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Segment Information | 6 Months Ended
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Jun. 30, 2016
Segment Reporting [Abstract] |
Segment Information | Segment Information The Company determines an operating segment if a component (1) engages in business activities from which it earns revenues and incurs expenses, (2) has discrete financial information that is, and (3) regularly reviewed by the Chief Operating Decision Maker (“CODM”) to make decisions about resources to be allocated to the segment and assess its performance. During 2015, the Company had a change in the CODM as well as a change in how the CODM manages the business. As a result, in the fourth quarter of 2015, the Company reassessed its determination of operating segments. Decisions regarding allocations of resources are made and will be made based on the overall performance of the overall Partner Firm network. Therefore, the Company has determined that the Partner Firm network represents its operating segment. The Company also reassessed its previous allocation methodology and has conformed the allocations to align with how the CODM manages the business. The overall Partner Firm network consists of each of the Company’s operating agencies. The Company now reports in one reportable Advertising and Communications segment in addition to the Corporate Group described as follows:
• | The Advertising and Communications segment consists of Partner Firms that deliver innovative, value-added marketing, activation, communications and strategic consulting services to their clients. MDC and its Partner Firms deliver a wide range of customized services, including (1) multi-channel media management and optimization, (2) interactive and mobile marketing, (3) direct marketing, (4) database and customer relationship management, (5) sales promotion, (6) corporate communications, (7) market research, (8) data analytics and insights, (9) corporate identity, design and branding services, (10) social media communications, (11) product and service innovation and (12) e-commerce management.
• | The Corporate Group consists of corporate office expenses incurred in connection with the strategic resources provided to the Advertising and Communications segment, as well as certain other centrally managed expenses that are not fully allocated to the reportable segment. Office and general expenses include (1) salaries and related expenses for corporate office employees including employees dedicated to supporting the Partner Firms, (2) occupancy expense relating to properties occupied by all corporate office employees, (3) other office and general expenses including professional fees for the financial statement audits, and (4) certain other professional fees managed by the corporate office. Additional expenses managed by the corporate office that are directly related to the Partner Firms are allocated to the reportable segment.
Prior year results have been recast to reflect the new reportable segment. The significant accounting policies are in the summary of significant accounting policies included in the notes to the consolidated financial statements. Three Months Ended June 30, 2016 (thousands of United States dollars)
| Advertising and Communications |  | Corporate |  | Total
Revenue | $ | 337,047 |  |  | $ | — |  |  | $ | 337,047 |
Cost of services sold | 228,835 |  |  | — |  |  | 228,835 |
Office and general expenses | 60,418 |  |  | 12,291 |  |  | 72,709 |
Depreciation and amortization | 10,926 |  |  | 510 |  |  | 11,436 |
Operating profit (loss) | 36,868 |  |  | (12,801 | ) |  | 24,067 |
Other Income (Expense): |  |  |  |  |  |  |  |
Other income, net |  |  |  |  |  |  | 26 |
Interest expense and finance charges, net |  |  |  |  |  |  | (16,971 | )
Income from continuing operations before income taxes and equity in earnings of non-consolidated affiliates |  |  |  |  |  |  | 7,122 |
Income tax expense |  |  |  |  |  |  | 4,405 |
Income from continuing operations before equity in earnings of non-consolidated affiliates |  |  |  |  |  |  | 2,717 |
Equity in losses of non-consolidated affiliates |  |  |  |  |  |  | (290 | )
Net income |  |  |  |  |  |  | 2,427 |
Net income attributable to the noncontrolling interests | (1,254 | ) |  | — |  |  | (1,254 | )
Net income attributable to MDC Partners Inc. |  |  |  |  |  |  | $ | 1,173 |
Stock-based compensation | $ | 4,880 |  |  | $ | 650 |  |  | $ | 5,530 |
Supplemental Segment Information: |  |  |  |  |  |  |  |
Capital expenditures | $ | 7,905 |  |  | $ | 4 |  |  | $ | 7,909 |
Three Months Ended June 30, 2015 (thousands of United States dollars)
| Advertising and Communications |  | Corporate |  | Total
Revenue | $ | 336,606 |  |  | $ | — |  |  | $ | 336,606 |
Cost of services sold | 225,042 |  |  | — |  |  | 225,042 |
Office and general expenses | 43,638 |  |  | 9,437 |  |  | 53,075 |
Depreciation and amortization | 13,554 |  |  | 453 |  |  | 14,007 |
Operating profit (loss) | 54,372 |  |  | (9,890 | ) |  | 44,482 |
Other Income (Expense): |  |  |  |  |  |  |  |
Other income, net |  |  |  |  |  |  | 4,348 |
Interest expense and finance charges, net |  |  |  |  |  |  | (13,183 | )
Income from continuing operations before income taxes and equity in earnings of non-consolidated affiliates |  |  |  |  |  |  | 35,647 |
Income tax expense |  |  |  |  |  |  | 4,679 |
Income from continuing operations before equity in earnings of non-consolidated affiliates |  |  |  |  |  |  | 30,968 |
Equity in earnings of non-consolidated affiliates |  |  |  |  |  |  | 104 |
Income from continuing operations |  |  |  |  |  |  | 31,072 |
Income from discontinued operations attributable to MDC Partners Inc., net of taxes |  |  |  |  |  |  | 1,329 |
Net income |  |  |  |  |  |  | 32,401 |
Net income attributable to the noncontrolling interests | (2,841 | ) |  | — |  |  | (2,841 | )
Net income attributable to MDC Partners Inc. |  |  |  |  |  |  | $ | 29,560 |
Stock-based compensation | $ | 4,863 |  |  | $ | 451 |  |  | $ | 5,314 |
Supplemental Segment Information: |  |  |  |  |  |  |  |
Capital expenditures | $ | 3,653 |  |  | $ | 195 |  |  | $ | 3,848 |
Six Months Ended June 30, 2016 (thousands of United States dollars)
| Advertising and Communications |  | Corporate |  | Total
Revenue | $ | 646,089 |  |  | $ | — |  |  | $ | 646,089 |
Cost of services sold | 440,281 |  |  | — |  |  | 440,281 |
Office and general expenses | 125,513 |  |  | 25,024 |  |  | 150,537 |
Depreciation and amortization | 21,749 |  |  | 907 |  |  | 22,656 |
Operating profit (loss) | 58,546 |  |  | (25,931 | ) |  | 32,615 |
Other Income (Expense): |  |  |  |  |  |  |  |
Other income, net |  |  |  |  |  |  | 15,538 |
Interest expense and finance charges, net |  |  |  |  |  |  | (32,368 | )
Loss on redemption of notes |  |  |  |  | (33,298 | )
Loss from continuing operations before income taxes and equity in earnings of non-consolidated affiliates |  |  |  |  |  |  | (17,513 | )
Income tax expense |  |  |  |  |  |  | 2,433 |
Loss from continuing operations before equity in earnings of non-consolidated affiliates |  |  |  |  |  |  | (19,946 | )
Equity in losses of non-consolidated affiliates |  |  |  |  |  |  | (61 | )
Net loss |  |  |  |  |  |  | (20,007 | )
Net income attributable to the noncontrolling interests | (2,113 | ) |  | — |  |  | (2,113 | )
Net loss attributable to MDC Partners Inc. |  |  |  |  |  |  | $ | (22,120 | )
Stock-based compensation | $ | 8,761 |  |  | $ | 1,454 |  |  | $ | 10,215 |
Supplemental Segment Information: |  |  |  |  |  |  |  |
Capital expenditures | $ | 13,416 |  |  | $ | 32 |  |  | $ | 13,448 |
Goodwill and intangibles | $ | 938,062 |  |  | $ | — |  |  | $ | 938,062 |
Total Assets | $ | 1,484,027 |  |  | $ | 132,126 |  |  | $ | 1,616,153 |
Six Months Ended June 30, 2015 (thousands of United States dollars)
| Advertising and Communications |  | Corporate |  | Total
Revenue | $ | 638,828 |  |  | $ | — |  |  | $ | 638,828 |
Cost of services sold | 435,461 |  |  | — |  |  | 435,461 |
Office and general expenses | 97,574 |  |  | 29,809 |  |  | 127,383 |
Depreciation and amortization | 25,408 |  |  | 899 |  |  | 26,307 |
Operating profit (loss) | 80,385 |  |  | (30,708 | ) |  | 49,677 |
Other Income (Expense): |  |  |  |  |  |  |  |
Other expense, net |  |  |  |  |  |  | (13,692 | )
Interest expense and finance charges, net |  |  |  |  |  |  | (28,160 | )
Income from continuing operations before income taxes and equity in earnings of non-consolidated affiliates |  |  |  |  |  |  | 7,825 |
Income tax expense |  |  |  |  |  |  | 625 |
Income from continuing operations before equity in earnings of non-consolidated affiliates |  |  |  |  |  |  | 7,200 |
Equity in earnings of non-consolidated affiliates |  |  |  |  |  |  | 455 |
Income from continuing operations |  |  |  |  |  |  | 7,655 |
Loss from discontinued operations attributable to MDC Partners Inc., net of taxes |  |  |  |  |  |  | (4,965 | )
Net income |  |  |  |  |  |  | 2,690 |
Net income attributable to the noncontrolling interests | (5,221 | ) |  | — |  |  | (5,221 | )
Net loss attributable to MDC Partners Inc. |  |  |  |  |  |  | $ | (2,531 | )
Stock-based compensation | $ | 8,363 |  |  | $ | 1,396 |  |  | $ | 9,759 |
Supplemental Segment Information: |  |  |  |  |  |  |  |
Capital expenditures | $ | 9,241 |  |  | $ | 263 |  |  | $ | 9,504 |
Goodwill and intangibles | $ | 961,860 |  |  | $ | — |  |  | $ | 961,860 |
Total Assets | $ | 1,657,959 |  |  | $ | 176,806 |  |  | $ | 1,834,765 |
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, |  |  |  |  |  |  |  |  |  |  |
2016 | $ | 272,992 |  |  | $ | 33,614 |  |  | $ | 30,441 |  |  | $ | 337,047 |
2015 | $ | 271,375 |  |  | $ | 35,432 |  |  | $ | 29,799 |  |  | $ | 336,606 |
Six Months Ended June 30, |  |  |  |  |  |  |  |  |  |  |
2016 | $ | 525,190 |  |  | $ | 62,020 |  |  | $ | 58,879 |  |  | $ | 646,089 |
2015 | $ | 523,392 |  |  | $ | 65,258 |  |  | $ | 50,178 |  |  | $ | 638,828 |

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- Definition The entire disclosure for reporting segments including data and tables. Reportable segments include those that meet any of the following quantitative thresholds a) it's reported revenue, including sales to external customers and intersegment sales or transfers is 10 percent or more of the combined revenue, internal and external, of all operating segments b) the absolute amount of its reported profit or loss is 10 percent or more of the greater, in absolute amount of 1) the combined reported profit of all operating segments that did not report a loss or 2) the combined reported loss of all operating segments that did report a loss c) its assets are 10 percent or more of the combined assets of all operating segments. + References Reference 1: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 34 -URI http://asc.fasb.org/extlink&oid=68060357&loc=d3e8981-108599 Reference 2: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 41 -URI http://asc.fasb.org/extlink&oid=68060357&loc=d3e9038-108599 Reference 3: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 33 -URI http://asc.fasb.org/extlink&oid=68060357&loc=d3e8971-108599 Reference 4: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 12 -URI http://asc.fasb.org/extlink&oid=68060357&loc=d3e8595-108599 Reference 5: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 1 -URI http://asc.fasb.org/extlink&oid=68060357&loc=d3e8380-108599 Reference 6: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 32 -URI http://asc.fasb.org/extlink&oid=68060357&loc=d3e8933-108599 Reference 7: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 26 -URI http://asc.fasb.org/extlink&oid=68060357&loc=d3e8844-108599 Reference 8: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 35 -URI http://asc.fasb.org/extlink&oid=68060357&loc=d3e8984-108599 Reference 9: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 40 -URI http://asc.fasb.org/extlink&oid=68060357&loc=d3e9031-108599 Reference 10: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 42 -URI http://asc.fasb.org/extlink&oid=68060357&loc=d3e9054-108599 Reference 11: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 10 -URI http://asc.fasb.org/extlink&oid=68060357&loc=d3e8538-108599 Reference 12: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 29 -URI http://asc.fasb.org/extlink&oid=68060357&loc=d3e8864-108599 Reference 13: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 31 -URI http://asc.fasb.org/extlink&oid=68060357&loc=d3e8924-108599 Reference 14: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 30 -URI http://asc.fasb.org/extlink&oid=68060357&loc=d3e8906-108599 + Details
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