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Segment Information
9 Months Ended
Sep. 30, 2013
Segment Reporting [Abstract]  
Segment Information
10.
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 two 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 two segments plus 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. Each of the entities within the Performance 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, the services provided to the customer and they exhibit similar long term financial performance and have been aggregated together.
 
The significant accounting polices 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 September 30, 2013
(thousands of United States dollars)
 
 
 
Strategic
Marketing
Services
 
Performance
Marketing
Services
 
Corporate
 
Total
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Revenue
 
$
203,440
 
$
85,467
 
$
 
$
288,907
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Cost of services sold
 
 
128,300
 
 
60,919
 
 
 
 
189,219
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Office and general expenses
 
 
40,995
 
 
14,907
 
 
33,074
 
 
88,976
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Depreciation and amortization
 
 
5,807
 
 
3,372
 
 
297
 
 
9,476
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Operating Profit (Loss)
 
 
28,338
 
 
6,269
 
 
(33,371)
 
 
1,236
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Other Income (Expense):
 
 
 
 
 
 
 
 
 
 
 
 
 
Other income, net
 
 
 
 
 
 
 
 
 
 
 
1,733
 
Interest expense, net
 
 
 
 
 
 
 
 
 
 
 
(10,552)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Loss from continuing operations before income taxes,
    equity in affiliates
 
 
 
 
 
 
 
 
 
 
 
(7,583)
 
Income tax expense
 
 
 
 
 
 
 
 
 
 
 
4,334
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Loss from continuing operations before equity in affiliates
 
 
 
 
 
 
 
 
 
 
 
(11,917)
 
Equity in earnings of non-consolidated affiliates
 
 
 
 
 
 
 
 
 
 
 
73
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Loss from continuing operations
 
 
 
 
 
 
 
 
 
 
 
(11,844)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Loss from discontinuing operations attributable to MDC
    Partners Inc., net of taxes
 
 
 
 
 
 
 
 
 
 
 
(7,446)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net loss
 
 
 
 
 
 
 
 
 
 
 
(19,290)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net income attributable to the noncontrolling interests
 
 
(1,471)
 
 
(439)
 
 
 
 
(1,910)
 
Net loss attributable to MDC Partners Inc.
 
 
 
 
 
 
 
 
 
 
$
(21,200)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Non cash stock based compensation
 
$
1,835
 
$
646
 
$
24,954
 
$
27,435
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Supplemental Segment Information:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Capital expenditures
 
$
2,613
 
$
844
 
$
908
 
$
4,365
 
 
Three Months Ended September 30, 2012
(thousands of United States dollars)
 
 
 
Strategic
Marketing
Services
 
Performance
Marketing
Services
 
Corporate
 
Total
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Revenue
 
$
176,209
 
$
89,646
 
$
 
$
265,855
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Cost of services sold
 
 
112,280
 
 
66,789
 
 
 
 
179,069
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Office and general expenses
 
 
47,754
 
 
18,300
 
 
6,288
 
 
72,342
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Depreciation and amortization
 
 
7,754
 
 
4,161
 
 
330
 
 
12,245
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Operating Profit (Loss)
 
 
8,421
 
 
396
 
 
(6,618)
 
 
2,199
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Other Income (Expense):
 
 
 
 
 
 
 
 
 
 
 
 
 
Other expense, net
 
 
 
 
 
 
 
 
 
 
 
(432)
 
Interest expense, net
 
 
 
 
 
 
 
 
 
 
 
(11,485)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Loss from continuing operations before income taxes,
    equity in affiliates
 
 
 
 
 
 
 
 
 
 
 
(9,718)
 
Income tax expense
 
 
 
 
 
 
 
 
 
 
 
2,207
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Loss from continuing operations before equity in affiliates
 
 
 
 
 
 
 
 
 
 
 
(11,925)
 
Equity in earnings of non-consolidated affiliates
 
 
 
 
 
 
 
 
 
 
 
93
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Loss from continuing operations
 
 
 
 
 
 
 
 
 
 
 
(11,832)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Loss from discontinuing operations attributable to MDC
    Partners Inc., net of taxes
 
 
 
 
 
 
 
 
 
 
 
(1,352)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net loss
 
 
 
 
 
 
 
 
 
 
 
(13,184)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net income attributable to the noncontrolling interests
 
 
(830)
 
 
(482)
 
 
 
 
(1,312)
 
Net loss attributable to MDC Partners Inc.
 
 
 
 
 
 
 
 
 
 
$
(14,496)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Non cash stock based compensation
 
$
2,769
 
$
2,009
 
$
355
 
$
5,133
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Supplemental Segment Information:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Capital expenditures
 
$
2,596
 
$
2,105
 
$
61
 
$
4,762
 
 
Nine Months Ended September 30, 2013
(thousands of United States dollars)
 
 
 
Strategic
Marketing
Services
 
Performance
Marketing
Services
 
Corporate
 
Total
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Revenue
 
$
587,540
 
$
254,980
 
$
 
$
842,520
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Cost of services sold
 
 
375,681
 
 
181,096
 
 
 
 
556,777
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Office and general expenses
 
 
115,759
 
 
53,860
 
 
47,916
 
 
217,535
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Depreciation and amortization
 
 
17,334
 
 
10,132
 
 
989
 
 
28,455
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Operating Profit (Loss)
 
 
78,766
 
 
9,892
 
 
(48,905)
 
 
39,753
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Other Income (Expense):
 
 
 
 
 
 
 
 
 
 
 
 
 
Other income, net
 
 
 
 
 
 
 
 
 
 
 
1,549
 
Interest expense, net
 
 
 
 
 
 
 
 
 
 
 
(88,778)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Loss from continuing operations before income taxes,
    equity in affiliates
 
 
 
 
 
 
 
 
 
 
 
(47,476)
 
Income tax benefit
 
 
 
 
 
 
 
 
 
 
 
(8,189)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Loss from continuing operations before equity in affiliates
 
 
 
 
 
 
 
 
 
 
 
(39,287)
 
Equity in earnings of non-consolidated affiliates
 
 
 
 
 
 
 
 
 
 
 
196
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Loss from continuing operations
 
 
 
 
 
 
 
 
 
 
 
(39,091)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Loss from discontinuing operations attributable to MDC
    Partners Inc., net of taxes
 
 
 
 
 
 
 
 
 
 
 
(11,041)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net loss
 
 
 
 
 
 
 
 
 
 
 
(50,132)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net income attributable to the noncontrolling interests
 
 
(3,578)
 
 
(832)
 
 
 
 
(4,410)
 
Net loss attributable to MDC Partners Inc.
 
 
 
 
 
 
 
 
 
 
$
(54,542)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Non cash stock based compensation
 
$
4,815
 
$
2,505
 
$
29,370
 
$
36,690
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Supplemental Segment Information:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Capital expenditures
 
$
8,223
 
$
4,225
 
$
1,528
 
$
13,976
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Goodwill and intangibles
 
$
520,408
 
$
241,737
 
$
 
$
762,145
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Total assets
 
$
845,342
 
$
376,577
 
$
143,768
 
$
1,365,687
 
 
Nine Months Ended September 30, 2012
(thousands of United States dollars)
 
 
 
Strategic
Marketing
Services
 
Performance
Marketing
Services
 
Corporate
 
Total
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Revenue
 
$
519,209
 
$
252,731
 
$
 
$
771,940
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Cost of services sold
 
 
353,145
 
 
186,964
 
 
 
 
540,109
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Office and general expenses
 
 
121,281
 
 
52,510
 
 
31,196
 
 
204,987
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Depreciation and amortization
 
 
21,602
 
 
13,006
 
 
1,007
 
 
35,615
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Operating Profit (Loss)
 
 
23,181
 
 
251
 
 
(32,203)
 
 
(8,771)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Other Income (Expense):
 
 
 
 
 
 
 
 
 
 
 
 
 
Other expense, net
 
 
 
 
 
 
 
 
 
 
 
(1,241)
 
Interest expense, net
 
 
 
 
 
 
 
 
 
 
 
(34,163)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Loss from continuing operations before income taxes,
    equity in affiliates
 
 
 
 
 
 
 
 
 
 
 
(44,175)
 
Income tax expense
 
 
 
 
 
 
 
 
 
 
 
6,014
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Loss from continuing operations before equity in affiliates
 
 
 
 
 
 
 
 
 
 
 
(50,189)
 
Equity in earnings of non-consolidated affiliates
 
 
 
 
 
 
 
 
 
 
 
399
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Loss from continuing operations
 
 
 
 
 
 
 
 
 
 
 
(49,790)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Loss from discontinuing operations attributable to MDC
    Partners Inc., net of taxes
 
 
 
 
 
 
 
 
 
 
 
(5,942)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net loss
 
 
 
 
 
 
 
 
 
 
 
(55,732)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net income attributable to the noncontrolling interests
 
 
(3,727)
 
 
(1,432)
 
 
 
 
(5,159)
 
Net loss attributable to MDC Partners Inc.
 
 
 
 
 
 
 
 
 
 
$
(60,891)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Non cash stock based compensation
 
$
6,602
 
$
5,587
 
$
14,181
 
$
26,370
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Supplemental Segment Information:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Capital expenditures
 
$
7,705
 
$
6,326
 
$
248
 
$
14,279
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Goodwill and intangibles
 
$
536,336
 
$
257,845
 
$
 
$
794,181
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Total assets
 
$
812,320
 
$
404,705
 
$
134,716
 
$
1,351,741
 
 
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 September 30,
 
 
 
 
 
 
 
 
 
 
 
 
 
2013
 
$
237,259
 
$
34,129
 
$
17,519
 
$
288,907
 
2012
 
$
218,313
 
$
34,753
 
$
12,789
 
$
265,855
 
Nine Months Ended September 30,
 
 
 
 
 
 
 
 
 
 
 
 
 
2013
 
$
694,670
 
$
100,612
 
$
47,238
 
$
842,520
 
2012
 
$
626,019
 
$
109,475
 
$
36,446
 
$
771,940