Segment Information

3 Months Ended

Mar. 31, 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 database marketing and data analytics 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 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 Group 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 our 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 the notes to the consolidated financial statements. The Company continues to evaluate its Corporate Group and the services provided by the Corporate Group to the operating segments.

Summary financial information concerning the Company’s operating segments is shown in the following tables:

Three Months Ended March 31, 2015

(thousands of United States dollars)

	Strategic Marketing Services			Performance Marketing Services			Corporate			Total
Revenue	$	240,436		$	61,786		$	—		$	302,222
Cost of services sold	166,026			44,393			—			210,419
Office and general expenses	49,156			11,154			13,998			74,308
Depreciation and amortization	6,423			5,430			447			12,300
Operating profit (loss)	18,831			809			(14,445		)	5,195
Other Income (Expense):
Other expense, net										(18,040		)
Interest expense, net										(14,977		)
Loss from continuing operations before income taxes and equity in non-consolidated affiliates										(27,822		)
Income tax benefit										(4,054		)
Loss from continuing operations before equity in non-consolidated affiliates										(23,768		)
Equity in earnings of non-consolidated affiliates										351
Loss from continuing operations										(23,417		)
Loss from discontinued operations attributable to MDC Partners Inc., net of taxes										(6,294		)
Net Loss										(29,711		)
Net income attributable to the non-controlling interests	(2,293		)	(87		)	—			(2,380		)
Net loss attributable to MDC Partners Inc.										$	(32,091	)
Stock based compensation	$	2,524		$	1,121		$	800		$	4,445
Supplemental Segment Information:
Capital expenditures	$	5,330		$	258		$	68		$	5,656
Goodwill and intangibles	$	553,066		$	363,156		$	—		$	916,222
Total Assets	$	918,200		$	565,411		$	156,514		$	1,640,125

Three Months Ended March 31, 2014

(thousands of United States dollars)

	Strategic Marketing Services			Performance Marketing Services			Corporate			Total
Revenue	$	214,804		$	60,050		$	—		$	274,854
Cost of services sold	140,560			40,908			—			181,468
Office and general expenses	45,046			16,315			9,975			71,336
Depreciation and amortization	5,148			4,832			502			10,482
Operating profit (loss)	24,050			(2,005		)	(10,477		)	11,568
Other Income (Expense):
Other expense,net										(6,571		)
Interest expense, net										(12,619		)
Loss from continuing operations before income taxes, equity in affiliates										(7,622		)
Income tax benefit										(346		)
Loss from continuing operations before equity in affiliates										(7,276		)
Equity in earnings of non-consolidated affiliates										63
Loss from continuing operations										(7,213		)
Loss from discontinuing operations attributable to MDC Partners Inc., net of taxes										(271		)
Net loss										(7,484		)
Net income attributable to the noncontrolling interests	(1,390		)	28			—			(1,362		)
Net loss attributable to MDC Partners Inc.										$	(8,846	)
Stock based compensation	$	2,139		$	1,277		$	952		$	4,368
Supplemental Segment Information:
Capital expenditures	$	1,702		$	253		$	541		$	2,496
Goodwill and intangibles	$	522,170		$	424,485		$	—		$	946,655
Total Assets	$	860,571		$	573,308		$	136,393		$	1,570,272

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 March 31,
2015	$	252,018	$	29,825	$	20,379	$	302,222
2014	$	228,833	$	30,913	$	15,108	$	274,854