8-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 8-K

CURRENT REPORT

PURSUANT TO SECTION 13 OR 15(d) OF THE

SECURITIES EXCHANGE ACT OF 1934

Date of Report (Date of earliest event reported):

October 30, 2015

Internap Corporation

(Exact Name of Registrant as Specified in Charter)

Delaware (State or Other Jurisdiction
of Incorporation) 001-31989 (Commission File Number) 91-2145721 (IRS Employer
Identification Number

One Ravinia Drive, Suite 1300, Atlanta, Georgia (Address of Principal Executive Offices) 30346 (Zip Code)

Registrant’s telephone number, including area code: (404) 302-9700

Not applicable

(Former Name or Former Address, if Changed Since Last Report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):

¨ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

¨ Soliciting material pursuant to Rule 14a-12 under the Securities Act (17 CFR 240.14a-12)

¨ Pre-commencement communications pursuant to Rule 14d-2(b) under the Securities Act (17 CFR 240.14d-2(b))

¨ Pre-commencement communications pursuant to Rule 13e-4(c) under the Securities Act (17 CFR 240.13e-2(c))

Item 1.01.         Entry into a Material Definitive Agreement.

First Amendment to Credit Agreement

As of October 30, 2015, Internap Corporation (the “Company”), the lenders party thereto (the “Lenders”) and Jefferies Finance LLC, as Administrative Agent (the “Administrative Agent”), and as consented to by guarantor parties thereto, entered into a First Amendment to Credit Agreement (the “First Amendment”). The First Amendment amends the Credit Agreement, dated as of November 26, 2013 (the “Credit Agreement”), among the Company, the Lenders and the Administrative Agent, by removing from the definition of “change in control” the alleged “dead hand proxy put” provision whereby certain changes in the composition of the Company’s board of directors would have constituted a change of control and thereby an event of default under the Credit Agreement.

The Company and its subsidiaries from time to time have had, and may continue to have, various commercial, lending or other relationships with the Lenders and the Lenders’ respective affiliates.

Item 2.02         Results of Operations and Financial Condition.

On November 5, 2015, the Company issued a press release announcing its financial results for the quarter ended September 30, 2015. A copy of the press release is attached hereto as Exhibit 99.1 hereto and is incorporated herein by reference.

The information contained herein and in the accompanying exhibit shall not be incorporated by reference into any filing of the Company, whether made before or after the date hereof, regardless of any general incorporation language in such filing, unless expressly incorporated by specific reference to this or such filing. The information in this report, including the exhibit hereto, shall be deemed to be “furnished” and therefore shall not be deemed to be “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, or otherwise subject to the liabilities of that section or Sections 11 and 12(a)(2) of the Securities Act of 1933, as amended.

Item 9.01         Financial Statements and Exhibits.

(d)          Exhibits

The following exhibit is furnished with this Current Report on Form 8-K:

Exhibit No.	Description
10.1	First Amendment to Credit Agreement entered into as of October 30, 2015, among Internap Corporation, each of the Lenders party thereto and Jefferies Finance LLC, as Administrative Agent.
99.1	Press Release dated November 5, 2015.

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

	INTERNAP CORPORATION
Date: November 5, 2015	By:	/s/ Kevin M. Dotts
		Kevin M. Dotts
		Chief Financial Officer

EXHIBIT INDEX

Exhibit No.	Description of Exhibit
10.1	First Amendment to Credit Agreement entered into as of October 30, 2015, among Internap Corporation, each of the Lenders party thereto and Jefferies Finance LLC, as Administrative Agent.
99.1	Press Release of the Company dated November 5, 2015.

EX-10.1

Exhibit 10.1

First Amendment to

Credit Agreement

This FIRST AMENDMENT TO CREDIT AGREEMENT (this “Amendment”) is entered into as of October 30, 2015, among Internap Corporation (f/k/a Internap Network Services Corporation), a Delaware corporation (the “Borrower”), each of the Lenders (as defined below) party hereto and Jefferies Finance LLC, as Administrative Agent (in such capacity, the “Administrative Agent”), and is acknowledged and consented to by each Guarantor.

R E C I T A L S:

A.           The Borrower, the lenders from time to time party thereto (the “Lenders”) and the Administrative Agent are parties to the Credit Agreement, dated as of November 26, 2013 (as amended, amended and restated, supplemented or otherwise modified from time to time, the “Credit Agreement”).

B.           The Loan Parties have requested an amendment to the Credit Agreement that would effect the modifications thereto set forth herein, and the Administrative Agent and each Lender party hereto consents to this Amendment.

C.           Accordingly, in consideration of the premises made hereunder, and for good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto, intending to be legally bound, hereby agree as follows:

Section 1.          Definitions and Interpretation.

1.1           Definitions. Unless otherwise defined in this Amendment, capitalized terms used herein shall have the meanings given to them in the Credit Agreement.

1.2           Interpretation. This Amendment shall be construed and interpreted in accordance with the rules of construction set forth in Sections 1.02 through 1.06 of the Credit Agreement.

Section 2.          Amendment to Credit Agreement.

2.1           Definitions.

(a)          Clause (b) of the definition of “Change in Control” in Section 1.01 of the Credit Agreement is hereby amended and restated in its entirety as follows:

“(b)          during any period of 12 consecutive months, a majority of the members of the Board of Directors of Borrower cease to be composed of individuals (i) who were members of that Board of Directors at the commencement of such period, (ii) whose election or nomination to that Board of Directors was approved by individuals referred to in preceding clause (i) constituting at the time of such election or nomination at least a majority of that Board of Directors or (iii) whose election or nomination to that Board of Directors was approved by individuals referred to in preceding clauses (i) and (ii) constituting at the time of such election or nomination at least a majority of that Board of Directors, or”

Section 3.          Effectiveness.

3.1           Conditions Precedent To Effectiveness of Amendment. The effectiveness of this Amendment is subject to the satisfaction of the following conditions precedent:

(a)          this Amendment shall have been (i) executed by the Borrower, the Administrative Agent and the Required Lenders and (ii) acknowledged by each Guarantor, and in each case, counterparts hereof as so executed or acknowledged shall have been delivered to the Administrative Agent;

(b)          the Loan Parties shall have paid all reasonable and documented legal fees and out-of-pocket expenses of the Administrative Agent; and

(c)          the Administrative Agent shall have received from the Borrower a fee for the account of each Lender that has executed and delivered a signature page hereto to the Administrative Agent no later than 5:00 p.m., New York City time, on October 30, 2015 (or such later deadline, if any, as may be agreed to by the Borrower and Administrative Agent), in an amount equal to 0.025% of the sum of such Lender’s outstanding Term Loans and Revolving Commitment (regardless of whether all or any portion of such Revolving Commitment is used or unused on the date hereof).

3.2           Effective Date. This Amendment, shall be effective on the date (the “Amendment Effective Date”) upon which the conditions precedent set forth in Section 3.1 above are satisfied.

Section 4.          Representations and Warranties. The Borrower hereby represents and warrants to the Administrative Agent and the Lenders party hereto as follows:

4.1           Power and Authority. It has the legal power and authority to execute and deliver this Amendment and perform its obligations hereunder and under the Credit Agreement as amended hereby.

4.2           Authorization. It has taken all proper and necessary corporate action to authorize the execution, delivery and performance of this Amendment and the transactions contemplated hereby.

4.3           Non-Violation. The execution and delivery of this Amendment and the performance and observance by it of the provisions hereof do not and will not (a) violate the Organizational Documents of any Company, (b) violate or result in a default or require any consent or approval under (x) any indenture, instrument, agreement, or other document binding upon any Company or its property or to which any Company or its property is subject, or give rise to a right thereunder to require any payment to be made by any Company, except for violations, defaults or the creation of such rights that could not reasonably be expected to result in a Material Adverse Effect or (y) any Organizational Document (other than such as have been obtained and are in full force and effect), (c) violate any Legal Requirement in any material respect, and (d) result in the creation or imposition of any Lien on any property of any Company, except Permitted Liens.

4.4           Validity and Binding Effect. This Amendment has been duly executed and delivered by the Borrower. Upon satisfaction of the conditions set forth in Section 3.1 above, this Amendment shall constitute a legal, valid and binding obligation of the Borrower, enforceable in accordance with its terms, subject to applicable bankruptcy, insolvency, reorganization, moratorium or other similar laws affecting creditors’ rights generally, regardless of whether considered in a proceeding in equity or at law.

4.5           Representations and Warranties in Credit Agreement. The representations and warranties of each Loan Party contained in the Credit Agreement as amended hereby and each Loan Document are (i) in the case of representations and warranties qualified by materiality, “Material Adverse Effect” or similar language, true and correct in all respects and (ii) in the case of all other representations and warranties, true and correct in all material respects, in each case on and as of the Amendment Effective Date, except to the extent that such representations and warranties specifically refer to an earlier date, in which case such representations and warranties are true and correct on the basis set forth above as of such earlier date.

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4.6           No Event of Default. No Default or Event of Default exists before, nor will occur immediately after, giving effect to this Amendment or observing any provision hereof.

4.7           No Consent. No consent, exemption, authorization or approval of, registration or filing with, or any other action by, any Governmental Authority is required in connection with this Amendment, or the execution, delivery, performance, validity or enforceability of this Amendment or any other Loan Document, except consents, authorizations, filings and notices which have been obtained or made and are in full force and effect.

Section 5.          Guarantor Acknowledgment. Each Guarantor, by signing this Amendment hereby:

5.1           confirms and ratifies its respective guarantees, pledges and grants of security interests, as applicable, under each Loan Document to which it is a party, and agrees that notwithstanding the effectiveness of the Amendment and the consummation of the transactions contemplated thereby such guarantees, pledges and grants of security interests shall continue to be in full force and effect and shall accrue to the benefit of the Secured Parties;

5.2           acknowledges and agrees that all of the Loan Documents to which such Guarantor is a party or otherwise bound shall continue in full force and effect and that all of such Guarantor’s obligations thereunder shall be valid and enforceable and shall not be impaired or limited by the execution or effectiveness of this Amendment; and

5.3           hereby consents and agrees to and acknowledges and affirms the terms of this Amendment and the transactions contemplated thereby.

Section 6.          Miscellaneous.

6.1           Successors and Assigns. The provisions of this Amendment shall be binding upon and inure to the benefit of the parties hereto and their respective successors and assigns.

6.2           Survival of Representations and Warranties. All representations and warranties made hereunder shall survive the execution and delivery of this Amendment, and no investigation by the Administrative Agent or the Lenders or any subsequent extension of credit shall affect any of such representations and warranties or the right of the Administrative Agent or any Lender to rely upon them.

6.3           Severability. Any provision of this Amendment held to be invalid, illegal or unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective to the extent of such invalidity, illegality or unenforceability without affecting the validity, legality and enforceability of the remaining provisions hereof; and the invalidity of a particular provision in a particular jurisdiction shall not invalidate such provision in any other jurisdiction.

6.4           Headings. The headings, captions and arrangements used in this Amendment are for convenience only and shall not affect the interpretation of this Amendment.

6.5           Loan Documents Unaffected. Each reference to the Credit Agreement in any Loan Document shall hereafter be construed as a reference to the Credit Agreement as amended hereby. This Amendment shall not by implication or otherwise limit, impair, constitute a waiver of, or otherwise affect the rights and remedies of any party under, the Credit Agreement or any other Loan Document. Except as herein otherwise specifically provided, all provisions of the Credit Agreement and the other Loan Documents, and the guarantees, pledges and grants of security interests, as applicable, under each of the Security Documents, are hereby reaffirmed and ratified and shall remain in full force and effect, shall continue to accrue to the benefit of the Secured Parties and shall be unaffected hereby. This Amendment is a Loan Document.

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6.6          Waiver of Claims. The Loan Parties hereby acknowledge and agree that, through the date hereof, each of the Administrative Agent and the Lenders has acted in good faith and has conducted itself in a commercially reasonable manner in its relationships with the Loan Parties in connection with the Obligations, the Credit Agreement, and the other Loan Documents, and the Loan Parties hereby waive and release any claims to the contrary. The Loan Parties hereby release, acquit and forever discharge the Administrative Agent and each of the Lenders, their respective Affiliates, and their respective officers, directors, employees, agents, attorneys, advisors, successors and assigns, both present and former, from any and all claims and defenses, known or unknown as of the date hereof, with respect to the Obligations, this Amendment, the Credit Agreement, the other Loan Documents and the transactions contemplated hereby and thereby.

6.7          Expenses. As provided in the Credit Agreement, but without limiting any terms or provisions thereof, each of the Loan Parties hereby jointly and severally agrees to pay on demand all reasonable costs and expenses incurred by the Administrative Agent in connection with the documentation, preparation and execution of this Amendment, regardless of whether this Amendment becomes effective in accordance with the terms hereof, and all costs and expenses incurred by the Administrative Agent and/or any Lender in connection with the enforcement or preservation of any rights under the Credit Agreement as amended or otherwise modified hereby, including reasonable and documented fees and out-of-pocket disbursements of one outside counsel of the Lenders and one counsel to each Agent and any necessary local counsel.

6.8          Entire Agreement. This Amendment, together with the Credit Agreement and the other Loan Documents, integrates all the terms and conditions mentioned herein or incidental hereto and supersedes all oral representations and negotiations and prior writings with respect to the subject matter hereof.

6.9          Acknowledgments. Each Loan Party hereby acknowledges that:

(a)          it has been advised by counsel in the negotiation, execution and delivery of this Amendment and the other Loan Documents;

(b)          neither the Administrative Agent nor any Lender has any fiduciary relationship with or duty to any Loan Party arising out of or in connection with this Amendment or any of the other Loan Documents, and the relationship between the Administrative Agent and the Lenders, on one hand, and the Loan Parties, on the other hand, in connection herewith or therewith is solely that of debtor and creditor; and

(c)          no joint venture is created hereby or by the other Loan Documents or otherwise exists by virtue of the transactions contemplated hereby among the Lenders or among the Loan Parties and the Lenders.

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6.10        Counterparts. This Amendment may be executed by the parties hereto separately in one or more counterparts, each of which when so executed shall be deemed to be an original, but all of which when taken together shall constitute one and the same agreement. Transmission by a party to another party (or its counsel) via facsimile or electronic mail of a copy of this Amendment (or a signature page of this Amendment) shall be as fully effective as delivery by such transmitting party to the other parties hereto of a counterpart of this Amendment that had been manually signed by such transmitting party.

6.11        Governing Law. THIS AMENDMENT AND THE OTHER LOAN DOCUMENTS AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES HEREUNDER AND THEREUNDER SHALL BE GOVERNED BY, AND CONSTRUED AND INTERPRETED IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK.

6.12        Submission To Jurisdiction; Waivers

Each Loan Party hereby irrevocably and unconditionally:

(a)          submits for itself and its property in any legal action or proceeding relating to this Amendment and the other Loan Documents to which it is a party, or for recognition and enforcement of any judgment in respect thereof, to the non-exclusive general jurisdiction of the courts of the State of New York, the courts of the United States for the Southern District of New York, and appellate courts from any thereof;

(b)          consents that any such action or proceeding may be brought in such courts and waives any objection that it may now or hereafter have to the venue of any such action or proceeding in any such court or that such action or proceeding was brought in an inconvenient court and agrees not to plead or claim the same;

(c)          agrees that service of process in any such action or proceeding may be effected by mailing a copy thereof by registered or certified mail (or any substantially similar form of mail), postage prepaid, to the Borrower or any other Loan Party at its address set forth in Section 10.01 of the Credit Agreement, or, in any case, at such other address of which the Administrative Agent shall have been notified pursuant thereto;

(d)          agrees that nothing herein shall affect the right to effect service of process in any other manner permitted by law or shall limit the right to sue in any other jurisdiction; and

(e)          waives, to the maximum extent not prohibited by law, any right it may have to claim or recover in any legal action or proceeding referred to in this Section any special, exemplary, punitive or consequential damages.

6.13         Jury Trial Waiver. EACH LOAN PARTY, EACH AGENT AND EACH LENDER SIGNATORY HERETO HEREBY IRREVOCABLY AND UNCONDITIONALLY WAIVE TRIAL BY JURY IN ANY LEGAL ACTION OR PROCEEDING RELATING TO THIS AMENDMENT (INCLUDING, WITHOUT LIMITATION, ANY AMENDMENTS, WAIVERS OR OTHER MODIFICATIONS RELATING TO ANY OF THE FOREGOING) OR ANY OTHER LOAN DOCUMENT AND FOR ANY COUNTERCLAIM THEREIN.

[Signature page follows]

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IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be duly executed and delivered by their proper and duly authorized officers as of the day and year first above written.

INTERNAP CORPORATION (F/K/A INTERNAP NETWORK SERVICES CORPORATION),
By:	/s/ Kevin M. Dotts
	Name: Kevin M. Dotts
	Title: Chief Financial Officer

First Amendment to Credit Agreement

JEFFERIES FINANCE LLC,
as Administrative Agent and as a Lender
By:	/s/ J. Paul McDonnell
	Name: J. Paul McDonnell
	Title: Managing Director
	[Lenders’ signature pages omitted]

[Signature Page to First Amendment to Credit Agreement]

Acknowledged and agreed:
VOXEL HOLDINGS, INC., as a Guarantor
By	/s/ John D. Maggard
Name:	John D. Maggard
Title:	President and Treasurer
VOXEL DOT NET, INC., as a Guarantor
By	/s/ John D. Maggard
Name:	John D. Maggard
Title:	President and Treasurer
UBERSMITH, INC., as a Guarantor
By	/s/ John D. Maggard
Name:	John D. Maggard
Title:	President and Treasurer
INTERNAP CONNECTIVITY LLC, as a Guarantor
By	/s/ John D. Maggard
Name:	John D. Maggard
Title:	President and Treasurer

[Signature Page to First Amendment to Credit Agreement]

EX-99.1

Exhibit 99.1

Internap Reports Continued Adjusted EBITDA Margin Expansion and Positive Levered Free Cash Flow

· Revenue of $78.3 million, down 7% versus the third quarter of 2014

· Data center services revenue of $58.6 million, down 5% year-over-year

· Segment margin¹ of 57.0%, up 90 basis points versus the third quarter of 2014

· Adjusted EBITDA² of $19.8 million unchanged year-over-year

· Adjusted EBITDA margin² of 25.2%, up 190 basis points year-over-year

· Levered free cash flow³ of $2.2 million

ATLANTA, GA – (November 5, 2015) Internap Corporation (NASDAQ: INAP), a provider of high-performance Internet infrastructure services, today announced financial results for the third quarter of 2015.

“Our company-wide growth initiatives are beginning to yield encouraging results. We gained positive operating momentum throughout the third quarter of 2015 with bookings increasing each month during the quarter and September bookings reaching the highest level in six months. Additionally, customer churn is improving while channel partner productivity is increasing,” said Michael Ruffolo, President and Chief Executive Officer of Internap. “We believe our third quarter 2015 results provide a solid foundation to accelerate top-line revenue growth and expand margins. With a disciplined approach to capital allocation, we are encouraged in our ability to generate positive levered free cash flow. We remain confident that our compelling performance-based value proposition should drive long-term profitable growth for the business.”

Third Quarter 2015 Financial Summary

(In thousands)

										YoY			QoQ
	3Q 2015			3Q 2014			2Q 2015			Growth			Growth
Revenues:
Data center services	$	58,622		$	61,640		$	59,422			-5	%		-1	%
IP services		19,696		$	23,027		$	21,010			-14	%		-6	%
Total Revenues	$	78,318		$	84,667		$	80,432			-7	%		-3	%
Operating Expenses	$	87,503		$	87,702		$	86,270			0	%		1	%
GAAP Net Loss	$	(14,197	)	$	(9,377	)	$	(12,534	)		-51	%		-13	%
Normalized Net Loss2	$	(9,990	)	$	(7,543	)	$	(10,290	)		-32	%		3	%
Segment Profit1	$	44,637		$	47,519		$	47,454			-6	%		-6	%
Segment Profit Margin		57.0	%		56.1	%		59.0	%		90 BPS			-200 BPS
Adjusted EBITDA	$	19,752		$	19,714		$	19,109			0	%		3	%
Adjusted EBITDA Margin		25.2	%		23.3	%		23.8	%		190 BPS			140 BPS

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Revenue

● Revenue totaled $78.3 million in the third quarter, a decrease of 7% year-over-year and 3% sequentially. The year-over-year decrease was due to the loss of revenue related to customer attrition following our migration out of the New York metro data center into our Secaucus facility, the decrease in partner colocation revenue and lower IP revenue, partially offset by organic growth in core data center services revenue. Sequentially, revenue declined in data center services and IP services.

● Data center services revenue totaled $58.6 million in the third quarter, a decrease of 5% year-over-year and 1% sequentially. The year-over-year decrease was primarily due to the loss of revenue from the New York metro data center migration. The sequential decrease was primarily attributable to previously-disclosed hosting churn experienced late in the second quarter of 2015, partially offset by organic growth in core revenues. Partner colocation revenue declined due to our strategy to focus on selling into our company-controlled data centers.

● IP services revenue totaled $19.7 million in the third quarter, a decrease of 14% year-over-year and 6% sequentially. Both decreases were driven by a decline in IP pricing for new and renewing customers and the loss of legacy contracts.

Net Loss

● GAAP net loss was $(14.2) million, or $(0.27) per share, compared with $(9.4) million, or $(0.18) per share, in the third quarter of 2014 and $(12.5) million, or $(0.24) per share, in the second quarter of 2015.

● Normalized net loss was $(10.0) million, or $(0.19) per share, compared with normalized net loss of $(7.5) million, or $(0.15) per share, in the third quarter of 2014, and normalized net loss of $(10.3) million, or $(0.20) per share, in the second quarter of 2015.

Segment Profit and Adjusted EBITDA

● Segment profit totaled $44.6 million in the third quarter, a 6% decrease year-over-year and quarter-over-quarter. Segment margin was 57.0%, an increase of 90 basis points year-over-year and a decrease of 200 basis points sequentially.

● Data center services segment profit totaled $33.5 million in the third quarter, a 1% decrease compared with the third quarter of 2014 and a 4% decrease from the second quarter of 2015. Data center services segment margin was 57.2% in the third quarter, up 220 basis points year-over-year and down 180 basis points sequentially. An increasing proportion of higher-margin services, specifically colocation sold in company-controlled data centers, hosting and cloud services drove data center services segment profit and margin higher compared with the third quarter of 2014. Higher seasonal power costs resulted in a decrease in data center services segment profit and margin compared with the second quarter of 2015.

● IP services segment profit totaled $11.1 million in the third quarter, an 18% decrease compared with the third quarter of 2014 and a 10% decrease from the second quarter of 2015. IP services segment margin was 56.5% in the third quarter, down 250 basis points year-over-year and 240 basis points sequentially. Lower IP transit revenue and the loss of legacy contracts drove the decrease in segment profit and segment margin.

● Adjusted EBITDA totaled $19.8 million in the third quarter, flat compared with the third quarter of 2014 and a 3% increase from the second quarter of 2015. Adjusted EBITDA margin was 25.2% in the third quarter, up 190 basis points year-over-year and 140 basis points sequentially. Lower cash operating expense⁴ positively impacted adjusted EBITDA and adjusted EBITDA margin. Benefits included a decrease in sales and marketing costs primarily related to the removal of redundancies in connection with the phase-out of the iWeb trade name and other marketing program efficiencies. General and administrative costs decreased primarily due to lower cash-based compensation.

Balance Sheet and Cash Flow Statement

● Cash and cash equivalents totaled $18.3 million at September 30, 2015. Total debt was $376.3 million, net of discount, at the end of the quarter, including $57.5 million in capital lease obligations.

● Cash generated from operations for the three months ended September 30, 2015 was $10.8 million. Capital expenditures over the same period were $10.9 million and cash interest expense was $6.7 million, resulting in $2.2 million of levered free cash flow.

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Business Outlook

We are reaffirming the following guidance for full-year 2015:

●	Revenue	$320 million - $325 million
●	Adjusted EBITDA	$80 million - $85 million
●	Capital Expenditures	$60 million - $70 million

Recent Operational Highlights

Historical trends of key financial and operational metrics can be found in a supplementary data schedule on Internap’s website at http://ir.internap.com/results.cfm.

● Internap announced the general availability of AgileSERVER 2.0, the next generation of its bare-metal Infrastructure-as-a-Service (IaaS) offering. A high-performance IaaS option, AgileSERVER 2.0 features significant hardware, networking and management advancements designed to meet the needs of enterprises and devops teams deploying mission-critical applications and big-data workloads on OpenStack.

● Internap announced an alliance with Akamai to provide customers with Internap's performance-optimized cloud, data center and network services combined with Akamai's cloud security and data center protection services.

● Internap’s New York Metro data center was recently awarded Leadership in Energy and Environmental Design (LEED) Platinum certification by the U.S. Green Building Council. This facility has also achieved ENERGY STAR certification, a program run by the U.S. Environmental Protection Agency (EPA) to identify ways in which energy efficiency can be measured, documented and implemented in data centers.

● We had 11,021 customers at September 30, 2015.

1 Segment margin and segment profit are non-GAAP financial measures which we define in an attachment to this press release entitled “Non-GAAP (Adjusted) Financial Measures.” Reconciliations between GAAP and non-GAAP information related to segment profit and segment margin are contained in the table entitled “Segment Profit and Segment Margin” in the attachment.

2 Adjusted EBITDA, adjusted EBITDA margin and normalized net loss are non-GAAP financial measures which we define in an attachment to this press release entitled “Non-GAAP (Adjusted) Financial Measures.” Reconciliations between GAAP information and non-GAAP information related to adjusted EBITDA and normalized net loss are contained in the tables entitled “Reconciliation of Loss from Operations to Adjusted EBITDA,” and “Reconciliation of Net Loss and Basic and Diluted Net Loss Per Share to Normalized Net Loss and Basic and Diluted Normalized Net Loss Per Share” in the attachment.

3 Levered free cash flow is a non-GAAP measure which we define in an attachment to this press release entitled “Non-GAAP (Adjusted) Financial Measures.” Reconciliations between GAAP and non-GAAP information related to levered free cash flow is contained in the table entitled “Levered Free Cash Flow” in the attachment.

4 Cash operating expense is a non-GAAP measure which we define in an attachment to this press release entitled “Non-GAAP (Adjusted) Financial Measures.” Reconciliations between GAAP and non-GAAP information related to cash operating expense is contained in the table entitled “Cash Operating Expense” in the attachment.

Conference Call Information:

Internap’s third quarter 2015 conference call will be held today at 5:00 p.m. ET. Listeners may connect to a webcast of the call, which will include accompanying presentation slides, on the investor relations section of Internap’s web site at http://ir.internap.com/events.cfm. The call can be also accessed by dialing 866-515-9839. International callers should dial 631-813-4875. An online archive of the webcast presentation will be available for one month following the call. An audio-only replay will be accessible from Thursday, November 5, 2015 at 8:00 p.m. ET through Wednesday, November 11, 2015 at 855-859-2056 using replay code 61666043. International callers can listen to the archived event at 404-537-3406 with the same code.

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About Internap

Internap is the high-performance Internet infrastructure provider that powers the applications shaping the way we live, work and play. Our hybrid infrastructure delivers performance without compromise – blending virtual and bare-metal cloud, hosting and colocation services across a global network of data centers, optimized from the application to the end user and backed by rock-solid customer support and a 100% uptime guarantee. Since 1996, the most innovative companies have relied on Internap to make their applications faster and more scalable. For more information, visit www.internap.com.

Forward-Looking Statements

This press release contains forward-looking statements. These forward-looking statements include statements related to our ability to accelerate top-line growth, expand margins, generate positive levered free cash flow and drive long-term profitable growth and our expectations for full-year 2015 revenue, adjusted EBITDA and capital expenditures. Our ability to accelerate top-line growth, expand margins, generate positive levered free cash flow and drive long-term profitable growth and our expectations for full-year 2015 revenue, adjusted EBITDA and capital expenditures are based on certain assumptions, including anticipated new product launches, our ability to execute on our business strategy, leveraging of multiple routes to market, expanded brand awareness for high-performance Internet infrastructure services and customer churn levels. These assumptions may prove to be inaccurate in the future. Because such forward-looking statements are not guarantees of future performance and involve risks and uncertainties, there are important factors that could cause Internap’s actual results to differ materially from those in the forward-looking statements. These factors include our ability to execute on our business strategy and drive growth; the robustness of the IT infrastructure services market; our ability to achieve or sustain profitability; our ability to expand margins and drive higher returns on investment; our ability to complete expansion of company-controlled data centers within the expected timeframe; our ability to sell into new and existing data center space; the actual performance of our IT infrastructure services; our ability to maintain current customers and obtain new ones, whether in a cost-effective manner or at all; our ability to correctly forecast capital needs, demand planning and space utilization; our ability to respond successfully to technological change and the resulting competition; the availability of services from Internet network service providers or network service providers providing network access loops and local loops on favorable terms, or at all; failure of third party suppliers to deliver their products and services on favorable terms, or at all; failures in our network operations centers, data centers, network access points or computer systems; our ability to provide or improve Internet infrastructure services to our customers; and our ability to protect our intellectual property, as well as other factors discussed in our filings with the Securities and Exchange Commission. Given these risks and uncertainties, investors should not place undue reliance on forward-looking statements as a prediction of actual results. We undertake no obligation to update, amend or clarify any forward-looking statement for any reason.

###

Press Contact:	Investor Contact:
Mariah Torpey	Michael Nelson
(781) 418-2404	(404) 302-9700
internap@daviesmurphy.com	ir@internap.com

4

INTERNAP CORPORATION

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(In thousands, except per share amounts)

	Three Months Ended September 30,						Nine Months Ended September 30,
	2015			2014			2015			2014
Revenues:
Data center services	$	58,622		$	61,640		$	177,142		$	181,318
Internet protocol (IP) services		19,696			23,027			62,394			69,378
Total revenues		78,318			84,667			239,536			250,696
Operating costs and expenses:
Direct costs of sales and services, exclusive of depreciation and amortization, shown below:
Data center services		25,111			27,716			73,711			80,170
IP services		8,570			9,432			26,295			29,300
Direct costs of customer support		9,173			9,114			27,381			27,594
Direct costs of amortization of acquired and developed technologies		816			1,524			2,557			4,535
Sales and marketing		8,305			8,858			28,347			28,938
General and administrative		10,793			11,611			34,295			34,471
Depreciation and amortization		23,815			19,391			64,847			54,773
Exit activities, restructuring and impairments		920			56			1,245			3,001
Total operating costs and expenses		87,503			87,702			258,678			262,782
Loss from operations		(9,185	)		(3,035	)		(19,142	)		(12,086	)
Non-operating expenses:
Interest expense		6,923			6,699			20,613			19,996
Other, net		(288	)		(149	)		(763	)		335
Total non-operating expenses		6,635			6,550			19,850			20,331
Loss before income taxes and equity in (earnings) of equity-method investment		(15,820	)		(9,585	)		(38,992	)		(32,417	)
Benefit for income taxes		(1,612	)		(128	)		(1,723	)		(982	)
Equity in (earnings) of equity-method investment, net of taxes		(11	)		(80	)		(96	)		(198	)
Net loss	$	(14,197	)	$	(9,377	)	$	(37,173	)	$	(31,237	)
Basic and diluted net loss per share	$	(0.27	)	$	(0.18	)	$	(0.72	)	$	(0.61	)
Weighted average shares outstanding used in computing net loss per share:
Basic and diluted		51,699			51,063			51,763			51,180

5

INTERNAP CORPORATION

UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS

(In thousands, except par value amounts)

	September 30,			December 31,
	2015			2014
ASSETS
Current assets:
Cash and cash equivalents	$	18,312		$	20,084
Accounts receivable, net of allowance for doubtful accounts of $1,830 and $2,121, respectively		22,007			19,606
Deferred tax asset		676			633
Prepaid expenses and other assets		10,994			12,276
Total current assets		51,989			52,599
Property and equipment, net		330,603			342,145
Investment in joint venture		2,733			2,622
Intangible assets, net		38,463			52,545
Goodwill		130,313			130,313
Deposits and other assets		10,790			9,923
Deferred tax asset		164			1,637
Total assets	$	565,055		$	591,784
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable	$	18,047		$	30,589
Accrued liabilities		11,981			13,120
Deferred revenues		6,696			7,345
Capital lease obligations		8,218			7,366
Term loan, less discount of $1,523 and $1,463, respectively		1,477			1,537
Exit activities and restructuring liability		2,140			1,809
Other current liabilities		2,232			1,590
Total current liabilities		50,791			63,356
Deferred revenues		4,613			3,544
Capital lease obligations		49,291			52,686
Revolving credit facility		31,000			10,000
Term loan, less discount of $5,396 and $6,543 respectively		286,354			287,457
Exit activities and restructuring liability		1,756			2,701
Deferred rent		9,296			10,583
Deferred tax liability		3,610			7,293
Other long-term liabilities		4,668			3,828
Total liabilities		441,379			441,448
Commitments and contingencies
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; 56,036 and 54,410 shares outstanding, respectively		56			54
Additional paid-in capital		1,274,834			1,262,402
Treasury stock, at cost; 768 and 621 shares, respectively		(6,014	)		(4,683	)
Accumulated deficit		(1,142,687	)		(1,105,514	)
Accumulated items of other comprehensive loss		(2,513	)		(1,923	)
Total stockholders' equity		123,676			150,336
Total liabilities and stockholders' equity	$	565,055		$	591,784

6

INTERNAP CORPORATION

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(In thousands)

	Three Months Ended September 30,						Nine Months Ended September 30,
	2015			2014			2015			2014
Cash Flows from Operating Activities:
Net loss	$	(14,197	)	$	(9,377	)	$	(37,173	)	$	(31,237	)
Adjustments to reconcile net loss to net cash provided by operating activities:
Depreciation and amortization		24,631			20,915			67,404			59,308
Impairment of property and equipment		232			-			232			537
Amortization of debt discount and issuance costs		508			763			1,498			1,441
Stock-based compensation expense, net of capitalized amount		2,435			1,778			6,200			5,675
Equity in (earnings) of equity-method investment		(11	)		(80	)		(96	)		(198	)
Provision for doubtful accounts		316			634			922			811
Non-cash change in capital lease obligations		(527	)		(440	)		(1,167	)		(87	)
Non-cash change in exit activities and restructuring liability		864			145			1,400			2,996
Non-cash change in deferred rent		(499	)		(646	)		(1,287	)		(2,028	)
Deferred taxes		(2,024	)		(92	)		(2,181	)		(1,226	)
Other, net		212			(293	)		230			197
Changes in operating assets and liabilities:		-
Accounts receivable		(1,812	)		(2,011	)		(3,459	)		3,198
Prepaid expenses, deposits and other assets		1,797			111			836			(3,080	)
Accounts payable		414			614			(7,748	)		(2,585	)
Accrued and other liabilities		(308	)		1,991			(1,862	)		4,795
Deferred revenues		(529	)		(1,229	)		624			99
Exit activities and restructuring liability		(673	)		(756	)		(2,014	)		(2,296	)
Other liabilities		(1	)		(97	)		34			(90	)
Net cash flows provided by operating activities		10,828			11,930			22,393			36,230
Cash Flows from Investing Activities:
Purchases of property and equipment		(10,610	)		(14,051	)		(41,299	)		(51,312	)
Additions to acquired and developed technology		(310	)		(704	)		(1,120	)		(2,004	)
Proceeds from sale-leaseback transactions		-			2,603			-			2,603
Acquisition, net of cash received		-			-			-			74
Net cash flows used in investing activities		(10,920	)		(12,152	)		(42,419	)		(50,639	)
Cash Flows from Financing Activities:
Proceeds from credit agreements		4,000			-			21,000			5,000
Principal payments on credit agreements		(750	)		(750	)		(2,250	)		(2,250	)
Return of deposit collateral on credit agreement		-			308			-			6,461
Payments on capital lease obligations		(2,001	)		(1,469	)		(5,718	)		(4,212	)
Proceeds from exercise of stock options		1,517			95			6,005			973
Acquisition of common stock for income tax withholdings		(464	)		(59	)		(1,332	)		(744	)
Other, net		(74	)		(46	)		869			(135	)
Net cash flows provided by (used in) financing activities		2,228			(1,921	)		18,574			5,093
Effect of exchange rates on cash and cash equivalents		(236	)		(227	)		(320	)		(209	)
Net increase (decrease) in cash and cash equivalents		1,900			(2,370	)		(1,772	)		(9,525	)
Cash and cash equivalents at beginning of period		16,412			27,863			20,084			35,018
Cash and cash equivalents at end of period	$	18,312		$	25,493		$	18,312		$	25,493

7

INTERNAP CORPORATION
NON-GAAP (ADJUSTED) FINANCIAL MEASURES

In addition to providing financial measurements based on accounting principles generally accepted in the United States of America (“GAAP”), Internap has historically provided additional financial measures that are not prepared in accordance with GAAP (“non-GAAP”), including adjusted EBITDA and adjusted EBITDA margin, normalized net loss, normalized diluted shares outstanding, segment profit and segment margin and cash operating expense. The most directly comparable GAAP equivalent to adjusted EBITDA and normalized net loss is loss from operations and net loss, respectively. The most directly comparable GAAP equivalent to normalized diluted shares outstanding is diluted common shares outstanding.

We define non-GAAP measures as follows:

● Adjusted EBITDA is loss from operations plus depreciation and amortization, loss (gain) on disposals of property and equipment, exit activities, restructuring and impairments, stock-based compensation, acquisition costs and strategic alternatives and related costs.

● Adjusted EBITDA margin is adjusted EBITDA as a percentage of revenues.

● Normalized net loss is net loss plus exit activities, restructuring and impairments, stock-based compensation, acquisition costs and strategic alternatives and related costs.

● Normalized diluted shares outstanding are diluted shares of common stock outstanding used in GAAP net loss per share calculations, excluding the dilutive effect of stock-based compensation using the treasury stock method.

● Normalized net loss per share is normalized net loss divided by basic and normalized diluted shares outstanding.

● Segment profit is segment revenues less direct costs of sales and services, exclusive of depreciation and amortization for the segment, as presented in the notes to our consolidated financial statements. Segment profit does not include direct costs of customer support, direct costs of amortization of acquired and developed technologies or any other depreciation or amortization associated with direct costs.

● Segment margin is segment profit as a percentage of segment revenues.

● Levered free cash flow is adjusted EBITDA less capital expenditures, net of equipment sale-leaseback transactions and cash paid for interest.

● Cash operating expense is GAAP operating expense less direct cost of sales and services, depreciation and amortization, loss (gain) on disposals of property and equipment, exit activities, restructuring and impairments, stock-based compensation, acquisition costs and strategic alternatives and related costs.

We detail reconciliations of our non-GAAP financial measures to the most directly comparable financial measure in the reconciliations of GAAP to non-GAAP measures below. We believe that presentation of these non-GAAP financial measures provides useful information to investors regarding our results of operations.

We believe that excluding depreciation and amortization and loss on disposals of property and equipment, as well as impairments and restructuring, to calculate adjusted EBITDA provides supplemental information and an alternative presentation that is useful to investors’ understanding of our core operating results and trends. Not only are depreciation and amortization expenses based on historical costs of assets that may have little bearing on present or future replacement costs, but also they are based on management estimates of remaining useful lives. Loss on disposals of property and equipment is also based on historical costs of assets that may have little bearing on replacement costs. Impairments and restructuring expenses primarily reflect goodwill impairments and subsequent plan adjustments in sublease income assumptions for certain properties included in our previously disclosed restructuring plans.

We believe that impairment and restructuring charges are unique costs that we do not expect to recur on a regular basis, and consequently, we do not consider these charges as a normal component of expenses related to current and ongoing operations.

Similarly, we believe that excluding the effects of stock-based compensation from non-GAAP financial measures provides supplemental information and an alternative presentation useful to investors’ understanding of our core operating results and trends. Investors have indicated that they consider financial measures of our results of operations excluding stock-based compensation as important supplemental information useful to their understanding of our historical results and estimating our future results.

8

INTERNAP CORPORATION
NON-GAAP (ADJUSTED) FINANCIAL MEASURES (Continued)

We also believe that, in excluding the effects of stock-based compensation, our non-GAAP financial measures provide investors with transparency into what management uses to measure and forecast our results of operations, to compare on a consistent basis our results of operations for the current period to that of prior periods and to compare our results of operations on a more consistent basis against that of other companies, in making financial and operating decisions and to establish certain management compensation.

Stock-based compensation is an important part of total compensation, especially from the perspective of employees. We believe, however, that supplementing GAAP net loss and net loss per share information by providing normalized net loss and normalized net loss per share, excluding the effect of exit activities, restructuring and impairments, stock-based compensation and acquisition costs in all periods, is useful to investors because it enables additional and more meaningful period-to-period comparisons. We consider normalized diluted shares to be another important indicator of our overall performance because it eliminates the effect of non-cash items.

Adjusted EBITDA is not a measure of liquidity calculated in accordance with GAAP, and should be viewed as a supplement to — not a substitute for — our results of operations presented on the basis of GAAP. Adjusted EBITDA does not purport to represent cash flow provided by operating activities as defined by GAAP. Our statements of cash flows present our cash flow activity in accordance with GAAP. Furthermore, adjusted EBITDA is not necessarily comparable to similarly-titled measures reported by other companies.

We believe adjusted EBITDA is used by and is useful to investors and other users of our financial statements in evaluating our operating performance because it provides them with an additional tool to compare business performance across companies and across periods. We believe that:

● EBITDA is widely used by investors to measure a company’s operating performance without regard to items such as interest expense, income taxes, depreciation and amortization, which can vary substantially from company-to-company depending upon accounting methods and book value of assets, capital structure and the method by which assets were acquired; and

● investors commonly adjust EBITDA information to eliminate the effect of disposals of property and equipment, impairments, restructuring and stock-based compensation which vary widely from company-to-company and impair comparability.

Our management uses adjusted EBITDA:

● as a measure of operating performance to assist in comparing performance from period-to-period on a consistent basis;

● as a measure for planning and forecasting overall expectations and for evaluating actual results against such expectations; and

● in communications with the board of directors, analysts and investors concerning our financial performance.

Our presentation of segment profit and segment margin excludes direct costs of customer support and depreciation and amortization in order to allow investors to see the business through the eyes of management. Management views direct costs of network, sales and services as generally less controllable, external costs and management regularly monitors the margin of revenues in excess of these direct costs. Similarly, we view the costs of customer support to also be an important component of costs of revenues but believe that the costs of customer support to be more within our control and to some degree discretionary as we can adjust those costs by hiring and terminating employees.

Segment margin is an important metric to our investors and analysts, as we have regularly discussed and disclosed the effects of third party vendors’ pricing declines and the corresponding effect on our revenues. The presentation of segment margin highlights the impact of the pricing declines and allows investors and analysts to evaluate our revenue generation performance relative to direct costs of network, sales and services. Conversely, we have much greater latitude in controlling the compensation component of costs of revenues, represented by customer support, and we analyze this component separately from the direct external costs.

We also have excluded depreciation and amortization from segment profit and segment margin because, as noted above, they are based on estimated useful lives of tangible and intangible assets. Further, depreciation and amortization are based on historical costs incurred to build out our deployed network and the historical costs of these assets may not be indicative of current or future capital expenditures.

9

INTERNAP CORPORATION
NON-GAAP (ADJUSTED) FINANCIAL MEASURES (Continued)

Although we believe, for the foregoing reasons, that our presentation of non-GAAP financial measures provides useful supplemental information to investors regarding our results of operations, our non-GAAP financial measures should only be considered in addition to, and not as a substitute for, or superior to, any measure of financial performance prepared in accordance with GAAP.

Use of non-GAAP financial measures is subject to inherent limitations because they do not include all the expenses that must be included under GAAP and because they involve the exercise of judgment of which charges should properly be excluded from the non-GAAP financial measure. Management accounts for these limitations by not relying exclusively on non-GAAP financial measures, but only using such information to supplement GAAP financial measures. Our non-GAAP financial measures may not be the same non-GAAP measures, and may not be calculated in the same manner, as those used by other companies.

RECONCILIATION OF LOSS FROM OPERATIONS TO ADJUSTED EBITDA

A reconciliation of loss from operations, the most directly comparable GAAP measure, to adjusted EBITDA for each of the periods indicated is as follows (in thousands):

	Three Months Ended
	September 30, 2015			June 30, 2015			September 30, 2014
Loss from operations (GAAP)	$	(9,185	)	$	(5,838	)	$	(3,035	)
Depreciation and amortization, including amortization of acquired and developed technologies		24,631			22,566			20,915
Loss on disposal of property and equipment, net		99			137			-
Exit activities, restructuring and impairments		920			59			56
Stock-based compensation		2,435			2,185			1,778
Strategic alternatives and related costs		852			-			-
Adjusted EBITDA (non-GAAP)	$	19,752		$	19,109		$	19,714

RECONCILIATION OF NET LOSS AND BASIC AND DILUTED
NET LOSS PER SHARE TO NORMALIZED NET LOSS AND
BASIC AND DILUTED NORMALIZED NET LOSS PER SHARE

Reconciliations of (1) net loss, the most directly comparable GAAP measure, to normalized net loss, (2) diluted shares outstanding used in per share calculations, the most directly comparable GAAP measure, to normalized diluted shares used in normalized per share outstanding calculations and (3) net loss per share, the most directly comparable GAAP measure, to normalized net loss per share for each of the periods indicated is as follows (in thousands, except per share data):

	Three Months Ended
	September 30, 2015			June 30, 2015			September 30, 2014
Net loss (GAAP)	$	(14,197	)	$	(12,534	)	$	(9,377	)
Exit activities, restructuring and impairments		920			59			56
Stock-based compensation		2,435			2,185			1,778
Strategic alternatives and related costs		852			-			-
Normalized net loss (non-GAAP)		(9,990	)		(10,290	)		(7,543	)
Normalized net income allocable to participating securities (non-GAAP)		-			-			-
Normalized net loss available to common stockholders (non-GAAP)	$	(9,990	)	$	(10,290	)	$	(7,543	)
Participating securities (GAAP)		1,305			1,246			1,083
Weighted average shares outstanding used in per share calculation:
Basic and diluted (GAAP)		51,699			51,579			51,063
Add potentially dilutive securities		-			-			-
Less dilutive effect of stock-based compensation under the treasury stock method		-			-			-
Normalized diluted shares (non-GAAP)		51,699			51,579			51,063
Loss per share (GAAP):
Basic and diluted	$	(0.27	)	$	(0.24	)	$	(0.18	)
Normalized net loss per share (non-GAAP):
Basic and diluted	$	(0.19	)	$	(0.20	)	$	(0.15	)

10

INTERNAP CORPORATION
NON-GAAP (ADJUSTED) FINANCIAL MEASURES (Continued)

INTERNAP CORPORATION
SEGMENT PROFIT AND SEGMENT MARGIN

Segment profit and segment margin, which does not include direct costs of customer support, direct costs of amortization of acquired and developed technologies or any other depreciation or amortization, for each of the periods indicated is as follows (dollars in thousands):

	Three Months Ended
	September 30, 2015			June 30, 2015			September 30, 2014
Revenues:
Data center services:
Core	$	48,385		$	48,711		$	49,941
Partner colocation		10,237			10,711			11,699
Total data center services		58,622			59,422			61,640
IP services		19,696			21,010			23,027
Total		78,318			80,432			84,667
Direct cost of sales and services, exclusive of depreciation and amortization:
Data center services:
Core		17,203			16,371			18,849
Partner colocation		7,908			7,964			8,867
Total data center services		25,111			24,335			27,716
IP services		8,570			8,643			9,432
Total		33,681			32,978			37,148
Segment Profit:
Data center services:
Core		31,182			32,340			31,092
Partner colocation		2,329			2,747			2,832
Total data center services		33,511			35,087			33,924
IP services		11,126			12,367			13,595
Total	$	44,637		$	47,454		$	47,519
Segment Margin:
Data center services:
Core		64.4	%		66.4	%		62.3	%
Partner colocation		22.8	%		25.6	%		24.2	%
Total data center services		57.2	%		59.0	%		55.0	%
IP services		56.5	%		58.9	%		59.0	%
Total		57.0	%		59.0	%		56.1	%

11

INTERNAP CORPORATION
NON-GAAP (ADJUSTED) FINANCIAL MEASURES (Continued)

LEVERED FREE CASH FLOW

Levered free cash flow is a non-GAAP measure and is adjusted EBITDA less capital expenditures, net of equipment sale-leaseback transactions and cash paid for interest (in thousands):

	Three Months Ended
	September 30, 2015			June 30, 2015			September 30, 2014
Adjusted EBITDA (non-GAAP)	$	19,752		$	19,109		$	19,714
Capital expenditures, net of equipment sale-leaseback transactions		(10,920	)		(15,797	)		(13,758	)
Unlevered free cash flow (non-GAAP)		8,832			3,312			5,956
Cash interest expense		(6,660	)		(6,602	)		(6,167	)
Levered free cash flow (non-GAAP)	$	2,172		$	(3,290	)	$	(211	)

CASH OPERATING EXPENSE

Cash operating expense is a non-GAAP measure and is operating expense defined by GAAP, less direct costs of sales and services, depreciation and amortization, (loss) gain on disposal of property and equipment, exit activities, restructuring and impairments, stock-based compensation, acquisition costs and strategic alternatives and related costs (in thousands):

	Three Months Ended
	September 30, 2015			June 30, 2015			September 30, 2014
Total operating costs and expenses	$	87,503		$	86,270		$	87,702
Direct costs of sales and services, exclusive of depreciation and amortization		(33,681	)		(32,978	)		(37,148	)
Depreciation and amortization, including amortization of acquired and developed technologies		(24,631	)		(22,566	)		(20,915	)
Loss on disposal of property and equipment, net		(99	)		(137	)		-
Exit activities, restructuring and impairments		(920	)		(59	)		(56	)
Stock-based compensation		(2,435	)		(2,185	)		(1,778	)
Strategic alternatives and related costs		(852	)		-			-
Cash operating expense (non-GAAP)	$	24,885		$	28,345		$	27,805

12