PR Newswire | Mar 2, 2021 07:02AM EST

December 31, 2020

03/02 06:00 CST

MDC Partners Inc. Reports Results For The Three And Twelve Months Ended December 31, 2020 NEW YORK, March 2, 2021

Company Delivers15.8% Sequential Revenue Growth in Fourth Quarter,Guides 7-9% Revenue Growth in 2021

FOURTH QUARTER & 2020 HIGHLIGHTS:

* Revenue of $328.2 million in the fourth quarter versus $382.0 million in the prior year period, a decline of 14.1%; and $1.20 billion in 2020 versus $1.42 billion in the prior year, a decline of 15.3%. * Sequential revenue growth of 15.8% from the third quarter of 2020. * Organic revenue declined 13.7% in the fourth quarter and 13.9% in 2020. * Net loss attributable to MDC Partners Inc. common shareholders was $243.2 million (inclusive of principally non-cash impairment and other charges of $96.4 million and a $130 million non-cash income tax valuation allowance) in 2020 versus a net loss of $17.6 million in the prior year. * Adjusted EBITDA of $177.3 million in 2020 versus $174.2 million in the prior year, an increase of 1.8%. Adjusted EBITDA Margin of 14.8% in 2020, increasing 250 basis points from 12.3% in the prior year. * Excluding the sales of Kingsdale and Sloane, Adjusted EBITDA increased 5.2% in 2020 compared with the prior year. * Covenant EBITDA of $190.1 million in 2020 versus $180.5 million in 2019, an improvement of 5.3%. * Net New Business wins totaled $29.5 million in the fourth quarter and $90.3 million in 2020.

NEW YORK, March 2, 2021 /PRNewswire/ -- (NASDAQ: MDCA) - MDC Partners Inc. ("MDC Partners" or the "Company") today announced financial results for the three and twelve months ended December 31, 2020.

"MDC delivered 15.8% sequential revenue growth from the third quarter of 2020, $190 million of Covenant EBITDA in 2020, up 5.3% from prior year and $90 million of net new business in 2020," said Mark Penn, Chairman and Chief Executive Officer of MDC Partners. "The business continued to see a rebound from pandemic lows, with strong sequential improvement in revenue driven by double-digit growth in most client sectors led by Consumer Products, Technology and Healthcare. While COVID-19 headwinds remain, we expect the rebound to continue into 2021, with 7 to 9% organic revenue growth for the year."

"Building upon MDC's transformation over the last two years, we recently announced a strategic business combination with The Stagwell Group, which unites the award-winning creative talent of MDC's network with the advanced technology platform of Stagwell, unleashing the power of Talent & Technology around the world."

Frank Lanuto, Chief Financial Officer, added, "Despite lower revenue in 2020, we expanded Adjusted EBITDA margins by 250 basis points. We continued to lower our leverage, down to 4.4x, and delivered $35 million in cash flow from operations in the quarter, ending the year with $61 million in cash and no revolver borrowings."

Fourth Quarter and Year-to-Date2020 Financial ResultsRevenue for the fourth quarter of 2020 was $328.2 million versus $382.0 million for the fourth quarter of 2019, a decline of 14.1%. The effect on revenue of foreign exchange was positive 0.7%, the impact of non-GAAP acquisitions (dispositions), net was negative 1.2%, and organic revenue decline was 13.7%. Organic revenue declined primarily due to reduced spending by clients in connection with COVID-19. Net revenue (revenue less billable costs), was $271.4 million for the fourth quarter of 2020 versus $314.0 million for the fourth quarter of 2019, a decline of 13.6%. The effect on net revenue of foreign exchange was positive 0.8%, the impact of non-GAAP acquisitions (dispositions), net was negative 1.2%, and organic net revenue decline was 13.0%.

Revenue in the fourth quarter of 2020 increased 15.8% sequentially from the third quarter of 2020 as client spending activity increased following the initial decline in the third quarter.

Net New Business wins in the fourth quarter of 2020 totaled $29.5 million.

Net loss attributable to MDC Partners Inc. common shareholders for the fourth quarter of 2020 was $237.1 million versus a net loss of $11.1 million for the fourth quarter of 2019. The increase was primarily due to the recognition of impairment charges and an income tax valuation allowance, as well as the decline in revenue. Diluted loss per share attributable to MDC Partners Inc. common shareholders for the fourth quarter of 2020 was $3.23 versus diluted loss per share of $0.15 for the fourth quarter of 2019.

Adjusted EBITDA for the fourth quarter of 2020 was $47.5 million versus $57.0 million for the fourth quarter of 2019, a decrease of 16.6%, primarily due to COVID-19 driven reductions in revenue. In addition, Adjusted EBITDA margin in the fourth quarter of 2020 was 14.5%, down from 14.9% in the fourth quarter of 2019.

Revenue in 2020 was $1.20 billion versus $1.42 billion in 2019, a decline of 15.3%. The effect on revenue of foreign exchange due to the rising US Dollar was negative 0.1%, the impact of non-GAAP acquisitions (dispositions), net was negative 1.3%, and organic revenue decline was 13.9%. Organic revenue declined primarily due to reduced spending by clients in connection with COVID-19. Net revenue (revenue less billable costs), was $1.02 billion in 2020 versus $1.19 billion in 2019, a decline of 13.9%. The effect on net revenue of foreign exchange was negative 0.2%, the impact of non-GAAP acquisitions (dispositions), net was negative 1.4%, and organic net revenue decline was 12.3%.

Net New Business wins in 2020 totaled $90.3 million.

Net loss attributable to MDC Partners Inc. common shareholders in 2020 was $243.2 million, an increase versus a net loss of $17.6 million in 2019. The increase was primarily due to the recognition of impairment charges and an income tax valuation allowance, as well as the decline in revenue. Diluted loss per share attributable to MDC Partners Inc. common shareholders in 2020 was $3.34 versus a diluted loss per share of $0.25 in 2019.

Adjusted EBITDA in 2020 was $177.3 million versus $174.2 million in 2019, an increase of 1.8%. The improvement was primarily due to a reduction in expenses to combat the impact of COVID-19 on the business, partially offset by lower revenues. This led to a 250 basis point improvement in Adjusted EBITDA Margin in 2020 to 14.8% from 12.3% in 2019.

Covenant EBITDA for 2020 was $190.1 million versus $180.5 million in 2019, an increase of 5.3%. The change was primarily driven by the increase in Adjusted EBITDA.

Financial Outlook

2021 financial guidance is updated as follows:

2021 Outlook Commentary *



Organic Revenue Growth We expect approximately7 to 9% growth in organic revenue.



Foreign Exchange Impact, net No estimated impact at this time.



Our current Impact of Non-GAAP Acquisitions (Dispositions), netexpectations are that the impact of acquisitions, net of disposition activity, will have no material impact on revenue.



Adjusted EBITDA The Company expects to complete fiscal year 2021 with approximately$190 million to $200 million of Adjusted EBITDA, approximately 7 to 13% above prior year.





* The Company has excluded a quantitative reconciliation with respect to theCompany's 2020 guidance under the "unreasonable efforts" exception in Item 10(e)(1)(i)(B) of Regulation S-K See "Non-GAAP Financial Measures" below foradditional information.

Conference Call

Management will host a conference call on Tuesday, March 2, 2021, at 8:30 a.m. (ET) to discuss its results. The conference call will be accessible by dialing 1-412-902-4266 or toll free 1-888-346-6216. An investor presentation has been posted on our website at www.mdc-partners.com and may be referred to during the conference call.

A recording of the conference call will be accessible within one hour after the end of the conference call until 12:00 a.m. (ET), March 7, 2021, by dialing 1-412-317-0088 or toll free 1-877-344-7529 (passcode 10151483), or by visiting our website at www.mdc-partners.com

About MDC Partners Inc.

MDC Partners is one of the most influential marketing and communications networks in the world. As "The Place Where Great Talent Lives," MDC Partners is celebrated for its innovative advertising, public relations, branding, digital, social and event marketing agency partners, which are responsible for some of the most memorable and effective campaigns for the world's most respected brands. By leveraging technology, data analytics, insights and strategic consulting solutions, MDC Partners drives creative excellence, business growth and measurable return on marketing investment for over 1,700 clients worldwide. For more information about MDC Partners and its partner firms, visit our website at www.mdc-partners.com and follow us on Twitter at http://www.twitter.com/mdcpartners.

Non-GAAP Financial Measures

In addition to its reported results, MDC Partners has included in this earnings release certain financial results that the Securities and Exchange Commission (SEC) defines as "non-GAAP financial measures." Management believes that such non-GAAP financial measures, when read in conjunction with the Company's reported results, can provide useful supplemental information for investors analyzing period to period comparisons of the Company's results. Such non-GAAP financial measures include the following:

(1) Organic Revenue: "Organic revenue growth" and "organic revenue decline" refer to the positive or negative results, respectively, of subtracting both the foreign exchange and acquisition (disposition) components from total revenue growth. The acquisition (disposition) component is calculated by aggregating prior period revenue for any acquired businesses, less the prior period revenue of any businesses that were disposed of during the current period. The organic revenue growth (decline) component reflects the constant currency impact of (a) the change in revenue of the partner firms that the Company has held throughout each of the comparable periods presented, and (b) "non-GAAP acquisitions (dispositions), net". Non-GAAP acquisitions (dispositions), net consists of (i) for acquisitions during the current year, the revenue effect from such acquisition as if the acquisition had been owned during the equivalent period in the prior year and (ii) for acquisitions during the previous year, the revenue effect from such acquisitions as if they had been owned during that entire year (or same period as the current reportable period), taking into account their respective pre-acquisition revenues for the applicable periods, and (iii) for dispositions, the revenue effect from such disposition as if they had been disposed of during the equivalent period in the prior year.

(2) Net New Business: Estimate of annualized revenue for new wins less annualized revenue for losses incurred in the period.

(3) Adjusted EBITDA: Adjusted EBITDA is a non-GAAP financial measure that represents Net income (loss) attributable to MDC Partners Inc. common shareholders plus or minus adjustments to operating income (loss) plus depreciation and amortization, stock-based compensation, deferred acquisition consideration adjustments, distributions from non-consolidated affiliates, and other items, net which includes items such as severance expense and other restructuring expenses, including costs for leases that will either be terminated or sublet in connection with the centralization of our New York real estate portfolio.

(4) Covenant EBITDA: Covenant EBITDA is a measure that includes pro forma adjustments for acquisitions, onetime charges, permitted dispositions and other items, as defined in the Company's Credit Agreement. We believe that the presentation of Covenant EBITDA is useful to investors as it eliminates the effect of certain non-cash and other items not necessarily indicative of a company's underlying operating performance. In addition, the presentation of Covenant EBITDA provides additional information to investors about the calculation of, and compliance with, certain financial covenants in the Company's Credit Agreement.

Included in this earnings release are tables reconciling MDC Partners' reported results to arrive at certain of these non-GAAP financial measures.

This press release contains forward-looking statements. Statements in this press release that are not historical facts, including without limitation the information under the heading "Financial Outlook" and statements about the Company's beliefs and expectations, earnings (loss) guidance, recent business and economic trends, potential acquisitions, and estimates of amounts for redeemable noncontrolling interests and deferred acquisition consideration, constitute forward-looking statements. Words such as "estimates", "expects", "contemplates", "will", "anticipates", "projects", "plans", "intends", "believes", "forecasts", "may", "should", and variations of such words or similar expressions are intended to identify forward-looking statements. These statements are based on current plans, estimates and projections, and are subject to change based on a number of factors, including those outlined in this section. Forward-looking statements speak only as of the date they are made, and the Company undertakes no obligation to update publicly any of them in light of new information or future events, if any.

Forward-looking statements involve inherent risks and uncertainties. A number of important factors could cause actual results to differ materially from those contained in any forward-looking statements. Such risk factors include, but are not limited to, the following:

* risks associated with international, national and regional unfavorable economic conditions that could affect the Company or its clients, including as a result of the novel coronavirus pandemic ("COVID-19"); * the effects of the outbreak of COVID-19, including the measures to reduce its spread, and the impact on the economy and demand for our services, which may precipitate or exacerbate other risks and uncertainties; * an inability to realize expected benefits of the proposed redomiciliation of the Company from the federal jurisdiction of Canada to the State of Delaware (the "Redomiciliation") and the subsequent combination of the Company's business with the business of the subsidiaries of Stagwell Media LP ("Stagwell") that own and operate a portfolio of marketing services companies (the "Business Combination" and, together with the Redomiciliation, the "Proposed Transactions") or the occurrence of difficulties in connection with the Proposed Transaction; * adverse tax consequences in connection with the Proposed Transactions for the Company, its operations and its shareholders, that may differ from the expectations of the Company, including that future changes in tax law, potential increases to corporate tax rates in the United States and disagreements with the tax authorities on the Company's determination of value and computations of its tax attributes may result in increased tax costs; * the occurrence of material Canadian federal income tax (including material "emigration tax") as a result of the Proposed Transactions; * the impact of uncertainty associated with the Proposed Transactions on the Company's businesses; * direct or indirect costs associated with the Proposed Transactions, which could be greater than expected; * the risk that a condition to completion of the Proposed Transactions may not be satisfied and the Proposed Transactions may not be completed; * the risk of parties challenging the Proposed Transactions or the impact of the Proposed Transactions on the Company's debt arrangements; * the Company's ability to attract new clients and retain existing clients; * reduction in client spending and changes in client advertising, marketing and corporate communications requirements; * financial failure of the Company's clients; * the Company's ability to retain and attract key employees; * the Company's ability to achieve the full amount of its stated cost saving initiatives; * the Company's implementation of strategic initiatives; * the Company's ability to remain in compliance with its debt agreements and the Company's ability to finance its contingent payment obligations when due and payable, including but not limited to those relating to redeemable noncontrolling interests and deferred acquisition consideration; * the successful completion and integration of acquisitions which complement and expand the Company's business capabilities; and * foreign currency fluctuations.

Investors should carefully consider these risk factors and the additional risk factors outlined in more detail in the Company's Annual Report on Form 10-K and in the Company's other SEC filings.

SCHEDULE 1

MDC PARTNERS INC.

UNAUDITED CONSOLIDATED STATEMENTS OF OPERATIONS

(US$ in 000s, Except per Share Amounts)

Three Months Ended Twelve Months Ended December 31, December 31,

2020 2019 2020 2019

Revenue:

Services $ 328,168 $ 381,975 $ 1,199,011 $ 1,415,803

Operating Expenses:

Cost of services sold 209,043 260,725 769,899 961,076

Office and general expenses 136,490 94,219 341,565 328,339

Depreciation and amortization 9,468 9,460 36,905 38,329

Impairment and other losses 77,240 6,655 96,399 8,599

432,241 371,059 1,244,768 1,336,343

Operating income (loss) (104,073) 10,916 (45,757) 79,460

Other Income (Expenses):

Interest expense and finance charges, net (15,344) (15,658) (62,163) (64,942)

Foreign exchange gain (loss) 6,274 4,349 (982) 8,750

Other, net (2,223) 2,158 20,500 (2,401)

(11,293) (9,151) (42,645) (58,593)

Income (loss) before income taxes and equity in earnings of (115,366) 1,765 (88,402) 20,867non-consolidated affiliates

Income tax expense 109,526 4,024 116,555 10,316

Income (loss) before equity in earnings of non-consolidated affiliates (224,892) (2,259) (204,957) 10,551

Equity in earnings (losses) of non-consolidated affiliates (1,411) - (2,240) 352

Net income (loss) (226,303) (2,259) (207,197) 10,903

Net income attributable to the noncontrolling interest (7,154) (5,419) (21,774) (16,156)

Net loss attributable to MDC Partners Inc. (233,457) (7,678) (228,971) (5,253)

Accretion on and net income allocated to convertible preference shares (3,651) (3,373) (14,179) (12,304)

Net loss attributable to MDC Partners Inc. common shareholders $ (237,108) $ (11,051) $ (243,150) $ (17,557)

Loss Per Common Share:

Basic

Net loss attributable to MDC Partners Inc. common shareholders $ (3.23) $ (0.15) $ (3.34) $ (0.25)

Diluted

Net loss attributable to MDC Partners Inc. common shareholders $ (3.23) $ (0.15) $ (3.34) $ (0.25)

Weighted Average Number of Common Shares Outstanding:

Basic 73,312,906 72,149,204 72,862,178 69,132,100

Diluted 73,312,906 72,149,204 72,862,178 69,132,100

SCHEDULE 2

MDC PARTNERS INC.

UNAUDITED REVENUE RECONCILIATION

(US$ in 000s, except percentages)

Three Months Ended Twelve Months Ended

Revenue $ % Change Revenue $ % Change

December 31, 2019 $ 381,975 $ 1,415,803

Organic revenue^ (1) (52,180) (13.7) % (197,466) (13.9) %

Non-GAAP acquisitions (dispositions), net (4,447) (1.2) % (18,312) (1.3) %

Foreign exchange impact 2,820 0.7 % (1,014) (0.1) %

Total change (53,807) (14.1) % (216,792) (15.3) %

December 31, 2020 $ 328,168 $ 1,199,011

^(1) Organic revenue refers to the positive results of subtracting both theforeign exchange and acquisition (disposition) components from total revenuegrowth. The acquisition (disposition) component is calculated by aggregatingprior period revenue for any acquired businesses, less the prior period revenueof any businesses that were disposed of during the current period. The organicrevenue component reflects the constant currency impact of (a) the change inrevenue of the partner firms which the Company has held throughout each of thecomparable periods presented, and (b) "non-GAAP acquisitions (dispositions),net". Non-GAAP acquisitions (dispositions), net consists of (i) foracquisitions during the current year, the revenue effect from such acquisitionas if the acquisition had been owned during the equivalent period in the prioryear and (ii) for acquisitions during the previous year, the revenue effectfrom such acquisitions as if they had been owned during that entire year (orsame period as the current reportable period), taking into account theirrespective pre-acquisition revenues for the applicable periods, and (iii) fordispositions, the revenue effect from such disposition as if they had beendisposed of during the equivalent period in the prior year. See "Non-GAAPFinancial Measures" herein.

Note: Actuals may not foot due to rounding.

SCHEDULE 3

MDC PARTNERS INC.

UNAUDITED RECONCILIATION OF NET INCOME (LOSS) TO ADJUSTED EBITDA

(US$ in 000s, except percentages)

For the Three Months Ended December 31, 2020

Integrated Integrated Media & Networks - Networks - Data All Other Corporate Total Group A Group B Network

Revenue $ 119,228 $ 112,325 $ 35,834 $ 60,781 $ - $ 328,168

Net loss attributable to MDC Partners Inc. common $ (237,108)shareholders

Adjustments to reconcile to operating loss:

Accretion on and net income allocated to convertible 3,651preference shares

Net income attributable to the noncontrolling 7,154interests

Equity in losses of non-consolidated affiliates 1,411

Income tax expense 109,526

Interest expense and finance charges, net 15,344

Foreign exchange gain (6,274)

Other, net 2,223

Operating income (loss) $ (25,040) $ 1,501 $ (10,501) $ (41,066) $ (28,967) $ (104,073)

margin (21.0) % 1.3 % (29.3) % (67.6) % (31.7) %

Adjustments:

Depreciation and amortization 1,559 3,478 1,975 1,743 713 9,468

Impairment and other losses 6,391 13,998 11,725 45,126 - 77,240

Stock-based compensation 1,700 803 - (35) 1,143 3,611

Deferred acquisition consideration adjustments 39,682 1,153 - 837 - 41,672

Distributions from non- consolidated affiliates^ (1) - - - - 902 902

Other items, net ^(2) 985 243 798 214 16,485 18,725

Adjusted EBITDA ^(3) $ 25,277 $ 21,176 $ 3,997 $ 6,819 $ (9,724) $ 47,545

Adjusted EBITDA margin 21.2 % 18.9 % 11.2 % 11.2 % 14.5 %

^(1) Distributions from non-consolidated affiliates includes (i) cash receivedfor profit distributions from non-consolidated affiliates, and (ii)consideration from the sale of ownership interests in non-consolidatedaffiliates less contributions to date plus undistributed earnings (losses).

^(2) Other items, net includes items such as severance expense and otherrestructuring expenses. See Schedule 11 for a reconciliation of amounts.

^(3) Adjusted EBITDA is a non-GAAP financial measure, and as shown above itrepresents operating income (loss) plus depreciation and amortization,stock-based compensation, deferred acquisition consideration adjustments,distributions from non-consolidated affiliates, impairment and other items. See"Non-GAAP Financial Measures" herein.

Note: Effective in the first quarter of 2020, the Company reorganized itsmanagement structure resulting in the aggregation of certain Partner Firms intointegrated groups ("Networks"). In connection with our discussions with theSEC, the Company has changed the prior presentation for the Networks. Beginningin the second quarter of 2020, the Company separated the Networks into tworeportable segments: Integrated Networks - Group A and Integrated Networks -Group B. Prior periods presented have been recast to reflect the change inreportable segments.

Note: Actuals may not foot due to rounding.

SCHEDULE 4

MDC PARTNERS INC.

UNAUDITED RECONCILIATION OF NET INCOME (LOSS) TO ADJUSTED EBITDA

(US$ in 000s, except percentages)

For the Twelve Months Ended December 31, 2020

Integrated Integrated Media & Networks - Networks - Data All Other Corporate Total Group A Group B Network

Revenue $ 379,648 $ 435,589 $ 139,015 $ 244,759 $ - $ 1,199,011

Net loss attributable to MDC Partners Inc. common $ (243,150)shareholders

Adjustments to reconcile to operating income (loss):

Accretion on and net income allocated to convertible 14,179preference shares

Net income attributable to the noncontrolling 21,774interests

Equity in losses of non-consolidated affiliates 2,240

Income tax expense 116,555

Interest expense and finance charges, net 62,163

Foreign exchange loss 982

Other, net (20,500)

Operating income (loss) $ 14,297 $ 34,581 $ (7,724) $ (23,021) $ (63,890) $ (45,757)

margin 3.8 % 7.9 % (5.6) % (9.4) % (3.8) %

Adjustments:

Depreciation and amortization 6,467 17,204 4,376 7,478 1,380 36,905

Impairment and other losses 6,391 31,784 11,760 45,335 1,129 96,399

Stock-based compensation 7,580 3,191 122 304 2,982 14,179

Deferred acquisition consideration adjustments 44,073 (2,706) 375 445 - 42,187

Distributions from non- consolidated affiliates^ (1) - - - - 2,175 2,175

Other items, net ^(2) 985 243 798 214 29,004 31,244

Adjusted EBITDA ^(3) $ 79,793 $ 84,297 $ 9,707 $ 30,755 $ (27,220) $ 177,332

Adjusted EBITDA margin 21.0 % 19.4 % 7.0 % 12.6 % 14.8 %

^(1) Distributions from non-consolidated affiliates includes (i) cash receivedfor profit distributions from non-consolidated affiliates, and (ii)consideration from the sale of ownership interests in non-consolidatedaffiliates less contributions to date plus undistributed earnings (losses).

^(2) Other items, net includes items such as severance expense and otherrestructuring expenses. See Schedule 11 for a reconciliation of amounts.

^(3) Adjusted EBITDA is a non-GAAP financial measure, and as shown above itrepresents operating income (loss) plus depreciation and amortization,stock-based compensation, deferred acquisition consideration adjustments,distributions from non-consolidated affiliates, impairment and other items. See"Non-GAAP Financial Measures" herein.

Note: Actuals may not foot due to rounding.

SCHEDULE 5

MDC PARTNERS INC.

UNAUDITED RECONCILIATION OF NET INCOME (LOSS) TO ADJUSTED EBITDA

(US$ in 000s, except percentages)

For the Three Months Ended December 31, 2019

Integrated Integrated Media & Networks - Networks - Data All Other Corporate Total Group A Group B Network

Revenue $ 115,814 $ 136,095 $ 42,527 $ 87,539 $ - $ 381,975

Net loss attributable to MDC Partners Inc. common $ (11,051)shareholders

Adjustments to reconcile to operating loss:

Accretion on and net income allocated to convertible 3,373preference shares

Net income attributable to the noncontrolling interests 5,419

Income tax expense 4,024

Interest expense and finance charges, net 15,658

Foreign exchange gain (4,349)

Other, net (2,158)

Operating income (loss) $ 6,677 $ 9,226 $ 3,416 $ 6,800 $ (15,203) $ 10,916

margin 5.8 % 6.8 % 8.0 % 7.8 % 2.9 %

Adjustments:

Depreciation and amortization 2,139 3,940 971 2,172 238 9,460

Impairment and other losses 4,879 - 929 - 847 6,655

Stock-based compensation 15,856 1,072 42 10 1,428 18,408

Deferred acquisition consideration adjustments 2,140 5,213 - 1,677 - 9,030

Distributions from non- consolidated affiliates^ (1) - - - - 2,219 2,219

Other items, net ^(2) - - - - 349 349

Adjusted EBITDA ^(3) $ 31,691 $ 19,451 $ 5,358 $ 10,659 $ (10,122) $ 57,037

Adjusted EBITDA margin 27.4 % 14.3 % 12.6 % 12.2 % 14.9 %

^(1) Distributions from non-consolidated affiliates includes (i) cash receivedfor profit distributions from non-consolidated affiliates, and (ii)consideration from the sale of ownership interests in non-consolidatedaffiliates less contributions to date plus undistributed earnings (losses).

^(2) Other items, net includes items such as severance expense and otherrestructuring expenses. See Schedule 11 for a reconciliation of amounts.

^(3) Adjusted EBITDA is a non-GAAP financial measure, and as shown above itrepresents operating income (loss) plus depreciation and amortization,stock-based compensation, deferred acquisition consideration adjustments,distributions from non-consolidated affiliates, impairment and other items. See"Non-GAAP Financial Measures" herein.

Note: Actuals may not foot due to rounding.

SCHEDULE 6

MDC PARTNERS INC.

UNAUDITED RECONCILIATION OF NET INCOME (LOSS) TO ADJUSTED EBITDA

(US$ in 000s, except percentages)

For the Twelve Months Ended December 31, 2019

Integrated Integrated Media & Networks - Networks - Data All Other Corporate Total Group A Group B Network

Revenue $ 392,101 $ 531,717 $ 161,451 $ 330,534 $ - $ 1,415,803

Net loss attributable to MDC Partners Inc. common $ (17,557)shareholders

Adjustments to reconcile to operating income (loss):

Accretion on and net income allocated to convertible 12,304preference shares

Net income attributable to the noncontrolling interests 16,156

Equity in earnings of non-consolidated affiliates (352)

Income tax expense 10,316

Interest expense and finance charges, net 64,942

Foreign exchange gain (8,750)

Other, net 2,401

Operating income (loss) $ 35,230 $ 61,417 $ 2,376 $ 26,205 $ (45,768) $ 79,460

margin 9.0 % 11.6 % 1.5 % 7.9 % 5.6 %

Additional adjustments to reconcile to Adjusted EBITDA:

Depreciation and amortization 8,559 15,904 4,303 8,695 868 38,329

Impairment and other losses 4,879 1,933 929 11 847 8,599

Stock-based compensation 24,420 4,303 63 374 1,880 31,040

Deferred acquisition consideration adjustments 1,734 1,261 75 2,333 - 5,403

Distributions from non- consolidated affiliates^ (1) - (250) - - 2,298 2,048

Other items, net ^(2) - - - - 9,274 9,274

Adjusted EBITDA ^(3) $ 74,822 $ 84,568 $ 7,746 $ 37,618 $ (30,601) $ 174,153

Adjusted EBITDA margin 19.1 % 15.9 % 4.8 % 11.4 % 12.3 %

^(1) Distributions from non-consolidated affiliates includes (i) cash receivedfor profit distributions from non-consolidated affiliates, and (ii)consideration from the sale of ownership interests in non-consolidatedaffiliates less contributions to date plus undistributed earnings (losses).

^(2) Other items, net includes items such as severance expense and otherrestructuring expenses. See Schedule 11 for a reconciliation of amounts.

^(3) Adjusted EBITDA is a non-GAAP financial measure, and as shown above itrepresents operating income (loss) plus depreciation and amortization,stock-based compensation, deferred acquisition consideration adjustments,distributions from non-consolidated affiliates, impairment and other items.See "Non-GAAP Financial Measures" herein.

Note: Actuals may not foot due to rounding.

SCHEDULE 7

MDC PARTNERS INC.

UNAUDITED RECONCILIATION OF NET INCOME (LOSS) TO COVENANT EBITDA

(US$ in 000s)

Covenant

2020 EBITDA

(LTM) ^(1)

Q1 Q2 Q3 Q4 Q4-2020 - LTM

Net income (loss) attributable to MDC Partners Inc. common $ (2,437) $ (4,102) $ 360 $ (237,108) $ (243,287)shareholders

Adjustments to reconcile to operating income (loss):

Accretion on and net income allocated to convertible 3,440 3,509 3,716 3,651 14,316preference shares

Net income attributable to the noncontrolling interests 791 3,101 10,728 7,154 21,774

Equity in losses of non-consolidated affiliates - 798 31 1,411 2,240

Income tax expense (benefit) 13,500 (7,923) 1,452 109,526 116,555

Interest expense and finance charges, net 15,612 15,941 15,266 15,344 62,163

Foreign exchange loss (gain) 14,757 (5,342) (2,159) (6,274) 982

Other, net (16,334) (5,884) (505) 2,223 (20,500)

Operating income (loss) 29,329 98 28,889 (104,073) (45,757)

Adjustments to reconcile to Adjusted EBITDA:

Depreciation and amortization 9,206 8,899 9,332 9,468 36,905

Impairment and other losses 161 18,839 159 77,240 96,399

Stock-based compensation 3,070 1,039 6,459 3,611 14,179

Deferred acquisition consideration adjustments (4,600) 2,312 2,803 41,672 42,187

Distributions from non-consolidated affiliates (14) 1,079 208 902 2,175

Other items, net ^(2) 2,416 3,895 6,208 18,725 31,244

Adjusted EBITDA 39,568 36,161 54,058 47,545 177,332

Adjustments to reconcile to Covenant EBITDA:

Proforma dispositions ^(3) (124) - - - (124)

Severance due to eliminated positions 2,133 5,233 2,336 1,987 11,689

Other adjustments, net^ (4) 357 207 77 585 1,226

Covenant adjusted EBITDA $ 41,934 $ 41,601 $ 56,471 $ 50,117 $ 190,123

^(1) Covenant EBITDA is a measure that includes pro forma adjustments foracquisitions, one-time charges, permitted dispositions and other adjustments,as defined in the Company's Credit Agreement. Covenant EBITDA is calculated asthe aggregate of operating results for the rolling last twelve months (LTM).Each quarter is presented to provide the information utilized to calculateCovenant EBITDA. Historical Covenant EBITDA may be re-casted in the currentperiod for any proforma adjustments related to acquisitions and/or dispositionsin the current period. See "Non-GAAP Financial Measures" herein.

^(2) Other items, net includes items such as severance expense and otherrestructuring expenses. See Schedule 11 for a reconciliation of amounts.

^(3) Represents Kingsdale and Sloane EBITDA for the respective period.

^(4) Other adjustments, net primarily includes one-time professional fees andcosts associated with real estate consolidation.

Note: Actuals may not foot due to rounding.

SCHEDULE 8

MDC PARTNERS INC.

UNAUDITED RECONCILIATION OF NET INCOME (LOSS) TO COVENANT EBITDA

(US$ in 000s)

Covenant 2019 EBITDA (LTM) ^(1)

Q1 Q2 Q3 Q4 Q4-2019 LTM

Net income (loss) attributable to MDC Partners Inc. common $ (2,496) $ 1,048 $ (5,058) $ (11,051) $ (17,557)shareholders

Adjustments to reconcile to operating income:

Accretion on and net income allocated to convertible 2,383 3,242 3,306 3,373 12,304preference shares

Net income attributable to the noncontrolling interests 429 3,043 7,265 5,419 16,156

Equity in (earnings) of non-consolidated affiliates (83) (206) (63) - (352)

Income tax expense 746 2,089 3,457 4,024 10,316

Interest expense and finance charges, net 16,761 16,413 16,110 15,658 64,942

Foreign exchange loss (gain) (5,442) (2,932) 3,973 (4,349) (8,750)

Other, net 3,383 745 431 (2,158) 2,401

Operating income 15,681 23,442 29,421 10,916 79,460

Adjustments to reconcile to Adjusted EBITDA:

Depreciation and amortization 8,838 10,663 9,368 9,460 38,329

Impairment and other losses - - 1,944 6,655 8,599

Stock-based compensation 2,972 3,634 6,026 18,408 31,040

Deferred acquisition consideration adjustments (7,643) 2,073 1,943 9,030 5,403

Distributions from non-consolidated affiliates - 31 (202) 2,219 2,048

Other items, net ^(2) 1,626 6,594 705 349 9,274

Adjusted EBITDA 21,474 46,437 49,205 57,037 174,153

Adjustments to reconcile to Covenant EBITDA:

Proforma acquisitions/dispositions ^(3) (2,701) (729) (996) (1,294) (5,720)

Severance due to eliminated positions 1,534 2,346 1,956 3,221 9,057

Other adjustments, net^ (4) 1,412 989 228 368 2,997

$ 21,719 $ 49,043 $ 50,393 $ 59,332 $ 180,487

^(1) Covenant EBITDA is a measure that includes pro forma adjustments foracquisitions, one-time charges, permitted dispositions and other adjustments,as defined in the Company's Credit Agreement. Covenant EBITDA is calculated asthe aggregate of operating results for the rolling last twelve months (LTM).Each quarter is presented to provide the information utilized to calculateCovenant EBITDA. Historical Covenant EBITDA may be re-casted in the currentperiod for any proforma adjustments related to acquisitions and/or dispositionsin the current period. See "Non-GAAP Financial Measures" herein.

^(2) Other items, net includes items such as severance expense and otherrestructuring expenses. See Schedule 10 for a reconciliation of amounts.

^(3) Represents Kingsdale EBITDA for the respective period.

^(4) Other adjustments, net primarily includes one-time professional fees andcosts associated with real estate consolidation.

Note: Actuals may not foot due to rounding.

SCHEDULE 9

MDC PARTNERS INC.

UNAUDITED CONSOLIDATED BALANCE SHEETS

(US$ in 000s)

December 31, December 31, 2020 2019

ASSETS

Current Assets:

Cash and cash equivalents $ 60,757 $ 106,933

Accounts receivable, less allowance for doubtful accounts of $5,473 and $3,304 374,892 449,288

Expenditures billable to clients 10,552 30,133

Other current assets 40,939 35,613

Total Current Assets 487,140 621,967

Fixed assets, at cost, less accumulated depreciation of $136,166 and $129,579 90,413 81,054

Right-of-use assets - operating leases 214,188 223,622

Goodwill 668,211 731,691

Other intangible assets, net 33,844 54,893

Deferred tax assets 179 84,900

Other assets 17,339 30,179

Total Assets $ 1,511,314 $ 1,828,306

LIABILITIES, REDEEMABLE NONCONTROLLING INTERESTS, ANDSHAREHOLDERS' DEFICIT

Current Liabilities:

Accounts payable $ 168,398 $ 200,148

Accruals and other liabilities 274,968 353,575

Advance billings 152,956 171,742

Current portion of lease liabilities - operating leases 41,208 48,659

Current portion of deferred acquisition consideration 53,730 45,521

Total Current Liabilities 691,260 819,645

Long-term debt 843,184 887,630

Long-term portion of deferred acquisition consideration 29,335 29,699

Long-term lease liabilities - operating leases 247,243 219,163

Other liabilities 82,065 25,771

Total Liabilities 1,893,087 1,981,908

Redeemable Noncontrolling Interests 27,137 36,973

Commitments, Contingencies, and Guarantees

Shareholders' Deficit:

Convertible preference shares, 145,000 authorized, issued and outstanding atDecember 31, 2020 152,746 152,746and 2019

Common stock and other paid-in capital 104,367 101,469

Accumulated deficit (709,751) (480,779)

Accumulated other comprehensive income (loss) 2,739 (4,269)

MDC Partners Inc. Shareholders' Deficit (449,899) (230,833)

Noncontrolling interests 40,989 40,258

Total Shareholders' Deficit (408,910) (190,575)

Total Liabilities, Redeemable Noncontrolling Interests and Shareholders' $ 1,511,314 $ 1,828,306Deficit

SCHEDULE 10

MDC PARTNERS INC.

UNAUDITED SUMMARY CASH FLOW DATA

(US$ in 000s)

Twelve Months Ended December 31,

2020 2019

Net cash provided by operating activities $ 32,559 $ 86,539

Net cash provided by (used in) investing activities (8,287) 115

Net cash used in financing activities (73,426) (11,729)

Effect of exchange rate changes on cash, cash equivalents, and cash held in 2,978 1trusts

Net increase (decrease) in cash, and cash equivalents $ (46,176) $ 74,926

Change in cash and cash equivalents held in trusts classified within held for - (3,307)sale

Change in cash and cash equivalents classified within assets held for sale - 4,441

Net increase (decrease) in cash and cash equivalents (46,176) 76,060

Cash and cash equivalents at beginning of period 106,933 30,873

Cash and cash equivalents at end of period $ 60,757 $ 106,933

Supplemental disclosures:

Cash income taxes paid $ 7,946 $ 2,296

Cash interest paid $ 57,752 $ 62,223

Note: Actuals may not foot due to rounding

SCHEDULE 11

MDC PARTNERS INC.

UNAUDITED RECONCILIATION OF COMPONENTS OF NON- GAAP MEASURES

(US$ in 000s)

2019 2020

Q1 Q2 Q3 Q4 YTD Q1 Q2 Q3 Q4 YTD

NON-GAAP ACQUISITIONS (DISPOSITIONS), NET

GAAP revenue from current year acquisitions $ - $ 698 $ 1,347 $ 1,396 $ 3,441 $ - $ - $ - $ - $ -

GAAP revenue from prior year acquisitions ^(1) 15,685 1,519 1,109 291 18,604 - - - - -

Foreign exchange impact - - 470 (248) 222 (248) - - - (248)

Contribution to organic revenue (growth) decline^ (4,008) (440) (2,185) (1,694) (8,327) (411) - - - (411)(2)

Prior year revenue from dispositions ^(3) (1,825) (5,995) (3,178) (4,505) (15,503) (5,024) (4,106) (4,076) (4,447) (17,653)

Non-GAAP acquisitions (dispositions), net $ 9,852 $ (4,218) $ (2,437) $ (4,760) $ (1,563) $ (5,683) $ (4,106) $ (4,076) $ (4,447) $ (18,312)

2019 2020

Q1 Q2 Q3 Q4 YTD Q1 Q2 Q3 Q4 YTD

OTHER ITEMS, NET

Severance and other restructuring expenses $ - $ 6,703 $ 705 $ - $ 7,408 $ 1,334 $ 2,969 $ 3,270 1,072 $ 8,645

Strategic review process costs 1,626 (109) - 349 1,866 1,082 926 2,938 17,653 22,599

Total other items, net $ 1,626 $ 6,594 $ 705 $ 349 $ 9,274 $ 2,416 $ 3,895 $ 6,208 $ 18,725 $ 31,244

2019 2020

Q1 Q2 Q3 Q4 YTD Q1 Q2 Q3 Q4 YTD

CASH INTEREST, NET & OTHER

Cash interest paid $ (1,629) $ (30,014) $ (882) $ (29,698) $ (62,223) $ (145) $ (28,591) $ (575) $ (28,441) $ (57,752)

Bond interest accrual adjustment (14,625) 14,625 (14,625) 14,625 - (14,625) 13,894 (14,035) 14,376 (390)

Adjusted cash interest paid (16,254) (15,389) (15,507) (15,073) (62,223) (14,770) (14,697) (14,610) (14,065) (58,142)

Interest income 149 138 165 162 614 114 190 114 99 517

Total cash interest, net & other $ (16,105) $ (15,251) $ (15,342) $ (14,911) $ (61,609) $ (14,656) $ (14,507) $ (14,496) $ (13,966) $ (57,625)

2019 2020

Q1 Q2 Q3 Q4 YTD Q1 Q2 Q3 Q4 YTD

CAPITAL EXPENDITURES, NET

Capital expenditures $ (3,606) $ (4,317) $ (5,863) $ (4,810) $ (18,596) $ (1,546) $ (2,144) $ (24,187) $ (9,426) $ (37,303)

2019 2020

Q1 Q2 Q3 Q4 YTD Q1 Q2 Q3 Q4 YTD

MISCELLANEOUS OTHER DISCLOSURES

Net income attributable to the noncontrolling $ 429 $ 3,043 $ 7,265 $ 5,419 $ 16,156 $ 791 $ 3,101 $ 10,728 $ 7,154 $ 21,774interests

Cash taxes $ 1,677 $ 1,817 $ 137 $ (1,335) $ 2,296 $ 849 $ 1,717 $ 134 $ 5,246 $ 7,946

^(1) GAAP revenue from prior year acquisitions for 2019 relate to acquisitionswhich occurred 2018.

^(2) Contribution to organic revenue growth (decline) represents the change inrevenue, measured on a constant currency basis, relative to the comparablepre-acquisition period for acquired businesses that are included in theCompany's organic revenue growth (decline) calculation.

^(3) Prior year revenue from dispositions reflects the incremental impact onrevenue for the comparable period after the Company's disposition of suchdisposed business, plus revenue from each business disposed of by the Companyin the previous year through the twelve month anniversary of the disposition.

Note: Actuals may not foot due to rounding.

CONTACT:Erica Bartsch

Sloane & Company

212-446-1875

IR@mdc-partners.com

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SOURCE MDC Partners Inc.