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Segment Information
 12 Months Ended
Dec. 31, 2013
Segment Reporting [Abstract]  
Segment Information

15. 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 service, 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, and services provided to the customer, they exhibit similar long term financial performance and have been aggregated together.
The significant accounting policies 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. The Company will continue to evaluate the services and amount of time spent directly on the operating segments business operations, and adjust accordingly.
 
 
 
 
 
 
For the Year Ended December 31, 2013
  
 
Strategic Marketing Services
 
Performance Marketing Services
 
Corporate
 
Total
Revenue
 
$
805,439
 
 
$
343,442
 
 
$
—
 
 
$
1,148,881
 
Cost of services sold
 
 
510,014
 
 
 
244,480
 
 
 
—
 
 
 
754,494
 
Office and general expenses
 
 
186,369
 
 
 
73,696
 
 
 
126,714
 
 
 
386,779
 
Depreciation and amortization
 
 
23,720
 
 
 
14,486
 
 
 
1,394
 
 
 
39,600
 
Operating profit (Loss)
 
 
85,336
 
 
 
10,780
 
 
 
(128,108
) 
 
 
(31,992
) 
Other income (Expense):
 
 
  
 
 
 
  
 
 
 
  
 
 
 
  
 
Other income, net
 
 
  
 
 
 
  
 
 
 
  
 
 
 
2,531
 
Foreign exchange loss
 
 
  
 
 
 
  
 
 
 
  
 
 
 
(5,537
) 
Interest expense, finance charges, and loss on redemption of notes, net
 
 
 
 
 
 
 
 
 
 
 
(100,592
) 
Loss from continuing operations before income taxes, equity in affiliates
 
 
  
 
 
 
  
 
 
 
  
 
 
 
(135,590
) 
Income tax recovery
 
 
 
 
 
 
 
 
 
 
 
(4,291
) 
Loss from continuing operations before equity in affiliates
 
 
  
 
 
 
  
 
 
 
  
 
 
 
(131,299
) 
Equity in earnings of affiliates
 
 
 
 
 
 
 
 
 
 
 
281
 
Loss from continuing operations
 
 
  
 
 
 
  
 
 
 
  
 
 
 
(131,018
) 
Loss from discontinued operations attributable to MDC Partners Inc., net of taxes
 
 
 
 
 
 
 
 
 
 
 
(11,384
) 
Net loss
 
 
  
 
 
 
  
 
 
 
  
 
 
 
(142,402
) 
Net income attributable to noncontrolling interests
 
 
(4,889
) 
 
 
(1,572
) 
 
 
—
 
 
 
(6,461
) 
Net loss attributable to MDC Partners Inc.
 
 
 
 
 
 
 
 
 
 
$
(148,863
) 
Stock-based compensation
 
$
7,249
 
 
$
3,425
 
 
$
89,731
 
 
$
100,405
 
Capital expenditures from continuing operations
 
$
12,220
 
 
$
5,197
 
 
$
2,132
 
 
$
19,549
 
Goodwill and intangibles
 
$
516,304
 
 
$
284,291
 
 
$
—
 
 
$
800,595
 
Total assets
 
$
820,577
 
 
$
400,176
 
 
$
204,474
 
 
$
1,425,227
 
 
 
 
 
 
 
For the Year Ended December 31, 2012
  
 
Strategic Marketing Services
 
Performance Marketing Services
 
Corporate
 
Total
Revenue
 
$
719,364
 
 
$
343,901
 
 
$
—
 
 
$
1,063,265
 
Cost of services sold
 
 
479,060
 
 
 
254,740
 
 
 
—
 
 
 
733,800
 
Office and general expenses
 
 
188,954
 
 
 
71,798
 
 
 
38,847
 
 
 
299,599
 
Depreciation and amortization
 
 
27,260
 
 
 
17,190
 
 
 
1,342
 
 
 
45,792
 
Operating profit (Loss)
 
 
24,090
 
 
 
173
 
 
 
(40,189
) 
 
 
(15,926
) 
Other income (Expense):
 
 
  
 
 
 
  
 
 
 
  
 
 
 
  
 
Other income, net
 
 
  
 
 
 
  
 
 
 
  
 
 
 
117
 
Foreign exchange loss
 
 
  
 
 
 
  
 
 
 
  
 
 
 
(976
) 
Interest expense and finance charges, net
 
 
 
 
 
 
 
 
 
 
 
(46,190
) 
Loss from continuing operations before income taxes, equity in affiliates
 
 
  
 
 
 
  
 
 
 
  
 
 
 
(62,975
) 
Income tax expense
 
 
 
 
 
 
 
 
 
 
 
9,553
 
Loss from continuing operations before equity in affiliates
 
 
  
 
 
 
  
 
 
 
  
 
 
 
(72,528
) 
Equity in earnings of affiliates
 
 
 
 
 
 
 
 
 
 
 
633
 
Loss from continuing operations
 
 
  
 
 
 
  
 
 
 
  
 
 
 
(71,895
) 
Loss from discontinued operations attributable to MDC Partners Inc., net of taxes
 
 
 
 
 
 
 
 
 
 
 
(6,681
) 
Net loss
 
 
  
 
 
 
  
 
 
 
  
 
 
 
(78,576
) 
Net income attributable to noncontrolling
interests
 
 
(5,167
) 
 
 
(1,696
) 
 
 
—
 
 
 
(6,863
) 
Net loss attributable to MDC Partners Inc.
 
 
 
 
 
 
 
 
 
 
$
(85,439
) 
Stock-based compensation
 
$
9,186
 
 
$
8,227
 
 
$
14,784
 
 
$
32,197
 
Capital expenditures from continuing operations
 
$
11,455
 
 
$
8,459
 
 
$
382
 
 
$
20,296
 
Goodwill and intangibles
 
$
532,643
 
 
$
250,671
 
 
$
—
 
 
$
783,314
 
Total assets
 
$
827,248
 
 
$
397,450
 
 
$
120,247
 
 
$
1,344,945
 
 
 
 
 
 
 
For the Year Ended December 31, 2011
  
 
Strategic Marketing Services
 
Performance Marketing Services
 
Corporate
 
Total
Revenue
 
$
608,022
 
 
$
326,266
 
 
$
—
 
 
$
934,288
 
Cost of services sold
 
 
425,316
 
 
 
241,402
 
 
 
—
 
 
 
666,718
 
Office and general expenses
 
 
137,824
 
 
 
44,172
 
 
 
35,432
 
 
 
217,428
 
Depreciation and amortization
 
 
22,378
 
 
 
16,457
 
 
 
826
 
 
 
39,661
 
Operating profit (Loss)
 
 
22,504
 
 
 
24,235
 
 
 
(36,258
) 
 
 
10,481
 
Other income (Expense):
 
 
  
 
 
 
  
 
 
 
  
 
 
 
  
 
Other income, net
 
 
  
 
 
 
  
 
 
 
  
 
 
 
116
 
Foreign exchange loss
 
 
  
 
 
 
  
 
 
 
  
 
 
 
(1,677
) 
Interest expense and finance charges, net
 
 
 
 
 
 
 
 
 
 
 
(41,561
) 
Loss from continuing operations before income taxes, equity in affiliates
 
 
  
 
 
 
  
 
 
 
  
 
 
 
(32,641
) 
Income tax expense
 
 
 
 
 
 
 
 
 
 
 
41,735
 
Loss from continuing operations before equity in affiliates
 
 
  
 
 
 
  
 
 
 
  
 
 
 
(74,376
) 
Equity in earnings of affiliates
 
 
 
 
 
 
 
 
 
 
 
213
 
Loss from continuing operations
 
 
  
 
 
 
  
 
 
 
  
 
 
 
(74,163
) 
Loss from discontinued operations attributable to MDC Partners Inc., net of taxes
 
 
 
 
 
 
 
 
 
 
 
(2,082
) 
Net loss
 
 
  
 
 
 
  
 
 
 
  
 
 
 
(76,245
) 
Net income attributable to noncontrolling
interests
 
 
(6,414
) 
 
 
(2,015
) 
 
 
—
 
 
 
(8,429
) 
Net loss attributable to MDC Partners Inc.
 
 
 
 
 
 
 
 
 
 
$
(84,674
) 
Stock-based compensation
 
$
5,149
 
 
$
3,695
 
 
$
14,813
 
 
$
23,657
 
Capital expenditures from continuing operations
 
$
11,647
 
 
$
4,719
 
 
$
6,929
 
 
$
23,295
 
Goodwill and intangibles
 
$
426,034
 
 
$
237,190
 
 
$
—
 
 
$
663,224
 
Total assets
 
$
627,268
 
 
$
380,825
 
 
$
47,652
 
 
$
1,055,745
 
A summary of the Company’s long-lived assets, comprised of fixed assets, goodwill and intangibles, net, as at December 31, is set forth in the following table.
 
 
 
 
 
 
United States
 
Canada
 
Other
 
Total
Long-lived Assets
 
 
  
 
 
 
  
 
 
 
  
 
 
 
  
 
2013
 
$
44,360
 
 
$
5,424
 
 
$
2,287
 
 
$
52,071
 
2012
 
$
45,068
 
 
$
6,145
 
 
$
1,701
 
 
$
52,914
 
Goodwill and Intangible Assets
 
 
  
 
 
 
  
 
 
 
  
 
 
 
  
 
2013
 
$
720,373
 
 
$
80,222
 
 
$
—
 
 
$
800,595
 
2012
 
$
698,083
 
 
$
85,231
 
 
$
—
 
 
$
783,314
 
A summary of the Company’s revenue as at December 31 is set forth in the following table.
 
 
 
 
 
 
United States
 
Canada
 
Other
 
Total
Revenue:
 
 
  
 
 
 
  
 
 
 
  
 
 
 
  
 
2013
 
$
944,954
 
 
$
135,630
 
 
$
68,297
 
 
$
1,148,881
 
2012
 
$
862,611
 
 
$
148,063
 
 
$
52,591
 
 
$
1,063,265
 
2011
 
$
751,875
 
 
$
149,670
 
 
$
32,743
 
 
$
934,288