15. Segment Information

The Company determines an operating segment if a component (i) engages in business activities from which it earns revenues and incurs expenses, (ii) has discrete financial information, and is (iii) regularly reviewed by the Chief Operating Decision Maker (“CODM”) to make decisions regarding resource allocation for the segment and assess its performance. Once operating segments are identified, the Company performs an analysis to determine if aggregation of its operating segments is consistent with the principles detailed in ASC 280. This determination is based upon a quantitative analysis of the expected and historic average long-term profitability for each operating segment, together with an assessment of the qualitative characteristics set forth in ASC Topic 280-10-50.

The four reportable segments that result from applying the aggregation criteria are as follows: “Global Integrated Agencies”; “Domestic Creative Agencies”; “Specialist Communications”; and “Media Services.” In addition, the Company combines and discloses those operating segments that do not meet the aggregation criteria as “All Other.” The Company also reports corporate expenses, as further detailed below, as “Corporate.” All segments follow the same basis of presentation and accounting policies as those described in Note 1 and 2 of the Notes to the Consolidated Financial Statements included herein, respectively.

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The Global Integrated Agencies reportable segment is comprised of the Company’s six global, integrated operating segments with broad marketing communication capabilities, including advertising, branding, digital, social media, design and production services, serving multinational clients around the world. The Global Integrated Agencies reportable segment includes 72andSunny, Anomaly, Crispin Porter + Bogusky, Doner, Forsman & Bodenfors, and kbs+. These operating segments share similar characteristics related to (i) the nature of their services; (ii) the type of global clients and the methods used to provide services; and (iii) the extent to which they may be impacted by global economic and geopolitical risks. In addition, these operating segments compete with each other for new business and from time to time have business move between them. The Company believes the historic and expected average long-term profitability is similar among the operating segments aggregated in the Global Integrated Agencies reportable segment.

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The Domestic Creative Agencies reportable segment is comprised of four operating segments that are national advertising agencies leveraging creative capabilities at their core. The Domestic Creative Agencies reportable segment includes Colle + McVoy, Laird+Partners, Mono Advertising and Union. These operating segments share similar characteristics related to (i) the nature of their creative advertising services; (ii) the type of domestic client accounts and the methods used to provide services; and (iii) the extent to which they may be impacted by domestic economic and policy factors within North America. In addition, these operating segments compete with each other for new business and from time to time have business move between them. The Company believes the historic and expected average long-term profitability is similar among the operating segments aggregated in the Domestic Creative Agencies reportable segment.

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The Specialist Communications reportable segment is comprised of seven operating segments that are each communications agencies with core service offerings in public relations and related communications services. The Specialist Communications reportable segment includes Allison & Partners, Hunter PR, HL Group Partners, Kwittken, Luntz Global, Sloane & Company and Veritas. These operating segments share similar characteristics related to (i) the nature of their public relations and communication services, including content creation, social media and influencer marketing; (ii) the type of client accounts and the methods used to provide services; (iii) the extent to which they may be impacted by domestic economic and policy factors within North America; and (iv) the regulatory environment regarding public relations and social media. In addition, these operating segments compete with each other for new business and from time to time have business move between them. The Company believes the historic and expected average long-term profitability is similar among the operating segments aggregated in the Specialist Communications reportable segment.

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The Media Services reportable segment is comprised of a single operating segment known as MDC Media Partners. MDC Media Partners is comprised of the Company’s network of stand-alone agencies with media buying and planning as their core competency, including the integrated platform Assembly. The agencies within this single operating segment share a Chief Executive Officer and Chief Financial Officer, who have operational oversight of these agencies. These agencies provide other services, including influencer marketing, content, insights & analytics, out-of-home, paid search, social media, lead generation, programmatic, artificial intelligence, and corporate barter. MDC Media Partners operates primarily in North America.

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All Other consists of the Company’s remaining operating segments that provide a range of diverse marketing communication services, but generally do not have similar services offerings or financial characteristics as those aggregated in the reportable segments. The All Other category includes 6Degrees, Bruce Mau Design, Concentric Partners, Civilian, Gale Partners, Hello Design, Kenna, Kingsdale, Northstar Research Partners, Redscout, Relevent, Source Marketing, Team, Vitro, Yamamoto and Y Media Labs. The nature of the specialist services provided by these operating segments vary among each other and from those operating segments aggregated into the reportable segments. This results in these operating segments having current and long-term performance expectations inconsistent with those operating segments aggregated in the reportable segments.

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Corporate consists of corporate office expenses incurred in connection with the strategic resources provided to the operating segments, as well as certain other centrally managed expenses that are not fully allocated to the operating segments. These office and general expenses include (i) salaries and related expenses for corporate office employees, including employees dedicated to supporting the operating segments, (ii) occupancy expenses relating to properties occupied by all corporate office employees, (iii) other office and general expenses including professional fees for the financial statement audits and other public company costs, and (iv) certain other professional fees managed by the corporate office. Additional expenses managed by the corporate office that are directly related to the operating segments are allocated to the appropriate reportable segment and the All Other category.



	Years Ended December 31,
	2017			2016			2015
Revenue:
Global Integrated Agencies	$	786,644		$	696,410		$	652,987
Domestic Creative Agencies	90,663			85,953			91,658
Specialist Communications	172,565			170,285			153,920
Media Services	142,387			131,498			132,419
All Other	321,520			301,639			295,272
Total	$	1,513,779		$	1,385,785		$	1,326,256

Segment operating income (loss):
Global Integrated Agencies	$	74,902		$	58,505		$	66,161
Domestic Creative Agencies	16,977			16,583			17,535
Specialist Communications	20,714			1,939			18,047
Media Services	12,963			6,154			20,116
All Other	47,259			9,368			15,423
Corporate	(40,856		)	(44,118		)	(65,172		)
Total	$	131,959		$	48,431		$	72,110

Other Income (Expense):
Other income, net	1,346			414			7,238
Foreign exchange gain (loss)	18,137			(213		)	(39,328		)
Interest expense and finance charges, net	(64,364		)	(65,858		)	(57,436		)
Loss on redemption of Notes	—			(33,298		)	—
Income (loss) from continuing operations before income taxes and equity in earnings of non-consolidated affiliates	87,078			(49,716		)	(17,416		)
Income tax expense (benefit)	(168,064		)	(9,404		)	3,761
Income (loss) from continuing operations before equity in earnings of non-consolidated affiliates	255,142			(40,312		)	(21,177		)
Equity in earnings (loss) of non-consolidated affiliates	2,081			(309		)	1,058
Income (loss) from continuing operations	257,223			(40,621		)	(20,119		)
Income (loss) from discontinued operations attributable to MDC Partners Inc., net of taxes	—			—			(6,281		)
Net income (loss)	257,223			(40,621		)	(26,400		)
Net income attributable to the noncontrolling interest	(15,375		)	(5,218		)	(9,054		)
Net income (loss) attributable to MDC Partners Inc.	$	241,848		$	(45,839	)	$	(35,454	)



	Years Ended December 31,
	2017		2016		2015
Depreciation and amortization:
Global Integrated Agencies	$	23,800	$	21,447	$	20,599
Domestic Creative Agencies	1,434		1,653		1,855
Specialist Communications	4,714		6,637		11,201
Media Services	3,629		5,718		4,660
All Other	8,799		9,406		12,134
Corporate	1,098		1,585		1,774
Total	$	43,474	$	46,446	$	52,223

Stock-based compensation:
Global Integrated Agencies	$	15,203	$	12,141	$	6,981
Domestic Creative Agencies	845		634		644
Specialist Communications	2,954		3,629		1,510
Media Services	614		301		471
All Other	2,600		1,773		5,450
Corporate	2,134		2,525		2,740
Total	$	24,350	$	21,003	$	17,796

Capital expenditures:
Global Integrated Agencies	$	20,748	$	16,439	$	17,043
Domestic Creative Agencies	1,032		1,055		1,321
Specialist Communications	1,288		2,741		1,311
Media Services	3,035		5,110		825
All Other	6,832		4,054		2,704
Corporate	23		33		371
Total	$	32,958	$	29,432	$	23,575

A summary of the Company’s long-lived assets, comprised of fixed assets, goodwill and intangibles, net, by geographic region at December 31, is set forth in the following table.



	United States		Canada		Other		Total
Long-lived Assets
2017	$	77,163	$	5,638	$	7,505	$	90,306
2016	$	67,617	$	5,887	$	4,873	$	78,377
Goodwill and Intangible Assets
2017	$	706,241	$	127,014	$	73,285	$	906,540
2016	$	736,334	$	121,987	$	71,509	$	929,830

The Company’s CODM does not use segment assets to allocate resources or to assess performance of the segments and therefore, total segment assets have not been disclosed.

A summary of the Company’s revenue by geographic region at December 31 is set forth in the following table.



	United States		Canada		Other		Total
Revenue:
2017	$	1,172,364	$	123,092	$	218,323	$	1,513,779
2016	$	1,103,714	$	124,101	$	157,970	$	1,385,785
2015	$	1,085,051	$	129,039	$	112,166	$	1,326,256