OPERATING SEGMENTS

The Company has two reportable segments: INAP US and INAP INTL. These segments are comprised of strategic businesses that are defined by the location of the service offerings. Our INAP US segment consists of US Colocation, US Cloud, and US Network services based in the United States. Our INAP INTL segment consists of these same services based in countries other than the United States, and Ubersmith.

Each segment is managed as an operation with well-established strategic directions and performance requirements. Each segment is led by a separate General Manager who reports to the Chief Operating Officer. The Chief Operating Officer reports directly to the Company's CODM. The CODM evaluates segment performance using business unit contribution which is defined as business unit revenues less direct costs of sales and services, customer support, and sales and marketing, exclusive of depreciation and amortization.

Our services, which are included within both our reportable segments, are described as follows:

Colocation

Colocation involves providing conditioned power with back-up capacity and physical space within data centers along with associated services such as interconnection, remote hands, environmental controls, monitoring and security while allowing our customers to deploy and manage their servers, storage and other equipment in our secure data centers. We design the data center infrastructure, procure the capital equipment, deploy the infrastructure and are responsible for the operation and maintenance of the facility.

Cloud

Cloud services involve providing compute resources and storage services on demand via an integrated platform that includes our automated bare metal solutions. We offer our next generation cloud platforms in our high density colocation facilities and utilize the INAP Performance IP for low latency connectivity.

Network

Network services includes our patented Performance IP™ service, content delivery network services, as well as our IP routing hardware and software platform. By intelligently routing traffic with redundant, high-speed connections over multiple, major Internet backbones, our IP connectivity provides high-performance and highly-reliable delivery of content, applications and communications to end users globally. We deliver our IP connectivity through 100 network POPs around the world.

The following table provides segment results (in thousands):



	Three Months Ended September 30,						Nine Months Ended September 30,
	2019			2018			2019			2018
Revenues:
INAP US	$	56,947		$	65,678		$	171,928		$	186,821
INAP INTL	15,931			17,294			47,648			52,314
Net revenues	72,878			82,972			219,576			239,135

Cost of sales and services, customer support and sales and marketing:
INAP US	32,920			35,197			97,780			99,532
INAP INTL	10,148			11,478			29,892			34,483
Total costs of sales and services, customer support and sales and marketing	43,068			46,675			127,672			134,015
										.
Segment profit:
INAP US	24,027			30,481			74,148			87,289
INAP INTL	5,783			5,816			17,756			17,831
Total segment profit	29,810			36,297			91,904			105,120

Exit activities, restructuring and impairments	3,792			2,347			5,439			3,140
Other operating expenses, including sales, general and administrative and depreciation and amortization expenses	29,954			31,253			91,885			95,404
(Loss) income from operations	(3,936		)	2,697			(5,420		)	6,576
Non-operating expenses	19,919			17,989			56,906			50,143
Loss before income taxes and equity in earnings of equity-method investment	$	(23,855	)	$	(15,292	)	$	(62,326	)	$	(43,567	)

The CODM does not manage the operating segments based on asset allocations. Therefore, assets by operating segment have not been provided.