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Segment Information | 6 Months Ended
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Jun. 30, 2018
Segment Reporting [Abstract] |
Segment Information | 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 operating segments is applicable. This determination is based upon a quantitative analysis of the expected and historic average long-term profitability for each operating segment, together with a qualitative assessment to determine if operating segments have similar operating characteristics. Due to changes in the Company’s internal management and reporting structure during 2018, reportable segment results for periods presented prior to the second quarter of 2018 have been recast to reflect the reclassification of certain businesses between segments. The changes were as follows:
• | Source Marketing, previously within the All Other category, is included within the Doner operating segment, which is aggregated into the Global Integrated Agencies reportable segment
• | Yamamoto, previously within the All Other category, was operationally merged with Civilian and is now included within the Domestic Creative Agencies reportable segment
• | Bruce Mau Design, Hello Design and Northstar Research Partners, previously within the All Other category, and Varick Media Management, previously within the Media Services reportable segment, were included into a newly-formed operating segment, Yes & Company, which is aggregated within the Media Services reportable segment
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 throughout the Notes to the Unaudited Condensed Consolidated Financial Statements included herein, and Note 2 of the Company’s Form 10-K for the year ended December 31, 2017.
• | 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.
• | The Domestic Creative Agencies reportable segment is comprised of five 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, Union and Yamamoto. 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.
• | 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, HL Group Partners, Hunter PR, 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.
• | The Media Services reportable segment is comprised of two operating segments, MDC Media Partners and Yes & Company. These operating segments perform media buying and planning as their core competency and provide other services, including influencer marketing, content, insights & analytics, out-of-home, paid search, social media, lead generation, programmatic, artificial intelligence, and corporate barter.
• | 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 Communications, Concentric Partners, Gale Partners, Kenna, Kingsdale, Instrument, Redscout, Relevent, Team, Vitro, 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.
• | 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.
| Three Months Ended June 30, |  | Six Months Ended June 30,
| 2018 |  | 2017 |  | 2018 |  | 2017
Revenue: |  |  |  |  |  |  |
Global Integrated Agencies | $ | 182,607 |  |  | $ | 209,090 |  |  | $ | 332,962 |  |  | $ | 388,316 |
Domestic Creative Agencies | 26,388 |  |  | 25,486 |  |  | 50,705 |  |  | 49,229 |
Specialist Communications | 43,938 |  |  | 44,116 |  |  | 87,088 |  |  | 84,800 |
Media Services | 33,293 |  |  | 42,648 |  |  | 69,438 |  |  | 83,893 |
All Other | 93,517 |  |  | 69,192 |  |  | 166,518 |  |  | 128,994 |
Total | $ | 379,743 |  |  | $ | 390,532 |  |  | $ | 706,711 |  |  | $ | 735,232 |
Operating profit (loss): |  |  |  |  |  |  |
Global Integrated Agencies | $ | 19,227 |  |  | $ | 13,811 |  |  | $ | 3,466 |  |  | $ | 13,172 |
Domestic Creative Agencies | 4,993 |  |  | 4,959 |  |  | 8,919 |  |  | 8,784 |
Specialist Communications | 5,767 |  |  | 4,300 |  |  | 9,794 |  |  | 8,648 |
Media Services | (1,183 | ) |  | 3,955 |  |  | (980 | ) |  | 6,614 |
All Other | 15,108 |  |  | 9,044 |  |  | 22,152 |  |  | 15,819 |
Corporate | (13,140 | ) |  | (9,688 | ) |  | (27,212 | ) |  | (18,257 | )
Total | $ | 30,772 |  |  | $ | 26,381 |  |  | $ | 16,139 |  |  | $ | 34,780 |
Other income (expense): |  |  |  |  |  |  |
Other (expense) income, net | (5,957 | ) |  | 6,596 |  |  | (12,176 | ) |  | 9,163 |
Interest expense and finance charges, net | (16,859 | ) |  | (15,510 | ) |  | (32,942 | ) |  | (32,051 | )
Income (loss) before income taxes and equity in earnings (losses) of non-consolidated affiliates | 7,956 |  |  | 17,467 |  |  | (28,979 | ) |  | 11,892 |
Income tax expense (benefit) | 1,977 |  |  | 4,641 |  |  | (6,353 | ) |  | 8,610 |
Income (loss) before equity in earnings (losses) of non-consolidated affiliates | 5,979 |  |  | 12,826 |  |  | (22,626 | ) |  | 3,282 |
Equity in earnings (losses) of non-consolidated affiliates | (28 | ) |  | 641 |  |  | 58 |  |  | 502 |
Net income (loss) | 5,951 |  |  | 13,467 |  |  | (22,568 | ) |  | 3,784 |
Net income attributable to the noncontrolling interest | (2,545 | ) |  | (2,214 | ) |  | (3,442 | ) |  | (3,097 | )
Net income (loss) attributable to MDC Partners Inc. | $ | 3,406 |  |  | $ | 11,253 |  |  | $ | (26,010 | ) |  | $ | 687 |
| Three Months Ended June 30, |  | Six Months Ended June 30,
| 2018 |  | 2017 |  | 2018 |  | 2017
Depreciation and amortization: |  |  |  |  |  |  |
Global Integrated Agencies | $ | 5,329 |  |  | $ | 5,587 |  |  | $ | 13,345 |  |  | $ | 11,548 |
Domestic Creative Agencies | 396 |  |  | 403 |  |  | 789 |  |  | 797 |
Specialist Communications | 1,027 |  |  | 1,221 |  |  | 2,029 |  |  | 2,437 |
Media Services | 767 |  |  | 1,112 |  |  | 1,534 |  |  | 2,221 |
All Other | 4,024 |  |  | 2,144 |  |  | 5,997 |  |  | 4,053 |
Corporate | 160 |  |  | 299 |  |  | 384 |  |  | 608 |
Total | $ | 11,703 |  |  | $ | 10,766 |  |  | $ | 24,078 |  |  | $ | 21,664 |
Stock-based compensation: |  |  |  |  |  |  |
Global Integrated Agencies | $ | 2,585 |  |  | $ | 3,080 |  |  | $ | 5,132 |  |  | $ | 6,070 |
Domestic Creative Agencies | 610 |  |  | 181 |  |  | 770 |  |  | 346 |
Specialist Communications | 163 |  |  | 1,087 |  |  | 499 |  |  | 1,605 |
Media Services | 85 |  |  | 165 |  |  | 170 |  |  | 335 |
All Other | 939 |  |  | 509 |  |  | 1,600 |  |  | 1,012 |
Corporate | 1,221 |  |  | 518 |  |  | 2,469 |  |  | 1,122 |
Total | $ | 5,603 |  |  | $ | 5,540 |  |  | $ | 10,640 |  |  | $ | 10,490 |
Capital expenditures: |  |  |  |  |  |  |
Global Integrated Agencies | $ | 2,620 |  |  | $ | 8,788 |  |  | $ | 5,457 |  |  | $ | 15,696 |
Domestic Creative Agencies | 269 |  |  | 300 |  |  | 489 |  |  | 613 |
Specialist Communications | 2,225 |  |  | 175 |  |  | 2,465 |  |  | 467 |
Media Services | 185 |  |  | 298 |  |  | 418 |  |  | 1,799 |
All Other | 567 |  |  | 2,180 |  |  | 828 |  |  | 2,578 |
Corporate | 24 |  |  | 2 |  |  | 32 |  |  | 3 |
Total | $ | 5,890 |  |  | $ | 11,743 |  |  | $ | 9,689 |  |  | $ | 21,156 |
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. See Note 2 of the Notes to the Unaudited Condensed Consolidated Financial Statements included herein for a summary of the Company’s revenue by geographic region for three and six months ended June 30, 2018 and 2017.

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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 -URI http://asc.fasb.org/topic&trid=2134510 + Details
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