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Segment Information
 9 Months Ended
Sep. 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 September 30, 2012

(thousands of United States dollars)

 

    Strategic
Marketing
Services		     Performance
Marketing
Services		     Corporate     Total  
                         
Revenue   $ 176,672     $ 91,145     $ —     $ 267,817  
                                 
Cost of services sold     112,647       68,241       —       180,888  
                                 
Office and general expenses     48,054       18,826       6,288       73,168  
                                 
Depreciation and amortization     7,813       4,292       330       12,435  
                                 
Operating Profit/(Loss)     8,158       (214 )     (6,618 )     1,326  
                                 
Other Income (Expense):                                
Other expense, net                             (433 )
Interest expense, net                             (11,524 )
                                 
Loss from continuing operations before income taxes, equity in affiliates                             (10,631 )
Income tax expense                             2,207  
                                 
Loss from continuing operations before equity in affiliates                             (12,838 )
Equity in earnings of non-consolidated affiliates                             93  
                                 
Loss from continuing operations                             (12,745 )
                                 
Loss from discontinuing operations attributable to MDC Partners Inc., net of taxes                             (630 )
                                 
Net loss                             (13,375 )
                                 
Net income attributable to the noncontrolling interests     (683 )     (438 )     —       (1,121 )
Net loss attributable to MDC Partners Inc.                           $ (14,496 )
                                 
Non cash stock based compensation   $ 2,769     $ 2,009     $ 355     $ 5,133  
                                 
Supplemental Segment Information:                                
                                 
Capital expenditures   $ 2,597     $ 2,097     $ 61     $ 4,755  

 

Three Months Ended September 30, 2011

(thousands of United States dollars)

 

    Strategic
Marketing
Services		     Performance
Marketing
Services		     Corporate     Total  
                         
Revenue   $ 146,130     $ 89,576     $ —     $ 235,706  
                                 
Cost of services sold     109,127       64,399       —       173,526  
                                 
Office and general expenses     31,833       14,251       9,289       55,373  
                                 
Depreciation and amortization     5,353       4,200       225       9,778  
                                 
Operating Profit/(Loss)     (183 )     6,726       (9,514 )     (2,971 )
                                 
Other Income (Expense):                                
Other expense, net                             (3,112 )
Interest expense, net                             (10,749 )
                                 
Loss from continuing operations before income taxes, equity in affiliates                             (16,832 )
Income tax recovery                             (42 )
                                 
Loss from continuing operations before equity in affiliates                             (16,790 )
Equity in loss of non-consolidated affiliates                             (120 )
                                 
Loss from continuing operations                             (16,910 )
                                 
Loss from discontinuing operations attributable to MDC Partners Inc., net of taxes                             (608 )
                                 
Net loss                             (17,518 )
                                 
Net income attributable to the noncontrolling interests     (1,118 )     (938 )     —       (2,056 )
Net loss attributable to MDC Partners Inc.                           $ (19,574 )
                                 
Non cash stock based compensation   $ 2,173     $ 1,608     $ 3,990     $ 7,771  
                                 
Supplemental Segment Information:                                
                                 
Capital expenditures   $ 2,188     $ 899     $ 6,224     $ 9,311  

 

Nine Months Ended September 30, 2012

(thousands of United States dollars)

 

    Strategic
Marketing
Services		     Performance
Marketing
Services		     Corporate     Total  
                         
Revenue   $ 520,518     $ 256,751     $ —     $ 777,269  
                                 
Cost of services sold     354,485       191,632       —       546,117  
                                 
Office and general expenses     122,251       53,850       31,196       207,297  
                                 
Depreciation and amortization     21,738       13,326       1,007       36,071  
                                 
Operating Profit/(Loss)     22,044       (2,057 )     (32,203 )     (12,216 )
                                 
Other Income (Expense):                                
Other expense, net                             (1,242 )
Interest expense, net                             (34,237 )
                                 
Loss from continuing operations before income taxes, equity in affiliates                             (47,695 )
Income tax expense                             6,014  
                                 
Loss from continuing operations before equity in affiliates                             (53,709 )
Equity in earnings of non-consolidated affiliates                             399  
                                 
Loss from continuing operations                             (53,310 )
Loss from discontinued operations attributable to MDC Partners Inc., net of taxes                             (3,153 )
Net loss                             (56,463 )
                                 
Net income attributable to the noncontrolling interests     (3,136 )     (1,292 )     —       (4,428 )
Net loss attributable to MDC Partners Inc.                           $ (60,891 )
                                 
Non cash stock based compensation   $ 6,602     $ 5,587     $ 14,181     $ 26,370  
                                 
Supplemental Segment Information:                                
                                 
Capital expenditures   $ 7,731     $ 6,326     $ 248     $ 14,305  
                                 
Goodwill and intangibles   $ 536,336     $ 257,845     $ —     $ 794,181  
                                 
Total Assets   $ 812,320     $ 404,705     $ 134,716     $ 1,351,741  

 

Nine Months Ended September 30, 2011

(thousands of United States dollars)

 

    Strategic
Marketing
Services		     Performance
Marketing
Services		     Corporate     Total  
                         
Revenue   $ 442,580     $ 243,755     $ —     $ 686,335  
                                 
Cost of services sold     308,787       180,420       —       489,207  
                                 
Office and general expenses     86,611       38,884       26,598       152,093  
                                 
Depreciation and amortization     16,342       12,857       446       29,645  
                                 
Operating Profit/(Loss)     30,840       11,594       (27,044 )     15,390  
                                 
Other Income (Expense):                                
Other expense, net                             (2,350 )
Interest expense, net                             (30,878 )
                                 
Loss from continuing operations before income taxes, equity in affiliates                             (17,838 )
Income tax expense                             904  
                                 
Loss from continuing operations before equity in affiliates                             (18,742 )
Equity in earnings of non-consolidated affiliates                             214  
                                 
Loss from continuing operations                             (18,528 )
Loss from discontinuing operations attributable to MDC Partners Inc., net of taxes                             (1,869 )
Net loss                             (20,397 )
                                 
Net income attributable to the noncontrolling interests     (5,096 )     (1,441 )     —       (6,537 )
Net loss attributable to MDC Partners Inc.                           $ (26,934 )
                                 
Non cash stock based compensation   $ 3,896     $ 2,591     $ 11,333     $ 17,820  
                                 
Supplemental Segment Information:                                
                                 
Capital expenditures   $ 8,541     $ 2,620     $ 6,454     $ 17,615  
                                 
Goodwill and intangibles   $ 426,533     $ 209,550     $ —     $ 636,083  
                                 
Total assets   $ 626,865     $ 324,895     $ 53,667     $ 1,005,427  

 

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 September 30,                        
2012   $ 220,275     $ 34,753     $ 12,789     $267,817
2011   $ 189,657     $ 39,207     $ 6,842     $235,706
Nine Months Ended September 30,                            
2012   $ 631,348     $ 109,475     $ 36,446     $777,269
2011   $ 549,297     $ 113,676     $ 23,362     $686,335