Segment Information

3 Months Ended

Mar. 31, 2020

The Company classifies its operations into two operating segments: National Networks and International and Other. These operating segments represent strategic business units that are managed separately.

The Company generally allocates all corporate overhead costs within operating expenses to the Company's two operating segments based upon their proportionate estimated usage of services, including such costs as executive salaries and benefits, costs of maintaining corporate headquarters, facilities and common support functions (such as human resources, legal, finance, strategic planning and information technology) as well as sales support functions and creative and production services.

The Company evaluates segment performance based on several factors, of which the primary financial measure is operating segment adjusted operating income ("AOI"), a non-GAAP measure. The Company defines AOI as operating income

(loss) before depreciation and amortization, cloud computing amortization, share-based compensation expense or benefit, impairment and related charges (including gains or losses on sales or dispositions of businesses), restructuring and other related charges and including the Company’s proportionate share of adjusted operating income (loss) from majority-owned equity method investees. The Company has presented the components that reconcile adjusted operating income to operating income, an accepted GAAP measure, and other information as to the continuing operations of the Company's operating segments below.


(In thousands)	Three Months Ended March 31, 2020
			National Networks			International and Other			Inter-segment eliminations			Consolidated
Revenues, net
Advertising	$	213,226		$	19,365		$	—		$	232,591
Distribution	353,713			151,129			(3,058)			501,784
Consolidated revenues, net	$	566,939		$	170,494		$	(3,058)		$	734,375
Operating income (loss)	$	195,224		$	(19,450)		$	(2,804)		$	172,970
Share-based compensation expense	12,465			3,047			—			15,512
Depreciation and amortization	8,389			18,341			—			26,730
Restructuring and other related charges	1,509			4,457			—			5,966
Majority owned equity investees AOI	—			1,276			—			1,276
Adjusted operating income	$	217,587		$	7,671		$	(2,804)		$	222,454


(In thousands)	Three Months Ended March 31, 2019
			National Networks			International and Other			Inter-segment eliminations			Consolidated
Revenues, net
Advertising	$	239,089		$	21,206		$	—		260,295
Distribution	377,029			149,882			(2,985)			523,926
Consolidated revenues, net	$	616,118		$	171,088		$	(2,985)		$	784,221
Operating income (loss)	$	251,502		$	(13,748)		$	7,109		244,863
Share-based compensation expense	16,269			3,630			—			19,899
Depreciation and amortization	8,612			15,444			—			24,056
Restructuring and other related charges	303			3,035			(696)			2,642

Majority-owned equity investees AOI	—			1,580			—			1,580
Adjusted operating income	$	276,686		$	9,941		$	6,413		$	293,040

Inter-segment eliminations are primarily licensing revenues recognized between the National Networks and International and Other segments as well as revenues recognized by AMC Networks Broadcasting & Technology for transmission revenues recognized from the International and Other operating segment.


(In thousands)	Three Months Ended March 31,
			2020			2019
Inter-segment revenues
National Networks	$	(2,070)		$	(1,390)
International and Other	(988)			(1,595)
	$	(3,058)		$	(2,985)

The table below summarizes revenues based on customer location:


(In thousands)	Three Months Ended March 31,
			2020			2019
Revenues
United States	$	624,993		$	662,464
Europe	72,479			79,434
Other	36,903			42,323
	$	734,375		$	784,221

The table below summarizes property and equipment based on asset location:


(In thousands)	March 31, 2020		December 31, 2019
Property and equipment, net
United States	$	252,702	$	244,175
Europe	23,762		25,925
Other	13,055		13,652
	$	289,519	$	283,752