Cover
Cover - shares | 3 Months Ended | |
Dec. 31, 2023 | Feb. 05, 2024 | |
Document Information [Line Items] | ||
Document Type | 10-Q | |
Document Quarterly Report | true | |
Document Period End Date | Dec. 31, 2023 | |
Document Transition Report | false | |
Entity File Number | 001-32502 | |
Entity Registrant Name | Warner Music Group Corp. | |
Entity Incorporation, State or Country Code | DE | |
Entity Tax Identification Number | 13-4271875 | |
Entity Address, Address Line One | 1633 Broadway | |
Entity Address, City or Town | New York | |
Entity Address, State or Province | NY | |
Entity Address, Postal Zip Code | 10019 | |
City Area Code | (212) | |
Local Phone Number | 275-2000 | |
Title of 12(b) Security | Class A Common Stock, $0.001 par value per share | |
Trading Symbol | WMG | |
Security Exchange Name | NASDAQ | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Large Accelerated Filer | |
Entity Small Business | false | |
Entity Emerging Growth Company | false | |
Entity Shell Company | false | |
Amendment Flag | false | |
Document Fiscal Year Focus | 2024 | |
Document Fiscal Period Focus | Q1 | |
Entity Central Index Key | 0001319161 | |
Current Fiscal Year End Date | --09-30 | |
Class A Common Stock | ||
Document Information [Line Items] | ||
Entity Common Stock, Shares Outstanding | 140,777,952 | |
Class B Common Stock | ||
Document Information [Line Items] | ||
Entity Common Stock, Shares Outstanding | 377,103,200 |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets (Unaudited) - USD ($) $ in Millions | Dec. 31, 2023 | Sep. 30, 2023 |
Current assets: | ||
Cash and equivalents | $ 754 | $ 641 |
Accounts receivable, net of allowances of $19 million and $19 million | 1,195 | 1,120 |
Inventories | 106 | 126 |
Royalty advances expected to be recouped within one year | 453 | 413 |
Prepaid and other current assets | 108 | 102 |
Total current assets | 2,616 | 2,402 |
Royalty advances expected to be recouped after one year | 755 | 688 |
Property, plant and equipment, net of accumulated depreciation of $551 million and $523 million | 466 | 458 |
Operating lease right-of-use assets, net | 242 | 245 |
Goodwill | 2,015 | 1,993 |
Intangible assets subject to amortization, net | 2,390 | 2,353 |
Intangible assets not subject to amortization | 151 | 149 |
Deferred tax assets, net | 31 | 32 |
Other assets | 325 | 225 |
Total assets | 8,991 | 8,545 |
Current liabilities: | ||
Accounts payable | 246 | 300 |
Accrued royalties | 2,460 | 2,219 |
Accrued liabilities | 538 | 533 |
Accrued interest | 29 | 18 |
Operating lease liabilities, current | 43 | 41 |
Deferred revenue | 305 | 371 |
Other current liabilities | 124 | 57 |
Total current liabilities | 3,745 | 3,539 |
Long-term debt | 4,004 | 3,964 |
Operating lease liabilities, noncurrent | 249 | 255 |
Deferred tax liabilities, net | 223 | 216 |
Other noncurrent liabilities | 154 | 141 |
Total liabilities | 8,375 | 8,115 |
Equity: | ||
Additional paid-in capital | 2,039 | 2,015 |
Accumulated deficit | (1,317) | (1,387) |
Accumulated other comprehensive loss, net | (260) | (322) |
Total Warner Music Group Corp. equity | 463 | 307 |
Noncontrolling interest | 153 | 123 |
Total equity | 616 | 430 |
Total liabilities and equity | 8,991 | 8,545 |
Class A Common Stock | ||
Equity: | ||
Common stock | 0 | 0 |
Class B Common Stock | ||
Equity: | ||
Common stock | $ 1 | $ 1 |
Condensed Consolidated Balanc_2
Condensed Consolidated Balance Sheets (Unaudited) (Parenthetical) - USD ($) $ in Millions | Dec. 31, 2023 | Sep. 30, 2023 |
Accounts receivable, allowances | $ 19 | $ 19 |
Accumulated depreciation | $ 551 | $ 523 |
Class A Common Stock | ||
Par value (in dollars per share) | $ 0.001 | $ 0.001 |
Shares authorized (in shares) | 1,000,000,000 | 1,000,000,000 |
Shares issued (in shares) | 140,637,000 | 138,345,000 |
Shares outstanding (in shares) | 140,637,000 | 138,345,000 |
Class B Common Stock | ||
Par value (in dollars per share) | $ 0.001 | $ 0.001 |
Shares authorized (in shares) | 1,000,000,000 | 1,000,000,000 |
Shares issued (in shares) | 377,103,000 | 377,650,000 |
Shares outstanding (in shares) | 377,103,000 | 377,650,000 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Operations (Unaudited) - USD ($) $ in Millions | 3 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | ||
Revenue | $ 1,748 | $ 1,488 | |
Costs and expenses: | |||
Cost of revenue | (880) | (761) | |
Selling, general and administrative expenses | [1] | (476) | (440) |
Amortization expense | (55) | (63) | |
Total costs and expenses | (1,411) | (1,264) | |
Net loss (gain) on divestitures | 17 | 41 | |
Operating income | 354 | 265 | |
Interest expense, net | (39) | (32) | |
Other expense | (50) | (61) | |
Income before income taxes | 265 | 172 | |
Income tax expense | (72) | (48) | |
Net income | 193 | 124 | |
Less: Income attributable to noncontrolling interest | (34) | (2) | |
Net income attributable to Warner Music Group Corp. | 159 | 122 | |
Class A Common Stock | |||
Costs and expenses: | |||
Net income attributable to Warner Music Group Corp. | $ 44 | $ 34 | |
Net income per share attributable to common stockholders: | |||
Basic (in dollars per share) | $ 0.30 | $ 0.23 | |
Diluted (in dollars per share) | $ 0.30 | $ 0.23 | |
Weighted average common shares: | |||
Basic (in shares) | 138,972,000 | 137,424,000 | |
Diluted (in shares) | 138,972,000 | 137,424,000 | |
Class B Common Stock | |||
Costs and expenses: | |||
Net income attributable to Warner Music Group Corp. | $ 115 | $ 88 | |
Net income per share attributable to common stockholders: | |||
Basic (in dollars per share) | $ 0.30 | $ 0.23 | |
Diluted (in dollars per share) | $ 0.30 | $ 0.23 | |
Weighted average common shares: | |||
Basic (in shares) | 377,490,000 | 377,650,000 | |
Diluted (in shares) | 377,490,000 | 377,650,000 | |
[1] Includes depreciation expense of $(26) and $(21) for the three months ended December 31, 2023 and 2022, respectively. |
Condensed Consolidated Statem_2
Condensed Consolidated Statements of Operations (Unaudited) (Parenthetical) - USD ($) $ in Millions | 3 Months Ended | 12 Months Ended | |||
Dec. 31, 2023 | Dec. 31, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2021 | |
Income Statement [Abstract] | |||||
Depreciation expense | $ (26) | $ (21) | $ (87) | $ (76) | $ (77) |
Condensed Consolidated Statem_3
Condensed Consolidated Statements of Comprehensive Income (Unaudited) - USD ($) $ in Millions | 3 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
Statement of Comprehensive Income [Abstract] | ||
Net income | $ 193 | $ 124 |
Other comprehensive income, net of tax: | ||
Foreign currency adjustment | 64 | 72 |
Deferred loss on derivative financial instruments | (1) | (1) |
Minimum pension liability | (1) | 0 |
Other comprehensive income, net of tax | 62 | 71 |
Total comprehensive income | 255 | 195 |
Less: Income attributable to noncontrolling interest | (34) | (2) |
Comprehensive income attributable to Warner Music Group Corp. | $ 221 | $ 193 |
Condensed Consolidated Statem_4
Condensed Consolidated Statements of Cash Flows (Unaudited) - USD ($) $ in Millions | 3 Months Ended | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | |
Cash flows from operating activities | ||||
Net income | $ 193 | $ 124 | ||
Adjustments to reconcile net income to net cash provided by operating activities: | ||||
Depreciation and amortization | 81 | 84 | ||
Unrealized (gains) losses and remeasurement of foreign-denominated loans and foreign currency forward exchange contracts | 61 | 79 | ||
Deferred income taxes | 5 | (5) | ||
Net loss (gain) on investments | (3) | 0 | ||
Net loss (gain) on divestitures | (17) | (41) | $ (41) | $ 0 |
Non-cash interest expense | 0 | 2 | ||
Non-cash stock-based compensation expense | 9 | 14 | ||
Changes in operating assets and liabilities: | ||||
Accounts receivable, net | (53) | 7 | ||
Inventories | 24 | 13 | ||
Royalty advances | (89) | (55) | ||
Other non current assets | (81) | (3) | ||
Accounts payable and accrued liabilities | (31) | (61) | ||
Royalty payables | 202 | 117 | ||
Accrued interest | 11 | 12 | ||
Operating lease liabilities | (1) | (2) | ||
Deferred revenue | (70) | (104) | ||
Other balance sheet changes | 52 | 28 | ||
Net cash provided by operating activities | 293 | 209 | ||
Cash flows from investing activities | ||||
Acquisition of music publishing rights and music catalogs, net | (59) | (33) | ||
Capital expenditures | (29) | (21) | ||
Investments and acquisitions of businesses, net of cash received | (17) | (8) | ||
Proceeds from the sale of investments | 9 | 10 | ||
Proceeds from divestitures | 4 | 42 | ||
Net cash used in investing activities | (92) | (10) | ||
Cash flows from financing activities | ||||
Proceeds from incremental Senior Term Loan Facility | 0 | 147 | ||
Deferred financing costs paid | 0 | (2) | ||
Distribution to noncontrolling interest holders | (4) | (6) | ||
Dividends paid | (89) | (84) | ||
Payment of deferred and contingent consideration | 0 | (125) | ||
Net cash used in financing activities | (93) | (70) | ||
Effect of exchange rate changes on cash and equivalents | 5 | 7 | ||
Net increase in cash and equivalents | 113 | 136 | ||
Cash and equivalents at beginning of period | 641 | 584 | 584 | |
Cash and equivalents at end of period | $ 754 | $ 720 | $ 641 | $ 584 |
Condensed Consolidated Statem_5
Condensed Consolidated Statements of Equity (Unaudited) - USD ($) $ in Millions | Total | Class A Common Stock | Class B Common Stock | Total Warner Music Group Corp. Equity | Common Stock Class A Common Stock | Common Stock Class B Common Stock | Additional Paid-in Capital | Accumulated Deficit | Accumulated Other Comprehensive Loss | Non-controlling Interest |
Beginning balance (in shares) at Sep. 30, 2022 | 137,199,000 | 377,650,000 | ||||||||
Beginning balance at Sep. 30, 2022 | $ 168 | $ 152 | $ 0 | $ 1 | $ 1,975 | $ (1,477) | $ (347) | $ 16 | ||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||||
Net income | 124 | 122 | 122 | 2 | ||||||
Other comprehensive income, net of tax | 71 | 71 | 71 | |||||||
Dividends | (84) | (84) | (84) | |||||||
Stock-based compensation expense | 9 | 9 | 9 | |||||||
Distribution to noncontrolling interest holders | (6) | (6) | ||||||||
Shares issued under the plan (in shares) | 869,000 | |||||||||
Shares issued under omnibus incentive plan (in shares) | 5,000 | |||||||||
Ending balance (in shares) at Dec. 31, 2022 | 138,073,000 | 377,650,000 | ||||||||
Ending balance at Dec. 31, 2022 | 282 | 270 | $ 0 | $ 1 | 1,984 | (1,439) | (276) | 12 | ||
Beginning balance (in shares) at Sep. 30, 2023 | 138,345,000 | 377,650,000 | 138,345,000 | 377,650,000 | ||||||
Beginning balance at Sep. 30, 2023 | 430 | 307 | $ 0 | $ 1 | 2,015 | (1,387) | (322) | 123 | ||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||||
Net income | 193 | 159 | 159 | 34 | ||||||
Other comprehensive income, net of tax | 62 | 62 | 62 | |||||||
Dividends | (89) | (89) | (89) | |||||||
Stock-based compensation expense | 24 | 24 | 24 | |||||||
Distribution to noncontrolling interest holders | (4) | (4) | ||||||||
Shares issued under the plan (in shares) | 1,738,016 | 547,249 | ||||||||
Exchange of Class B shares for Class A shares (in shares) | 547,000 | (547,000) | ||||||||
Shares issued under omnibus incentive plan (in shares) | 7,000 | |||||||||
Ending balance (in shares) at Dec. 31, 2023 | 140,637,000 | 377,103,000 | 140,637,000 | 377,103,000 | ||||||
Ending balance at Dec. 31, 2023 | $ 616 | $ 463 | $ 0 | $ 1 | $ 2,039 | $ (1,317) | $ (260) | $ 153 |
Condensed Consolidated Statem_6
Condensed Consolidated Statements of Equity (Unaudited) (Parenthetical) - $ / shares | 3 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
Statement of Stockholders' Equity [Abstract] | ||
Dividends (in dollars per share) | $ 0.17 | $ 0.16 |
Description of Business
Description of Business | 3 Months Ended |
Dec. 31, 2023 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Description of Business | Description of Business Warner Music Group Corp. (the “Company”) was formed on November 21, 2003. The Company is the direct parent of WMG Holdings Corp. (“Holdings”), which is the direct parent of WMG Acquisition Corp. (“Acquisition Corp.”). Acquisition Corp. is one of the world’s major music entertainment companies. We classify our business interests into two fundamental operations: Recorded Music and Music Publishing. Recorded Music Operations Our Recorded Music business primarily consists of the discovery and development of recording artists and the related marketing, promotion, distribution, sale and licensing of music created by such recording artists. We play an integral role in virtually all aspects of the recorded music value chain from discovering and developing talent to producing, distributing and selling music to marketing and promoting recording artists and their music. Music Publishing Operations While Recorded Music is focused on marketing, promoting, distributing and licensing a particular recording of a musical composition, Music Publishing is an intellectual property business focused on generating revenue from uses of the musical composition itself. In return for promoting, placing, marketing and administering the creative output of a songwriter, or engaging in those activities for other rightsholders, our Music Publishing business shares the revenues generated from use of the musical compositions with the songwriter or other rightsholders. |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 3 Months Ended |
Dec. 31, 2023 | |
Accounting Policies [Abstract] | |
Summary of Significant Accounting Policies | Summary of Significant Accounting Policies Interim Financial Statements The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with United States generally accepted accounting principles (“U.S. GAAP”) for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all the information and notes required by U.S. GAAP for complete financial statements. In the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation have been included. Operating results for the three months ended December 31, 2023 are not necessarily indicative of the results that may be expected for the fiscal year ending September 30, 2024. The consolidated balance sheet at September 30, 2023 has been derived from the audited consolidated financial statements at that date but does not include all the information and notes required by U.S. GAAP for complete financial statements. For further information, refer to the consolidated financial statements and notes thereto included in our Annual Report on Form 10-K for the fiscal year ended September 30, 2023 (File No. 001-32502). Basis of Consolidation The accompanying financial statements present the consolidated accounts of all entities in which the Company has a controlling voting interest and/or variable interest required to be consolidated in accordance with U.S. GAAP. All intercompany balances and transactions have been eliminated. Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) Topic 810, Consolidation (“ASC 810”) requires the Company first evaluate its investments to determine if any investments qualify as a variable interest entity (“VIE”). A VIE is consolidated if the Company is deemed to be the primary beneficiary of the VIE, which is the party involved with the VIE that has both (i) the power to control the most significant activities of the VIE and (ii) either the obligation to absorb losses or the right to receive benefits that could potentially be significant to the VIE. If an entity is not deemed to be a VIE, the Company consolidates the entity if the Company has a controlling voting interest. As of December 31, 2023 and September 30, 2023, there were approximately $74 million and $5 million of assets and $2 million and $2 million of liabilities, respectively, related to VIEs included in our condensed consolidated balance sheets. The Company has performed a review of all subsequent events through the date the financial statements were issued and has determined that no additional disclosures are necessary. Income Taxes The Company uses the estimated annual effective tax rate method in computing its interim tax provision. Certain items, including those deemed to be unusual and infrequent are excluded from the estimated annual effective tax rate. In such cases, the actual tax expense or benefit is reported in the same period as the related item. Certain tax effects are also not reflected in the estimated annual effective tax rate, primarily certain changes in the realizability of deferred tax assets and uncertain tax positions, and are recorded in the period in which the change occurs. Global Intangible Low-Taxed Income (“GILTI”) imposes U.S. taxes on the excess of a deemed return on tangible assets of certain foreign subsidiaries. The Company made an election to recognize GILTI tax in the specific period in which it occurs. New Accounting Pronouncements Accounting Pronouncements Not Yet Adopted In November 2023, the FASB issued ASU 2023-07, Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures . The amendment enhances reportable segment disclosure requirements, primarily by requiring enhanced disclosures about significant segment expenses, reporting for interim periods, and Chief Operating Decision Maker (“CODM”) related information. The amendments in this ASU are effective for fiscal years beginning after December 15, 2023 and interim periods within fiscal years beginning after December 15, 2024. The Company is in the process of evaluating the effect that the adoption of these standards will have on its consolidated financial statements. In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures . The amendment enhances income tax disclosure requirements, by requiring enhanced disclosures on the income tax rate reconciliation and income taxes paid. The amendments in this ASU are effective for fiscal years beginning after December 15, 2024. The Company is in the process of evaluating the effect that the adoption of these standards will have on its consolidated financial statements. |
Earnings per Share
Earnings per Share | 3 Months Ended |
Dec. 31, 2023 | |
Earnings Per Share [Abstract] | |
Earnings per Share | Earnings per Share The Company utilizes the two-class method to report earnings per share. Basic earnings per share is computed by dividing net income available to each class of stock by the weighted average number of outstanding common shares for each class of stock. Diluted earnings per share is computed by dividing net income available to each class of stock by the weighted average number of outstanding common shares, plus dilutive potential common shares, which is calculated using the treasury-stock method. The potentially dilutive common shares did not have a dilutive effect on the Company’s EPS calculation for the three months ended December 31, 2023 and 2022, respectively. The following table sets forth the calculation of basic and diluted net income per common share under the two-class method for the three months ended December 31, 2023 and 2022 (in millions, except share amounts, which are reflected in thousands, and per share data): Three Months Ended December 31, 2023 2022 Class A Class B Class A Class B Basic and Diluted EPS: Numerator Net income attributable to Warner Music Group Corp. $ 44 $ 115 $ 34 $ 88 Less: Net income attributable to participating securities (2) — (2) — Net income attributable to common stockholders $ 42 $ 115 $ 32 $ 88 Denominator Weighted average shares outstanding 138,972 377,490 137,424 377,650 Basic and Diluted EPS $ 0.30 $ 0.30 $ 0.23 $ 0.23 |
Revenue Recognition
Revenue Recognition | 3 Months Ended |
Dec. 31, 2023 | |
Revenue from Contract with Customer [Abstract] | |
Revenue Recognition | Revenue Recognition Disaggregation of Revenue The Company’s revenue consists of the following categories, which aggregate into the segments – Recorded Music and Music Publishing: Three Months Ended 2023 2022 (in millions) Revenue by Type Digital $ 908 $ 803 Physical 154 133 Total Digital and Physical 1,062 936 Artist services and expanded-rights 204 206 Licensing 179 97 Total Recorded Music 1,445 1,239 Performance 51 45 Digital 196 149 Mechanical 15 14 Synchronization 39 39 Other 3 3 Total Music Publishing 304 250 Intersegment eliminations (1) (1) Total Revenues $ 1,748 $ 1,488 Revenue by Geographical Location U.S. Recorded Music $ 627 $ 539 U.S. Music Publishing 172 133 Total U.S. 799 672 International Recorded Music 818 700 International Music Publishing 132 117 Total International 950 817 Intersegment eliminations (1) (1) Total Revenues $ 1,748 $ 1,488 Sales Returns and Uncollectible Accounts Based on management’s analysis of sales returns, refund liabilities of $25 million and $19 million were established at December 31, 2023 and September 30, 2023, respectively. Based on management’s analysis of estimated credit losses, reserves of $19 million and $19 million were established at December 31, 2023 and September 30, 2023, respectively. Deferred Revenue Deferred revenue increased by $160 million during the three months ended December 31, 2023 related to cash received from customers for fixed fees and minimum guarantees in advance of performance, including amounts recognized in the period. Revenues of $151 million were recognized during the three months ended December 31, 2023 related to the balance of deferred revenue at September 30, 2023. There were no other significant changes to deferred revenue during the reporting period. Performance Obligations For the three months ended December 31, 2023 and December 31, 2022, the Company recognized revenue of $30 million and $27 million, respectively, from performance obligations satisfied in previous periods. Revenues expected to be recognized in the future related to performance obligations that are unsatisfied at December 31, 2023 are as follows: Rest of FY24 FY25 FY26 Thereafter Total (in millions) Remaining performance obligations $ 468 $ 226 $ 22 $ 6 $ 722 Total $ 468 $ 226 $ 22 $ 6 $ 722 |
Acquisitions
Acquisitions | 3 Months Ended |
Dec. 31, 2023 | |
Business Combination and Asset Acquisition [Abstract] | |
Acquisitions | Acquisitions On August 25, 2023, the Company purchased 51% of the issued and outstanding equity securities of TenThousand Projects Holdings LLC (“TenThousand Projects”), an independent U.S. record label pursuant to the terms of the unit purchase agreement of the same date among Warner Music Inc., a wholly-owned subsidiary of the Company, TenThousand Projects LLC, and Ten Thousand Projects Holdings LLC (the “Unit Purchase Agreement”). The consideration transferred on the acquisition date was approximately $98 million which was comprised of the base purchase price of $102 million and the preliminary working capital adjustments, primarily comprised of cash acquired, net of a deferred purchase price of $12 million which is payable on or prior to one year from the acquisition date. At December 31, 2023, the Company updated the purchase price allocation recorded at September 30, 2023, which resulted in a decrease to intangible assets of approximately $1 million and a net increase to other acquired assets and liabilities of approximately $3 million, with a corresponding net decrease to goodwill of approximately $2 million. The acquisition accounting is subject to revision based on final determinations of fair value and allocations of purchase price to the identifiable assets and liabilities acquired, in addition to the determination of the final consideration, including the determination of the final working capital adjustment pursuant to the mechanism set forth in the Unit Purchase Agreement. See Note 5, “Acquisitions,” to the consolidated financial statements included in the Company’s Annual Report on Form 10-K for the fiscal year ended September 30, 2023 for the preliminary purchase price allocation, valuation methodology, and other information related to the TenThousand Projects acquisition. |
Comprehensive Income
Comprehensive Income | 3 Months Ended |
Dec. 31, 2023 | |
Equity [Abstract] | |
Comprehensive Income | Comprehensive Income Comprehensive income, which is reported in the accompanying condensed consolidated statements of equity, consists of net income and other gains and losses affecting equity that, under U.S. GAAP, are excluded from net income. For the Company, the components of other comprehensive income primarily consist of foreign currency translation gains and losses, minimum pension liabilities, and deferred gains and losses on financial instruments designated as hedges under ASC 815, Derivatives and Hedging . The following summary sets forth the changes in the components of accumulated other comprehensive loss, net of related tax benefit of less than $1 million: Foreign Currency Translation Loss (a) Minimum Pension Liability Adjustment Deferred Gains (Losses) On Derivative Financial Instruments Accumulated Other Comprehensive Loss, net (in millions) Balances at September 30, 2023 $ (322) $ (1) $ 1 $ (322) Other comprehensive income (loss) 64 (1) (1) 62 Balances at December 31, 2023 $ (258) $ (2) $ — $ (260) ______________________________________ (a) Includes historical foreign currency translation related to certain intra-entity transactions. |
Goodwill and Intangible Assets
Goodwill and Intangible Assets | 3 Months Ended |
Dec. 31, 2023 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Goodwill and Intangible Assets | Goodwill and Intangible Assets Goodwill The following analysis details the changes in goodwill for each reportable segment: Recorded Music Total (in millions) Balances at September 30, 2023 $ 1,529 $ 464 $ 1,993 Acquisitions 3 — 3 Other adjustments (a) 19 — 19 Balances at December 31, 2023 $ 1,551 $ 464 $ 2,015 ______________________________________ (a) Other adjustments during the three months ended December 31, 2023 represent foreign currency movements. The Company performs its annual goodwill impairment test in accordance with ASC 350, Intangibles—Goodwill and Other (“ASC 350”) during the fourth quarter of each fiscal year as of July 1. The Company may conduct an earlier review if events or circumstances occur that would suggest the carrying value of the Company’s goodwill may not be recoverable. No indicators of impairment were identified during the current period that required the Company to perform an interim assessment or recoverability test. Intangible Assets Intangible assets consist of the following: Weighted-Average Useful Life December 31, September 30, (in millions) Intangible assets subject to amortization: Recorded music catalog 12 years $ 1,540 $ 1,507 Music publishing copyrights 25 years 2,111 2,026 Artist and songwriter contracts 13 years 1,113 1,091 Trademarks 14 years 113 111 Other intangible assets 6 years 106 104 Total gross intangible assets subject to amortization 4,983 4,839 Accumulated amortization (2,593) (2,486) Total net intangible assets subject to amortization 2,390 2,353 Intangible assets not subject to amortization: Trademarks and tradenames Indefinite 151 149 Total net intangible assets $ 2,541 $ 2,502 |
Debt
Debt | 3 Months Ended |
Dec. 31, 2023 | |
Debt Disclosure [Abstract] | |
Debt | Debt Debt Capitalization Long-term debt, all of which was issued by Acquisition Corp., consists of the following: December 31, September 30, (in millions) Revolving Credit Facility (a) $ — $ — Senior Term Loan Facility due 2028 1,295 1,295 2.750% Senior Secured Notes due 2028 (€325 face amount) 360 343 3.750% Senior Secured Notes due 2029 540 540 3.875% Senior Secured Notes due 2030 535 535 2.250% Senior Secured Notes due 2031 (€445 face amount) 493 471 3.000% Senior Secured Notes due 2031 800 800 Mortgage Term Loan due 2033 18 $ 18 Total long-term debt, including the current portion $ 4,041 $ 4,002 Issuance premium less unamortized discount and unamortized deferred financing costs (37) (38) Total long-term debt, including the current portion, net $ 4,004 $ 3,964 ______________________________________ (a) Reflects $350 million and $300 million of commitments under the Revolving Credit Facility, less letters of credit outstanding of approximately $4 million and $2 million as of December 31, 2023 and September 30, 2023, respectively. There were no loans outstanding under the Revolving Credit Facility at December 31, 2023 or September 30, 2023. The Company is the direct parent of Holdings, which is the direct parent of Acquisition Corp. Acquisition Corp. is party to a $1,295 million senior secured term loan credit facility, pursuant to a credit agreement dated November 1, 2012, as amended or supplemented (the “Senior Term Loan Credit Agreement”) with JPMorgan Chase Bank NA, as administrative agent and collateral agent, and the other financial institutions and lenders from time to time party thereto (the “Senior Term Loan Facility”). Additionally, as of December 31, 2023 Acquisition Corp. had issued and outstanding the 2.750% Senior Secured Notes due 2028, the 3.750% Senior Secured Notes due 2029, the 3.875% Senior Secured Notes due 2030, the 2.250% Senior Secured Notes due 2031 and the 3.000% Senior Secured Notes due 2031 (together, the “Acquisition Corp. Notes”). All of the Acquisition Corp. Notes are guaranteed by all of Acquisition Corp.’s domestic wholly-owned subsidiaries. The guarantee of the Acquisition Corp. Notes by Acquisition Corp.’s domestic wholly-owned subsidiaries is full, unconditional and joint and several. The secured notes are guaranteed on a senior secured basis. The Company and Holdings are holding companies that conduct substantially all of their business operations through Acquisition Corp. Accordingly, while Acquisition Corp. and its subsidiaries are not currently restricted from distributing funds to the Company and Holdings under the indentures for the Acquisition Corp. Notes or the credit agreements for the Acquisition Corp. Senior Credit Facilities, including the Revolving Credit Facility (as defined below) and the Senior Term Loan Facility, should Acquisition Corp.’s Total Indebtedness to EBITDA Ratio increase above 3.50:1.00 and the term loans not achieve an investment grade rating, the covenants under the Revolving Credit Facility, which are currently suspended, will be reinstated and the ability of the Company and Holdings to obtain funds from their subsidiaries will be restricted by the Revolving Credit Facility. The Company was in compliance with its covenants under its outstanding notes, the Revolving Credit Facility and the Senior Term Loan Facility as of December 31, 2023 . Fiscal 2024 Transactions Revolving Credit Agreement Amendment On November 30, 2023, Acquisition Corp. entered into an amendment (the “Revolving Credit Agreement Amendment”) to the revolving credit agreement, dated January 31, 2018, as amended, among Acquisition Corp., the several banks and other financial institutions party thereto and Credit Suisse AG, Cayman Islands Branch, as predecessor administrative agent, governing Acquisition Corp.’s revolving credit facility (the “Revolving Credit Facility”) with JPMorgan Chase Bank, N.A., as administrative agent, and the other financial institutions and lenders from time to time party thereto. The Revolving Credit Agreement Amendment (among other changes): (i) increased the commitments under the Revolving Credit Facility from an aggregate principal amount of $300 million to an aggregate principal amount of $350 million, (ii) extended the final maturity date of the Revolving Credit Facility from April 3, 2025 to November 30, 2028, (iii) appointed JPMorgan Chase Bank, N.A. as administrative agent in the place of Credit Suisse AG, Cayman Islands Branch, (iv) modified the existing springing Secured Indebtedness to EBITDA Ratio financial maintenance covenant by increasing the springing threshold from $105,000,000 to $140,000,000, and (v) included provisions that allow Acquisition Corp. to terminate the security interests securing the obligations under the Revolving Credit Facility upon the satisfaction of the Collateral Suspension Conditions (as defined below) and, in the event that the security interests are so terminated, the existing springing Secured Indebtedness to EBITDA Ratio financial maintenance covenant (which is calculated net of up to $250 million of cash and cash equivalents held by Acquisition Corp. and its restricted subsidiaries) shall automatically be replaced with a new financial maintenance covenant prohibiting Acquisition Corp. from permitting the Total Indebtedness to EBITDA Ratio to be greater than 3.60:1.00 (calculated net of all cash and cash equivalents held by Acquisition Corp. and its restricted subsidiaries) as of the end of any fiscal quarter. In the event that the security interests securing the obligations under the Facility are reinstated as a result of the occurrence of a Collateral Suspension Reversion Date (as defined below), the Total Indebtedness to EBITDA Ratio financial maintenance covenant shall revert back to a springing Secured Indebtedness to EBITDA Ratio financial maintenance covenant set at 5.00:1.00. For purposes the Revolving Credit Agreement Amendment, (i) “Collateral Suspension Conditions” means conditions that are satisfied if (x) the investment grade condition has been satisfied and (y) the aggregate outstanding principal amount of senior secured indebtedness incurred by Acquisition Corp. and its restricted subsidiaries is not in excess of $500,000,000 and (ii) “Collateral Suspension Reversion Date” means, the earlier of (x) the date on which the Collateral Suspension Conditions cease to be satisfied or (y) the date on which Acquisition Corp. delivers a collateral suspension reversion notice to the Administrative Agent. December 2023 Senior Term Loan Credit Agreement Amendment On December 29, 2023, Acquisition Corp. entered into an amendment (the “Thirteenth Amendment”) to the Senior Term Loan Credit Agreement among Acquisition Corp., the other loan parties, Holdings, each lender party hereto, Credit Suisse AG, Cayman Islands Branch as the resigning administrative agent, and JPMorgan Chase Bank, N.A, as the successor administrative agent. The Thirteenth Amendment appointed JPMorgan Chase Bank, N.A. as administrative agent in the place of Credit Suisse AG, Cayman Islands Branch. Interest Rates The loans under the Revolving Credit Facility bear interest at Acquisition Corp.’s election at a rate equal to (i) the secured overnight financing rate as administered by the Federal Reserve Bank of New York for the applicable interest period (“Revolving Term SOFR”), and other rates for alternate currencies, such as EURIBOR and SONIA, as provided in the Revolving Credit Agreement, subject to a zero floor, plus 1.75% per annum in the case of Initial Revolving Loans (as defined in the Revolving Credit Agreement), or 1.875% per annum in the case of 2020 Revolving Loans (as defined in the Revolving Credit Agreement), or (ii) the base rate, which is the highest of (x) the corporate base rate established by the administrative agent from time to time, (y) 0.50% in excess of the overnight federal funds rate and (z) the one-month Revolving Term SOFR plus 1.0% per annum, plus, in each case, 0.75% per annum in the case of Initial Revolving Loans, or 0.875% per annum in the case of 2020 Revolving Loans; provided that, in respect of 2020 Revolving Loans, the applicable margin with respect to such loans is subject to adjustment as set forth in the pricing grid in the Revolving Credit Agreement. Based on the Senior Secured Indebtedness to EBITDA Ratio of 2.66x at December 31, 2023, the applicable margin for SOFR loans and RFR loans would be 1.375% instead of 1.875% and the applicable margin for ABR loans would be 0.375% instead of 0.875% in the case of 2020 Revolving Loans. If there is a payment default at any time, then the interest rate applicable to overdue principal will be the rate otherwise applicable to such loan plus 2.0% per annum. Default interest will also be payable on other overdue amounts at a rate of 2.0% per annum above the amount that would apply to an alternative base rate loan. The loans under the Senior Term Loan Facility bear interest at Acquisition Corp.’s election at a rate equal to (i) the forward-looking term rate based on the secured overnight financing rate as administered by the Federal Reserve Bank of New York for the applicable interest period (“Term SOFR”) plus an adjustment based on the applicable interest period subject to a zero floor, plus 2.125% per annum or (ii) the base rate, which is the highest of (x) the corporate base rate established by the administrative agent as its prime rate in effect at its principal office in New York City from time to time, (y) 0.50% in excess of the overnight federal funds rate and (z) one-month Term SOFR, plus 1.00% per annum, subject to a 1.00% floor, plus, in each case, 1.125% per annum. If there is a payment default at any time, then the interest rate applicable to overdue principal and interest will be the rate otherwise applicable to such loan plus 2.0% per annum. Default interest will also be payable on other overdue amounts at a rate of 2.0% per annum above the amount that would apply to an alternative base rate loan. The term loan entered into on January 27, 2023 (the “Term Loan Mortgage”) bears interest at a rate of 30-day SOFR plus the applicable margin of 1.40%, subject to a zero floor. The Company has entered into, and in the future may enter into, interest rate swaps to manage interest rate risk. Please refer to Note 13 of our condensed consolidated financial statements for further discussion. Maturity of Senior Term Loan Facility The loans outstanding under the Senior Term Loan Facility mature on January 20, 2028. Maturity of Revolving Credit Facility The maturity date of the Revolving Credit Facility is November 30, 2028. Maturities of Senior Secured Notes As of December 31, 2023, there are no scheduled maturities of notes until 2028, when $360 million is scheduled to mature. Thereafter, $2.368 billion is scheduled to mature. Maturity of Term Loan Mortgage The maturity date of the Term Loan Mortgage is January 27, 2033, subject to a call option exercisable by Truist Bank at any time after January 27, 2028 if certain criteria relating to the Company’s creditworthiness are met. Interest Expense, net Total interest expense, net was $39 million and $32 million for the three months ended December 31, 2023 and 2022, respectively. Interest expense, net includes interest expense related to our outstanding indebtedness of $45 million and $36 million for the three months ended December 31, 2023 and 2022, respectively. The weighted-average interest rate of the Company’s total debt was 4.6% at December 31, 2023, 4.1% at September 30, 2023, and 3.7% at December 31, 2022. |
Restructuring
Restructuring | 3 Months Ended |
Dec. 31, 2023 | |
Restructuring and Related Activities [Abstract] | |
Restructuring | Restructuring In March 2023, the Company announced a restructuring plan (the “Restructuring Plan”) intended to drive the evolution of the Company and position the Company for long-term growth, primarily through headcount reductions. The Restructuring Plan was substantially complete as of December 31, 2023, with related cash expenditures expected by the end of fiscal 2024. There were no restructuring costs recorded for the three months ended December 31, 2023. The following table sets forth the activity for the three months ended December 31, 2023 in the restructuring accrual included within accrued liabilities in the accompanying condensed consolidated balance sheets: Severance Costs (in millions) Balance at September 30, 2023 $ 19 Restructuring charges $ — Cash payments $ (8) Balance at December 31, 2023 $ 11 |
Commitments and Contingencies
Commitments and Contingencies | 3 Months Ended |
Dec. 31, 2023 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | Commitments and Contingencies From time to time the Company is involved in claims and legal proceedings that arise in the ordinary course of business. The Company is currently subject to several such claims and legal proceedings. Based on currently available information, the Company does not believe that resolution of pending matters will have a material adverse effect on its financial condition, cash flows or results of operations. However, litigation is subject to inherent uncertainties, and there can be no assurances that the Company’s defenses will be successful or that any such lawsuit or claim would not have a material adverse impact on the Company’s business, financial condition, cash flows and results of operations in a particular period. Any claims or proceedings against the Company, whether meritorious or not, can have an adverse impact because of defense costs, diversion of management and operational resources, negative publicity and other factors. |
Equity
Equity | 3 Months Ended |
Dec. 31, 2023 | |
Equity [Abstract] | |
Equity | Equity Stock-Based Compensation The Company’s stock-based compensation plans are described in Note 14, “Equity,” to the consolidated financial statements included in the Company’s Annual Report on Form 10-K for the fiscal year ended September 30, 2023. Stock-based compensation consists primarily of common stock, restricted stock units and market-based performance share units granted to eligible employees and executives under the Omnibus Incentive Plan. For the three months ended December 31, 2023, the Company recognized a total of $9 million of non-cash stock-based compensation expense which was recorded to additional paid-in capital. For the three months ended December 31, 2022, the Company recognized a total of $14 million of non-cash stock-based compensation expense, of which $4 million was recorded to additional paid-in capital and $10 million was recorded as a share-based compensation liability. During the three months ended December 31, 2023, $15 million of share-based compensation liabilities were reclassified to additional paid-in capital. Common Stock During the three months ended December 31, 2023, in connection with the Senior Management Free Cash Flow Plan (the “Plan”), the Company issued a total of 1,738,016 shares of Class A Common Stock to settle a portion of participants’ deferred equity units previously issued under the Plan. Additionally, a Plan participant redeemed a portion of their vested Class B equity units of WMG Management Holdings LLC in exchange for a total of 547,249 shares of Class B Common Stock which were converted to shares of Class A Common Stock upon the exchange. During the three months ended December 31, 2023, the Company issued approximately 7,000 shares of Class A Common Stock, under the Omnibus Incentive Plan. |
Income Taxes
Income Taxes | 3 Months Ended |
Dec. 31, 2023 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Income Taxes For the three months ended December 31, 2023, the Company recorded an income tax expense of $72 million. The income tax expense for the three months ended December 31, 2023 is higher than the expected tax expense at the statutory rate of 21% primarily due to withholding taxes, foreign income taxed at rates higher than the United States, U.S. state and local taxes, non-deductible executive compensation under IRC Section 162(m), and unrecognized tax benefit related to uncertain tax positions. These charges were partially offset by non-controlling interest, the net impact of GILTI and foreign derived intangible income (“FDII”), and tax benefits associated with Research and Development (“R&D”) credits. For the three months ended December 31, 2022, the Company recorded an income tax expense of $48 million. The income tax expense for the three months ended December 31, 2022 is higher than the expected tax benefit at the statutory tax rate of 21% primarily due to U.S. state and local taxes, withholding taxes, foreign income taxed at rates higher than the U.S., and non-deductible executive compensation under IRC Section 162(m), offset by a deduction against FDII. The Company has determined that it is reasonably possible that the gross unrecognized tax benefits as of December 31, 2023 could decrease by up to approximately $4 million related to various ongoing audits and settlement discussions in various jurisdictions during the next twelve months. The Organization for Economic Co-operation and Development (“OECD”) introduced Base Erosion and Profit Shifting (“BEPS”) Pillar 2 rules that impose a global minimum tax rate of 15%. Numerous countries, including European Union member states, have enacted or are expected to enact legislation to be effective as early as January 1, 2024, with general implementation of a global minimum tax rate by January 1, 2025. We are currently evaluating the potential impact of the rules on our consolidated financial statements and related disclosures. The Inflation Reduction Act of 2022 (H.R. 5376) includes a 15 percent corporate alternative minimum tax (CAMT) on adjusted financial statement income for corporations with average profits over $1 billion over a three-year period. Although the U.S. Treasury and Internal Revenue Service (IRS) issued interim CAMT guidance during 2023, many details and specifics of application of the CAMT remain subject to future guidance. The Company is not expecting to be subject to CAMT for our fiscal year 2024. |
Derivative Financial Instrument
Derivative Financial Instruments | 3 Months Ended |
Dec. 31, 2023 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Derivative Financial Instruments | Derivative Financial Instruments The Company uses derivative financial instruments, primarily foreign currency forward exchange contracts and interest rate swaps, for the purposes of managing foreign currency exchange rate risk and interest rate risk on expected future cash flows. The fair value of interest rate swaps is based on dealer quotes of market rates (i.e., Level 2 inputs) which is discussed further in Note 20, “Fair Value Measurements,” to the consolidated financial statements included in the Company’s Annual Report on Form 10-K for the fiscal year ended September 30, 2023. Interest income or expense related to interest rate swaps is recognized in interest income (expense), net in the same period as the related expense is recognized. The ineffective portions of interest rate swaps are recognized in other income (expense) in the period measured. As of December 31, 2023, the Company had outstanding foreign currency forward exchange contracts for the sale of $366 million and the purchase of $219 million of foreign currencies at fixed rates that will be settled by September 2024. As of December 31, 2023, the Company had no outstanding interest rate swaps and no unrealized deferred gains or losses in comprehensive income related to the interest rate swaps. As of September 30, 2023, the Company had outstanding $500 million in a pay-fixed receive-variable interest rate swap with $1 million of unrealized deferred gains in comprehensive income related to the interest rate swaps. The Company recorded no realized pre-tax gains or losses and unrealized pre-tax losses of $6 million related to its foreign currency forward exchange contracts in the condensed consolidated statement of operations as other expense for the three months ended December 31, 2023. The Company recorded realized pre-tax losses of $1 million and unrealized pre-tax losses of $7 million related to its foreign currency forward exchange contracts in the condensed consolidated statement of operations as other expense for the three months ended December 31, 2022. The unrealized pre-tax losses of the Company’s derivative interest rate swaps designated as cash flow hedges recorded in other comprehensive income during the three months ended December 31, 2023 and December 31, 2022 were $1 million and $2 million, respectively. The following is a summary of amounts recorded in the consolidated balance sheets pertaining to the Company’s derivative instruments at December 31, 2023 and September 30, 2023: December 31, September 30, (in millions) Other Current Assets: Interest Rate Swap $ — $ 2 Other Current Liabilities: Foreign Currency Forward Exchange Contracts (a) (6) — ______________________________________ (a) Includes $9 million and $15 million of foreign exchange derivative contracts in asset and liability positions, respectively, which net to $6 million of current liabilities. |
Segment Information
Segment Information | 3 Months Ended |
Dec. 31, 2023 | |
Segment Reporting [Abstract] | |
Segment Information | Segment Information Based on the nature of its products and services, the Company classifies its business interests into two fundamental operations: Recorded Music and Music Publishing, which also represent the reportable segments of the Company. Information as to each of these operations is set forth below. The Company evaluates performance based on several factors, of which the primary financial measure is operating income (loss) before non-cash depreciation of tangible assets and non-cash amortization of intangible assets adjusted to exclude the impact of non-cash stock-based compensation and other related expenses and certain items that affect comparability including but not limited to gains or losses on divestitures and expenses related to restructuring and transformation initiatives, which includes costs associated with the Company’s financial transformation initiative to upgrade our information technology and finance infrastructure (“Adjusted OIBDA”). Items excluded are not viewed to contribute directly to management’s evaluation of operating results. The accounting policies of the Company’s business segments are the same as those described in Note 2, “Summary of Significant Accounting Policies,” to the consolidated financial statements included in the Company’s Annual Report on Form 10-K for the fiscal year ended September 30, 2023. The Company accounts for intersegment sales at fair value as if the sales were to third parties. While intercompany transactions are treated like third-party transactions to determine segment performance, the revenues (and corresponding expenses recognized by the segment that is counterparty to the transaction) are eliminated in consolidation, and therefore, do not themselves impact consolidated results. Recorded Music Corporate Total Three Months Ended (in millions) December 31, 2023 Revenues $ 1,445 $ 304 $ (1) $ 1,748 Adjusted OIBDA 412 86 (47) 451 December 31, 2022 Revenues $ 1,239 $ 250 (1) 1,488 Adjusted OIBDA 299 72 (36) 335 Adjusted OIBDA is not a measure defined by U.S. GAAP but is computed using amounts that are determined in accordance with U.S. GAAP. A reconciliation of the Company’s Adjusted OIBDA to operating income is presented below. For the Three Months Ended 2023 2022 Operating income 354 265 Amortization expense 55 63 Depreciation expense 26 21 Transformation initiatives and other related costs 19 12 Net gain on divestitures (17) (41) Non-cash stock-based compensation and other related costs 14 15 Adjusted OIBDA $ 451 $ 335 In connection with the aforementioned change in segment profitability measure, the Company has also revised disclosures relating to segment profitability for the fiscal years ended September 30, 2023, 2022 and 2021, as presented below, to be comparable to the current period presentation. Recorded Music Corporate Total Twelve Months Ended (in millions) September 30, 2023 Revenues $ 4,955 $ 1,088 $ (6) $ 6,037 Adjusted OIBDA 1,093 296 (154) 1,235 September 30, 2022 Revenues $ 4,966 $ 958 $ (5) $ 5,919 Adjusted OIBDA 1,046 233 (130) 1,149 September 30, 2021 Revenues $ 4,544 $ 761 (4) $ 5,301 Adjusted OIBDA 975 179 (136) 1,018 For the Twelve Months Ended September 30, 2023 2022 2021 Operating income 790 714 609 Amortization expense 245 263 229 Depreciation expense 87 76 77 Restructuring 42 8 18 Transformation initiatives and other related costs 53 46 36 Executive transition costs 7 — — Net gain on divestitures (41) — — COVID-19 related costs — — 1 Non-cash stock-based compensation and other related costs 52 42 48 Adjusted OIBDA $ 1,235 $ 1,149 $ 1,018 |
Additional Financial Informatio
Additional Financial Information | 3 Months Ended |
Dec. 31, 2023 | |
Additional Financial Information [Abstract] | |
Additional Financial Information | Additional Financial Information Supplemental Cash Flow Disclosures The Company made interest payments of approximately $33 million and $25 million during the three months ended December 31, 2023 and 2022, respectively. The Company paid approximately $39 million and $45 million of income and withholding taxes, net of refunds, for the three months ended December 31, 2023 and 2022, respectively. Noncash investing activities was approximately $18 million related to the acquisition of music publishing rights and music catalogs, net during the three months ended December 31, 2023. Net Gain on Divestitures The Company recognized a pre-tax gain of $17 million and $41 million, during the three months ended December 31, 2023 and December 31, 2022, respectively, in connection with the divestiture of certain sound recordings rights in the quarter and has been reflected as a net gain on divestiture in the accompanying condensed consolidated statement of operations. Dividends The Company’s ability to pay dividends may be restricted by covenants in the credit agreement for the Revolving Credit Facility which are currently suspended but which will be reinstated if Acquisition Corp.’s Total Indebtedness to EBITDA Ratio increases above 3.50:1.00 and the term loans do not achieve an investment grade rating. The Company intends to pay quarterly cash dividends to holders of its Class A Common Stock and Class B Common Stock. The declaration of each dividend will continue to be at the discretion of the Company’s board of directors and will depend on the Company’s financial condition, earnings, liquidity and capital requirements, level of indebtedness, contractual restrictions with respect to payment of dividends, restrictions imposed by Delaware law, general business conditions and any other factors that the Company’s board of directors deems relevant in making such a determination. Therefore, there can be no assurance that the Company will pay any dividends to holders of the Company’s common stock, or as to the amount of any such dividends. On November 9, 2023, the Company’s board of directors declared a cash dividend of $0.17 per share on the Company’s Class A Common Stock and Class B Common Stock, as well as related payments under certain stock-based compensation plans, which was paid to stockholders on December 1, 2023. The Company paid an aggregate of approximately $89 million, or $0.17 per share, in cash dividends to stockholders and participating security holders for the three months ended December 31, 2023. |
Fair Value Measurements
Fair Value Measurements | 3 Months Ended |
Dec. 31, 2023 | |
Fair Value Disclosures [Abstract] | |
Fair Value Measurements | Fair Value Measurements The following tables show the fair value of the Company’s financial instruments that are required to be measured at fair value as of December 31, 2023 and September 30, 2023. Fair Value Measurements as of December 31, 2023 (Level 1) (Level 2) (Level 3) Total (in millions) Other Current Liabilities: Foreign Currency Forward Exchange Contracts (a) $ — $ (6) $ — $ (6) Other Noncurrent Assets: Equity Investments with Readily Determinable Fair Value (c) 13 — — 13 Other Noncurrent Liabilities: Contractual Obligations (b) — — (1) (1) Fair Value Measurements as of September 30, 2023 (Level 1) (Level 2) (Level 3) Total (in millions) Other Current Assets: Interest Rate Swap (d) $ — $ 2 $ — $ 2 Other Noncurrent Assets: Equity Investment with Readily Determinable Fair Value (c) 15 — — 15 Other Noncurrent Liabilities: Contractual Obligations (b) — — (1) (1) ______________________________________ (a) The fair value of foreign currency forward exchange contracts is based on dealer quotes of market forward rates and reflects the amount that the Company would receive or pay at their maturity dates for contracts involving the same currencies and maturity dates. (b) This represents contingent consideration related to acquisitions. This is based on a probability weighted performance approach and it is adjusted to fair value on a recurring basis and any adjustments are typically included as a component of operating income in the condensed consolidated statements of operations. This amount was primarily calculated using unobservable inputs such as future earnings performance of the acquiree and the expected timing of payments. (c) These represent equity investments with a readily determinable fair value. The Company has measured its investments to fair value in accordance with ASC 321, Investments—Equity Securities, based on quoted prices in active markets. (d) The fair value of the interest rate swaps is based on dealer quotes of market forward rates and reflects the amount that the Company would receive or pay as of each reporting period for contracts involving the same attributes and maturity dates. The following table reconciles the beginning and ending balances of net liabilities classified as Level 3: Total (in millions) Balance at September 30, 2023 $ (1) Additions — Reductions — Payments — Balance at December 31, 2023 $ (1) The majority of the Company’s non-financial instruments, which include goodwill, intangible assets, inventories and property, plant and equipment, are not required to be re-measured to fair value on a recurring basis. These assets are evaluated for impairment if certain triggering events occur. If such evaluation indicates that impairment exists, the asset is written down to its fair value. In addition, an impairment analysis is performed at least annually for goodwill and indefinite-lived intangible assets. Equity Investments Without Readily Determinable Fair Value The Company evaluates its equity investments without readily determinable fair values for impairment if factors indicate that a significant decrease in value has occurred. The Company has elected to use the measurement alternative to fair value that will allow these investments to be recorded at cost, less impairment, and adjusted for subsequent observable price changes. The Company recorded approximately $1 million of impairment charges on these investments during the three months ended December 31, 2023. The Company did not record any impairment charges on these investments during the three months ended December 31, 2022. In addition, there were no observable price changes events that were completed during the three months ended December 31, 2023 and 2022. Fair Value of Debt Based on the level of interest rates prevailing at December 31, 2023, the fair value of the Company’s debt was $3.763 billion. Based on the level of interest rates prevailing at September 30, 2023, the fair value of the Company’s debt was $3.525 billion. The fair value of the Company’s debt instruments is determined using quoted market prices from less active markets or by using quoted market prices for instruments with identical terms and maturities; both approaches are considered a Level 2 measurement. |
Subsequent Events
Subsequent Events | 3 Months Ended |
Dec. 31, 2023 | |
Subsequent Events [Abstract] | |
Subsequent Events | Subsequent Events January 2024 Senior Term Loan Credit Agreement Amendment On January 24, 2024, Acquisition Corp. entered into an amendment (the “Fourteenth Amendment”) to the credit agreement, dated November 1, 2012, as amended or supplemented, among Acquisition Corp., the guarantors party thereto, the lenders party thereto and JPMorgan Chase Bank, N.A., as administrative agent, governing Acquisition Corp.’s senior secured term loan facility with JPMorgan Chase Bank N.A., as administrative agent, and the other financial institutions and lenders from time to time party thereto. The Fourteenth Amendment (among other changes) extended the maturity date of its outstanding term loans from January 20, 2028 to January 24, 2031 through the issuance of tranche I term loans and refinancing of the existing tranche G term loans. The tranche I term loans shall bear interest at a rate equal to, at Acquisition Corp.’s election (i) the forward-looking term rate based on Term SOFR as administered by the Federal Reserve Bank of New York for the applicable interest period subject to a zero floor, plus 2.000% per annum or (ii) the base rate, which is the highest of (x) the corporate base rate established by the administrative agent as its prime rate in effect at its principal office in New York City from time to time, (y) 0.50% in excess of the overnight federal funds rate and (z) one-month Term SOFR, plus 1.00% per annum, in each case, subject to a 1.00% floor, plus 1.000% per annum. Strategic Restructuring Plan On February 6, 2024, the Company’s board of directors approved and the Company subsequently announced a strategic restructuring plan (the “Strategic Restructuring Plan”) designed to free up more funds to invest in music and accelerate the Company's growth for the next decade. The Company expects the Strategic Restructuring Plan to generate pre-tax cost savings by the end of fiscal year 2025 and anticipates allocating a majority of the cost savings to increase investment in the Company’s core Recorded Music and Music Publishing businesses, new skill sets and tech capabilities. The cost savings under the Strategic Restructuring Plan will be achieved through a combination of the disposal or winding down of certain of the Company’s non-core owned and operated media properties including the Company’s in-house ad sales function (the “O&O Media Properties”), continuing to manage overhead, sharpening focus, expanding shared services, and implementing previously disclosed expected operational efficiencies made possible by the Company’s financial transformation initiative. The Strategic Restructuring Plan anticipates a reduction in headcount, a majority of which will be related to the O&O Media Properties, Corporate and various support functions. The Strategic Restructuring Plan is expected to result in approximately $140 million of total non-recurring pre-tax charges and approximately $105 million in total after tax charges. The pre-tax charges include approximately $85 million representing severance payments and other related termination costs, and approximately $55 million represents non-cash impairment charges primarily in connection with the disposal or winding down of the O&O Media Properties. The majority of the charges associated with the Strategic Restructuring Plan are expected to be incurred by the end of fiscal year 2024 and the actions related to those charges will commence immediately. The severance payments and other termination costs are expected to be paid by the end of fiscal year 2026 with approximately $35 million of those payments and costs expected to be paid by the end of fiscal year 2024. |
Summary of Significant Accoun_2
Summary of Significant Accounting Policies (Policies) | 3 Months Ended |
Dec. 31, 2023 | |
Accounting Policies [Abstract] | |
Interim Financial Statements | Interim Financial Statements The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with United States generally accepted accounting principles (“U.S. GAAP”) for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all the information and notes required by U.S. GAAP for complete financial statements. In the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation have been included. Operating results for the three months ended December 31, 2023 are not necessarily indicative of the results that may be expected for the fiscal year ending September 30, 2024. The consolidated balance sheet at September 30, 2023 has been derived from the audited consolidated financial statements at that date but does not include all the information and notes required by U.S. GAAP for complete financial statements. For further information, refer to the consolidated financial statements and notes thereto included in our Annual Report on Form 10-K for the fiscal year ended September 30, 2023 (File No. 001-32502). |
Basis of Consolidation | Basis of Consolidation The accompanying financial statements present the consolidated accounts of all entities in which the Company has a controlling voting interest and/or variable interest required to be consolidated in accordance with U.S. GAAP. All intercompany balances and transactions have been eliminated. Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) Topic 810, Consolidation |
Income Taxes | Income Taxes The Company uses the estimated annual effective tax rate method in computing its interim tax provision. Certain items, including those deemed to be unusual and infrequent are excluded from the estimated annual effective tax rate. In such cases, the actual tax expense or benefit is reported in the same period as the related item. Certain tax effects are also not reflected in the estimated annual effective tax rate, primarily certain changes in the realizability of deferred tax assets and uncertain tax positions, and are recorded in the period in which the change occurs. Global Intangible Low-Taxed Income (“GILTI”) imposes U.S. taxes on the excess of a deemed return on tangible assets of certain foreign subsidiaries. The Company made an election to recognize GILTI tax in the specific period in which it occurs. |
New Accounting Pronouncements | New Accounting Pronouncements Accounting Pronouncements Not Yet Adopted In November 2023, the FASB issued ASU 2023-07, Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures . The amendment enhances reportable segment disclosure requirements, primarily by requiring enhanced disclosures about significant segment expenses, reporting for interim periods, and Chief Operating Decision Maker (“CODM”) related information. The amendments in this ASU are effective for fiscal years beginning after December 15, 2023 and interim periods within fiscal years beginning after December 15, 2024. The Company is in the process of evaluating the effect that the adoption of these standards will have on its consolidated financial statements. In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures . The amendment enhances income tax disclosure requirements, by requiring enhanced disclosures on the income tax rate reconciliation and income taxes paid. The amendments in this ASU are effective for fiscal years beginning after December 15, 2024. The Company is in the process of evaluating the effect that the adoption of these standards will have on its consolidated financial statements. |
Earnings per Share (Tables)
Earnings per Share (Tables) | 3 Months Ended |
Dec. 31, 2023 | |
Earnings Per Share [Abstract] | |
Schedule of Earnings Per Share | The following table sets forth the calculation of basic and diluted net income per common share under the two-class method for the three months ended December 31, 2023 and 2022 (in millions, except share amounts, which are reflected in thousands, and per share data): Three Months Ended December 31, 2023 2022 Class A Class B Class A Class B Basic and Diluted EPS: Numerator Net income attributable to Warner Music Group Corp. $ 44 $ 115 $ 34 $ 88 Less: Net income attributable to participating securities (2) — (2) — Net income attributable to common stockholders $ 42 $ 115 $ 32 $ 88 Denominator Weighted average shares outstanding 138,972 377,490 137,424 377,650 Basic and Diluted EPS $ 0.30 $ 0.30 $ 0.23 $ 0.23 |
Revenue Recognition (Tables)
Revenue Recognition (Tables) | 3 Months Ended |
Dec. 31, 2023 | |
Revenue from Contract with Customer [Abstract] | |
Summary of Disaggregation of Revenue | The Company’s revenue consists of the following categories, which aggregate into the segments – Recorded Music and Music Publishing: Three Months Ended 2023 2022 (in millions) Revenue by Type Digital $ 908 $ 803 Physical 154 133 Total Digital and Physical 1,062 936 Artist services and expanded-rights 204 206 Licensing 179 97 Total Recorded Music 1,445 1,239 Performance 51 45 Digital 196 149 Mechanical 15 14 Synchronization 39 39 Other 3 3 Total Music Publishing 304 250 Intersegment eliminations (1) (1) Total Revenues $ 1,748 $ 1,488 Revenue by Geographical Location U.S. Recorded Music $ 627 $ 539 U.S. Music Publishing 172 133 Total U.S. 799 672 International Recorded Music 818 700 International Music Publishing 132 117 Total International 950 817 Intersegment eliminations (1) (1) Total Revenues $ 1,748 $ 1,488 |
Summary of Revenues Expected to be Recognized in Future Related to Performance Obligations | Revenues expected to be recognized in the future related to performance obligations that are unsatisfied at December 31, 2023 are as follows: Rest of FY24 FY25 FY26 Thereafter Total (in millions) Remaining performance obligations $ 468 $ 226 $ 22 $ 6 $ 722 Total $ 468 $ 226 $ 22 $ 6 $ 722 |
Comprehensive Income (Tables)
Comprehensive Income (Tables) | 3 Months Ended |
Dec. 31, 2023 | |
Equity [Abstract] | |
Schedule of Accumulated Other Comprehensive Loss | The following summary sets forth the changes in the components of accumulated other comprehensive loss, net of related tax benefit of less than $1 million: Foreign Currency Translation Loss (a) Minimum Pension Liability Adjustment Deferred Gains (Losses) On Derivative Financial Instruments Accumulated Other Comprehensive Loss, net (in millions) Balances at September 30, 2023 $ (322) $ (1) $ 1 $ (322) Other comprehensive income (loss) 64 (1) (1) 62 Balances at December 31, 2023 $ (258) $ (2) $ — $ (260) ______________________________________ (a) Includes historical foreign currency translation related to certain intra-entity transactions. |
Goodwill and Intangible Assets
Goodwill and Intangible Assets (Tables) | 3 Months Ended |
Dec. 31, 2023 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Changes in Goodwill for Each Reportable Segment | The following analysis details the changes in goodwill for each reportable segment: Recorded Music Total (in millions) Balances at September 30, 2023 $ 1,529 $ 464 $ 1,993 Acquisitions 3 — 3 Other adjustments (a) 19 — 19 Balances at December 31, 2023 $ 1,551 $ 464 $ 2,015 ______________________________________ (a) Other adjustments during the three months ended December 31, 2023 represent foreign currency movements. |
Schedule of Indefinite Intangible Assets | Intangible assets consist of the following: Weighted-Average Useful Life December 31, September 30, (in millions) Intangible assets subject to amortization: Recorded music catalog 12 years $ 1,540 $ 1,507 Music publishing copyrights 25 years 2,111 2,026 Artist and songwriter contracts 13 years 1,113 1,091 Trademarks 14 years 113 111 Other intangible assets 6 years 106 104 Total gross intangible assets subject to amortization 4,983 4,839 Accumulated amortization (2,593) (2,486) Total net intangible assets subject to amortization 2,390 2,353 Intangible assets not subject to amortization: Trademarks and tradenames Indefinite 151 149 Total net intangible assets $ 2,541 $ 2,502 |
Schedule of Finite-Lived Intangible Assets | Intangible assets consist of the following: Weighted-Average Useful Life December 31, September 30, (in millions) Intangible assets subject to amortization: Recorded music catalog 12 years $ 1,540 $ 1,507 Music publishing copyrights 25 years 2,111 2,026 Artist and songwriter contracts 13 years 1,113 1,091 Trademarks 14 years 113 111 Other intangible assets 6 years 106 104 Total gross intangible assets subject to amortization 4,983 4,839 Accumulated amortization (2,593) (2,486) Total net intangible assets subject to amortization 2,390 2,353 Intangible assets not subject to amortization: Trademarks and tradenames Indefinite 151 149 Total net intangible assets $ 2,541 $ 2,502 |
Debt (Tables)
Debt (Tables) | 3 Months Ended |
Dec. 31, 2023 | |
Debt Disclosure [Abstract] | |
Schedule of Long-term Debt | Long-term debt, all of which was issued by Acquisition Corp., consists of the following: December 31, September 30, (in millions) Revolving Credit Facility (a) $ — $ — Senior Term Loan Facility due 2028 1,295 1,295 2.750% Senior Secured Notes due 2028 (€325 face amount) 360 343 3.750% Senior Secured Notes due 2029 540 540 3.875% Senior Secured Notes due 2030 535 535 2.250% Senior Secured Notes due 2031 (€445 face amount) 493 471 3.000% Senior Secured Notes due 2031 800 800 Mortgage Term Loan due 2033 18 $ 18 Total long-term debt, including the current portion $ 4,041 $ 4,002 Issuance premium less unamortized discount and unamortized deferred financing costs (37) (38) Total long-term debt, including the current portion, net $ 4,004 $ 3,964 ______________________________________ (a) Reflects $350 million and $300 million of commitments under the Revolving Credit Facility, less letters of credit outstanding of approximately $4 million and $2 million as of December 31, 2023 and September 30, 2023, respectively. There were no loans outstanding under the Revolving Credit Facility at December 31, 2023 or September 30, 2023. |
Restructuring (Tables)
Restructuring (Tables) | 3 Months Ended |
Dec. 31, 2023 | |
Restructuring and Related Activities [Abstract] | |
Schedule of Restructuring Accrual Activity | The following table sets forth the activity for the three months ended December 31, 2023 in the restructuring accrual included within accrued liabilities in the accompanying condensed consolidated balance sheets: Severance Costs (in millions) Balance at September 30, 2023 $ 19 Restructuring charges $ — Cash payments $ (8) Balance at December 31, 2023 $ 11 |
Derivative Financial Instrume_2
Derivative Financial Instruments (Tables) | 3 Months Ended |
Dec. 31, 2023 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Summary of Amounts Recorded in Consolidated Balance Sheets | The following is a summary of amounts recorded in the consolidated balance sheets pertaining to the Company’s derivative instruments at December 31, 2023 and September 30, 2023: December 31, September 30, (in millions) Other Current Assets: Interest Rate Swap $ — $ 2 Other Current Liabilities: Foreign Currency Forward Exchange Contracts (a) (6) — ______________________________________ (a) Includes $9 million and $15 million of foreign exchange derivative contracts in asset and liability positions, respectively, which net to $6 million of current liabilities. |
Segment Information (Tables)
Segment Information (Tables) | 3 Months Ended |
Dec. 31, 2023 | |
Segment Reporting [Abstract] | |
Schedule of Segment Information | While intercompany transactions are treated like third-party transactions to determine segment performance, the revenues (and corresponding expenses recognized by the segment that is counterparty to the transaction) are eliminated in consolidation, and therefore, do not themselves impact consolidated results. Recorded Music Corporate Total Three Months Ended (in millions) December 31, 2023 Revenues $ 1,445 $ 304 $ (1) $ 1,748 Adjusted OIBDA 412 86 (47) 451 December 31, 2022 Revenues $ 1,239 $ 250 (1) 1,488 Adjusted OIBDA 299 72 (36) 335 In connection with the aforementioned change in segment profitability measure, the Company has also revised disclosures relating to segment profitability for the fiscal years ended September 30, 2023, 2022 and 2021, as presented below, to be comparable to the current period presentation. Recorded Music Corporate Total Twelve Months Ended (in millions) September 30, 2023 Revenues $ 4,955 $ 1,088 $ (6) $ 6,037 Adjusted OIBDA 1,093 296 (154) 1,235 September 30, 2022 Revenues $ 4,966 $ 958 $ (5) $ 5,919 Adjusted OIBDA 1,046 233 (130) 1,149 September 30, 2021 Revenues $ 4,544 $ 761 (4) $ 5,301 Adjusted OIBDA 975 179 (136) 1,018 |
Schedule of Components of Adjusted OIBDA to Operating Income | Adjusted OIBDA is not a measure defined by U.S. GAAP but is computed using amounts that are determined in accordance with U.S. GAAP. A reconciliation of the Company’s Adjusted OIBDA to operating income is presented below. For the Three Months Ended 2023 2022 Operating income 354 265 Amortization expense 55 63 Depreciation expense 26 21 Transformation initiatives and other related costs 19 12 Net gain on divestitures (17) (41) Non-cash stock-based compensation and other related costs 14 15 Adjusted OIBDA $ 451 $ 335 For the Twelve Months Ended September 30, 2023 2022 2021 Operating income 790 714 609 Amortization expense 245 263 229 Depreciation expense 87 76 77 Restructuring 42 8 18 Transformation initiatives and other related costs 53 46 36 Executive transition costs 7 — — Net gain on divestitures (41) — — COVID-19 related costs — — 1 Non-cash stock-based compensation and other related costs 52 42 48 Adjusted OIBDA $ 1,235 $ 1,149 $ 1,018 |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 3 Months Ended |
Dec. 31, 2023 | |
Fair Value Disclosures [Abstract] | |
Schedule of Fair Value of Financial Instruments | The following tables show the fair value of the Company’s financial instruments that are required to be measured at fair value as of December 31, 2023 and September 30, 2023. Fair Value Measurements as of December 31, 2023 (Level 1) (Level 2) (Level 3) Total (in millions) Other Current Liabilities: Foreign Currency Forward Exchange Contracts (a) $ — $ (6) $ — $ (6) Other Noncurrent Assets: Equity Investments with Readily Determinable Fair Value (c) 13 — — 13 Other Noncurrent Liabilities: Contractual Obligations (b) — — (1) (1) Fair Value Measurements as of September 30, 2023 (Level 1) (Level 2) (Level 3) Total (in millions) Other Current Assets: Interest Rate Swap (d) $ — $ 2 $ — $ 2 Other Noncurrent Assets: Equity Investment with Readily Determinable Fair Value (c) 15 — — 15 Other Noncurrent Liabilities: Contractual Obligations (b) — — (1) (1) ______________________________________ (a) The fair value of foreign currency forward exchange contracts is based on dealer quotes of market forward rates and reflects the amount that the Company would receive or pay at their maturity dates for contracts involving the same currencies and maturity dates. (b) This represents contingent consideration related to acquisitions. This is based on a probability weighted performance approach and it is adjusted to fair value on a recurring basis and any adjustments are typically included as a component of operating income in the condensed consolidated statements of operations. This amount was primarily calculated using unobservable inputs such as future earnings performance of the acquiree and the expected timing of payments. (c) These represent equity investments with a readily determinable fair value. The Company has measured its investments to fair value in accordance with ASC 321, Investments—Equity Securities, based on quoted prices in active markets. (d) The fair value of the interest rate swaps is based on dealer quotes of market forward rates and reflects the amount that the Company would receive or pay as of each reporting period for contracts involving the same attributes and maturity dates. |
Reconciliation of Net Liabilities Classified as Level 3 | The following table reconciles the beginning and ending balances of net liabilities classified as Level 3: Total (in millions) Balance at September 30, 2023 $ (1) Additions — Reductions — Payments — Balance at December 31, 2023 $ (1) |
Summary of Significant Accoun_3
Summary of Significant Accounting Policies (Details) - USD ($) $ in Millions | Dec. 31, 2023 | Sep. 30, 2023 |
Variable Interest Entity [Line Items] | ||
Assets | $ 8,991 | $ 8,545 |
Liabilities | 8,375 | 8,115 |
Variable Interest Entity, Primary Beneficiary | ||
Variable Interest Entity [Line Items] | ||
Assets | 74 | 5 |
Liabilities | $ 2 | $ 2 |
Earnings per Share (Detail)
Earnings per Share (Detail) - USD ($) $ / shares in Units, $ in Millions | 3 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
Numerator | ||
Net income attributable to Warner Music Group Corp. | $ 159 | $ 122 |
Class A Common Stock | ||
Numerator | ||
Net income attributable to Warner Music Group Corp. | 44 | 34 |
Less: Net income attributable to participating securities | (2) | (2) |
Net income attributable to common stockholders | $ 42 | $ 32 |
Denominator | ||
Weighted average shares outstanding, basic (in shares) | 138,972,000 | 137,424,000 |
Weighted average shares outstanding, diluted (in shares) | 138,972,000 | 137,424,000 |
Basic (in dollars per share) | $ 0.30 | $ 0.23 |
Diluted (in dollars per share) | $ 0.30 | $ 0.23 |
Class B Common Stock | ||
Numerator | ||
Net income attributable to Warner Music Group Corp. | $ 115 | $ 88 |
Less: Net income attributable to participating securities | 0 | 0 |
Net income attributable to common stockholders | $ 115 | $ 88 |
Denominator | ||
Weighted average shares outstanding, basic (in shares) | 377,490,000 | 377,650,000 |
Weighted average shares outstanding, diluted (in shares) | 377,490,000 | 377,650,000 |
Basic (in dollars per share) | $ 0.30 | $ 0.23 |
Diluted (in dollars per share) | $ 0.30 | $ 0.23 |
Revenue Recognition - Summary o
Revenue Recognition - Summary of Disaggregation of Revenue (Detail) - USD ($) $ in Millions | 3 Months Ended | 12 Months Ended | |||
Dec. 31, 2023 | Dec. 31, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2021 | |
Disaggregation of Revenue [Line Items] | |||||
Total Revenues | $ 1,748 | $ 1,488 | $ 6,037 | $ 5,919 | $ 5,301 |
Operating Segments | U.S. | |||||
Disaggregation of Revenue [Line Items] | |||||
Total Revenues | 799 | 672 | |||
Operating Segments | International | |||||
Disaggregation of Revenue [Line Items] | |||||
Total Revenues | 950 | 817 | |||
Intersegment eliminations | |||||
Disaggregation of Revenue [Line Items] | |||||
Total Revenues | (1) | (1) | |||
Recorded Music | Operating Segments | |||||
Disaggregation of Revenue [Line Items] | |||||
Total Revenues | 1,445 | 1,239 | 4,955 | 4,966 | 4,544 |
Recorded Music | Operating Segments | U.S. | |||||
Disaggregation of Revenue [Line Items] | |||||
Total Revenues | 627 | 539 | |||
Recorded Music | Operating Segments | International | |||||
Disaggregation of Revenue [Line Items] | |||||
Total Revenues | 818 | 700 | |||
Recorded Music | Digital | Operating Segments | |||||
Disaggregation of Revenue [Line Items] | |||||
Total Revenues | 908 | 803 | |||
Recorded Music | Physical | Operating Segments | |||||
Disaggregation of Revenue [Line Items] | |||||
Total Revenues | 154 | 133 | |||
Recorded Music | Total Digital and Physical | Operating Segments | |||||
Disaggregation of Revenue [Line Items] | |||||
Total Revenues | 1,062 | 936 | |||
Recorded Music | Artist services and expanded-rights | Operating Segments | |||||
Disaggregation of Revenue [Line Items] | |||||
Total Revenues | 204 | 206 | |||
Recorded Music | Licensing | Operating Segments | |||||
Disaggregation of Revenue [Line Items] | |||||
Total Revenues | 179 | 97 | |||
Music Publishing | Operating Segments | |||||
Disaggregation of Revenue [Line Items] | |||||
Total Revenues | 304 | 250 | $ 1,088 | $ 958 | $ 761 |
Music Publishing | Operating Segments | U.S. | |||||
Disaggregation of Revenue [Line Items] | |||||
Total Revenues | 172 | 133 | |||
Music Publishing | Operating Segments | International | |||||
Disaggregation of Revenue [Line Items] | |||||
Total Revenues | 132 | 117 | |||
Music Publishing | Digital | Operating Segments | |||||
Disaggregation of Revenue [Line Items] | |||||
Total Revenues | 196 | 149 | |||
Music Publishing | Performance | Operating Segments | |||||
Disaggregation of Revenue [Line Items] | |||||
Total Revenues | 51 | 45 | |||
Music Publishing | Mechanical | Operating Segments | |||||
Disaggregation of Revenue [Line Items] | |||||
Total Revenues | 15 | 14 | |||
Music Publishing | Synchronization | Operating Segments | |||||
Disaggregation of Revenue [Line Items] | |||||
Total Revenues | 39 | 39 | |||
Music Publishing | Other | Operating Segments | |||||
Disaggregation of Revenue [Line Items] | |||||
Total Revenues | $ 3 | $ 3 |
Revenue Recognition - Additiona
Revenue Recognition - Additional Information (Detail) - USD ($) $ in Millions | 3 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Sep. 30, 2023 | |
Revenue from Contract with Customer [Abstract] | |||
Refund liabilities | $ 25 | $ 19 | |
Uncollectible accounts, reserves | 19 | $ 19 | |
Deferred revenue increased related to cash received from customers | 160 | ||
Revenue recognized related to deferred revenue | 151 | ||
Revenue recognized from performance obligations satisfied in previous periods | $ 30 | $ 27 |
Revenue Recognition - Summary_2
Revenue Recognition - Summary of Revenues Expected to be Recognized in Future Related to Performance Obligations (Detail) $ in Millions | Dec. 31, 2023 USD ($) |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Remaining performance obligations | $ 722 |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date: 2024-01-01 | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Remaining performance obligations | $ 468 |
Revenue, remaining performance obligation, expected timing of satisfaction, period | 9 months |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date: 2024-10-01 | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Remaining performance obligations | $ 226 |
Revenue, remaining performance obligation, expected timing of satisfaction, period | 1 year |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date: 2025-10-01 | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Remaining performance obligations | $ 22 |
Revenue, remaining performance obligation, expected timing of satisfaction, period | 1 year |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date: 2026-10-01 | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Remaining performance obligations | $ 6 |
Revenue, remaining performance obligation, expected timing of satisfaction, period |
Acquisitions - Additional Infor
Acquisitions - Additional Information (Detail) - USD ($) $ in Millions | 3 Months Ended | |
Aug. 25, 2023 | Dec. 31, 2023 | |
TenThousand Projects | ||
Business Acquisition [Line Items] | ||
Percentage of voting interests acquired (as a percent) | 51% | |
Purchase price of selected assets | $ 98 | |
Final purchase price | 102 | |
Base price payable | $ 12 | |
300 Entertainment | ||
Business Acquisition [Line Items] | ||
Decrease to intangible assets | $ 1 | |
Increase to other acquired liabilities | 3 | |
Increase in goodwill | $ 2 |
Comprehensive Income - Addition
Comprehensive Income - Additional Information (Detail) $ in Millions | 3 Months Ended |
Dec. 31, 2023 USD ($) | |
Equity [Abstract] | |
Changes in accumulated other comprehensive loss, net of related taxes amount less than | $ 1 |
Comprehensive Income - Schedule
Comprehensive Income - Schedule of Accumulated Other Comprehensive Loss (Detail) $ in Millions | 3 Months Ended |
Dec. 31, 2023 USD ($) | |
AOCI Including Portion Attributable to Noncontrolling Interest, Net of Tax [Roll Forward] | |
Beginning balance | $ 430 |
Other comprehensive income (loss) | 62 |
Ending balance | 616 |
Foreign Currency Translation Loss | |
AOCI Including Portion Attributable to Noncontrolling Interest, Net of Tax [Roll Forward] | |
Beginning balance | (322) |
Other comprehensive income (loss) | 64 |
Ending balance | (258) |
Minimum Pension Liability Adjustment | |
AOCI Including Portion Attributable to Noncontrolling Interest, Net of Tax [Roll Forward] | |
Beginning balance | (1) |
Other comprehensive income (loss) | (1) |
Ending balance | (2) |
Deferred Gains (Losses) On Derivative Financial Instruments | |
AOCI Including Portion Attributable to Noncontrolling Interest, Net of Tax [Roll Forward] | |
Beginning balance | 1 |
Other comprehensive income (loss) | (1) |
Ending balance | 0 |
Accumulated Other Comprehensive Loss, net | |
AOCI Including Portion Attributable to Noncontrolling Interest, Net of Tax [Roll Forward] | |
Beginning balance | (322) |
Ending balance | $ (260) |
Goodwill and Intangible Asset_2
Goodwill and Intangible Assets - Changes in Goodwill for Each Reportable Segment (Detail) $ in Millions | 3 Months Ended |
Dec. 31, 2023 USD ($) | |
Goodwill [Roll Forward] | |
Beginning balance | $ 1,993 |
Acquisitions | 3 |
Other adjustments | 19 |
Ending balance | 2,015 |
Recorded Music | |
Goodwill [Roll Forward] | |
Beginning balance | 1,529 |
Acquisitions | 3 |
Other adjustments | 19 |
Ending balance | 1,551 |
Music Publishing | |
Goodwill [Roll Forward] | |
Beginning balance | 464 |
Acquisitions | 0 |
Other adjustments | 0 |
Ending balance | $ 464 |
Goodwill and Intangible Asset_3
Goodwill and Intangible Assets - Schedule of Intangible Assets (Detail) - USD ($) $ in Millions | Dec. 31, 2023 | Sep. 30, 2023 |
Finite Lived And Indefinite Lived Intangible Assets [Line Items] | ||
Total gross intangible assets subject to amortization | $ 4,983 | $ 4,839 |
Accumulated amortization | (2,593) | (2,486) |
Total net intangible assets subject to amortization | 2,390 | 2,353 |
Intangible assets not subject to amortization: | ||
Trademarks and tradenames | 151 | 149 |
Total net intangible assets | 2,541 | 2,502 |
Trademarks and tradenames | ||
Intangible assets not subject to amortization: | ||
Trademarks and tradenames | $ 151 | 149 |
Recorded music catalog | ||
Finite Lived And Indefinite Lived Intangible Assets [Line Items] | ||
Weighted-Average Useful Life | 12 years | |
Total gross intangible assets subject to amortization | $ 1,540 | 1,507 |
Music publishing copyrights | ||
Finite Lived And Indefinite Lived Intangible Assets [Line Items] | ||
Weighted-Average Useful Life | 25 years | |
Total gross intangible assets subject to amortization | $ 2,111 | 2,026 |
Artist and songwriter contracts | ||
Finite Lived And Indefinite Lived Intangible Assets [Line Items] | ||
Weighted-Average Useful Life | 13 years | |
Total gross intangible assets subject to amortization | $ 1,113 | 1,091 |
Trademarks | ||
Finite Lived And Indefinite Lived Intangible Assets [Line Items] | ||
Weighted-Average Useful Life | 14 years | |
Total gross intangible assets subject to amortization | $ 113 | 111 |
Other intangible assets | ||
Finite Lived And Indefinite Lived Intangible Assets [Line Items] | ||
Weighted-Average Useful Life | 6 years | |
Total gross intangible assets subject to amortization | $ 106 | $ 104 |
Debt - Long-term Debt (Detail)
Debt - Long-term Debt (Detail) € in Millions | Dec. 31, 2023 USD ($) | Dec. 31, 2023 EUR (€) | Nov. 30, 2023 USD ($) | Nov. 29, 2023 USD ($) | Sep. 30, 2023 USD ($) |
Debt Instrument [Line Items] | |||||
Total long-term debt, including the current portion | $ 4,041,000,000 | $ 4,002,000,000 | |||
Issuance premium less unamortized discount and unamortized deferred financing costs | (37,000,000) | (38,000,000) | |||
Total long-term debt, including the current portion, net | 4,004,000,000 | 3,964,000,000 | |||
Acquisition Corp. | |||||
Debt Instrument [Line Items] | |||||
Total long-term debt, including the current portion | 1,295,000,000 | ||||
Acquisition Corp. | Senior Term Loan Facility due 2028 | |||||
Debt Instrument [Line Items] | |||||
Total long-term debt, including the current portion | $ 1,295,000,000 | 1,295,000,000 | |||
Acquisition Corp. | 2.750% Senior Secured Notes due 2028 | |||||
Debt Instrument [Line Items] | |||||
Interest rate | 2.75% | 2.75% | |||
Face or principal amount of debt instrument | € | € 325 | ||||
Total long-term debt, including the current portion | $ 360,000,000 | 343,000,000 | |||
Acquisition Corp. | 3.750% Senior Secured Notes due 2029 | |||||
Debt Instrument [Line Items] | |||||
Interest rate | 3.75% | 3.75% | |||
Total long-term debt, including the current portion | $ 540,000,000 | 540,000,000 | |||
Acquisition Corp. | 3.875% Senior Secured Notes due 2030 | |||||
Debt Instrument [Line Items] | |||||
Interest rate | 3.875% | 3.875% | |||
Total long-term debt, including the current portion | $ 535,000,000 | 535,000,000 | |||
Acquisition Corp. | 2.250% Senior Secured Notes due 2031 | |||||
Debt Instrument [Line Items] | |||||
Interest rate | 2.25% | 2.25% | |||
Face or principal amount of debt instrument | € | € 445 | ||||
Total long-term debt, including the current portion | $ 493,000,000 | 471,000,000 | |||
Acquisition Corp. | 3.000% Senior Secured Notes due 2031 | |||||
Debt Instrument [Line Items] | |||||
Interest rate | 3% | 3% | |||
Total long-term debt, including the current portion | $ 800,000,000 | 800,000,000 | |||
Acquisition Corp. | Mortgage Term Loan due 2033 | |||||
Debt Instrument [Line Items] | |||||
Total long-term debt, including the current portion | 18,000,000 | 18,000,000 | |||
Acquisition Corp. | Revolving Credit Facility | |||||
Debt Instrument [Line Items] | |||||
Total long-term debt, including the current portion | 0 | 0 | |||
Commitments under revolving credit facility | 350,000,000 | $ 350,000,000 | $ 300,000,000 | 300,000,000 | |
Letters of credit outstanding | 4,000,000 | 2,000,000 | |||
Revolving credit facility outstanding | $ 0 | $ 0 |
Debt - Additional Information (
Debt - Additional Information (Detail) | 3 Months Ended | |||||||
Dec. 31, 2023 USD ($) | Dec. 30, 2023 | Jan. 27, 2023 | Dec. 31, 2023 USD ($) | Dec. 31, 2022 USD ($) | Nov. 30, 2023 USD ($) | Nov. 29, 2023 USD ($) | Sep. 30, 2023 USD ($) | |
Debt Instrument [Line Items] | ||||||||
Total long-term debt, including the current portion | $ 4,041,000,000 | $ 4,041,000,000 | $ 4,002,000,000 | |||||
Debt instrument, covenant, total indebtedness to EBITDA ratio | 3.50 | 3.50 | ||||||
Interest expense, net | $ 39,000,000 | $ 32,000,000 | ||||||
Interest expense, debt | $ 45,000,000 | $ 36,000,000 | ||||||
Weighted-average interest rate of total debt | 4.60% | 4.60% | 3.70% | 4.10% | ||||
Senior Notes | ||||||||
Debt Instrument [Line Items] | ||||||||
Long-term debt, maturities, repayments of principal in next rolling twelve months | $ 0 | $ 0 | ||||||
Long-term debt, maturities, repayments of principal in rolling year five | 360,000,000 | 360,000,000 | ||||||
Long term debt maturities repayments of principal in rolling after year five | $ 2,368,000,000 | $ 2,368,000,000 | ||||||
Revolving Credit Facility | Line of Credit | ||||||||
Debt Instrument [Line Items] | ||||||||
Debt instrument, covenant, total indebtedness to EBITDA ratio | 3.50 | 3.50 | ||||||
2020 Revolving Loans | Revolving Credit Facility | Eurodollar Applicable Margin Rate | ||||||||
Debt Instrument [Line Items] | ||||||||
Debt instrument, marginal interest rate | 1.375% | 1.875% | ||||||
2020 Revolving Loans | Revolving Credit Facility | ABR Applicable Margin Rate | ||||||||
Debt Instrument [Line Items] | ||||||||
Debt instrument, marginal interest rate | 0.375% | 0.875% | ||||||
Acquisition Corp. | ||||||||
Debt Instrument [Line Items] | ||||||||
Total long-term debt, including the current portion | $ 1,295,000,000 | $ 1,295,000,000 | ||||||
Acquisition Corp. | Revolving Credit Facility | ||||||||
Debt Instrument [Line Items] | ||||||||
Total long-term debt, including the current portion | 0 | 0 | $ 0 | |||||
Debt instrument, covenant, total indebtedness to EBITDA ratio | 3.60 | |||||||
Commitments under revolving credit facility | $ 350,000,000 | $ 350,000,000 | $ 350,000,000 | $ 300,000,000 | 300,000,000 | |||
Increase in secured indebtedness to EBITDA | 140,000,000 | $ 105,000,000 | ||||||
Secured indebtedness of EBITDA | $ 250,000,000 | |||||||
Senior secured indebtedness to EBITDA ratio | 5 | |||||||
Senior secured indebtedness, maximum amount | $ 500,000,000 | |||||||
Term loan base rate plus election rate | 1% | 1% | ||||||
Interest rate applicable to overdue principal | 2% | |||||||
Acquisition Corp. | Revolving Credit Facility | Federal Funds Effective Swap Rate | ||||||||
Debt Instrument [Line Items] | ||||||||
Debt instrument, marginal interest rate | 0.50% | |||||||
Acquisition Corp. | 2.750% Senior Secured Notes due 2028 | ||||||||
Debt Instrument [Line Items] | ||||||||
Total long-term debt, including the current portion | $ 360,000,000 | $ 360,000,000 | 343,000,000 | |||||
Interest rate | 2.75% | 2.75% | ||||||
Acquisition Corp. | 3.750% Senior Secured Notes due 2029 | ||||||||
Debt Instrument [Line Items] | ||||||||
Total long-term debt, including the current portion | $ 540,000,000 | $ 540,000,000 | 540,000,000 | |||||
Interest rate | 3.75% | 3.75% | ||||||
Acquisition Corp. | 3.875% Senior Secured Notes due 2030 | ||||||||
Debt Instrument [Line Items] | ||||||||
Total long-term debt, including the current portion | $ 535,000,000 | $ 535,000,000 | 535,000,000 | |||||
Interest rate | 3.875% | 3.875% | ||||||
Acquisition Corp. | 2.250% Senior Secured Notes due 2031 | ||||||||
Debt Instrument [Line Items] | ||||||||
Total long-term debt, including the current portion | $ 493,000,000 | $ 493,000,000 | 471,000,000 | |||||
Interest rate | 2.25% | 2.25% | ||||||
Acquisition Corp. | 3.000% Senior Secured Notes due 2031 | ||||||||
Debt Instrument [Line Items] | ||||||||
Total long-term debt, including the current portion | $ 800,000,000 | $ 800,000,000 | 800,000,000 | |||||
Interest rate | 3% | 3% | ||||||
Acquisition Corp. | Initial Revolving Loans | Revolving Credit Facility | ||||||||
Debt Instrument [Line Items] | ||||||||
Debt instrument, marginal interest rate | 0.75% | |||||||
Acquisition Corp. | Initial Revolving Loans | Revolving Credit Facility | London Interbank Offered Rate | ||||||||
Debt Instrument [Line Items] | ||||||||
Debt instrument, marginal interest rate | 1.75% | |||||||
Acquisition Corp. | 2020 Revolving Loans | Revolving Credit Facility | ||||||||
Debt Instrument [Line Items] | ||||||||
Senior secured indebtedness to EBITDA ratio | 2.66 | 2.66 | ||||||
Debt instrument, marginal interest rate | 0.875% | |||||||
Acquisition Corp. | 2020 Revolving Loans | Revolving Credit Facility | London Interbank Offered Rate | ||||||||
Debt Instrument [Line Items] | ||||||||
Debt instrument, marginal interest rate | 1.875% | |||||||
Acquisition Corp. | Senior Term Loan Facility -Tranche G | Federal Funds Effective Swap Rate | ||||||||
Debt Instrument [Line Items] | ||||||||
Debt instrument, marginal interest rate | 0.50% | |||||||
Acquisition Corp. | Senior Term Loan Facility -Tranche G | Secured Overnight Financing Rate (SOFR) | ||||||||
Debt Instrument [Line Items] | ||||||||
Debt instrument, marginal interest rate | 2.125% | |||||||
Acquisition Corp. | Senior Term Loan Facility -Tranche G | Base Rate | ||||||||
Debt Instrument [Line Items] | ||||||||
Debt instrument, marginal interest rate | 1.125% | |||||||
Term loan base rate plus election rate | 1% | 1% | ||||||
Additional Interest rate on other overdue amounts | 2% | |||||||
Acquisition Corp. | Mortgage Term Loan due 2033 | ||||||||
Debt Instrument [Line Items] | ||||||||
Total long-term debt, including the current portion | $ 18,000,000 | $ 18,000,000 | $ 18,000,000 | |||||
Acquisition Corp. | Mortgage Term Loan due 2033 | Secured Overnight Financing Rate (SOFR) | ||||||||
Debt Instrument [Line Items] | ||||||||
Debt instrument, marginal interest rate | 1.40% |
Restructuring - Schedule of Res
Restructuring - Schedule of Restructuring Accrual Activity (Details) - Employee Severance $ in Millions | 3 Months Ended |
Dec. 31, 2023 USD ($) | |
Restructuring Reserve [Roll Forward] | |
Beginning balance | $ 19 |
Restructuring charges | 0 |
Cash payments | (8) |
Ending Balance | $ 11 |
Equity - Additional Information
Equity - Additional Information (Detail) - USD ($) $ in Millions | 3 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | ||
Non-cash stock-based compensation expense | $ 9 | $ 14 |
Share-Based Payment Arrangement, Tranche Two | ||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | ||
Share-based compensation liability | 10 | |
Additional Paid-in Capital | ||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | ||
Non-cash stock-based compensation expense | $ 15 | $ 4 |
Common Stock | Class A Common Stock | ||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | ||
Shares issued under the plan (in shares) | 1,738,016 | 869,000 |
Shares issued under omnibus incentive plan (in shares) | 7,000 | 5,000 |
Common Stock | Class B Common Stock | ||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | ||
Shares issued under the plan (in shares) | 547,249 |
Income Taxes - Additional Infor
Income Taxes - Additional Information (Detail) - USD ($) $ in Millions | 3 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
Income Tax Disclosure [Abstract] | ||
Income tax expense (benefit) | $ 72 | $ 48 |
Reasonably possible decrease in gross unrecognized tax benefits from ongoing audits and settlement | $ 4 |
Derivative Financial Instrume_3
Derivative Financial Instruments - Additional Information (Detail) - USD ($) $ in Millions | 3 Months Ended | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | Sep. 30, 2023 | |
Interest Rate Swap | |||
Derivatives, Fair Value [Line Items] | |||
Outstanding hedge contracts | $ 500 | ||
Deferred (losses) gains on derivative financial instruments | $ 1 | ||
Unrealized pre-tax (losses) gains on derivative financial instruments | $ (1) | $ (2) | |
Foreign Exchange Contract | Other Income (Expense) | |||
Derivatives, Fair Value [Line Items] | |||
Unrealized foreign exchange forward contract gain (loss) | (6) | (7) | |
Realized foreign exchange forward contract gain (loss) | $ (1) | ||
Sale | |||
Derivatives, Fair Value [Line Items] | |||
Outstanding hedge contracts | 366 | ||
Purchase | |||
Derivatives, Fair Value [Line Items] | |||
Outstanding hedge contracts | $ 219 |
Derivative Financial Instrume_4
Derivative Financial Instruments - Summary of Amounts Recorded in Consolidated Balance Sheets (Detail) - USD ($) $ in Millions | Dec. 31, 2023 | Sep. 30, 2023 |
Derivatives, Fair Value [Line Items] | ||
Foreign exchange derivative contracts in asset | $ 9 | |
Foreign exchange derivative contracts in liability | 15 | |
Other Current Assets | Interest Rate Swap | ||
Derivatives, Fair Value [Line Items] | ||
Other assets | 0 | $ 2 |
Other Current Liabilities | Interest Rate Swap | ||
Derivatives, Fair Value [Line Items] | ||
Foreign currency forward exchange contract | (6) | $ 0 |
Other Current Liabilities | Foreign Exchange Contract | ||
Derivatives, Fair Value [Line Items] | ||
Foreign currency forward exchange contract | $ (6) |
Segment Information - Additiona
Segment Information - Additional Information (Detail) | 3 Months Ended |
Dec. 31, 2023 segment | |
Segment Reporting [Abstract] | |
Number of fundamental operations | 2 |
Segment Information - Schedule
Segment Information - Schedule of Segment Information (Detail) - USD ($) $ in Millions | 3 Months Ended | 12 Months Ended | |||
Dec. 31, 2023 | Dec. 31, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2021 | |
Segment Reporting Information [Line Items] | |||||
Revenue | $ 1,748 | $ 1,488 | $ 6,037 | $ 5,919 | $ 5,301 |
Adjusted OIBDA | 451 | 335 | 1,235 | 1,149 | 1,018 |
Operating Segments | Recorded Music | |||||
Segment Reporting Information [Line Items] | |||||
Revenue | 1,445 | 1,239 | 4,955 | 4,966 | 4,544 |
Adjusted OIBDA | 412 | 299 | 1,093 | 1,046 | 975 |
Operating Segments | Music Publishing | |||||
Segment Reporting Information [Line Items] | |||||
Revenue | 304 | 250 | 1,088 | 958 | 761 |
Adjusted OIBDA | 86 | 72 | 296 | 233 | 179 |
Corporate expenses and eliminations | |||||
Segment Reporting Information [Line Items] | |||||
Revenue | (1) | (1) | (6) | (5) | (4) |
Adjusted OIBDA | $ (47) | $ (36) | $ (154) | $ (130) | $ (136) |
Segment Information - Schedul_2
Segment Information - Schedule of Components of Adjusted OIBDA to Operating Income (Details) - USD ($) $ in Millions | 3 Months Ended | 12 Months Ended | |||
Dec. 31, 2023 | Dec. 31, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2021 | |
Segment Reporting [Abstract] | |||||
Operating income | $ 354 | $ 265 | $ 790 | $ 714 | $ 609 |
Amortization expense | 55 | 63 | 245 | 263 | 229 |
Depreciation expense | 26 | 21 | 87 | 76 | 77 |
Restructuring | 19 | 12 | 42 | 8 | 18 |
Transformation initiatives and other related costs | 53 | 46 | 36 | ||
Executive transition costs | 7 | 0 | 0 | ||
Net loss (gain) on divestitures | (17) | (41) | (41) | 0 | 0 |
COVID-19 related costs | 0 | 0 | 1 | ||
Non-cash stock-based compensation and other related costs | 14 | 15 | 52 | 42 | 48 |
Adjusted OIBDA | $ 451 | $ 335 | $ 1,235 | $ 1,149 | $ 1,018 |
Additional Financial Informat_2
Additional Financial Information - Additional Information (Detail) $ / shares in Units, $ in Millions | 3 Months Ended | 12 Months Ended | ||||
Dec. 31, 2023 USD ($) $ / shares | Dec. 31, 2022 USD ($) | Sep. 30, 2023 USD ($) | Sep. 30, 2022 USD ($) | Sep. 30, 2021 USD ($) | Nov. 09, 2023 $ / shares | |
Dividends Payable [Line Items] | ||||||
Interest payments | $ 33 | $ 25 | ||||
Income and withholding taxes paid | 39 | 45 | ||||
Noncash acquisition activities | 18 | |||||
Net loss (gain) on divestitures | $ 17 | 41 | $ 41 | $ 0 | $ 0 | |
Debt instrument, covenant, total indebtedness to EBITDA ratio | 3.50 | |||||
Dividends paid | $ 89 | $ 84 | ||||
Dividends paid (in dollars per share) | $ / shares | $ 0.17 | |||||
Common Stock | ||||||
Dividends Payable [Line Items] | ||||||
Cash dividends declared (in dollars per share) | $ / shares | $ 0.17 |
Fair Value Measurements - Sched
Fair Value Measurements - Schedule of Fair Value of Financial Instruments (Detail) - USD ($) $ in Millions | Dec. 31, 2023 | Sep. 30, 2023 |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Equity investment with readily determinable fair value | $ 13 | $ 15 |
Level 1 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Equity investment with readily determinable fair value | 13 | 15 |
Level 2 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Equity investment with readily determinable fair value | 0 | 0 |
Level 3 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Equity investment with readily determinable fair value | 0 | $ 0 |
Other Noncurrent Assets | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Derivative Asset, Statement of Financial Position [Extensible Enumeration] | Other assets | |
Interest Rate Swap | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Contractual obligations | (1) | $ (1) |
Interest Rate Swap | Level 1 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Contractual obligations | 0 | 0 |
Interest Rate Swap | Level 2 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Contractual obligations | 0 | 0 |
Interest Rate Swap | Level 3 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Contractual obligations | (1) | (1) |
Foreign Exchange Contract | Interest Rate Swap | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Foreign currency forward exchange contract | (6) | |
Foreign Exchange Contract | Interest Rate Swap | Level 1 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Foreign currency forward exchange contract | 0 | |
Foreign Exchange Contract | Interest Rate Swap | Level 2 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Foreign currency forward exchange contract | (6) | |
Foreign Exchange Contract | Interest Rate Swap | Level 3 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Foreign currency forward exchange contract | 0 | |
Interest Rate Swap | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Equity investment with readily determinable fair value | 2 | |
Interest Rate Swap | Level 1 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Equity investment with readily determinable fair value | 0 | |
Interest Rate Swap | Level 2 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Equity investment with readily determinable fair value | 2 | |
Interest Rate Swap | Level 3 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Equity investment with readily determinable fair value | 0 | |
Interest Rate Swap | Other Current Assets | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Other assets | 0 | $ 2 |
Interest Rate Swap | Other Current Assets | Level 2 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Derivative Asset, Statement of Financial Position [Extensible Enumeration] | Prepaid and other current assets | |
Interest Rate Swap | Interest Rate Swap | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Foreign currency forward exchange contract | $ (6) | $ 0 |
Fair Value Measurements - Recon
Fair Value Measurements - Reconciliation of Net Liabilities Classified as Level 3 (Detail) $ in Millions | 3 Months Ended |
Dec. 31, 2023 USD ($) | |
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | |
Beginning balance | $ (1) |
Additions | 0 |
Reductions | 0 |
Payments | 0 |
Ending balance | $ (1) |
Fair Value Measurements - Addit
Fair Value Measurements - Additional Information (Detail) - USD ($) $ in Millions | 3 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Sep. 30, 2023 | |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Impairment charges | $ 1 | $ 0 | |
Level 2 measurement | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Fair value of debt | $ 3,763 | $ 3,525 |
Subsequent Events (Details)
Subsequent Events (Details) - Subsequent Event - USD ($) $ in Millions | Feb. 06, 2024 | Jan. 24, 2024 |
Subsequent Event [Line Items] | ||
Restructuring charges, pretax | $ 140 | |
Restructuring charges | 105 | |
Employee Severance and Other Restructuring | ||
Subsequent Event [Line Items] | ||
Restructuring charges, pretax | 85 | |
Restructuring cash payments | 35 | |
Property Wind Down | ||
Subsequent Event [Line Items] | ||
Restructuring charges, pretax | $ 55 | |
Acquisition Corp. | ||
Subsequent Event [Line Items] | ||
Debt instrument, marginal interest rate | 2% | |
Federal Funds Effective Swap Rate | Acquisition Corp. | ||
Subsequent Event [Line Items] | ||
Debt instrument, marginal interest rate | 0.50% | |
Secured Overnight Financing Rate (SOFR) | Acquisition Corp. | ||
Subsequent Event [Line Items] | ||
Debt instrument, marginal interest rate | 1% | |
Base Rate | Acquisition Corp. | ||
Subsequent Event [Line Items] | ||
Debt instrument, marginal interest rate | 1% |