MDC Partners Inc. Reports Results For The Three Months Ended March 31, 2020

SCHEDULE 1

MDC PARTNERS INC.

UNAUDITED CONSOLIDATED STATEMENTS OF OPERATIONS

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

Three Months Ended March 31,

2020

2019

Revenue:

Services

$

327,742

$

328,791

Operating Expenses:

Cost of services sold

222,693

237,153

Office and general expenses

66,353

67,118

Depreciation and amortization

9,206

8,838

Other asset impairment

161

—

298,413

313,109

Operating income

29,329

15,682

Other Income (Expenses):

Interest expense and finance charges, net

(15,612)

(16,760)

Foreign exchange gain (loss)

(14,757)

5,442

Other, net

16,334

(3,383)

(14,035)

(14,701)

Income before income taxes and equity in earnings of non-consolidated affiliates

15,294

981

Income tax expense

13,500

748

Income before equity in earnings of non-consolidated affiliates

1,794

233

Equity in earnings of non-consolidated affiliates

—

83

Net income

1,794

316

Net income attributable to the noncontrolling interest

(791)

(429)

Net income (loss) attributable to MDC Partners Inc.

1,003

(113)

Accretion on and net income allocated to convertible preference shares

(3,440)

(2,383)

Net loss attributable to MDC Partners Inc. common shareholders

$

(2,437)

$

(2,496)

Loss Per Common Share:

Basic

Net loss attributable to MDC Partners Inc. common shareholders

$

(0.03)

$

(0.04)

Diluted

Net loss attributable to MDC Partners Inc. common shareholders

$

(0.03)

$

(0.04)

Weighted Average Number of Common Shares Outstanding:

Basic

72,397,661

60,258,102

Diluted

72,397,661

60,258,102

SCHEDULE 2

MDC PARTNERS INC.

UNAUDITED REVENUE RECONCILIATION

(US$ in 000s, except percentages)

Three Months Ended

Revenue $

% Change

March 31, 2019

$

328,791

Organic revenue ⁽¹⁾

6,434

2.0

%

Non-GAAP acquisitions (dispositions), net

(5,683)

(1.7)

%

Foreign exchange impact

(1,800)

(0.5)

%

Total change

(1,049)

(0.3)

March 31, 2020

$

327,742

⁽¹⁾ "Organic revenue refers to the positive results 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 component reflects the constant currency impact of (a) the change in revenue of the partner firms which 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. See "Non-GAAP 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 March 31, 2020

Integrated

Agencies

Network

Media &

Data

Network

All Other

Corporate

Total

Revenue

$208,328

$41,058

$78,356

—

$327,742

Net loss attributable to MDC Partners Inc. common

shareholders

(2,437)

Adjustments to reconcile to operating income (loss):

Accretion on convertible preference shares

3,440

Net income attributable to the noncontrolling

interests

791

Income tax expense

13,500

Interest expense and finance charges, net

15,612

Foreign exchange loss

14,757

Other, net

(16,334)

Operating income (loss)

$29,193

$617

$7,857

$(8,338)

$29,329

margin

14.0

%

1.5

%

10.0

%

8.9

%

Additional adjustments to reconcile to Adjusted

EBITDA:

Depreciation and amortization

6,267

808

1,899

232

9,206

Other asset impairment

161

—

—

—

161

Stock-based compensation

2,861

(13)

80

142

3,070

Deferred acquisition consideration adjustments

(5,044)

375

69

—

(4,600)

Distributions from non-consolidated affiliates ⁽²⁾

—

—

—

(14)

(14)

Other items, net ⁽³⁾

—

—

—

2,416

2,416

Adjusted EBITDA ⁽¹⁾

$33,438

$1,787

$9,905

$(5,562)

$39,568

Adjusted EBITDA margin

16.1

%

4.4

%

12.6

%

12.1

%

⁽¹⁾ Adjusted EBITDA is a non-GAAP measure, and as shown above it represents 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

Measures" herein.

⁽²⁾ Distributions from non-consolidated affiliates includes (i) cash received for profit distributions from non-consolidated affiliates, and (ii) consideration from

the sale of ownership interests in non-consolidated affiliates less contributions to date plus undistributed earnings (losses).

⁽³⁾ Other items, net includes items such as severance expense and other restructuring expenses. See Schedule 8 for a reconciliation of amounts.

Note: Effective in the first quarter of 2020, the Company reorganized its management structure resulting in the aggregation of certain Partner Firms into

integrated groups ("Networks"). In connection with the reorganization, we reassessed our reportable segments to align our external reporting with how we

operate the Networks under our new organizational structure. Prior periods presented have been recast to reflect the change in reportable 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 Three Months Ended March 31, 2019

Integrated

Agencies

Network

Media &

Data

Network

All Other

Corporate

Total

Revenue

$206,910

$43,232

$78,649

—

$328,791

Net loss attributable to MDC Partners Inc. common

shareholders

(2,496)

Adjustments to reconcile to operating income (loss):

Accretion on convertible preference shares

2,383

Net income attributable to the noncontrolling

interests

429

Equity in earnings of non-consolidated affiliates

(83)

Income tax expense

748

Interest expense and finance charges, net

16,760

Foreign exchange income

(5,442)

Other, net

3,383

Operating income (loss)

$15,512

$(1,649)

$6,641

$(4,822)

$15,682

margin

7.5

%

(3.8)

%

8.4

%

4.8

%

Additional adjustments to reconcile to Adjusted

EBITDA:

Depreciation and amortization

5,715

993

1,913

217

8,838

Other asset impairment

—

—

—

—

—

Stock-based compensation

4,459

—

86

(1,573)

2,972

Deferred acquisition consideration adjustments

(6,491)

687

(1,839)

—

(7,643)

Distributions from non-consolidated affiliates ⁽²⁾

—

—

—

—

—

Other items, net ⁽³⁾

—

—

—

1,626

1,626

Adjusted EBITDA ⁽¹⁾

$19,195

$31

$6,801

$(4,552)

$21,475

Adjusted EBITDA margin

9.3

%

0.1

%

8.6

%

6.5

%

⁽¹⁾ Adjusted EBITDA is a non-GAAP measure, and as shown above it represents 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

Measures" herein.

⁽²⁾ Distributions from non-consolidated affiliates includes (i) cash received for profit distributions from non-consolidated affiliates, and (ii) consideration from

the sale of ownership interests in non-consolidated affiliates less contributions to date plus undistributed earnings (losses).

⁽³⁾ Other items, net includes items such as restructuring expenses. See Schedule 8 for a reconciliation of amounts.

Note: Effective in the first quarter of 2020, the Company reorganized its management structure resulting in the aggregation of certain Partner Firms into

integrated groups ("Networks"). In connection with the reorganization, we reassessed our reportable segments to align our external reporting with how we

operate the Networks under our new organizational structure. Prior periods presented have been recast to reflect the change in reportable segments.

Note: Actuals may not foot due to rounding.

SCHEDULE 5

MDC PARTNERS INC.

UNAUDITED RECONCILIATION OF NET INCOME (LOSS) TO COVENANT EBITDA

(US$ in 000s)

2019

 Covenant EBITDA

(LTM) ⁽¹⁾

Q1

Q2

Q3

Q4

Q1

Q4-2019 -

LTM

Q1-2020 - L

TM

Net income (loss) attributable to MDC Partners

Inc. common shareholders

$

(2,497)

$

776

$

(5,058)

$

(10,488)

$

(2,437)

$

(17,267)

$

(17,207)

Adjustments to reconcile to operating income:

Accretion on and net income allocated to

convertible preference shares

2,383

3,515

3,306

3,373

3,440

12,577

13,634

Net income attributable to the noncontrolling

interests

429

3,043

7,265

5,419

791

16,156

16,518

Equity in losses of non-consolidated affiliates

(83)

(206)

(63)

—

—

(352)

(269)

Income tax expense

746

2,088

3,457

4,241

13,500

10,532

23,286

Interest expense and finance charges, net

16,761

16,413

16,110

15,658

15,612

64,942

63,793

Foreign exchange loss (gain)

(5,442)

(2,932)

3,973

(4,349)

14,757

(8,750)

11,449

Other, net

3,384

745

431

(2,158)

(16,334)

2,402

(17,316)

Operating income

15,681

23,442

29,421

11,696

29,329

80,240

93,888

Adjustments to reconcile to Adjusted EBITDA:

Depreciation and amortization

8,838

10,663

9,368

9,460

9,206

38,329

38,697

Goodwill and other asset impairment

—

—

1,944

5,875

161

7,819

7,980

Stock-based compensation

2,972

3,634

6,026

18,408

3,070

31,040

31,138

Deferred acquisition consideration adjustments

(7,643)

2,073

1,943

9,030

(4,600)

5,403

8,446

Distributions from non-consolidated affiliates

—

31

(202)

2,219

(14)

2,048

2,034

Other items, net ⁽²⁾

1,626

6,594

705

349

2,416

9,274

10,064

Adjusted EBITDA

21,474

46,437

49,205

57,037

39,568

174,153

192,247

Adjustments to reconcile to Covenant EBITDA:

Proforma dispositions ⁽³⁾

(2,701)

(729)

(996)

(1,294)

(124)

(5,720)

(3,143)

Severance due to eliminated positions

1,534

2,346

1,956

3,221

2,133

9,057

9,656

Other adjustments, net ⁽⁴⁾

1,412

989

228

368

357

2,997

1,942

Covenant adjusted EBITDA

$

21,719

$

49,043

$

50,393

$

59,332

$

41,934

$

180,487

$

200,702

⁽¹⁾ Covenant EBITDA is a measure that includes pro forma adjustments for acquisitions, one-time charges, permitted dispositions and other adjustments, as defined

in the Company's Credit Agreement. Covenant EBITDA is calculated as the aggregate of operating results for the rolling last twelve months (LTM). Each quarter is

presented to provide the information utilized to calculate Covenant EBITDA. Historical Covenant EBITDA may be re-casted in the current period for any proforma

adjustments related to acquisitions and/or dispositions in the current period. See "Non-GAAP Measures" herein.

⁽²⁾ Other items, net includes items such as severance expense, other restructuring expenses and costs associated with the Company's strategic review process.

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

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

Note: Actuals may not foot due to rounding.

SCHEDULE 6

MDC PARTNERS INC.

UNAUDITED CONSOLIDATED BALANCE SHEETS

(US$ in 000s)

March 31,

 2020

December 31,

 2019

ASSETS

Current Assets:

Cash and cash equivalents

$

221,102

$

106,933

Accounts receivable, less allowance for doubtful accounts of $2,118 and $3,304

407,311

450,403

Expenditures billable to clients

22,763

30,133

Other current assets

44,689

35,613

Total Current Assets

695,865

623,082

Fixed assets, at cost, less accumulated depreciation of $132,174 and $129,579

75,767

81,054

Right-of-use assets - operating leases

216,194

223,622

Goodwill

725,390

740,674

Other intangible assets, net

50,640

54,893

Deferred tax assets

77,378

85,988

Other assets

29,622

30,179

Total Assets

$

1,870,856

$

1,839,492

LIABILITIES, REDEEMABLE NONCONTROLLING

INTERESTS, AND SHAREHOLDERS' DEFICIT

Current Liabilities:

Accounts payable

$

153,491

$

200,148

Accruals and other liabilities

325,826

353,575

Advance billings

146,803

171,742

Current portion of lease liabilities - operating leases

48,022

48,659

Current portion of deferred acquisition consideration

46,337

45,521

Total Current Liabilities

720,479

819,645

Long-term debt

1,014,260

887,630

Long-term portion of deferred acquisition consideration

26,399

29,699

Long-term lease liabilities - operating leases

211,254

219,163

Other liabilities

35,523

25,771

Total Liabilities

2,007,915

1,981,908

Redeemable Noncontrolling Interests

35,698

36,973

Commitments, Contingencies, and Guarantees

Shareholders' Deficit:

Convertible preference shares, 145,000 authorized, issued

and outstanding at March 31, 2020 and December 31, 2019

152,746

152,746

Common stock and other paid-in capital

99,587

101,469

Accumulated deficit

(468,508)

(469,593)

Accumulated other comprehensive (loss) income

3,669

(4,269)

MDC Partners Inc. Shareholders' Deficit

(212,506)

(219,647)

Noncontrolling interests

39,749

40,258

Total Shareholders' Deficit

(172,757)

(179,389)

Total Liabilities, Redeemable Noncontrolling Interests and

Shareholders' Deficit

$

1,870,856

$

1,839,492

SCHEDULE 7

MDC PARTNERS INC.

UNAUDITED SUMMARY CASH FLOW DATA

(US$ in 000s)

Three Months Ended March 31,

2020

2019

Net cash used in operating activities

$

(19,954)

$

(81,200)

Net cash provided by investing activities

16,645

18,101

Net cash provided by financing activities

119,642

60,753

Effect of exchange rate changes on cash, cash equivalents, and

cash held in trusts

(2,164)

(576)

Net increase (decrease) in cash, cash equivalents, and cash held

in trusts including cash classified within assets held for sale

$

114,169

$

(2,922)

Change in cash and cash equivalents held in trusts classified

within held for sale

—

(3,307)

Change in cash and cash equivalents classified within assets held

for sale

—

1,728

Net increase (decrease) in cash and cash equivalents

$

114,169

$

(4,501)

Note: Actuals may not foot due to rounding.

SCHEDULE 8

MDC PARTNERS INC.

UNAUDITED RECONCILIATION OF COMPONENTS OF NON-GAAP MEASURES

(US$ in 000s)

2019

2020

Q1

Q2

Q3

Q4

YTD

Q1

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

(246)

224

(248)

Contribution to organic revenue (growth) decline ⁽²⁾

(4,008)

(440)

(2,185)

(1,694)

(8,327)

(411)

Prior year revenue from dispositions ⁽³⁾

(1,825)

(5,995)

(3,178)

(4,505)

(15,503)

(5,024)

Non-GAAP acquisitions (dispositions), net

$

9,852

$

(4,218)

$

(2,437)

$

(4,758)

$

(1,561)

$

(5,683)

2019

2020

Q1

Q2

Q3

Q4

YTD

Q1

OTHER ITEMS, NET

Severance and other restructuring expenses

—

6,703

705

—

7,408

1,334

Strategic review process costs

1,626

(109)

—

349

1,866

1,082

Total other items, net

$

1,626

$

6,594

$

705

$

349

$

9,274

$

2,416

2019

2020

Q1

Q2

Q3

Q4

YTD

Q1

CASH INTEREST, NET & OTHER

Cash interest paid

(1,629)

(30,014)

(882)

(29,698)

(62,223)

145

Bond interest accrual adjustment

(14,625)

14,625

(14,625)

14,625

—

(14,625)

Adjusted cash interest paid

(16,254)

(15,389)

(15,507)

(15,073)

(62,223)

(14,480)

Interest income

149

138

165

162

614

(114)

Total cash interest, net & other

$

(16,105)

$

(15,251)

$

(15,342)

$

(14,911)

$

(61,609)

$

(14,594)

2019

2020

Q1

Q2

Q3

Q4

YTD

Q1

CAPITAL EXPENDITURES, NET

Capital expenditures

(3,606)

(4,317)

(5,863)

(4,810)

(18,596)

(1,546)

2019

2020

Q1

Q2

Q3

Q4

YTD

Q1

MISCELLANEOUS OTHER DISCLOSURES

Net income attributable to the noncontrolling interests

429

3,043

7,265

5,419

16,156

791

Cash taxes

$

1,677

$

1,817

$

137

$

(1,335)

$

2,296

$

849

⁽¹⁾  GAAP revenue from prior year acquisitions for 2020 and 2019 relates to acquisitions which occurred in 2019 and 2018, respectively.

⁽²⁾ Contribution to organic revenue represents the change in revenue, measured on a constant currency basis, relative to the comparable pre-acquisition

period for acquired businesses that are included in the Company's organic revenue growth (decline) calculation.

⁽³⁾ Prior year revenue from dispositions reflects the incremental impact on revenue for the comparable period after the Company's disposition of such disposed

business, plus revenue from each business disposed of by the Company in the previous year through the twelve month anniversary of the disposition.

Note: Actuals may not foot due to rounding.