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Segment Information
 6 Months Ended
Jun. 30, 2012
Segment Reporting [Abstract]  
Segment Reporting Disclosure [Text Block]
10. Segment Information

 

The Company’s segment reporting is consistent with the current manner of how the Chief Operating Decision Maker (“CODM”) and the Board of Directors view the business. The Company is focused on expanding its capabilities in database marketing and data analytics in order to position the Company for future business development efforts and revenue growth.

 

In order to position this strategic focus along the lines of how the CODM and management will base their business decisions, the Company reports two segments. Decisions regarding allocation of resources are made and will be made based not only on the individual operating results of the subsidiaries but also on the overall performance of the reportable segments. These reportable segments are the aggregation of various reporting segments.

  

The Company reports in two segments plus corporate. The segments are as follows:

 

  • The Strategic Marketing Services segment includes 72andSunny, Anomaly Partners, Crispin Porter & Bogusky, Doner and kirshenbaum bond senecal + partners among others. This segment consists of integrated marketing consulting services firms that offer a full complement of marketing consulting services including advertising and media, marketing communications including direct marketing, public relations, corporate communications, market research, corporate identity and branding, interactive marketing, ecommerce and sales promotion. Each of the entities within the Strategic Marketing Services Group share similar economic characteristics, specifically related to the nature of their respective services, the manner in which the services are provided and the similarity of their respective customers. Due to the similarities in these businesses, they exhibit similar long term financial performance and have been aggregated together.

 

  • The Performance Marketing Services segment includes our firms that provide consumer insights to satisfy the growing need for targetable, measurable solutions or cost effective means of driving return on marketing investment. These services interface directly with the consumer of a client’s product or service. Such services include the design, development, research and implementation of consumer media services and direct marketing initiatives. Each of the entities within the Performance Marketing Services Group share similar economic characteristics specifically related to the nature of their respective services, the manner in which the services are provided, and the similarity of their respective customers. Due to the similarities in these businesses, the services provided to the customer and they exhibit similar long term financial performance and have been aggregated together.

 

The significant accounting polices of these segments are the same as those described in the summary of significant accounting policies included in the notes to the consolidated financial statements. The Company continues to evaluate its Corporate Group and the services provided by the Corporate Group to the operating segments.

 

Summary financial information concerning the Company’s operating segments is shown in the following tables:

 

Three Months Ended June 30, 2012

(thousands of United States dollars)

 

    Strategic
Marketing
Services		     Performance
Marketing
Services		     Corporate     Total  
                         
Revenue   $ 183,750     $ 90,352     $ —     $ 274,102  
                                 
Cost of services sold     122,285       66,644       —       188,929  
                                 
Office and general expenses     39,557       17,713       16,975       74,245  
                                 
Depreciation and amortization     8,828       4,488       329       13,645  
                                 
Operating Profit/(Loss)     13,080       1,507       (17,304 )     (2,717 )
                                 
Other Income (Expense):                                
Other income, net                             214  
Interest expense, net                             (11,809 )
                                 
Loss from continuing operations before income taxes, equity in affiliates                             (14,312 )
Income tax expense                             2,544  
                                 
Loss from continuing operations before equity in affiliates                             (16,856 )
Equity in earnings of non-consolidated affiliates                             34  
                                 
Loss from continuing operations                             (16,822 )
                                 
Loss from discontinuing operations attributable to MDC Partners Inc., net of taxes                             (1,687 )
                                 
Net loss                             (18,509 )
                                 
Net income attributable to the noncontrolling interests     (1,353 )     (252 )     —       (1,605 )
Net loss attributable to MDC Partners Inc.                           $ (20,114 )
                                 
Non cash stock based compensation   $ 1,967     $ 1,887     $ 11,499     $ 15,353  
                                 
Supplemental Segment Information:                                
                                 
Capital expenditures   $ 2,447     $ 1,905     $ 87     $ 4,439  

 

Three Months Ended June 30, 2011

(thousands of United States dollars)

 

    Strategic
Marketing
Services		     Performance
Marketing
Services		     Corporate     Total  
                         
Revenue   $ 154,957     $ 83,063     $ —     $ 238,020  
                                 
Cost of services sold     99,099       61,979       —       161,078  
                                 
Office and general expenses     27,625       14,280       10,603       52,508  
                                 
Depreciation and amortization     5,182       4,270       117       9,569  
                                 
Operating Profit/(Loss)     23,051       2,534       (10,720 )     14,865  
                                 
Other Income (Expense):                                
Other income, net                             448  
Interest expense, net                             (10,633 )
                                 
Income from continuing operations before income taxes, equity in affiliates                             4,680  
Income tax expense                             588  
                                 
Income from continuing operations before equity in affiliates                             4,092  
Equity in earnings of non-consolidated affiliates                             79  
                                 
Income from continuing operations                             4,171  
                                 
Loss from discontinuing operations attributable to MDC Partners Inc., net of taxes                             (321 )
                                 
Net income                             3,850  
                                 
Net income attributable to the noncontrolling interests     (2,335 )     (192 )     —       (2,527 )
Net income attributable to MDC Partners Inc.                           $ 1,323  
                                 
Non cash stock based compensation   $ 176     $ 478     $ 5,121     $ 5,775  
                                 
Supplemental Segment Information:                                
                                 
Capital expenditures   $ 2,620     $ 789     $ 32     $ 3,441  

 

Six Months Ended June 30, 2012

(thousands of United States dollars)

 

    Strategic
Marketing
Services		     Performance
Marketing
Services		     Corporate     Total  
                         
Revenue   $ 343,846     $ 165,912     $ —     $ 509,758  
                                 
Cost of services sold     241,838       124,051       —       365,889  
                                 
Office and general expenses     74,197       35,174       24,908       134,279  
                                 
Depreciation and amortization     13,925       9,042       677       23,644  
                                 
Operating Profit/(Loss)     13,886       (2,355 )     (25,585 )     (14,054 )
                                 
Other Income (Expense):                                
Other income, net                             (809 )
Interest expense, net                             (22,756 )
                                 
Loss from continuing operations before income taxes, equity in affiliates                             (37,619 )
Income tax expense                             3,807  
                                 
Loss from continuing operations before equity in affiliates                             (41,426 )
Equity in earnings of non-consolidated affiliates                             306  
                                 
Loss from continuing operations                             (41,120 )
Loss from discontinued operations attributable to MDC Partners Inc., net of taxes                             (2,240 )
Net loss                             (43,360 )
                                 
Net income attributable to the noncontrolling interests     (2,453 )     (582 )     —       (3,035 )
Net loss attributable to MDC Partners Inc.                           $ (46,395 )
                                 
Non cash stock based compensation   $ 3,833     $ 3,578     $ 13,826     $ 21,237  
                                 
Supplemental Segment Information:                                
                                 
Capital expenditures   $ 5,134     $ 4,229     $ 187     $ 9,550  
                                 
Goodwill and intangibles   $ 543,134     $ 258,868     $ —     $ 802,002  
                                 
Total Assets   $ 835,564     $ 429,899     $ 127,974     $ 1,393,437  

 

Six Months Ended June 30, 2011

(thousands of United States dollars)

 

    Strategic
Marketing
Services		     Performance
Marketing
Services		     Corporate     Total  
                         
Revenue   $ 296,450     $ 156,661     $ —     $ 453,111  
                                 
Cost of services sold     199,660       118,971       —       318,631  
                                 
Office and general expenses     54,778       24,845       17,309       96,932  
                                 
Depreciation and amortization     10,989       8,662       221       19,872  
                                 
Operating Profit/(Loss)     31,023       4,183       (17,530 )     17,676  
                                 
Other Income (Expense):                                
Other income, net                             762  
Interest expense, net                             (20,159 )
                                 
Loss from continuing operations before income taxes, equity in affiliates                             (1,721 )
Income tax expense                             946  
                                 
Loss from continuing operations before equity in affiliates                             (2,667 )
Equity in earnings of non-consolidated affiliates                             334  
                                 
Loss from continuing operations                             (2,333 )
Loss from discontinuing operations attributable to MDC Partners Inc., net of taxes                             (895 )
Net loss                             (3,228 )
                                 
Net income attributable to the noncontrolling interests     (3,978 )     (154 )     —       (4,132 )
Net loss attributable to MDC Partners Inc.                           $ (7,360 )
                                 
Non cash stock based compensation   $ 1,723     $ 983     $ 7,343     $ 10,049  
                                 
Supplemental Segment Information:                                
                                 
Capital expenditures   $ 6,353     $ 1,721     $ 230     $ 8,304  
                                 
Goodwill and intangibles   $ 390,835     $ 215,826     $ —     $ 606,661  
                                 
Total assets   $ 578,419     $ 332,092     $ 42,408     $ 952,919  

 

A summary of the Company’s revenue by geographic area, based on the location in which the services originated, is set forth in the following table:

 

    United
States		     Canada     Other     Total  
Revenue                                
Three Months Ended June 30,                                
2012   $ 223,514     $ 38,284     $ 12,304     $ 274,102  
2011   $ 189,213     $ 40,330     $ 8,477     $ 238,020  
Six Months Ended June 30,                                
2012   $ 411,379     $ 74,722     $ 23,657     $ 509,758  
2011   $ 361,122     $ 75,469     $ 16,520     $ 453,111