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DISCONTINUED OPERATIONS AND OTHER BUSINESS DISPOSITIONS
 12 Months Ended
Dec. 31, 2019
Discontinued Operation, Gain (Loss) on Disposal of Discontinued Operation, Net of Tax [Abstract]  
DISCONTINUED OPERATIONS AND OTHER BUSINESS DISPOSITIONS DISCONTINUED OPERATIONS
In October 2016, we completed a strategic review of our international markets in connection with our efforts to optimize our global footprint and focus on the markets that we believe have the greatest potential to benefit our long-term financial performance. Based on that review, we decided to focus our business on 15 core countries and to pursue strategic alternatives for our operations in the remaining 12 countries, which were primarily based in Asia and Latin America. The dispositions of our operations in those 12 countries were completed between November 2016 and March 2017.
A business disposition that represents a strategic shift and has (or will have) a major effect on our operations and financial results is reported as a discontinued operation. We determined that the decision reached by management and our Board of Directors to exit those 12 non-core countries, which comprised a substantial majority of the operations outside of North America and EMEA (Europe, the Middle East and Africa), represented a strategic shift in our business. Additionally, based on our review of quantitative and qualitative factors relevant to the dispositions, we determined that the disposition of the businesses in those countries would have a major effect on our operations and financial results. As such, the results of operations and cash flows for the operations in those countries, including the gains and losses on the dispositions and related income tax effects, are presented as discontinued operations in the accompanying consolidated financial statements.
In connection with our strategic initiative to exit non-core countries as discussed above, we sold an 83% controlling stake in our subsidiary in Israel and sold our subsidiaries in Argentina, Chile, Colombia, Peru, Mexico, Brazil, Singapore and Hong Kong during the first quarter 2017. For the year ended December 31, 2017, we recognized a net pretax loss of $1.6 million on those dispositions, which consisted of the following (in thousands):
 
Year Ended December 31, 2017
Net consideration received:
 
Fair value of minority investments retained or acquired
$
2,021

Cash proceeds received
3,462

Cash proceeds receivable
2,000

Less: Transaction costs
1,394

Total net consideration received
6,089

Cumulative translation gain reclassified to earnings
14,718

Less: Net book value upon closing of the transactions
14,958

Less: Indemnification liabilities (1)
5,365

Less: Unfavorable contract liability for transition services
2,114

Loss on dispositions
$
(1,630
)

(1)
See Note 11, Commitments and Contingencies, for additional information about the indemnification liabilities.
The following table summarizes the major classes of line items included in income (loss) from discontinued operations, net of tax, for the years ended December 31, 2019 and 2017 (in thousands).There was no activity related to discontinued operations for the year ended December 31, 2018.
 
Year Ended December 31,
 
2019
 
2017 (1)
Service revenue
$
—

 
$
12,602

Product revenue
—

 
2,962

Service cost of revenue
—

 
(2,557
)
Product cost of revenue
—

 
(3,098
)
Marketing expense
—

 
(1,239
)
Selling, general and administrative expense (2)
2,597

 
(12,007
)
Restructuring
—

 
(778
)
Other income (expense), net
—

 
3,852

Income (loss) from discontinued operations before loss on dispositions and provision for income taxes
2,597

 
(263
)
Loss on dispositions
—

 
(1,630
)
Provision for income taxes
—

 
(81
)
Income (loss) from discontinued operations, net of tax
$
2,597

 
$
(1,974
)
(1)
The loss from discontinued operations before loss on dispositions and provision for income taxes for the year ended December 31, 2017 includes the results of each business through its respective disposition date.
(2)
Selling, general and administrative expense from discontinued operations for the year ended December 31, 2019 primarily consists of a gain related to the expiration of certain contingent liabilities under indemnification agreements. Selling, general and administrative expense from discontinued operations for the year ended December 31, 2017 includes increases to contingent liabilities under indemnification agreements. See Note 11, Commitments and Contingencies, for additional information about the indemnification liabilities.