities of the term loan are as follows: 2019 $ 4,357 2020 4,357 2021 4,357 2022 416,072 2023 — $ 429,143 |
Schedule of information with respect to financial covenants | |
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, 2018 , are as follows (in thousands): 2019 $ 34,719 2020 33,901 2021 34,894 2022 33,637 2023 32,878 Thereafter 630,573 Remaining capital lease payments 800,602 Less: amounts representing imputed interest (529,140 ) Present value of minimum lease payments 271,462 Less: current portion (9,080 ) $ 262,382 |
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, 2018 (in thousands): 2019 $ 7,980 2020 7,616 2021 7,616 2022 7,108 2023 5,407 Thereafter 3,757 $ 39,484 |
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, 2018 (in thousands): 2019 $ 3,981 2020 1,707 2021 655 2022 85 2023 19 Thereafter — $ 6,447 |
OPERATING SEGMENTS AND GEOGRA_2
OPERATING SEGMENTS AND GEOGRAPHIC INFORMATION (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
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, 2018 2017 2016 Revenues: INAP US $ 248,184 $ 215,770 $ 229,902 INAP INTL 69,189 64,948 68,395 Total revenues 317,373 280,718 298,297 Costs of sales and services, customer support and sales and marketing: INAP US 134,792 128,062 148,706 INAP INTL 45,124 37,829 41,900 Total costs of sales and services, customer support and sales and marketing 179,916 165,891 190,606 Segment profit: INAP US 113,392 87,708 81,196 INAP INTL 24,065 27,119 26,495 Total segment profit 137,457 114,827 107,691 Goodwill impairment — — 80,105 Exit activities, restructuring and impairments 5,406 6,249 7,236 Other operating expenses, including sales, general and administrative and depreciation and amortization expenses 125,895 103,804 113,420 Income (loss) from operations 6,156 4,774 (93,070 ) Non-operating expenses 67,874 51,001 31,312 Loss before income taxes and equity in earnings of equity-method investment $ (61,718 ) $ (46,227 ) $ (124,382 ) |
Disaggregation of revenue | Revenue by source, with sales and usage-based taxes excluded, is as follows (in thousands): Year Ended December 31, 2018 2017 2016 Colocation $ 131,124 $ 124,083 $ 129,881 Network Services 64,111 67,435 70,779 Cloud 122,138 89,200 97,637 $ 317,373 $ 280,718 $ 298,297 The following table presents disaggregated revenues by category for the year ended December 31, 2018 (in thousands): Year Ended December 31, 2018 INAP US INAP INTL Colocation $ 125,282 $ 5,842 Network Services 52,748 11,363 Cloud 70,154 51,984 $ 248,184 $ 69,189 |
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, 2018 2017 2016 Revenues: United States $ 252,482 $ 220,018 $ 231,943 Canada 38,133 38,750 44,206 Other countries 26,758 21,950 22,148 $ 317,373 $ 280,718 $ 298,297 |
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, 2018 2017 United States $ 433,508 $ 417,936 Canada 38,718 34,296 Other countries 5,835 6,333 $ 478,061 $ 458,565 |
STOCK-BASED COMPENSATION PLANS
STOCK-BASED COMPENSATION PLANS (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
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, 2018 2017 2016 Costs of customer support $ 165 $ 167 $ 1,159 Sales, general and administrative 4,513 2,873 3,838 $ 4,678 $ 3,040 $ 4,997 |
Schedule of stock option activity of stock-based compensation plans | Stock option activity during the year ended December 31, 2018 under all of our stock-based compensation plans was as follows (shares in thousands): Shares Weighted Average Exercise Price Balance, December 31, 2017 379 $ 21.17 Granted — — Exercised (6 ) 8.49 Forfeitures and post-vesting cancellations (150 ) 14.55 Balance, December 31, 2018 223 25.95 Exercisable, December 31, 2018 211 26.74 |
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, 2018 are further summarized as follows (shares in thousands): Fully Vested and Exercisable Expected to Vest Total shares 211 223 Weighted-average exercise price $ 26.74 $ 25.95 Aggregate intrinsic value $ — $ — Weighted-average remaining contractual term (in years) 3.8 4.0 |
Schedule of restricted stock activity | Restricted stock activity during the year ended December 31, 2018 was as follows (shares in thousands): Shares Weighted- Average Grant Date Fair Value Unvested balance, December 31, 2017 760 $ 4.03 Granted 608 $ 7.73 Vested (277 ) $ 6.95 Forfeited (133 ) $ 6.61 Unvested balance, December 31, 2018 958 $ 5.17 |
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, 2018 is as follows (dollars in thousands): Stock Options Restricted Stock Total Unrecognized compensation $ 53 $ 3,330 $ 3,383 Weighted-average remaining recognition period (in years) 1.03 2.90 2.90 |
INCOME TAXES (Tables)
INCOME TAXES (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
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, 2018 2017 2016 United States $ (64,237 ) $ (46,648 ) $ (120,553 ) Foreign 2,519 421 (3,829 ) Loss from continuing operations before income taxes, non-controlling interest and equity in (earnings) of equity-method investment $ (61,718 ) $ (46,227 ) $ (124,382 ) |
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, 2018 2017 2016 Current: Federal $ — $ (730 ) $ (15 ) State 118 123 155 Foreign 277 507 61 395 (100 ) 201 Deferred: Federal — — — State — — — Foreign 262 353 329 262 353 329 Provision for income taxes $ 657 $ 253 $ 530 |
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, 2018 2017 2016 Federal income tax at statutory rates (21.0 )% (34.0 )% (34.0 )% Foreign income tax (0.1 ) 0.5 0.7 State income tax (5.5 ) (5.0 ) (5.0 ) Other permanent differences 1.3 0.4 0.2 Statutory tax rate change 1.2 — (3.2 ) Statutory tax rate change - Deferred - Tax Reform Act — (128.4 ) — Statutory tax rate change - Valuation Allowance - Tax Reform Act — 128.4 — Compensation — — 3.0 Goodwill impairment — — 25.2 Refundable AMT credit — (1.5 ) — Change in valuation allowance 25.2 40.1 13.5 Effective tax rate 1.1 % 0.5 % 0.4 % |
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, 2018 2017 Long-term deferred income tax (liabilities) assets: Property and equipment $ 50,405 $ 43,554 Goodwill 1,071 1,392 Intangible assets (26,534 ) (22,021 ) Deferred revenue, less current portion 1,358 1,834 Restructuring liability, less current portion 696 1,282 Refinance (4,130 ) (374 ) Deferred rent 285 639 Stock-based compensation 1,450 911 Provision for doubtful accounts 1,360 1,772 U.S. net operating loss carryforwards 99,026 89,117 Foreign net operating loss carryforwards, less current portion 7,631 8,053 Tax credit carryforwards 2,775 2,812 Interest limitation 9,403 — Impact of adoption of ASC 606 (6,666 ) — Other 2,408 2,090 Long-term deferred income tax assets 140,538 131,061 Less: valuation allowance (142,749 ) (132,712 ) Net long-term deferred income tax (liabilities) assets (2,211 ) (1,651 ) Net deferred tax liabilities $ 2,211 $ 1,651 |
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, 2018 2017 2016 Balance, January 1, $ 132,712 $ 164,865 $ 148,310 Increase in deferred tax assets 10,037 27,183 16,555 Remeasurement in deferred tax assets — (59,336 ) — Balance, December 31, $ 142,749 $ 132,712 $ 164,865 |
Schedule of changes in unrecognized tax benefits | Changes in our unrecognized tax benefits are summarized as follows (in thousands): Year Ended December 31, 2018 2017 2016 Unrecognized tax benefits balance, January 1, $ 162 $ 187 $ — Addition for tax positions taken in a prior year 300 162 187 Deduction for tax positions taken in a prior year — (187 ) — Unrecognized tax benefits balance, December 31, $ 462 $ 162 $ 187 |
UNAUDITED QUARTERLY RESULTS (Ta
UNAUDITED QUARTERLY RESULTS (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
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). 2018 Quarter Ended March 31 June 30 September 30 December 31 Net revenues $ 74,201 $ 81,962 $ 82,972 $ 78,238 Costs of sales and services, exclusive of depreciation and amortization 25,467 28,621 29,511 23,662 Costs of customer support 7,387 8,841 7,984 8,305 Exit activities, restructuring and impairments (33 ) 826 2,347 2,266 Net loss attributable to INAP shareholders (14,288 ) (14,279 ) (15,479 ) (18,454 ) Basic and diluted net loss per share $ (0.70 ) $ (0.69 ) $ (0.75 ) $ (0.82 ) 2017 Quarter Ended March 31 June 30 September 30 December 31 Net 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 shareholders (8,230 ) (19,283 ) (10,895 ) (6,934 ) Basic and diluted net loss per share $ (0.51 ) $ (0.97 ) $ (0.55 ) $ (0.35 ) |
DESCRIPTION OF THE COMPANY AN_2
DESCRIPTION OF THE COMPANY AND NATURE OF OPERATIONS - Narrative (Details) $ in Thousands, ft² in Millions | 12 Months Ended | |||||
Dec. 31, 2018USD ($)ft²data_center | Sep. 30, 2018USD ($) | Jun. 30, 2018USD ($) | Mar. 31, 2018USD ($) | Jan. 01, 2018USD ($) | Dec. 31, 2017USD ($) | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | ||||||
Number of metropolitan markets | data_center | 21 | |||||
Area under lease | ft² | 1 | |||||
Area of data centers | ft² | 0.6 | |||||
Accumulated deficit | $ | $ 1,363,019 | $ 1,344,566 | $ 1,329,086 | $ 1,313,826 | $ 1,300,519 | $ 1,323,723 |
Working capital deficit | $ | $ 5,900 |
SUMMARY OF SIGNIFICANT ACCOUN_4
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Narrative (Details) | Aug. 15, 2017USD ($) | Dec. 31, 2018USD ($)reporting_unit | Dec. 31, 2017USD ($) | Dec. 31, 2016USD ($) | Aug. 14, 2017USD ($) |
Summary Of Significant Accounting Policy [Line Items] | |||||
Capitalized cost of internal-use software | $ 3,500,000 | $ 4,400,000 | $ 4,300,000 | ||
Unamortized software costs | 12,700,000 | 17,900,000 | |||
Amortization expense capitalized | $ 7,600,000 | 7,200,000 | 8,300,000 | ||
Number of reporting units | reporting_unit | 7 | ||||
Amortization of intangible assets | $ 4,034,000 | 2,147,000 | 3,048,000 | ||
Uncertain tax positions recognized | 500,000 | 200,000 | |||
Research and development costs | 2,800,000 | 1,500,000 | 1,100,000 | ||
Excluded capitalized cost of internal-use software | 5,200,000 | 5,200,000 | 6,300,000 | ||
Advertising costs | $ 2,600,000 | $ 1,900,000 | $ 2,100,000 | ||
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 | 5 years | ||||
Minimum | |||||
Summary Of Significant Accounting Policy [Line Items] | |||||
Amortized period of assets | 5 years | ||||
Minimum | Acquired Technologies and Noncompete Agreements | |||||
Summary Of Significant Accounting Policy [Line Items] | |||||
Amortized period of assets | 4 years | ||||
Minimum | Trade names | |||||
Summary Of Significant Accounting Policy [Line Items] | |||||
Amortized period of assets | 8 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 | 3 years | ||||
Minimum | Leasehold improvements | |||||
Summary Of Significant Accounting Policy [Line Items] | |||||
Duration of lease obligations and commitments | 2 years | ||||
Maximum | Acquired Technologies and Noncompete Agreements | |||||
Summary Of Significant Accounting Policy [Line Items] | |||||
Amortized period of assets | 8 years | ||||
Maximum | Trade names | |||||
Summary Of Significant Accounting Policy [Line Items] | |||||
Amortized period of assets | 15 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 | 7 years | ||||
Maximum | Leasehold improvements | |||||
Summary Of Significant Accounting Policy [Line Items] | |||||
Duration of lease obligations and commitments | 34 years | ||||
Internap Japan Investment | |||||
Summary Of Significant Accounting Policy [Line Items] | |||||
Investment in joint venture | $ 4,100,000 | ||||
Internap Japan | |||||
Summary Of Significant Accounting Policy [Line Items] | |||||
Ownership percentage | 66.63% | ||||
Internap Japan | |||||
Summary Of Significant Accounting Policy [Line Items] | |||||
Gain recognized | $ 1,100,000 | ||||
Service and Renewal Contracts | |||||
Summary Of Significant Accounting Policy [Line Items] | |||||
Capitalized contract cost | $ 24,900,000 | ||||
Capitalized contract cost, amortization | 9,600,000 | ||||
Capitalized contract cost, impairment | $ 0 |
SUMMARY OF SIGNIFICANT ACCOUN_5
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Adjustments (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | 9 Months Ended | 12 Months Ended | |||||||||||
Dec. 31, 2018 | Sep. 30, 2018 | Jun. 30, 2018 | Mar. 31, 2018 | Dec. 31, 2017 | Sep. 30, 2017 | Jun. 30, 2017 | Mar. 31, 2017 | Jun. 30, 2018 | Sep. 30, 2018 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | Jan. 01, 2018 | Dec. 31, 2015 | |
Error Corrections and Prior Period Adjustments Restatement [Line Items] | |||||||||||||||
Costs of sales and services, exclusive of depreciation and amortization | $ 23,662 | $ 29,511 | $ 28,621 | $ 25,467 | $ 25,798 | $ 24,945 | $ 26,429 | $ 29,045 | $ 54,088 | $ 83,601 | $ 107,262 | $ 106,217 | $ 124,255 | ||
Depreciation and amortization | 23,309 | 22,468 | 20,996 | 43,464 | 66,771 | 90,676 | 74,993 | 76,948 | |||||||
Interest expense | 16,003 | 14,981 | 14,450 | 29,431 | 45,435 | 68,132 | 50,476 | 30,909 | |||||||
Net loss attributable to INAP shareholders | (18,454) | (15,479) | (14,279) | (14,288) | (6,934) | $ (10,895) | $ (19,283) | $ (8,230) | (28,567) | (44,046) | (62,500) | (45,343) | (124,742) | ||
Property and equipment, net | 478,061 | 487,616 | 463,273 | 471,752 | 458,565 | 463,273 | 487,616 | 478,061 | 458,565 | ||||||
Total assets | 744,931 | 756,231 | 735,022 | 742,358 | 586,525 | 735,022 | 756,231 | 744,931 | 586,525 | ||||||
Capital lease obligations | 9,080 | 263,544 | 231,415 | 234,019 | 11,711 | 231,415 | 263,544 | 9,080 | 11,711 | ||||||
Total liabilities | 744,874 | 775,949 | 740,422 | 733,568 | 587,557 | 740,422 | 775,949 | 744,874 | 587,557 | ||||||
Accumulated deficit | (1,363,019) | (1,344,566) | (1,329,086) | (1,313,826) | (1,323,723) | (1,329,086) | (1,344,566) | (1,363,019) | (1,323,723) | $ (1,300,519) | |||||
Total stockholders' equity (deficit) | $ 57 | (19,923) | (5,605) | 8,594 | $ (1,032) | (5,605) | (19,923) | $ 57 | $ (1,032) | $ (3,724) | $ 114,436 | ||||
As reported | |||||||||||||||
Error Corrections and Prior Period Adjustments Restatement [Line Items] | |||||||||||||||
Costs of sales and services, exclusive of depreciation and amortization | 28,866 | 27,976 | 25,037 | 53,013 | 81,880 | ||||||||||
Depreciation and amortization | 23,431 | 22,590 | 21,077 | 43,667 | 67,097 | ||||||||||
Interest expense | 16,898 | 15,860 | 15,027 | 30,887 | 47,786 | ||||||||||
Net loss attributable to INAP shareholders | (15,106) | (13,923) | (14,060) | (27,983) | (43,089) | ||||||||||
Property and equipment, net | 477,423 | 452,958 | 461,314 | 452,958 | 477,423 | ||||||||||
Total assets | 746,038 | 724,707 | 731,920 | 724,707 | 746,038 | ||||||||||
Capital lease obligations | 252,599 | 220,721 | 223,549 | 220,721 | 252,599 | ||||||||||
Total liabilities | 765,004 | 729,728 | 723,098 | 729,728 | 765,004 | ||||||||||
Accumulated deficit | (1,343,609) | (1,328,502) | (1,313,598) | (1,328,502) | (1,343,609) | ||||||||||
Total stockholders' equity (deficit) | (18,966) | (5,021) | 8,822 | (5,021) | (18,966) | ||||||||||
Adjustments | Adjustment | |||||||||||||||
Error Corrections and Prior Period Adjustments Restatement [Line Items] | |||||||||||||||
Costs of sales and services, exclusive of depreciation and amortization | 645 | 645 | 430 | 1,075 | 1,721 | ||||||||||
Depreciation and amortization | (122) | (122) | (81) | (203) | (326) | ||||||||||
Interest expense | (895) | (879) | (577) | (1,456) | (2,351) | ||||||||||
Net loss attributable to INAP shareholders | (373) | (356) | (228) | (584) | (957) | ||||||||||
Property and equipment, net | 10,193 | 10,315 | 10,438 | 10,315 | 10,193 | ||||||||||
Total assets | 10,193 | 10,315 | 10,438 | 10,315 | 10,193 | ||||||||||
Capital lease obligations | 10,945 | 10,694 | 10,470 | 10,694 | 10,945 | ||||||||||
Total liabilities | 10,945 | 10,694 | 10,470 | 10,694 | 10,945 | ||||||||||
Accumulated deficit | (957) | (584) | (228) | (584) | (957) | ||||||||||
Total stockholders' equity (deficit) | $ (957) | $ (584) | $ (228) | $ (584) | $ (957) |
SUMMARY OF SIGNIFICANT ACCOUN_6
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Summary of Contracts (Details) $ in Thousands | 12 Months Ended |
Dec. 31, 2018USD ($) | |
Current | |
Change in Contract with Customer Asset [Roll Forward] | |
Contract assets - current | $ 0 |
Adjustments resulting from adoption of ASC 606 | 9,035 |
Deferred customer acquisition costs incurred in the period | 1,877 |
Amounts recognized as expense in the period | (9,638) |
Reclassification between short-term and long-term | 7,570 |
Contract assets - current | 8,844 |
Non-current | |
Change in Contract with Customer Asset [Roll Forward] | |
Contract assets - non-current | 0 |
Adjustments resulting from adoption of ASC 606 | 16,313 |
Deferred customer acquisition costs incurred in the period | 7,361 |
Amounts recognized as expense in the period | 0 |
Reclassification between short-term and long-term | (7,570) |
Contract assets - non-current | $ 16,104 |
SUMMARY OF SIGNIFICANT ACCOUN_7
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 | 6 Months Ended | 9 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2018 | Sep. 30, 2018 | Jun. 30, 2018 | Mar. 31, 2018 | Dec. 31, 2017 | Sep. 30, 2017 | Jun. 30, 2017 | Mar. 31, 2017 | Jun. 30, 2018 | Sep. 30, 2018 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Accounting Policies [Abstract] | |||||||||||||
Net loss and net loss available to common stockholders | $ (18,454) | $ (15,479) | $ (14,279) | $ (14,288) | $ (6,934) | $ (10,895) | $ (19,283) | $ (8,230) | $ (28,567) | $ (44,046) | $ (62,500) | $ (45,343) | $ (124,742) |
Weighted average shares outstanding, basic and diluted (in shares) | 20,732 | 18,993 | 13,083 | ||||||||||
Net loss per share, basic and diluted (in dollars per share) | $ (0.82) | $ (0.75) | $ (0.69) | $ (0.70) | $ (0.35) | $ (0.55) | $ (0.97) | $ (0.51) | $ (3.01) | $ (2.39) | $ (9.54) | ||
Anti-dilutive securities excluded from diluted net loss per share calculation for stock-based compensation plans (in shares) | 1,509 | 1,076 | 1,350 |
SUMMARY OF SIGNIFICANT ACCOUN_8
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Summary of Reclassifications (Details) - USD ($) | 3 Months Ended | 6 Months Ended | 9 Months Ended | 12 Months Ended | 50 Months Ended | |||||||||
Dec. 31, 2018 | Sep. 30, 2018 | Jun. 30, 2018 | Mar. 31, 2018 | Dec. 31, 2017 | Sep. 30, 2017 | Jun. 30, 2017 | Mar. 31, 2017 | Jun. 30, 2018 | Sep. 30, 2018 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | Sep. 30, 2018 | |
Revenues: | ||||||||||||||
Revenues | $ 78,238,000 | $ 82,972,000 | $ 81,962,000 | $ 74,201,000 | $ 70,035,000 | $ 68,907,000 | $ 69,642,000 | $ 72,133,000 | $ 317,373,000 | $ 280,718,000 | $ 298,297,000 | $ 8,855 | ||
Costs of sales and services, exclusive of depreciation and amortization, shown below: | ||||||||||||||
Costs of sales and services, exclusive of depreciation and amortization | $ 23,662,000 | 29,511,000 | 28,621,000 | 25,467,000 | $ 25,798,000 | $ 24,945,000 | $ 26,429,000 | $ 29,045,000 | $ 54,088,000 | $ 83,601,000 | 107,262,000 | 106,217,000 | 124,255,000 | |
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 | ||||||||||||
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 | ||||||||||||
INAP US | ||||||||||||||
Revenues: | ||||||||||||||
Revenues | 248,184,000 | 215,770,000 | 229,902,000 | |||||||||||
Costs of sales and services, exclusive of depreciation and amortization, shown below: | ||||||||||||||
Costs of sales and services, exclusive of depreciation and amortization | 82,977,000 | 98,512,000 | ||||||||||||
INAP INTL | ||||||||||||||
Revenues: | ||||||||||||||
Revenues | $ 69,189,000 | 64,948,000 | 68,395,000 | |||||||||||
Costs of sales and services, exclusive of depreciation and amortization, shown below: | ||||||||||||||
Costs of sales and services, exclusive of depreciation and amortization | 23,220,000 | 25,743,000 | ||||||||||||
As Previously Reported | ||||||||||||||
Costs of sales and services, exclusive of depreciation and amortization, shown below: | ||||||||||||||
Costs of sales and services, exclusive of depreciation and amortization | $ 28,866,000 | $ 27,976,000 | $ 25,037,000 | $ 53,013,000 | $ 81,880,000 | |||||||||
As Previously Reported | INAP COLO | ||||||||||||||
Revenues: | ||||||||||||||
Revenues | 209,580,000 | 221,678,000 | ||||||||||||
Costs of sales and services, exclusive of depreciation and amortization, shown below: | ||||||||||||||
Costs of sales and services, exclusive of depreciation and amortization | 89,240,000 | 105,620,000 | ||||||||||||
As Previously Reported | INAP CLOUD | ||||||||||||||
Revenues: | ||||||||||||||
Revenues | 71,138,000 | 76,619,000 | ||||||||||||
Costs of sales and services, exclusive of depreciation and amortization, shown below: | ||||||||||||||
Costs of sales and services, exclusive of depreciation and amortization | 16,977,000 | 18,635,000 | ||||||||||||
As Previously Reported | INAP US | ||||||||||||||
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 INTL | ||||||||||||||
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 | INAP COLO | ||||||||||||||
Revenues: | ||||||||||||||
Revenues | (209,580,000) | (221,678,000) | ||||||||||||
Costs of sales and services, exclusive of depreciation and amortization, shown below: | ||||||||||||||
Costs of sales and services, exclusive of depreciation and amortization | (89,240,000) | (105,620,000) | ||||||||||||
Reclassification | INAP CLOUD | ||||||||||||||
Revenues: | ||||||||||||||
Revenues | (71,138,000) | (76,619,000) | ||||||||||||
Costs of sales and services, exclusive of depreciation and amortization, shown below: | ||||||||||||||
Costs of sales and services, exclusive of depreciation and amortization | (16,977,000) | (18,635,000) | ||||||||||||
Reclassification | INAP US | ||||||||||||||
Revenues: | ||||||||||||||
Revenues | 215,770,000 | 229,902,000 | ||||||||||||
Costs of sales and services, exclusive of depreciation and amortization, shown below: | ||||||||||||||
Costs of sales and services, exclusive of depreciation and amortization | 82,997,000 | 98,512,000 | ||||||||||||
Reclassification | INAP INTL | ||||||||||||||
Revenues: | ||||||||||||||
Revenues | 64,948,000 | 68,395,000 | ||||||||||||
Costs of sales and services, exclusive of depreciation and amortization, shown below: | ||||||||||||||
Costs of sales and services, exclusive of depreciation and amortization | $ 23,220,000 | $ 25,743,000 |
SUMMARY OF SIGNIFICANT ACCOUN_9
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Schedule of Adjustments to Previously Reported Financial Statements from the Adoption (Details) - USD ($) $ in Thousands | Dec. 31, 2018 | Sep. 30, 2018 | Jun. 30, 2018 | Mar. 31, 2018 | Jan. 01, 2018 | Dec. 31, 2017 |
ASSETS | ||||||
Contract assets - current | $ 8,609 | |||||
Contract assets - non-current | 15,759 | |||||
LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT) | ||||||
Deferred revenues | $ 8,022 | 4,112 | $ 4,861 | |||
Deferred tax liability | 2,211 | 1,860 | 1,651 | |||
Other long-term liabilities | 3,473 | 145 | 2,983 | |||
Accumulated deficit | $ (1,363,019) | $ (1,344,566) | $ (1,329,086) | $ (1,313,826) | (1,300,519) | (1,323,723) |
Calculated under Revenue Guidance in Effect before Topic 606 | ||||||
ASSETS | ||||||
Contract assets - current | 0 | |||||
Contract assets - non-current | 0 | |||||
LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT) | ||||||
Deferred revenues | 4,861 | |||||
Deferred tax liability | 1,651 | |||||
Other long-term liabilities | 4,761 | |||||
Accumulated deficit | $ (1,323,723) | |||||
Accounting Standards Update 2014-09 | Difference Between Revenue Guidance In Effect Before And After Topic 606 | ||||||
ASSETS | ||||||
Contract assets - current | 8,609 | |||||
Contract assets - non-current | 15,759 | |||||
LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT) | ||||||
Deferred revenues | (749) | |||||
Deferred tax liability | 209 | |||||
Other long-term liabilities | (4,616) | |||||
Accumulated deficit | $ 23,204 |
SUMMARY OF SIGNIFICANT ACCOU_10
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Schedule of Current Impact from Adoption on Consolidated Income Statements (Details) - USD ($) | 3 Months Ended | 6 Months Ended | 9 Months Ended | 12 Months Ended | 50 Months Ended | |||||||||
Dec. 31, 2018 | Sep. 30, 2018 | Jun. 30, 2018 | Mar. 31, 2018 | Dec. 31, 2017 | Sep. 30, 2017 | Jun. 30, 2017 | Mar. 31, 2017 | Jun. 30, 2018 | Sep. 30, 2018 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | Sep. 30, 2018 | |
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | ||||||||||||||
Net revenues | $ 78,238,000 | $ 82,972,000 | $ 81,962,000 | $ 74,201,000 | $ 70,035,000 | $ 68,907,000 | $ 69,642,000 | $ 72,133,000 | $ 317,373,000 | $ 280,718,000 | $ 298,297,000 | $ 8,855 | ||
Sales, general and administrative | 75,356,000 | 62,728,000 | 70,639,000 | |||||||||||
Total Expense Reduction | 311,217,000 | 275,944,000 | 391,367,000 | |||||||||||
Income (loss) from operations | 6,156,000 | 4,774,000 | (93,070,000) | |||||||||||
Loss from continuing operations before income taxes, non-controlling interest and equity in (earnings) of equity-method investment | (61,718,000) | (46,227,000) | (124,382,000) | |||||||||||
Net loss | (62,375,000) | (45,273,000) | (124,742,000) | |||||||||||
Less net income attributable to non-controlling interest | (125,000) | (70,000) | 0 | |||||||||||
Net loss attributable to INAP shareholders | $ (18,454,000) | $ (15,479,000) | $ (14,279,000) | $ (14,288,000) | $ (6,934,000) | $ (10,895,000) | $ (19,283,000) | $ (8,230,000) | $ (28,567,000) | $ (44,046,000) | (62,500,000) | (45,343,000) | (124,742,000) | |
Comprehensive loss | (62,241,000) | $ (45,175,000) | $ (123,453,000) | |||||||||||
Calculated under Revenue Guidance in Effect before Topic 606 | ||||||||||||||
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | ||||||||||||||
Net revenues | 316,606,000 | |||||||||||||
Sales, general and administrative | 75,120,000 | |||||||||||||
Total Expense Reduction | 310,981,000 | |||||||||||||
Income (loss) from operations | 5,625,000 | |||||||||||||
Loss from continuing operations before income taxes, non-controlling interest and equity in (earnings) of equity-method investment | (62,249,000) | |||||||||||||
Net loss | (62,906,000) | |||||||||||||
Less net income attributable to non-controlling interest | (125,000) | |||||||||||||
Net loss attributable to INAP shareholders | (63,031,000) | |||||||||||||
Comprehensive loss | (62,772,000) | |||||||||||||
Accounting Standards Update 2014-09 | Difference Between Revenue Guidance In Effect Before And After Topic 606 | ||||||||||||||
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | ||||||||||||||
Net revenues | 767,000 | |||||||||||||
Sales, general and administrative | 236,000 | |||||||||||||
Total Expense Reduction | 236,000 | |||||||||||||
Income (loss) from operations | 531,000 | |||||||||||||
Loss from continuing operations before income taxes, non-controlling interest and equity in (earnings) of equity-method investment | 531,000 | |||||||||||||
Net loss | 531,000 | |||||||||||||
Less net income attributable to non-controlling interest | 0 | |||||||||||||
Net loss attributable to INAP shareholders | 531,000 | |||||||||||||
Comprehensive loss | $ 531,000 |
SUMMARY OF SIGNIFICANT ACCOU_11
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Schedule of Current Impact from Adoption on Consolidated Balance Sheet (Details) - USD ($) $ in Thousands | Dec. 31, 2018 | Sep. 30, 2018 | Jun. 30, 2018 | Mar. 31, 2018 | Jan. 01, 2018 | Dec. 31, 2017 |
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | ||||||
Contract assets | $ 8,844 | $ 0 | ||||
Non-current contract assets | 16,104 | 0 | ||||
Deferred revenues | 8,022 | $ 4,112 | 4,861 | |||
Other long-term liabilities | 3,473 | 145 | 2,983 | |||
Accumulated deficit | $ (1,363,019) | $ (1,344,566) | $ (1,329,086) | $ (1,313,826) | (1,300,519) | (1,323,723) |
Calculated under Revenue Guidance in Effect before Topic 606 | ||||||
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | ||||||
Deferred revenues | 4,861 | |||||
Other long-term liabilities | 4,761 | |||||
Accumulated deficit | $ (1,323,723) | |||||
Accounting Standards Update 2014-09 | Difference Between Revenue Guidance In Effect Before And After Topic 606 | ||||||
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | ||||||
Deferred revenues | (749) | |||||
Other long-term liabilities | (4,616) | |||||
Accumulated deficit | $ 23,204 |
FAIR VALUE MEASUREMENTS - Summa
FAIR VALUE MEASUREMENTS - Summary of Assets and Liabilities Measured at Fair Value on Recurring Basis (Details) - USD ($) $ in Thousands | Dec. 31, 2018 | Dec. 31, 2017 |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Available-for-sale securities | $ 2,309 | $ 2,271 |
Recurring basis | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Available-for-sale securities | 2,309 | 0 |
Asset retirement obligations | 2,090 | 1,936 |
Recurring basis | Level 1 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Available-for-sale securities | 0 | 0 |
Asset retirement obligations | 0 | 0 |
Recurring basis | Level 2 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Available-for-sale securities | 2,309 | 2,271 |
Asset retirement obligations | 0 | 0 |
Recurring basis | Level 3 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Available-for-sale securities | 0 | 0 |
Asset retirement obligations | $ 2,090 | 1,936 |
Other Current Liabilities | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Asset retirement obligations | 200 | |
Other Noncurrent Liabilities | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Asset retirement obligations | $ 1,700 |
FAIR VALUE MEASUREMENTS - Sum_2
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, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | |||
Balance, January 1 | $ 1,936 | $ 2,810 | $ 2,803 |
Accretion | 154 | 197 | 207 |
Subsequent revision of estimated obligation | 0 | 449 | 0 |
Payments | 0 | (1,520) | (200) |
Balance, December 31 | $ 2,090 | $ 1,936 | $ 2,810 |
FAIR VALUE MEASUREMENTS - Sum_3
FAIR VALUE MEASUREMENTS - Summary of Fair Value Level 3 Debt Instruments (Details) - USD ($) $ in Thousands | Dec. 31, 2018 | Dec. 31, 2017 |
Carrying Amount | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Term loan | $ 429,143 | $ 298,500 |
Revolving credit facility | 0 | 5,000 |
Fair Value | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Term loan | 428,071 | 301,485 |
Revolving credit facility | $ 0 | $ 5,050 |
FAIR VALUE MEASUREMENTS - Sum_4
FAIR VALUE MEASUREMENTS - Summary of Amortized Costs vs Fair Value (Details) - USD ($) $ in Thousands | Dec. 31, 2018 | Dec. 31, 2017 |
Debt Securities, Available-for-sale [Line Items] | ||
Cost | $ 2,271 | $ 2,354 |
Unrealized Gain | 149 | 18 |
Unrealized Loss | (111) | (101) |
Fair Value | 2,309 | 2,271 |
Japanese Corporate Bonds | ||
Debt Securities, Available-for-sale [Line Items] | ||
Cost | 2,184 | 2,267 |
Unrealized Gain | 144 | 17 |
Unrealized Loss | (107) | (100) |
Fair Value | 2,221 | 2,184 |
Japanese Government Bonds | ||
Debt Securities, Available-for-sale [Line Items] | ||
Cost | 87 | 87 |
Unrealized Gain | 5 | 1 |
Unrealized Loss | (4) | (1) |
Fair Value | $ 88 | $ 87 |
PROPERTY AND EQUIPMENT - Summar
PROPERTY AND EQUIPMENT - Summary of Property and Equipment (Details) - USD ($) $ in Thousands | Dec. 31, 2018 | Sep. 30, 2018 | Jun. 30, 2018 | Mar. 31, 2018 | Dec. 31, 2017 |
Property, Plant and Equipment [Line Items] | |||||
Property and equipment, gross | $ 1,067,701 | $ 971,685 | |||
Less: accumulated depreciation and amortization ($55,198 and $50,253 related to capital leases at December 31, 2018 and 2017, respectively) | (589,640) | (513,120) | |||
Property and equipment, net | 478,061 | $ 487,616 | $ 463,273 | $ 471,752 | 458,565 |
Accumulated depreciation and amortization related to capital leases | 57,641 | 50,253 | |||
Network equipment | |||||
Property, Plant and Equipment [Line Items] | |||||
Property and equipment, gross | 274,322 | 247,190 | |||
Network equipment under capital lease | |||||
Property, Plant and Equipment [Line Items] | |||||
Property and equipment, gross | 14,206 | 14,206 | |||
Furniture and equipment | |||||
Property, Plant and Equipment [Line Items] | |||||
Property and equipment, gross | 28,583 | 26,246 | |||
Software | |||||
Property, Plant and Equipment [Line Items] | |||||
Property and equipment, gross | 66,924 | 43,930 | |||
Leasehold improvements | |||||
Property, Plant and Equipment [Line Items] | |||||
Property and equipment, gross | 414,212 | 412,631 | |||
Buildings under capital lease | |||||
Property, Plant and Equipment [Line Items] | |||||
Property and equipment, gross | $ 269,455 | $ 227,482 |
PROPERTY AND EQUIPMENT - Narrat
PROPERTY AND EQUIPMENT - Narrative (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Property, Plant and Equipment [Line Items] | |||
Asset retired | $ 4,400 | $ 9,200 | $ 5,000 |
Asset retired accumulated depreciation | 4,200 | 7,300 | $ 4,400 |
Property and equipment, gross | 1,067,701 | 971,685 | |
Accumulated depreciation | 589,640 | 513,120 | |
Leasehold improvements | |||
Property, Plant and Equipment [Line Items] | |||
Property and equipment, gross | 414,212 | 412,631 | |
Software | |||
Property, Plant and Equipment [Line Items] | |||
Property and equipment, gross | $ 66,924 | 43,930 | |
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 | $ 21,900 |
PROPERTY AND EQUIPMENT - Summ_2
PROPERTY AND EQUIPMENT - Summary of Depreciation and Amortization of Property and Equipment (Details) - USD ($) | 3 Months Ended | 6 Months Ended | 9 Months Ended | 12 Months Ended | ||||
Sep. 30, 2018 | Jun. 30, 2018 | Mar. 31, 2018 | Jun. 30, 2018 | Sep. 30, 2018 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Property, Plant and Equipment [Abstract] | ||||||||
Costs of sales and services | $ 75,998,000 | $ 70,368,000 | $ 71,626,000 | |||||
Other depreciation and amortization | 10,644,000 | 2,478,000 | 2,274,000 | |||||
Subtotal | 86,642,000 | 72,846,000 | 73,900,000 | |||||
Amortization of acquired and developed technologies | 4,034,000 | 2,147,000 | 3,048,000 | |||||
Total depreciation and amortization | $ 23,309,000 | $ 22,468,000 | $ 20,996,000 | $ 43,464,000 | $ 66,771,000 | $ 90,676,000 | $ 74,993,000 | $ 76,948,000 |
ACQUISITION - Narrative (Detail
ACQUISITION - Narrative (Details) - SingleHop, LLC - USD ($) $ in Millions | Feb. 28, 2018 | Sep. 30, 2018 |
Business Acquisition [Line Items] | ||
Payment to acquire business | $ 132 | |
Working capital adjustment | $ 0.4 | |
Acquisition related costs | $ 2.9 | |
Customer relationships | ||
Business Acquisition [Line Items] | ||
Weighted average useful life | 10 years | |
Noncompete agreements | ||
Business Acquisition [Line Items] | ||
Weighted average useful life | 4 years | |
Trade names | ||
Business Acquisition [Line Items] | ||
Weighted average useful life | 8 years | |
Technology | ||
Business Acquisition [Line Items] | ||
Weighted average useful life | 7 years |
ACQUISITION - Fair Value of Net
ACQUISITION - Fair Value of Net Assets (Details) - USD ($) $ in Thousands | 9 Months Ended | |||
Dec. 31, 2018 | Mar. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Business Acquisition [Line Items] | ||||
Goodwill | $ 116,217 | $ 50,209 | $ 50,209 | |
SingleHop, LLC | ||||
Business Acquisition [Line Items] | ||||
Cash | 2,823 | $ 2,857 | ||
Measurement period adjustment, cash | (34) | |||
Prepaid expenses and other assets | 2,227 | 1,683 | ||
Measurement period adjustment, prepaid expenses and other assets | 544 | |||
Property and equipment | 14,253 | 14,885 | ||
Measurement period adjustment, property, plant and equipment | (632) | |||
Other assets | 576 | 39 | ||
Measurement period adjustment, other long term assets | 537 | |||
Goodwill | 66,008 | 67,868 | ||
Measurement period adjustment, goodwill | (1,860) | |||
Total assets acquired | 140,787 | 142,232 | ||
Measurement period adjustment, total assets acquired | (1,445) | |||
Accounts payable and accrued liabilities | 2,819 | 5,098 | ||
Measurement period adjustment, accounts payable and accrued liabilities | (2,279) | |||
Deferred revenue | 2,434 | 1,600 | ||
Measurement period adjustment, deferred revenue | 834 | |||
Long term liabilities | 534 | 534 | ||
Measurement period adjustment, long term liabilities | 0 | |||
Net assets acquired | 135,000 | 135,000 | ||
Measurement period adjustment, net assets acquired | 0 | |||
Noncompete agreements | SingleHop, LLC | ||||
Business Acquisition [Line Items] | ||||
Customer relationships | 4,000 | 4,000 | ||
Measurement period adjustment, intangible assets | 0 | |||
Trade names | SingleHop, LLC | ||||
Business Acquisition [Line Items] | ||||
Customer relationships | 1,700 | 1,700 | ||
Measurement period adjustment, intangible assets | 0 | |||
Technology | SingleHop, LLC | ||||
Business Acquisition [Line Items] | ||||
Customer relationships | 15,100 | 15,100 | ||
Measurement period adjustment, intangible assets | 0 | |||
Customer relationships | SingleHop, LLC | ||||
Business Acquisition [Line Items] | ||||
Customer relationships | 34,100 | $ 34,100 | ||
Measurement period adjustment, intangible assets | $ 0 |
ACQUISITION - Unaudited Pro-For
ACQUISITION - Unaudited Pro-Forma Financial Information (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Business Combinations [Abstract] | ||
Revenue | $ 325,498 | $ 328,572 |
Net loss attributable to INAP stockholders | $ (63,577) | $ (47,391) |
Basic and diluted net loss per share (in dollars per share) | $ (3.07) | $ (2.50) |
Weighted average shares outstanding used in computing basic and diluted net loss per share (in shares) | 20,732 | 18,993 |
GOODWILL AND OTHER INTANGIBLE_3
GOODWILL AND OTHER INTANGIBLE ASSETS - Narrative (Details) - USD ($) | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Goodwill [Line Items] | |||
Goodwill impairment | $ 0 | $ 0 | $ 80,105,000 |
Amortization expense for intangible assets | $ 11,100,000 | $ 4,400,000 | $ 4,500,000 |
Minimum | |||
Goodwill [Line Items] | |||
Goodwill, impairment rate | 0.00% | ||
Useful life | 5 years | ||
Maximum | |||
Goodwill [Line Items] | |||
Goodwill, impairment rate | 2.50% | ||
Measurement Input, Discount Rate | Minimum | |||
Goodwill [Line Items] | |||
Goodwill, impairment rate | 9.00% | 2.00% | |
Measurement Input, Discount Rate | Maximum | |||
Goodwill [Line Items] | |||
Goodwill, impairment rate | 16.00% | 5.00% | |
Other Intangible Assets | Minimum | |||
Goodwill [Line Items] | |||
Useful life | 4 years | ||
Other Intangible Assets | Maximum | |||
Goodwill [Line Items] | |||
Useful life | 15 years |
GOODWILL AND OTHER INTANGIBLE_4
GOODWILL AND OTHER INTANGIBLE ASSETS - Summary of Re-Allocations of Goodwill (Details) - USD ($) | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Goodwill [Roll Forward] | |||
Goodwill, beginning of period | $ 50,209,000 | $ 50,209,000 | |
Impairment | 0 | 0 | $ (80,105,000) |
SingleHop Acquisition | 66,008,000 | ||
Goodwill, end of period | 116,217,000 | 50,209,000 | 50,209,000 |
Cloud and hosting services | |||
Goodwill [Roll Forward] | |||
Goodwill, beginning of period | 50,209,000 | ||
Re-allocations | (50,209,000) | ||
Goodwill, end of period | $ 50,209,000 | ||
INAP COLO | |||
Goodwill [Roll Forward] | |||
Goodwill, beginning of period | 6,003,000 | ||
Re-allocations | (6,003,000) | 6,003,000 | |
Goodwill, end of period | 6,003,000 | ||
INAP CLOUD | |||
Goodwill [Roll Forward] | |||
Goodwill, beginning of period | 44,206,000 | ||
Re-allocations | (44,206,000) | 44,206,000 | |
Goodwill, end of period | $ 44,206,000 | ||
INAP US | |||
Goodwill [Roll Forward] | |||
Re-allocations | 28,118,000 | ||
SingleHop Acquisition | 66,008,000 | ||
Goodwill, end of period | 94,126,000 | ||
INAP INTL | |||
Goodwill [Roll Forward] | |||
Re-allocations | 22,091,000 | ||
Goodwill, end of period | $ 22,091,000 |
GOODWILL AND OTHER INTANGIBLE_5
GOODWILL AND OTHER INTANGIBLE ASSETS - Summary of Components of Amortizing Intangible Assets, Including Capitalized Software (Details) - USD ($) $ in Thousands | Dec. 31, 2018 | Dec. 31, 2017 |
Finite-Lived Intangible Assets [Line Items] | ||
Gross Carrying Amount | $ 182,371 | $ 123,941 |
Accumulated Amortization | (109,329) | (98,275) |
Acquired and developed technology | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross Carrying Amount | 71,586 | 52,825 |
Accumulated Amortization | (52,097) | (48,063) |
Customer relationships and trade names | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross Carrying Amount | 110,785 | 71,116 |
Accumulated Amortization | $ (57,232) | $ (50,212) |
GOODWILL AND OTHER INTANGIBLE_6
GOODWILL AND OTHER INTANGIBLE ASSETS - Summary of Remaining Amortization Expense (Details) $ in Thousands | Dec. 31, 2018USD ($) |
Goodwill and Intangible Assets Disclosure [Abstract] | |
2019 | $ 13,080 |
2020 | 12,375 |
2021 | 11,234 |
2022 | 8,317 |
2023 | 7,995 |
Thereafter | 20,041 |
Finite-lived intangible assets, Total | $ 73,042 |
ACCRUED LIABILITIES - Summary o
ACCRUED LIABILITIES - Summary of Accrued Liabilities (Details) - USD ($) $ in Thousands | Dec. 31, 2018 | Dec. 31, 2017 |
Payables and Accruals [Abstract] | ||
Compensation and benefits payable | $ 7,523 | $ 6,673 |
Property, sales, and other taxes | 785 | 2,636 |
Customer credit balances | 2,204 | 1,616 |
Accrued interest | 1,762 | 1,690 |
Other | 3,266 | 3,293 |
Accrued liabilities, current, total | $ 15,540 | $ 15,908 |
EXIT ACTIVITIES AND RESTRUCTU_3
EXIT ACTIVITIES AND RESTRUCTURING - Schedule of Exit Activities and Restructuring Charges (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Restructuring Reserve [Roll Forward] | |||
Balance | $ 4,816 | $ 4,703 | $ 3,878 |
Initial Charges | 3,484 | 3,359 | 3,568 |
Plan Adjustments | 1,687 | 2,932 | 840 |
Cash Payments | (7,386) | (6,178) | (3,583) |
Balance | 2,601 | 4,816 | 4,703 |
Activity of 2018 Restructuring | Real estate obligations | |||
Restructuring Reserve [Roll Forward] | |||
Balance | 0 | ||
Initial Charges | 3,484 | ||
Plan Adjustments | 1,023 | ||
Cash Payments | (2,585) | ||
Balance | 1,922 | 0 | |
Activity of 2017 Restructuring | Real estate obligations | |||
Restructuring Reserve [Roll Forward] | |||
Balance | 3,380 | 0 | |
Initial Charges | 0 | 3,359 | |
Plan Adjustments | 316 | 1,741 | |
Cash Payments | (3,596) | (1,720) | |
Balance | 100 | 3,380 | 0 |
Activity of 2016 Restructuring | Real estate obligations | |||
Restructuring Reserve [Roll Forward] | |||
Balance | 247 | 933 | 0 |
Initial Charges | 0 | 0 | 1,082 |
Plan Adjustments | 39 | 82 | 14 |
Cash Payments | (161) | (768) | (163) |
Balance | 125 | 247 | 933 |
Activity of 2016 Restructuring | Service contracts | |||
Restructuring Reserve [Roll Forward] | |||
Balance | 0 | 0 | |
Initial Charges | 42 | ||
Plan Adjustments | (21) | ||
Cash Payments | (21) | ||
Balance | 0 | ||
Activity of 2016 Restructuring | Severance | |||
Restructuring Reserve [Roll Forward] | |||
Balance | 46 | 1,911 | 0 |
Initial Charges | 0 | 0 | 2,444 |
Plan Adjustments | 34 | 957 | 0 |
Cash Payments | (80) | (2,822) | (533) |
Balance | 0 | 46 | 1,911 |
Activity of 2015 Restructuring | Real estate obligations | |||
Restructuring Reserve [Roll Forward] | |||
Balance | 64 | 111 | 164 |
Initial Charges | 0 | 0 | 0 |
Plan Adjustments | 4 | 0 | (13) |
Cash Payments | (41) | (47) | (40) |
Balance | 27 | 64 | 111 |
Activity of 2015 Restructuring | Service contracts | |||
Restructuring Reserve [Roll Forward] | |||
Balance | 388 | 565 | 843 |
Initial Charges | 0 | 0 | 0 |
Plan Adjustments | 31 | 21 | 9 |
Cash Payments | (198) | (198) | (287) |
Balance | 221 | 388 | 565 |
Activity of 2014 Restructuring | Real estate obligations | |||
Restructuring Reserve [Roll Forward] | |||
Balance | 691 | 1,183 | 1,701 |
Initial Charges | 0 | 0 | 0 |
Plan Adjustments | 240 | 131 | 104 |
Cash Payments | (725) | (623) | (622) |
Balance | $ 206 | 691 | 1,183 |
Activity of 2007 Restructuring | |||
Restructuring Reserve [Roll Forward] | |||
Balance | $ 0 | 1,170 | |
Initial Charges | 0 | ||
Plan Adjustments | 747 | ||
Cash Payments | (1,917) | ||
Balance | $ 0 |
COMMITMENTS, CONTINGENCIES AN_3
COMMITMENTS, CONTINGENCIES AND LITIGATION - Narrative (Details) - USD ($) | Aug. 28, 2018 | Apr. 09, 2018 | Feb. 28, 2018 | Feb. 06, 2018 | Apr. 06, 2017 | Feb. 28, 2017 | Dec. 31, 2018 | Sep. 30, 2018 | Jun. 30, 2018 | Mar. 31, 2018 | Dec. 31, 2017 | Sep. 30, 2017 | Jun. 30, 2017 | Mar. 31, 2017 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | Sep. 30, 2018 |
Commitment Contingencies and Litigation [Line Items] | ||||||||||||||||||
Loss on extinguishment and modification of debt | $ 0 | $ 6,785,000 | $ 0 | |||||||||||||||
Asset retirement obligation | $ 1,900,000 | 1,900,000 | ||||||||||||||||
Rent expense | 8,300,000 | 14,000,000 | 21,800,000 | |||||||||||||||
Revenues | $ 78,238,000 | $ 82,972,000 | $ 81,962,000 | $ 74,201,000 | 70,035,000 | $ 68,907,000 | $ 69,642,000 | $ 72,133,000 | 317,373,000 | 280,718,000 | $ 298,297,000 | $ 8,855 | ||||||
Revolving credit facility | Base rate | ||||||||||||||||||
Commitment Contingencies and Litigation [Line Items] | ||||||||||||||||||
Basis spread on variable rate | 6.00% | |||||||||||||||||
Revolving credit facility | LIBOR | ||||||||||||||||||
Commitment Contingencies and Litigation [Line Items] | ||||||||||||||||||
Basis spread on variable rate | 7.00% | |||||||||||||||||
Term Loan | ||||||||||||||||||
Commitment Contingencies and Litigation [Line Items] | ||||||||||||||||||
Debt balance | $ 429,143,000 | 429,143,000 | ||||||||||||||||
Term loan, unamortized discount and prepaid costs | $ 13,500,000 | 9,800,000 | $ 13,500,000 | 9,800,000 | ||||||||||||||
Term Loan | Base rate | ||||||||||||||||||
Commitment Contingencies and Litigation [Line Items] | ||||||||||||||||||
Basis spread on variable rate | 4.75% | |||||||||||||||||
Term Loan | LIBOR | ||||||||||||||||||
Commitment Contingencies and Litigation [Line Items] | ||||||||||||||||||
Interest rate during period for the credit agreement | 8.20% | |||||||||||||||||
Basis spread on variable rate | 5.75% | |||||||||||||||||
Other Current Liabilities | ||||||||||||||||||
Commitment Contingencies and Litigation [Line Items] | ||||||||||||||||||
Asset retirement obligation | $ 2,100,000 | 200,000 | $ 2,100,000 | 200,000 | ||||||||||||||
Other Noncurrent Liabilities | ||||||||||||||||||
Commitment Contingencies and Litigation [Line Items] | ||||||||||||||||||
Asset retirement obligation | 1,700,000 | 1,700,000 | ||||||||||||||||
Minimum | ||||||||||||||||||
Commitment Contingencies and Litigation [Line Items] | ||||||||||||||||||
Initial lease terms | 3 years | 3 years | ||||||||||||||||
Maximum | ||||||||||||||||||
Commitment Contingencies and Litigation [Line Items] | ||||||||||||||||||
Initial lease terms | 25 years | 25 years | ||||||||||||||||
Credit Agreement 2017 | Revolving credit facility | ||||||||||||||||||
Commitment Contingencies and Litigation [Line Items] | ||||||||||||||||||
Credit limit | $ 25,000,000 | |||||||||||||||||
Debt issuance costs | 400,000 | |||||||||||||||||
Credit Agreement 2017 | Term Loan | ||||||||||||||||||
Commitment Contingencies and Litigation [Line Items] | ||||||||||||||||||
Credit limit | 300,000,000 | |||||||||||||||||
Debt issuance costs | 5,700,000 | |||||||||||||||||
Debt balance | $ 415,600,000 | $ 415,600,000 | ||||||||||||||||
Debt fee amount | 3,300,000 | |||||||||||||||||
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) | $ 135,000,000 | |||||||||||||||||
Minimum net cash proceeds from equity offering (not less than) | $ 135,000,000 | |||||||||||||||||
Credit Agreement | LIBOR | ||||||||||||||||||
Commitment Contingencies and Litigation [Line Items] | ||||||||||||||||||
Basis spread on variable rate | 1.00% | 1.00% | ||||||||||||||||
Credit Agreement | Prime Rate | ||||||||||||||||||
Commitment Contingencies and Litigation [Line Items] | ||||||||||||||||||
Basis spread on variable rate | 2.00% | 2.00% | ||||||||||||||||
Credit Agreement | Federal Funds Effective Rate | ||||||||||||||||||
Commitment Contingencies and Litigation [Line Items] | ||||||||||||||||||
Basis spread on variable rate | 0.50% | 0.50% | ||||||||||||||||
Credit Agreement | Revolving credit facility | ||||||||||||||||||
Commitment Contingencies and Litigation [Line Items] | ||||||||||||||||||
Debt issuance costs paid | $ 1,900,000 | |||||||||||||||||
Fifth Amendment To Credit Agreement | Revolving credit facility | ||||||||||||||||||
Commitment Contingencies and Litigation [Line Items] | ||||||||||||||||||
Credit limit | $ 10,000,000 | |||||||||||||||||
Line of credit facility increase (decrease) | $ 35,000,000 | |||||||||||||||||
Line of Credit | Credit Agreement 2017 | ||||||||||||||||||
Commitment Contingencies and Litigation [Line Items] | ||||||||||||||||||
Debt issuance costs paid | $ 5,700,000 | |||||||||||||||||
Line of Credit | Second Amendment To 2017 Credit Agreement | ||||||||||||||||||
Commitment Contingencies and Litigation [Line Items] | ||||||||||||||||||
Debt issuance costs paid | $ 1,000,000 | |||||||||||||||||
Debt issuance costs | 1,000,000 | |||||||||||||||||
Legal fees | 200,000 | |||||||||||||||||
Debt fee amount | $ 800,000 | |||||||||||||||||
Line of Credit | Third Amendment To 2017 Credit Agreement | ||||||||||||||||||
Commitment Contingencies and Litigation [Line Items] | ||||||||||||||||||
Debt issuance costs paid | $ 5,000,000 | |||||||||||||||||
Legal fees | 100,000 | |||||||||||||||||
Debt fee amount | 4,900,000 | |||||||||||||||||
Line of Credit | Third Amendment To 2017 Credit Agreement | Term Loan | ||||||||||||||||||
Commitment Contingencies and Litigation [Line Items] | ||||||||||||||||||
Debt issuance costs | $ 5,000,000 | |||||||||||||||||
Line of Credit | Fourth Amendment To Credit Agreement | Term Loan | ||||||||||||||||||
Commitment Contingencies and Litigation [Line Items] | ||||||||||||||||||
Debt issuance costs paid | $ 1,700,000 | |||||||||||||||||
Interest rate increase (decrease) | (1.25%) | |||||||||||||||||
Debt issuance costs | $ 1,700,000 | |||||||||||||||||
Legal fees | 100,000 | |||||||||||||||||
Debt fee amount | $ 1,600,000 |
COMMITMENTS, CONTINGENCIES AN_4
COMMITMENTS, CONTINGENCIES AND LITIGATION - Summary of Credit Agreement (Details) - USD ($) $ in Thousands | Dec. 31, 2018 | Dec. 31, 2017 |
Line of Credit Facility [Line Items] | ||
Borrowing capacity | $ 30,682 | $ 14,639 |
Term Loan | ||
Line of Credit Facility [Line Items] | ||
Outstanding principal balance | $ 415,599 | $ 288,712 |
Interest rate | 8.20% | 8.40% |
Maturities of the term loan are as follows: | ||
2019 | $ 4,357 | |
2020 | 4,357 | |
2021 | 4,357 | |
2022 | 416,072 | |
2023 | 0 | |
Total term loan | 429,143 | |
Revolving Credit Facility | ||
Line of Credit Facility [Line Items] | ||
Outstanding principal balance | 0 | $ 5,000 |
Letters of credit issued with proceeds from revolving credit facility | $ 4,187 | $ 5,361 |
Interest rate | 0.00% | 10.30% |
Surety Bond | ||
Line of Credit Facility [Line Items] | ||
Outstanding principal balance | $ 131 | $ 0 |
COMMITMENTS, CONTINGENCIES AN_5
COMMITMENTS, CONTINGENCIES AND LITIGATION - Financial Covenants (Details) | 12 Months Ended |
Dec. 31, 2018USD ($) | |
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: | 5.4 |
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: | 2.1 |
Limitation on capital expenditure | $ 36,000,000 |
March 1, 2018 Through June 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 March 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: | 5,500 |
June 30, 2020 Through September 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: | 5,250 |
December 31, 2020 Through June 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 September 30, 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 AN_6
COMMITMENTS, CONTINGENCIES AND LITIGATION - Capital Leases (Details) - USD ($) $ in Thousands | Dec. 31, 2018 | Dec. 31, 2017 |
Commitments and Contingencies Disclosure [Abstract] | ||
2019 | $ 34,719 | |
2020 | 33,901 | |
2021 | 34,894 | |
2022 | 33,637 | |
2023 | 32,878 | |
Thereafter | 630,573 | |
Remaining capital lease payments | 800,602 | |
Less: amounts representing imputed interest | (529,140) | |
Present value of minimum lease payments | 271,462 | |
Less: current portion | (9,080) | |
Capital lease obligations | $ 262,382 | $ 223,749 |
COMMITMENTS, CONTINGENCIES AN_7
COMMITMENTS, CONTINGENCIES AND LITIGATION - Operating Lease (Details) $ in Thousands | Dec. 31, 2018USD ($) |
Commitments and Contingencies Disclosure [Abstract] | |
2019 | $ 7,980 |
2020 | 7,616 |
2021 | 7,616 |
2022 | 7,108 |
2023 | 5,407 |
Thereafter | 3,757 |
Operating leases, future minimum payments due, Total | $ 39,484 |
COMMITMENTS, CONTINGENCIES AN_8
COMMITMENTS, CONTINGENCIES AND LITIGATION - Other Commitments (Details) - IP, Telecommunications and Data Center Services $ in Thousands | Dec. 31, 2018USD ($) |
Schedule Of Commitments And Contingencies [Line Items] | |
2019 | $ 3,981 |
2020 | 1,707 |
2021 | 655 |
2022 | 85 |
2023 | 19 |
Thereafter | 0 |
Total contractual commitments future minimum payments due | $ 6,447 |
OPERATING SEGMENTS AND GEOGRA_3
OPERATING SEGMENTS AND GEOGRAPHIC INFORMATION - Narrative (Details) | 12 Months Ended | ||
Dec. 31, 2018USD ($)segment | Dec. 31, 2017USD ($) | Dec. 31, 2016USD ($) | |
Segment Reporting [Abstract] | |||
Number of reportable segments | segment | 2 | ||
Goodwill impairment | $ | $ 0 | $ 0 | $ 80,105,000 |
OPERATING SEGMENTS AND GEOGRA_4
OPERATING SEGMENTS AND GEOGRAPHIC INFORMATION - Summary of Operating Results for Business Segments (Details) - USD ($) | 3 Months Ended | 12 Months Ended | 50 Months Ended | |||||||||
Dec. 31, 2018 | Sep. 30, 2018 | Jun. 30, 2018 | Mar. 31, 2018 | Dec. 31, 2017 | Sep. 30, 2017 | Jun. 30, 2017 | Mar. 31, 2017 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | Sep. 30, 2018 | |
Revenues: | ||||||||||||
Revenues | $ 78,238,000 | $ 82,972,000 | $ 81,962,000 | $ 74,201,000 | $ 70,035,000 | $ 68,907,000 | $ 69,642,000 | $ 72,133,000 | $ 317,373,000 | $ 280,718,000 | $ 298,297,000 | $ 8,855 |
Costs of sales and services, customer support and sales and marketing: | ||||||||||||
Costs of sales and services, customer support and sales and marketing: | 179,916,000 | 165,891,000 | 190,606,000 | |||||||||
Segment profit: | ||||||||||||
Segment profit | 137,457,000 | 114,827,000 | 107,691,000 | |||||||||
Goodwill impairment | 0 | 0 | 80,105,000 | |||||||||
Exit activities, restructuring and impairments | $ 2,266,000 | $ 2,347,000 | $ 826,000 | $ (33,000) | $ (148,000) | $ 745,000 | $ 4,628,000 | $ 1,023,000 | 5,406,000 | 6,249,000 | 7,236,000 | |
Other operating expenses, including sales, general and administrative and depreciation and amortization expenses | 125,895,000 | 103,804,000 | 113,420,000 | |||||||||
Income (loss) from operations | 6,156,000 | 4,774,000 | (93,070,000) | |||||||||
Non-operating expenses | 67,874,000 | 51,001,000 | 31,312,000 | |||||||||
Loss from continuing operations before income taxes, non-controlling interest and equity in (earnings) of equity-method investment | (61,718,000) | (46,227,000) | (124,382,000) | |||||||||
INAP US | ||||||||||||
Revenues: | ||||||||||||
Revenues | 248,184,000 | 215,770,000 | 229,902,000 | |||||||||
Costs of sales and services, customer support and sales and marketing: | ||||||||||||
Costs of sales and services, customer support and sales and marketing: | 134,792,000 | 128,062,000 | 148,706,000 | |||||||||
Segment profit: | ||||||||||||
Segment profit | 113,392,000 | 87,708,000 | 81,196,000 | |||||||||
INAP INTL | ||||||||||||
Revenues: | ||||||||||||
Revenues | 69,189,000 | 64,948,000 | 68,395,000 | |||||||||
Costs of sales and services, customer support and sales and marketing: | ||||||||||||
Costs of sales and services, customer support and sales and marketing: | 45,124,000 | 37,829,000 | 41,900,000 | |||||||||
Segment profit: | ||||||||||||
Segment profit | $ 24,065,000 | $ 27,119,000 | $ 26,495,000 |
OPERATING SEGMENTS AND GEOGRA_5
OPERATING SEGMENTS AND GEOGRAPHIC INFORMATION - Revenue by Source (Details) - USD ($) | 3 Months Ended | 12 Months Ended | 50 Months Ended | |||||||||
Dec. 31, 2018 | Sep. 30, 2018 | Jun. 30, 2018 | Mar. 31, 2018 | Dec. 31, 2017 | Sep. 30, 2017 | Jun. 30, 2017 | Mar. 31, 2017 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | Sep. 30, 2018 | |
Disaggregation of Revenue [Line Items] | ||||||||||||
Revenues | $ 78,238,000 | $ 82,972,000 | $ 81,962,000 | $ 74,201,000 | $ 70,035,000 | $ 68,907,000 | $ 69,642,000 | $ 72,133,000 | $ 317,373,000 | $ 280,718,000 | $ 298,297,000 | $ 8,855 |
Colocation | ||||||||||||
Disaggregation of Revenue [Line Items] | ||||||||||||
Revenues | 131,124,000 | 124,083,000 | 129,881,000 | |||||||||
Network Services | ||||||||||||
Disaggregation of Revenue [Line Items] | ||||||||||||
Revenues | 64,111,000 | 67,435,000 | 70,779,000 | |||||||||
Cloud | ||||||||||||
Disaggregation of Revenue [Line Items] | ||||||||||||
Revenues | 122,138,000 | 89,200,000 | 97,637,000 | |||||||||
INAP US | ||||||||||||
Disaggregation of Revenue [Line Items] | ||||||||||||
Revenues | 248,184,000 | 215,770,000 | 229,902,000 | |||||||||
INAP US | Colocation | ||||||||||||
Disaggregation of Revenue [Line Items] | ||||||||||||
Revenues | 125,282,000 | |||||||||||
INAP US | Network Services | ||||||||||||
Disaggregation of Revenue [Line Items] | ||||||||||||
Revenues | 52,748,000 | |||||||||||
INAP US | Cloud | ||||||||||||
Disaggregation of Revenue [Line Items] | ||||||||||||
Revenues | 70,154,000 | |||||||||||
INAP INTL | ||||||||||||
Disaggregation of Revenue [Line Items] | ||||||||||||
Revenues | 69,189,000 | $ 64,948,000 | $ 68,395,000 | |||||||||
INAP INTL | Colocation | ||||||||||||
Disaggregation of Revenue [Line Items] | ||||||||||||
Revenues | 5,842,000 | |||||||||||
INAP INTL | Network Services | ||||||||||||
Disaggregation of Revenue [Line Items] | ||||||||||||
Revenues | 11,363,000 | |||||||||||
INAP INTL | Cloud | ||||||||||||
Disaggregation of Revenue [Line Items] | ||||||||||||
Revenues | $ 51,984,000 |
OPERATING SEGMENTS AND GEOGRA_6
OPERATING SEGMENTS AND GEOGRAPHIC INFORMATION - Summary of Revenues by Country (Details) - USD ($) | 3 Months Ended | 12 Months Ended | 50 Months Ended | |||||||||
Dec. 31, 2018 | Sep. 30, 2018 | Jun. 30, 2018 | Mar. 31, 2018 | Dec. 31, 2017 | Sep. 30, 2017 | Jun. 30, 2017 | Mar. 31, 2017 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | Sep. 30, 2018 | |
Segment Reporting Information [Line Items] | ||||||||||||
Revenues | $ 78,238,000 | $ 82,972,000 | $ 81,962,000 | $ 74,201,000 | $ 70,035,000 | $ 68,907,000 | $ 69,642,000 | $ 72,133,000 | $ 317,373,000 | $ 280,718,000 | $ 298,297,000 | $ 8,855 |
United States | ||||||||||||
Segment Reporting Information [Line Items] | ||||||||||||
Revenues | 252,482,000 | 220,018,000 | 231,943,000 | |||||||||
Canada | ||||||||||||
Segment Reporting Information [Line Items] | ||||||||||||
Revenues | 38,133,000 | 38,750,000 | 44,206,000 | |||||||||
Other countries | ||||||||||||
Segment Reporting Information [Line Items] | ||||||||||||
Revenues | $ 26,758,000 | $ 21,950,000 | $ 22,148,000 |
OPERATING SEGMENTS AND GEOGRA_7
OPERATING SEGMENTS AND GEOGRAPHIC INFORMATION - Summary of Net Property and Equipment by Country (Details) - USD ($) $ in Thousands | Dec. 31, 2018 | Sep. 30, 2018 | Jun. 30, 2018 | Mar. 31, 2018 | Dec. 31, 2017 |
Segment Reporting Information [Line Items] | |||||
Property and equipment, net | $ 478,061 | $ 487,616 | $ 463,273 | $ 471,752 | $ 458,565 |
United States | |||||
Segment Reporting Information [Line Items] | |||||
Property and equipment, net | 433,508 | 417,936 | |||
Canada | |||||
Segment Reporting Information [Line Items] | |||||
Property and equipment, net | 38,718 | 34,296 | |||
Other countries | |||||
Segment Reporting Information [Line Items] | |||||
Property and equipment, net | $ 5,835 | $ 6,333 |
STOCK-BASED COMPENSATION PLAN_2
STOCK-BASED COMPENSATION PLANS - Narrative (Details) - USD ($) $ / shares in Units, $ in Millions | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Capitalized stock-based compensation | $ 0.1 | $ 0.2 | |
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 | ||
Volatility rate | 45.00% | ||
Risk free interest rate | 1.20% | ||
Dividend yield | 0.00% | ||
Weighted average grant date fair value per share (in dollars per share) | $ 3.13 | ||
Options, exercises in period, intrinsic value | $ 0.1 | $ 0.4 | $ 0.1 |
Vested in period, fair value | 1.7 | 2.6 | 1.5 |
Nonvested total intrinsic value | $ 4 | ||
2017 Stock Incentive Plan | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Number of shares authorized (in shares) | 1,300,000 | ||
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 | 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 | $ 0.7 | $ 1.1 | $ 0.4 |
STOCK-BASED COMPENSATION PLAN_3
STOCK-BASED COMPENSATION PLANS - Summary of Amount of Stock-Based Compensation, Net of Estimated Forfeitures (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | |||
Stock-based compensation | $ 4,678 | $ 3,040 | $ 4,997 |
Costs of customer support | |||
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | |||
Stock-based compensation | 165 | 167 | 1,159 |
Sales, general and administrative | |||
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | |||
Stock-based compensation | $ 4,513 | $ 2,873 | $ 3,838 |
STOCK-BASED COMPENSATION PLAN_4
STOCK-BASED COMPENSATION PLANS - Summary of Stock Option Activity (Details) | 12 Months Ended |
Dec. 31, 2018$ / sharesshares | |
Shares | |
Granted (in shares) | 0 |
Stock options | |
Shares | |
Balance, December 31, 2017 (in shares) | 379,000 |
Granted (in shares) | 0 |
Exercised (in shares) | (6,000) |
Forfeitures and post-vesting cancellations (in shares) | (150,000) |
Balance, December 31, 2018 (in shares) | 223,000 |
Exercisable, December 31, 2018 (in shares) | 211,000 |
Weighted Average Exercise Price | |
Balance, December 31, 2017 (in dollars per share) | $ / shares | $ 21.17 |
Granted (in dollars per share) | $ / shares | 0 |
Exercised (in dollars per share) | $ / shares | 8.49 |
Forfeitures and post-vesting cancellations (in dollars per share) | $ / shares | 14.55 |
Balance, December 31, 2018 (in dollars per share) | $ / shares | 25.95 |
Exercisable, December 31, 2018 (in dollars per share) | $ / shares | $ 26.74 |
STOCK-BASED COMPENSATION PLAN_5
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, 2018USD ($)$ / sharesshares | |
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | |
Fully vested and exercisable, total shares (in shares) | shares | 211 |
Fully vested and exercisable, weighted-average exercise price (in dollars per share) | $ / shares | $ 26.74 |
Fully vested and exercisable, aggregate intrinsic value | $ | $ 0 |
Fully vested and exercisable, weighted-average remaining contractual term (in years) | 3 years 9 months 18 days |
Expected to vest, total shares (in shares) | shares | 223 |
Expected to vest, weighted-average exercise price (in dollars per share) | $ / shares | $ 25.95 |
Expected to vest, aggregate intrinsic value | $ | $ 0 |
Expected to vest, weighted-average remaining contractual term (in years) | 4 years |
STOCK-BASED COMPENSATION PLAN_6
STOCK-BASED COMPENSATION PLANS - Summary of Restricted Stock Activity (Details) - Restricted stock shares in Thousands | 12 Months Ended |
Dec. 31, 2018$ / sharesshares | |
Shares | |
Unvested balance, December 31, 2017 (in shares) | shares | 760 |
Granted (in shares) | shares | 608 |
Vested (in shares) | shares | (277) |
Forfeited (in shares) | shares | (133) |
Unvested balance, December 31, 2018 (in shares) | shares | 958 |
Weighted-Average Grant Date Fair Value | |
Unvested balance, December 31, 2017 (in dollars per share) | $ / shares | $ 4.03 |
Granted (in dollars per share) | $ / shares | 7.73 |
Vested (in dollars per share) | $ / shares | 6.95 |
Forfeited (in dollars per share) | $ / shares | 6.61 |
Unvested balance, December 31, 2018 (in dollars per share) | $ / shares | $ 5.17 |
STOCK-BASED COMPENSATION PLAN_7
STOCK-BASED COMPENSATION PLANS - Summary of Total Unrecognized Compensation Costs Related to Unvested Stock-Based Compensation (Details) $ in Thousands | 12 Months Ended |
Dec. 31, 2018USD ($) | |
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | |
Unrecognized compensation | $ 3,383 |
Weighted-average remaining recognition period (in years) | 2 years 10 months 24 days |
Stock options | |
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | |
Unrecognized compensation | $ 53 |
Weighted-average remaining recognition period (in years) | 1 year 10 days |
Restricted stock | |
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | |
Unrecognized compensation | $ 3,330 |
Weighted-average remaining recognition period (in years) | 2 years 10 months 24 days |
EMPLOYEE RETIREMENT PLAN - Narr
EMPLOYEE RETIREMENT PLAN - Narrative (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Retirement Benefits [Abstract] | |||
Employer contributions | $ 0.7 | $ 0.4 | $ 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, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Income Tax Disclosure [Abstract] | |||
United States | $ (64,237) | $ (46,648) | $ (120,553) |
Foreign | 2,519 | 421 | (3,829) |
Loss from continuing operations before income taxes, non-controlling interest and equity in (earnings) of equity-method investment | $ (61,718) | $ (46,227) | $ (124,382) |
INCOME TAXES - Summary of Curre
INCOME TAXES - Summary of Current and Deferred Income Tax Provision (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Current: | |||
Federal | $ 0 | $ (730) | $ (15) |
State | 118 | 123 | 155 |
Foreign | 277 | 507 | 61 |
Total current income tax provision | 395 | (100) | 201 |
Deferred: | |||
Federal | 0 | 0 | 0 |
State | 0 | 0 | 0 |
Foreign | 262 | 353 | 329 |
Total deferred income tax provision | 262 | 353 | 329 |
Provision for income taxes | $ 657 | $ 253 | $ 530 |
INCOME TAXES - Summary of Effec
INCOME TAXES - Summary of Effective Income Tax Rate Reconciliation (Details) | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Income Tax Disclosure [Abstract] | |||
Federal income tax at statutory rates | (21.00%) | (34.00%) | (34.00%) |
Foreign income tax | (0.10%) | 0.50% | 0.70% |
State income tax | (5.50%) | (5.00%) | (5.00%) |
Other permanent differences | 1.30% | 0.40% | 0.20% |
Statutory tax rate change | 1.20% | 0.00% | (3.20%) |
Statutory tax rate change - Deferred - Tax Reform Act | 0.00% | (128.40%) | 0.00% |
Statutory tax rate change - Valuation Allowance - Tax Reform Act | 0.00% | 128.40% | 0.00% |
Compensation | 0.00% | 0.00% | 3.00% |
Goodwill impairment | 0.00% | 0.00% | 25.20% |
Refundable AMT credit | 0.00% | (1.50%) | 0.00% |
Change in valuation allowance | 25.20% | 40.10% | 13.50% |
Effective tax rate | 1.10% | 0.50% | 0.40% |
INCOME TAXES - Summary of Defer
INCOME TAXES - Summary of Deferred Tax Assets and Liabilities (Details) - USD ($) $ in Thousands | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 |
Long-term deferred income tax (liabilities) assets: | ||||
Property and equipment | $ 50,405 | $ 43,554 | ||
Goodwill | 1,071 | 1,392 | ||
Intangible assets | (26,534) | (22,021) | ||
Deferred revenue, less current portion | 1,358 | 1,834 | ||
Restructuring liability, less current portion | 696 | 1,282 | ||
Refinance | (4,130) | (374) | ||
Deferred rent | 285 | 639 | ||
Stock-based compensation | 1,450 | 911 | ||
Provision for doubtful accounts | 1,360 | 1,772 | ||
U.S. net operating loss carryforwards | 99,026 | 89,117 | ||
Foreign net operating loss carryforwards, less current portion | 7,631 | 8,053 | ||
Tax credit carryforwards | 2,775 | 2,812 | ||
Interest limitation | 9,403 | 0 | ||
Impact of adoption of ASC 606 | (6,666) | 0 | ||
Other | 2,408 | 2,090 | ||
Long-term deferred income tax assets | 140,538 | 131,061 | ||
Less: valuation allowance | (142,749) | (132,712) | $ (164,865) | $ (148,310) |
Net deferred tax liabilities | $ (2,211) | $ (1,651) |
INCOME TAXES - Narrative (Detai
INCOME TAXES - Narrative (Details) - USD ($) $ in Thousands | 12 Months Ended | |||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Income Tax [Line Items] | ||||
Minimum tax and research and development tax credit carryforwards | $ 500 | |||
Tax reform, decrease to valuation allowance | 700 | |||
Deferred tax asset, Valuation allowance | 142,749 | $ 132,712 | $ 164,865 | $ 148,310 |
Unrecognized tax positions | 300 | 162 | $ 187 | |
Interest and penalties accrued | 200 | $ 100 | ||
U.S. Tax Authority | ||||
Income Tax [Line Items] | ||||
Net operating loss carryforwards | 367,100 | |||
Operating loss carryforwards deduction of stock-based compensation | 27,700 | |||
Deferred tax asset, Valuation allowance | 137,100 | |||
Foreign Tax Authority | ||||
Income Tax [Line Items] | ||||
Net operating loss carryforwards | 36,700 | |||
Deferred tax asset, Valuation allowance | 5,600 | |||
Tax Years 2018 to 2037 | U.S. Tax Authority | ||||
Income Tax [Line Items] | ||||
Net operating loss carryforwards | 331,700 | |||
No Expiration Date | U.S. Tax Authority | ||||
Income Tax [Line Items] | ||||
Net operating loss carryforwards | $ 35,400 |
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, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Deferred Tax Assets [Roll Forward] | |||
Balance, January 1, | $ 132,712 | $ 164,865 | $ 148,310 |
Increase in deferred tax assets | 10,037 | 27,183 | 16,555 |
Remeasurement in deferred tax assets | 0 | (59,336) | 0 |
Balance, December 31, | $ 142,749 | $ 132,712 | $ 164,865 |
INCOME TAXES - Summary of Cha_2
INCOME TAXES - Summary of Changes in Unrecognized Tax Benefits (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Reconciliation of Unrecognized Tax Benefits, Excluding Amounts Pertaining to Examined Tax Returns [Roll Forward] | |||
Unrecognized tax benefits balance, January 1, | $ 162 | $ 187 | $ 0 |
Addition for tax positions taken in a prior year | 300 | 162 | 187 |
Deduction for tax positions taken in a prior year | 0 | (187) | 0 |
Unrecognized tax benefits balance, December 31, | $ 462 | $ 162 | $ 187 |
EQUITY (Details)
EQUITY (Details) | Oct. 23, 2018USD ($)$ / sharesshares | Nov. 16, 2017 | Feb. 22, 2017USD ($)$ / sharesshares | Dec. 31, 2018USD ($) |
Class of Stock [Line Items] | ||||
Stock repurchase program, authorized amount | $ 5,000,000 | |||
Shares issued (in shares) | shares | 4,210,527 | |||
Stock split ratio | 0.25 | |||
Public Offering | ||||
Class of Stock [Line Items] | ||||
Sale of stock, price per share (in dollars per share) | $ / shares | $ 9.50 | |||
Consideration received on transaction | $ 37,100,000 | |||
Payments of stock issuance costs | $ 500,000 | |||
Securities Purchase Agreement | ||||
Class of Stock [Line Items] | ||||
Sale of stock, price per share (in dollars per share) | $ / shares | $ 7.24 | |||
Common stock issuance (in shares) | shares | 5,950,712 | |||
Common stock issuance | $ 43,100,000 | |||
Payments of stock issuance costs | 100,000 | |||
Proceeds used to pay down credit facility | $ 39,200,000 |
RELATED PARTY TRANSACTION (Deta
RELATED PARTY TRANSACTION (Details) - USD ($) | Nov. 01, 2016 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 |
Payment For Leased Office Space | ||||
Related Party Transaction [Line Items] | ||||
Payment for leased office space | $ 146,571 | $ 138,371 | $ 24,000 | |
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) - Subsequent Event $ in Millions | Jan. 15, 2019USD ($) |
NTT ME | |
Subsequent Event [Line Items] | |
Noncontrolling interest ownership | 15.00% |
INAP | |
Subsequent Event [Line Items] | |
Ownership percentage | 85.00% |
Put Option | |
Subsequent Event [Line Items] | |
Put options fair market value of the shares purchased | $ 1 |
UNAUDITED QUARTERLY RESULTS - S
UNAUDITED QUARTERLY RESULTS - Summary of Unaudited Quarterly Data (Details) - USD ($) | 3 Months Ended | 6 Months Ended | 9 Months Ended | 12 Months Ended | 50 Months Ended | |||||||||
Dec. 31, 2018 | Sep. 30, 2018 | Jun. 30, 2018 | Mar. 31, 2018 | Dec. 31, 2017 | Sep. 30, 2017 | Jun. 30, 2017 | Mar. 31, 2017 | Jun. 30, 2018 | Sep. 30, 2018 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | Sep. 30, 2018 | |
Quarterly Financial Information Disclosure [Abstract] | ||||||||||||||
Net revenues | $ 78,238,000 | $ 82,972,000 | $ 81,962,000 | $ 74,201,000 | $ 70,035,000 | $ 68,907,000 | $ 69,642,000 | $ 72,133,000 | $ 317,373,000 | $ 280,718,000 | $ 298,297,000 | $ 8,855 | ||
Costs of sales and services, exclusive of depreciation and amortization | 23,662,000 | 29,511,000 | 28,621,000 | 25,467,000 | 25,798,000 | 24,945,000 | 26,429,000 | 29,045,000 | $ 54,088,000 | $ 83,601,000 | 107,262,000 | 106,217,000 | 124,255,000 | |
Costs of customer support | 8,305,000 | 7,984,000 | 8,841,000 | 7,387,000 | 6,122,000 | 6,237,000 | 6,133,000 | 7,264,000 | 32,517,000 | 25,757,000 | 32,184,000 | |||
Exit activities, restructuring and impairments | 2,266,000 | 2,347,000 | 826,000 | (33,000) | (148,000) | 745,000 | 4,628,000 | 1,023,000 | 5,406,000 | 6,249,000 | 7,236,000 | |||
Net loss attributable to INAP shareholders | $ (18,454,000) | $ (15,479,000) | $ (14,279,000) | $ (14,288,000) | $ (6,934,000) | $ (10,895,000) | $ (19,283,000) | $ (8,230,000) | $ (28,567,000) | $ (44,046,000) | $ (62,500,000) | $ (45,343,000) | $ (124,742,000) | |
Basic and diluted net loss per share (in dollars per share) | $ (0.82) | $ (0.75) | $ (0.69) | $ (0.70) | $ (0.35) | $ (0.55) | $ (0.97) | $ (0.51) | $ (3.01) | $ (2.39) | $ (9.54) |
SCHEDULE II - VALUATION AND Q_2
SCHEDULE II - VALUATION AND QUALIFYING ACCOUNTS AND RESERVES (Details) - Allowance for doubtful accounts - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
SEC Schedule, 12-09, Valuation and Qualifying Accounts Disclosure [Line Items] | |||
Balance at Beginning of Fiscal Period | $ 1,487 | $ 1,246 | $ 1,751 |
Charges to Costs and Expense | 882 | 1,049 | 1,093 |
Deductions | (822) | (808) | (1,598) |
Balance at End of Fiscal Period | $ 1,547 | $ 1,487 | $ 1,246 |
Uncategorized Items - inap-2017
Label | Element | Value |
Accounting Standards Update 2016-16 [Member] | ||
Cumulative Effect of New Accounting Principle in Period of Adoption | us-gaap_CumulativeEffectOfNewAccountingPrincipleInPeriodOfAdoption | $ 319,000 |
Accounting Standards Update 2016-16 [Member] | Retained Earnings [Member] | ||
Cumulative Effect of New Accounting Principle in Period of Adoption | us-gaap_CumulativeEffectOfNewAccountingPrincipleInPeriodOfAdoption | 319,000 |
Accounting Standards Update 2014-09 [Member] | ||
Cumulative Effect of New Accounting Principle in Period of Adoption | us-gaap_CumulativeEffectOfNewAccountingPrincipleInPeriodOfAdoption | 23,204,000 |
Accounting Standards Update 2014-09 [Member] | Retained Earnings [Member] | ||
Cumulative Effect of New Accounting Principle in Period of Adoption | us-gaap_CumulativeEffectOfNewAccountingPrincipleInPeriodOfAdoption | $ 23,204,000 |