Acquisitions

Pro forma financial information has not been presented for 2014 since there were no material acquisitions. During 2014, the Company completed a number of non-material acquisitions and a number of step-up transactions to increase its equity ownership percentage in majority owned entities. Included in the Company’s consolidated statement of operations for the three and six months ended June 30, 2014 was revenue of $10,480 and $16,141 and net income of $3,456 and $4,085, respectively, related to 2014 acquisitions.

2014 Acquisitions

During 2014, the Company entered into several acquisitions and various immaterial transactions with certain majority owned entities. Effective January 1, 2014, MDC acquired 60% of the equity interests of Luntz Global Partners LLC (“LG”). Effective February 14, 2014, MDC acquired 65% of the equity interests of Kingsdale Partners LP (“Kingsdale”). LG and Kingsdale are both in the Company’s Performance Marketing Services segment. In addition, in June 2014, MDC (through a subsidiary) entered into an immaterial acquisition.

The aggregate purchase price of these acquisitions has an estimated present value at acquisition date of $100,574 and consisted of total closing cash payments of $43,315, and additional deferred acquisition payments that will be based on the financial results of the underlying businesses from 2013 to 2017 with final payments due in 2018. These additional deferred payments have an estimated present value at acquisition date of $57,259. An allocation of excess purchase price consideration of these acquisitions to the fair value of the net assets acquired resulted in identifiable intangibles of $24,374, consisting primarily of customer lists, a technology asset and covenants not to compete, and goodwill of $135,651, representing the value of the assembled workforce. The identified assets will be amortized over a five to six year period in a manner represented by the pattern in which the economic benefits of the customer contracts/relationships are realized. In addition, the Company has recorded $61,517 as the present value of noncontrolling interest. The intangibles and goodwill of $101,290 are tax deductible.

The actual adjustments that the Company will ultimately make in finalizing the allocation of purchase price to fair value of the net assets acquired will depend on a number of factors.

2013 Acquisitions

During the fourth quarter of 2013, the Company acquired a 70% interest in Local Biz Now LLC (“LBN”). The acquisition of LBN allows MDC to participate in the online local search market. LBN is in the Company’s Performance Marketing Services segment. During the year, the Company also entered into various immaterial transactions with certain majority owned entities.

The aggregate purchase price has an estimated present value at acquisition date of $38,202 and consisted of total closing cash payments of $12,000, and additional contingent deferred acquisition consideration that are based on the financial results of the underlying businesses from 2013 to 2017 with final payments due in 2018 that have an estimated present value at acquisition date of $26,202. An allocation of excess purchase price consideration of these acquisitions to the fair value of the net assets acquired resulted in identifiable intangibles of $10,835 consisting primarily of customer lists, a technology asset, and covenants not to compete, and goodwill of $35,956 representing the value of the assembled workforce. The identified assets will be amortized over a five to six year period in a manner represented by the pattern in which the economic benefits of the customer contracts/relationships are realized. In addition, the Company has recorded $11,090 as the present value of noncontrolling interest. The intangibles and goodwill of $46,791 are tax deductible.

The actual adjustments that the Company will ultimately make in finalizing the allocation of purchase price to fair value of the net assets acquired will depend on a number of factors.

Noncontrolling Interests

Changes in the Company’s ownership interests in our less than 100% owned subsidiaries during the six months ended June 30, were as follows:

Net Income (Loss) Attributable to MDC Partners Inc. and

Transfers (to) from the Noncontrolling Interest



	Three Months Ended June 30,					Six Months Ended June 30,
	2014			2013		2014			2013
Net income (loss) attributable to MDC Partners Inc.	$	16,470		$	9,816	$	7,624		$	(33,342	)
Transfers to (from) the noncontrolling Interest:
Increase (decrease) in MDC Partners Inc. paid in capital for purchase of equity interests in excess of Redeemable Noncontrolling Interests and Noncontrolling Interests	(1,440		)	10,875		(6,238		)	9,816
Net transfers to (from) noncontrolling interest	$	(1,440	)	$	10,875	$	(6,238	)	$	9,816
Change from Net income (loss) attributable to MDC Partners Inc. and transfers to non controlling interest	$	15,030		$	20,691	$	1,386		$	(23,526	)