Internap (INAPQ) 10-Q 4 Aug 15 2015 Q2 Quarterly report Financial data

Document and Entity Information

Document and Entity Information - Jun. 30, 2015 - shares	Total
Document and Entity Information Abstract
Entity Registrant Name	Internap Corp
Entity Central Index Key	1,056,386
Trading Symbol	inap
Current Fiscal Year End Date	--12-31
Entity Filer Category	Accelerated Filer
Entity Common Stock Shares Outstanding	55,521,685
Document Type	10-Q
Document Period End Date	Jun. 30, 2015
Amendment Flag	false
Document Fiscal Year Focus	2,015
Document Fiscal Period Focus	Q2

UNAUDITED CONDENSED CONSOLIDATE

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS - USD ($) shares in Thousands, $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2015	Jun. 30, 2014	Jun. 30, 2015	Jun. 30, 2014
Direct costs of network, sales and services, exclusive of depreciation and amortization, shown below:
Direct costs of customer support	$ 9,090	$ 9,553	$ 18,208	$ 18,480
Direct costs of amortization of acquired and developed technologies	592	1,551	1,742	3,012
Sales and marketing	9,759	9,977	20,042	20,080
General and administrative	11,818	11,461	23,502	22,858
Depreciation and amortization	21,974	17,917	41,032	35,382
Exit activities, restructuring and impairments	59	1,561	325	2,945
Total operating costs and expenses	86,270	88,582	171,175	175,080
Loss from operations	(5,838)	(4,514)	(9,957)	(9,051)
Non-operating expenses:
Interest expense	6,825	6,806	13,689	13,297
Other, net	55	382	(474)	483
Total non-operating expenses	6,880	7,188	13,215	13,780
Loss before income taxes and equity in (earnings) of equity-method investment	(12,718)	(11,702)	(23,172)	(22,831)
Benefit for income taxes	(137)	(437)	(111)	(853)
Equity in (earnings) of equity-method investment, net of taxes	(47)	(80)	(85)	(117)
Net loss	(12,534)	(11,185)	(22,976)	(21,861)
Other comprehensive income (loss):
Foreign currency translation adjustment	(16)	$ 107	(158)	$ 170
Unrealized gain (loss) on foreign currency contracts	168		(187)
Unrealized gain (loss) on interest rate swap	67	$ (329)	(149)	$ (280)
Total other comprehensive income (loss)	219	(222)	(494)	(110)
Comprehensive loss	$ (12,315)	$ (11,407)	$ (23,470)	$ (21,971)
Basic and diluted net loss per share (in dollars per share)	$ (0.24)	$ (0.22)	$ (0.45)	$ (0.43)
Weighted average shares outstanding used in computing basic and diluted net loss per share: (in shares)	51,579	51,045	51,590	51,125
Operating segments
Revenues:
Total revenues	$ 80,432	$ 84,068	$ 161,218	$ 166,029
Direct costs of network, sales and services, exclusive of depreciation and amortization, shown below:
Direct costs of network, sales and services, exclusive of depreciation and amortization	32,978	36,562	66,324	72,323
Operating segments | Data center services
Revenues:
Total revenues	59,422	61,395	118,520	119,678
Direct costs of network, sales and services, exclusive of depreciation and amortization, shown below:
Direct costs of network, sales and services, exclusive of depreciation and amortization	24,335	26,563	48,599	52,454
Operating segments | IP services
Revenues:
Total revenues	21,010	22,673	42,698	46,351
Direct costs of network, sales and services, exclusive of depreciation and amortization, shown below:
Direct costs of network, sales and services, exclusive of depreciation and amortization	$ 8,643	$ 9,999	$ 17,725	$ 19,869

UNAUDITED CONDENSED CONSOLIDAT3

UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands	Jun. 30, 2015	Dec. 31, 2014
Current assets:
Cash and cash equivalents	$ 16,412	$ 20,084
Accounts receivable, net of allowance for doubtful accounts of $1,949 and $2,121, respectively	20,566	19,606
Deferred tax asset	607	633
Prepaid expenses and other assets	12,860	12,276
Total current assets	50,445	52,599
Property and equipment, net	336,358	342,145
Investment in joint venture	2,637	2,622
Intangible assets, net	44,064	52,545
Goodwill	130,313	130,313
Deposits and other assets	10,690	9,923
Deferred tax asset		1,637
Total assets	574,507	591,784
Current liabilities:
Accounts payable	18,422	30,589
Accrued liabilities	11,935	13,120
Deferred revenues	7,462	7,345
Capital lease obligations	7,596	7,366
Term loan, less discount of $1,502 and $1,463, respectively	1,498	1,537
Exit activities and restructuring liability	1,705	1,809
Other current liabilities	2,008	1,590
Total current liabilities	50,626	63,356
Deferred revenues	4,453	3,544
Capital lease obligations	49,275	52,686
Revolving credit facility	27,000	10,000
Term loan, less discount of $5,788 and $6,543, respectively	286,712	287,457
Exit activities and restructuring liability	1,999	2,701
Deferred rent	9,795	10,583
Deferred tax liability	5,448	7,293
Other long-term liabilities	4,786	3,828
Total liabilities	$ 440,094	$ 441,448
Commitments and contingencies (note 5)
Stockholders' equity:
Preferred stock, $0.001 par value; 20,000 shares authorized; no shares issued or outstanding
Common stock, $0.001 par value; 120,000 shares authorized; 55,521 and 54,410 shares outstanding, respectively	$ 56	$ 54
Additional paid-in capital	1,270,815	1,262,402
Treasury stock, at cost; 713 and 621 shares, respectively	(5,551)	(4,683)
Accumulated deficit	(1,128,490)	(1,105,514)
Accumulated items of other comprehensive loss	(2,417)	(1,923)
Total stockholders' equity	134,413	150,336
Total liabilities and stockholders' equity	$ 574,507	$ 591,784

UNAUDITED CONDENSED CONSOLIDAT4

UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS (Parentheticals) - USD ($) shares in Thousands, $ in Thousands	Jun. 30, 2015	Dec. 31, 2014
Allowance for doubtful accounts receivable (in dollars)	$ 1,949	$ 2,121
Preferred stock, par value (in dollars per share)	$ 0.001	$ 0.001
Preferred stock, shares authorized	20,000	20,000
Preferred stock, shares issued
Preferred stock, shares outstanding
Common stock, par value (in dollars per share)	$ 0.001	$ 0.001
Common stock, shares authorized	120,000	120,000
Common stock, shares outstanding	55,521	54,410
Treasury stock, shares	713	621
Term loan current
Term loan, discount (in dollars)	$ 1,502	$ 1,463
Term loan noncurrent
Term loan, discount (in dollars)	$ 5,788	$ 6,543

UNAUDITED CONDENSED CONSOLIDAT5

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands	6 Months Ended
	Jun. 30, 2015	Jun. 30, 2014
Cash Flows from Operating Activities:
Net loss	$ (22,976)	$ (21,861)
Adjustments to reconcile net loss to net cash provided by operating activities:
Depreciation and amortization	42,774	38,394
Impairment of property and equipment		537
Amortization of debt discount and issuance costs	990	952
Stock-based compensation expense, net of capitalized amount	3,764	3,897
Equity in (earnings) of equity-method investment	(85)	(117)
Provision for doubtful accounts	606	177
Non-cash change in capital lease obligations	(640)	353
Non-cash change in exit activities and restructuring liability	536	2,851
Non-cash change in deferred rent	(788)	(1,382)
Deferred taxes	(157)	(1,134)
Other, net	19	215
Changes in operating assets and liabilities:
Accounts receivable	(1,647)	5,209
Prepaid expenses, deposits and other assets	(962)	(3,191)
Accounts payable	(8,162)	(3,199)
Accrued and other liabilities	(1,554)	2,804
Deferred revenues	1,153	1,328
Exit activities and restructuring liability	(1,342)	(1,540)
Other liabilities	35	7
Net cash flows provided by operating activities	11,564	24,300
Cash Flows from Investing Activities:
Purchases of property and equipment	(30,689)	(37,261)
Additions to acquired and developed technologies	(810)	(1,300)
Acquisition, net of cash received		74
Net cash flows used in investing activities	(31,499)	(38,487)
Cash Flows from Financing Activities:
Proceeds from credit agreements	17,000	5,000
Principal payments on credit agreements	(1,500)	(1,500)
Return of deposit collateral on credit agreement		6,153
Payments on capital lease obligations	(3,717)	(2,743)
Proceeds from exercise of stock options	4,489	878
Acquisition of common stock for income tax withholdings	(868)	(685)
Other, net	943	(89)
Net cash flows provided by financing activities	16,347	7,014
Effect of exchange rates on cash and cash equivalents	(84)	18
Net decrease in cash and cash equivalents	(3,672)	(7,155)
Cash and cash equivalents at beginning of period	20,084	35,018
Cash and cash equivalents at end of period	16,412	27,863
Supplemental disclosure of cash flow information:
Cash paid for interest	13,052	11,942
Non-cash acquisition of property and equipment under capital leases	1,176	6,241
Additions to property and equipment included in accounts payable	$ 4,298	$ 6,045

NATURE OF OPERATIONS AND BASIS

NATURE OF OPERATIONS AND BASIS OF PRESENTATION	6 Months Ended
	Jun. 30, 2015
Organization, Consolidation and Presentation Of Financial Statements [Abstract]
NATURE OF OPERATIONS AND BASIS OF PRESENTATION	1. NATURE OF OPERATIONS AND BASIS OF PRESENTATION Internap Corporation (“we,” “us” or “our”) provides high-performance information technology (“IT”) infrastructure services at 52 data centers across North America, Europe and the Asia-Pacific region and through 88 Internet Protocol (“IP”) service points. We have prepared the accompanying unaudited condensed consolidated financial statements in accordance with accounting principles generally accepted in the United States of America (“GAAP”) for interim financial information. These financial statements include all of our accounts and those of our wholly-owned subsidiaries. We have eliminated all intercompany transactions and balances in the accompanying financial statements. We have condensed or omitted certain information and note disclosures normally included in annual financial statements prepared in accordance with GAAP. In the opinion of management, the accompanying financial statements reflect all adjustments, which consist of normal recurring adjustments unless otherwise disclosed, necessary for a fair statement of our financial position as of June 30, 2015 and our operating results and cash flows for the interim periods presented. The balance sheet at December 31, 2014 was derived from our audited financial statements, but does not include all disclosures required by GAAP. You should read the accompanying financial statements and the related notes in conjunction with our financial statements and notes thereto contained in our Annual Report on Form 10-K for the year ended December 31, 2014 filed with the Securities and Exchange Commission. The preparation of financial statements requires us to make estimates and judgments that affect the reported amounts of assets, liabilities, revenues and expenses and related disclosure of contingent assets and liabilities. Actual results may differ materially from these estimates. The results of operations for the three and six months ended June 30, 2015 are not necessarily indicative of the results that may be expected for any future periods.

FAIR VALUE MEASUREMENTS

FAIR VALUE MEASUREMENTS	6 Months Ended
	Jun. 30, 2015
Fair Value Disclosures [Abstract]
FAIR VALUE MEASUREMENTS	2. 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 June 30, 2015: Foreign currency contracts $ — $ 257 $ — $ 257 Interest rate swap (note 4) — 962 — 962 Asset retirement obligations (1) — — 2,602 2,602 December 31, 2014: Interest rate swap (note 4) — 813 — 813 Asset retirement obligations (1) — — 2,471 2,471 (1) We calculate the fair value of asset retirement obligations by discounting the estimated amount using the current Treasury bill rate adjusted for our credit non-performance. We include asset retirement obligations of $2.6 million in “Other long-term liabilities” in the accompanying consolidated balance sheets for June 30, 2015 and December 31, 2014. The following table provides a summary of changes in our Level 3 asset retirement obligations for the six months ended June 30, 2015 (in thousands): Balance, January 1, 2015 $ 2,471 Accretion 131 Balance, June 30, 2015 $ 2,602 The fair values of our other Level 3 debt liabilities, estimated using a discount cash flow analysis based on incremental borrowing rates for similar types of borrowing arrangements, are as follows (in thousands): June 30, 2015 December 31, 2014 Carrying Amount Fair Value Carrying Amount Fair Value Revolving credit facility $ 27,000 $ 26,800 $ 10,000 $ 9,900 Term loan 295,500 310,000 297,000 313,000

TRADE NAME

TRADE NAME	6 Months Ended
	Jun. 30, 2015
Trade Name [Abstract]
TRADE NAME	3. TRADE NAME As part of the acquisition of iWeb Technologies Inc., formerly known as iWeb Group Inc., (“iWeb”), in November 2013, we ascribed a value of $15.1 million to the iWeb trade name. Since the acquisition, we have operated under two brands, Internap and iWeb. In late March 2015, we determined to phase-out the use of the iWeb trade name to support our long-term strategy. Maintaining two brands adds costs and complexity and is no longer necessary as we have merged our product development, customer support and other key functions. We expect to complete the phase-out of the iWeb trade name by December 31, 2015. As a result, we changed the estimate of the trade name’s useful life to approximately nine months beginning in late March 2015. During the three and six months ended June 30, 2015, the additional amortization expense was $4.5 million and $5.0 million, respectively. As of June 30, 2015, the unamortized balance was $9.3 million. We will continue to evaluate the remaining six-month useful life during the phase-out period.

INTEREST RATE SWAP

INTEREST RATE SWAP	6 Months Ended
	Jun. 30, 2015
Derivative Instruments and Hedging Activities Disclosure [Abstract]
INTEREST RATE SWAP	4. INTEREST RATE SWAP As of June 30, 2015, the fair value of our interest rate swap was $1.0 million, of which $0.8 million is included in “Other current liabilities” and $0.2 million is included in “Other long-term liabilities” in the accompanying consolidated balance sheets. As of December 31, 2014, the fair value of our interest rate swap was $0.8 million which we included in “Other long-term liabilities.” During the three and six months ended June 30, 2015 and 2014, we recorded the effective portion of the change in fair value of our interest rate swap in “Accumulated items of other comprehensive loss” in the accompanying consolidated balance sheets. We did not recognize any hedge ineffectiveness during the three and six months ended June 30, 2015 and 2014. We will reclassify amounts reported in “Accumulated items of other comprehensive loss” related to our interest rate swaps to “Interest expense” in our accompanying consolidated statements of operations and comprehensive loss as we accrue interest payments on our variable-rate debt. Through June 30, 2016, we estimated that we will reclassify an additional $0.8 million as an increase to interest expense since the hedge interest rate currently exceeds the variable interest rate on our debt. The activity of our interest rate swap is summarized as follows (in thousands): Three Months Ended June 30, Six Months Ended June 30, 2015 2014 2015 2014 Gain (loss) recorded as the effective portion of the change in fair value $ 67 $ (329 ) $ (149 ) $ (280 ) Interest payments reclassified as an increase to interest expense 199 201 397 401

COMMITMENTS, CONTINGENCIES AND

COMMITMENTS, CONTINGENCIES AND LITIGATION	6 Months Ended
	Jun. 30, 2015
Commitments and Contingencies Disclosure [Abstract]
COMMITMENTS, CONTINGENCIES AND LITIGATION	5. COMMITMENTS, CONTINGENCIES AND LITIGATION We are subject to 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.

EXIT ACTIVITIES AND RESTRUCTURI

EXIT ACTIVITIES AND RESTRUCTURING LIABILITIES	6 Months Ended
	Jun. 30, 2015
Restructuring and Related Activities [Abstract]
EXIT ACTIVITIES AND RESTRUCTURING LIABILITIES	6. EXIT ACTIVITIES AND RESTRUCTURING LIABILITIES In prior years, we incurred costs related to certain exited facilities. In addition, during the six months ended June 30, 2015, we recorded subsequent plan adjustments in sublease income assumptions for certain properties included in our previously-disclosed plans. We include subsequent plan adjustments in “Exit activities, restructuring and impairments” in the accompanying statements of operations and comprehensive loss for the six months ended June 30, 2015 and 2014. The following table displays the transactions and balances for exit activities and restructuring charges, substantially related to our data center services segment, during the six months ended June 30, 2015 and 2014 (in thousands): December 31, 2014 Initial Charges Plan Adjustments Cash Payments June 30, 2015 Real estate obligations: 2014 exit activities $ 2,010 $ — $ 217 $ (264 ) $ 1,963 2007 restructuring 2,325 — 324 (908 ) 1,741 Other 175 — (6 ) (169 ) — Total $ 4,510 $ — $ 535 $ (1,341 ) $ 3,704 December 31, 2013 Initial Charges Plan Adjustments Cash Payments June 30, 2014 Real estate obligations: 2014 exit activities $ — $ 1,454 $ (1 ) $ (128 ) $ 1,325 2007 restructuring 3,296 — 1,375 (1,025 ) 3,646 Other 867 — 23 (386 ) 504 Total $ 4,163 $ 1,454 $ 1,397 $ (1,539 ) $ 5,475

OPERATING SEGMENTS

OPERATING SEGMENTS	6 Months Ended
	Jun. 30, 2015
Segment Reporting [Abstract]
OPERATING SEGMENTS	7. OPERATING SEGMENTS We operate in two business segments: data center services and IP services. The data center services segment includes colocation, hosting and cloud services. Colocation involves providing physical space within data centers and associated services such as power, interconnection, environmental controls and security while allowing our customers to deploy and manage their servers, storage and other equipment. Hosting and cloud services involve the provision and maintenance of hardware, operating system software, management and monitoring software, data center infrastructure and interconnection, while allowing our customers to own and manage their software applications and content. Our IP services segment includes our patented Performance IP™ service, content delivery network services and IP routing and hardware and software platform. Segment profit is calculated as segment revenues less direct costs of sales and services, exclusive of depreciation and amortization for the segment and does not include direct costs of customer support, direct costs of amortization of acquired technologies or any other depreciation or amortization associated with direct costs. Three Months Ended June 30, Six Months Ended June 30, 2015 2014 2015 2014 Revenues: Data center services $ 59,422 $ 61,395 $ 118,520 $ 119,678 IP services 21,010 22,673 42,698 46,351 Total revenues 80,432 84,068 161,218 166,029 Direct costs of sales and services, exclusive of depreciation and amortization: Data center services 24,335 26,563 48,599 52,454 IP services 8,643 9,999 17,725 19,869 Total direct costs of network, sales and services, exclusive of depreciation and amortization 32,978 36,562 66,324 72,323 Segment profit: Data center services 35,087 34,832 69,921 67,224 IP services 12,367 12,674 24,973 26,482 Total segment profit 47,454 47,506 94,894 93,706 Exit activities, restructuring and impairments 59 1,561 325 2,945 Other operating expenses, including direct costs of customer support, depreciation and amortization 53,233 50,459 104,526 99,812 Loss from operations (5,838 ) (4,514 ) (9,957 ) (9,051 ) Non-operating expense 6,880 7,188 13,215 13,780 Loss before income taxes and equity in (earnings) of equity-method investment $ (12,718 ) $ (11,702 ) $ (23,172 ) (22,831 )

INCOME TAXES

INCOME TAXES	6 Months Ended
	Jun. 30, 2015
Income Tax Disclosure [Abstract]
INCOME TAXES	8. INCOME TAXES We periodically evaluate the recoverability of our deferred tax assets and the appropriateness of a valuation allowance. During the three months ended June 30, 2015, we recorded a $1.7 million reserve against our U.K. net deferred tax asset. We record the resulting income tax expense for the reserve, netted with the tax benefit for the operational results of iWeb, in “Benefit for income taxes” in the accompanying consolidated statements of operations for the three and six months ended June 30, 2015.

NET LOSS PER SHARE

NET LOSS PER SHARE	6 Months Ended
	Jun. 30, 2015
Earnings Per Share [Abstract]
NET LOSS PER SHARE	9. NET LOSS PER SHARE We compute basic net loss per share by dividing net loss attributable to our common stockholders by the weighted average number of shares of common stock outstanding during the period. We exclude all outstanding options and unvested restricted stock as such securities are anti-dilutive for all periods presented. Basic and diluted net loss per share is calculated as follows (in thousands, except per share amounts): Three Months Ended June 30, Six Months Ended June 30, 2015 2014 2015 2014 Net loss attributable to common stock $ (12,534 ) $ (11,185 ) $ (22,976 ) $ (21,861 ) Weighted average shares outstanding, basic and diluted 51,579 51,045 51,590 51,125 Net loss per share, basic and diluted $ (0.24 ) $ (0.22 ) $ (0.45 ) $ (0.43 ) Anti-dilutive securities excluded from diluted net loss per share calculation for stock-based compensation plans 6,866 7,382 6,866 7,382

RECENT ACCOUNTING PRONOUNCEMENT

RECENT ACCOUNTING PRONOUNCEMENTS	6 Months Ended
	Jun. 30, 2015
New Accounting Pronouncements and Changes In Accounting Principles [Abstract]
RECENT ACCOUNTING PRONOUNCEMENTS	10. RECENT ACCOUNTING PRONOUNCEMENTS In April 2015, the Financial Accounting Standards Board (“FASB”) issued guidance that requires debt issuance costs related to a recognized debt liability be presented in the balance sheet as a direct deduction from the carrying amount of that debt liability, which is consistent with the presentation of debt discounts. The guidance, to be applied retrospectively, is effective for financial statements issued for fiscal years beginning after December 15, 2015, and interim periods within those fiscal years. Early adoption is permitted. We expect adoption will not have a material impact on our financial condition and no impact on our result of operations. In February 2015, FASB issued guidance to improve targeted areas of the existing consolidation guidance and reduce the number of consolidation models. This update is effective for annual and interim periods beginning after December 15, 2015, with early adoption permitted. We expect adoption will not have a material impact on our financial condition or result of operations. In August 2014, FASB issued new guidance which requires management to evaluate, in connection with preparing financial statements for each annual and interim reporting period, whether there are conditions or events, considered in the aggregate, that raise substantial doubt about an entity’s ability to continue as a going concern within one year after the date the financial statements are issued (or within one year after the date that the financial statements are available to be issued when applicable) and provide related disclosures. The guidance is effective for the annual and interim periods ending after December 15, 2016. Early adoption is permitted. We expect adoption will not have a material impact on our financial condition or result of operations. In May 2014, FASB issued new guidance which provides a single model for revenue arising from contracts with customers and supersedes current revenue recognition guidance. The guidance is effective the first quarter of 2018. The guidance permits the application of its requirements retrospectively to all prior periods presented or in the year of adoption through a cumulative adjustment. We are currently evaluating the impact that the adoption will have on our consolidated financial statements and related disclosures. As we have not completed our evaluation, we cannot make a determination of the impact and have not yet selected a transition method or determined the impact of the standard on our ongoing financial reporting.

FAIR VALUE MEASUREMENTS (Tables

FAIR VALUE MEASUREMENTS (Tables)	6 Months Ended
	Jun. 30, 2015
Fair Value Disclosures [Abstract]
Schedule of assets and liabilities measured at fair value on a recurring basis	Level 1 Level 2 Level 3 Total June 30, 2015: Foreign currency contracts $ — $ 257 $ — $ 257 Interest rate swap (note 4) — 962 — 962 Asset retirement obligations (1) — — 2,602 2,602 December 31, 2014: Interest rate swap (note 4) — 813 — 813 Asset retirement obligations (1) — — 2,471 2,471 (1) We calculate the fair value of asset retirement obligations by discounting the estimated amount using the current Treasury bill rate adjusted for our credit non-performance. We include asset retirement obligations of $2.6 million in “Other long-term liabilities” in the accompanying consolidated balance sheets for June 30, 2015 and December 31, 2014.
Schedule of changes in asset retirement obligations	Balance, January 1, 2015 $ 2,471 Accretion 131 Balance, June 30, 2015 $ 2,602
Schedule of fair value of term loan and revolving credit facility	June 30, 2015 December 31, 2014 Carrying Amount Fair Value Carrying Amount Fair Value Revolving credit facility $ 27,000 $ 26,800 $ 10,000 $ 9,900 Term loan 295,500 310,000 297,000 313,000

INTEREST RATE SWAP (Tables)

INTEREST RATE SWAP (Tables)	6 Months Ended
	Jun. 30, 2015
Derivative Instruments and Hedging Activities Disclosure [Abstract]
Schedule of activity of interest rate swaps	Three Months Ended June 30, Six Months Ended June 30, 2015 2014 2015 2014 Gain (loss) recorded as the effective portion of the change in fair value $ 67 $ (329 ) $ (149 ) $ (280 ) Interest payments reclassified as an increase to interest expense 199 201 397 401

EXIT ACTIVITIES AND RESTRUCTU18

EXIT ACTIVITIES AND RESTRUCTURING LIABILITIES (Tables)	6 Months Ended
	Jun. 30, 2015
Restructuring and Related Activities [Abstract]
Schedule of transactions and balances for exit activities and restructuring charges	December 31, 2014 Initial Charges Plan Adjustments Cash Payments June 30, 2015 Real estate obligations: 2014 exit activities $ 2,010 $ — $ 217 $ (264 ) $ 1,963 2007 restructuring 2,325 — 324 (908 ) 1,741 Other 175 — (6 ) (169 ) — Total $ 4,510 $ — $ 535 $ (1,341 ) $ 3,704 December 31, 2013 Initial Charges Plan Adjustments Cash Payments June 30, 2014 Real estate obligations: 2014 exit activities $ — $ 1,454 $ (1 ) $ (128 ) $ 1,325 2007 restructuring 3,296 — 1,375 (1,025 ) 3,646 Other 867 — 23 (386 ) 504 Total $ 4,163 $ 1,454 $ 1,397 $ (1,539 ) $ 5,475

OPERATING SEGMENTS (Tables)

OPERATING SEGMENTS (Tables)	6 Months Ended
	Jun. 30, 2015
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	Three Months Ended June 30, Six Months Ended June 30, 2015 2014 2015 2014 Revenues: Data center services $ 59,422 $ 61,395 $ 118,520 $ 119,678 IP services 21,010 22,673 42,698 46,351 Total revenues 80,432 84,068 161,218 166,029 Direct costs of sales and services, exclusive of depreciation and amortization: Data center services 24,335 26,563 48,599 52,454 IP services 8,643 9,999 17,725 19,869 Total direct costs of network, sales and services, exclusive of depreciation and amortization 32,978 36,562 66,324 72,323 Segment profit: Data center services 35,087 34,832 69,921 67,224 IP services 12,367 12,674 24,973 26,482 Total segment profit 47,454 47,506 94,894 93,706 Exit activities, restructuring and impairments 59 1,561 325 2,945 Other operating expenses, including direct costs of customer support, depreciation and amortization 53,233 50,459 104,526 99,812 Loss from operations (5,838 ) (4,514 ) (9,957 ) (9,051 ) Non-operating expense 6,880 7,188 13,215 13,780 Loss before income taxes and equity in (earnings) of equity-method investment $ (12,718 ) $ (11,702 ) $ (23,172 ) (22,831 )

NET LOSS PER SHARE (Tables)

NET LOSS PER SHARE (Tables)	6 Months Ended
	Jun. 30, 2015
Earnings Per Share [Abstract]
Schedule of basic and diluted net loss per share	Three Months Ended June 30, Six Months Ended June 30, 2015 2014 2015 2014 Net loss attributable to common stock $ (12,534 ) $ (11,185 ) $ (22,976 ) $ (21,861 ) Weighted average shares outstanding, basic and diluted 51,579 51,045 51,590 51,125 Net loss per share, basic and diluted $ (0.24 ) $ (0.22 ) $ (0.45 ) $ (0.43 ) Anti-dilutive securities excluded from diluted net loss per share calculation for stock-based compensation plans 6,866 7,382 6,866 7,382

NATURE OF OPERATIONS AND BASI21

NATURE OF OPERATIONS AND BASIS OF PRESENTATION (Detail Textuals) - 6 months ended Jun. 30, 2015	PointData_Center
Organization, Consolidation and Presentation Of Financial Statements [Abstract]
Number of data centers | Data_Center	52
Number of internet protocol service points	88

FAIR VALUE MEASUREMENTS - Summa

FAIR VALUE MEASUREMENTS - Summary of Assets and liabilities measured at fair value on recurring basis (Details) - Recurring basis - USD ($) $ in Thousands		Jun. 30, 2015	Dec. 31, 2014
Level 1 | Foreign currency contracts
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Assets, fair value
Level 1 | Interest rate swap
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Liabilities, fair value
Level 1 | Asset retirement obligations
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Liabilities, fair value	[1]
Level 2 | Foreign currency contracts
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Assets, fair value		$ 257
Level 2 | Interest rate swap
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Liabilities, fair value		$ 962	$ 813
Level 2 | Asset retirement obligations
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Liabilities, fair value	[1]
Level 3 | Foreign currency contracts
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Assets, fair value
Level 3 | Interest rate swap
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Liabilities, fair value
Level 3 | Asset retirement obligations
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Liabilities, fair value	[1]	$ 2,602	$ 2,471
Total | Foreign currency contracts
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Assets, fair value		257
Total | Interest rate swap
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Liabilities, fair value		962	813
Total | Asset retirement obligations
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Liabilities, fair value	[1]	$ 2,602	$ 2,471
[1]	We calculate the fair value of asset retirement obligations by discounting the estimated amount using the current Treasury bill rate adjusted for our credit non-performance. We include asset retirement obligations of $2.6 million in "Other long-term liabilities" in the accompanying consolidated balance sheets for June 30, 2015 and December 31, 2014.

FAIR VALUE MEASUREMENTS - Sum23

FAIR VALUE MEASUREMENTS - Summary of Assets and liabilities measured at fair value on recurring basis (Parentheticals) (Details) - USD ($) $ in Millions	Jun. 30, 2015	Dec. 31, 2014
Other long-term liabilities
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Asset retirement obligation	$ 2.6	$ 2.6

FAIR VALUE MEASUREMENTS - Sum24

FAIR VALUE MEASUREMENTS - Summary of changes in Level 3 financial asset - Asset retirement obligation (Details 1) - Asset retirement obligations $ in Thousands	6 Months Ended
	Jun. 30, 2015USD ($)
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward]
Balance, January 1, 2015	$ 2,471
Accretion	131
Balance, June 30, 2015	$ 2,602

FAIR VALUE MEASUREMENTS - Sum25

FAIR VALUE MEASUREMENTS - Summary of fair value Level 3 debt - Term loan (Details 2) - USD ($) $ in Thousands	Jun. 30, 2015	Dec. 31, 2014
Carrying Amount
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Revolving credit facility	$ 27,000	$ 10,000
Term loan	295,500	297,000
Fair Value
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Revolving credit facility	26,800	9,900
Term loan	$ 310,000	$ 313,000

TRADE NAME (Detail Textuals)

TRADE NAME (Detail Textuals) - iWeb Technologies Inc - Trade name - USD ($) $ in Millions	1 Months Ended	3 Months Ended	6 Months Ended
	Nov. 30, 2013	Jun. 30, 2015	Jun. 30, 2015
Trade Name [Line Items]
Acquisition value	$ 15.1
Additional amortization expense		$ 4.5	$ 5
Unamortized balance		$ 9.3	$ 9.3

INTEREST RATE SWAP (Details)

INTEREST RATE SWAP (Details) - Interest rate swap - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2015	Jun. 30, 2014	Jun. 30, 2015	Jun. 30, 2014
Derivative [Line Items]
Gain (loss) recorded as the effective portion of the change in fair value	$ 67	$ (329)	$ (149)	$ (280)
Interest payments reclassified as an increase to interest expense	$ 199	$ 201	$ 397	$ 401

INTEREST RATE SWAP (Detail Text

INTEREST RATE SWAP (Detail Textuals) - Designated as Hedging Instrument - Cash Flow Hedging - Interest rate swap - USD ($) $ in Millions	6 Months Ended
	Jun. 30, 2015	Dec. 31, 2014
Derivative [Line Items]
Fair value of the interest rate swaps	$ 1	$ 0.8
Other comprehensive loss
Derivative [Line Items]
Estimated reclassification of additional increase in interest expense through June 30, 2016	0.8
Other long-term liabilities
Derivative [Line Items]
Fair value of the interest rate swaps	0.2	$ 0.8
Other current liabilities
Derivative [Line Items]
Fair value of the interest rate swaps	$ 0.8

EXIT ACTIVITIES AND RESTRUCTU29

EXIT ACTIVITIES AND RESTRUCTURING LIABILITIES - Summary of activity and balances for restructuring and asset impairment activity (Details) - Data center services - Exit activities and Restructuring charges - USD ($) $ in Thousands	6 Months Ended
	Jun. 30, 2015	Jun. 30, 2014
Restructuring Reserve [Roll Forward]
December 31, 2013 and 2014	$ 4,510	$ 4,163
Initial Charges		1,454
Plan Adjustments	$ 535	1,397
Cash Payments	(1,341)	(1,539)
June 30, 2014 and 2015	3,704	$ 5,475
2014 exit activities
Restructuring Reserve [Roll Forward]
December 31, 2013 and 2014	$ 2,010
Initial Charges		$ 1,454
Plan Adjustments	$ 217	(1)
Cash Payments	(264)	(128)
June 30, 2014 and 2015	1,963	1,325
2007 restructuring
Restructuring Reserve [Roll Forward]
December 31, 2013 and 2014	$ 2,325	$ 3,296
Initial Charges
Plan Adjustments	$ 324	$ 1,375
Cash Payments	(908)	(1,025)
June 30, 2014 and 2015	1,741	3,646
Other
Restructuring Reserve [Roll Forward]
December 31, 2013 and 2014	$ 175	$ 867
Initial Charges
Plan Adjustments	$ (6)	$ 23
Cash Payments	$ (169)	(386)
June 30, 2014 and 2015		$ 504

OPERATING SEGMENTS - Summary of

OPERATING SEGMENTS - Summary of operating results for business segments - (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2015	Jun. 30, 2014	Jun. 30, 2015	Jun. 30, 2014
Segment profit:
Exit activities, restructuring and impairments	$ 59	$ 1,561	$ 325	$ 2,945
Loss from operations	(5,838)	(4,514)	(9,957)	(9,051)
Non-operating expense	(6,880)	(7,188)	(13,215)	(13,780)
Loss before income taxes and equity in (earnings) of equity-method investment	(12,718)	(11,702)	(23,172)	(22,831)
Operating segments
Revenues:
Total revenues	80,432	84,068	161,218	166,029
Direct costs of sales and services, exclusive of depreciation and amortization:
Total direct costs of sales and services, exclusive of depreciation and amortization	32,978	36,562	66,324	72,323
Segment profit:
Total segment profit	47,454	47,506	94,894	93,706
Operating segments | Data center services
Revenues:
Total revenues	59,422	61,395	118,520	119,678
Direct costs of sales and services, exclusive of depreciation and amortization:
Total direct costs of sales and services, exclusive of depreciation and amortization	24,335	26,563	48,599	52,454
Segment profit:
Total segment profit	35,087	34,832	69,921	67,224
Operating segments | IP services
Revenues:
Total revenues	21,010	22,673	42,698	46,351
Direct costs of sales and services, exclusive of depreciation and amortization:
Total direct costs of sales and services, exclusive of depreciation and amortization	8,643	9,999	17,725	19,869
Segment profit:
Total segment profit	12,367	12,674	24,973	26,482
Segment reconciling items
Segment profit:
Exit activities, restructuring and impairments	59	1,561	325	2,945
Other operating expenses, including direct costs of customer support, depreciation and amortization	53,233	50,459	104,526	99,812
Loss from operations	(5,838)	(4,514)	(9,957)	(9,051)
Non-operating expense	6,880	7,188	13,215	13,780
Loss before income taxes and equity in (earnings) of equity-method investment	$ (12,718)	$ (11,702)	$ (23,172)	$ (22,831)

OPERATING SEGMENTS (Detail Text

OPERATING SEGMENTS (Detail Textuals)	6 Months Ended
	Jun. 30, 2015Segment
Segment Reporting [Abstract]
Number of operating segments	2

INCOME TAXES (Details Textuals)

INCOME TAXES (Details Textuals) $ in Millions	3 Months Ended
	Jun. 30, 2015USD ($)
U.K. net deferred tax asset
Valuation Allowance [Line Items]
Valuation allowance reserve	$ 1.7

NET LOSS PER SHARE (Details)

NET LOSS PER SHARE (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2015	Jun. 30, 2014	Jun. 30, 2015	Jun. 30, 2014
Earnings Per Share [Abstract]
Net loss attributable to common stock	$ (12,534)	$ (11,185)	$ (22,976)	$ (21,861)
Weighted average shares outstanding, basic and diluted (in shares)	51,579	51,045	51,590	51,125
Net loss per share, basic and diluted (in dollars per share)	$ (0.24)	$ (0.22)	$ (0.45)	$ (0.43)
Anti-dilutive securities excluded from diluted net loss per share calculation for stock-based compensation plans (in shares)	6,866	7,382	6,866	7,382