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Segment Information
 3 Months Ended
Mar. 31, 2013
Segment Reporting [Abstract]  
Segment Information
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 consists of integrated marketing consulting services firms that offer a full complement of marketing, activation and consulting services including advertising and media, marketing communications including direct marketing, public relations, corporate communications, market research, corporate identity and branding, interactive marketing, 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 and analytics 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 services, media planning and buying, 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 March 31, 2013

(thousands of United States dollars)

 

    Strategic
Marketing
Services		     Performance
Marketing
Services		     Corporate     Total  
                         
Revenue   $ 183,844     $ 83,170     $ —     $ 267,014  
                                 
Cost of services sold     119,046       59,961       —       179,007  
                                 
Office and general expenses     36,689       21,171       10,145       68,005  
                                 
Depreciation and amortization     5,834       3,423       365       9,622  
                                 
Operating Profit (Loss)     22,275       (1,385 )     (10,510 )     10,380  
                                 
Other Income (Expense):                                
Other income, net                             2,692  
Interest expense, net                             (67,980 )
                                 
Loss from continuing operations before income taxes, equity in affiliates                             (54,908 )
Income tax benefit                             (14,250 )
                                 
Loss from continuing operations before equity in affiliates                             (40,658 )
Equity in earnings of non-consolidated affiliates                             41  
                                 
Loss from continuing operations                             (40,617 )
                                 
Loss from discontinuing operations attributable to MDC Partners Inc., net of taxes                             (1,557 )
                                 
Net loss                             (42,174 )
                                 
Net income attributable to the noncontrolling interests     (762 )     (222 )     —       (984 )
Net loss attributable to MDC Partners Inc.                           $ (43,158 )
                                 
Non cash stock based compensation   $ 1,141     $ 829     $ 2,531     $ 4,501  
                                 
Supplemental Segment Information:                                
                                 
Capital expenditures   $ 1,778     $ 1,052     $ 89     $ 2,919  
                                 
Goodwill and intangibles   $ 528,944     $ 248,096     $ —     $ 777,040  
                                 
Total assets   $ 852,901     $ 404,072     $ 161,536     $ 1,418,509  

 

Three Months Ended March 31, 2012

(thousands of United States dollars)

 

    Strategic
Marketing
Services		     Performance
Marketing
Services		     Corporate     Total  
                         
Revenue   $ 160,096     $ 75,056     $ —     $ 235,152  
                                 
Cost of services sold     119,553       56,493       —       176,046  
                                 
Office and general expenses     34,640       17,295       7,933       59,868  
                                 
Depreciation and amortization     5,097       4,543       348       9,988  
                                 
Operating Profit (Loss)     806       (3,275 )     (8,281 )     (10,750 )
                                 
Other Income (Expense):                                
Other expense, net                             (1,023 )
Interest expense, net                             (10,928 )
                                 
Loss from continuing operations before income taxes, equity in affiliates                             (22,701 )
Income tax expense                             1,263  
                                 
Loss from continuing operations before equity in affiliates                             (23,964 )
Equity in earnings of non-consolidated affiliates                             272  
                                 
Loss from continuing operations                             (23,692 )
                                 
Loss from discontinuing operations attributable to MDC Partners Inc., net of taxes                             (1,092 )
                                 
Net loss                             (24,784 )
                                 
Net income attributable to the noncontrolling interests     (1,100 )     (397 )     —       (1,497 )
Net loss attributable to MDC Partners Inc.                           $ (26,281 )
                                 
Non cash stock based compensation   $ 1,866     $ 1,691     $ 2,327     $ 5,884  
                                 
Supplemental Segment Information:                                
                                 
Capital expenditures   $ 2,676     $ 2,316     $ 100     $ 5,092  
                                 
Goodwill and intangibles   $ 551,674     $ 260,672     $ —     $ 812,346  
                                 
Total Assets   $ 837,832     $ 414,448     $ 86,330     $ 1,338,610  

 

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 March 31,                                
2013   $ 220,656     $ 32,285     $ 14,073     $ 267,014  
2012   $ 187,359     $ 36,439     $ 11,354     $ 235,152