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Segment Information | 9 Months Ended
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Sep. 30, 2015
Segment Reporting [Abstract] |
Segment Information | 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 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 in one reportable segment and two “other” 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 one reportable Strategic Marketing Services segment plus two “other” segments, Performance Marketing Services and Corporate. The operating 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 segment 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 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. In addition, services include consumer activation, investor relations and general public insights.
The significant accounting policies of these segments are the same as those described in the summary of significant accounting policies included in these notes to the consolidated financial statements. The Company continues to evaluate its Corporate segment and the services provided by the Corporate segment to the operating segments. Summary financial information concerning the Company’s operating segments is shown in the following tables: Three Months Ended September 30, 2015 (thousands of United States dollars)
| Strategic Marketing Services |  | Performance Marketing Services |  | Corporate |  | Total
Revenue | $ | 264,552 |  |  | $ | 63,863 |  |  | $ | — |  |  | $ | 328,415 |
Cost of services sold | 168,367 |  |  | 44,558 |  |  | — |  |  | 212,925 |
Office and general expenses | 52,933 |  |  | 10,777 |  |  | 15,076 |  |  | 78,786 |
Depreciation and amortization | 6,445 |  |  | 5,577 |  |  | 1,064 |  |  | 13,086 |
Operating profit (loss) | 36,807 |  |  | 2,951 |  |  | (16,140 | ) |  | 23,618 |
Other Income (Expense): |  |  |  |  |  |  |  |  |  |  |
Other expense, net |  |  |  |  |  |  |  |  |  | (15,623 | )
Interest expense and finance charges, net |  |  |  |  |  |  |  |  |  | (14,524 | )
Loss from continuing operations before income taxes and equity in non-consolidated affiliates |  |  |  |  |  |  |  |  |  | (6,529 | )
Income tax benefit |  |  |  |  |  |  |  |  |  | (1,191 | )
Loss from continuing operations before equity in non-consolidated affiliates |  |  |  |  |  |  |  |  |  | (5,338 | )
Equity in earnings of non-consolidated affiliates |  |  |  |  |  |  |  |  |  | 172 |
Loss from continuing operations |  |  |  |  |  |  |  |  |  | (5,166 | )
Loss from discontinued operations attributable to MDC Partners Inc., net of taxes |  |  |  |  |  |  |  |  |  | (1,316 | )
Net loss |  |  |  |  |  |  |  |  |  | (6,482 | )
Net income attributable to the noncontrolling interests | (1,930 | ) |  | (192 | ) |  | — |  |  | (2,122 | )
Net loss attributable to MDC Partners Inc. |  |  |  |  |  |  |  |  |  | $ | (8,604 | )
Stock-based compensation | $ | 2,594 |  |  | $ | 508 |  |  | $ | 164 |  |  | $ | 3,266 |
Supplemental Segment Information: |  |  |  |  |  |  |  |  |  |  |
Capital expenditures | $ | 7,524 |  |  | $ | 627 |  |  | $ | 10 |  |  | $ | 8,161 |
Three Months Ended September 30, 2014 (thousands of United States dollars)
| Strategic Marketing Services |  | Performance Marketing Services |  | Corporate |  | Total
Revenue | $ | 238,419 |  |  | $ | 70,972 |  |  | $ | — |  |  | $ | 309,391 |
Cost of services sold | 156,667 |  |  | 48,882 |  |  | — |  |  | 205,549 |
Office and general expenses | 48,524 |  |  | 11,354 |  |  | 10,937 |  |  | 70,815 |
Depreciation and amortization | 6,895 |  |  | 4,368 |  |  | 421 |  |  | 11,684 |
Operating profit (loss) | 26,333 |  |  | 6,368 |  |  | (11,358 | ) |  | 21,343 |
Other Income (Expense): |  |  |  |  |  |  |  |  |  |  |
Other expense, net |  |  |  |  |  |  |  |  |  | (9,641 | )
Interest expense and finance charges, net |  |  |  |  |  |  |  |  |  | (13,917 | )
Loss from continuing operations before income taxes and equity in non-consolidated affiliates |  |  |  |  |  |  |  |  |  | (2,215 | )
Income tax benefit |  |  |  |  |  |  |  |  |  | (266 | )
Loss from continuing operations before equity in non-consolidated affiliates |  |  |  |  |  |  |  |  |  | (1,949 | )
Equity in earnings of non-consolidated affiliates |  |  |  |  |  |  |  |  |  | 81 |
Loss from continuing operations |  |  |  |  |  |  |  |  |  | (1,868 | )
Loss from discontinued operations attributable to MDC Partners Inc., net of taxes |  |  |  |  |  |  |  |  |  | (1,369 | )
Net loss |  |  |  |  |  |  |  |  |  | (3,237 | )
Net (income) loss attributable to the noncontrolling interests | (1,744 | ) |  | 59 |  |  | — |  |  | (1,685 | )
Net loss attributable to MDC Partners Inc. |  |  |  |  |  |  |  |  |  | $ | (4,922 | )
Stock-based compensation | $ | 1,816 |  |  | $ | 477 |  |  | $ | 1,144 |  |  | $ | 3,437 |
Supplemental Segment Information: |  |  |  |  |  |  |  |  |  |  |
Capital expenditures | $ | 12,133 |  |  | $ | 417 |  |  | $ | 428 |  |  | $ | 12,978 |
Nine Months Ended September 30, 2015 (thousands of United States dollars)
| Strategic Marketing Services |  | Performance Marketing Services |  | Corporate |  | Total
Revenue | $ | 775,079 |  |  | $ | 192,164 |  |  | $ | — |  |  | $ | 967,243 |
Cost of services sold | 515,624 |  |  | 132,762 |  |  | — |  |  | 648,386 |
Office and general expenses | 151,023 |  |  | 22,586 |  |  | 32,560 |  |  | 206,169 |
Depreciation and amortization | 19,360 |  |  | 16,797 |  |  | 3,236 |  |  | 39,393 |
Operating profit (loss) | 89,072 |  |  | 20,019 |  |  | (35,796 | ) |  | 73,295 |
Other Income (Expense): |  |  |  |  |  |  |  |  |  |  |
Other expense, net |  |  |  |  |  |  |  |  |  | (29,315 | )
Interest expense and finance charges, net |  |  |  |  |  |  |  |  |  | (42,684 | )
Income from continuing operations before income taxes and equity in non-consolidated affiliates |  |  |  |  |  |  |  |  |  | 1,296 |
Income tax benefit |  |  |  |  |  |  |  |  |  | (566 | )
Income from continuing operations before equity in non-consolidated affiliates |  |  |  |  |  |  |  |  |  | 1,862 |
Equity in earnings of non-consolidated affiliates |  |  |  |  |  |  |  |  |  | 627 |
Income from continuing operations |  |  |  |  |  |  |  |  |  | 2,489 |
Loss from discontinued operations attributable to MDC Partners Inc., net of taxes |  |  |  |  |  |  |  |  |  | (6,281 | )
Net loss |  |  |  |  |  |  |  |  |  | (3,792 | )
Net income attributable to the noncontrolling interests | (6,977 | ) |  | (366 | ) |  | — |  |  | (7,343 | )
Net loss attributable to MDC Partners Inc. |  |  |  |  |  |  |  |  |  | $ | (11,135 | )
Stock-based compensation | $ | 9,205 |  |  | $ | 2,467 |  |  | $ | 1,353 |  |  | $ | 13,025 |
Supplemental Segment Information: |  |  |  |  |  |  |  |  |  |  |
Capital expenditures | $ | 16,083 |  |  | $ | 1,309 |  |  | $ | 273 |  |  | $ | 17,665 |
Goodwill and intangibles | $ | 546,148 |  |  | $ | 398,554 |  |  | $ | — |  |  | $ | 944,702 |
Total Assets | $ | 924,072 |  |  | $ | 555,728 |  |  | $ | 137,401 |  |  | $ | 1,617,201 |
Nine Months Ended September 30, 2014 (thousands of United States dollars)
| Strategic Marketing Services |  | Performance Marketing Services |  | Corporate |  | Total
Revenue | $ | 683,340 |  |  | $ | 200,261 |  |  | $ | — |  |  | $ | 883,601 |
Cost of services sold | 442,906 |  |  | 132,986 |  |  | — |  |  | 575,892 |
Office and general expenses | 136,922 |  |  | 43,640 |  |  | 33,025 |  |  | 213,587 |
Depreciation and amortization | 17,182 |  |  | 13,545 |  |  | 1,356 |  |  | 32,083 |
Operating profit (loss) | 86,330 |  |  | 10,090 |  |  | (34,381 | ) |  | 62,039 |
Other Income (Expense): |  |  |  |  |  |  |  |  |  |  |
Other expense, net |  |  |  |  |  |  |  |  |  | (8,648 | )
Interest expense and finance charges, net |  |  |  |  |  |  |  |  |  | (40,376 | )
Income from continuing operations before income taxes and equity in non-consolidated affiliates |  |  |  |  |  |  |  |  |  | 13,015 |
Income tax expense |  |  |  |  |  |  |  |  |  | 2,764 |
Income from continuing operations before equity in non-consolidated affiliates |  |  |  |  |  |  |  |  |  | 10,251 |
Equity in earnings of non-consolidated affiliates |  |  |  |  |  |  |  |  |  | 223 |
Income from continuing operations |  |  |  |  |  |  |  |  |  | 10,474 |
Loss from discontinued operations attributable to MDC Partners Inc., net of taxes |  |  |  |  |  |  |  |  |  | (2,976 | )
Net income |  |  |  |  |  |  |  |  |  | 7,498 |
Net (income) loss attributable to the noncontrolling interests | (4,994 | ) |  | 198 |  |  | — |  |  | (4,796 | )
Net income attributable to MDC Partners Inc. |  |  |  |  |  |  |  |  |  | $ | 2,702 |
Stock-based compensation | $ | 6,067 |  |  | $ | 2,684 |  |  | $ | 3,482 |  |  | $ | 12,233 |
Supplemental Segment Information: |  |  |  |  |  |  |  |  |  |  |
Capital expenditures | $ | 16,228 |  |  | $ | 1,216 |  |  | $ | 1,234 |  |  | $ | 18,678 |
Goodwill and intangibles | $ | 572,453 |  |  | $ | 421,330 |  |  | $ | — |  |  | $ | 993,783 |
Total Assets | $ | 973,884 |  |  | $ | 553,637 |  |  | $ | 179,805 |  |  | $ | 1,707,326 |
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, |  |  |  |  |  |  |  |  |  |  |
2015 | $ | 270,512 |  |  | $ | 29,559 |  |  | $ | 28,344 |  |  | $ | 328,415 |
2014 | $ | 249,128 |  |  | $ | 38,052 |  |  | $ | 22,211 |  |  | $ | 309,391 |
Nine Months Ended September 30, |  |  |  |  |  |  |  |  |  |  |
2015 | $ | 793,904 |  |  | $ | 94,817 |  |  | $ | 78,522 |  |  | $ | 967,243 |
2014 | $ | 721,089 |  |  | $ | 107,993 |  |  | $ | 54,519 |  |  | $ | 883,601 |

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