OPERATING SEGMENTS AND GEOGRAPHIC INFORMATION

Operating Segments Information

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

As of January 1, 2018, we changed our organizational structure in an effort to create more effective and efficient operations and to improve customer and product focus. In that regard, we revised the information that our chief executive officer, who is also our Chief Operating Decision Maker ("CODM"), regularly reviews for purposes of allocating resources and assessing performance. As a result, we report our financial performance based on our revised segment structure. We have reclassified prior period amounts to conform to the current presentation.

Each segment is managed as an operation with well-established strategic directions and performance requirements. Each segment is led by a separate General Manager who reports directly to the Company's CODM. Effective January 2019, both segments are led by the Chief Operating Officer, who reports directly to the Company's CODM. The CODM evaluates segment performance using business unit contribution which is defined as business unit revenues less direct costs of sales and services, customer support, and sales and marketing, exclusive of depreciation and amortization.

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

Colocation

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

Cloud

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

Network

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

The following table provides segment results, with prior period amounts reclassified to conform to the current presentation (in thousands):



	Year Ended December 31,
	2018			2017			2016
Revenues:
INAP US	$	248,184		$	215,770		$	229,902
INAP INTL	69,189			64,948			68,395
Total revenues	317,373			280,718			298,297

Costs of sales and services, customer support and sales and marketing:
INAP US	134,792			128,062			148,706
INAP INTL	45,124			37,829			41,900
Total costs of sales and services, customer support and sales and marketing	179,916			165,891			190,606

Segment profit:
INAP US	113,392			87,708			81,196
INAP INTL	24,065			27,119			26,495
Total segment profit	137,457			114,827			107,691

Goodwill impairment	—			—			80,105
Exit activities, restructuring and impairments	5,406			6,249			7,236
Other operating expenses, including sales, general and administrative and depreciation and amortization expenses	125,895			103,804			113,420
Income (loss) from operations	6,156			4,774			(93,070		)
Non-operating expenses	67,874			51,001			31,312
Loss before income taxes and equity in earnings of equity-method investment	$	(61,718	)	$	(46,227	)	$	(124,382	)

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

We discuss goodwill by segment in Note 6, and as mentioned in that note, we did not record an impairment charge during the years ended December 31, 2018 and December 31, 2017, respectively. A goodwill impairment charge was recorded for the year ended December 31, 2016 of $80.1 million.

Revenue by Source

Revenue by source, with sales and usage-based taxes excluded, is as follows (in thousands):



	Year Ended December 31,
	2018		2017		2016

Colocation	$	131,124	$	124,083	$	129,881
Network Services	64,111		67,435		70,779
Cloud	122,138		89,200		97,637
	$	317,373	$	280,718	$	298,297

In accordance with ASC 606, the Company disaggregates revenue from contracts with customers based on the timing of revenue recognition. The Company determined that disaggregating revenue into these categories depicts how the nature, amount, timing and uncertainty of revenue and cash flows are affected by economic factors. As discussed in this note, the Company business consists of INAP US and INAP INTL colocation, cloud and network services. The following table presents disaggregated revenues by category for the year ended December 31, 2018 (in thousands):



	Year Ended December 31, 2018

	INAP US		INAP INTL

Colocation	$	125,282	$	5,842
Network Services	52,748		11,363
Cloud	70,154		51,984
	$	248,184	$	69,189

Geographic Information

Revenues are allocated to countries based on location of services. Revenues, by country with revenues over 10% of total revenues, are as follows (in thousands):



	Year Ended December 31,
	2018		2017		2016
Revenues:
United States	$	252,482	$	220,018	$	231,943
Canada	38,133		38,750		44,206
Other countries	26,758		21,950		22,148
	$	317,373	$	280,718	$	298,297

Net property and equipment, by country with assets over 10% of total property and equipment, is as follows (in thousands):



	December 31,
	2018		2017
United States	$	433,508	$	417,936
Canada	38,718		34,296
Other countries	5,835		6,333
	$	478,061	$	458,565