Document And Entity Information
Document And Entity Information - shares | 3 Months Ended | |
Mar. 31, 2016 | Apr. 28, 2016 | |
Document Information [Line Items] | ||
Entity Registrant Name | MDC PARTNERS INC | |
Entity Central Index Key | 876,883 | |
Current Fiscal Year End Date | --12-31 | |
Entity Filer Category | Large Accelerated Filer | |
Trading Symbol | MDCA | |
Document Type | 10-Q | |
Document Period End Date | Mar. 31, 2016 | |
Document Fiscal Year Focus | 2,016 | |
Document Fiscal Period Focus | Q1 | |
Amendment Flag | false | |
Common Class A | ||
Document Information [Line Items] | ||
Entity Common Stock, Shares Outstanding | 51,651,737 | |
Common Class B | ||
Document Information [Line Items] | ||
Entity Common Stock, Shares Outstanding | 3,755 |
CONDENSED CONSOLIDATED STATEMEN
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2016 | Mar. 31, 2015 | |
Revenue: | ||
Services | $ 309,042 | $ 302,222 |
Operating Expenses: | ||
Cost of services sold | 211,446 | 210,419 |
Office and general expenses | 77,828 | 74,308 |
Depreciation and amortization | 11,220 | 12,300 |
Costs and Expenses, Total | 300,494 | 297,027 |
Operating profit | 8,548 | 5,195 |
Other Income (Expense): | ||
Other, net | 15,512 | (18,040) |
Interest expense and finance charges | (15,575) | (15,096) |
Loss on redemption of notes | (33,298) | 0 |
Interest income | 178 | 119 |
Nonoperating Income (Expense), Total | (33,183) | (33,017) |
Loss from continuing operations before income taxes and equity in earnings of non-consolidated affiliates | (24,635) | (27,822) |
Income tax benefit | (1,972) | (4,054) |
Loss from continuing operations before equity in earnings of non-consolidated affiliates | (22,663) | (23,768) |
Equity in earnings of non-consolidated affiliates | 229 | 351 |
Income from continuing operations | (22,434) | (23,417) |
Loss from discontinued operations attributable to MDC Partners Inc., net of taxes | 0 | (6,294) |
Net loss | (22,434) | (29,711) |
Net income attributable to the noncontrolling interests | (859) | (2,380) |
Net loss attributable to MDC Partners Inc. | $ (23,293) | $ (32,091) |
Basic and Diluted | ||
Loss from continuing operations attributable to MDC Partners Inc. common shareholders (usd per share) | $ (0.47) | $ (0.52) |
Income (Loss) from Continuing Operations, Per Basic and Diluted Share | (0.47) | (0.52) |
Income (Loss) from Discontinued Operations and Disposal of Discontinued Operations, Net of Tax, Per Basic and Diluted Share | 0 | (0.13) |
Earnings Per Share, Basic and Diluted | $ (0.47) | $ (0.65) |
Weighted Average Number of Common Shares Outstanding: | ||
Basic (USD per share) | 50,002,552 | 49,754,961 |
Weighted Average Number of Shares Outstanding, Basic and Diluted | 50,002,552 | 49,754,961 |
Diluted (USD per share) | 50,002,552 | 49,754,961 |
Share-based Compensation [Abstract] | ||
Cost of services sold | $ 3,136 | $ 2,738 |
Office and general expenses | 1,549 | 1,707 |
Total | $ 4,685 | $ 4,445 |
CONSOLIDATED STATEMENTS OF COMP
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2016 | Mar. 31, 2015 | |
Comprehensive Loss | ||
Net loss | $ (22,434) | $ (29,711) |
Other comprehensive income (loss), net of applicable tax: | ||
Foreign currency translation adjustment | 8,825 | (5,181) |
Other comprehensive income (loss) | (31,259) | (24,530) |
Other Comprehensive Income (Loss), Net of Tax | (8,825) | 5,181 |
Comprehensive income (loss) attributable to noncontrolling interests | (2,515) | 151 |
Comprehensive loss attributable to MDC Partners Inc. | $ (33,774) | $ (24,379) |
CONDENSED CONSOLIDATED BALANCE
CONDENSED CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands | Mar. 31, 2016 | Dec. 31, 2015 |
Current Assets: | ||
Cash and cash equivalents | $ 21,840 | $ 61,458 |
Cash held in trust | 5,330 | 5,122 |
Accounts receivable, less allowance for doubtful accounts of $1,465 and $1,306 | 392,639 | 361,044 |
Expenditures billable to clients | 22,320 | 44,012 |
Other current assets | 49,804 | 37,109 |
Total Current Assets | 491,933 | 508,745 |
Fixed assets, at cost, less accumulated depreciation of $101,117 and $96,554 | 64,755 | 63,557 |
Investments in non-consolidated affiliates | 6,632 | 6,263 |
Goodwill | 877,167 | 870,301 |
Other intangible assets, net | 67,493 | 72,382 |
Deferred tax asset | 20,597 | 15,367 |
Other assets | 42,978 | 41,010 |
Total Assets | 1,571,555 | 1,577,625 |
Current Liabilities: | ||
Accounts payable | 313,183 | 359,568 |
Trust Liability, Current | 5,330 | 5,122 |
Accruals and other liabilities | 212,869 | 297,964 |
Advance billings | 136,116 | 119,100 |
Current portion of long-term debt | 415 | 470 |
Current portion of deferred acquisition consideration | 98,061 | 130,400 |
Total Current Liabilities | 765,974 | 912,624 |
Long-term debt, less current portion | 896,694 | 728,413 |
Long-term portion of deferred acquisition consideration | 222,912 | 216,704 |
Other liabilities | 44,779 | 44,905 |
Deferred tax liabilities | 95,405 | 92,581 |
Total Liabilities | 2,025,764 | 1,995,227 |
Redeemable Noncontrolling Interests (Note 2) | $ 71,000 | $ 69,471 |
Commitments, Contingencies and Guarantees (Note 11) | ||
Shareholders’ Deficit: | ||
Charges in excess of capital | $ (326,701) | $ (315,261) |
Accumulated deficit | (550,283) | (526,990) |
Total Shareholders' Deficit | (525,209) | (487,073) |
Total Liabilities, Redeemable Noncontrolling Interests and Shareholders’ Deficit | 1,571,555 | 1,577,625 |
Common Class A | ||
Shareholders’ Deficit: | ||
Class A Shares, no par value, unlimited authorized, 50,253,153 and 49,986,705 shares issued and outstanding in 2016 and 2015 | 275,263 | 269,841 |
Class B Shares, no par value, unlimited authorized, 3,755 shares issued and outstanding in 2016 and 2015, each convertible into one Class A share | 275,263 | 269,841 |
Common Class B | ||
Shareholders’ Deficit: | ||
Class A Shares, no par value, unlimited authorized, 50,253,153 and 49,986,705 shares issued and outstanding in 2016 and 2015 | 1 | 1 |
Class B Shares, no par value, unlimited authorized, 3,755 shares issued and outstanding in 2016 and 2015, each convertible into one Class A share | 1 | 1 |
AOCI Including Portion Attributable to Noncontrolling Interest [Member] | ||
Shareholders’ Deficit: | ||
Accumulated other comprehensive income (loss) | (4,224) | 6,257 |
Total Shareholders' Deficit | (4,224) | 6,257 |
Parent [Member] | ||
Shareholders’ Deficit: | ||
Stockholders' Equity Attributable to Parent | (605,944) | (566,152) |
Total Shareholders' Deficit | (605,944) | (566,152) |
Noncontrolling Interest [Member] | ||
Shareholders’ Deficit: | ||
Noncontrolling Interests | 80,735 | 79,079 |
Total Shareholders' Deficit | $ 80,735 | $ 79,079 |
CONDENSED CONSOLIDATED BALANCE5
CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($) $ in Thousands | Mar. 31, 2016 | Dec. 31, 2015 |
Accounts receivable, allowance for doubtful accounts (in dollars) | $ 1,465 | $ 1,306 |
Accumulated depreciation (in dollars) | $ 101,117 | $ 96,554 |
Preferred stock, shares issued | 0 | 0 |
Shares to be issued, shares | 0 | 0 |
Common Class A | ||
Common stock, shares issued | 50,253,153 | 49,986,705 |
Common stock, shares outstanding | 50,253,153 | 49,986,705 |
Common Class B | ||
Common stock, shares issued | 3,755 | 3,755 |
Common stock, shares outstanding | 3,755 | 3,755 |
CONDENSED CONSOLIDATED STATEME6
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2016 | Mar. 31, 2015 | |
Cash flows from operating activities: | ||
Net loss | $ (22,434) | $ (29,711) |
Loss from discontinued operations attributable to MDC Partners Inc., net of taxes | 0 | (6,294) |
Loss from continuing operations | (22,434) | (23,417) |
Adjustments to reconcile net loss from continuing operations to cash used in operating activities: | ||
Stock-based compensation | 4,685 | 4,445 |
Depreciation | 5,028 | 4,537 |
Amortization of intangibles | 6,192 | 7,763 |
Amortization of deferred finance charges and debt discount | 7,021 | 1,494 |
Adjustment to deferred acquisition consideration | 6,440 | 2,801 |
Deferred income tax | (2,266) | (3,929) |
Earnings of non-consolidated affiliates | (229) | (351) |
Other non-current assets and liabilities | (1,482) | 733 |
Foreign exchange | (14,134) | 15,219 |
Changes in working capital: | ||
Accounts receivable | (31,586) | (97,760) |
Expenditures billable to clients | 21,692 | (5,721) |
Prepaid expenses and other current assets | (13,030) | (12,211) |
Accounts payable, accruals and other liabilities | (138,473) | (36,478) |
Advance billings | 17,016 | 30,496 |
Cash flows used in continuing operating activities | (128,687) | (112,379) |
Discontinued operations | 0 | (1,294) |
Net cash used in operating activities | (128,687) | (113,673) |
Cash flows used in investing activities: | ||
Capital expenditures | (5,539) | (5,656) |
Acquisitions, net of cash acquired | (1,774) | (1,310) |
Proceeds from sale of assets | 0 | 29 |
Other investments | (822) | (2,318) |
Distributions from non-consolidated affiliates | 7 | 342 |
Cash flows used in continuing investing activities | (8,128) | (8,913) |
Discontinued operations | 0 | (153) |
Net cash used in investing activities | (8,128) | (9,066) |
Cash flows provided by financing activities: | ||
Payments for (Proceeds from) Previous Acquisition | 30,479 | 11,142 |
Repayment of long-term debt | (156) | (126) |
Purchase of shares | (902) | (876) |
Premium Paid On Redemption Of Notes | 26,873 | 0 |
Payments of Financing Costs | 18,091 | 0 |
Distributions to noncontrolling interests | (2,399) | (2,839) |
Cash overdrafts | 6,271 | 32,103 |
Payment of dividends | (10,636) | (10,636) |
Cash flows provided by continuing financing activities | 98,714 | 26,086 |
Discontinued operations | 0 | (40) |
Net cash provided by financing activities | 98,714 | 26,046 |
Effect of exchange rate changes on cash and cash equivalents | (1,517) | 711 |
Decrease in cash and cash equivalents | (39,618) | (95,982) |
Cash and cash equivalents at beginning of period | 61,458 | 113,348 |
Cash and cash equivalents at end of period | 21,840 | 17,366 |
Supplemental disclosures: | ||
Cash income taxes paid | 143 | 540 |
Cash interest paid | 25,703 | 367 |
Change in assets held-in-trust | 208 | (246) |
Non-cash transactions: | ||
Capital leases | 156 | 42 |
Dividends payable | 1,115 | 1,384 |
Six Point Seven Five Percentage Notes [Member] | ||
Adjustments to reconcile net loss from continuing operations to cash used in operating activities: | ||
Loss on redemption of notes | 26,873 | 0 |
Cash flows provided by financing activities: | ||
Proceeds from Issuance of Senior Long-term Debt | 900,000 | 0 |
Repayments of Senior Debt | 735,000 | 0 |
Wells Fargo Capital Finance, LLC | Revolving Credit Facility [Member] | ||
Cash flows provided by financing activities: | ||
Repayments of Lines of Credit | (217,208) | (91,190) |
Proceeds from (Repayments of) Lines of Credit | $ 234,187 | $ 110,792 |
CONDENSED STATEMENTS OF SHAREHO
CONDENSED STATEMENTS OF SHAREHOLDERS' DEFICIT - 3 months ended Mar. 31, 2016 - USD ($) $ in Thousands | Total | Common StockCommon Class A | Common StockCommon Class B | Additional Paid-in Capital | Charges in Excess of Capital | Accumulated Deficit | Accumulated Other Comprehensive Income (Loss) | Parent [Member] | Noncontrolling Interest [Member] | Contingent Consideration, Liability Settlements [Domain] | Contingent Consideration, Liability Settlements [Domain]Parent [Member] |
Balance at Dec. 31, 2015 | $ (487,073) | $ 269,841 | $ 1 | $ 0 | $ (315,261) | $ (526,990) | $ 6,257 | $ (566,152) | $ 79,079 | ||
Balance (in shares) at Dec. 31, 2015 | 49,986,705 | 3,754.5 | |||||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||||||
Net loss attributable to MDC Partners Inc. | (23,293) | $ 0 | $ 0 | 0 | 0 | (23,293) | 0 | (23,293) | 0 | ||
Other Comprehensive income (loss) | (8,825) | 0 | 0 | 0 | 0 | 0 | (10,481) | (10,481) | 1,656 | ||
Issuance of restricted stock | 0 | $ 956 | $ 0 | (956) | 0 | 0 | 0 | 0 | 0 | ||
Stock Issued During Period, Shares, New Issues | 227,437 | ||||||||||
Stock Issued During Period, Value, New Issues | $ 5,368 | $ 5,368 | $ 5,368 | ||||||||
Issuance of restricted stock (in shares) | 79,278 | 0 | |||||||||
Shares acquired and cancelled | (902) | $ (902) | $ 0 | 0 | 0 | 0 | 0 | (902) | 0 | ||
Shares acquired and cancelled (in shares) | (40,267) | 0 | |||||||||
Stock-based compensation | 1,779 | $ 0 | $ 0 | 1,779 | 0 | 0 | 0 | 1,779 | 0 | ||
Changes in redemption value of redeemable noncontrolling interests | 1,423 | 0 | 0 | 0 | 0 | 0 | 0 | ||||
Temporary Equity, Accretion to Redemption Value | (1,423) | (1,423) | (1,423) | ||||||||
Changes in noncontrolling interests and redeemable noncontrolling interest from step-up transactions | 0 | ||||||||||
Dividends paid and to be paid | (10,840) | 0 | 0 | (10,840) | 0 | 0 | 0 | (10,840) | 0 | ||
Transfer to charges in excess of capital | 0 | 0 | 0 | 11,440 | (11,440) | 0 | 0 | 0 | 0 | ||
Balance at Mar. 31, 2016 | $ (525,209) | $ 275,263 | $ 1 | $ 0 | $ (326,701) | $ (550,283) | $ (4,224) | $ (605,944) | $ 80,735 | ||
Balance (in shares) at Mar. 31, 2016 | 50,253,153 | 3,755 |
Basis of Presentation
Basis of Presentation | 3 Months Ended |
Mar. 31, 2016 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Basis of Presentation | Basis of Presentation MDC Partners Inc. (the “Company” or “MDC”) has prepared the unaudited condensed consolidated interim financial statements included herein pursuant to the rules and regulations of the United States Securities and Exchange Commission (the “SEC”). Certain information and footnote disclosures normally included in annual financial statements prepared in accordance with generally accepted accounting principles (“GAAP”) of the United States of America (“U.S. GAAP”) have been condensed or omitted pursuant to these rules. The accompanying financial statements reflect all adjustments, consisting of normally recurring accruals, which in the opinion of management are necessary for a fair presentation, in all material respects, of the information contained therein. Results of operations for interim periods are not necessarily indicative of annual results. These statements should be read in conjunction with the consolidated financial statements and related notes included in the Annual Report on Form 10-K for the year ended December 31, 2015 . |
Significant Accounting Policies
Significant Accounting Policies | 3 Months Ended |
Mar. 31, 2016 | |
Accounting Policies [Abstract] | |
Significant Accounting Policies | Significant Accounting Policies The Company’s significant accounting policies are summarized as follows: Accounting Change. On January 1, 2016, the Company retrospectively adopted the FASB Accounting Standards Update (“ASU”) 2015-03, Interest - Imputation of Interest. This update requires that debt issuance costs related to a recognized debt liability be presented in the balance sheet as a direct deduction from the carrying amount of that debt liability. As a result of the adoption of this update, the balance sheet at December 31, 2015 and March 31, 2015 was adjusted to reflect the reclassification of $12,625 and $14,511 , respectively, from other assets to long-term debt. Principles of Consolidation . The accompanying condensed consolidated financial statements include the accounts of MDC Partners Inc. and its domestic and international controlled subsidiaries that are not considered variable interest entities, and variable interest entities for which the Company is the primary beneficiary. Intercompany balances and transactions have been eliminated in consolidation. Reclassifications . Certain reclassifications have been made to the prior period financial statements to conform to the current period presentation. Use of Estimates. The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions. These estimates and assumptions affect the reported amounts of assets and liabilities including goodwill, intangible assets, contingent deferred acquisition consideration, valuation allowances for receivables, deferred tax assets and the amounts of revenue and expenses reported during the period. These estimates are evaluated on an ongoing basis and are based on historical experience, current conditions and various other assumptions believed to be reasonable under the circumstances. Actual results could differ from these estimates. Fair Value. The Company applies the fair value measurement guidance of the Financial Accounting Standards Board (the “FASB”) Accounting Standards Codification (the “ASC”) Topic 820, Fair Value Measurements, for financial assets and liabilities that are required to be measured at fair value and for nonfinancial assets and liabilities that are not required to be measured at fair value on a recurring basis, including goodwill and other identifiable intangible assets. The measurement of fair value requires the use of techniques based on observable and unobservable inputs. Observable inputs reflect market data obtained from independent sources, while unobservable inputs reflect market assumptions. The inputs create the following fair value hierarchy: • Level 1 - Quoted prices for identical instruments in active markets. • Level 2 - Quoted prices for similar instruments in active markets; quoted prices for identical or similar instruments in markets that are not active; and model-derived valuations where inputs are observable or where significant value drivers are observable. • Level 3 - Instruments where significant value drivers are unobservable to third parties. When available, the Company uses quoted market prices to determine the fair value of its financial instruments and classifies such items in Level 1. In some cases, quoted market prices are used for similar instruments in active markets and the Company classifies such items in Level 2. Concentration of Credit Risk. The Company provides marketing communications services to clients who operate in most industry sectors. Credit is granted to qualified clients in the ordinary course of business. Due to the diversified nature of the Company’s client base, the Company does not believe that it is exposed to a concentration of credit risk. No client accounted for more than 10% of the Company’s consolidated accounts receivable at March 31, 2016 and December 31, 2015 . No clients accounted for 10% of the Company’s revenue for the three months ended March 31, 2016 or for the three months ended March 31, 2015 . Cash and Cash Equivalents. The Company’s cash equivalents are primarily comprised of investments in overnight interest-bearing deposits, commercial paper and money market instruments and other short-term investments with original maturity dates of three months or less at the time of purchase. The Company has a concentration of credit risk in that there are cash deposits in excess of federally insured amounts. Cash in Trust. A subsidiary of the Company holds restricted cash in trust accounts related to funds received on behalf of clients. Such amounts are held in escrow under depositary service agreements and distributed at the direction of the clients. The funds are presented as a corresponding liability on the balance sheet. Allowance for Doubtful Accounts . Trade receivables are stated at invoiced amounts less allowances for doubtful accounts. The allowances represent estimated uncollectible receivables associated with potential customer defaults usually due to customers’ potential insolvency. The allowances include amounts for certain customers where a risk of default has been specifically identified. The assessment of the likelihood of customer defaults is based on various factors, including the length of time the receivables are past due, historical experience and existing economic conditions. Expenditures Billable to Clients . Expenditures billable to clients consist principally of outside vendor costs incurred on behalf of clients when providing advertising, marketing and corporate communications services that have not yet been invoiced to clients. Such amounts are invoiced to clients at various times over the course of the production process. Fixed Assets . Fixed assets are stated at cost, net of accumulated depreciation. Computers, furniture and fixtures are depreciated on a straight-line basis over periods of three to seven years. Leasehold improvements are depreciated on a straight-line basis over the lesser of the term of the related lease or the estimated useful life of the asset. Repairs and maintenance costs are expensed as incurred. Equity Method Investments. The equity method is used to account for investments in entities in which the Company has an ownership interest of less than 50% and has significant influence, or joint control by contractual arrangement, (i) over the operating and financial policies of the affiliate or (ii) has an ownership interest greater than 50% ; however, the substantive participating rights of the noncontrolling interest shareholders preclude the Company from exercising unilateral control over the operating and financial policies of the affiliate. The Company’s investments accounted for using the equity method include a 30% undivided interest in a real estate joint venture and various interests in investment funds. The Company’s management periodically evaluates these investments to determine if there has been a decline in value that is other than temporary. These investments are included in investments in non-consolidated affiliates. Cost Method Investments. From time to time, the Company makes non-material cost based investments in start-up advertising technology companies and innovative consumer product companies where the Company does not exercise significant influence over the operating and financial policies of the investee. The total net cost basis of these investments, which is included in Other Assets on the balance sheet, at March 31, 2016 and December 31, 2015 was $12,645 and $11,763 , respectively. These investments are periodically evaluated to determine whether a significant event or change in circumstances has occurred that may impact the fair value of each investment other than temporary declines below book value. A variety of factors are considered when determining if a decline is other than temporary, including, among others, the financial condition and prospects of the investee, as well as the Company’s investment intent. In addition, the Company's partner agencies may receive minority equity interests from start-up companies in lieu of fees. Business Combinations. Business combinations are accounted for using the acquisition method and accordingly, the assets acquired (including identified intangible assets), the liabilities assumed and any noncontrolling interest in the acquired business are recorded at their acquisition date fair values. The Company’s acquisition model typically provides for an initial payment at closing and for future additional contingent purchase price obligations. Contingent purchase price obligations are recorded as deferred acquisition consideration on the balance sheet at the acquisition date fair value and are remeasured at each reporting period. Changes in such estimated values are recorded in the results of operations. For further information see Note 4 and Note 8. For the three months ended March 31, 2016 and 2015 , $6,327 and $2,248 of expense, respectively, related to changes in such estimated values was recorded in results of operations. The Company expenses acquisition related costs. For the three months ended March 31, 2016 and 2015 , $553 and $874 , respectively, of acquisition related costs were charged to operations. For each acquisition, the Company undertakes a detailed review to identify intangible assets and a valuation is performed for all such identified assets. The Company uses several market participant measurements to determine the estimated value. This approach includes consideration of similar and recent transactions, as well as utilizing discounted expected cash flow methodologies. Like most service businesses, a substantial portion of the intangible asset value that the Company acquires is the specialized know-how of the workforce, which is treated as part of goodwill and is not required to be valued separately. The majority of the value of the identifiable intangible assets acquired is derived from customer relationships, including the related customer contracts, as well as trade names. In executing the Company's overall acquisition strategy, one of the primary drivers in identifying and executing a specific transaction is the existence of, or the ability to, expand the existing client relationships. The expected benefits of the Company's acquisitions are typically shared across multiple agencies and regions. Redeemable Noncontrolling Interests . Many of the Company’s acquisitions include contractual arrangements where the noncontrolling shareholders have an option to purchase, or may require the Company to purchase, such noncontrolling shareholders' incremental ownership interests under certain circumstances and the Company has similar call options under the same contractual terms. The amount of consideration under these contractual arrangements is not a fixed amount, but rather is dependent upon various valuation formulas as described in Note 11. In the event that an incremental purchase may be required of the Company, the amounts are recorded as redeemable noncontrolling interests in mezzanine equity on the balance sheet at their acquisition date fair value and adjusted for changes to their estimated redemption value through additional paid-in capital (but not less than their initial redemption value), except for foreign currency translation adjustments. These adjustments will not impact the calculation of earnings (loss) per share. If the estimated redemption value is in excess of the fair value of the noncontrolling interests, the Company records a charge to income attributable to noncontrolling interests. For the three months ended March 31, 2016 and 2015 , there were no charges to income attributable to noncontrolling interests. Changes in the estimated redemption amounts of the redeemable noncontrolling interests are adjusted at each reporting period with a corresponding adjustment to equity. These adjustments will not impact the calculation of earnings (loss) per share. The following table presents changes in redeemable noncontrolling interests: Three Months Ended March 31, 2016 Year Ended December 31, 2015 Beginning Balance $ 69,471 $ 194,951 Redemptions — (155,042 ) Additions (1) — 7,703 Changes in redemption value 1,423 22,809 Currency Translation Adjustments 106 (950 ) Ending Balance $ 71,000 $ 69,471 (1) Additions in 2015 consisted of transfers from noncontrolling interests related to step-up transactions and new acquisitions. Subsidiary and Equity Investment Stock Transactions. Transactions involving the purchase, sale or issuance of stock of a subsidiary where control is maintained are recorded as a reduction in the redeemable noncontrolling interests or noncontrolling interests, as applicable. Any difference between the purchase price and noncontolling interest are recorded to additional paid-in capital. In circumstances where the purchase of shares of an equity investment results in obtaining control, the existing carrying value of the investment is remeasured to the acquisition date fair value and any gain or loss is recognized in results of operations. Variable Interest Entity . Effective March 28, 2012, the Company invested in Doner Partners LLC (“Doner”). The Company acquired a 30% voting interest and convertible preferred interests that allow the Company to increase ordinary voting ownership to 70% at the Company’s option. The Company has determined that (i) this entity is a variable interest entity, and (ii) the Company is the primary beneficiary because it receives a disproportionate share of profits and losses as compared to its ownership percentage. As such, Doner is consolidated for all periods subsequent to the date of investment. Doner is a full service integrated creative agency that is included as part of the Company's portfolio in the Advertising and Communications segment. The Company’s Credit Agreement (see Note 7) is guaranteed and secured by all of Doner’s assets. Total assets and total liabilities of Doner included in the Company’s consolidated balance sheet at March 31, 2016 were $113,235 and $77,668 , respectively, and at December 31, 2015 were $122,558 and $86,047 , respectively. Guarantees . Guarantees issued or modified by the Company to third parties after January 1, 2003 are generally recognized at the inception or modification of the guarantee as a liability for the obligations it has undertaken in issuing the guarantee, including its ongoing obligation to stand ready to perform over the term of the guarantee in the event that the specified triggering events or conditions occur. The initial measurement of that liability is the fair value of the guarantee. The recognition of a liability is required even if it is not probable that payments will be required under a guarantee. The Company’s liability associated with guarantees is not significant. (See Note 11). Revenue Recognition. The Company’s revenue recognition policies are established in accordance with the Revenue Recognition topics of the FASB ASC, and accordingly, revenue is recognized when all of the following criteria are satisfied: (i) persuasive evidence of an arrangement exists; (ii) the selling price is fixed or determinable; (iii) services have been performed or upon delivery of the products when ownership and risk of loss has transferred to the client; and (iv) collection of the resulting receivable is reasonably assured. The Company follows the Multiple-Element Arrangement topic of the FASB ASC, which addresses certain aspects of the accounting by a vendor for arrangements under which it will perform multiple revenue-generating activities and how to determine whether an arrangement involving multiple deliverables contains more than one unit of accounting. The Company follows the Principal Agent Consideration topic of the FASB ASC which addresses (i) whether revenue should be recorded at the gross amount billed because it has earned revenue from the sale of goods or services, or recorded at the net amount retained because it has earned a fee or commission, and (ii) that reimbursements received for out-of-pocket expenses incurred should be characterized in the income statement as revenue. Accordingly, the Company has included such reimbursed expenses in revenue. The Company earns revenue from agency arrangements in the form of retainer fees or commissions; from short-term project arrangements in the form of fixed fees or per diem fees for services; and from incentives or bonuses. Non-refundable retainer fees are generally recognized on a straight-line basis over the term of the specific customer arrangement. Commission revenue is earned and recognized upon the placement of advertisements in various media when the Company has no further performance obligations. Fixed fees for services are recognized upon completion of the earnings process and acceptance by the client. Per diem fees are recognized upon the performance of the Company’s services. In addition, for a limited number of certain service transactions, which require delivery of a number of service acts, the Company uses the proportional performance model, which generally results in revenue being recognized based on the straight-line method. Fees billed to clients in excess of fees recognized as revenue are classified as Advanced Billings on the Company's balance sheet. A small portion of the Company’s contractual arrangements with customers includes performance incentive provisions, which allow the Company to earn additional revenue as a result of its performance relative to both quantitative and qualitative goals. The Company recognizes the incentive portion of revenue under these arrangements when specific quantitative goals are assured, or when the Company’s clients determine performance against qualitative goals has been achieved. In all circumstances, revenue is only recognized when collection is reasonably assured. The Company records revenue net of sales and other taxes due to be collected and remitted to governmental authorities. Cost of Services Sold . Cost of services sold do not include depreciation charges for fixed assets. Interest Expense . Interest expense primarily consists of the cost of borrowing on the Company's previously outstanding 6.75% senior notes due 2020 (the “6.75% Notes”); the Company's 6.50% senior unsecured notes due 2024 (the “6.50% Notes”); and the Company's $325 million senior secured revolving credit agreement due 2019 (the “Credit Agreement”). The Company uses the effective interest method to amortize the deferred financing costs on the 6.75% Notes and the 6.50% Notes as well as the original issue premium on the 6.75% Notes. The Company also uses the straight-line method to amortize the deferred financing costs on the Credit Agreement. For the three months ended March 31, 2016 and 2015 , interest expense included $112 and $554 , respectively, relating to present value adjustments for fixed deferred acquisition consideration payments. The Company redeemed the 6.75% Notes with the net proceeds from the issuance of the 6.50% Notes. For further information see Note 7. Income Taxes. The Company’s U.S. operating units are generally structured as limited liability companies, which are treated as partnerships for tax purposes. The Company is only taxed on its share of profits, while noncontrolling holders are responsible for taxes on their share of the profits. The Company currently has a fully reserved valuation allowance on its deferred tax assets related to U.S. net operating losses. During the three months ended March 31, 2016 and 2015 , the Company's effective tax rate was substantially lower than the statutory rate due primarily to (i) the utilization of previously fully reserved net operating losses, and (ii) noncontrolling interest charges and losses in certain tax jurisdictions where a valuation allowance was deemed necessary, offset by non-deductible stock-based compensation. Stock-Based Compensation. Under the fair value method, compensation cost is measured at fair value at the date of grant and is expensed over the service period, in this case the award’s vesting period. When awards are exercised, share capital is credited by the sum of the consideration paid, together with the related portion previously credited to additional paid-in capital when compensation costs were charged against income or acquisition consideration. The Company uses its historical volatility derived over the expected term of the award to determine the volatility factor used in determining the fair value of the award. Stock-based awards that are settled in cash, or may be settled in cash at the option of employees, are recorded as liabilities. The measurement of the liability and compensation cost for these awards is based on the fair value of the award, and is recorded in operating income over the service period, in this case the award's vesting period. Changes in the Company’s payment obligation prior to the settlement date of a stock-based award are recorded as compensation cost in operating income in the period of the change. The final payment amount for such awards is established on the date of the exercise of the award by the employee. Stock-based awards that are settled in cash or equity at the option of the Company are recorded at fair value on the date of grant and recorded as additional paid-in capital. The fair value measurement of the compensation cost for these awards is based on using the Black-Scholes option pricing-model and is recorded in operating income over the service period, in this case the award's vesting period. It is the Company’s policy for issuing shares upon the exercise and/or vesting of an equity incentive award to calculate and verify the amount of shares to be issued, as well as the amount of proceeds to be collected (if any) and to deliver new shares to the exercising party. The Company has adopted the straight-line attribution method for determining the compensation cost to be recorded during each accounting period. However, awards based on performance conditions are recorded as compensation expense when the performance conditions are expected to be met. The Company treats benefits paid by shareholders or equity members to employees as a stock-based compensation charge with a corresponding credit to additional paid-in-capital. From time to time, certain acquisitions and step-up transactions include an element of compensation related payments. The Company accounts for those payments as stock-based compensation. During the three months ended March 31, 2016 , the Company issued 111,500 restricted stock units (“RSUs”) to its employees and directors. The RSUs have an aggregate grant date fair value of $2,018 and generally vest on the third anniversary of the date of grant. In addition, the Company issued 527,348 restricted stock awards. The vesting of these awards are contingent upon the Company meeting a cumulative three year earnings target and vesting date. Once the Company defines the earnings target and the vesting conditions and a grant date is established, the Company will record the compensation expense over the vesting period. A total of 1,376,388 Class A shares of restricted stock, granted to employees as equity incentive awards but not yet vested, has been excluded in the Company’s calculation of Class A shares outstanding as of March 31, 2016 . Loss per Common Share . Basic loss per share is based upon the weighted average number of common shares outstanding during each period, including the “Share capital to be issued” as reflected in Shareholders’ Equity on the balance sheet. Diluted loss per share is based on the above, plus, if dilutive, common share equivalents, which include outstanding options, stock appreciation rights, and unvested restricted stock units. Foreign Currency Translation . The Company’s financial statements were prepared in accordance with the requirements of the Foreign Currency Translation topic of the FASB ASC. The functional currency of the Company is the Canadian dollar and it has decided to use U.S. dollars as its reporting currency for consolidated reporting purposes. Generally, the Company’s subsidiaries use their local currency as their functional currency. Accordingly, the currency impacts of the translation of the balance sheets of the Company’s non-U.S. dollar based subsidiaries to U.S. dollar statements are included as cumulative translation adjustments in accumulated other comprehensive income. Translation of intercompany debt, which is not intended to be repaid, is included in cumulative translation adjustments. Cumulative translation adjustments are not included in net earnings unless they are actually realized through a sale or upon complete or substantially complete liquidation of the Company’s net investment in the foreign operation. Translation of current intercompany balances are included in net earnings. The balance sheets of non-U.S. dollar based subsidiaries are translated at the period end rate. The income statements of non-U.S. dollar based subsidiaries are translated at average exchange rates for the period. Gains and losses arising from the Company’s foreign currency transactions are reflected in net earnings. Unrealized gains or losses arising on the translation of certain intercompany foreign currency transactions that are of a long-term nature (that is settlement is not planned or anticipated in the future) are included as cumulative translation adjustments in accumulated other comprehensive income. |
Loss Per Common Share
Loss Per Common Share | 3 Months Ended |
Mar. 31, 2016 | |
Earnings Per Share [Abstract] | |
Loss Per Common Share | Loss Per Common Share The following table sets forth the computation of basic and diluted loss per common share from continuing operations. Three Months Ended 2016 2015 Numerator Numerator for basic loss per common share - loss from continuing operations $ (22,434 ) $ (23,417 ) Net income attributable to the noncontrolling interests (859 ) (2,380 ) Net loss from continuing operations attributable to MDC Partners Inc. common shareholders (23,293 ) (25,797 ) Effect of dilutive securities — — Numerator for diluted loss per common share - loss attributable to MDC Partners Inc. common shareholders from continuing operations $ (23,293 ) $ (25,797 ) Denominator Denominator for basic loss per common share - weighted average common shares 50,002,552 49,754,961 Effect of dilutive securities — — Denominator for diluted loss per common share - adjusted weighted shares and assumed conversions 50,002,552 49,754,961 Basic loss per common share from continuing operations $ (0.47 ) $ (0.52 ) Diluted loss per common share from continuing operations $ (0.47 ) $ (0.52 ) During the three months ended March 31, 2016 , options and other rights to purchase 1,498,535 shares of common stock, which includes 1,423,535 shares of non-vested restricted stock and restricted stock units, were outstanding and were excluded in the computation of diluted income per common share. During the three months ended March 31, 2015 , options and other rights to purchase 944,835 shares of common stock, which includes 832,335 shares of non-vested restricted stock, were outstanding and were not included in the computation of diluted income per common share. |
Acquisitions
Acquisitions | 3 Months Ended |
Mar. 31, 2016 | |
Business Combinations [Abstract] | |
Acquisitions | Acquisitions Valuations of acquired companies are based on a number of factors, including specialized know-how, reputation, competitive position and service offerings. The Company's acquisition strategy has been focused on acquiring the expertise of an assembled workforce in order to continue to build upon the core capabilities of its various strategic business platforms to better serve the Company's clients. MDC’s strategy includes acquiring ownership stakes in well-managed businesses with strong reputations in the industry. The Company’s model of “Perpetual Partnership” often involves acquiring a majority interest rather than a 100% interest and leaving management owners with a significant financial interest in the performance of the acquired entity for a minimum period of time, typically not less than five years. The Company’s acquisition model in this scenario typically provides for (i) an initial payment at the time of closing, (ii) additional contingent purchase price obligations based on the future performance of the acquired entity, and (iii) an option by the Company to purchase (and in some instances a requirement to so purchase) the remaining interest of the acquired entity under a predetermined formula. Contingent purchase price obligations. The Company's contingent purchase price obligations are generally payable within a five year period following the acquisition date, and are based on (i) the achievement of specific thresholds of future earnings, and (ii) in certain cases, the growth rate of those earnings. Contingent purchase price obligations are recorded as deferred acquisition consideration on the balance sheet at the acquisition date fair value and adjusted at each reporting period through operating income or net interest expense, depending on the nature of the arrangement. See Note 8 for additional information on deferred acquisition consideration. Options to purchase . When acquiring less than 100% ownership, the Company may enter into agreements that give the Company an option to purchase, or require the Company to purchase, the incremental ownership interests under certain circumstances. Where the option to purchase the incremental ownership is within the Company's control, the amounts are recorded as noncontrolling interests in the equity section of the Company's balance sheet. Where the incremental purchase may be required of the Company, the amounts are recorded as redeemable noncontrolling interests in mezzanine equity at their acquisition date estimated redemption value and adjusted at each reporting period for changes to their estimated redemption value through additional paid-in capital (but not less than their initial redemption value), except for foreign currency translation adjustments. On occasion, the Company may initiate a renegotiation to acquire an incremental ownership interest and the amount of consideration paid may differ materially from the balance sheet amounts. See Note 11 for additional information on redeemable noncontrolling interests. Employment conditions. From time to time, specifically when the projected success of an acquisition is deemed to be dependent on retention of specific personnel, such acquisition may include deferred payments that are contingent upon employment terms as well as financial performance. The Company accounts for those payments through operating income as stock-based compensation over the required retention period. For the three months ended March 31, 2016 and 2015 , stock-based compensation included $2,906 and $2,668 , respectively, of expense relating to those payments. Distributions to minority shareholders. If minority shareholders have the right to receive distributions based on the profitability of an acquired entity, the amount is recorded as income attributable to noncontrolling interests. However, there are circumstances when the Company acquires a majority interest and the selling shareholders waive their right to receive distributions with respect to their retained interest for a period of time, typically not less than five years. Under this model, the right to receive such distributions typically begins concurrently with the purchase option period and, therefore, if such option is exercised at the first available date the Company may not record any minority interest over the entire period from the initial acquisition date through the acquisition date of the remaining interests. Pro forma financial information has not been presented for 2016 as there were no material acquisitions. 2015 Acquisitions Effective May 1, 2015, the Company acquired a majority of the equity interests of Y Media Labs LLC, such that following the transaction, the Company's effective ownership was 60% . Effective October 31, 2015, the Company acquired substantially 100% of the assets of Unique Influence, LLC (and certain other affiliated entities). The aggregate purchase price of these acquisitions had an estimated present value at acquisition date of $55,279 and consisted of total closing cash payments of $23,000 and additional deferred acquisition payments that will be based on the future financial results of the underlying businesses from 2015 to 2020 with final payments due in 2022. These additional deferred payments have an estimated present value at acquisition date of $32,279 . An allocation of excess purchase price consideration of this acquisition to the fair value of the net assets acquired resulted in identifiable intangibles of $16,721 , consisting primarily of customer lists, trade names and covenants not to compete, and goodwill of $43,654 , representing the value of the assembled workforce. The identified assets have a weighted average useful life of approximately 6.3 years and will be amortized 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 $1,999 as the present value of redeemable noncontrolling interests. The Company expects intangibles and goodwill of $9,720 to be 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. In 2015, the Company acquired incremental ownership interests of Sloane & Company LLC, Anomaly Partners LLC, Allison & Partners LLC, Relevent Partners LLC, Kenna Communications LP and 72andSunny Partners LLC. In addition, the Company also entered into various non-material transactions in connection with other majority owned entities. The aggregate purchase price for these 2015 acquisitions of incremental ownership interests has an estimated present value at transaction date of $200,822 and consisted of total closing cash payments of $37,467 and additional deferred acquisition payments that are both fixed and based on the future financial results of the underlying businesses from 2015 to 2021 with final payments due in 2022. These additional deferred payments have an estimated present value at acquisition date of $163,355 . The Company reduced redeemable noncontrolling interests by $149,335 and noncontrolling interests by $8,708 . The difference between the purchase price and the noncontrolling interests of $42,780 was recorded in additional paid-in capital. 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 three months ended March 31, 2016 and 2015 were as follows: Net Loss Attributable to MDC Partners Inc. and Transfers (to) from the Noncontrolling Interests Three Months Ended March 31, 2016 2015 Net loss attributable to MDC Partners Inc. $ (23,293 ) $ (32,091 ) Transfers to (from) the noncontrolling interest: Decrease in MDC Partners Inc. paid-in capital for purchase of equity interests in excess of redeemable noncontrolling interests and noncontrolling interests — (2,917 ) Net transfers to (from) noncontrolling interests $ — $ (2,917 ) Change from net loss attributable to MDC Partners Inc. and transfers to noncontrolling interests $ (23,293 ) $ (35,008 ) |
Accruals and Other Liabilities
Accruals and Other Liabilities | 3 Months Ended |
Mar. 31, 2016 | |
Accrued and Other Liabilities [Abstract] | |
Accruals and Other Liabilities | Accruals and Other Liabilities At March 31, 2016 and December 31, 2015 , accruals and other liabilities included accrued media of $138,441 and $187,540 , respectively; and included amounts due to noncontrolling interest holders, for their share of profits, which will be distributed within the next twelve months of $3,921 and $5,473 , respectively. Changes in amounts due to noncontrolling interest holders included in accrued and other liabilities for the year ended December 31, 2015 and three months ended March 31, 2016 were as follows: Noncontrolling Balance, December 31, 2014 $ 6,014 Income attributable to noncontrolling interests 9,054 Distributions made (9,503 ) Other (1) (92 ) Balance, December 31, 2015 $ 5,473 Income attributable to noncontrolling interests 859 Distributions made (2,399 ) Other (1) (12 ) Balance, March 31, 2016 $ 3,921 (1) Other consists primarily of step-up transactions and cumulative translation adjustments. |
Discontinued Operations
Discontinued Operations | 3 Months Ended |
Mar. 31, 2016 | |
Discontinued Operations and Disposal Groups [Abstract] | |
Discontinued Operations | Discontinued Operations Effective May 31, 2015, the Company completed the sale of Accent Marketing Services, L.L.C. for an aggregate selling price of $17,102 , net of transaction expenses. There were no discontinued operations for the three months ended March 31, 2016. Included in discontinued operations in the Company’s consolidated statements of operations for the three months ended March 31, 2015 were the following: Three Months Ended 2015 Revenue $ 15,524 Operating loss (1,552 ) Other expense (72 ) Loss on disposal (4,670 ) Net loss from discontinued operations attributable to MDC Partners Inc., net of taxes $ (6,294 ) At March 31, 2016 and December 31, 2015 , the Company had no assets classified as held for sale. |
Debt
Debt | 3 Months Ended |
Mar. 31, 2016 | |
Debt Disclosure [Abstract] | |
Debt | Debt The Company's indebtedness was comprised as follows: March 31, December 31, 2015 Revolving credit agreement $ 16,979 $ — 6.50% Senior Notes due 2024 900,000 — 6.75% Senior Notes due 2020 — 735,000 Original issue premium — 5,838 Debt issuance costs (20,389 ) (12,625 ) 896,590 728,213 Obligations under capital leases 519 670 897,109 728,883 Less current portion: 415 470 $ 896,694 $ 728,413 6.50% Senior Notes On March 23, 2016, MDC entered into an indenture (the “Indenture”) among MDC, its existing and future restricted subsidiaries that guarantee, or are co-borrowers under or grant liens to secure, the Credit Agreement, as guarantors (the “Guarantors”) and The Bank of New York Mellon, as trustee, relating to the issuance by MDC of $900,000 aggregate principal amount of the 6.50% Notes. The 6.50% Notes were sold in a private placement in reliance on exceptions from registration under the the Securities Act of 1933. The 6.50% Notes bear interest at a rate of 6.50% per annum, accruing from March 23, 2016. Interest is payable semiannually in arrears on May 1 and November 1 of each year, beginning November 1, 2016. The 6.50% Notes mature on May 1, 2024 , unless earlier redeemed or repurchased. The Company received net proceeds from the offering of the 6.50% Notes equal to approximately $880,000 . The Company used the net proceeds to redeem all of its existing 6.75% Notes, together with accrued interest, related premiums, fees and expenses and recorded a charge for the loss on redemption of such notes of $33,298 , including write offs of unamortized original issue premium and debt issuance costs. Remaining proceeds were used for general corporate purposes, including funding of deferred acquisition consideration. The 6.50% Notes are guaranteed on a senior unsecured basis by all of MDC’s existing and future restricted subsidiaries that guarantee, or are co-borrowers under or grant liens to secure, the Credit Agreement. The 6.50% Notes are unsecured and unsubordinated obligations of MDC and rank (i) equally in right of payment with all of MDC’s or any Guarantor’s existing and future senior indebtedness, (ii) senior in right of payment to MDC’s or any Guarantor’s existing and future subordinated indebtedness, (iii) effectively subordinated to all of MDC’s or any Guarantor’s existing and future secured indebtedness to the extent of the collateral securing such indebtedness, including the Credit Agreement, and (iv) structurally subordinated to all existing and future liabilities of MDC’s subsidiaries that are not Guarantors. MDC may, at its option, redeem the 6.50% Notes in whole at any time or in part from time to time, on and after May 1, 2019 (i) at a redemption price of 104.875% of the principal amount thereof if redeemed during the twelve-month period beginning on May 1, 2019 , (ii) at a redemption price of 103.250% of the principal amount thereof if redeemed during the twelve-month period beginning on May 1, 2020 , (iii) at a redemption price of 101.625% of the principal amount thereof if redeemed during the twelve-month period beginning on May 1, 2021 , and (iv) at a redemption price of 100% of the principal amount thereof if redeemed on May 1, 2022 and thereafter. Prior to May 1, 2019 , MDC may, at its option, redeem some or all of the 6.50% Notes at a price equal to 100% of the principal amount of the 6.50% Notes plus a “make whole” premium and accrued and unpaid interest. MDC may also redeem, at its option, prior to May 1, 2019 , up to 35% of the 6.50% Notes with the proceeds from one or more equity offerings at a redemption price of 106.50% of the principal amount thereof. If MDC experiences certain kinds of changes of control (as defined in the Indenture), holders of the 6.50% Notes may require MDC to repurchase any 6.50% Notes held by them at a price equal to 101% of the principal amount of the 6.50% Notes plus accrued and unpaid interest. In addition, if MDC sells assets under certain circumstances, it must apply the proceeds from such sale and offer to repurchase the 6.50% Notes at a price equal to 100% of the principal amount plus accrued and unpaid interest. The Indenture includes covenants that, among other things, restrict MDC’s ability and the ability of its restricted subsidiaries (as defined in the Indenture) to incur or guarantee additional indebtedness; pay dividends on or redeem or repurchase the capital stock of MDC; make certain types of investments; create restrictions on the payment of dividends or other amounts from MDC’s restricted subsidiaries; sell assets; enter into transactions with affiliates; create liens; enter into sale and leaseback transactions; and consolidate or merge with or into, or sell substantially all of MDC’s assets to, another person. These covenants are subject to a number of important limitations and exceptions. The 6.50% Notes are also subject to customary events of default, including a cross-payment default and cross-acceleration provision. Redemption of 6.75% Senior Notes On March 23, 2016, the Company redeemed the 6.75% Notes in whole at a redemption price of 103.375% of the principal amount thereof with the proceeds from the issuance of the 6.50% Notes. Credit Agreement On March 20, 2013, MDC, Maxxcom Inc. (a subsidiary of MDC) and each of their subsidiaries party thereto entered into an amended and restated, $225 million senior secured revolving credit agreement due 2018 (the “Credit Agreement”) with Wells Fargo Capital Finance, LLC, as agent, and the lenders from time to time party thereto. Advances under the Credit Agreement are to be used for working capital and general corporate purposes, in each case pursuant to the terms of the Credit Agreement. Capitalized terms used in this section and not otherwise defined have the meanings set forth in the Credit Agreement. Effective October 23, 2014, MDC and its subsidiaries entered into an amendment to its Credit Agreement. The amendment: (i) expands the commitments under the facility by $100 million , from $225 million to $325 million ; (ii) extends the date by an additional eighteen months to September 30, 2019 ; (iii) reduces the base borrowing interest rate by 25 basis points (the applicable margin for borrowing is 1.00% in the case of Base Rate Loans and 1.75% in the case of LIBOR Rate Loans) ; and (iv) modifies certain covenants to provide the Company with increased flexibility to fund its continued growth and other general corporate purposes. Advances under the Credit Agreement bear interest as follows: (a)(i) LIBOR Rate Loans bear interest at the LIBOR Rate and (ii) Base Rate Loans bear interest at the Base Rate, plus (b) an applicable margin. The initial applicable margin for borrowing is 1.00% in the case of Base Rate Loans and 1.75% in the case of LIBOR Rate Loans. In addition to paying interest on outstanding principal under the Credit Agreement, MDC is required to pay an unused revolver fee to lenders under the Credit Agreement in respect of unused commitments thereunder. The Credit Agreement is guaranteed by substantially all of MDC’s present and future subsidiaries, other than immaterial subsidiaries and subject to customary exceptions. The Credit Agreement includes covenants that, among other things, restrict MDC’s ability and the ability of its subsidiaries to incur or guarantee additional indebtedness; pay dividends on or redeem or repurchase the capital stock of MDC; make certain types of investments; impose limitations on dividends or other amounts from MDC’s subsidiaries; incur certain liens, sell or otherwise dispose of certain assets; enter into transactions with affiliates; enter into sale and leaseback transactions; and consolidate or merge with or into, or sell substantially all of MDC’s assets to, another person. These covenants are subject to a number of important limitations and exceptions. The Credit Agreement also contains financial covenants, including a total leverage ratio, a senior leverage ratio, a fixed charge coverage ratio and a minimum earnings level. The Credit Agreement is also subject to customary events of default. The Company is currently in compliance with all of the terms and conditions of its Credit Agreement, and management believes, based on its current financial projections, that the Company will be in compliance with the covenants over the next twelve months. At March 31, 2016 , there were $16,979 borrowings under the Credit Agreement. At March 31, 2016 , the Company had issued $4,597 of undrawn outstanding letters of credit. At March 31, 2016 and December 31, 2015 , accounts payable included $67,287 and $73,558 of outstanding checks, respectively. |
Fair Value Measurements
Fair Value Measurements | 3 Months Ended |
Mar. 31, 2016 | |
Fair Value Disclosures [Abstract] | |
Fair Value Measurements | Fair Value Measurements Authoritative guidance for fair value establishes a framework for measuring fair value. A fair value measurement assumes a transaction to sell an asset or transfer a liability occurs in the principal market for the asset or liability or, in the absence of a principal market, the most advantageous market for the asset or liability. In order to increase consistency and comparability in fair value measurements, the guidance establishes a hierarchy for observable and unobservable inputs used to measure fair value into three broad levels, which are described below: • Level 1 - Quoted prices (unadjusted) in active markets that are accessible at the measurement date for assets or liabilities. The fair value hierarchy gives the highest priority to Level 1 inputs. • Level 2 - Observable prices that are based on inputs not quoted on active markets, but corroborated by market data. • Level 3 - Unobservable inputs are used when little or no market data is available. The fair value hierarchy gives the lowest priority to Level 3 inputs. In determining fair value, the Company utilizes valuation techniques that maximize the use of observable inputs and minimize the use of unobservable inputs to the extent possible as well as considers counterparty credit risk in its assessment of fair value. Financial Liabilities Measured at Fair Value on a Recurring Basis The following tables present certain information for the financial liabilities that are disclosed at fair value on a recurring basis at March 31, 2016 and December 31, 2015 : Level 1 Level 1 March 31, 2016 December 31, 2015 Carrying Fair Value Carrying Fair Value Liabilities: 6.50% Senior Notes due 2024 $ 900,000 $ 918,000 $ — $ — 6.75% Senior Notes due 2020 — — 740,838 765,319 Long-term debt includes fixed rate debt. The fair value of this instrument is based on quoted market prices. The following table presents changes in deferred acquisition consideration: Fair Value Measurements Using Significant Unobservable Inputs March 31, December 31, 2016 2015 Beginning Balance of contingent payments $ 306,734 $ 172,227 Payments (1) (6,188 ) (77,301 ) Additions (2) 517 174,530 Redemption value adjustments (3) 8,321 41,636 Foreign translation adjustment 1,549 (4,358 ) Ending Balance of contingent payments $ 310,933 $ 306,734 (1) For the three months ended March 31, 2016 , payments include $5,368 of deferred acquisition consideration settled through the issuance of 227,437 MDC Class A Shares in lieu of cash. (2) Additions are the initial estimated deferred acquisition payments of new acquisitions and step-up transactions completed within that fiscal period. (3) Redemption value adjustments are fair value changes from the Company's initial estimates of deferred acquisition payments, including the accretion of present value and stock-based compensation charges relating to acquisition payments that are tied to continued employment. In addition to the above amounts, there are fixed payments of $10,040 and $40,370 for total deferred acquisition consideration of $320,973 and $347,104 , which reconciles to the consolidated balance sheets at March 31, 2016 and December 31, 2015 , respectively. The Company includes the payments of all deferred acquisition consideration in financing activities in the Company's consolidated statement of cash flows as the Company believes these payments to be seller-related financing activities, which is the predominant source of cash flows. Level 3 payments relate to payments made for deferred acquisition consideration. Level 3 grants relate to contingent purchase price obligations related to acquisitions and are recorded on the balance sheet at the acquisition date fair value. The estimated liability is determined in accordance with various contractual valuation formulas that may be dependent on future events, such as the growth rate of the earnings of the relevant subsidiary during the contractual period and, in some cases, the currency exchange rate as of the date of payment. Level 3 redemption value adjustments relate to the remeasurement and change in these various contractual valuation formulas as well as adjustments of present value. At March 31, 2016 and December 31, 2015 , the carrying amount of the Company’s financial instruments, including cash and cash equivalents, accounts receivable and accounts payable, approximated fair value because of their short-term maturity. The Company does not disclose the fair value for equity method investments or investments held at cost as it is not practical to estimate fair value since there is no readily available market data. Non-financial Assets and Liabilities that are Measured at Fair Value on a Nonrecurring Basis On a nonrecurring basis, the Company uses fair value measures when analyzing asset impairment. Long-lived assets and certain identifiable intangible assets are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. If it is determined such indicators are present and the review indicates that the assets will not be fully recoverable, based on undiscounted estimated cash flows over the remaining amortization periods, their carrying values are reduced to estimated fair value. Measurements based on undiscounted cash flows are considered to be Level 3 inputs. During the fourth quarter of each year, the Company evaluates goodwill and indefinite-lived intangibles for impairment at the reporting unit level. For each acquisition, the Company performed a detailed review to identify intangible assets and a valuation is performed for all such identified assets. The Company used several market participant measurements to determine estimated value. This approach includes consideration of similar and recent transactions, as well as utilizing discounted expected cash flow methodologies. The amounts allocated to assets acquired and liabilities assumed in the acquisitions were determined using Level 3 inputs. Fair value for property and equipment was based on other observable transactions for similar property and equipment. Accounts receivable represents the best estimate of balances that will ultimately be collected, which is based in part on allowance for doubtful accounts reserve criteria and an evaluation of the specific receivable balances. |
Other Income (Expense)
Other Income (Expense) | 3 Months Ended |
Mar. 31, 2016 | |
Other Income and Expenses [Abstract] | |
Other Income (Expense) | Other Income (Expense) Three Months Ended March 31, 2016 2015 Other income $ 58 $ 490 Foreign currency gain (loss) 15,454 (18,530 ) $ 15,512 $ (18,040 ) |
Segment Information
Segment Information | 3 Months Ended |
Mar. 31, 2016 | |
Segment Reporting [Abstract] | |
Segment Information | Segment Information The Company determines an operating segment if a component (1) engages in business activities from which it earns revenues and incurs expenses, (2) has discrete financial information that is, and (3) regularly reviewed by the Chief Operating Decision Maker (“CODM”) to make decisions about resources to be allocated to the segment and assess its performance. During 2015, the Company had a change in the CODM as well as a change in how the CODM manages the business. As a result, in the fourth quarter of 2015, the Company reassessed its determination of operating segments. Decisions regarding allocations of resources are made and will be made based on the overall performance of the overall Partner Firm network. Therefore, the Company has determined that the Partner Firm network represents its operating segment. The Company also reassessed its previous allocation methodology and has conformed the allocations to align with how the CODM manages the business. The overall Partner Firm network consists of each of the Company's operating agencies. The Company now reports in one reportable Advertising and Communications segment in addition to the Corporate Group described as follows: • The Advertising and Communications segment consists of Partner Firms that deliver innovative, value-added marketing, activation, communications and strategic consulting services to their clients. MDC and its Partner Firms deliver a wide range of customized services, including (1) multi-channel media management and optimization, (2) interactive and mobile marketing, (3) direct marketing, (4) database and customer relationship management, (5) sales promotion, (6) corporate communications, (7) market research, (8) data analytics and insights, (9) corporate identity, design and branding services, (10) social media communications, (11) product and service innovation and (12) e-commerce management. • The Corporate Group consists of corporate office expenses incurred in connection with the strategic resources provided to the Advertising and Communications segment, as well as certain other centrally managed expenses that are not fully allocated to the reportable segment. Office and general expenses include (1) salaries and related expenses for corporate office employees including employees dedicated to supporting the Partner Firms, (2) occupancy expense relating to properties occupied by all corporate office employees, (3) other office and general expenses including professional fees for the financial statement audits, and (4) certain other professional fees managed by the corporate office. Additional expenses managed by the corporate office that are directly related to the Partner Firms are allocated to the reportable segment. Prior year results have been recast to reflect the new reportable segment. The significant accounting policies are in the summary of significant accounting policies included in the notes to the consolidated financial statements. Three Months Ended March 31, 2016 (thousands of United States dollars) Advertising and Communications Corporate Total Revenue $ 309,042 $ — $ 309,042 Cost of services sold 211,446 — 211,446 Office and general expenses 65,095 12,733 77,828 Depreciation and amortization 10,823 397 11,220 Operating profit (loss) 21,678 (13,130 ) 8,548 Other Income (Expense): Other income, net 15,512 Interest expense and finance charges, net (15,397 ) Loss on redemption of notes (33,298 ) Loss from continuing operations before income taxes and equity in earnings of non-consolidated affiliates (24,635 ) Income tax benefit (1,972 ) Loss from continuing operations before equity in earnings of non-consolidated affiliates (22,663 ) Equity in earnings of non-consolidated affiliates 229 Loss from continuing operations (22,434 ) Loss from discontinued operations attributable to MDC Partners Inc., net of taxes — Net loss (22,434 ) Net income attributable to the noncontrolling interests (859 ) — (859 ) Net loss attributable to MDC Partners Inc. $ (23,293 ) Stock-based compensation $ 3,881 $ 804 $ 4,685 Supplemental Segment Information: Capital expenditures $ 5,511 $ 28 $ 5,539 Goodwill and intangibles $ 944,660 $ — $ 944,660 Total Assets $ 1,412,988 $ 158,567 $ 1,571,555 Three Months Ended March 31, 2015 (thousands of United States dollars) Advertising and Communications Corporate Total Revenue $ 302,222 $ — $ 302,222 Cost of services sold 210,419 — 210,419 Office and general expenses 53,936 20,372 74,308 Depreciation and amortization 11,854 446 12,300 Operating profit (loss) 26,013 (20,818 ) 5,195 Other Income (Expense): Other expense, net (18,040 ) Interest expense and finance charges, net (14,977 ) Loss from continuing operations before income taxes and equity in earnings of non-consolidated affiliates (27,822 ) Income tax benefit (4,054 ) Loss from continuing operations before equity in earnings of 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 noncontrolling interests (2,380 ) — (2,380 ) Net loss attributable to MDC Partners Inc. $ (32,091 ) Stock-based compensation $ 3,500 $ 945 $ 4,445 Supplemental Segment Information: Capital expenditures $ 5,588 $ 68 $ 5,656 Goodwill and intangibles $ 916,222 $ — $ 916,222 Total Assets $ 1,483,613 $ 142,000 $ 1,625,613 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, 2016 $ 252,199 $ 28,406 $ 28,437 $ 309,042 2015 $ 252,018 $ 29,825 $ 20,379 $ 302,222 |
Commitments, Contingencies and
Commitments, Contingencies and Guarantees | 3 Months Ended |
Mar. 31, 2016 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments, Contingencies and Guarantees | Commitments, Contingencies and Guarantees Deferred Acquisition Consideration. In addition to the consideration paid by the Company in respect of certain of its acquisitions at closing, additional consideration may be payable, or may be potentially payable based on the achievement of certain threshold levels of earnings. See Note 2 and Note 4. Options to purchase. Noncontrolling shareholders in certain subsidiaries have the right in certain circumstances to require the Company to acquire the remaining ownership interests held by them. The noncontrolling shareholders’ ability to exercise any such option right is subject to the satisfaction of certain conditions, including conditions requiring notice in advance of exercise and specific employment termination conditions. In addition, these rights cannot be exercised prior to specified staggered exercise dates. The exercise of these rights at their earliest contractual date would result in obligations of the Company to fund the related amounts during the remainder of 2016 to 2024 . It is not determinable, at this time, if or when the owners of these rights will exercise all or a portion of these rights. The amount payable by the Company in the event such rights are exercised is dependent on various valuation formulas and on future events, such as the average earnings of the relevant subsidiary through the date of exercise, the growth rate of the earnings of the relevant subsidiary during that period and, in some cases, the currency exchange rate at the date of payment. Management estimates, assuming that the subsidiaries owned by the Company at March 31, 2016 , perform over the relevant future periods at their trailing twelve-months earnings levels, that these rights, if all exercised, could require the Company, in future periods, to pay an aggregate amount of approximately $16,710 to the owners of such rights to acquire such ownership interests in the relevant subsidiaries. Of this amount, the Company is entitled, at its option, to fund approximately $120 by the issuance of share capital. In addition, the Company is obligated under similar contractual rights to pay an aggregate amount of approximately $50,841 only upon termination of such owner’s employment with the applicable subsidiary or death. The amount the Company would be required to pay to the noncontrolling interest holders should the Company acquire the remaining ownership interests is $3,449 less than the initial redemption value recorded in redeemable noncontrolling interests. Included in redeemable noncontrolling interests at March 31, 2016 was $71,000 of these options to purchase because they are not within the control of the Company. The ultimate amount payable relating to these transactions will vary because it is dependent on the future results of operations of the subject businesses and the timing of when these rights are exercised. Natural Disasters. Certain of the Company’s operations are located in regions of the United States which typically are subject to hurricanes. During the three months ended March 31, 2016 and 2015 , these operations did not incur any costs related to damages resulting from hurricanes. Guarantees . Generally, the Company has indemnified the purchasers of certain assets in the event that a third party asserts a claim against the purchaser that relates to a liability retained by the Company. These types of indemnification guarantees typically extend for a number of years. Historically, the Company has not made any significant indemnification payments under such agreements and no amount has been accrued in the accompanying consolidated financial statements with respect to these indemnification guarantees. The Company continues to monitor the conditions that are subject to guarantees and indemnifications to identify whether it is probable that a loss has occurred, and would recognize any such losses under any guarantees or indemnifications in the period when those losses are probable and estimable. Legal Proceedings. The Company’s operating entities are involved in legal proceedings of various types. While any litigation contains an element of uncertainty, the Company has no reason to believe that the outcome of such proceedings or claims will have a material adverse effect on its financial condition or results of operations of the Company, except as set forth below in connection with the SEC investigation and the related class action litigation claims. SEC Investigation Update The Special Committee of the Board of Directors (the “Special Committee”) and management have continued to fully cooperate with the SEC in connection with its ongoing investigation of the Company, including with respect to payments made to or on behalf of Miles Nadal and Nadal Management Limited. Mr. Nadal resigned from his position as CEO and as a Director of the Company’s Board of Directors, effective July 20, 2015, and agreed to repay to the Company specified expenses paid by the Company on his behalf and prior cash bonus awards. Specifically, as of December 31, 2015, Mr. Nadal repaid to the Company an aggregate amount equal to $11,285 in respect of perquisites and improper payments identified by the Special Committee. No additional amounts have been identified during the three months ended March 31, 2016. Separately, Mr. Nadal agreed to repay to the Company $10,582 in connection with amounts required to be repaid pursuant to cash bonus awards previously paid to Mr. Nadal, with such repayments to be made in five installments, with the last to be paid on December 31, 2017. Mr. Nadal repaid to the Company the first installment of $1,000 in September 2015 and the second installment of $1,500 in December 2015. The Company recorded a charge of approximately $5,338 in the third quarter of 2015 for the balance of prior cash bonus award amounts that will not be recovered. The SEC investigation of these expenses and related matters remains ongoing. For the three months ended March 31, 2016 and 2015 , the Company has incurred $1,486 and $5,762 , respectively, of professional expenses relating to the ongoing SEC investigation. Class Action Litigation On July 31, 2015, North Collier Fire Control and Rescue District Firefighter Pension Plan filed a putative class action suit in the Southern District of New York, naming as defendants the Company, CFO David Doft, former CEO Miles Nadal, and former CAO Michael Sabatino. The plaintiff alleges violations of § 10(b), Rule 10b-5, and § 20 of the Securities Exchange Act of 1934, based on allegedly materially false and misleading statements in the Company’s SEC filings and other public statements regarding executive compensation, goodwill accounting, and the Company’s internal controls. The Company is vigorously defending this suit. On August 7, 2015, Roberto Paniccia issued a Statement of Claim in the Ontario Superior Court of Justice in the City of Brantford, Ontario seeking to certify a class action suit naming as Defendants the Company, former CEO Miles S. Nadal, former CAO Michael C. Sabatino, CFO David Doft and BDO USA LLP. The Plaintiff alleges violations of section 138.1 of the Ontario Securities Act (and equivalent legislation in other Canadian provinces and territories) as well as common law misrepresentation based on allegedly materially false and misleading statements in the company’s public statements, as well as omitting to disclose material facts with respect to an SEC investigation. The Company is also vigorously defending this suit. Commitments. At March 31, 2016 , the Company had issued $4,597 of undrawn outstanding letters of credit. In addition, the Company has commitments to fund investments in an aggregate amount of $3,182 . |
New Accounting Pronouncements
New Accounting Pronouncements | 3 Months Ended |
Mar. 31, 2016 | |
New Accounting Pronouncements and Changes in Accounting Principles [Abstract] | |
New Accounting Pronouncements | New Accounting Pronouncements In March 2016, the FASB issued ASU 2016-09, which amended guidance on the accounting for employee share-based payments that requires all excess tax benefits and tax deficiencies to be recognized on the income statement instead of as additional paid-in capital, with prospective application required. The guidance also changes the classification of such tax benefits or tax deficiencies on the Consolidated Statement of Cash Flows from a financing activity to an operating activity, with prospective application required. Additionally, the guidance changes the classification of employee taxes paid when an employer withholds shares for tax-withholding purposes on the Consolidated Statement of Cash Flows from an operating activity, previously included in the changes in Accounts payable, accruals and other liabilities, to a financing activity, with retrospective application required. This amended guidance, which will be effective beginning January 1, 2017 and early adoption is permitted. The Company is currently assessing the impact of this guidance on its results of operations and related cash flows. In February 2016, the FASB issued ASU 2016-02, which amends the ASC and creates Topic 842, Leases. Topic 842 will require lessees to recognize lease assets and lease liabilities for those leases classified as operating leases under previous U.S. GAAP on the balance sheet. This guidance is effective for annual periods beginning after December 15, 2018 and early adoption is permitted. The Company is currently assessing the impact of this guidance on its consolidated financial position and results of operations. In January 2016, the FASB issued ASU 2016-01, Financial Instruments - Overall: Recognition and Measurement of Financial Assets and Liabilities , which will require equity investments, except equity method investments, to be measured at fair value and any changes in fair value will be recognized in results of operations. This guidance is effective for annual and interim periods beginning after December 15, 2017 and early application is not permitted. Additionally, this guidance provides for the recognition of the cumulative effect of retrospective application of the new standard in the period of initial application. The Company does not expect the application of this guidance to have a significant impact on its consolidated financial position or results of operations. In November 2015, the FASB issued ASU 2015-17, Income Taxes, which amends Topic 740 and requires all deferred income tax assets and liabilities to be presented as noncurrent on the balance sheet. This amended guidance is effective beginning January 1, 2017, and may be applied retrospectively or prospectively, with early adoption permitted. The Company does not expect the application of this guidance to have a significant impact on its consolidated financial position or results of operations. The FASB has issued amended guidance on revenue recognition, Topic 606, Revenue from Contracts with Customers, that supersedes Topic 605, Revenue Recognition, and requires an entity to recognize revenue when it transfers promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. In July 2015, the FASB affirmed its proposal to delay the effective date of the new revenue standard by one year to January 1, 2018, with early adoption to be permitted as of the original effective date of January 1, 2017. The Company is currently assessing the impact and choice of either the full or modified retrospective adoption method as well as impact the adoption of the amended guidance will have on its consolidated financial position and results of operations. |
Subsequent Events and Other (No
Subsequent Events and Other (Notes) | 3 Months Ended |
Mar. 31, 2016 | |
Subsequent Events [Abstract] | |
Subsequent Events and Other | 13. Subsequent Events Second Amended and Restated Credit Agreement Effective May 3, 2016, MDC and its subsidiaries entered into an amended and restated Credit Agreement. The amendment extends the maturity date to May 3, 2021 and gives the Company the ability to borrow in foreign currencies, as well as certain other changes to provide additional flexibility in operating the Company's business. |
Significant Accounting Polici21
Significant Accounting Policies (Policies) | 3 Months Ended |
Mar. 31, 2016 | |
Accounting Policies [Abstract] | |
Subsidiary and Equity Investment Stock Transaction, Policy [Policy Text Block] | Subsidiary and Equity Investment Stock Transactions. Transactions involving the purchase, sale or issuance of stock of a subsidiary where control is maintained are recorded as a reduction in the redeemable noncontrolling interests or noncontrolling interests, as applicable. Any difference between the purchase price and noncontolling interest are recorded to additional paid-in capital. In circumstances where the purchase of shares of an equity investment results in obtaining control, the existing carrying value of the investment is remeasured to the acquisition date fair value and any gain or loss is recognized in results of operations. |
Earnings Per Share, Policy [Policy Text Block] | oss per Common Share . Basic loss per share is based upon the weighted average number of common shares outstanding during each period, including the “Share capital to be issued” as reflected in Shareholders’ Equity on the balance sheet. Diluted loss per share is based on the above, plus, if dilutive, common share equivalents, which include outstanding options, stock appreciation rights, and unvested restricted stock units. |
Foreign Currency Transactions and Translations Policy [Policy Text Block] | Foreign Currency Translation . The Company’s financial statements were prepared in accordance with the requirements of the Foreign Currency Translation topic of the FASB ASC. The functional currency of the Company is the Canadian dollar and it has decided to use U.S. dollars as its reporting currency for consolidated reporting purposes. Generally, the Company’s subsidiaries use their local currency as their functional currency. Accordingly, the currency impacts of the translation of the balance sheets of the Company’s non-U.S. dollar based subsidiaries to U.S. dollar statements are included as cumulative translation adjustments in accumulated other comprehensive income. Translation of intercompany debt, which is not intended to be repaid, is included in cumulative translation adjustments. Cumulative translation adjustments are not included in net earnings unless they are actually realized through a sale or upon complete or substantially complete liquidation of the Company’s net investment in the foreign operation. Translation of current intercompany balances are included in net earnings. The balance sheets of non-U.S. dollar based subsidiaries are translated at the period end rate. The income statements of non-U.S. dollar based subsidiaries are translated at average exchange rates for the period. Gains and losses arising from the Company’s foreign currency transactions are reflected in net earnings. Unrealized gains or losses arising on the translation of certain intercompany foreign currency transactions that are of a long-term nature (that is settlement is not planned or anticipated in the future) are included as cumulative translation adjustments in accumulated other comprehensive income. |
Guarantees, Indemnifications and Warranties Policies [Policy Text Block] | Guarantees . Guarantees issued or modified by the Company to third parties after January 1, 2003 are generally recognized at the inception or modification of the guarantee as a liability for the obligations it has undertaken in issuing the guarantee, including its ongoing obligation to stand ready to perform over the term of the guarantee in the event that the specified triggering events or conditions occur. The initial measurement of that liability is the fair value of the guarantee. The recognition of a liability is required even if it is not probable that payments will be required under a guarantee. The Company’s liability associated with guarantees is not significant. (See Note 11) |
Premiums Receivable, Allowance for Doubtful Accounts, Estimation Methodology, Policy [Policy Text Block] | Allowance for Doubtful Accounts . Trade receivables are stated at invoiced amounts less allowances for doubtful accounts. The allowances represent estimated uncollectible receivables associated with potential customer defaults usually due to customers’ potential insolvency. The allowances include amounts for certain customers where a risk of default has been specifically identified. The assessment of the likelihood of customer defaults is based on various factors, including the length of time the receivables are past due, historical experience and existing economic conditions. |
Expenditures Billable To Clients, Policy [Policy Text Block] | Expenditures Billable to Clients . Expenditures billable to clients consist principally of outside vendor costs incurred on behalf of clients when providing advertising, marketing and corporate communications services that have not yet been invoiced to clients. Such amounts are invoiced to clients at various times over the course of the production process. |
Property, Plant and Equipment, Policy [Policy Text Block] | Fixed Assets . Fixed assets are stated at cost, net of accumulated depreciation. Computers, furniture and fixtures are depreciated on a straight-line basis over periods of three to seven years. Leasehold improvements are depreciated on a straight-line basis over the lesser of the term of the related lease or the estimated useful life of the asset. Repairs and maintenance costs are expensed as incurred. |
Equity Method Investments, Policy [Policy Text Block] | Equity Method Investments. The equity method is used to account for investments in entities in which the Company has an ownership interest of less than 50% and has significant influence, or joint control by contractual arrangement, (i) over the operating and financial policies of the affiliate or (ii) has an ownership interest greater than 50% ; however, the substantive participating rights of the noncontrolling interest shareholders preclude the Company from exercising unilateral control over the operating and financial policies of the affiliate. The Company’s investments accounted for using the equity method include a 30% undivided interest in a real estate joint venture and various interests in investment funds. The Company’s management periodically evaluates these investments to determine if there has been a decline in value that is other than temporary. These investments are included in investments in non-consolidated affiliates. |
Principles of Consolidation | Principles of Consolidation . The accompanying condensed consolidated financial statements include the accounts of MDC Partners Inc. and its domestic and international controlled subsidiaries that are not considered variable interest entities, and variable interest entities for which the Company is the primary beneficiary. Intercompany balances and transactions have been eliminated in consolidation. |
Reclassification, Policy [Policy Text Block] | Reclassifications . Certain reclassifications have been made to the prior period financial statements to conform to the current period presentation. |
Use of Estimates, Policy | Use of Estimates. The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions. These estimates and assumptions affect the reported amounts of assets and liabilities including goodwill, intangible assets, contingent deferred acquisition consideration, valuation allowances for receivables, deferred tax assets and the amounts of revenue and expenses reported during the period. These estimates are evaluated on an ongoing basis and are based on historical experience, current conditions and various other assumptions believed to be reasonable under the circumstances. Actual results could differ from these estimates. |
Fair Value | Fair Value. The Company applies the fair value measurement guidance of the Financial Accounting Standards Board (the “FASB”) Accounting Standards Codification (the “ASC”) Topic 820, Fair Value Measurements, for financial assets and liabilities that are required to be measured at fair value and for nonfinancial assets and liabilities that are not required to be measured at fair value on a recurring basis, including goodwill and other identifiable intangible assets. The measurement of fair value requires the use of techniques based on observable and unobservable inputs. Observable inputs reflect market data obtained from independent sources, while unobservable inputs reflect market assumptions. The inputs create the following fair value hierarchy: • Level 1 - Quoted prices for identical instruments in active markets. • Level 2 - Quoted prices for similar instruments in active markets; quoted prices for identical or similar instruments in markets that are not active; and model-derived valuations where inputs are observable or where significant value drivers are observable. • Level 3 - Instruments where significant value drivers are unobservable to third parties. When available, the Company uses quoted market prices to determine the fair value of its financial instruments and classifies such items in Level 1. In some cases, quoted market prices are used for similar instruments in active markets and the Company classifies such items in Level 2. |
Concentration of Credit Risk | Concentration of Credit Risk. The Company provides marketing communications services to clients who operate in most industry sectors. Credit is granted to qualified clients in the ordinary course of business. Due to the diversified nature of the Company’s client base, the Company does not believe that it is exposed to a concentration of credit risk. No client accounted for more than 10% of the Company’s consolidated accounts receivable at March 31, 2016 and December 31, 2015 . No clients accounted for 10% of the Company’s revenue for the three months ended March 31, 2016 or for the three months ended March 31, 2015 . |
Cash and Cash Equivalents | Cash and Cash Equivalents. The Company’s cash equivalents are primarily comprised of investments in overnight interest-bearing deposits, commercial paper and money market instruments and other short-term investments with original maturity dates of three months or less at the time of purchase. The Company has a concentration of credit risk in that there are cash deposits in excess of federally insured amounts. |
Cash in Trust, Policy [Policy Text Block] | Cash in Trust. A subsidiary of the Company holds restricted cash in trust accounts related to funds received on behalf of clients. Such amounts are held in escrow under depositary service agreements and distributed at the direction of the clients. The funds are presented as a corresponding liability on the balance sheet |
Cost Method Investments, Policy | Cost Method Investments. From time to time, the Company makes non-material cost based investments in start-up advertising technology companies and innovative consumer product companies where the Company does not exercise significant influence over the operating and financial policies of the investee. The total net cost basis of these investments, which is included in Other Assets on the balance sheet, at March 31, 2016 and December 31, 2015 was $12,645 and $11,763 , respectively. These investments are periodically evaluated to determine whether a significant event or change in circumstances has occurred that may impact the fair value of each investment other than temporary declines below book value. A variety of factors are considered when determining if a decline is other than temporary, including, among others, the financial condition and prospects of the investee, as well as the Company’s investment intent. In addition, the Company's partner agencies may receive minority equity interests from start-up companies in lieu of fees. |
Business Combinations | Business Combinations. Business combinations are accounted for using the acquisition method and accordingly, the assets acquired (including identified intangible assets), the liabilities assumed and any noncontrolling interest in the acquired business are recorded at their acquisition date fair values. The Company’s acquisition model typically provides for an initial payment at closing and for future additional contingent purchase price obligations. Contingent purchase price obligations are recorded as deferred acquisition consideration on the balance sheet at the acquisition date fair value and are remeasured at each reporting period. Changes in such estimated values are recorded in the results of operations. For further information see Note 4 and Note 8. For the three months ended March 31, 2016 and 2015 , $6,327 and $2,248 of expense, respectively, related to changes in such estimated values was recorded in results of operations. The Company expenses acquisition related costs. For the three months ended March 31, 2016 and 2015 , $553 and $874 , respectively, of acquisition related costs were charged to operations. For each acquisition, the Company undertakes a detailed review to identify intangible assets and a valuation is performed for all such identified assets. The Company uses several market participant measurements to determine the estimated value. This approach includes consideration of similar and recent transactions, as well as utilizing discounted expected cash flow methodologies. Like most service businesses, a substantial portion of the intangible asset value that the Company acquires is the specialized know-how of the workforce, which is treated as part of goodwill and is not required to be valued separately. The majority of the value of the identifiable intangible assets acquired is derived from customer relationships, including the related customer contracts, as well as trade names. In executing the Company's overall acquisition strategy, one of the primary drivers in identifying and executing a specific transaction is the existence of, or the ability to, expand the existing client relationships. The expected benefits of the Company's acquisitions are typically shared across multiple agencies and regions. |
Redeemable Noncontrolling Interest | Redeemable Noncontrolling Interests . Many of the Company’s acquisitions include contractual arrangements where the noncontrolling shareholders have an option to purchase, or may require the Company to purchase, such noncontrolling shareholders' incremental ownership interests under certain circumstances and the Company has similar call options under the same contractual terms. The amount of consideration under these contractual arrangements is not a fixed amount, but rather is dependent upon various valuation formulas as described in Note 11. In the event that an incremental purchase may be required of the Company, the amounts are recorded as redeemable noncontrolling interests in mezzanine equity on the balance sheet at their acquisition date fair value and adjusted for changes to their estimated redemption value through additional paid-in capital (but not less than their initial redemption value), except for foreign currency translation adjustments. These adjustments will not impact the calculation of earnings (loss) per share. If the estimated redemption value is in excess of the fair value of the noncontrolling interests, the Company records a charge to income attributable to noncontrolling interests. For the three months ended March 31, 2016 and 2015 , there were no charges to income attributable to noncontrolling interests. Changes in the estimated redemption amounts of the redeemable noncontrolling interests are adjusted at each reporting period with a corresponding adjustment to equity. These adjustments will not impact the calculation of earnings (loss) per share. |
Variable Interest Entity | Variable Interest Entity . Effective March 28, 2012, the Company invested in Doner Partners LLC (“Doner”). The Company acquired a 30% voting interest and convertible preferred interests that allow the Company to increase ordinary voting ownership to 70% at the Company’s option. The Company has determined that (i) this entity is a variable interest entity, and (ii) the Company is the primary beneficiary because it receives a disproportionate share of profits and losses as compared to its ownership percentage. As such, Doner is consolidated for all periods subsequent to the date of investment. Doner is a full service integrated creative agency that is included as part of the Company's portfolio in the Advertising and Communications segment. The Company’s Credit Agreement (see Note 7) is guaranteed and secured by all of Doner’s assets. Total assets and total liabilities of Doner included in the Company’s consolidated balance sheet at March 31, 2016 were $113,235 and $77,668 , respectively, and at December 31, 2015 were $122,558 and $86,047 , respectively. |
Revenue Recognition | Revenue Recognition. The Company’s revenue recognition policies are established in accordance with the Revenue Recognition topics of the FASB ASC, and accordingly, revenue is recognized when all of the following criteria are satisfied: (i) persuasive evidence of an arrangement exists; (ii) the selling price is fixed or determinable; (iii) services have been performed or upon delivery of the products when ownership and risk of loss has transferred to the client; and (iv) collection of the resulting receivable is reasonably assured. The Company follows the Multiple-Element Arrangement topic of the FASB ASC, which addresses certain aspects of the accounting by a vendor for arrangements under which it will perform multiple revenue-generating activities and how to determine whether an arrangement involving multiple deliverables contains more than one unit of accounting. The Company follows the Principal Agent Consideration topic of the FASB ASC which addresses (i) whether revenue should be recorded at the gross amount billed because it has earned revenue from the sale of goods or services, or recorded at the net amount retained because it has earned a fee or commission, and (ii) that reimbursements received for out-of-pocket expenses incurred should be characterized in the income statement as revenue. Accordingly, the Company has included such reimbursed expenses in revenue. The Company earns revenue from agency arrangements in the form of retainer fees or commissions; from short-term project arrangements in the form of fixed fees or per diem fees for services; and from incentives or bonuses. Non-refundable retainer fees are generally recognized on a straight-line basis over the term of the specific customer arrangement. Commission revenue is earned and recognized upon the placement of advertisements in various media when the Company has no further performance obligations. Fixed fees for services are recognized upon completion of the earnings process and acceptance by the client. Per diem fees are recognized upon the performance of the Company’s services. In addition, for a limited number of certain service transactions, which require delivery of a number of service acts, the Company uses the proportional performance model, which generally results in revenue being recognized based on the straight-line method. Fees billed to clients in excess of fees recognized as revenue are classified as Advanced Billings on the Company's balance sheet. A small portion of the Company’s contractual arrangements with customers includes performance incentive provisions, which allow the Company to earn additional revenue as a result of its performance relative to both quantitative and qualitative goals. The Company recognizes the incentive portion of revenue under these arrangements when specific quantitative goals are assured, or when the Company’s clients determine performance against qualitative goals has been achieved. In all circumstances, revenue is only recognized when collection is reasonably assured. The Company records revenue net of sales and other taxes due to be collected and remitted to governmental authorities. |
Cost of Services Sold [Policy Text Block] | Cost of Services Sold . Cost of services sold do not include depreciation charges for fixed assets. |
Interest Expense | Interest Expense . Interest expense primarily consists of the cost of borrowing on the Company's previously outstanding 6.75% senior notes due 2020 (the “6.75% Notes”); the Company's 6.50% senior unsecured notes due 2024 (the “6.50% Notes”); and the Company's $325 million senior secured revolving credit agreement due 2019 (the “Credit Agreement”). The Company uses the effective interest method to amortize the deferred financing costs on the 6.75% Notes and the 6.50% Notes as well as the original issue premium on the 6.75% Notes. The Company also uses the straight-line method to amortize the deferred financing costs on the Credit Agreement. For the three months ended March 31, 2016 and 2015 , interest expense included $112 and $554 , respectively, relating to present value adjustments for fixed deferred acquisition consideration payments. |
Income Tax | Income Taxes. The Company’s U.S. operating units are generally structured as limited liability companies, which are treated as partnerships for tax purposes. The Company is only taxed on its share of profits, while noncontrolling holders are responsible for taxes on their share of the profits. The Company currently has a fully reserved valuation allowance on its deferred tax assets related to U.S. net operating losses. During the three months ended March 31, 2016 and 2015 , the Company's effective tax rate was substantially lower than the statutory rate due primarily to (i) the utilization of previously fully reserved net operating losses, and (ii) noncontrolling interest charges and losses in certain tax jurisdictions where a valuation allowance was deemed necessary, offset by non-deductible stock-based compensation. |
Share-based Compensation | Stock-Based Compensation. Under the fair value method, compensation cost is measured at fair value at the date of grant and is expensed over the service period, in this case the award’s vesting period. When awards are exercised, share capital is credited by the sum of the consideration paid, together with the related portion previously credited to additional paid-in capital when compensation costs were charged against income or acquisition consideration. The Company uses its historical volatility derived over the expected term of the award to determine the volatility factor used in determining the fair value of the award. Stock-based awards that are settled in cash, or may be settled in cash at the option of employees, are recorded as liabilities. The measurement of the liability and compensation cost for these awards is based on the fair value of the award, and is recorded in operating income over the service period, in this case the award's vesting period. Changes in the Company’s payment obligation prior to the settlement date of a stock-based award are recorded as compensation cost in operating income in the period of the change. The final payment amount for such awards is established on the date of the exercise of the award by the employee. Stock-based awards that are settled in cash or equity at the option of the Company are recorded at fair value on the date of grant and recorded as additional paid-in capital. The fair value measurement of the compensation cost for these awards is based on using the Black-Scholes option pricing-model and is recorded in operating income over the service period, in this case the award's vesting period. It is the Company’s policy for issuing shares upon the exercise and/or vesting of an equity incentive award to calculate and verify the amount of shares to be issued, as well as the amount of proceeds to be collected (if any) and to deliver new shares to the exercising party. The Company has adopted the straight-line attribution method for determining the compensation cost to be recorded during each accounting period. However, awards based on performance conditions are recorded as compensation expense when the performance conditions are expected to be met. The Company treats benefits paid by shareholders or equity members to employees as a stock-based compensation charge with a corresponding credit to additional paid-in-capital. From time to time, certain acquisitions and step-up transactions include an element of compensation related payments. The Company accounts for those payments as stock-based compensation. During the three months ended March 31, 2016 , the Company issued 111,500 restricted stock units (“RSUs”) to its employees and directors. The RSUs have an aggregate grant date fair value of $2,018 and generally vest on the third anniversary of the date of grant. In addition, the Company issued 527,348 restricted stock awards. The vesting of these awards are contingent upon the Company meeting a cumulative three year earnings target and vesting date. Once the Company defines the earnings target and the vesting conditions and a grant date is established, the Company will record the compensation expense over the vesting period. A total of 1,376,388 Class A shares of restricted stock, granted to employees as equity incentive awards but not yet vested, has been excluded in the Company’s calculation of Class A shares outstanding as of March 31, 2016 . |
Significant Accounting Polici22
Significant Accounting Policies (Tables) | 3 Months Ended |
Mar. 31, 2016 | |
Accounting Policies [Abstract] | |
Redeemable Noncontrolling Interest | The following table presents changes in redeemable noncontrolling interests: Three Months Ended March 31, 2016 Year Ended December 31, 2015 Beginning Balance $ 69,471 $ 194,951 Redemptions — (155,042 ) Additions (1) — 7,703 Changes in redemption value 1,423 22,809 Currency Translation Adjustments 106 (950 ) Ending Balance $ 71,000 $ 69,471 |
Loss Per Common Share (Tables)
Loss Per Common Share (Tables) | 3 Months Ended |
Mar. 31, 2016 | |
Earnings Per Share [Abstract] | |
Schedule of Calculation of Numerator and Denominator in Earnings Per Share | The following table sets forth the computation of basic and diluted loss per common share from continuing operations. Three Months Ended 2016 2015 Numerator Numerator for basic loss per common share - loss from continuing operations $ (22,434 ) $ (23,417 ) Net income attributable to the noncontrolling interests (859 ) (2,380 ) Net loss from continuing operations attributable to MDC Partners Inc. common shareholders (23,293 ) (25,797 ) Effect of dilutive securities — — Numerator for diluted loss per common share - loss attributable to MDC Partners Inc. common shareholders from continuing operations $ (23,293 ) $ (25,797 ) Denominator Denominator for basic loss per common share - weighted average common shares 50,002,552 49,754,961 Effect of dilutive securities — — Denominator for diluted loss per common share - adjusted weighted shares and assumed conversions 50,002,552 49,754,961 Basic loss per common share from continuing operations $ (0.47 ) $ (0.52 ) Diluted loss per common share from continuing operations $ (0.47 ) $ (0.52 ) |
Acquisitions (Tables)
Acquisitions (Tables) | 3 Months Ended |
Mar. 31, 2016 | |
Business Combinations [Abstract] | |
Schedule of Net Income (Loss) Attributable to Parent and Transfers to and from Noncontrolling Interest | Changes in the Company’s ownership interests in our less than 100% owned subsidiaries during the three months ended March 31, 2016 and 2015 were as follows: Net Loss Attributable to MDC Partners Inc. and Transfers (to) from the Noncontrolling Interests Three Months Ended March 31, 2016 2015 Net loss attributable to MDC Partners Inc. $ (23,293 ) $ (32,091 ) Transfers to (from) the noncontrolling interest: Decrease in MDC Partners Inc. paid-in capital for purchase of equity interests in excess of redeemable noncontrolling interests and noncontrolling interests — (2,917 ) Net transfers to (from) noncontrolling interests $ — $ (2,917 ) Change from net loss attributable to MDC Partners Inc. and transfers to noncontrolling interests $ (23,293 ) $ (35,008 ) |
Accruals and Other Liabilities
Accruals and Other Liabilities (Tables) | 3 Months Ended |
Mar. 31, 2016 | |
Accrued and Other Liabilities [Abstract] | |
Accrued and Other Liabilities Disclosure | Accruals and Other Liabilities At March 31, 2016 and December 31, 2015 , accruals and other liabilities included accrued media of $138,441 and $187,540 , respectively; and included amounts due to noncontrolling interest holders, for their share of profits, which will be distributed within the next twelve months of $3,921 and $5,473 , respectively. Changes in amounts due to noncontrolling interest holders included in accrued and other liabilities for the year ended December 31, 2015 and three months ended March 31, 2016 were as follows: Noncontrolling Balance, December 31, 2014 $ 6,014 Income attributable to noncontrolling interests 9,054 Distributions made (9,503 ) Other (1) (92 ) Balance, December 31, 2015 $ 5,473 Income attributable to noncontrolling interests 859 Distributions made (2,399 ) Other (1) (12 ) Balance, March 31, 2016 $ 3,921 (1) Other consists primarily of step-up transactions and cumulative translation adjustments. |
Discontinued Operations (Tables
Discontinued Operations (Tables) | 3 Months Ended |
Mar. 31, 2016 | |
Discontinued Operations and Disposal Groups [Abstract] | |
Schedule of Disposal Groups, Including Discontinued Operations, Income Statement, Balance Sheet and Additional Disclosures | There were no discontinued operations for the three months ended March 31, 2016. Included in discontinued operations in the Company’s consolidated statements of operations for the three months ended March 31, 2015 were the following: Three Months Ended 2015 Revenue $ 15,524 Operating loss (1,552 ) Other expense (72 ) Loss on disposal (4,670 ) Net loss from discontinued operations attributable to MDC Partners Inc., net of taxes $ (6,294 ) |
Debt (Tables)
Debt (Tables) | 3 Months Ended |
Mar. 31, 2016 | |
Debt Disclosure [Abstract] | |
Schedule of Debt | The Company's indebtedness was comprised as follows: March 31, December 31, 2015 Revolving credit agreement $ 16,979 $ — 6.50% Senior Notes due 2024 900,000 — 6.75% Senior Notes due 2020 — 735,000 Original issue premium — 5,838 Debt issuance costs (20,389 ) (12,625 ) 896,590 728,213 Obligations under capital leases 519 670 897,109 728,883 Less current portion: 415 470 $ 896,694 $ 728,413 |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 3 Months Ended |
Mar. 31, 2016 | |
Fair Value, Inputs, Level 1 | |
Fair Value, Liabilities Measured on Recurring and Nonrecurring Basis | The following tables present certain information for the financial liabilities that are disclosed at fair value on a recurring basis at March 31, 2016 and December 31, 2015 : Level 1 Level 1 March 31, 2016 December 31, 2015 Carrying Fair Value Carrying Fair Value Liabilities: 6.50% Senior Notes due 2024 $ 900,000 $ 918,000 $ — $ — 6.75% Senior Notes due 2020 — — 740,838 765,319 |
Fair Value, Inputs, Level 3 | |
Fair Value, Liabilities Measured on Recurring and Nonrecurring Basis | The following table presents changes in deferred acquisition consideration: Fair Value Measurements Using Significant Unobservable Inputs March 31, December 31, 2016 2015 Beginning Balance of contingent payments $ 306,734 $ 172,227 Payments (1) (6,188 ) (77,301 ) Additions (2) 517 174,530 Redemption value adjustments (3) 8,321 41,636 Foreign translation adjustment 1,549 (4,358 ) Ending Balance of contingent payments $ 310,933 $ 306,734 (1) For the three months ended March 31, 2016 , payments include $5,368 of deferred acquisition consideration settled through the issuance of 227,437 MDC Class A Shares in lieu of cash. (2) Additions are the initial estimated deferred acquisition payments of new acquisitions and step-up transactions completed within that fiscal period. (3) Redemption value adjustments are fair value changes from the Company's initial estimates of deferred acquisition payments, including the accretion of present value and stock-based compensation charges relating to acquisition payments that are tied to continued employment. |
Other Income (Expense) (Tables)
Other Income (Expense) (Tables) | 3 Months Ended |
Mar. 31, 2016 | |
Other Income and Expenses [Abstract] | |
Schedule of Other Nonoperating Income (Expense) | Other Income (Expense) Three Months Ended March 31, 2016 2015 Other income $ 58 $ 490 Foreign currency gain (loss) 15,454 (18,530 ) $ 15,512 $ (18,040 ) |
Segment Information (Tables)
Segment Information (Tables) | 3 Months Ended | |
Mar. 31, 2016 | Mar. 31, 2015 | |
Segment Reporting [Abstract] | ||
Schedule of Segment Reporting Information, by Segment | ||
Schedule of Revenue from External Customers Attributed to Foreign Countries by Geographic Area | 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, 2016 $ 252,199 $ 28,406 $ 28,437 $ 309,042 2015 $ 252,018 $ 29,825 $ 20,379 $ 302,222 |
Significant Accounting Polici31
Significant Accounting Policies (Details) - USD ($) | 3 Months Ended | 12 Months Ended | |
Mar. 31, 2016 | Mar. 31, 2015 | Dec. 31, 2015 | |
Accounting Policies [Abstract] | |||
Option to purchase noncontrolling interest impairment charge | $ 0 | $ 0 | |
Beginning Balance | 69,471,000 | $ 194,951,000 | $ 194,951,000 |
Redemptions | 0 | (155,042,000) | |
Granted | 0 | 7,703,000 | |
Changes in redemption value | 1,423,000 | 22,809,000 | |
Currency Translation Adjustments | 106,000 | (950,000) | |
Ending Balance | $ 71,000,000 | $ 69,471,000 |
Significant Accounting Polici32
Significant Accounting Policies (Details Textual) | May. 01, 2024 | Oct. 23, 2014USD ($) | Mar. 20, 2013 | Mar. 28, 2012 | Mar. 31, 2016USD ($)Clientsshares | Mar. 31, 2015USD ($)Clients | Mar. 23, 2016 | Dec. 31, 2015USD ($)Clients |
Significant Accounting Policies [Line Items] | ||||||||
Debt Issuance Costs, Net | $ (20,389,000) | $ (14,511,000) | $ (12,625,000) | |||||
Clients exceeding consolidated accounts receivable percentage | Clients | 0 | 0 | ||||||
Interest Rate Percentage On Senior Notes | 6.75% | |||||||
Put option noncontrolling interest impairment charge | $ 0 | $ 0 | ||||||
Cost Method Investments | $ 12,645,000 | $ 11,763,000 | ||||||
Consolidated Accounts Receivable Percentage | 10.00% | |||||||
Clients exceeding consolidated largest client revenue | Clients | 0 | 0 | ||||||
Consolidated Largest Client Revenue | 10.00% | 10.00% | ||||||
Business Combination, Acquisition Related Costs | $ 553,000 | $ 874,000 | ||||||
Assets | 1,571,555,000 | 1,625,613,000 | $ 1,577,625,000 | |||||
Liabilities | 2,025,764,000 | 1,995,227,000 | ||||||
Adjustment to deferred acquisition consideration included in interest expense | $ 112 | 554 | ||||||
Common Class A | ||||||||
Significant Accounting Policies [Line Items] | ||||||||
Aggregate Non-Vested, Shares, Restricted Stock Issued, Gross | shares | 1,376,388 | |||||||
Doner [Member] | ||||||||
Significant Accounting Policies [Line Items] | ||||||||
Variable Interest Entity, Qualitative or Quantitative Information, Ownership Percentage | 30.00% | |||||||
Assets | $ 113,235,000 | 122,558,000 | ||||||
Liabilities | $ 77,668,000 | $ 86,047,000 | ||||||
Aggregate 2012 Acquisitions [Member] | Doner [Member] | ||||||||
Significant Accounting Policies [Line Items] | ||||||||
Ownership Interest Percentage Increase On Exercise Of Option | 70.00% | |||||||
Minimum [Member] | ||||||||
Significant Accounting Policies [Line Items] | ||||||||
Property, Plant and Equipment, Useful Life | 3 years | |||||||
Maximum [Member] | ||||||||
Significant Accounting Policies [Line Items] | ||||||||
Property, Plant and Equipment, Useful Life | 7 years | |||||||
Equity Method Investment, Ownership Percentage | 50.00% | |||||||
Real Estate Joint Venture [Member] | ||||||||
Significant Accounting Policies [Line Items] | ||||||||
Equity Method Investment, Ownership Percentage | 30.00% | |||||||
Wells Fargo Capital Finance, LLC | ||||||||
Significant Accounting Policies [Line Items] | ||||||||
Debt Instrument, Maturity Date | Sep. 30, 2019 | |||||||
Line of Credit Facility, Maximum Borrowing Capacity | $ 325,000,000 | |||||||
Contingent payment [Domain] | ||||||||
Significant Accounting Policies [Line Items] | ||||||||
Business Combination, Contingent Consideration Arrangements, Change in Amount of Contingent Consideration, Liability | $ 6,327,000 | $ 2,248,000 | ||||||
Notes due 2020 [Member] | ||||||||
Significant Accounting Policies [Line Items] | ||||||||
Debt Instrument, Interest Rate, Stated Percentage | 6.75% | |||||||
Six Point Seven Five Percentage Notes [Member] | ||||||||
Significant Accounting Policies [Line Items] | ||||||||
Debt Instrument, Interest Rate, Stated Percentage | 6.75% | |||||||
Six Point Seven Five Percentage Notes [Member] | Wells Fargo Capital Finance, LLC | ||||||||
Significant Accounting Policies [Line Items] | ||||||||
Debt Instrument, Maturity Date | Apr. 1, 2020 | |||||||
Notes due 2024 [Domain] | ||||||||
Significant Accounting Policies [Line Items] | ||||||||
Debt Instrument, Interest Rate, Stated Percentage | 6.50% | |||||||
Six Point Five Zero Percentage Notes [Domain] | ||||||||
Significant Accounting Policies [Line Items] | ||||||||
Debt Instrument, Interest Rate, Stated Percentage | 6.50% | 6.50% | ||||||
Restricted Stock Units (RSUs) [Member] | Common Class A | ||||||||
Significant Accounting Policies [Line Items] | ||||||||
Stock Issued During Period, Shares, Restricted Stock Award, Gross | shares | 111,500 | |||||||
Restricted stock grant date fair value | $ 2,018,000 | |||||||
Stock Issued During Period, Shares, Restricted Stock Award, Gross | shares | 527,348 | |||||||
Scenario, Forecast [Member] | Six Point Five Zero Percentage Notes [Domain] | ||||||||
Significant Accounting Policies [Line Items] | ||||||||
Debt Instrument, Maturity Date | May 1, 2024 | |||||||
Scenario, Forecast [Member] | Six Point Five Zero Percentage Notes [Domain] | Wells Fargo Capital Finance, LLC | ||||||||
Significant Accounting Policies [Line Items] | ||||||||
Debt Instrument, Maturity Date | May 1, 2024 |
Loss Per Common Share (Details)
Loss Per Common Share (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 12 Months Ended | |
Mar. 31, 2016 | Mar. 31, 2015 | Dec. 31, 2015 | |
Earnings Per Share [Abstract] | |||
Income from continuing operations | $ (22,434) | $ (23,417) | |
Numerator | |||
Net income attributable to the noncontrolling interests | (859) | (2,380) | $ (9,054) |
Income (Loss) from Continuing Operations Attributable to Parent | (23,293) | (25,797) | |
Effect of dilutive securities | 0 | 0 | |
Income (Loss) from Continuing Operations Attributable to Parent, Diluted | $ (23,293) | $ (25,797) | |
Denominator | |||
Denominator for basic loss per common share - weighted average common shares | 50,002,552 | 49,754,961 | |
Effect of dilutive securities | 0 | 0 | |
Denominator for diluted loss per common share - adjusted weighted shares and assumed conversions | 50,002,552 | 49,754,961 | |
Income (loss) from continuing operations attributable to MDC Partners Inc. common shareholders (usd per share) | $ (0.47) | $ (0.52) | |
Income (loss) from continuing operations attributable to MDC Partners Inc. common shareholders (usd per share) | $ (0.47) | $ (0.52) |
Loss Per Common Share (Details
Loss Per Common Share (Details Textual) - shares | 3 Months Ended | ||
Mar. 31, 2016 | Sep. 30, 2015 | Mar. 31, 2015 | |
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | |||
Antidilutive Securities Excluded from Computation of Earnings Per Share, Amount | 1,498,535 | 942,574 | |
Incremental Common Shares Attributable to Dilutive Effect of Share-based Payment Arrangements | 944,835 | ||
Restricted Stock Units (RSUs) | |||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | |||
Antidilutive Securities Excluded from Computation of Earnings Per Share, Amount | 1,423,535 | 867,574 | |
Incremental Common Shares Attributable to Dilutive Effect of Share-based Payment Arrangements | 832,335 |
Acquisitions (Details)
Acquisitions (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2016 | Mar. 31, 2015 | |
Net loss attributable to MDC Partners Inc. | $ (23,293) | $ (32,091) |
Transfers to (from) the noncontrolling interest: | ||
Net transfers to (from) noncontrolling interests | 0 | (2,917) |
Change from net loss attributable to MDC Partners Inc. and transfers to noncontrolling interests | (23,293) | (35,008) |
Additional Paid-in Capital [Member] | ||
Net loss attributable to MDC Partners Inc. | 0 | |
Parent [Member] | ||
Net loss attributable to MDC Partners Inc. | (23,293) | |
Increase Decrease in Redeemable and Non Redeemable Non Controlling Interest from Step up Transactions | $ 0 | $ (2,917) |
Acquisitions (Details Textual)
Acquisitions (Details Textual) - USD ($) | 3 Months Ended | 12 Months Ended | ||||
Mar. 31, 2016 | Mar. 31, 2015 | Dec. 31, 2015 | Oct. 01, 2015 | May. 01, 2015 | Dec. 31, 2014 | |
Business Acquisition [Line Items] | ||||||
Adjustments to deferred acquisition consideration included in share-based compensation | $ 2,906 | $ 2,668 | ||||
Noncontrolling Interest, Decrease from Redemptions or Purchase of Interests | 0 | $ 155,042,000 | ||||
Redeemable Noncontrolling Interest, Equity, Fair Value | $ 71,000,000 | 69,471,000 | $ 194,951,000 | |||
Noncontrolling Interest, Ownership Percentage by Parent | 100.00% | |||||
Aggregate 2015 Acquisitions [Member] | ||||||
Business Acquisition [Line Items] | ||||||
Business Acquisition, Cost of Acquired Entity, Cash Paid | 23,000 | |||||
Business Combination, Consideration Transferred, Liabilities Incurred | 32,279 | |||||
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Finite-Lived Intangibles | 16,721 | |||||
Goodwill, Acquired During Period | $ 43,654 | |||||
Acquired Finite-lived Intangible Assets, Weighted Average Useful Life | 6 years 4 months | |||||
Business Acquisition, Goodwill, Expected Tax Deductible Amount | $ 9,720 | |||||
Business Combination, Consideration Transferred | 55,279 | |||||
Aggregate 2015 Acquisitions [Member] | Y Media Labs, LLC [Member] | ||||||
Business Acquisition [Line Items] | ||||||
Business Combination, Acquisition of Less than 100 Percent, Noncontrolling Interest, Fair Value | 1,999 | |||||
Business Acquisition, Percentage of Voting Interests Acquired | 60.00% | |||||
Aggregate 2015 Acquisitions [Member] | Unique Influence, LLC [Domain] | ||||||
Business Acquisition [Line Items] | ||||||
Business Acquisition, Percentage of Voting Interests Acquired | 100.00% | |||||
Aggregate 2015 Step Up Transactions [Member] | ||||||
Business Acquisition [Line Items] | ||||||
Business Acquisition, Cost of Acquired Entity, Cash Paid | 37,467 | |||||
Business Combination, Consideration Transferred, Liabilities Incurred | 163,355 | |||||
Noncontrolling Interest, Decrease from Redemptions or Purchase of Interests | 149,335 | |||||
Business Combination, Consideration Transferred | 200,822 | |||||
Noncontrolling Interest [Member] | Aggregate 2015 Step Up Transactions [Member] | ||||||
Business Acquisition [Line Items] | ||||||
Noncontrolling Interest, Decrease from Redemptions or Purchase of Interests | 8,708 | |||||
Additional Paid-in Capital [Member] | Aggregate 2015 Step Up Transactions [Member] | ||||||
Business Acquisition [Line Items] | ||||||
Noncontrolling Interest, Decrease from Redemptions or Purchase of Interests | $ 42,780 | |||||
Contingent payment [Domain] | ||||||
Business Acquisition [Line Items] | ||||||
Business Combination, Contingent Consideration Arrangements, Change in Amount of Contingent Consideration, Liability | $ 6,327,000 | $ 2,248,000 |
Accruals and Other Liabilitie37
Accruals and Other Liabilities (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | |
Mar. 31, 2016 | Mar. 31, 2015 | Dec. 31, 2015 | |
Accrued and Other Liabilities [Abstract] | |||
Net Income (Loss) Attributable to Noncontrolling Interest | $ 859 | $ 2,380 | $ 9,054 |
Payments to Noncontrolling Interests | 2,399 | 2,839 | 9,503 |
Beginning balance | 5,473 | $ 6,014 | 6,014 |
Other | (12) | (92) | |
Ending balance | $ 3,921 | $ 5,473 |
Accruals and Other Liabilitie38
Accruals and Other Liabilities (Details Textual) - USD ($) $ in Thousands | Mar. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 |
Accrued and Other Liabilities [Abstract] | |||
Accrued Media Cost, Current | $ 138,441 | $ 187,540 | |
Accrued and Other Liabilities Attributable To Noncontrolling Interest | $ 3,921 | $ 5,473 | $ 6,014 |
Discontinued Operations (Detail
Discontinued Operations (Details) - USD ($) | 3 Months Ended | |||
Mar. 31, 2016 | Mar. 31, 2015 | Dec. 31, 2015 | May. 31, 2015 | |
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||||
Net loss from discontinued operations attributable to MDC Partners Inc., net of taxes | $ 0 | $ (6,294,000) | ||
Disposal Group, Disposed of by Sale, Not Discontinued Operations [Member] | ||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||||
Disposal Group, Including Discontinued Operation, Consideration | $ 0 | |||
Discontinued Operations [Member] | ||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||||
Revenue | 15,524,000 | |||
Operating loss | (1,552,000) | |||
Other expense | (72,000) | |||
Loss on disposal | (4,670,000) | |||
Net loss from discontinued operations attributable to MDC Partners Inc., net of taxes | $ (6,294,000) | |||
Discontinued Operations, Held-for-sale [Member] | ||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||||
Disposal Group, Including Discontinued Operation, Assets | $ 0 |
Debt (Details)
Debt (Details) - USD ($) | Mar. 31, 2016 | Dec. 31, 2015 | Mar. 31, 2015 |
Debt [Line Items] | |||
Debt Issuance Costs, Net | $ (20,389,000) | $ (12,625,000) | $ (14,511,000) |
Revolving credit agreement | 16,979,000 | 0 | |
Debt Instrument, Unamortized Premium | 0 | 5,838,000 | |
Debt, Long-term and Short-term, Combined Amount, Total | 896,590,000 | 728,213,000 | |
Obligations under capital leases | 519,000 | 670,000 | |
Debt and Capital Lease Obligations | 897,109,000 | 728,883,000 | |
Less current portion: | 415,000 | 470,000 | |
Long-term Debt, Excluding Current Maturities, Total | 896,694,000 | 728,413,000 | |
Notes due 2024 [Domain] | |||
Debt [Line Items] | |||
Senior Notes | 900,000,000 | 0 | |
Notes due 2020 [Member] | |||
Debt [Line Items] | |||
Senior Notes | $ 0 | $ 735,000,000 |
Debt (Details Textual)
Debt (Details Textual) - USD ($) | May. 01, 2024 | Mar. 23, 2016 | Oct. 23, 2014 | Mar. 20, 2013 | Mar. 31, 2016 | Mar. 31, 2015 | May. 01, 2019 | Dec. 31, 2015 |
Debt [Line Items] | ||||||||
Debt Issuance Costs, Net | $ 20,389,000 | $ 14,511,000 | $ 12,625,000 | |||||
Long-term Line of Credit, Noncurrent | 16,979,000 | 0 | ||||||
Loss on redemption of notes | (33,298,000) | 0 | ||||||
Debt Instrument, Unamortized Premium | 0 | 5,838,000 | ||||||
Interest Paid | 25,703,000 | $ 367,000 | ||||||
Letters of Credit Outstanding, Amount | 4,597,000 | |||||||
Outstanding Checks | $ 67,287,000 | 73,558,000 | ||||||
Six Point Five Zero Percentage Notes [Domain] | ||||||||
Debt [Line Items] | ||||||||
Debt Instrument, Face Amount | $ 900,000 | |||||||
Debt Instrument, Interest Rate, Stated Percentage | 6.50% | 6.50% | ||||||
Proceeds from Offering | $ 880,000 | |||||||
Debt Instrument, Redemption Date, One | May 1, 2019 | |||||||
Debt Instrument, Redemption Date, Two | May 1, 2020 | |||||||
Debt Instrument, Percentage Of Redemption Price, Redemption Date Three | 101.625% | |||||||
Debt Instrument, Redemption Date, Three | May 1, 2021 | |||||||
Debt Instrument, Redemption Date, Latest For Redemption At Face Amount | May 1, 2022 | |||||||
Debt Instrument, Percentage Of Redemption Price, Redemption Date One | 104.875% | |||||||
Debt Instrument, Percentage Of Redemption Price, Redemption Date Two | 103.25% | |||||||
Debt Instrument, Percentage Of Redemption Price, Redemption Date, Latest For Redemption At Face Amount | 100.00% | |||||||
Debt Instrument, Percentage Redeemable Redemption Date, Additional | 106.50% | |||||||
Debt Instrument, Percentage Of Redemption Price, Change In Ownership Control | 101.00% | |||||||
Notes due 2024 [Domain] | ||||||||
Debt [Line Items] | ||||||||
Senior Notes | $ 900,000,000 | 0 | ||||||
Debt Instrument, Interest Rate, Stated Percentage | 6.50% | |||||||
Notes due 2020 [Member] | ||||||||
Debt [Line Items] | ||||||||
Senior Notes | $ 0 | $ 735,000,000 | ||||||
Debt Instrument, Interest Rate, Stated Percentage | 6.75% | |||||||
6.75% Notes | ||||||||
Debt [Line Items] | ||||||||
Debt Instrument, Interest Rate, Stated Percentage | 6.75% | |||||||
Loss on redemption of notes | $ 33,298 | |||||||
Debt Instrument, Percentage Of Redemption Price, Redemption Date One | 103.375% | |||||||
Wells Fargo Capital Finance, LLC | ||||||||
Debt [Line Items] | ||||||||
Line of Credit Facility, Increase (Decrease), Net | $ 100,000,000 | |||||||
Long-term Line of Credit | $ 225,000,000 | |||||||
Debt Instrument, Maturity Date | Sep. 30, 2019 | |||||||
Debt Instrument, Face Amount | $ 325,000,000 | |||||||
Line of Credit Facility, Description | Dec. 31, 2018 | |||||||
Wells Fargo Capital Finance, LLC | Base Rate | ||||||||
Debt [Line Items] | ||||||||
Debt Instrument, Interest Rate, Stated Percentage | 1.00% | 1.00% | ||||||
Wells Fargo Capital Finance, LLC | London Interbank Offered Rate (LIBOR) | ||||||||
Debt [Line Items] | ||||||||
Debt Instrument, Interest Rate, Stated Percentage | 1.75% | 1.75% | ||||||
Wells Fargo Capital Finance, LLC | 6.75% Notes | ||||||||
Debt [Line Items] | ||||||||
Debt Instrument, Maturity Date | Apr. 1, 2020 | |||||||
Scenario, Forecast [Member] | Six Point Five Zero Percentage Notes [Domain] | ||||||||
Debt [Line Items] | ||||||||
Debt Instrument, Maturity Date | May 1, 2024 | |||||||
Scenario, Forecast [Member] | Wells Fargo Capital Finance, LLC | Six Point Five Zero Percentage Notes [Domain] | ||||||||
Debt [Line Items] | ||||||||
Debt Instrument, Maturity Date | May 1, 2024 | |||||||
Scenario, Forecast [Member] | Optional redemption [Domain] | Six Point Five Zero Percentage Notes [Domain] | ||||||||
Debt [Line Items] | ||||||||
Debt Instrument, Percentage Of Redemption Price Redemption Date, Additional | 35.00% |
Fair Value Measurements (Detail
Fair Value Measurements (Details) - USD ($) $ in Thousands | Mar. 31, 2016 | Dec. 31, 2015 |
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Business Combination, Contingent Consideration, Liability | $ 320,973 | $ 347,104 |
Fair Value, Inputs, Level 1 | Six Point Five Zero Percentage Notes [Domain] | ||
Liabilities: | ||
Long term debt, Carrying Amount | 900,000 | 0 |
Long term debt, Fair Value | 918,000 | 0 |
Fair Value, Inputs, Level 1 | 6.75% Notes | ||
Liabilities: | ||
Long term debt, Carrying Amount | 0 | 740,838 |
Long term debt, Fair Value | $ 0 | $ 765,319 |
Fair Value Measurements (Deta43
Fair Value Measurements (Details 1) - Fair Value, Inputs, Level 3 - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended |
Mar. 31, 2016 | Dec. 31, 2015 | |
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | ||
Beginning Balance of contingent payments | $ 306,734 | $ 172,227 |
Payments | (6,188) | (77,301) |
Grants | 517 | 174,530 |
Redemption value adjustments | 8,321 | 41,636 |
Foreign translation adjustment | 1,549 | (4,358) |
Ending Balance of contingent payments | $ 310,933 | $ 306,734 |
Fair Value Measurements (Deta44
Fair Value Measurements (Details Textual) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2016 | Dec. 31, 2015 | |
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Stock Issued During Period, Value, Restricted Stock Award, Net of Forfeitures | $ 0 | |
Business Combination, Contingent Consideration, Liability | 320,973 | $ 347,104 |
Fixed payments [Member] | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Business Combination, Contingent Consideration, Liability | 10,040 | $ 40,370 |
Common Stock [Member] | Common Class A [Member] | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Stock Issued During Period, Value, New Issues | $ 5,368 | |
Stock Issued During Period, Shares, New Issues | 227,437 | |
Stock Issued During Period, Value, Restricted Stock Award, Net of Forfeitures | $ 956 | |
Stock Issued During Period, Shares, Restricted Stock Award, Net of Forfeitures | 79,278 | |
Contingent Consideration, Liability Settlements [Domain] | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Stock Issued During Period, Value, New Issues | $ 5,368 |
Other Income (Expense) (Details
Other Income (Expense) (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2016 | Mar. 31, 2015 | |
Other Income and Expenses [Abstract] | ||
Foreign Currency Transaction Gain, before Tax | $ 15,454 | $ (18,530) |
Other income (expense), net | $ 15,512 | $ (18,040) |
Other Expense Disclosure, Nonoperating | 58 | 490 |
Segment Information (Details)
Segment Information (Details) $ in Thousands | 3 Months Ended | 12 Months Ended | |
Mar. 31, 2016USD ($)segment | Mar. 31, 2015USD ($) | Dec. 31, 2015USD ($) | |
Segment Reporting Information [Line Items] | |||
Number of Reportable Segments | segment | 1 | ||
Revenue | $ 309,042 | $ 302,222 | |
Cost of services sold | 211,446 | 210,419 | |
Office and general expenses | 77,828 | 74,308 | |
Depreciation and amortization | 11,220 | 12,300 | |
Operating profit | 8,548 | 5,195 | |
Other Income (Expense): | |||
Other income, net | 15,512 | (18,040) | |
Interest expense, net | (15,397) | (14,977) | |
Loss On Redemption Of Notes | (33,298) | 0 | |
Loss from continuing operations before income taxes, equity in affiliates | (24,635) | (27,822) | |
Income tax benefit | (1,972) | (4,054) | |
Loss from continuing operations before equity in affiliates | (22,663) | (23,768) | |
Equity in earnings of non-consolidated affiliates | 229 | 351 | |
Income from continuing operations | (22,434) | (23,417) | |
Loss from discontinuing operations attributable to MDC Partners Inc., net of taxes | 0 | (6,294) | |
Net loss | (22,434) | (29,711) | |
Net income attributable to the noncontrolling interests | (859) | (2,380) | $ (9,054) |
Net loss attributable to MDC Partners Inc. | (23,293) | (32,091) | |
Stock based compensation | 4,685 | 4,445 | |
Supplemental Segment Information: | |||
Capital expenditures | 5,539 | 5,656 | |
Goodwill and intangibles | 944,660 | 916,222 | |
Total Assets | 1,571,555 | 1,625,613 | $ 1,577,625 |
Corporate | |||
Segment Reporting Information [Line Items] | |||
Revenue | 0 | 0 | |
Cost of services sold | 0 | 0 | |
Office and general expenses | 12,733 | 20,372 | |
Depreciation and amortization | 397 | 446 | |
Operating profit | (13,130) | (20,818) | |
Other Income (Expense): | |||
Net income attributable to the noncontrolling interests | 0 | 0 | |
Stock based compensation | 804 | 945 | |
Supplemental Segment Information: | |||
Capital expenditures | 28 | 68 | |
Goodwill and intangibles | 0 | 0 | |
Total Assets | 158,567 | 142,000 | |
Advertising and Communications Segment [Domain] | |||
Segment Reporting Information [Line Items] | |||
Revenue | 309,042 | 302,222 | |
Cost of services sold | 211,446 | 210,419 | |
Office and general expenses | 65,095 | 53,936 | |
Depreciation and amortization | 10,823 | 11,854 | |
Operating profit | 21,678 | 26,013 | |
Other Income (Expense): | |||
Net income attributable to the noncontrolling interests | (859) | (2,380) | |
Stock based compensation | 3,881 | 3,500 | |
Supplemental Segment Information: | |||
Capital expenditures | 5,511 | 5,588 | |
Goodwill and intangibles | 944,660 | 916,222 | |
Total Assets | $ 1,412,988 | $ 1,483,613 |
Segment Information (Details 1)
Segment Information (Details 1) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2016 | Mar. 31, 2015 | |
Segment Reporting Information [Line Items] | ||
Revenue | $ 309,042 | $ 302,222 |
United States | ||
Segment Reporting Information [Line Items] | ||
Revenue | 252,199 | 252,018 |
Canada | ||
Segment Reporting Information [Line Items] | ||
Revenue | 28,406 | 29,825 |
Other Regions [Domain] | ||
Segment Reporting Information [Line Items] | ||
Revenue | $ 28,437 | $ 20,379 |
Segment Information Additional
Segment Information Additional Information (Details) | 3 Months Ended |
Mar. 31, 2016segment | |
Segment Reporting Information [Line Items] | |
Number of Reportable Segments | 1 |
Commitments, Contingencies an49
Commitments, Contingencies and Guarantees (Details Textual) - USD ($) | Dec. 31, 2015 | Aug. 07, 2015 | Dec. 31, 2015 | Sep. 30, 2015 | Mar. 31, 2016 | Sep. 30, 2015 | Mar. 31, 2015 |
Other Commitments [Line Items] | |||||||
Redeemable Noncontrolling Interest, Equity, Redemption Value | $ 71,000,000 | ||||||
Initial Perquisites Repayment | $ 11,285 | ||||||
Bonus Repayment | $ 10,582 | $ 1,500 | $ 1,000 | ||||
Non-recoverable cash bonus award charge | $ 5,338 | ||||||
Investment Commitments | 3,182,000 | ||||||
Letters of Credit Outstanding, Amount | $ 4,597,000 | ||||||
Minimum [Member] | |||||||
Other Commitments [Line Items] | |||||||
Redeemable noncontrolling interest obligation, year of payment | 2,016 | ||||||
Maximum [Member] | |||||||
Other Commitments [Line Items] | |||||||
Redeemable noncontrolling interest obligation, year of payment | 2,024 | ||||||
Contractual redemption right [Member] | |||||||
Other Commitments [Line Items] | |||||||
Redeemable Noncontrolling Interest, Equity, Redemption Value | $ 16,710,000 | ||||||
Contractual redemption right [Domain] | Common Class A [Member] | |||||||
Other Commitments [Line Items] | |||||||
Redeemable Noncontrolling Interest, Equity, Redemption Value | 120,000 | ||||||
Excess initial redemption value [Domain] | |||||||
Other Commitments [Line Items] | |||||||
Redeemable Noncontrolling Interest, Equity, Redemption Value | 3,449,000 | ||||||
Termination or death redemption right [Domain] | |||||||
Other Commitments [Line Items] | |||||||
Redeemable Noncontrolling Interest, Equity, Redemption Value | 50,841,000 | ||||||
SEC Investigation [Member] | |||||||
Other Commitments [Line Items] | |||||||
Professional Fees | $ 1,486 | $ 5,762 |
Subsequent Events and Other (De
Subsequent Events and Other (Details) - Wells Fargo Capital Finance, Llc [Member] | May. 03, 2016 | Oct. 23, 2014 |
Subsequent Event [Line Items] | ||
Debt Instrument, Maturity Date | Sep. 30, 2019 | |
Subsequent Event [Member] | ||
Subsequent Event [Line Items] | ||
Debt Instrument, Maturity Date | May 3, 2021 |